Party Funding Reform

Baroness Hayter of Kentish Town Excerpts

Thursday 3rd November 2016 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, this has been an interesting debate on an important issue. There is a lack of trust in parties, and therefore in the political system, which is deeply unhealthy. We have a duty to work to restore confidence, and tackling political funding is a vital part of that. The Kelly Committee on Standards in Public Life emphasised not only that,

“the regulatory regime must be fair to all political parties”,

but also must be,

“widely believed to be so”.

As my noble friend Lord Whitty made clear, the then Trade Union Bill failed this test, addressing just one party’s source of funding—a view shared across your Lordships’ House. As we have heard, the House then set up a Select Committee to examine the union party funding in the context of Kelly’s view that a cross-party approach was needed. As we have heard, the Government were urged to take a wider and consensual route. Well, they did not, and the trade union aspect was the only one looked at, which has now been legislated for.

There will be an opt-in to the political levy for new members, even though these are a mere 10p per week. The Certification Officer is now consulting on how to implement this, after which there will be a year to put the new arrangements in place. That means that we now have time to rectify the imbalance of regulating Labour but not Conservative funding, and to deal with the bigger issue of companies’ and individuals’ largesse. It is urgent.

The Government are determined to remove the 15-year time limit for overseas voters, handing a vote for life to an estimated 1 million expats, who have left and not paid any taxes to this country for decades. But even more seriously, as the Minister helpfully revealed in her letter to me of 24 October—her department having refused to answer my questions for the year before that—all these extra voters will also become “permissible donors”. As she writes:

“If a British citizen is able to vote in an election for a political party, we consider that they should be able to donate to that political party”.

I cannot think what political party she had in mind.

Therefore, unless we change the law, all these extra voters, long after they have left these shores, will be able to funnel unlimited—presumably untaxed, probably unearned—amounts into the coffers of a UK political party, in a country in which they do not live, giving to a party that makes laws which do not apply to them and which takes decisions which do not affect them. Clearly, therefore, although the noble Lord, Lord Leigh, says that the Conservatives are content with existing donors, they are not—they want to add these extra expats as well. As the Mirror Online says about this today:

“Tycoons who have not lived or paid tax in the UK for decades will be able to fund political parties under new rules drawn up by the Tories … That means more foreign-based financiers will be able to push policy by pumping cash into the Conservative Party—where a £50,000 donation buys dinner with Theresa May as part of the ‘Leader’s Group’”,

as we heard today from both the noble Lord, Lord Wallace, and the noble Lord, Lord Leigh.

What does this look like to the general public? According to the noble Lord, Lord Wallace, three-quarters of the public think that wealthy individuals influence government to benefit their own interests, and the noble Lord, Lord Bew, said that nine out of 10 people think that large donations are motivated by hopes of influence. We have to deal with this. We must keep it simple and clean. There must be an upper limit on the size of the donation any one person—or company, trade association or a body corporate—can give. That was once accepted by the Conservative Party. Its 2010 manifesto promised,

“an across-the-board cap on donations”,

to,

“mark the end of the big donor era”.

Notably, this was dropped from the 2015 manifesto. Perhaps the Minister can explain this regrettable omission when she comes to reply.

A cap on individual donations is urgently needed, and at a level which avoids any perception—let alone reality—of bought influence. As Kelly emphasised, only a low cap will be seen as taking,

“big money out of politics”.

He thought £10,000 was low, as the noble Lord, Lord Leigh of Hurley, clearly does. To me, £10,000 is high. It could amount to £50,000 over a parliament from one individual. That sounds like big money to me, and to voters, if not to the noble Lord, Lord Leigh. A lower cap would signify that we are changing. In addition, we should not be afraid to discuss adjustments to public funding. The free post will, over time, become less of a necessity, and could be better directed, as the noble Lord, Lord Tyler, says.

A healthy democracy requires properly run and accountable parties, able to undertake serious policy work as well as campaigns, able to train and develop its elected representatives, able to engage with the electorate, and with MPs able to serve their constituents. This is a price worth paying for a healthy, functioning democracy. If it needs more public funding, so be it. What it does not require is unlimited donations from rich individuals. This matter is urgent. I hope that the Minister will take back what she has heard to Downing Street, with the message: “Something must be done”.