PERMISSIBLE DONORS (Hansard, 13 March 2000)

§ Mr. Linton
I beg to move amendment No. 162, in page 29, line 28, at end add— '(g) an individual who is by reason only of his age incapable of being included in any register of electors and is ordinarily resident in the UK.'.

§ Madam Speaker
With this it will be convenient to discuss amendment No. 163, in page 30, line 30, at end add— '(10) No donation by an individual under subsection (2) (a) above may exceed £250,000 in any financial year.'.

§ Mr. Linton
Amendment No. 162 would allow young people aged under 18 to give money to political parties. 125 Hon. Members may be surprised to know that the Bill forbids that. The list of permissible donors says that they have to be registered voters and clearly people cannot become registered voters until they reach their 18th birthday. Clause 61 disregards donations of less than £200. That is usually referred to as the de minimis rule from, I believe, the Latin de minimis non curat lex, which means something like, "The law does not concern itself with trivialities". However, we should be careful here. Calling the measure the de minimis rule does not suggest that donations by under-18s are legal, but merely that they are disregardable. Similarly, clause 61 does not say that donations under £200 are permissible, but simply that they may be disregarded.
The minimum age for joining the Labour party is 15 and I look to Members from other parties to tell me the minimum age for joining the Young Liberal Democrats or the Young Conservatives.

§ Mr. Forth
Thirty-seven.

§ Mr. Linton
That is the maximum age, I think. Even the hon. Member for Beaconsfield (Mr. Grieve) has left the Young Conservatives by now, in years if not in spirit.
All three main parties and other parties represented here—Plaid Cymru, I dare say—have youth movements. This is not a trivial point and it is insulting to young people that they should be included in the Bill only as an afterthought. Youth movements should be one of the first thoughts of political parties because there is enough apathy among young people already without giving under-18s who choose to join a political party the feeling that they are not even considered important enough to be declared permissible donors.
I am not suggesting that young people should be asked for a fee of more than £200 a year to join a political party, but we should make donations from under-18s permissible, along with those from over-18s. Under-18s may want to donate more than £200 and it is not the Bill's function to make that illegal. I have made that point to my hon. Friends, who said that it is of no consequence, but it is a complete oversight that no one has realised, until this point, that the Bill does not allow such donations. I have two daughters who joined the Labour party as teenagers and I would like to protect the interests of all young people who want to join political parties. It is excellent for them to show interest in the political arena at that age and I hope that my hon. Friends will agree to the amendment simply to clarify the status of young people.
Amendment No. 163 proposes an upper limit on permissible donations from an individual. I do not deny that £250,000 is an arbitrary figure, but any figure will be called arbitrary. The Liberal Democrats proposed £50,000 in their evidence to the Neill committee. I think that that is a bit low. I dare say that donations of £50,000 or £100,000 are all too infrequent, but they are unlikely to buy favours from a Government. We run the risk of creating that perception if we allow individual donations of more than £250,000 or £500,000. As a donations limit, £250,000 is a high figure.
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In Quebec, parties are legally not allowed to accept donations of more than $3,000, which is about £1,500. 126 In the United States, individuals cannot give more than £17,000 in total, which is $25,000. It is true that there are currently proposals in the US to increase that figure, but only to $50,000, which is nowhere near the figure proposed in the amendment. I do not know whether the hon. Member for Beaconsfield can give me the figure, but there is certainly a donation limit in France as well. The amendment proposes a much higher limit, because we should allow as much freedom as possible and go for the mischief in the system—the individual £1 million donations.
In its evidence to the Neill committee, the Labour party left the issue of donations limits open. It said: The Labour Party invites the committee to examine the question of contribution limits and assess their implications. The Neill report came out against donations limits for a number of reasons. It felt that disclosure of donations above £5,000 would continue the arms race between the main parties. I find that naive if not disingenuous, because many countries have disclosure—the United States has had disclosure of donations above $100 for the past 25 years—but that has not stopped people making donations: it has merely made them more blatant. Anyone who knows anything about the United States political system will know what I mean.
It is argued that if there were a limit on donations, it would be easy to evade it by spreading resources among friends, setting up subsidiary companies and using other such easy devices. The Bill makes it illegal to spread donations among friends or even among members of the same family. In Quebec, big companies used to be able to get round the donations limit of $3,000 by handing out money to a group of executives who would each write a personal cheque for $3,000—typically at a Liberal party lobster dinner or some such event.

§ Mr. Stunell
The hon. Gentleman is kidding.

