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Lord Hunt of Kings Heath: My Lords, I do not think that there is much that I can add to the comments that I have already made. The noble Lord referred to the communications allowance, which is set at £10,000 per Member with a cap of £7,000 on the provision of

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pre-paid envelopes. As I said, this was unanimously agreed by the relevant House of Commons committee. It clearly is applicable to all MPs from whichever party they come. In an era in which all of us are concerned about the engagement between politicians and the public, I should have thought that anything that helped Members of Parliament to communicate effectively with the people living in their constituency would be welcomed.

Lord Goodhart: My Lords, does the Minister agree that parties should have funding in elections that is broadly on a level playing field and that allowing very wealthy individuals to donate vast sums—in six or even seven figures—distorts the whole political process? Does he also agree that parties should be encouraged to obtain small donations from many people? I should add that I was a member of the Committee on Standards in Public Life—we researched and published our principal report in 1998. One method that we suggested then, which might have a number of virtues, would be something in the nature of a gift aid scheme for donations to political parties. Making modest donations to parties benefits the democratic system and it should be recognised that it does so. On the involvement of the tax system, that is already recognised in relation to inheritance tax, where donations to established political parties are tax exempt. Since inheritance tax is mainly paid by those who are supporters of the Conservative Party, would it not be fairer to extend similar tax relief to small payments such as membership subscription?

Lord Hunt of Kings Heath: My Lords, I am sure that my right honourable friends in the Treasury are always interested to hear of suggestions about taxation and tax incentives. On the substantive point, I am sure that all of us who are concerned about the health of our democracy would wish to see as many people as possible make contributions to the political party of their choice. Anything that we can do to encourage that should be considered very seriously, particularly at a time when all of us are concerned about overall reductions in the numbers of people actively involved in party-political activities. In the—

Lord Neill of Bladen: My Lords—

Lord Hunt of Kings Heath: My Lords, I am responding to the noble Lord, Lord Goodhart. He will know that Hayden Phillips, in the work being discussed, suggested incentive payments of £10 provided by the state for every £10 raised by the political parties. We do not think that we are in a position to go forward with state funding for the reasons that I have given. However, we very much welcome anything that we can do to encourage as many people as possible to participate and donate.

Lord Grocott: My Lords, is it not the case that, while my noble friend’s Statement quite rightly focuses both on income and expenditure, for those of us—I hope that it is all of us—who feel that money should not determine the outcome of elections, expenditure is more important than income? That has been the thrust of most electoral law since control on candidates’ expenditure was first introduced at the end of the 19th century.

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We have had many views on what is going on across the Atlantic where much is said about how wonderful the system is and how it reinvigorates politics. However, what is disturbing to all of us are the colossal sums of money that have to be raised in order for a democratic election to take place these days. Can my noble friend undertake, particularly in the light of those views, that the focus of his attention will be on limiting the amount of money that individual candidates can spend on their campaigns in their constituencies and on putting a tough cap—which I would make more severe than it is at present—on the total amount of money that can be spent in the national campaign? Whatever language we use, it is the expenditure of parties which clearly makes it grossly unfair if one is spending far more than the other.

Lord Hunt of Kings Heath: My Lords, I certainly agree with my noble friend on his general premise that money should not determine the outcome of the elections. I am sure that he is right to point to some of the lessons that can be learnt from the US. There are lessons to be learnt both ways here: we can also learn from the US in the way that many individuals—this goes back to what the noble Lord, Lord Goodhart, said—make contributions to political parties as well. In a sense, it is an endeavour to embrace good examples of a wider involvement in the political process and not the kind of arms race that I have described, and to which he has referred.

The extra spending in the 2005 election as compared to 2001 is a warning of what might happen. That is why we must keep these matters under very close review and why we very much welcome the continuance of a cross-party debate on those matters.

