Short Money and Policy Development Grant

John Penrose Excerpts

Thursday 11th February 2016 Commons Chamber

[Chris Bryant (Rhondda) (Lab)]

(Urgent Question): To ask the Leader of the House to make a statement on Short money and the policy development grant.

[The Parliamentary Secretary, Cabinet Office (John Penrose)]

rose—

[Hon. Members]

Where’s the Leader of the House?

[Mr Speaker]

I call the Minister with responsibility for constitutional reform.

[John Penrose]

That includes the policy development grant, Mr Speaker.

As the shadow Leader of the House will already know, the Electoral Commission has been consulting on changes to policy development grant, and there have been informal discussions about parallel changes to Short money between the political parties as well. I can confirm that we plan to initiate further, more formal consultations on Short money shortly. There will be plenty of time and opportunity for views to be expressed on both sides of the House, and I am sure, if he runs true to form, he will use those opportunities well.

I am also required, under the terms of the Political Parties, Elections and Referendums Act 2000, to lay a statutory instrument before the House to adjust the shares of policy development grant between political parties to reflect the results of the recent general election. This statutory instrument is nearly ready and will be laid soon. I am sure it will then be scrutinised and debated carefully by the House, if it wishes, in the usual way.

[Chris Bryant]

Does the Minister agree that it

“cannot be right…for Opposition parties to be under-resourced, particularly when…the Government have increased substantially, from taxpayers’ money, the resources that they receive for their own special advisers”?—[Official Report, 26 May 1999; Vol. 332, c. 428-9.]

Those are not my words; they were the words of Sir George Young, when he was the Conservative shadow Leader of the House, arguing for even more Short money for the Tories when the Labour Government trebled it for them in 1999. In opposition, the Prime Minister said he would cut the number and cost of special advisers, yet in government he has appointed 27 more than ever before and the cost to the taxpayer has gone up by £2.5 million a year. There is a word for that, Mr Speaker, but it is not parliamentary.

In opposition, the Conservatives banked £46 million a year in Short money, yet in government they want to cut it for the Opposition by 20%. There is a word for that, Mr Speaker, but it is not parliamentary. How can it be right for the Government to cut the policy development grant to political parties by 19%, when they are not cutting the amount of money spent on their own special advisers? Surely history has taught us that an overweening Executive is always a mistake. Surely, if a party in government needs financial support in addition to the civil service, it is in the national interest that all the Opposition parties should be properly resourced as well.

The Government have briefed journalists that they will publish their proposals on Short money tomorrow—in the recess—and that, basically, is what the Minister just admitted. Surely, above all else, this is a matter for the House. Short money was created by the House, and amendments have to be agreed by the House, so surely the House should hear first. Why, then, has the Leader of the House made absolutely no attempt to meet me or representatives of any other political party for proper consultation? Why did he fail to turn up for three meetings yesterday? Why is he not doing his proper job and standing at the Dispatch Box today? Mr Speaker, what is the word for this behaviour? Is it shabby, tawdry or just downright cynical?

[John Penrose]

I apologise fulsomely for not being the Leader of the House. I am sure that the shadow Leader of the House is looking forward to his weekly arm wrestle with him, but in the meantime I hope that he will accept having the other policy Minister—I am responsible for policy development grants—responding to his question and treat it as an amuse-bouche for his later work-outs with the Leader of the House.

To clarify one further point, I did not say we were launching “proposals”; I said we would be launching further “consultations”—and it is extremely important to understand that consultations involve a dialogue. The determined assault of the shadow Leader of the House is rather blunted by the fact that he will have a huge opportunity to contribute, as will others of all parties, as required, as soon as this consultation is launched.

One important point that the shadow Leader of the House managed to gloss over—I am sure inadvertently—is that Short money, contrary to the impression given by his remarks, has actually risen very substantially over the course of the last five years. It has gone up by more than 50%; it is more than 50% higher than it used to be. If we make no changes over the next few years, it will continue to rise still further. The population—the voters—who have had five or more years of having to tighten their belts to deal with the—[Interruption.]

[Mr Speaker]

Order. I appreciate that this is a high-octane issue, and it is because I judged it worthy of treatment today that the urgent question was granted. Members must, however, listen to the Minister who is, to be fair, among the most courteous of Ministers. He must be heard—[Interruption.] Order. There will then be a full opportunity for colleagues to question him.

