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Lord Monson: My Lords, I am sure that all noble Lords will have been interested to hear the speech of the noble Baroness, Lady Park. I should like to put a brief question to the noble and learned Lord, Lord Falconer. Even if one rejects the powerful and well-informed argument advanced by the noble Lord, Lord Fitt--although I would never do so--and continued to insist on the need for anonymity for donors resident in Northern Ireland, what is the justification for exempting Northern Ireland parties from having to declare the total sum received by way of donations from abroad in any given period, without having to identify individual donors? It is difficult to see how such an exemption can be justified.

Lord Hodgson of Astley Abbotts: My Lords, when the Government introduced the Political Parties, Elections and Referendums Bill, they did so on the grounds that it was to restore confidence in UK public life and thereby encourage a greater degree of public participation. Both were worthy objectives.

They sought to do this through two principles: first, the principle of transparency; and, secondly, the principle of independent supervision. Transparency was to be achieved by disclosure, and independent supervision was to be achieved by the creation of an independent electoral commission. This order drives a stake through the heart of both principles.

I listened when the Minister spoke about the need to avoid transparency and the disclosure of donations in Northern Ireland. Having heard the noble Lord, Lord Fitt, speak on this issue, it seems to me that "fig-leaf" is an inadequate description of what the Minister said.

I am more concerned about the impact that this order will have on the reputation of the Electoral Commission. The Act is half the size of a telephone directory, and it is difficult to see how an Act of that size will encourage public participation. With all its sanctions, some of which are of a criminal nature, it is likely to achieve the reverse. If the Act is to achieve many of the objectives we hoped for, it will be because the Electoral Commission is independent and above reproach.

Today, the Minister has said that the Electoral Commission is not to be trusted with information about donations and it is not to be trusted to keep an audit trail, albeit on an entirely private and confidential basis. If the Political Parties, Elections and Referendums Act is to be effective, the Electoral Commission must be effective. For that reason, I strongly support the amendment of my noble friend Lord Cope.

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4.45 p.m.

Lord Molyneaux of Killead: My Lords, the greater number of people in Northern Ireland--by that, I do not mean the unionist or Protestant majority, but the sensible, law-abiding people of all religions and of none--take the view that they do not wish this order to be imposed. As a democrat, I therefore have to support the amendment.

The order will permit "Northern Ireland parties" to receive global foreign funding but will place no obligation on them to keep records of donations received or to disclose the value or source of donations. I join other noble Lords and plead with the Minister to place his trust--and to encourage others to place their trust--in the Electoral Commission. During my time in active politics, I have always found that electoral officers, who conduct elections at all levels, are people of absolute integrity. I have the greatest confidence in the commissioner and his commission in this regard. While a reluctance to publish names is understandable--that case has been made--I hope that the Government, even at this late stage, will decide that no one should try to oppose records of donations being submitted in strict confidence to the Electoral Commissioner and his commission.

I do not believe that parties in Northern Ireland should be treated differently from those in other parts of the United Kingdom. If foreign funding is banned in mainland Britain and transparency is deemed necessary, the same should apply to Northern Ireland.

As your Lordships are aware, the legislation to which this order is to apply, or, in this case, to disapply--I refer to the Political Parties, Elections and Referendums Act 2000--was founded on the fifth report of the Neill committee. In that report, Recommendation 24 states:

    "Political parties should in principle be banned from receiving foreign donations".

It has been pointed out already that there was a slightly different, or amending, recommendation in that report. Paragraph 29 stated:

    "In relation ... to political parties in Northern Ireland, the definition of a permissible source should also include a citizen of the Republic of Ireland resident in the Republic subject to compliance with the Republic's Electoral Act".

But the fifth report did not recommend that Northern Ireland parties should be able to receive unrestricted global funding. It provided for a limited exception, a limited extension, to permit funding from the Republic of Ireland. I agree with the noble Baroness, Lady Blood, that that funding is not a major issue.

For your Lordships' information, the Republic's Electoral Act does not prohibit foreign funding at this time. However, as has been pointed out, the Republic's Prime Minister strongly indicated in the dying months of last year that such a prohibition will be introduced. Concrete proposals have not yet been made available, but I have good reason to believe that legislation will be introduced in the current parliamentary session.

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It is not surprising that the Republic is to introduce a package of funding reforms similar to those suggested in the Neill report when two recent investigatory tribunals have found scandal and corruption to be rife. However, it may be more of an influence that parties in the South fear, as we do, the immense wealth that Sinn Fein is amassing. The Irish Parliament has two good reasons for bringing its law into line with that which currently applies in Great Britain, but not in Northern Ireland.

