Political Parties (Funding and Expenditure) Bill [HL]

Lord Bew Excerpts

2nd reading (Hansard): House of Lords
Friday 10th March 2017 Lords Chamber

[Lord Bew (CB)]

My Lords, I thank the noble Lord, Lord Tyler, for introducing the Bill. I declare immediately that I am the chair of the Committee on Standards in Public Life. The report of that committee in 2011 has a certain family resemblance to the themes of this Bill in regard to public funding and the £10,000 donation cap in particular.

As I have done before in this House, I concede that from the beginning the 2011 report of the committee did not claim the support of either its Conservative Party or its Labour Party membership. This does not mean that we can shelve the report. In some respects—its emphasis on the difficulties surrounding the big donor culture in British politics and the moral difficulties—the issues are still alive. I am not here to fetishise any detail of the report but to defend one of its key ideas, the need for cross-party consensus, and to move the issue forward. It cannot be left where it now is.

I want to make it clear that, in a number of important respects, the whole landscape has changed in the last five or six years in regard to these issues, and any reform will have to take into account that change. I am grateful to the noble Lord, Lord True, for indicating that there were certain elements of reform that he, as a Conservative Peer, would support. That could easily be the beginning of a discussion between the parties to find a consensus.

However, there are enormous difficulties around this issue. I support the point made by the noble Lord, Lord Tyler: at the beginning of her tenure, as she took office, the Prime Minister talked about public trust. I am not now talking about the polling in regard to the Conservative Party’s fortunes—everyone knows that the Conservative side is quite solid and we have had an historic by-election—but there was a sympathetic upwards spike in public trust issues in the immediate period after the Prime Minister took office. She talked about trust in politics and about these issues and implied that there would be change. However, I am absolutely certain—I know I am speaking to a Government who are rising on the crest of a wave with high opinion polls—that the massive distraction of Brexit will take up a great deal of government energy. However, this issue cannot be left where it is when the expectation has been raised that there will be some movement in this area, and then absolutely nothing happens. There was, as I say, this positive reaction and, if absolutely nothing happens, it would be very unpleasant for all of us to see it turn sour in public opinion.

The matter is very difficult. To put it simply, 80% of the public believe that people give money to political parties only because they want to become Peers, and 80% believe that they will not contribute to the upkeep of political parties. So there you have a problem. Even more dramatically, the Committee on Standards in Public Life posted in November last year—this was the work of Dee Goddard of the University of Kent, which I will draw on later—that 90% of members of the public believe, very disturbingly, that MPs behave in a way determined to some degree by party donors, possibly against their conscience. I do not believe this. I believe that the level of real trustworthiness of our Members of Parliament is far higher than is indicated in some of these jaundiced surveys of trust. Nevertheless, the fact that that level of suspicion exists cannot be totally disregarded. However, there is no magic way forward. Our similar polling shows that 42% of the public are not sure that they believe in a donation cap—that is quite a large chunk—and they are certainly not sure what the level of that cap on donations to political parties should be.

I am not denying for one minute that it will be difficult to resolve these issues and I am not convinced that an all-singing, all-dancing reform will be possible. However, I am convinced—we have already seen some of this in the Bill of the noble Lord, Lord Tyler, and in the speech of the noble Lord, Lord True—that there are elements where the parties could come together and at least be seen to respond to public concern on these matters. It is not good enough for the Conservative Party or all the other main parties to have commitments in their 2010 to 2015 election manifestos which are widely disregarded.

I should say in the name of fairness that, while there is a pile of dusty and non-committal letters in the Committee on Standards office from when we asked the leaders of all the parties what they were going to do on this matter and how they were going to live up to the language in their manifestos, there is also a dusty and non-committal letter from the Deputy Prime Minister in the previous Government, which also did not move the situation forward in any dramatic way. All three major parties have not distinguished themselves in their enthusiasm for reform in this area.

There are a number of difficulties in the Bill, one of which the noble Lord, Lord Tyler, has already acknowledged and addressed in his speech, and that is the fact that it does not deal with matters in and around referendums. I add a simple coda to that. I think he is right about private companies’ declaration of ultimate ownership when they donate to political parties. This is now a key issue that is likely to surface when the Electoral Commission carries out its projected analysis of the funding of the referendum campaign. There is a gap.

The second point I wish to address is third-party funding, which the Bill steps away from. To be honest, our own committee report in 2011 was criticised by the brilliant Oxford political scientist Michael Pinto-Duschinsky for its neglect of the third-party funding issue. We simply said that it was an issue and we wanted the Electoral Commission to deal with it. We did not devote any real space or analysis to it in our report and I can understand why there was criticism of that neglect and deficiency.