§ Mr. Linton
Indeed, yes. The Liberal party in Canada is much richer than the Liberal Democrats in this country. The electoral commission in Quebec was well up to plugging those gaps when they appeared. There will always be attempts at evasion, as with any taxation system, but it is perfectly possible to impose a donations limit and to make it stick.
A third argument that has been used is that the proposals on tax relief, which the House discussed earlier, would encourage parties to switch from a few big donations to a large number of small ones. The Neill committee said that it is therefore unnecessary to introduce a new ban to produce the same result. The Neill committee regarded its proposal for tax relief on political donations as a substitute for an upper limit on individual donations. As the House has rejected the proposals for tax relief, the logical other side of that coin is to entertain the arguments for an upper limit on individual donations. That would be in keeping with the logic that the Neill committee used.
The argument against a donations limit, which is in the Neill committee report, is that individuals should have the freedom to contribute to political parties, and parties should be free to compete for donations. We have seen what happens when parties compete for big donations. I only have to mention Asil Nadir, John Latsis, Li Ka-shing, 127 C.K. Ma and, indeed, Bernie Ecclestone. Before the election, Labour had no choice but to try to match Tory spending by seeking large donations. Now we are in government and introducing a Bill on the subject. Not only Labour Members but the whole House have a chance to close that door for ever and to ban funding of political parties in this country by individual millionaires.
The amendment deals simply with individual donations because I do not think that corporate donations of more than £1 million from, for example, trade unions or companies are necessarily a problem. It is individual donations that render parties vulnerable to corruption or to the perception of corruption. No matter how well intentioned, a party that relies on individual £1 million donations will always feel beholden to the millionaire donor, will always feel nervous of offending that person, and will always feel anxious not to jeopardise the possibility of another donation.
After the last election, many people said, "Thank goodness. Never again will we see political parties funded in that way." Many of the electorate felt that, with the election, we were turning a new leaf and that there would be a new chapter in which such funding would never need to occur again. Even at this late hour, I hope that my right hon. and hon. Friends will see that funding is the crux of the Bill and that, if we do not close that door, we will not have completed the task that we have set ourselves in the Bill. It is a question not just of the size of donations, but of the vulnerability of political parties.

§ Mr. Walter
Will the hon. Gentleman give way?

§ Mr. Linton
No, I am just finishing my remarks. I am sorry.
It is a question of the perception in the public's mind of corruption. The Bill should deal with those issues.

§ Mr. Grieve
The hon. Member for Battersea (Mr. Linton) has raised two interesting amendments, although I am slightly more interested in, and possibly sympathetic to, one than the other. Perhaps I can start with the one with which I have some sympathy, albeit that I do not think that it necessarily goes as far as he would wish: amendment No. 162.
There is no doubt that the hon. Gentleman has identified what might potentially be a problem with the Bill. Notwithstanding the comment by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) about the minimum age, in practice, of membership of the Young Conservatives, I believe that we admit persons over the age of 15 to membership of the party. They would be incapable of making a donation of more than £200.
The hon. Gentleman makes a good point—whether a donation of under £200 from an impermissible donor is ipso facto permissible. I shall be interested to hear the Minister's comments about that. In reality, it never has to be declared, so it would never be identified, but the hon. Member for Battersea certainly has a point. If the Bill 128 criminalises the acceptance of a donation of £5 from a 16-year-old for his annual membership of the Conservative party, that will pose a problem.

§ Mr. Tipping
indicated dissent.

§ Mr. Grieve
I see the Minister shaking his head, approving of my view that that is not what the Bill does. In those circumstances, I am disinclined to go along with the amendment.
One point emerged during consideration of the Bill in Committee. The Government were able to justify denying the right to make donations to all who were not on the electoral register because if one started to allow other categories, as Lord Neill suggested—I think without his committee really applying its mind to the consequences—it would create enormous bureaucratic problems of validating donors. Therefore, unless the Minister can persuade me that such a provision would not cause such problems—I do not know why it should not cause them—I would not be in favour of complicating the issue.
We might reasonably consider another issue. Although I certainly think that persons under 18 who do not have the vote should be encouraged to make small donations to political parties, I am not sure that it would be in the public interest for young people to be encouraged to make very substantial donations to political parties. Although that is perhaps a more esoteric point, I think that it is perfectly proper for the House to say that the donation limit should stick at £200, which—in view of the Bill's other provisions—is where it will be in reality.
The hon. Member for Battersea also expressed his concern—I was about to call it the bee in his bonnet, but that would perhaps be very slightly unfair—to establish £250,000 as the absolute maximum that an individual may give annually in political donations. The logic of his argument was very difficult to follow. At one point, he told us that he thought that, although it was inherently corrupting to allow donations of more than £250,000 from an individual, it was not inherently corrupting to allow such donations from a company. That beggars belief.
If a company is paying huge sums to a political party, it might be said that it was doing so for corrupt purposes, allowing the company to promote its self-advantage and interests. Moreover, it would be difficult to dissociate such potentially huge donations from companies from donations from individuals.

