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.

Party Funding Reform

Lord Whitty Excerpts

Thursday 3rd November 2016 Lords Chamber

[Lord Whitty (Lab)]

My Lords, like the noble Lord, Lord Leigh, my voice might give out, so I will try to keep it brief. I do not have the same excuse as him, either.

Like others on the speakers list, I served on the Select Committee on the then Trade Union Bill a few months ago, under the chairmanship of the noble Lord, Lord Burns. That was in the context of a Bill to restrict activities for trade unions. It focused on the political funding for one party and from one source. The Bill intended to put restrictions on, and increase greater transparency of, that source, I think its proponents would say. Following the Select Committee, its recommendations and decisions of this House and of another place, some of those restrictions were slowed down, but nevertheless they will have a serious impact on the ability of trade unions to fund political parties, and therefore on the funding over time of the Labour Party.

I did not support the proposals in the Trade Union Bill. I do not really approve of even the revised proposals. But the important point tonight is that those changes affected one source of funding and, in effect, one political party. They had no effect on other institutions or individuals, and no effect—as it stands at the moment—on other political parties.

As I have said in the House before, in the five years up to the last election about £148 million was given in political donations by organisations as distinct from individuals. Some £65 million of that was from trade unions; therefore more than £80 million was given by other organisations. Trade unions are all required to have a separate political fund; they are all required to make a decision on that political fund and its retention every 10 years; they must all allow a member to opt out of it and, as a result of the Trade Union Act, members will eventually be allowed only to opt in. None of the other organisations, companies, trusts, friendly societies or partnerships which make the bulk of the institutional donations to parties—the great majority of which go to the Conservative Party although some of it goes to other parties, including my own—has such restrictions applied to it. There is now a requirement for listed companies to take a vote, but only once and without any separate political fund.

Although I opposed the restrictions on the trade unions, the whole experience of that Select Committee brought home to me yet again the unfairness and lack of principle underlying our rules on political funding. I think that I can speak for all members of the Select Committee, including those from the Conservative Party, in saying that we were shocked when Ministers came to tell us that absolutely nothing had been done by the Government to fulfil their election manifesto commitment to seek agreement with other parties. We noted this in paragraph 138 of our report and urged the Government to reconvene cross-party talks and seek agreement. In the months since then, nothing has happened. Like the noble Lord, Lord Wallace, I hope that the Minister will tell us tonight what is being done to address this issue.

This is not just a question of equity and balance between parties; it also relates to the health of our democracy. It is not healthy for any political party to depend on significant donations from the super-rich—and a very limited number of them. It is not healthy for a decreasing number of institutions, large corporations or private companies to provide support to political parties. I also accept that it is not healthy for a political party to depend solely or mainly on the admittedly reduced sources of funding from trade unions either.

We all know that in principle none of this is justifiable to the public or, quite often, to ourselves. We all know that we need to look at the level of political expenditure. The noble Lord, Lord Leigh, said that it is small here compared with other things, but as far as the public are concerned it is still a significant overspend, particularly in general elections. We need to look at limits on such expenditure and at enforcement of limits at both national and local level by the Electoral Commission and others.

I disagree profoundly with the noble Lord, Lord Leigh, that state funding should be excluded. We have the lowest level of state support for political parties in the whole of Europe and many other parts of the world—there is even significant state funding in the United States, even though you would think that they were awash with money in the first place. The health of and support for those other European countries’ political democracies are not diminished by a significant role for state funding in their operations. I do not want utter dependence on state funding; I hope with others for more encouragement for small donations to political parties and for a wider range of institutions to give relatively small donations. However, there is a role for state funding; it is not an entirely new principle—we have significant funding in terms of Short money and Cranborne money. We also have security subsidies for our conferences and freepost at election times; and, if one counts the BBC and the other television companies as part of the state, we have free airtime for party-political broadcasts.

So it is not a principle but, when we look at it again, the balance between state funding and the form of that political funding should be part of that review. As we said in our Select Committee report, the reality is that the public do not like the present situation. They consider it unhealthy and potentially corrupt. The prospect of state funding of political parties by the taxpayer is not particularly popular either, but in terms of balance it may well be regarded by the public as the lesser of two evils. I do not wish to see a situation where political parties are utterly dependent on the state, but I see state funding, along with limitations on the level of expenditure, as part of the package. Above all, as we said on the Trade Union Act 2016, whatever comes out of the talks that I hope that the Minister will tonight announce will be convened must be equitable between political parties, and seen to be by our electors.

