Clause 20

HC Deb 29 November 2000 vol 357 cc1054-87

Mr. Mike O'Brien

I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker

With this it will be convenient to discuss Lords amendments Nos. 27 to 33, 40, 41, 46 to 51, 53 to 55, 57, 61 and 62, 68 and amendment (a) thereto, 69, 71 and amendments (b) and (a) in lieu thereof, 73 to 79, 81 to 83, 97 and 131, 132 and amendment (a) in lieu thereof, 133 and amendments (a) to (g) thereto, 134, 142, 149, 213, 214, 218, 265, 267, 329, 333, 339, 343, 345, 376 to 378, 380, 390, 407, 436, 437, 487, 488, 541, 542 and 642.

Mr. O'Brien

The changes made by this group of amendments to the arrangement for the registration of political parties are primarily the result of the special provisions made for Northern Ireland in clause 65. Accordingly, to understand the amendments, it may be of help to the House if I set out why the Bill contains such special provisions.

I realise, of course, that some hon. Members will have concerns about certain aspects of the provisions that we are discussing. I understand that; on many Northern Ireland issues, it is extremely difficult to secure agreement across the spectrum of opinion in that part of our country. In those circumstances, Parliament must always consider the arguments with great care, to try to find a way—honestly and with integrity—to establish a set of provisions that can command support in the House.

In an ideal world, we should not need special provisions for Northern Ireland parties. However, as the House and Northern Ireland know, we have to face the realities of politics in Northern Ireland. It is undoubtedly true that the peace process has made several welcome advances since the Neill committee reported in October 1998, but the special factors identified by the committee have not disappeared during the intervening two years.

The Committee considered at some length the impact in Northern Ireland of its proposals for the disclosure of donations of more than £5,000 and the ban on foreign funding. At the Committee's public hearings in Belfast, it heard evidence on disclosure from both sides of the community that, notwithstanding the Good Friday agreement, it would be unsafe to disclose the names of donors to Northern Ireland political parties.

Public disclosure of donations would be likely to have one of two consequences. The first possibility is that donors might face intimidation, discrimination or worse. The second and perhaps more likely possibility is that party supporters would simply stop making donations for fear of the consequences. I emphasise that such fears were voiced by nationalists and Unionists. John Stephenson of the SDLP told the Neill committee: You should be aware that already many potential donors to political parties here do not donate due to fear. Even with the huge endorsement of the Good Friday Agreement, the problem with public declaration will still exist.

That is reported at paragraph 6548 of volume II of the Neill committee report.

Much the same sentiments were expressed by Jack Allen of the Ulster Unionist Council. At paragraphs 6667 and 6717 of the Neill committee report, he said:

Over a number of years, because of the political situation in Northern Ireland, people did not want to be identified with political parties… because of the risk factor in Northern Ireland…We are happy enough to put forward those people who give us donations of £5,000 or more but it would be important for them that it was kept private or confidential to an electoral committee or something like that, rather than be made public in the press. Such considerations appear to have led the Neill committee to recommend a temporary exemption from the reporting requirement for donations made to political parties in Northern Ireland.

The committee separately considered the effect of a ban on foreign funding in the context of Northern Ireland. They concluded that citizens of the Republic of Ireland must be able to continue to make donations to parties in Northern Ireland. They took the view that it was consistent with both the Ireland Act 1949 and the Good Friday agreement for Irish citizens to be able to contribute to Northern Ireland parties. As a result, the Neill committee recommended that

in relation to donations to political parties in Northern Ireland, the definition of a permissible source should also include a citizen of the Republic of Ireland resident in the Republic subject to compliance with the Republic's Electoral Act 1997.

We have run with the spirit, rather than the letter, of that recommendation. We concluded first that it would not be practicable to require a United Kingdom party to satisfy itself that a donor complies with legislation in a separate state. Secondly, it is the Government's view that such a safeguard would not amount to much. The Neill committee recognised that there could be no effective way to prevent funds from outside the republic, where there is no ban on foreign donations, from reaching parties in Northern Ireland. It would be pointless to imagine that confining the exemption to citizens of the republic would prevent donations from the United States or elsewhere reaching parties in Northern Ireland.

In the light of that very clear analysis by the Neill committee, the Government remain firmly of the view that Northern Ireland parties should be exempt from the controls on donations in part IV for an initial period of four years. We fully accept that any such exemption should be regularly reviewed. That is why we tabled amendment No. 128 in another place to limit to four years the duration of any order made under clause 65.