Men such as Martin Galvin use a romanticised image of Irish republicanism to prey on the purses of people in America who have not witnessed--as we in various parts of the United Kingdom have witnessed--the misery and sheer brutality of the Provisional IRA and its so-called dissidents, who are in fact its allies, in its campaign in Northern Ireland and throughout the United Kingdom over 30 years. His malevolent skills are now being deployed for the benefit of the so-called dissident elements of the IRA. As they are a happy band of brothers, I do not think that they will be too worried about the niceties of accountancy.

It was reported in the Irish Times on 9th December last year that the Friends of Sinn Fein organisation has raised 4.5 million US dollars for the IRA's political wing. An amazing 500,000 US dollars were raised at one annual fund-raising dinner at the Sheraton Hotel in New York in November last year, only three months ago. I wonder how many cocktail parties it held over Christmas.

Those figures were discovered because the Friends of Sinn Fein in America--there is a lesson here for us--as an agency raising funds in the United States for a foreign organisation, must make annual returns to the American Department of Justice. So all has been revealed. In the six months to the end of October 1999, Friends of Sinn Fein raised 396,000 US dollars; in the same period, according to the department, Friends of Fianna Fail raised 116,000 US dollars in the United States. Sinn Fein also raised substantial funds in Australia through Friends of Sinn Fein Australia.

I should prefer to see a complete ban on foreign funding for Northern Ireland parties. But if an exception must be made, it should be limited to the Republic of Ireland, in the hope--now the expectation, based on the declaration of the Irish Prime Minister--that it, too, will eventually prohibit foreign funding. Indeed, it is to be hoped that that will happen in the not-too-distant future; it needs to be in the present parliamentary Session. It is appropriate at this point to remember that nationalist parties in Scotland and Wales could have benefited from foreign funding, but none has been made available to them.

Transparency in the funding of Northern Ireland political parties will simply not exist if the order is approved unamended. If a Northern Ireland party cannot identify the source of a donation, there will be no issue. Anonymous donations will continue to be permitted in Northern Ireland. No improperly obtained funds will be subject to forfeiture, as there will be no concept in Northern Ireland of "improperly

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obtained funds". Sources need not be voluntary, as is implicit in the term "donor"; racketeering will continue to be a form of funding for paramilitary-linked parties in Northern Ireland--indeed it will be made legitimate by this order.

Acceptance of the order will mean that the words,

    "evasion of restrictions constituting an offence",

will not apply to Northern Ireland. As there will be no restrictions, there will be no restrictions to evade. Northern Ireland parties will not need to concern themselves with reporting on donations, weekly, quarterly or otherwise, during an election period or at other times.

In giving evidence to the Neill Committee, Unionists expressed concerns that public disclosure of donors might provide security problems, but those concerns did not preclude transparency and accountability by having records scrutinised by the electoral commission. For the life of me, I cannot see the objection to that clear-cut, straightforward way out.

The consequences of Sinn Fein dictating this piece of legislation in this Parliament, as it did with the Disqualifications Act, appear to be even more far-reaching than the Government anticipated. The order provides for political parties in Northern Ireland potentially to receive foreign funding generally, and to use the funding resource generally. This raises the issue of referenda already referred to.

The reference in the Belfast agreement,

    "within the concept of the principle of consent",

provides for the possibility of a referendum on the constitutional status of Northern Ireland, although such a referendum may never take place. It is of concern to all that if a referendum on the constitutional status of Northern Ireland were to take place, disproportionate funding would then be available to the different sides in a referendum campaign on the status of Northern Ireland.

Lavish campaigning by republicans and nationalists in any future referendum on Northern Ireland's constitutional position would not persuade Unionists to be anything other than unionist. However, disproportionate funding could affect the turn-out in any such campaign. The lack of foresight in regard to this exemption to suit Sinn Fein will result in organisations being specifically set up to campaign in any such referendum--unlike political parties, which will not be permitted to receive foreign funding.

This lack of foresight becomes even more apparent when considering the issue of UK-wide referenda. A British mainland party banned from receiving foreign donations could use a Northern Ireland party to receive foreign funding and to campaign on its behalf. There is no restriction on where Northern Ireland parties spend the resources obtained from foreign funding: the provision also works that way round. Surely this, too, must be regulated. Indeed, the party in government has a sister party in Northern Ireland; however, it is more likely that Sinn Fein would help the government who have been so helpful in legislating on its behalf.

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It is apparent that the order does no service to Northern Ireland or to its electorate. They gain no transparency, and they risk their politics being heavily influenced by foreign countries. Politics in Northern Ireland will be aided only by the removal of the contamination that is implicit in foreign funding. The transition from fascism to democracy that we all hope certain individuals in Northern Ireland will make, can only be slowed by their organisations being allowed the leeway to continue their economic dependency on extortion, drug dealing, robberies and foreign funding. Northern Ireland can only benefit from firm regulation of such contributions to political parties in line with the rest of the United Kingdom; and that can only assist in the restoration of stability and normality for which we are all striving.

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