Political Parties (Funding and Expenditure) Bill [HL]

Lord Wrigglesworth Excerpts

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

[Lord Wrigglesworth (LD)]

I join other noble Lords in congratulating my noble friend on introducing this very comprehensive Bill. I hope it will push forward the debates we have had in this Chamber and elsewhere on this very important topic. I was also a member of the Select Committee on Trade Union Political Funds and Political Party Funding, and the reason for that and for my interest in this is that I spent the years running up to the last election as treasurer of the Liberal Democrats, raising more than £20 million in the run-up to and during that election campaign. So I got some first-hand experience not only in the business world but in raising funds for political parties.

Before I go on to comment on the Bill and on the current state of the debate on this matter, I want to respond to the noble Lord, Lord True. He went through a series of instances and all I say to him about the Brown case and others like them—and this refers to all parties—is that, if the Bill or anything like it were on the statute book, none of those things would have happened. I spent last night with Sarah Olney, with the leader of the Liberal Democrats in Richmond and party members there, and I say to the noble Lord, in response to his comments about the Richmond local authority, well, we will see him at the ballot box next May.

The noble Lord, Lord Bew, raised some important features as well, but I think that the most important feature of the Bill is the reform of contributions. Bringing down the scale of contributions, introducing a cap so that the abuses that have taken place in the past can be avoided, would mean that trust in politicians could, I hope, be improved. I do not expect, frankly, that that is going to happen soon, because I think the party opposite will be adamantly opposed to any such reform. They clearly have a massive advantage from major donors in the funding of the Conservative Party and have had for many years. Therefore, I am not optimistic that that change will take place until another Government come into office and change it. The present Government need to remember that while they may be riding high at the moment, Governments do and will change, and circumstances may well lead to the change they do not want to see taking place at some time in the future.

The Labour Party has made major, very welcome reforms following the Collins review of political funding of the Labour Party by the trade unions. I think the changes that have taken place there have moved us in the right direction, towards individual donations, which should, in a rational world, enable the major parties to come to some agreement on how we move ahead in the future.

Another consequence of putting a cap on major payments is that it would make parties do what I think would be very good for our democracy, which President Obama demonstrated in his fundraising activities for his campaigns, and that is that it would make the parties go out to the electorate and raise funds—small donations—from many, many people. I have had to do this. It is very good for the health of democracy and for the parties that we should be forced into the position of having to go to thousands and thousands of people. If you had a cap of £10,000 you would have to do that. That would be a very good thing in our political life and parties would have to respond to a cap of that sort.

The noble Lord, Lord Bew, mentioned the changes in political campaigning. I agree with him that the speed with which campaigning methods are now progressing means that it all needs to be reviewed. The change in using social media in particular enables us to raise funds from a very substantial number of people, and day by day we see all sorts of examples of this happening. There is crowdfunding of all sorts of very good causes, people in crises, companies—it is a whole new scene. There is no reason why, and indeed I think it is happening to some extent, the political parties could not do the same thing, extend their reach and get over the whole burden of major donations being made to parties.

That is the biggest necessary reform, but I do not expect it to happen soon because I think the Conservative Party will be adamantly opposed to it. But there are some things, a number of which have been mentioned in the debate, that could be usefully discussed in talks between the major parties. When the coalition was in office, the Deputy Prime Minister called for all-party talks. Unfortunately, although the Labour Party responded by nominating a shadow Cabinet Minister and its general secretary to take part, and the Liberal Democrats did the same, the Conservative Party did not respond at all, despite being partners in government.

It was not until the Peter Cruddas affair hit the Sunday Times that the Conservative Party decided it should do something about it. I think the Prime Minister spoke to the Deputy Prime Minister when he learned that that exposure was going to be made in the Sunday Times and suggested that he would give names to him for the all-party talks to take place, and sure enough this was used as a cover for the Cruddas coverage at that time—a very cynical way in which to handle it. Of course, no real progress was made in those talks because the Conservative Party was not interested in making progress on any of the major matters that we discussed there.

The abuses that have been taking place and are being investigated at the moment demonstrate the need for those talks to take place as soon as possible. My noble friend referred to the investigations that the police and the Electoral Commission are carrying out. In 1979, a case went to the High Court over my election expenses, and I agree with my noble friend that it is quite unacceptable that these investigations have been going on for almost two years now and the Members of Parliament concerned have no certainty over their future in Parliament, because if the police find a case against them—if abuse is found—those Conservative Members who are being investigated could lose their seats. That is an impossible position for them to be in—guilty or not guilty. The matter should be resolved and it should be resolved very quickly.

As my noble friend said, we said in the Select Committee report that talks should take place. The Government have been extremely reluctant, as demonstrated by the time it took the Minister to respond to the Select Committee report, but there are some useful things that could be discussed. I urge the Minister to respond positively to this. There are changes—some have been mentioned already in the debate; no doubt others will be as well—possibly in the tax treatment of political donations or in methods of fundraising that could be considered by joint talks, as well as the distribution of the existing funding of parties. It is a bit of a myth that there is no state funding of the parties at present. There is enormous state funding of the political parties. Whether it is through support for research assistants in Parliament or the freepost mechanism, there is an enormous amount of money and that could be looked at and a more equitable system worked out.