Having concluded that there is a continuing need for those special provisions for Northern Ireland, it was necessary to find a satisfactory definition of a Northern Ireland party. The Bill as introduced in the House defined a Northern Ireland party as a registered party with either one or more Members of the House elected for a Northern Ireland constituency, or with one or more members elected to the Northern Ireland Assembly. We recognise that that definition is too narrowly drawn.

Any registered party that contests elections in Northern Ireland should be able to benefit from the exemption from the provisions in part IV. In extending the definition of a Northern Ireland party for the purposes of clause 65, we need to ensure that a party that operates throughout the United Kingdom does not use the exemption from the controls on donations that will operate in Northern Ireland to circumvent a ban on foreign funding operating in the rest of the United Kingdom.

9 pm

If we simply provided that any party or part of a party operating in Northern Ireland was exempt from controls on donations, a Northern Ireland constituency association of a United Kingdom-wide party could accept a foreign donation and pass it to its London headquarters. My hon. Friend the Member for Battersea (Mr. Linton) alluded to that possibility during our consideration of the Bill earlier this year.

To guard against Northern Ireland parties acting as a conduit for foreign donations making their way to Great Britain, it has been necessary to create what has been called a fire wall between parties operating in Northern Ireland and those operating in the rest of the United Kingdom. The majority of the amendments in this group are primarily dedicated to that end. They provide for the existing register of political parties maintained by Companies House to be replaced by the new registers—one for parties contesting elections in Great Britain and one for those contesting elections in Northern Ireland. Any UK-wide party would need to be on both registers. The fire wall to which I referred is provided by amendment No. 128, which prevents a party on the Great Britain register from accepting a donation from a party on the Northern Ireland register.

The changes in the registration scheme also deal with what has been referred to as the Scottish Green party problem. Owing to the way in which the Registration of Political Parties Act 1998 operates, the Scottish Green party, which is separate from the Green party in England and Wales, has been unable to register. Under the new registration scheme, a party registered on the Great Britain register could confine its registration to one or two parts of Great Britain. Another party with a similar name could then register in the other part of Great Britain.

The circumstances in Northern Ireland have required this Parliament to accept less than entirely satisfactory solutions to complex problems. We appreciate that some people would have preferred other options. We have, as honestly and straightforwardly as we could, tried to provide laws that deal with the particular circumstances of the political funding of parties in Northern Ireland. Therefore, I commend the amendments to the House.

Mr. MacKay

You will have noted, Mr. Deputy Speaker, that there are amendments in my name and those of the Leader of the Opposition and of the right hon. Member for Upper Bann (Mr. Trimble), on behalf of the Ulster Unionists, on the amendment paper. We can outline our position simply and straightforwardly. Wherever possible, Northern Ireland should be treated exactly the same as the rest of the United Kingdom. It is part of the UK and the Belfast agreement, which we support, underpins that fact. So, for electoral purposes, it should be treated in the same way as the rest of the UK.

We would always need to be persuaded of any change from what is the law in Scotland, England and Wales. We are persuaded in respect of disclosure. As the Minister pointed out, and as the evidence submitted in Belfast confirms, there is a potential security danger in identifying donors to certain political parties. Doing so might put those people at risk. While there is still a terrorist threat in Northern Ireland and there is still violence, it is important that full disclosure, which we would normally prefer, does not apply to Northern Ireland.

We see no reason for foreign donations to be allowed in Northern Ireland when all the main political parties in the House have agreed—following the Neill recommendations—that they are no longer appropriate. As the Minister knows, the Conservative party stated clearly, ahead of Neill, that it would no longer accept donations from overseas. We believe passionately that that approach should be adopted in the rest of the United Kingdom, including by all the Northern Ireland parties. With the greatest respect to the Minister, he said nothing in his opening remarks to persuade me or my colleagues that we should take a different view.

I regret to reach the conclusion that members of the Northern Ireland Office have put pressure on the Home Office to ensure that exemptions are available for Northern Ireland political parties. They have done so as yet another sop to Sinn Fein-IRA. Make no mistake about it, the sole reason for treating Northern Ireland differently is so that Sinn Fein-IRA and others can receive dirty money from the United States of America. I believe that that is wrong.

