Political Parties (Funding and Expenditure) Bill [HL]

Lord Rennard Excerpts

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

[Lord Rennard (LD)]

My Lords, I too congratulate my noble friend Lord Tyler and all those involved in bringing forward this Bill.

It is 17 years this month since I led for my party on the House’s deliberations on the Political Parties, Elections and Referendums Act 2000, generally known now as PPERA. There were hopes in those debates that its provisions for transparency concerning donations to parties, and a maximum cap on the parties’ national spending, would help to clean up the reputation of party funding. It was believed in those debates that it could help to restore the principles of a level playing field in politics, as first set out in the Corrupt and Illegal Practices Prevention Act 1883, which standardised the amount that could be spent on constituency election expenses. Gladstone’s Government introduced that Bill to try to prevent thousands of pounds counting for more than thousands of votes in individual constituencies. That principle has now been almost completely eroded.

The aims of the legislation passed in 2000 have clearly not been met. Politics is not seen to be cleaner and the effect of more recent legislation has been to completely undermine the principle of the 1883 legislation, which for over a hundred years did much to prevent parties purchasing constituencies as a result of superior spending power. The PPERA legislation suffered from the absence of pre-legislative scrutiny. It was then subject to very little scrutiny in the House of Commons and when we considered it in this place, it was subject to more than 500 government amendments, while other amendments which would have helped to avoid many of the problems were not accepted. We missed the chance then to impose a cap on donations. The effect of introducing national spending limits, permitting supposedly national spending to be targeted at individual constituencies, drove the proverbial coach and horses through the principle of a level playing field in constituency elections.

Some of the resulting problems, as identified recently by the excellent investigative journalist Michael Crick, may shortly be tested in the courts, but the only defence that I can see to many allegations that have been made is that the legislation is ambiguous. That is why we need greater clarity in legislation and a commitment to re-establishing a more level playing field in British politics, as provided for in the Bill. It is now clear that the very high limits on ostensibly national campaigns, which I argued 17 years ago should have been lower, are being abused by spending superior resources in individual targeted constituencies. The idea that any letter sent to a voter by a political party is not in some way designed to promote that party’s electoral success in the constituency where the voter lives defies basic common sense.

The failings of the PPERA legislation were largely addressed by the excellent report of the Committee on Standards in Public Life in 2011. The committee’s report provided the only possible route through which the coalition Government could have fulfilled the agreement on which they were based to take the big money out of politics, but vetoing an increase, however modest, in existing state funding for parties prevented the possibility of agreement on a cap on donations, as was proposed, or reform, at that time, of trade union funding.

In evidence to the Committee on Standards in Public Life in 1994, I drew up my party’s then policy on party finance. It was, first, to cap individual donations initially at £50,000 per year from any individual or organisation. As my noble friend Lord Wrigglesworth has just said, that could have avoided the embarrassment to all parties that has happened subsequently. Secondly, it was to prevent trade unions effectively spending their members’ money without them properly choosing to contribute to a party. Thirdly, it was to enable parties to campaign with a limited increase in the state funding which presently provides for things such as the distribution of election communications in parliamentary elections and research and communications support for parties in Parliament. In our debates in 2000, I also argued for more realistic expenditure levels at constituency level and lower limits on national expenditure by the parties.

The Bill takes those principles forward and sets out carefully considered and balanced proposals which also update the excellent work of the Committee on Standards in Public Life early in the previous Parliament. The reasons why we need to address these issues in legislation became more apparent not just in the 2015 general election but in last year’s referendum campaign. My noble friend Lord Tyler referred to the effective laundering of political donations during the recent EU referendum by way of Northern Ireland’s Democratic Unionist Party spending in parts of Great Britain where it does not campaign. Parliament made special provision for Northern Ireland in 2000, for reasons referred to by the noble Lord, Lord Bew, but we did not foresee this abuse of spending rules in a referendum, and I hope it will soon be time to bring Northern Ireland into line with the rules that apply in Great Britain and the Republic of Ireland.

Finally, I turn to the Government’s response to the Select Committee on Trade Union Political Funds and Political Party Funding. As my noble friend Lord Tyler said, it was right for the committee to remind the Conservative Party of its manifesto commitment to seek agreement on a comprehensive package of party funding reform and to call for the renewal of cross-party talks. The Government’s response, which he quoted, tries to kill off progress in those talks before they have even begun by pretending that an increase in funding to political parties is impossible to achieve without increasing the overall burden on the taxpayer.

I would never suggest that very limited spending on democratic engagement by political parties could be at the expense of funding on things such as schools and hospitals or through any kind of tax increase. I suggest that, instead, we cut the cost of government politicking through government advertising. The Minister recently disclosed in Answer to a Written Question from me that the Government are spending well over £100 million per year on advertising. That includes, for example, almost £700,000 on promoting their policy of a tax break for married couples. Many such campaigns seems to be based more on the promotion of Conservative Party policy than on public interest.

The Government’s response to the Select Committee says that the cost of the Committee on Standards in Public Life’s proposals would be almost £20 million a year at 2010 prices, but much of this could be found by re-allocating existing party spending provided by the Government. The Bill makes provision to reduce spend in other areas, for example, by ending policy development grants and by amalgamating the cost of delivering freepost election address mailings. These communications in the present system are sent by individual candidates at a cost to taxpayers in the 2010 general election of some £28 million. These communications could be more cheaply combined into a single booklet, as I first proposed for mayoral elections back in 2000, something which has been adopted successfully in mayoral elections ever since.

The combination of these savings and a reduction in the government advertising budget could cover the modest investment in cleaner politics that was proposed by the Committee on Standards in Public Life in 2011. Politics will be much better when each citizen contributes very modestly to the costs of democracy. This would be in return for a ban on the selling of influence and access, which takes place at the moment as the parties need to fundraise for the cost of their election campaigns.

Of course, in response to these proposals there will be some anger, distortion and misinformation in elements of the press, which would prefer to protect its own power to present issues to the public in its own way, as opposed to letting parties and candidates communicate directly and without all their views being filtered by the media. It is time to make progress on these issues and the Bill before us shows how this can be done.