Lord Fowler: My Lords, some things in this Statement are obviously welcomed. However, the Minister said, and has made it continually clear, that there are going to be no limits on donations, including trade union contributions. Does that not mean that this measure will not tackle one of the fundamental defects in the present party funding system; namely, the way that trade unions can assert their right to have policies accepted in return for the contributions they make? “No say, no pay” is how one trade union leader once put it. Does the Minister not understand that, until that is tackled, this Statement and White Paper will be seen as not only incomplete, but as a party-political measure?

Lord Hunt of Kings Heath: My Lords, I cannot possibly see why this would be seen as a party-political measure. All the proposals in today’s Statement have been the subject of considerable discussion and many of the reports that have come forward in the past few years have covered that ground. I do not recognise what the noble Lord, Lord Fowler, says with regard to the relationship between trade unions and the Labour Party. What I do recognise is that this is a highly regulated area and that his own party, in evidence to the committee of the noble Lord, Lord Neill of Bladen, only a few years ago, made no recommendations of any substance in that area. In relation to the opportunity that people have to make complaints about how the system works, very few complaints have been made.

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Lord Foulkes of Cumnock: My Lords, I assure my noble friend that I had intended to ask a non-partisan, non-contentious question about the Electoral Commission until the anti-trade union tirade from the noble Lords, Lord Henley and Lord Fowler, which was not unexpected in either case. Instead, I ask my noble friend whether he shares my disappointment that the two greatest experts in this House on party funding are unable to be present today. One of them, who promised the appointments committee that he would relocate his domicile to the United Kingdom, failed to do so and so is effectively barred from attendance in this House. The other one, who bankrolls the Tory party at national and local levels, is effectively resident in Belize. Does that not say a great deal about the modern-day Tory party?

Lord Hunt of Kings Heath: My Lords, I always find that my noble friend brings to your Lordships’ House an entirely impartial and balanced view on these matters.

Lord Shutt of Greetland: My Lords, much as I would like to speak on the real substance of this debate, there is a very important Chief Whip’s point that I should like to raise. Over the past three or four years I have been concerned about the provision of funds for the political parties within Parliament, in particular the position of the Cranborne money, with regard to which the figures available have been created by some system of great mystery. I have been told that this would be something which would be attended to within the slipstream of whatever came from Sir Hayden Phillips’s activities. Therefore, I should like to ask whether it is intended that these things can be attended to in the slipstream.

Only a few weeks ago, because of the Cross-Benchers’ inadequate resources here, an emergency dispensation was made. It is important that this should be looked at. I hope that the Minister can answer in the affirmative that this can be coped with in whatever Bill is proposed in the near future.

Lord Hunt of Kings Heath: My Lords, I am not at all sure that the issue of Cranborne money is in my gift, although I note what the noble Lord says. I also note that his party received £228,445 in 2007-08, while the Conservative Party received £457,000 and the Cross-Benchers £41,000. My noble friend the Lord President is aware of these matters and would be happy, I am sure, to engage with other Members of the House on them.

Lord Brooke of Sutton Mandeville: My Lords, I declare an interest as the Minister in the then government who reached complete agreement with the noble Baroness, Lady Gould, on the subject of the level of expenses in parliamentary by-elections in 1989, to the great relief of agents of all three major parties throughout the country.

Will the strengthening of the Electoral Commission—both as to quality and powers—be reflected in a greater willingness of the Government to accept its advice, especially in the area of postal votes, where in recent years the posture of the Government would have secured the admiration of Dr Pangloss?

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Lord Hunt of Kings Heath: My Lords, that is not an entirely fair representation of the Government’s actions in this matter. We listen with very great care to recommendations made by the Electoral Commission. In fact, the noble Lord will know that we have made changes. We are looking at these matters very seriously and continue to discuss them in relation to the question of individual voter registration, which I suspect he had in mind. We hope that the actions we have announced today will strengthen the future effectiveness of the Electoral Commission. I am sure that a strengthened commission will be listened to by government even more eagerly than is the case now.