Mr. Kevin McNamara (Hull, North)

Will the right hon. Gentleman give way?

Mr. MacKay

I will when I have finished my point, because the hon. Gentleman knows a lot about this money.

I believe strongly that Sinn Fein should be treated in exactly the same way as every other party in the United Kingdom. It claims to be now a non-violent party, and I hope that that is true and that it will fully implement the Belfast agreement, which it is not doing at the moment. If it wishes to be considered by the House and other observers as part of the body politic and as a proper political party in the United Kingdom, it should have the same rules applied to it as apply to all the other parties in the House.

Mr. McNamara

The right hon. Gentleman referred to dirty money. To whom is he applying his remarks? Is he suggesting that they apply to the SDLP and also to the other nationalist parties that are represented in the House and that have obtained funds from the United States? He must be careful about the terms that he uses and about the implications that they have for the United States Administration. The United States has been most careful and scrupulous under both Republican and Democrat Administrations to ensure that no money to support violence comes from the United States.

Mr. MacKay

If the hon. Gentleman really believes that there is no money flowing out of the United States to support paramilitaries—both republican and so-called loyalist—he is a less close observer of the scene than he claims. There is absolutely no doubt about it; it is beyond refutation. Successive Republican and Democrat American Governments have done their best to persuade fund raisers not to pass money on, but he, I and the House know that it happens. Money that comes from the United States to Sinn Fein, the IRA, the Real IRA and various so-called loyalist paramilitary parties and their terrorist associates is, in my view, dirty money. I know that the overwhelming majority of American citizens, the American Government and the overwhelming majority of Members of Congress are deeply embarrassed and appalled that this money comes. Many of them have done valiant work to try to ensure that it is not channelled in that way.

Mr. McNamara

The right hon. Gentleman has not replied to the point that I made about moneys going to the SDLP and elsewhere. How does he define "dirty money"? He has used a very broad brush. He should be more specific, giving us examples of cases and so on. He is condemning not only political parties in Ireland, but the American Administration for failing in their duties.

Mr. MacKay

Clearly, the hon. Gentleman failed to listen. Perhaps if I spell out my reply again in more simple terms and a little more slowly, he might pick it up this time. I clearly said that I believe that money that flows from America to paramilitary organisations and their political associates—Sinn Fein, the so-called loyalist paramilitaries and others—is dirty, tainted money. It embarrasses the American Administration, the overwhelming majority of Congressmen and the overwhelming majority of the American public. I said that last time, and I have said it again. The hon. Gentleman is at last nodding, so finally I am getting through.

Mr. McNamara

rose—

Mr. MacKay

It is a pity that the hon. Gentleman did not listen more attentively to what I said originally and to my reply. Anybody reading Hansard will see clearly what I said.

Mr. Salmond

Will the right hon. Gentleman address specifically the point about the SDLP—I hope that I said that slowly enough for him—and say that he is not defining that as dirty money from the United States?

Mr. MacKay

I am happy to do so. I never mentioned the SDLP and 1 specifically defined those whom we were discussing. Everybody knows who those are. Everybody is aware that dirty money comes, particularly from the east coast of America, through to paramilitary and related parties. That money is bad money. By agreeing to the Bill tonight, we will encourage that money to flow—

Mr. John McDonnell (Hayes and Harlington)

Is the right hon. Gentleman saying that any donation to Sinn Fein is dirty money?

Mr. MacKay

When the IRA has been committing awful atrocities in this country, any donation to Sinn Fein is most certainly dirty money. I am delighted to respond to the hon. Gentleman. I could not make that clearer. I thought that I had made it clear right from the beginning.

I was responding to the Minister and asking him to reconsider and understand why we believe that parties in Northern Ireland should be treated in exactly the same way as parties elsewhere in the United Kingdom.

I cannot but believe that the measure is another sop—another appeasement of republicans and so-called loyalist paramilitary groups. It is a huge mistake. As has been seen in the past, the more we give, the more they take. That process has not built confidence in the Belfast agreement, which we supported. If we go ahead tonight and treat Northern Ireland differently, the great majority of people in Northern Ireland will again feel that they have been let down and are being treated differently.

A further comfort measure and a sop will have been given to the men of violence. That is harmful to the process that the Minister and I very much wish to move forward. He should consider again tonight whether it is wise to treat Northern Ireland differently. We strongly believe that it is not.