Trade Union Bill

Lord Whitty Excerpts

Tuesday 3rd May 2016 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I had not intended to participate in the debate. I thought that it was going to go through smoothly and that a rather unfortunate period of legislation would have passed relatively quietly before the end of this parliamentary session. However, my former colleagues on the Select Committee have provoked me to intervene.

As the Minister pointed out, this is a compromise. All compromises are, by their nature, difficult for the parties. It is clear from the contributions of the noble Lords, Lord Robathan and Lord Callanan, that it is difficult for the hawks in the Conservative Party, who landed us with this proposition in the first place—but it is also difficult for the trade unions. There is more administration and considerable cost involved in this, and it is a difficult situation in the long run. But it is also a difficult compromise for the body politic because of the issue that the noble Lord, Lord Tyler—one of my other colleagues on the Select Committee—put forward.

I remind the House that we have spent hours on the issue of how trade unions deal with political contributions, but other organisations and extremely rich individuals make contributions. None of those organisations is required, like the Bill still requires trade unions, to have a separate political fund in the first place; to report precisely on how it uses and expends its political money; to give each of its members the possibility of an opt-out; and now to require future members to opt in rather than to opt out. In no other organisation in this land are those restraints put on political expenditure or involvement.

As was revealed in the Select Committee report, on the basis of figures given to us by the Electoral Commission, in the five years to 2015 the trade unions gave £64 million, the vast majority of it to the Labour Party. However, other organisations in this land gave £80 million—to, admittedly, a variety of parties, but predominantly and overwhelmingly to the Conservative Party. Yet none of those organisations was affected by previous legislation requiring separate political funds or opting out, or by new legislation requiring more detailed controls and more detailed reporting.

This relates to the points that the noble Lord, Lord Tyler, raised. If we are to come up with a democratic balance that is acceptable for a long-running constitutional settlement of this issue, we have to look at political funding in the round. As he said, the drafters of the Conservative Party manifesto recognised that and made a commitment that way. That has conveniently been dropped. Whatever the motivation for the compromise here—I do not particularly wish to go into that; it is possibly a matter for private grief within the Conservative Party—there is no reason now for the Conservative Government not to open those talks on political funding in the long run by organisations, individuals and the political parties themselves. That way we may get a balance in political funding that accords with democratic principles and is acceptable to the majority of the people. Without that, and despite this compromise, which I support, we will still have a seriously unbalanced situation once the Bill passes.

[Lord Cormack]

My Lords, I think we have to reflect, briefly, upon what has happened. We had a Motion, carried by a large majority, that the Select Committee should be established. I did not support it. I explained during the debate that I felt that the Bill was seriously impaired and that there was much unfairness in it, but I questioned whether a committee could, in the very short timescale that my noble friend Lady Neville-Rolfe has referred to today, produce a really good, definitive report. Thanks to the hard work of colleagues from all parts of the House and expert chairmanship, to which they all testified, by the noble Lord, Lord Burns, the deadline was met and a report was produced. It was signed up to by all the members of the committee—although, in the final, conclusive paragraph, there was, it was explained, a divergence of opinion.

The noble Lord, Lord Burns, decided to encapsulate that recommendation in the amendment which he moved on Report in your Lordships’ House. He moved the amendment with great skill and was supported by Members from other political parties as well as Members on the Cross Benches. My noble friend Lord Balfe and I voted enthusiastically for him. The names of a number of leading members of the Conservative Party will not be found in the Division list—I went through it carefully—because they felt that they could not oppose the amendment of the noble Lord, Lord Burns. It was carried by a large majority. The noble Lord, Lord Burns, explained that when he came to the negotiations at the beginning of last week, what was on offer not only did not meet his amendment but did not even meet the amendment to which my Conservative friends had signed up—in paragraph B, I think it was—so further negotiations were held.