§ Mr. Linton
The point that I was seeking to make is that if a company gives a donation, it has to conduct a ballot of all its shareholders to allow it to do so. Before a trade union makes a donation, every one of its members has to vote in a political fund ballot. In those cases, a decision to make a donation, or to change that decision, can be taken only collectively by a large group of people. The decision to turn on and off the tap does not rest in one person's hands. That is what is different about individual donations.

§ Mr. Grieve
I find the hon. Gentleman's argument on that point a little flawed. Although a private company may have shareholders, the shareholders may be only two or three in number. Therefore, in reality it seems unlikely that there will always be shareholder control over decisions by a private company to make donations. 129 Moreover, private companies, if they are incorporated in the United Kingdom, may frequently be vehicles for perfectly legitimate donations of substantial sums.
The Bill currently allows—we have not considered the issue on Report, but may well have to return to it later—donations by certain categories of European Union company that do not require shareholder approval at all. Therefore, it seems extremely optimistic to think that such an approach will provide proper control or an ability to remove the possible taint of corruption.
The other reason why we should not believe that it would be desirable to make amendment No. 163 is that the electorate themselves will make their decision. The hon. Member for Battersea has criticised—implicitly, if not explicitly—the Labour party for accepting, since it came to office, substantial individual donations exceeding the £250,000 limit. However, he has not yet told us that, consequently, he will not support the Government at the next general election.

§ Mr. Linton
As I said, before the previous general election, the Labour party and other parties had no choice but to seek donations to match those received by the Conservative party.

§ Mr. Grieve
Surely that is the point. As long as there is transparency about the source of gifts, the electorate—through the media, which will undoubtedly thoroughly investigate those matters—will indicate very precisely their view on whether it is proper for a political party to accept such donations. In Committee, some Labour Members argued that the Conservative party was damaged by the donations that it received in the early 1990s. That is a legitimate argument. If we follow that line of reason, the electorate showed their disapproval of the donations from those individuals.
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However, just as the electorate may disapprove, they may also be entitled to approve of such donations. Philanthropists prepared to give substantial sums of money from undoubtedly high motives do exist. It is an essential part of our civil liberties that individuals should be allowed to dispose of their money as they see fit. Whatever may happen in other countries, it is wrong to put a fetter on that.
The hon. Member for Battersea asked what the limit was on political donations in France. I am ignorant of the ceiling there. Indeed, I was not aware that there was such a limit, but I accept what he says. However, French politics has suffered over the years from serious examples of corruption both by individuals seeking their own ends and by corporations—there has been a lot about that in the French press recently. If such limits exist, they do not seem to have had any impact on improving the standing of politicians in that country. That is another reason why we should reject the amendment.

§ Mr. Stunell
I take almost exactly the opposite view to that of the hon. Member for Beaconsfield (Mr. Grieve): I think that the first amendment is mistaken and the second is desirable. I shall set out my case briefly.
If I were a millionaire living in—to take a country at random—Belize and had sent my son to Eton, I might give him a Christmas present of, let us say, £1 million. If, 130 when we got to somewhere near Easter, he made a voluntary decision to make a donation to a political party of, let us say—picking a random number—1 million, it would be permitted under the amendment. I doubt whether that is what the hon. Member for Battersea (Mr. Linton) intends. That should be sufficient to cause him to seek to withdraw it.
A donation of £200 is an adequate and sensible limit for those under 18. We might want to raise that limit in the future, but not now. For the record, I have taken advice and I believe that the minimum age for membership of the Liberal Democrats is 14. We are certainly on the record as wanting a voting age of 16, so in due course we shall want to move towards what the hon. Gentleman is suggesting, but at the moment his amendment would do what we have tried to guard against: it would create a loophole for one situation that provided a gap through which the less scrupulous could march with impunity. He has made a nice case, but he has left an enormous loophole.
The Liberal Democrats have argued for a ceiling on individual donations. Speaking personally, I should like a ceiling on donations from other sources as well, to answer the point made by the hon. Member for Beaconsfield However, amendment No. 163 is better than no amendment, so it finds favour with the Liberal Democrats. Amendment No. 162 certainly does not.