I shall deal briefly with the funding of referendums. We believe that the same should apply as applies to political parties. Referendums will take place from time to time—inevitably, in Northern Ireland, on the border. That used to be called the border poll. We believe that money should not flow in from abroad for that referendum. That would be a great mistake.

The same applies to United Kingdom-wide referendums, which will have as much impact in Northern Ireland as elsewhere. Neill has been clear that, for referendums, it would be wrong for overseas money to be used. We believe that there should be consistency.

I end as I started, by saying that Northern Ireland should be treated in the same way as the rest of the United Kingdom. Those of us, including the Minister and me, who support the Belfast agreement and passionately want the process to work would do a favour to that process if we treated all the parties in Northern Ireland in the same way as the rest of the United Kingdom. To do otherwise would further undermine the process.

Mr. Trimble

It was clearly signalled during the debate on the allocation of time motion that this was likely to be the most significant topic for discussion and the most significant group of amendments. As has been suggested in the discussion so far, on the part both of the Government and of the Opposition, this group of amendments essentially deals with Northern Ireland, although a few other matters are covered. In light of that fact, it is remarkable that no representative of the Northern Ireland Office is on the Treasury Bench. The hon. Member for Banff and Buchan (Mr. Salmond) made a similar point when we discussed an earlier group of amendments. I sympathised with his comment then, but it applies in spades to the serious issues covered by these amendments. I venture to suggest that Ministers in the Northern Ireland Office have fled the field because they are well aware of the weakness of the Government's argument. They have passed what is a poor brief on to Home Office Ministers and left them to manage as best they can.

9.15 pm

Members of different Opposition parties referred in our earlier debate to the emollient character of the comments made by the Parliamentary Secretary, Privy Council Office. Perhaps the Under-Secretary of State for the Home Department, the hon. Member for North Warwickshire (Mr. O'Brien), is hoping that he will get away with imitating his hon. Friend's manner, especially given the structure of his argument: he began with the one aspect of the Government's policy that has substance or ground for defence, but as he gradually moved away from that and got towards the enormity of the final result, he quickly speeded up and dashed to the finishing line in the hope that no one would notice the weakness of the arguments.

The one part of the Government's argument with any merit is the problem that the continuing threat of terrorism in Northern Ireland poses for donors who are identified. They might be intimidated or be reluctant to contribute, with the consequence that the political process in Northern Ireland—and certain parties in particular—would suffer. We understand that concern, and the Under-Secretary was right to mention it. In our evidence, my party and others drew attention to that problem, but we proposed a modest solution. We suggested that the identity of the donor should be disclosed only to the commission; it would go no further and would not be published.

We are prepared to trust the commission even though we are aware of the danger of official bodies being penetrated by the agents of terrorist organisations for the purpose of obtaining information that would enable them to threaten people. We are prepared to have a degree of disclosure that would satisfy the public need without exposing people to risk.

Rather than a solution that is proportionate to the reality of the problem, however, we have been given a set of proposals that is wholly disproportionate, which leads me to suspect that there is another reason for the measure. I am pretty certain that the genuine problem of likely intimidation or scaring off of donors has been used as an excuse to do something wholly different—to set in place an exceptional set of arrangements for Northern Ireland simply to advantage Irish nationalists.

Let me observe parenthetically that that is discriminatory. It discriminates between nationalist and non-nationalist parties in Northern Ireland, and between nationalist parties in Northern Ireland and nationalist parties in Wales and Scotland. It was said in our earlier debate that the Scottish National party has prominent and well-known donors who are resident outside the United Kingdom for most of the time. There is a Scottish diaspora, a Welsh diaspora and an Irish diaspora. Why is one treated more favourably than another? There is a serious point there.

It is not that I am arguing for further exemptions to be provided for Welsh and Scottish nationalist parties. I am simply pointing out that the Government's proposal is flawed and unfair and treats people unequally. As the Government's obligations under human rights and related legislation apply throughout the United Kingdom, and as there is an obligation under international law to treat all people within the United Kingdom equally, and as those obligations extend to political participation in elections—

Mr. Salmond

And Governments.

Mr. Trimble

Precisely. In view of those matters, the Government need to think seriously about whether their proposals can be sustained.

