Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Lord Campbell-Savours Excerpts

Wednesday 18th December 2013 Lords Chamber

Moved by

[Lord Campbell-Savours (Lab)]

176: After Clause 35, insert the following new Clause—
“Part 2ATax relief on donationsTax relief on donations
(1) In the Political Parties, Elections and Referendums Act 2000, after section 70 insert—
“70A Tax relief on donations
Tax relief shall be given, subject to Schedule (Tax relief on donations), to individuals who make donations to a registered political party.”(2) Schedule (Tax relief on donations) has effect.”

[Lord Campbell-Savours (Lab)]

My Lords, I shall speak also to Amendment 177. Amendment 176 is an attempt to reduce some of the controversy over the funding of political parties. It would incentivise a system of donations by individuals by allowing taxpayers to reclaim the basic rate of tax on their donations to political parties. It would limit the relief to the standard rate. It would operate in the same way as gift aid to charities or covenanting to your local church.

The objective is to help to build a more participatory democracy where a far larger section of the population can sign up to more active forms of political engagement. It would widen the donor base, as Obama managed during the course of his campaign for the presidency in the United States of America. It would be far healthier for democracy than a system where a few large donors and organisations stand accused of exercising undue influence over the democratic process. We all know that while that may be the case on occasion, more often than not it is not the case, but the public simply do not believe us. I argue that an arrangement that widens that donor base and reduces the reliance on large donors is to be welcomed.

I have support for my amendment right across the parties and there is wide support in both the Commons and in this House. I know that there are many who would have been here today if the debate was not taking place at this time of day shortly before the Christmas Recess.

Why has it not happened before? Why has my simple proposal not been considered and implemented in law? To examine the reason for that we have to go in the history of what has been a very difficult debate. Over the past century there were repeated scandals involving political donations. By 2000 the debate had become sufficiently heated to provoke the Government into introducing legislation in the form of the Political Parties, Elections and Referendums Act, which has been referred to repeatedly during proceedings on this Bill. However, that Act dealt with only part of the problem. Deficiencies in the legislation surfaced around the 2005 general election when a series of arguments broke out over the use of loans—or what were described as loans—as a means of funding political campaigns. As a result, the parties were driven into all-party discussions on reforms which, predictably, broke down. That breakdown and the inevitable stalemate that followed led to the 2007 review undertaken by Sir Hayden Phillips. It was hoped that this review would lead us out of the impasse but its report indicated only the nature of the problem and did not provide a solution. However, the review paved the way for further talks between the three main political parties, under Sir Hayden Phillips himself. Again, the inevitable happened as the talks broke down in October 2007. In May 2010, after aborted discussions and a general election, a reference to the problem surfaced in the coalition agreement:

“We will also pursue a detailed agreement on limiting donations and reforming party funding”.

The coalition agreement was followed in July 2010 by the Committee on Standards in Public Life, which re-energised the debate with its 2011 report. The report was accompanied by caveats in the appendices from both Labour and Conservative party representatives. We were back on the old merry-go-round with caps on contributions, trade union donations and the usual differences and suspicions—what appeared to be irresolvable problems. Two months later the Political and Constitutional Reform Committee called for heads to be banged together and a solution found to this intractable problem, which is so damaging the political class. The committee, despairingly, called for a resolution of the problem to help avoid further party funding scandals. Not that that plea had much of an effect. Within two months we had a further scandal, with the Cruddas affair: an allegation that led to a libel action against the Sunday Times, which Peter Cruddas, incidentally, won. Once again, Parliament had been submerged in sleaze allegations and more damage was done to its credibility.

Following the Cruddas affair, in the same month, Francis Maude, a Minister in the other place, announced a new series of talks. In his statement establishing the talks he said:

“We could also look at how to boost small donations and broaden the support base”,

for the parties. I could not agree more. That is the basis for this amendment. I understand that there were seven meetings in 2012 and 2013. Once again the predictable and the inevitable happened. The talks collapsed. They have been described to me as, “collapsed talks” that “fizzled out”. On 4 July this year, the Deputy Prime Minister, Mr Clegg, announced that there was no agreement between the parties and it was, in his words,

“clear that reforms cannot go forward in this Parliament”.

Where does that leave us? It leaves us with a totally discredited donor regime in place. Personally, I am fed up to the back teeth with all this ducking and weaving. All we are doing is bringing the entire political establishment, particularly Parliament, into disrepute, while increasing the disconnect between Parliament and the people. The rot has got to stop.

My amendment is the embryo of a scheme. It provides a framework on which a tax-relieved donor regime can be built. Discussions about what constitutes a political party or levels of tax-relieved donations, although defined in my proposal, can be the subject of negotiation and more precisely defined at a later stage. Today, I am simply moving a probing amendment, and I look forward to the considered response of Ministers.

--- Later in debate ---

[Lord Finkelstein (Con)]

My Lords, I apologise for not having spoken at Second Reading, when I was not present, and I declare my interests in charities that are in the register of interests.

