Political Parties (Funding and Expenditure) Bill [HL]

Lord Whitty Excerpts

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

[Lord Whitty (Lab)]

My Lords, as others have said, the noble Lord, Lord Tyler, is to be commended for bringing this Bill and this issue before the House, and for his persistence and resilience in this matter—against quite severe odds. This House is a good place for it to be discussed initially. Without an overall majority of any particular party, we can discuss the issues. But at the end of the day, while there are aspects of the Bill that I commend and others that I somewhat disagree with, the main point of the debate is to see how the Minister responds. There is a grave responsibility on the party of government to take the initiative in this respect. I am therefore greatly looking forward to the response of the noble Lord, Lord Young.

Like the noble Lords, Lord Tyler and Lord Wrigglesworth, I served on the Select Committee that was set up in the course of the Trade Union Bill. Since others have not eschewed partisan comments, I will say that that was set up in response to a rather blatant move by the Conservative Government to attempt to bankrupt the largest party of opposition—a move that would be condemned if we were talking about a banana republic purporting to be a proper democracy. That partisan move was part of a pattern but it was probably the most blatant. Over the years, Governments of different parties—Labour and Conservative, at least—have made minor moves to try to restrict the amount of money available to their main Opposition. The Trade Union Bill—Trade Union Act, as it is now—was a major such move, but in all contexts Governments have attempted to restrict the resources available to their opponents.

The point of the Select Committee report endorsed by this House, as the noble Lord, Lord Tyler, said, was that we ought to make another effort to try to reach a consensus on a fairer, more proportionate way forward, which does not impose huge burdens on the taxpayer or on the law but which all parties and all commentators could see as fair and comprehensive.

The Conservative Party manifesto, to which the noble Lord, Lord Tyler, has already referred, not only included a rather vaguely worded commitment to do something about trade union political funds but committed a future Conservative Government to do exactly what we are asking for—to set up a new initiative to look at party funding as a whole. The noble Lord, Lord Sherbourne, is not here, but it is fair to say that all members of the Select Committee were appalled at the complete indifference of Ministers who came to the committee to their own responsibilities, which they effectively put back to the individual parties. That applied to the Conservative members as much as to the Labour, Liberal Democrat and independent members of that committee. The reply to which the noble Lord, Lord Tyler, has referred, which we eventually got, does not really take us any further.

I suppose I should have declared a past interest at the beginning. For many years I administered a political fund for my union, the GMB, and subsequently I was the grateful recipient of trade union political funds as general secretary of the party. It is well known and fairly straightforward that my party has been pretty dependent on those funds. But I have always recognised that the way in which those funds are raised and passed to the party is controversial. That has reflected the public concern referred to in the report of the Committee on Standards in Public Life and earlier today. The issue is about opting out or opting in to the political funds, and to donations to political parties. For many years, I have strongly defended the opting-out provisions but I recognise the pressure there. Since that Chris Kelly report, it seems that the Labour Party has moved somewhat in the direction that it suggested.

Being an old cynic and old negotiator, I was not too keen on the move that followed my noble friend Lord Collins of Highbury’s report—not because of the rights or wrongs of the principles, but because I thought that the Labour Party was giving away one of the cards that it ought to be playing when multi-party negotiations started, which at that time I hoped would be fairly soon. I am not entirely in favour of what we have done but the fact is that we have made a move and there has been no reciprocal move from the other parties, particularly not from the Conservative Party, which has the responsibility in government. The situation now is that following the reforms under Ed Miliband and on the basis of my noble friend Lord Collins’s report, the trade unions face a double opt-in: you have to opt in to the political fund and then opt in to pay an affiliation fee to the Labour Party.

No other source of funds and no other political party faces those same barriers. I have had occasion to refer to this before but in the five years up to our report under the Trade Union Bill proceedings, £64 million was donated by trade unions to political parties, almost all of that to the Labour Party. However, more than another £80 million was donated by other organisations, the vast majority of which went to the Conservative Party. Whereas trade unions have to have a separate political fund and had to provide for their members to opt out of it, and now to opt into it, as well as having to have a periodic renewal of that political fund, the other organisations have no such restrictions. We are therefore faced with a very lop-sided system for legal organisations’ contribution to our political process.

The provisions of the Bill refer to membership organisations, by which I hope it means not only trade unions but corporate entities, partnerships and others that have made donations to political parties in the past and continue to do so. It will also involve the co-operative organisations and friendly societies. There will be particular problems for the Co-op Party which need to be taken on board during the process here. If all organisations faced the same hurdles and the same need to ensure that their members took a positive decision to pay money to a political party, the public’s anxiety and suspicion of where that money goes and what strings are attached to it would be significantly relieved.

I have a number of issues in relation to the Bill, which I would return to in detail were it to proceed further after today. I agree with the noble Lord, Lord Bew, and others who have referred to the need to update the provisions of our political fund regulations, in particular into areas of third parties or front organisations and in relation to the importance of social media as a means of communicating messages, which can frequently be targeted clearly at particular constituencies and groups of people. We need to catch up with that.

It is clear that if the main purpose of the Bill, which is to limit the level of donations, is to succeed it has to be accompanied by some other provisions: limits on spending at local and, particularly, at national level; limits on the way in which organisations can channel their money; and, most controversially of all, a degree of state funding in order that political parties can flourish. I know that that is not a particular priority, given the difficult fiscal situation. Nevertheless, if the case were made that state funding was part of the solution—and were the solutions which the noble Lord, Lord Tyler, has put forward in a different context for redistributing, in a more meaningful way, what state funding currently exists, so that the net result would be relatively small—it would be accepted.

Whatever our individual views—a number of views have been expressed around the House as to what the Bill ought to cover—what is really key today is whether the Government, in the person of the noble Lord, Lord Young of Cookham, can commit themselves to taking an initiative to get a review. We need a new start to look, on as consensual a basis as possible, at the need to produce a comprehensive package that will put political funding on a fairer basis. We should not kid ourselves. When Sir Chris Kelly produced his report, he referred to the deep concern among the public. Even in recent days, we have seen concern about the interference of vested interests in our politics through monetary proceedings, not all of which are as transparent as they should be. As the noble Lord, Lord Bew, said, transparency is key but it is not enough. I hope that the debate today will provoke the Minister to make a more positive response than his predecessors have on this issue, and to trigger a whole new start in looking at it, so that we can begin to put public trust back into the funding of political parties.