What justification has been offered tonight for treating Northern Ireland differently? As has been said, Northern Ireland is being treated in an exceptional manner. I listened to the Minister and heard two things mentioned—the Ireland Act 1949 and the Belfast agreement of 1998. The Ireland Act is interesting in that it declares that Ireland is not to be treated as a foreign country. That is unusual. The substance of that legislation was that the United Kingdom refused to recognise the independence of the Republic of Ireland. Until then, the Irish free state, as it was then called, was part of Her Majesty's dominions and part of the Commonwealth. In effect, in 1949, the then Labour Government said that they would not recognise that Ireland was different and foreign and that they would treat people from Ireland as if they were British citizens the moment they entered the United Kingdom.

One might wonder whether it is appropriate today to continue to say that we do not really regard the Republic of Ireland as a foreign country, particularly in view of the constitutional provisions in the Belfast agreement, in which there is a recognition that there are two states—the United Kingdom and the Republic of Ireland. From my point of view, one of the good things about the Belfast agreement is the fact that the Republic of Ireland recognises the existence of the United Kingdom and the territorial integrity of the entire United Kingdom. I do not say that one should rush into a precipitate re-examination of all the aspects and ramifications of the Ireland Act, but I do suggest that that is rather shaky ground on which to rely.

I see that desperate efforts have been made to rustle up another Northern Ireland Minister. The Under-Secretary of State for Northern Ireland, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth), has now staggered through to the Front Bench, but he will have to operate bereft of support from the Northern Ireland Office. No doubt pleas for assistance are proceeding in that direction. My point was that the Ireland Act 1949 is not a particularly good basis for the Home Office to rely on.

The other point on which the Home Office relied was the Belfast agreement. I am at a loss to understand why the Minister believes that there is anything in the Belfast agreement that in any way justifies the treatment of Northern Ireland in this legislation. The Belfast agreement explicitly recognises British sovereignty in Northern Ireland, and that is also recognised by the Republic of Ireland in that agreement. Therefore, there is no clear basis for such treatment.

It is the case that the Neill recommendation was that, in relation to political parties in Northern Ireland, the definition of a permissible source should also include a citizen of the Republic of Ireland resident in the Republic of Ireland, subject to compliance with the Republic's local Act. Neill did suggest that the donations should be extended to the Republic of Ireland but no further. Neill did not recommend foreign donations generally. Because of what Neill saw as a problem, and particular circumstances with regard to the Republic of Ireland—a matter on which I disagree—Neill suggested that the Republic of Ireland could be included among permissible sources of donations. The Minister then went on to demonstrate in his argument that the Neill recommendation was unworkable. That is the substance of what the Minister said. He said that it would be impossible for a political party in the United Kingdom to determine whether a donor in the Republic of Ireland that had sent money to it had complied with the Irish electoral Act. Furthermore, it would be impossible to tell whether money forwarded by a donor resident in the Republic of Ireland was from the Republic or had been laundered elsewhere. The Minister therefore proved that the Neill recommendation is unworkable.

The report made a recommendation which, on closer examination, turns out to be unworkable. The sensible solution would be to drop the recommendation but, having found unworkable a recommendation that was to extend to the Republic of Ireland, the Government have extended it to the whole world. That is wholly incompatible with the spirit of the Neill report. It is wrong of the Government to pray in aid the Neill report, given that they subvert it extensively in their proposals. An attempt was made to dress up as a reasonable argument a wholly unreasonable result. The Government's argument is flawed and thoroughly indefensible.

I accept the views of Members who said that the provision has been introduced simply to benefit Sinn Fein-IRA. Of course it will do that, but in fact it confers more benefit on the Social Democatic and Labour party, which may be why the hon. Member for Hull, North (Mr. McNamara) was so anxious to defend the SDLP in that context.

Mr. McNamara

And on every issue.

Mr. Trimble

I am interested to see a Labour Member crawl out and say that his object is to defend the SDLP in every context.

Mr. McNamara

Given the SDLP's support for constitutional measures and its derision for people who indulge in violent acts to advance their policies, and given that its members are concerned with social democracy, I would be prepared on any front, on any occasion, to defend the SDLP and other parties that are prepared to do the same thing.

Mr. Trimble

I am happy to have given the hon. Member for Hull, North an opportunity to qualify and limit his blanket support for the SDLP, and to hint that that support might be available to other parties. I am glad that he is broadminded about that and we look forward to evidence of it in his future conduct.