[John Penrose]

Thank you, Mr Speaker. To finish my point, the country will not understand why politicians should be exempt from having to deal with the effects of the financial deficit that we were bequeathed by the last Labour Government. The reason why we have to tighten our belts as a nation is that whopping financial deficit. It cannot be right for politicians to argue that they should be in some way exempt—a special class—and not have to do their bit. Short money has gone up by 50% so far, and it will continue to rise if we do nothing. I think that the country expects us as politicians to set an example and to do our bit.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I have great sympathy for my hon. Friend the Minister who has been sent here to be shouted at by the hon. Member for Rhondda (Chris Bryant) because I doubt whether he is the author of this policy or that he is responsible for determining the outcome. If the policy is as reasonable as the Minister insists, however, it is quite clear from these exchanges that the Government have handled the matter in a clumsy manner so that the Opposition feel they have not been consulted. On the other hand, could there be an agenda behind this change, which is rather more political in its intent?

I would like to inform Members that my Select Committee has already received correspondence from another Conservative Chair of a Select Committee expressing concern about this matter. We are looking into it and will be holding an inquiry. All sides should have a fair hearing so that these matters can be agreed by consensus.

[John Penrose]

I welcome the Select Committee Chairman’s pledge of a further consultation. That will provide further opportunities to air the issues around this matter in addition to—and possibly in parallel with, depending on the timing—the consultation I mentioned in my earlier remarks.

[Patrick Grady (Glasgow North) (SNP)]

I declare an interest as the national secretary of the Scottish National party. I echo the points already made on Short money. Government is growing, special advisers are growing, the House of Lords is growing, but our ability to hold the Government to account is being stripped back. There is one rule for Tory cronies and another rule for everyone else.

The policy development grant poses serious issues for the headquarters, especially of smaller parties and especially given the prospect of a cut in the middle of devolved election campaigns. Will the Minister take on board the recommendations of the Electoral Commission? What opportunities will be there be for further consultation and cross-party negotiation on both these issues?

[John Penrose]

The hon. Gentleman is absolutely right that the policy development grant has a slightly different mechanism. It has to be dealt with through a statutory instrument rather than by resolution of the House. The statutory instrument will be laid as soon as it is ready, whereupon the hon. Gentleman and everybody else will have an opportunity to debate it. The hon. Gentleman is also right to say that the Electoral Commission has been consulting carefully and making recommendations about the revised shares to reflect the results of the last general election. I look forward to hearing his further comments at that point.

[Mr Philip Hollobone (Kettering) (Con)]

May I make two points on behalf of my constituents? First, I absolutely agree with the shadow Leader of the House that the growth in the number of special advisers has got completely out of hand. If the Government want sensible policy advice, they should speak to their Back Benchers. After all, we are the ones who are in touch with our electorate.

Secondly, there should be some mechanism for measuring the effectiveness of the Opposition, because from where I am sitting it would seem that, pro rata, the Scottish National party offers a far more effective opposition than the present Labour party.

[John Penrose]

The shadow Leader of the House delights in using the standard format, “There is a word for that.” He has used that rhetorical device on several previous occasions, but one of the words he has not used is “shambles”, which is perhaps what my hon. Friend is suggesting about Labour’s performance on at least one or two issues.

I can happily confirm that the cost of Spads has started to fall since the last general election, which is tremendously important. I also heartily endorse my hon. Friend’s point that, in order to remain in touch with both the feelings of the House and those of the electorate, Governments need to listen to Back Benchers as well as to others very carefully indeed.

[Margaret Beckett (Derby South) (Lab)]

Is the Minister aware that I was fortunate enough to be the Leader of the House who put through the settlement on Short money to which my hon. Friend the Member for Rhondda (Chris Bryant) has referred? At the time, we had a massive majority and every opportunity to use office to disadvantage our opponents, had we wished. The Conservative party was politically on its knees, and financially as close to it as it had ever been. We had experienced one of the features of the proposal that is being considered, namely the freezing of the grant after it has been cut. We experienced inflation of 10% to 15% under the triumphant preceding Conservative Government. Consequently, not only did we treble the money and make special provision for the special needs of the Leader of the Opposition, but we inflation-proofed it. That is why the money has gone up for the past five years: it is his party’s own record on inflation that the Minister is criticising.

[John Penrose]

The right hon. Lady makes a very important point, but there is a crucial difference between the situation when she was in charge and the current situation: we have a huge deficit to deal with, while Labour inherited an economy that was doing incredibly well and a set of Government finances that were in a far stronger position. The difference is the deficit, and the reason for the deficit is sitting opposite me. I am afraid that that is why politicians and the rest of the country have to tighten our belts.