§ Mr. Miller
To answer the point raised by my hon. Friend the Member for Battersea (Mr. Linton) and the hon. Member for Beaconsfield (Mr. Grieve), the limit in France is 50,000 francs. I ask my hon. Friend the Minister to look at the situation across Europe and consider the contradictions in the pattern of funding from individuals and corporate donors. It seems to me that further research is needed. The reliance on European Commission decision 270\83 against France on the question of corporate donors must be examined further, as it covers insurance companies, not political parties. There is no pattern to the donations by companies, trade unions and individuals: the matter is a complete hotch-potch. I accept the integrity of the observations made by my hon. Friend the Member for Battersea, but the amendment does not stand up in the context of clause 48.
I urge my hon. Friend the Minister to study clause 48 again, as some significant improvements could be made. If the decision in case 270\83 were rejected, the clause could be tightened satisfactorily.

§ Mr. Tipping
Amendment No. 163 takes us back to familiar territory, as my hon. Friend the Member for Battersea (Mr. Linton) pushed the case for it hard in Committee. Amendment No. 162 breaks new ground and, although members of the Committee will remember that its subject was discussed in passing, this is the first time that the House has had the opportunity to discuss it.
My hon. Friend the Member for Battersea pointed out that people under 18 cannot be permissible donors, but he readily acknowledged that, under the de minimis provisions, a young person under 18 could contribute £200. The hon. Member for Beaconsfield asked whether a £5 subscription fee would be included in that £200. I can tell him that it would.
The hon. Member for Hazel Grove (Mr. Stunell) described the £200-limit as adequate and sensible, and I agree. As I see it, the only point of amendment No. 162 131 would be that it would allow young people under 18 to contribute sums greater than that. I heard some Labour Members comment that any young people who wanted to do that must be off their heads. However, the hon. Member for Beaconsfield made the more serious point that, under the Bill, people must be on the electoral register before they can contribute to a party. To break that link by accepting the amendment would be a step too far. I hope that my hon. Friend will withdraw the amendment.
Amendment No. 163 has attracted much argument both in Committee and in the House this evening. If there is to be a limit on donations, what should it be? The Government's libertarian view, supported by the Neill committee, is that people should be entitled to spend money as they think fit. I agree with that principle.
My hon. Friend the Member for Battersea was sceptical, to put it mildly, about whether the new reporting provisions would bring about a change in climate. The Bill is about transparency and honesty. I draw my hon. Friend's attention to what has happened with the Register of Members' Interests. As the reporting requirements have become more onerous, hon. Members have become more careful about what they do and what they receive.
It is widely accepted that the Bill will bring about changes in culture and in attitudes. All hon. Members support the notion that political parties should look for smaller donations, and that they should not rely on large donations. The attitude of the press and the public means that large donations will always be questioned. There is nothing wrong with them, but I think that the public will see them as suspicious, feeling that no one gives large sums for nothing. I do not think that the £250,000 cap is necessary.

§ Mr. Walter
Does the Minister agree that there is something slightly incongruous in the placing of a £250,000 limit on donations made by "permissible donors" to British political parties, when, under the European convention on human rights, foreigners are allowed to make contributions of up to £500,000 as third parties in general elections and as permitted participants in referendums?

§ Mr. Tipping
The hon. Gentleman is following the path of my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller). I understand that his amendment has not been selected, and that he has used this as a peg on which to hang his point.
The hon. Member for Beaconsfield said that hon. Members might want to pursue the issue, which does, I think, involve some uncomfortableness and tension, and I assure my hon. Friend the Member for Ellesmere Port and Neston that we shall consider what he said.
Ultimately, my hon. Friend the Member for Battersea said that £250,000 was an arbitrary limit, and I agree. I think it right, in this context, for us to be judged on and guided by what the Neill committee said, and I think it right to maintain a libertarian spirit.
Given all that, I hope that my hon. Friend will withdraw his amendment.

§ Mr. Linton
My hon. Friend the Minister defends a £200 maximum for teenagers, but rejects a £250,000 132 maximum for over-18s. I would rather liberate teenagers and restrain millionaires; but, as I am clearly getting nowhere with that argument, I beg to ask leave to withdraw the amendment.