It is natural for us, as people who are involved in politics, to think that it would be a good idea to subsidise politics in a way that other activities are not subsidised, and for us to be keenly aware of the difficulties we all have as members of political parties in raising money for our political causes. However, our problems in doing that are the same as those that other people have. We should therefore think very deeply about appropriating for ourselves a privilege that is not given to other people. Although this is a modest proposal, and does not go as far as other proposals for state financing of political parties, it would be naive of us to think that if we asked the electorate to treat political parties as if they were charities, they would not in return begin to expect political parties to behave as if they were charities and ask us to do all sorts of things that justify our claim that subsidising our activities is something of public worth. Therefore, although I respect the intention behind this amendment, and I understand why we all feel that our work is incredibly important and therefore should be exempt from the normal taxation that other people’s important work is subject to, we should be careful before appropriating to ourselves that privilege.

[Lord Campbell-Savours]

Does the noble Lord know by how much the state already funds political parties now? Does he know what the figure is?

[Lord Finkelstein]

I know it is already many millions of pounds, and I am very nervous and worried about that. That money leads to the state beginning to suggest to political parties how they should spend that money, in a very restricted way. In the end, to avoid the problems that the noble Lord talked about in his speech, we would have to impose all sorts of restrictions on political parties’ funding. Otherwise, political parties would be able to raise that money on top of the other money that has been given to them.

--- Later in debate ---

[Lord Finkelstein]

If it were a charitable activity, the party would be a charity. It is not a charitable activity; it is a political activity. There is a distinction between a charitable activity and a political activity. I am sure that the noble Lord is motivated in his politics by a charitable instinct, but that is very different from a political party being a charity. There are rules that govern what is a charity—rules that we have determined should exist. If we wished political parties to be charities, my point is precisely that the electorate would begin to expect us to impose on political parties the same sort of restrictions that we place on charities.

[Lord Campbell-Savours]

In the light of these interventions, might the noble Lord not wish to revise his article on these matters in the Times this morning?

[Lord Finkelstein]

It is hardly to my surprise that I discover that in a group of people who are involved in politics, everybody thinks that political activity is very special and ought to be granted privileges not granted to other activities. It should not come as a surprise to any of us that we are all very keen on it and understand its importance. My question is whether we think that because we have an interest in politics and believe it to be a noble and important activity, we have a right to expect the electorate to grant us that privilege—an exemption from our other duties as taxpayers. I would argue that we do not.

--- Later in debate ---

The history of more recent discussions has been narrated. The amendments would allow individuals to make donations to a registered political party, and the individual would be able to obtain tax relief on the donation. There is a proposed new schedule that indicates the various conditions that would have to be fulfilled. I am not sure whether there is a printing error. Amendment 177 states that the tax relief must not exceed £16 in the year 2014-15, £16 in 2015-16 and £96 in 2016-17. The noble Lord says that it is meant to increase to £96. I wondered whether that figure was intended to continue at £16.

[Lord Campbell-Savours]

To illustrate the point, I was making a distinction between a monthly contribution and an annual contribution.

[Lord Wallace of Tankerness]

I am grateful to the noble Lord for explaining that.

It will not come as any surprise that the Government do not feel able to support the amendment. There have been discussions among the three main parties, which have been guided by the principle of consensus. There has been not total consensus but substantial consensus in your Lordships’ House this evening—a consensus that was not found in the discussions that have taken place. The noble Lord, Lord Campbell-Savours, said that there had been seven such discussions. In a Written Ministerial Statement on 4 July, my right honourable friend the Deputy Prime Minister indicated that the talks had not produced results and that it was,

“clear that reforms cannot go forward in this Parliament”.—[Official Report, Commons; 4/7/13; col. 62WS.]

From what has been said, it has been a source of considerable disappointment that agreement could not be reached. I do not necessarily think that the Bill is the best place in which to start to do these things without that wider consensus as to what other things might be needed. However, it is important that we have had this debate, which has shown that there can be consensus across the parties.

I therefore say to my noble friend Lord Cormack that, while I am sympathetic, I regret that I cannot be encouraging. I therefore ask the noble Lord, Lord Campbell-Savours, to withdraw his amendment.

--- Later in debate ---

[Lord Campbell-Savours]

My Lords, I do not know whether to describe that as a disappointing reply. I hope that behind the scenes wise heads get together and further consider these matters.

All that I have tried to do in the amendment is break a logjam. These talks go on and on, collapse, start again and collapse. That is the history of this debate and we are getting nowhere. Meanwhile, our Parliament is submerged in a reputation of sleaze nationally, and some of us really resent it. Whether it is due to Hanningfield, Mackenzie and all these people, it is all part of the same reputation that is developing and surrounding Westminster. We cannot go on forever talking and nothing happening.

I say to the political parties that this is the beginning and is a way through. It would mean that we would have to re-engage in discussions about how to go forward. I am grateful to the noble Lords, Lord Deben, Lord Tyler, Lord Marland, Lord Hodgson of Astley Abbotts, Lord Finkelstein, and Lord Cormack, and my noble friend for their comments. The fact is that more people spoke on this amendment than on most amendments to this Bill, because people really are conscious of this matter and they know that there is a problem of credibility outside in the country.

I beg leave to withdraw my amendment, but I hope that at some stage in the future heads are banged together to sort this problem out.

Amendment 176 withdrawn.