[Michael Fabricant (Lichfield) (Con)]

Will my hon. Friend, despite all the outrage on the Opposition Benches, just remind us again by precisely how much Short money has risen since 2010?

[John Penrose]

It has gone up by 50% when everybody else has had to tighten their belts, and if we do nothing, it will continue to rise further.

[Mr Douglas Carswell (Clacton) (UKIP)]

I am delighted that the Government are cutting Short money; few things this Administration have announced have pleased me more. Does the Minister agree that this is public money and that the public will deeply resent it being spent on politicians to do more politics? Does he agree that the rules on Short money need to reflect the fact that the cost of doing politics—of doing policy, research and communication—have come down? We live in a world where Google is at our fingertips, so we do not need researchers. We also have Twitter and blogs so we do not need a whole department of press officers. Does he agree that the public will resent using public money to pay for Spads and shadow special advisers, who have watched too much of “The West Wing”, to sit in Portcullis House at public expense?

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[John Penrose]

I agree with large parts of what the hon. Gentleman says. I think that the public will look at these contributions from the public purse—which taxpayers fund without choice, unlike other forms of political donation about which people do have a choice—and wonder why the political classes think that they should be exempt, particularly because, as the hon. Gentleman rightly points out, it is far more possible nowadays to do this work in an efficient fashion and to deliver greater efficiencies. I believe that he has in the past turned down potential allocations of either Short money or the policy development grant to which he was theoretically entitled, and I compliment him on that principled stand.

[John Glen (Salisbury) (Con)]

Speaking as one who managed Short money and the policy development grant for the Conservative party when we were in opposition, I think that they are critical elements of what we need in order to function effectively in a democracy. I recognise that the grants have increased significantly, but I would gently say to those on the Front Bench that when making proposals about the future of these sums and how they are to be spent, due consideration should be given to the risks of their being spent more broadly in political parties, and also the opportunities that exist to fund a great deal of the work involved from sources outside political parties in the modern age of politics.

[John Penrose]

My hon. Friend is absolutely right, and, as he says, he speaks from personal experience. I think that the crucial point we all need to remember—the guiding star—is that at some point whoever is in government will be in opposition, although I hope it will not be for a great deal of time in our case. We must therefore come up with rules that we are all happy to live with, whichever side of the aisle we are on.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

The Government are setting to one side all the conventions for dealing with issues of this kind. There is no precedent for them to proceed in this way. In fact, what they are doing does not amount to anything more than Bullingdon Club bullying of Parliament. They are treating Parliament as if it were a Department of Government, and an unfavoured Department of Government at that. Will the Leader of the House—sorry, I mean the Minister, although it ought to be the Leader of the House—tell us what he has done to defend the interests of Parliament, rather than the narrow political interests of the Conservative Government?

[John Penrose]

I would gently and respectfully demur from the right hon. Gentleman’s starting point. We have been undertaking some informal discussions between parties, which we are planning to make much more formal in the future, and I think that means that there will be plenty of opportunities for cross-party views to be gathered. There is absolutely no intention to subvert the will of Parliament. In fact, as you know, Mr Speaker, whatever proposals are made will have to be subject to debate and passage through the House when they eventually materialise.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Will my hon. Friend tell me how much money we are talking about, in cash terms? If he does not know, will he write to me about it, please?

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[John Penrose]

I shall.

[Mr Nigel Dodds (Belfast North) (DUP)]

Can the Minister reassure me that all parties in the House will be fully involved in every stage of all the consultations? Will he also bear it in mind that a flat cut in both Short money and policy development grant will have a disproportionate effect on smaller parties, particularly regional parties? They are important elements in allowing us to function properly.

[John Penrose]

I can give the right hon. Gentleman exactly that reassurance. We will ensure that all political parties are involved in our consultation.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

If this is about responding to the deficit and the cuts are therefore justified, will the Minister explain how it is justified that the number of Spads has risen from 79 to 95, at an extra cost of more than £2 million?

[John Penrose]

As I said earlier, the cost of Spads has started to fall in the current Parliament. It is also important to remember that the total amount of Short money and policy development grant comes to dramatically more than the cost of Spads or anything of that sort.

[Tom Brake (Carshalton and Wallington) (LD)]

The Government, and the Conservatives, have form when it comes to rigging the electoral playing field. The Conservatives may have broken the law by spending more than the legal limit at by-elections. They are ramming through one-sided changes in the funding of political parties, while leaving in place their ability to raise huge sums from hedge fund managers. Now they intend to slash the Short money which ensures that Opposition parties can hold Governments to account. Can the Minister guarantee that the cuts will not be the final chapter in our transition from a multi-party state to a one-party state in which Robert Mugabe would be at home?