Sinn Fein-IRA undoubtedly benefits from foreign funding, and the right hon. Member for Bracknell (Mr. MacKay) was completely justified in his comments about that, even though a misleading construction was placed on them. The money that Sinn Fein receives from foreign donations is only a small proportion of its total funding. Indeed, the greater part of its funding is very dirty money derived from racketeering in the British Isles—and possibly elsewhere. It ought to be a principal object of the Government to deal with that racketeering, if only because it produces a loss to the Treasury of at least —200 million per annum. The Government are treating the matter rather jovially, but they ought to tackle that racketeering. In that context, one is sorry to see that, some years ago, they stood down the terrorist finance unit and are only now moving in an extremely dilatory way to redeem their claims that they will act to try to deal with the finances derived from racketeering. They ought to see that the flow of dirty money into the hands of Sinn Fein-IRA and other paramilitary organisations is staunched.

The money that comes to Sinn Fein through declared channels is only a small proportion of its overall funding. By contrast, the money that the SDLP receives from the Republic of Ireland is a significant proportion of its income. However, that does not justify the provision. I say that with full respect to SDLP Members and would repeat it if any of them were in the House tonight. That party contests elections in Northern Ireland. It is organised as a Northern Ireland party and competes with other Northern Ireland parties—mine and others. I believe that I am right in saying that we are entirely dependent on money raised from voluntary membership and donors in Northern Ireland. Finding ourselves competing with parties that raise funds overseas would involve the creation of a very unlevel playing field. That is why I find the proposals extremely objectionable. They have the potential to distort the operation of the democratic process in Northern Ireland.

9.30 pm

My point may become clearer if we consider the position with regard to referendums, to which the provisions will apply. There could be a referendum on Northern Ireland's constitutional future, which we used to call a border poll—a poll to decide whether Northern Ireland should remain part of the United Kingdom or become part of the Republic of Ireland. In such a referendum, from which many consequences would flow, my hon. Friends and I, and those in other Unionist parties, would campaign on one side with what limited financial resources we have. And on the other side? Why, the parties and persons arguing for an all-Ireland state would be supported by money from the Irish Government and from other interests in the Republic of Ireland and perhaps further afield. In terms of finance, that would create an extremely unfair situation. I wonder whether the Government have specifically considered that.

I have not followed closely the arguments made in another place, and I do not know whether that point was developed or whether the Government had any answer to it. I want to establish tonight whether they have any clear answer to the wholly unfair situation that would pertain in the event of a border poll. Inevitably, substantial Government money would flow from the Irish Government campaigning for a particular result, but there would not be equivalent assistance on the other side. Or would there? We want an answer from the Government, because that would draw out the unfairness of the proposals.

A further objection goes to the heart of the matter. I referred earlier to my exchange with the Under-Secretary about who said what and when. Way back in June 1998, when my party first gave evidence to the Neill committee on this matter, we made it clear that we wished to be treated in the same way as parties in the rest of the United Kingdom. There is a fundamental point at stake here. Two registers have been created—the GB register and an NI register. Parties that extend to the whole of the United Kingdom are told that, as a matter of law, they must now be chopped in two or treated as two parties and that there will be elaborate controls on the movement of funds and separate reporting requirements. In terms of party organisation, a barrier has been put up across the Irish sea. We are being treated as if we are not part of the United Kingdom. That is fundamentally wrong and deeply offensive to us. I cannot stress that strongly enough.

Insult was added to injury when, in another place, the noble Lord who has the misfortune to speak for the Government tried to justify the proposals by saying that politics in Northern Ireland is not yet conducted on quite the same basis as it is in Great Britain.—[Official Report, House of Lords, 10 October 2000; Vol. 617, c. 246.]

That is an interesting turn of phrase. It suggests that it is rather a bad thing that politics in Northern Ireland is not yet conducted on the same basis as in Great Britain. Furthermore, the phrase "not yet conducted" implies that the speaker wished that it was. That person, who by implication suggests that it is a bad idea that politics in Northern Ireland is not yet conducted on the same basis as in Great Britain and that it would be a good thing if it were so conducted, introduced and defended proposals that will put obstacles in the way, deepen the difference and make resolving that difference more difficult.