However, since then, we have had the important independent report of the noble Lord, Lord Hodgson of Astley Abbotts, on third-party funding. It was published in 2016 and hits on the way in which the terrain of party-political campaigning is changing so rapidly in this country. This is important and reinforces my earlier point. Reforms such as ours were, essentially, designed to deal with certain realities—payments for leafleting, how the parties operated locally, how activists behaved locally—which, in some ways, had not changed since the 1850s. In the past five years a new world has been created. The report of the noble Lord, Lord Hodgson, had the great merit of modernising our thinking on this key subject, in particular on the ambiguous way in which social media transforms traditional forms of campaigning. The parties show increasing skill in the exploitation of social media platforms for targeted advertising using big data. The ability to data mine remains difficult and expensive, and heightens the significance of the use of private money in our politics. There is a strong sense that in the last election—perfectly legitimately—the Conservative Party was well ahead of the game in this respect. Certainly, its expenditure was well ahead of the game as against that of the Labour Party. That is politics: you are either awake or you are not. I make no protest on that point; none the less it is something that will now have to be thought about.

The noble Lord, Lord Hodgson, for example, makes the point very strongly in his report that many of these processes involved are likely to take place before the regulated campaign begins. These are things we must at least take account of. We are not carrying out our political campaigns in the way we used to and any reform should try to address this. As so often with the internet, some of the ways in which these new procedures might be deployed are liberating, and in other respects they are ambiguous and potentially disturbing.

I stress my strong support for a key theme of the Bill, which is the need for reform of the situation in Northern Ireland. Obviously I have a personal interest as I am from Northern Ireland but my committee had this interest long before and has been addressing this subject since 2009. It is no longer acceptable to have secrecy over party donations in Northern Ireland. There may yet be a need for some transitional phase, but the fact that we have had this secrecy is part of the crisis that now grips Northern Irish politics. It is a small but not insignificant part, because the point is that the public believe that those who benefited from the renewable heating scandal and the alleged waste of hundreds of millions of pounds of public money are, in many cases, party donors. This may not be true. My neighbours all believe it to be true. It may be entirely unfair, but there is no doubt in my mind that it was a complicating and poisonous factor in the recent election.

We often wonder about transparency. It is perfectly true to say, as I look back through the minutes of the Committee on Standards in Public Life from before my time, going back 20 years, that there is an illusion among my very distinguished predecessors about transparency. They believed for sure that if only we achieved more transparency in this or that area of British public life, there would be an increase in public trust. In many respects this has not happened. It is an illusion, but it is also the case, as is very clear from the recent scandal in Northern Ireland, that the absence of transparency makes things worse: transparency is not the cure-all it was once believed to be, but its absence is poisonous.

In fairness, the noble Lord, Lord Tyler, mentioned only the issue of the Democratic Unionist Party. Let me explain the business of transferred funding. The option was open to the Conservative Party to exploit this idea that money would go to Northern Ireland. There is no suggestion that the Conservative Party, which organises in Northern Ireland, has ever used that route, which technically it could have done—hidden donations and shipped them into UK politics. Indeed, it is an option open to the Labour Party, which, while it does not stand candidates in Northern Ireland, has members who are allowed to vote for the Labour leadership, for example. There has never been a suggestion—I am confident it has not happened—that either of the main parties, which could have exploited the route now complained about in the press, has done so.

By the way, this is another indication of the point I was trying to make earlier that levels of trustworthiness in mainstream British politics are often higher than the public believe them to be. Technically, how can it be said to be illegal? Once you have donations to a political party in Northern Ireland, it may make you very uncomfortable, but where is the illegality involved? We have already conceded secrecy of donations in Northern Ireland, so where is the illegality involved in what I see currently being written about critically in the press? I do not quite see the illegality.

Just to complete the point that it is not just the DUP that is a problem here, current Northern Irish electoral law favours Sinn Fein also, in that it breaks another of our main principles, which is that political parties do not accept foreign donations. Because we are linked to the capacious definition that the Irish Government have of what it is to be an Irish citizen, and because Irish citizens are allowed to donate, it is perfectly possible that a chap in a Chicago business who has never been in Ireland in his life could be donating to one of the political parties. So the opposition we have to foreign donations is another fundamental principle that is flouted in the current legislation.

Suppose Sinn Fein had taken its seats in the last Government and, if the polls had been right, tipped the election towards a Labour Government. We could have had a Prime Minister elected in this country on the basis of a totally different franchise, in terms of the expenditure limits and expenditure contexts they were working under. Noble Lords will say that Sinn Fein do not take their seats, but one of the last public statements of Martin McGuinness was to suggest that perhaps Brexit was such a bad thing that it might be necessary for his party to revise its policy and oppose it in this Parliament.

I know that the Government have a consultative paper out and there is a hint that they are looking for change in this area. I would be greatly comforted if the Minister were able to say in his conclusion what the state of the Government’s thinking is on party funding in Northern Ireland.