[John Penrose]

I do not know where to start in trying to rebut some of the absurd assumptions in that question, but I think that the short answer to all of them is “No.”

[Liz McInnes (Heywood and Middleton) (Lab)]

These proposals come on the back of the Government’s attack on Labour’s funding via the Trade Union Bill. It is clearly part of a partisan move to hit the Opposition and give the Government an unfair advantage, while leaving their own funding base of big donors untouched. Can the Minister confirm that the Government are now in favour of rigging the rules to suit themselves?

[John Penrose]

The hon. Lady will be unsurprised to hear that I disagree strongly with almost every word of her question. I am happy to confirm that I and my hon. Friend the Minister for Skills in the Department for Business, Innovation and Skills will give evidence on the Trade Union Bill to the House of Lords Trade Union Political Funds and Political Party Funding Committee later today, when we will perhaps have an opportunity to debate the proposals in even greater depth.

[Mr David Winnick (Walsall North) (Lab)]

The name is after the Leader of the House at the time, Edward Short, who provided money for the Opposition parties, particularly the Tories. Is the Minister aware that the measure he has announced will be seen, despite all his denials, as sheer spite against the Opposition parties, particularly the main Opposition party? The Government should be thoroughly ashamed of taking such a measure together with others to introduce, as was rightly said, a one-party state.

[John Penrose]

I am terribly sorry to disagree with such a senior and experienced Member, but I must remind the hon. Gentleman and others that the public at large have had several years of belt-tightening. They have had to deal with the effects of the deficit and have all had to contribute to try to close the yawning financial gap that we were bequeathed by the previous Government. They will just not understand—they will judge politicians and the political classes, as they see them, extremely harshly—if we are not willing to do our bit and make this work.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

There is a great sense of fairness in the British public at large and a much better sense of fairness among some Government Back Benchers. When the Minister is talking to the public about belt-tightening, it does not wash very well when they see the gala fundraisers the Conservative party is currently holding. If the proposal comes to this House of Commons for a vote, I warn him that reasonable people who value democracy and a healthy Opposition will not give him a majority.

[John Penrose]

The measures will in due course come to the House for a vote, and rightly so. They will be subject to proper democratic scrutiny in due course, so the hon. Gentleman will have his opportunity to try to persuade others of his point of view, but I again draw a crucial distinction between the provision of public money, funded by taxpayers, who do not have a choice about whether the money goes to political parties, and voluntary political donations made by whoever it may be—individuals or trade unions. In the end, people should have a choice. That is the crucial distinction between those two sources.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Short money and the policy development grant are vital for parties such as mine in developing ideas and policies, which are the vital ingredients of any functioning democracy. If the UK Government are serious about cutting the cost of politics, why do they not reduce the membership of the over-bloated other House?

[John Penrose]

We are extremely serious about cutting the cost of politics. As you know, Mr Speaker, we have plans to reduce the size of this Chamber from 650 to 600 MPs, as was agreed in the last Parliament. The number of peers is going up, but the cost of the upper House is falling. I am sure the hon. Gentleman will welcome that news and the news that there are ongoing political discussions on a cross-party basis on how other reforms might be effected in the House of Lords.

[Paul Flynn (Newport West) (Lab)]

If the money for democracy is cut and if the ermine-clad pantomime of the House of Lords is further bloated, contrary to what the Minister just said, is it not likely to bring shameless hypocrisy into disrepute?

[John Penrose]

There were an awful lot of negatives in that question, but I think that I get the hon. Gentleman’s drift. I take his point on the concerns about the overall size of the House of Lords, but it is important for us not to forget that it has managed to reduce its total costs. As I mentioned earlier, there are ongoing cross-party discussions on how to address its overall size. I encourage their lordships to continue those discussions and, with any luck, to produce proposals shortly.

[Jo Stevens (Cardiff Central) (Lab)]

The Minister has repeatedly spoken this morning of tightening belts, but will he confirm that, when in opposition, the Conservative party took every penny of the £4.8 million Short money it was offered each year? There was no tightening of the belts then.

[John Penrose]

I cannot speak for what happened while we were in opposition, but I can confirm that we have on occasion handed back parts of, I think, the policy development grant because we were unable to spend it and we felt that it was appropriate to ensure that the taxpayer was reimbursed.