Lord Stoddart of Swindon: My Lords, it is true that the Statement and the White Paper are about party financing but what we really need to be concerned about is the public’s participation in the political process. The White Paper does not deal with that at all; it simply deals with the financing of political parties. At present, political parties are held in great disdain by the public and we need to return to the days of active participation in political parties by the people of this country. When I joined the Labour Party—I was expelled a few years ago but I remember when I joined it in 1947—it had 1 million individual members and 14 million trade union members. The Tory party had 3 million individual members, and I think that even the Liberal Party had about 40,000 members. Therefore, at that time people were involved in the political process. Now, they feel divorced from it and nothing in the White Paper will alter that. Only decent policies and activity on the ground will bring back the public.

Lord Hunt of Kings Heath: My Lords, first, I agree with the noble Lord that this is a very important matter, but it really is outside the scope of the Statement and the White Paper. However, I say to the noble Lord that the more public confidence we can bring about by ensuring that party funding is dealt with as transparently and effectively as possible, the more likely it is that members of the public will be willing to engage in the political process. I absolutely agree that political parties have a critical role to play in the future health of our democracy, and the more we can engage with and encourage members of the public to take part in political activities, the better our democracy will be.

Viscount Astor: My Lords, will the Minister remind his noble friend Lord Foulkes—in a non-partisan way, of course—that the largest donor to any political party in this House was a Minister who used to sit on the Government’s Front Bench and whose name is somewhat similar to a well known high-street chain of supermarkets?

Lord Hunt of Kings Heath: My Lords, I have been a little too long in this job to offer any advice to my noble friend.

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EU: Lisbon Treaty

6.33 pm

The Lord President of the Council (Baroness Ashton of Upholland): My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend the Foreign Secretary in another place.

“With permission, Mr Speaker, I should like to make a Statement about the Irish referendum on the Lisbon treaty held last Thursday. The ‘no’ vote on the treaty in the referendum is important because of our strong national interest in an effective European Union, and it needs to be respected.

“The next step is for the Irish Government to give their views on how to proceed from here, consistent with their aims for Ireland’s role in the European Union. They have made clear that they need time to absorb and analyse the result and its implications, and to consult widely at home and abroad. The Irish Prime Minister has said he is disappointed by the result but wants Ireland to continue to play a full part in the life of the European Union.

“I have just returned from a meeting of EU Foreign Ministers in Luxembourg and that message was reiterated by the Irish Foreign Minister. He emphasised the diverse nature of the Irish debate and the overlap in the debate between issues affected by the treaty and those not. He also expressed his appreciation that around Europe leaders had committed themselves to work co-operatively with Ireland. He committed Ireland to work for a common European approach with Ireland at the heart of Europe. There will be further discussion among Heads of State and Government and Foreign Ministers at the European Council this Thursday and Friday—not to take final decisions but to hear a preliminary report from the Irish Government and preliminary thoughts on the next steps.

“The rules of the treaty and the European Union are clear. All 27 member states must ratify the treaty for it to come into force. There is no question of ignoring the Irish vote or bulldozing Irish opinion. Ireland clearly cannot be bound by changes which it has not ratified. Equally, there is no appetite for a return to years of institutional negotiation. The EU as a whole needs to find a way forward for all countries that allows it to focus on the big policy issues that confront us.

“Eighteen countries have approved the Lisbon treaty. The Irish Government have set out clearly their respect for the right of other countries to complete their ratification processes. My conversations with other Foreign Ministers, representing all shades of political opinion across the European Union, show this to be a very strong view. The reason for this approach is simple: an Irish vote is determinant of an Irish position but cannot determine the ratification decision of other countries. The British view is for this Parliament to determine.

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“In this House and the other place there have been 24 days of debate, and both Houses have voted strongly in favour of the European Union (Amendment) Bill at each stage. The final stage is the Third Reading in the other place on Wednesday. The Government believe that ratification should proceed as planned. It must be right that every country takes its own view on the treaty in accordance with its democratic traditions. That is right according to democratic principle; it is right in terms of our negotiating position in the European Union; and it is right in terms of our national interest.