I hope that the Minister will respond to the debate by saying that the Government are going to initiate talks between the political parties. I think it would be welcome to the public. It certainly would be welcome on these Benches and, I hope, the Labour Benches as well, and I hope the Minister will respond well to the debate by saying that talks will be initiated.

Party Funding Reform

Lord Wrigglesworth Excerpts

Thursday 3rd November 2016 Lords Chamber

[Lord Wrigglesworth (LD)]

I am very pleased to follow the noble Lord in the comments he has just made. We are all anxious about the consequences of not doing something about this subject, and I have a tremendous sense of déjà vu this evening, because of the debates that have been held so often in the past on this subject. The solution to the problem that the noble Lord has just outlined lies with his own Government and with the Conservative Party. If they are not prepared to see reform taking place, and not even prepared to call all-party talks to try to get agreement, no progress will be made and the electorate will rightly be cynical about manifestos which promise things that are then not carried out. The Conservative Party manifesto, on this subject, is frankly not worth the paper it is written on, because none of the things that were suggested in it have been done.

We know from our experience in the coalition Government—from the Deputy Prime Minister and David Laws speaking to colleagues from the Conservative Party—that the Conservatives were not prepared to carry out what they had committed themselves to in their own manifesto. If the £50,000 cap that was promised had been introduced, a lot of these problems would not have arisen. I do not agree with the noble Lord about the cap having consequences. It would get rid of a lot of the cynicism about major donors running or influencing parties in their own interests, but it would also—I speak as a former treasurer of the Liberal Democrats—force the parties to go out and get more donors.

Look what President Obama did in the United States with crowdfunding; look what lots of venture capitalists are doing with it. If you want to do it, and make the effort, you can get the money from a substantial number of people. As party treasurer, I raised as much for the Liberal Democrats as the Labour Party raised from individuals and small businesses. In fact, most of the time I raised more, as the Labour Party has not historically needed to go out and get those individual funds in, because it has had the trade union funding. It would be an incentive if the cap was introduced, as well as getting rid of a lot of the electorate’s cynicism towards the funding of political parties.

The Labour Party has shown that it is willing to shift its view. It introduced legislation when it was in government, and the report of the noble Lord, Lord Collins, which we looked at, which will lead to reform in the funding of the Labour Party, was a substantial step in the right direction—which I, frankly, never thought it would take—moving to individual donations.

The Government’s response tonight is crucial. Are we going to make progress on this issue or not? I think the Labour Party is willing to have discussions; the Liberal Democrats certainly are; I do not know about the other parties.

Look at what happened in the coalition days. The Deputy Prime Minister called for all-party talks—my noble friend was very much involved in that. We had a response from the Labour Party; we Liberal Democrats gave a response. We waited and waited for a response from the Conservative Party, but none was forthcoming until there was a scandal which led to the Conservative Party treasurer having to resign. On the day that that story broke in the Sunday Times, all of a sudden, the Conservative Party came up with nominees for the all-party talks. Surprise, surprise.

So I am deeply cynical about the seriousness of the party opposite ever reforming the system. I suspect that it will always be other parties that will introduce the reforms that are so necessary.

State funding could come in many forms. As the noble Lord, Lord Sherborne, said, there is already substantial state funding of political parties. I think the noble Lord referred to it as soft funding. Soft, hard, or whatever, it is a lot of money. Providing the funds for political parties to mail virtually the whole of the country with election addresses during a general election is a substantial amount of state funding. So are the Short, Cranborne and other funds that come in from the state. The principle has already been established; it is not new.

I do not know whether noble Lords opposite would be prepared to consider another alternative—giving tax relief to parties, as happens with charitable donations. There is a respectable argument for doing that. I agree with the comments made earlier that funding political parties is a noble thing to do. Democracy would be nowhere without resources being found to run our parties, and we should praise individuals for being prepared to support them by making contributions. If we believe that, we should consider tax relief on contributions. I do not know whether noble Lords opposite would regard that as state funding or whether they would be prepared to consider it.

There are various ways in which this problem could be overcome, but it will not be unless we all sit down together to talk about it. There is an immense obligation on the Government to get talks under way. It is the cynicism bred by parties breaking manifesto commitments and not doing the things they say they will that leads to the growth of the protest vote through the UKIPs of this world—and, indeed, the Trumps in the United States—those disillusioned with existing parties for not carrying out the things they say they will.

I urge the Government immediately—I hope that we will hear this from the Minister this evening—to get talks between the parties under way to try to reach some sort of agreement. With his report from the Committee on Standards in Public Life, the noble Lord, Lord Bew, has given us immense help and information to point us in the right direction. There is an agenda there that could achieve progress, and I very much hope that we will hear from the Minister this evening that that is what the Government are going to do.