Democratic Political Activity (Funding and Expenditure) Bill [HL]

Lord Whitty Excerpts

2nd reading (Hansard): House of Lords
Friday 27th October 2017 Lords Chamber

[Lord Whitty (Lab)]

Well, my Lords, I suppose I should thank the noble Lord, Lord True, for his totally non-partisan intervention on this issue and for being the only member of the massed ranks of the Conservative Party to come here to defend the totally unbalanced status quo which exists in political funding, which largely favours the Conservative Party, whatever anomalies there may be elsewhere.

I congratulate the noble Lord, Lord Tyler, if only on his perseverance. He has many times attempted to put this rather important issue before the House, and has again produced a detailed Bill. I suppose I have to declare an interest: I am in a very small way a donor to the Labour Party and in a past life have been both a collector and a receiver of rather large affiliation fees, which are relevant to this area.

The Bill is another attempt to clean up what most of the public regard as an appalling state of affairs in political funding. It is not that I agree with every aspect of this Bill; there are some provisions that I do not agree with, and some that I have reservations about—and I may come on to those. But it is important that we debate these issues. The public are concerned about who pays for our politics, how that is disclosed and what those who pay get in return for their donations. The noble Lord, Lord Tyler, takes as his template for this proposal the report by the Committee on Standards in Public Life under Sir Chris Kelly back in 2011. Again, while I support the overall thrust of that committee, I do not necessarily agree with all its recommendations. However, the reality is that successive Conservative-dominated Governments have not taken on board what was the central thrust of that report—namely, that the public do not trust the structure of political funding within this country. That needs to be addressed.

The scandal of the six years in between Chris Kelly’s report and now is that nothing has actually moved. Instead, the only thing that we got in the last Parliament —the first time we had had a majority Conservative Government for 20 years—was the Trade Union Bill, which actually made the balance more unfair. This is a bit of a nostalgic reunion party, because the noble Lords, Lord Tyler and Lord Wrigglesworth, and I sat on the Select Committee during the passage of that Bill, which restrained a bit the Government’s intentions. That Bill was supposed to be about industrial relations and the proper administration of trade unions but was in fact designed to undermine a very large proportion of the financing of the main opposition party—something which, if it had taken place in Belarus, would I am sure have been before the United Nations by now. We restrained it a bit, in the sense that we slowed it down. The report from that Select Committee, incidentally, was unanimous—particularly the part of it that did not propose to change the text of the Bill but called on the House and the Government to go back to the issue and reconvene the political parties to make a new attempt to address the issues raised in the original Chris Kelly report and those resulting from the attempt to change the balance that the Trade Union Bill represented.

The provisions of the Trade Union Act will still affect the long-term finances of the Labour Party. Nothing has been proposed, or is being proposed, to balance that out by an attack on what are, essentially, the main sources of the government party’s finances, which are donations from very rich individuals. That situation was compounded, as the noble Lord, Lord Tyler, said, during the referendum, when a large proportion of both sides was funded by donations from very rich individuals, with no requirement equivalent to the requirements on trade unions, which have to go through several hoops, with opt-outs or opt-ins, and have to set up a separate political fund, disclose and ring-fence it and reiterate the decision to have that political fund every few years. No other organisation or limited company, private or public, and, clearly, no individual has to go through similar hoops. The present balance—or imbalance—needs to be addressed.

There are some detailed points that I could make about the Bill, but I shall probably leave most of them to Committee. The most contentious one is that it would limit expenditure in elections and change the nature of the taxpayer-funded part of political funding, which could be a very difficult political sell. I am not sure that the Bill in present form addresses that sufficiently, although in other contexts the noble Lord, Lord Tyler, has made a number of suggestions that we should take into account. I am not sure that the changes in how taxpayers’ money is given to political parties that are dealt with in the Bill would actually alter the situation. I am not sure that we should totally rely on an amount per vote, and I am reluctant to say that it should all relate to the previous general election. Indeed, I am slightly surprised that the Liberal Democrats are proposing that. Maybe a longer-term run of popular support for parties should be reflected in any public funding.

There seems little appetite from the Government to take a new run at this, to set up an independent commission, to ask the Committee on Standards in Public Life, or even to bring in the political parties again to see whether they can reach some degree of consensus on the way forward. Admittedly, there is not much enthusiasm from the political parties either, but it is the Government who have in their hands the responsibility for the integrity of and public support for our political system. There is, therefore, an onus on the Government to give us some way forward.

I had a fairly lengthy additional point on this; the noble Lord, Lord Tyler, has, to some extent, pre-empted it, but the Bill does not. The Bill reads in a somewhat old-fashioned form, talking about a world of election addresses, mail deliveries, party-political broadcasts, election meetings and so forth, whereas we know that a lot of political discourse, and a lot of the most effective forms of political campaigning, now exist in the cyber world. Our present rules, frankly, do not address that. It is true that, when the election expenses for the last election come to be published, there will be a small line for the main political parties for advertising on social media—it has been reported this week that the Labour Party did rather better than the Conservative Party at that. It relates to placing adverts on Facebook or Twitter and is, as the Bill recognises, another form of media from traditional advertising, in one sense. But the reality is that political life in this country and elsewhere has been seriously affected by the existence of other forms of messages, not necessarily—in fact, not mainly—from political parties, but from influential, well-heeled individuals with nefarious but unpublished intentions throughout the world.

There are different views on whether the cyber intrusion into the political world is a good or a bad thing. Some regard it as a vast advance in democracy, others as a dystopian nightmare, but we cannot deny that it is there. It is true that, to begin with, progressives or, if you like, those on the left of the political spectrum, hailed it as a major improvement—the first Obama election, the Arab spring and so forth. The right in America regarded it as a negative thing, but then got to work. The book Dark Money, which the noble Lord has already referred to, spells out in great detail how American billionaires have greatly influenced the political weather within America, through the Tea Party, through their contacts and, essentially, not so much through advertisements and messages on social media but the intensive mining of sources of data on individuals and groups, which—without any permission from the originators of the data—were collected for commercial and other purposes. They then used that effectively to target their political message. The American right has been extremely successful. Initially, Donald Trump was not the main beneficiary of this, but he became the main beneficiary of it in the end. None of that appears in the accounts of the main American political parties, nor in the accounts of the legitimate election committees for individual candidates within America.

The noble Lord also mentioned that we had a small example of this very clearly in our referendum. This is a serious problem. If Cambridge Analytica and its related companies were using material that was not in practice declared, and if the DUP—the only political party that was party to that—was using it to campaign in Great Britain, one asks why, and also what the source of that money is. I do not know the answer to that. However, the fact that Northern Ireland has different rules on disclosure and allows, for good and understandable historical reasons, donations from outside the United Kingdom to be given to political parties, raises suspicions that that financing operates outside the normal rules for elections in the United Kingdom. Clause 29 extends the Bill to the whole United Kingdom. While we have to respect the fact that some provisions of Northern Ireland legislation are different, in general disclosure matters must be the same across the whole United Kingdom, particularly given that we are now in a situation where a party based solely in Northern Ireland is in effect part of the Government.

Some new issues have been raised. I commend the noble Lord, Lord Tyler, for bringing back the old issues, but the onus is now on the Minister and the Government. If the Minister is prepared to accept that the Bill should go further, we can discuss this again in Committee. If he wants to stop it, the best way of doing so is to announce today a new inquiry and that the Government will call together the political parties to see how best we can progress it, in which case I suspect that the noble Lord, Lord Tyler, will drop this Bill and rely on that process. If, however, the Minister does not give that commitment today, I hope to discuss some of these issues in Committee.