What happened was very simply this. The parliamentary Session is coming to an end. The State Opening of Parliament has already been designated for 18 May—a fortnight tomorrow. So what was to happen? My noble friend Lady Neville-Rolfe and Mr Boles in another place decided that half a loaf was indeed better than no bread: that it would be far better to have a Bill that had widespread support—albeit that some of it is reluctant support. I myself do not think that this is the greatest Bill that the Government have placed before this House. Nevertheless, it is now, as far as one-nation Conservatives are concerned, a fairer, more decent and more equitable Bill, and one that has within it some recognition of the underlying dichotomy of party funding, because the Bill in its original state—and I used the words “unfairness” and “choice” many times in contributing to earlier debates—whether by accident or design, was penalising one of the great parties of state and not the others.

I believe that it is important that the second recommendation in the manifesto, which has already been alluded to two or three times in this debate, should be followed up. I hope that there will be something in the Queen’s Speech about it, because I do not like the way in which party politics is funded in this country—and I know that that view is widely shared in all parts of your Lordships’ House and in all parts of the country. But what we now have is a Bill that can go on to the statute book and which honours a number of the important pledges in last year’s manifesto. I accept that a manifesto Bill is different from another sort of Bill. Therefore, we have something in which the Government can take a degree of quiet satisfaction—and those of us who were concerned about the underlying unfairness of the original Bill can also feel that it has been improved.

I was only too glad to put my name—alongside that of my noble friend Lord Balfe—to the amendment of the noble Lord, Lord Burns. The noble Lord, Lord Tyler, also signed it. Your Lordships’ House gave that a very large majority, as I said. So the Government’s choice was a very simple one: should they go along with the will of your Lordships’ House as expressed in the Division Lobbies or should they invite further defeat, which could have jeopardised every particular of the Bill?

I think that the Government have made a wise, moderate and sensible decision. I pay unreserved tribute to the unfailing courtesy and diligence of my noble friend Lady Neville-Rolfe and to Mr Boles in another place. I hope that we can now move on. Last week, when we had the Third Reading, I said I hoped that the spirit of euphoria was not premature. I hope that it will not prove to have been premature and that we can now accept what is before us and get something on the statute book that is much more acceptable to those who have genuine concerns.

Trade Union Bill

Lord Whitty Excerpts

Monday 25th April 2016 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, these Benches would also welcome the simplification that this amendment recognises. We agree with the noble Lord, Lord Burns, that it provides a much better balance. I have two questions for the Government. I hope they have not forgotten something which we have said throughout this debate: for every new regulation put in, two should be taken out. Is that no longer the Government’s policy, or is this yet another example of the Government ignoring that diktat when it comes to somewhat partisan legislation?

We now have the slightly ridiculous situation where two bodies monitor political funds and expenditure: the Electoral Commission and, in relation to trade union funds, the Certification Officer. What consultations have the Government had on this new amendment with the Electoral Commission, and are they satisfied that it eliminates unnecessary duplication between the two organisations?

[Lord Whitty (Lab)]

My Lords, although I welcome the Government’s movement on this, the original draft of the clause was, frankly, unworkable. This is definitely a step in the right direction, although my noble friend Lord Collins and the noble Lord, Lord Stoneham, require answers to their questions.

Before the Minister replies, I will point out something which I have mentioned at earlier stages in the passage of the Bill. In the five years to 2015, £64 million was given by trade unions in political donations, but £80 million was given to various parties—predominantly the Conservative Party—by other organisations. What steps is the Minister taking to ensure that there is a parallel requirement for reporting for all the other organisations which make political donations?

[Lord Leigh of Hurley (Con)]

I welcome Amendment 1. The Select Committee actually said there is a “lack of transparency” over how political funds are spent. Such transparency would assist union members in having an informed choice over whether to sign up to paying a political levy. The amount of money in political funds varies from £14.8 million in reserves for Unite to £8.2 million in UNISON and so on. While I welcome Amendment 1, which seeks to categorise payments, Amendment 2 would take away the whole point of the transparency that would allow union members to see how their money is spent when it is not being spent directly on political parties.

The move to transparency is taking place throughout all areas of our lives. In the Conservative Party manifesto—indeed, it is actually happening—the Government committed to disclose online any expenditure over £25,000. Given the amount of money the Government spend in a year, it does not seem unreasonable to look for similar transparency on union political spending.