[Valerie Vaz (Walsall South) (Lab)]

The Minister will be aware that 63% of the British population did not vote for this Government, and those people need to have their voices heard when policies hurt them. This is not about money for hotel rooms during by-elections; this is about democracy. Will the Minister start the consultation after the Public Administration and Constitutional Affairs Committee has reported?

[John Penrose]

We are all anxious to crack on with this as soon as we can, and we would like to start the consultation shortly. Given the level of interest that has been made evident during this urgent question, I am sure that we would be criticised further if we were to delay the consultation. I would like to get on with it soon, if we can, and to allow plenty of time for people to respond over a period of weeks. I am sure that the Select Committee’s Chairman, my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), will understand that timetable and that he will time his Committee’s investigations appropriately.

[Nick Thomas-Symonds (Torfaen) (Lab)]

The Chancellor of the Exchequer has increased the pay of one of his special advisers by as much as 42%. How on earth can it be justified for the Chancellor to lecture the rest of us on tightening our belts when that does not seem to apply to him?

[John Penrose]

As I mentioned before, the total cost of Spads since the general election has started to fall.

[Jim McMahon (Oldham West and Royton) (Lab)]

This cannot be taken in isolation. The fact is that the Government do not like being held to account. That is precisely why we now have the Trade Union Bill, why charities are being gagged by the Charities (Protection and Social Investment) Bill and why the Government are cutting the money to the Opposition. The truth is that they might be able to win a vote, but they cannot win the argument.

[John Penrose]

I keep on coming back to the central point that it is perfectly possible to undertake policy raising and policy development tasks more cheaply than before, as the hon. Member for Clacton (Mr Carswell) mentioned. The rest of the country would not understand why, when everyone else has had to become more efficient, politicians should somehow be a special case. They would accuse us of feathering our own nests, and it would be extremely hard to justify that kind of action to anyone outside this place.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Mr Speaker, you said earlier that the Minister was one of the most courteous in the House—indeed he is—but he has now been in denial for the best part of half an hour. Does he not accept that the combination of a Trade Union Bill attacking Labour party funds, a boundary review that is likely to favour the Conservative party and a reduction in Short money and policy development money gives the impression outside this place that the Government are acting like the bully in the playground? The damage will be inflicted not on a child but on the integrity of Parliament and on the health of our democracy.

[John Penrose]

I am glad that the hon. Gentleman has mentioned the boundary review. It is important that we all sign up to the principle that everybody’s vote, right the way across the country, no matter which constituency they might be in, should weigh the same. It cannot be right to have a system in which, in the past, Members of Parliament from some political parties have been elected in constituencies with many fewer people than others. People might justifiably ask why the Labour party, which benefited from that system for a very long time, is so against the notion of having equal votes for equal weight. I commend the new changes and the equalisation of the size of constituencies to all here.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

The Minister is desperately trying, and failing, to justify the 19% cut to the Short money in the context of a Trade Union Bill that takes funds from the Labour party, of stuffing up the House of Lords and of changes to the electoral register and general election boundaries. Will he now admit that the so-called one nation party is trying to create a one-party nation?

[John Penrose]

I compliment the hon. Lady on a well-rehearsed soundbite, but I have to tell her that I am not feeling terribly desperate at the moment. Indeed, I am feeling quite principled, because we are trying to make the system fairer and to ensure that our democracy works in a fairer fashion in future.

[Diana Johnson (Kingston upon Hull North) (Lab)]

The Minister has said several times we all need to tighten our belts, so can he just answer this question: how come the Chancellor of the Exchequer can increase his Spad’s pay by 42%? Just answer the question, please.

[John Penrose]

I believe that I already have. The cost of Spads has fallen since the general election.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Minister is right when he says that in times of austerity politicians have to take their cut in expenditure. Will he therefore give a commitment that any percentage drop in Short money for the Opposition is more than matched by cuts in expenditure on Government Spads?

[John Penrose]

I can go broader than that. I can promise that the proposed cuts are the same as those being applied to all non-protected Departments right the way across the Government. This is not picking on any particular area at all. This is the standard cut, which every other Department that has not been protected has had to deal with. That is an important point to get across to the rest of the country.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

The number of Government political advisers is up to nearly 100. The number of political advisers on the highest pay grade is up 150%. The Prime Minister’s reportable salaries have increased by 51% and the Chancellor’s reportable political salaries have increased by 277%. When the Minister told us, just minutes ago, that the Government were tightening their belt on their political budget, did he deliberately mislead the House?

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[Mr Speaker]

Very dextrous.

[John Penrose]

Not as far as I am aware.