“Our national interest is a strong Britain in a strong European Union. The EU now consists of 27 countries and more than 490 million people. Reform of EU institutions and working practices is important to ensure that the EU can function more effectively and cohesively, and also to ensure that it embraces an outward-looking agenda that tackles in an effective way international issues such as migration, climate change, security and defence policy and counterterrorism. But treaty change rightly requires unanimity across all countries. That is why it is right that we take the time to allow the Irish Government to make proposals on what to do next; right that we assert Britain’s national interest in an effective European Union that addresses the problems of the modern world; and right that we work to maintain the cohesion of the European Union. That is what the Government will be doing in the weeks and months ahead, and I commend this approach to the House”.

My Lords, that concludes the Statement.

6.38 pm

Lord Howell of Guildford: My Lords, I thank the noble Baroness the Leader of the House for repeating this Statement by the Foreign Secretary, who has just returned from meeting his fellow Ministers, although I heard much of what he said and what she repeated with incredulity. That approach may commend itself to the other place—I am not sure whether it does—but it certainly should not commend itself to your Lordships’ House. The objective facts of this whole situation are absolutely clear. The treaty was negotiated and required the common consent of all EU member countries to come into effect. In the words of the Foreign Secretary, the rules are absolutely clear: unless all 27 member states pass the Lisbon treaty, it cannot pass into law—he repeats something to that effect in the Statement.

The British Government had many reservations about the treaty—we all know that. They tried and failed to resist many of the features in the final treaty text and attempted to hedge them around with so-called red lines, significant numbers of which were breached, with others having to be protected by various devices and defences, which our discussions on the enacting Bill in recent weeks have shown to be of dubious worth.

Alone among the European nations, the Irish Government, because they had to, allowed their people a referendum on the treaty. The Irish people have rejected it decisively, and the treaty to be enacted in the Bill before your Lordships' House therefore, if not

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completely dead, as the Liberal Democrat spokesman was saying earlier this afternoon in the other place, is at least in a deep coma—until and unless the Irish people are told to vote and vote again until they give a different answer, which they are not going to do and which we should not expect them to do.

Giving the Bill a Third Reading here this Wednesday, which is the implication of what the noble Baroness said—doing it in haste—is absolutely pointless. A new negotiation now obviously has to begin, perhaps after a considerable pause to respond to the Irish concerns. Although there are many interpretations of what those concerns are, we know that a large number of them are shared by a huge number of people in our country and other European states.

Whether one is for or against the treaty—I know that there are deep divisions in your Lordships' House—the worst tactic in such negotiation would be to pass this wounded and dire Bill in this House on Wednesday next. What would that be saying to the rest of the EU? I do not know why the Foreign Secretary cannot see this. It would be saying, “We, the British Government, are entirely satisfied with the Lisbon treaty as now written. We would not amend one comma of it or change the way we handle it here in the UK. We wish to be included out of any discussions and are entirely content for Mr Barroso to settle with the mischievous people of Ireland on the basis of the present text”. In fact, we would be saying that we approve the “isolate Ireland” strategy, which seems to be going the rounds, and will join the bullying camp. I hope that that is not so—I know that the Foreign Secretary has said that it is not so—but that is what we will be doing if we push through Third Reading of a near-dead Bill. To proceed in that way would be folly. It would be giving away our negotiating room, just as the Government gave away our rebate for nothing except castles in the air on the common agricultural policy.

I confess—I do not have to hide—that I have consistently argued that this is a bad treaty, the wrong treaty, and that we could have done and could do much better for modern Europe, old and new, by moving in more democratic directions, as the Laeken declaration originally required. Wherever you stand, the common-sense approach must be not to proceed further with the Bill at present. If the leaders of the EU attempt to devise some method of proceeding about which Parliament, the British people and, probably, the Government, know nothing, at least the Bill's discussion provides a forum for delivering some parliamentary control of that process, if we keep it alive.

Although we know that the treaty cannot be amended, the Bill could be brought back later with any new aspects that might come out of any intergovernmental conference or Council, such as new protocols and other adjustments of that kind. The Government could table amendments not to the treaty but to the Bill and they could be fully discussed and debated in both Houses.

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