I would love politics in Northern Ireland to be conducted on the same basis as in the rest of the United Kingdom. I would like social life generally to be conducted on the same basis as that of the rest of the United Kingdom. I should like the special circumstances that necessitate exceptions in measures in order to protect individuals from threat to disappear. Consequently, my hon. Friends and I must treat with abhorrence provisions that drive a deeper wedge, because they are contrary to the spirit of the agreement that the Under-Secretary prayed in aid when trying to slip the proposals under our noses. The proposals, which are thoroughly bad, are inconsistent with the Good Friday agreement.

Mr. McNamara

The right hon. Member for Upper Bann (Mr. Trimble) spoke as though his party and the situation that he represents were normal in the United Kingdom. They are not. Northern Ireland is the only part of the United Kingdom where a sizeable proportion of the population identifies with a culture and a Government who are different from those of the rest of the United Kingdom. Scottish and Welsh nationalists may support an independent Scotland or an independent Wales, but they do not look to a country that is outside their boundaries. Northern Ireland is different because a large part of the population looks to Dublin as much as an even larger part looks to Westminster.

Mr. Trimble

The hon. Gentleman is trying to make an unsustainable distinction. There is a separatist party in Northern Ireland and a separatist party in Scotland. I am not sure whether that is true of Wales; I shall leave Welsh Members to speak for themselves. It is therefore baloney to try to distinguish between one lot of separatists and another on the grounds that the hon. Gentleman suggests.

Mr. McNamara

I am sorry that the right hon. Gentleman misses my point. Nationalists in Scotland and Wales look to their own boundaries. However, as a result of events in Ireland in the 1920s—I shall not go into them in great detail—Northern Ireland is different. A group looks outside current boundaries in Northern Ireland to Dublin as the place to which they direct their allegiance, while the current majority offer their allegiance to Westminster. Consequently, legislation to deal with the position in Northern Ireland must be very different.

I mentioned the SDLP earlier. By all accounts, which no one has challenged, that party supports constitutional measures and does not support violence; its members argue for consent. Nevertheless, they do not see the future of Northern Ireland in the United Kingdom. We have to deal with parties that hold that view. We shall examine that in detail later when we consider another amendment.

On raising money, the SDLP is a small party in the United Kingdom. It does not share the advantages of other parties. Perhaps the Ulster Unionist party does not share them—I doubt that; it has the support of The Daily Telegraph. Nevertheless, the SDLP has a point of view that it must advance. Its members therefore look for support outside the United Kingdom. If we know that the support comes from the Republic of Ireland or the United States, and it is properly monitored and declared, there is no point in our saying that it should not be received.

Irish nationalism has traditionally been able to sustain itself in the 18th, 19th and 20th centuries through support from the Irish diaspora. I agree to some extent with the right hon. Member for Upper Bann, in that moneys have been raised by dubious means—through robberies, falsification and fraud. That, of course, should be jumped upon immediately.

I believe that the Government of the United States, and the Governments of many other countries where there is an Irish diaspora, have been active in preventing money from being used to support violence and the incorporation of violence in Northern Ireland or, indeed, the Republic. When countries such as the United States, Australia, New Zealand and Canada use their means to prevent money from being used for the perpetration of violence, they should be supported, as should their populations. If it is for beneficial means, or constitutional means, why should not people be able to support a degree of change in Northern Ireland?

Mr. Robert Walter (North Dorset)

Does the hon. Gentleman fundamentally disagree with Lord Fitt, the former SDLP leader who sat in the House of Commons as a representative of that party? He said in the other place the other day: The Government are not expressing the view of the vast majority of the people in the island of Ireland by permitting contributions to be brought from America to support the different factions in the IRA—and making excuses for doing so…I know from my experience at the SDLP's yearly functions in the Republic that the amount that we received from people there to help our political objectives would not bankrupt the exchequer.—[Official Report, House of Lords, 27 November 2000; Vol. 619, c. 1119.]

Mr. McNamara

Alas poor Gerry, I know him well. He is still a friend, I hope. I have great admiration for a man who stood up to what Unionism was doing in Northern Ireland in the 1960s and 1970s, and who stood up to the violence perpetrated against him by elements of the provisional IRA. Not a word of what the hon. Gentleman quoted. however, attacks my argument.

I do not believe that the money coming to the SDLP would break the exchequer. Moreover, I believe that at a time when Sinn Fein has been recognised by Her Majesty's Government, and indeed by the Opposition, as a legitimate party in Northern Ireland, and at a time when we are trying to gain support—in different ways—for the continuation of Sinn Fein's constitutional activities, we should not try to confuse the past with the present. We should recognise the role that some Sinn Fein members are taking, very courageously, in opposing such organisations as Continuity IRA and Real IRA, and trying to ensure that their own organisation honours its undertakings to observe and maintain the ceasefire. Rather than attacking them, the Opposition should support them.

Mr. Salmond

Do the hon. Gentleman's arguments about the legitimacy of donations from the Irish diaspora also apply to the Scottish diaspora?

Mr. McNamara

Yes, and also to the Welsh diaspora.

The real problem in regard to the Bill is that the sleaze, crime and filth that have been associated with all sorts of organisations seeking to influence Government, appointments and decisions have caused a lack of recognition of those in the Scottish diaspora, the Welsh diaspora, the Irish diaspora and, indeed, the English diaspora, who want ordinary, decent politics to be conducted without huge corporations—great organisations—seeking to influence decisions with the money they put into political parties' purses. That applies as much to the Opposition parties as it does to my party. I say as a former sponsored Member of the Transport and General Workers Union that, when we put in our money, we knew where it was going. What is more, everyone else knew where it was going. We do not know at present—it is why the legislation is necessary—what money is going where, who it is seeking to influence and what it will do.

9.45 pm

Mr. Grieve

I take it, therefore, that the hon. Gentleman does not support the main thrust of the Bill. It is designed, with exceptions, to close off foreign funding; there are some odd exceptions, such as European companies.

Mr. McNamara

On balance, I support the Bill, but in dealing on principle with foreign funding from individuals, as opposed to corporate organisations, in some ways we have taken a sledgehammer to prevent, for example, a Scotsman living in Anguilla, an Irishman living in Australia or even an Englishman living in Bermuda from giving something to someone. Sadly, however, foreigners in Hong Kong and in other countries have brought in money—people who are not resident here and have no connection with this country or with the British islands generally have sought to use that money to gain influence. We must support the Bill, but I accept that we are using a broad brush.

Mr. Salmond

I will start with a point of levity, as much of the rest of what I have to say is by no means light-hearted. I was interested in the Minister saying that there was a specific amendment to solve what he called the Scottish Green party problem. Apparently, according to him, it was unable to be registered as a political party in 1998. I find that remarkable because it succeeded in having a Member elected to the Scots Parliament, which is one of the biggest successes that it has ever had, so the obvious lesson that we must draw is that not being registered as a political party did it absolutely no harm.

That is the only point of levity that I can find in the amendments. The Minister described them as less than satisfactory. The Government's solution to the untenable nature of the Neill committee's recommendations with

regard to the Republic of Ireland has produced what is a less than satisfactory solution. He is showing one of the greatest talents for understatement that I have ever seen in the House of Commons. He should go far with that ability if he goes on to higher office. They are not less than satisfactory—they are a total dog's breakfast.

We were told in the guillotine debate that much of the Bill was uncontroversial. This particular aspect succeeded in the other place on Monday by only 167 votes to 148, and only then because the Liberal Democrats in the other place seemed to turn turtle on what the Liberal Democrats had done in this place at earlier stages. If the other place had voted differently, the Government could have found that it was not just the air traffic control issue that was forcing them to a crisis at the end of their legislative programme.

The reason why that aspect of the Bill is so controversial has become obvious in this debate and in the earlier one. I agree with much of what the hon. Member for Hull, North (Mr. McNamara) said about the conduct of political parties. He touched on the distinction that we should draw in considering the legitimacy of political parties. The issue should not be the politics of Northern Ireland, or whether the Government want to appease one group or another. It should not even be the politics of Scotland, Wales or England. It should be the nature of the political parties involved. The key qualification in legislation to clean up politics should be the conduct and nature of the political parties—whether they go about their business in a peaceful, democratic and constitutional manner.

What the Government have managed to do in recognising that the Neill committee was untenable is to produce legislation that will make it legal for an expatriate Irishman from the United States or elsewhere to donate money to Sinn Fein—a party that has been associated with violence—but illegal for an expatriate Scot to donate money to the Scottish National party, which has had a 70-year record of impeccable constitutional credentials. How on earth can that be fair, just or right?

If it were the Government's intention to discriminate against the Scottish National party or against Plaid Cymru, they should have said so at the outset, when the legislation was introduced and the Neill committee was formed. Moreover, the Neill committee was formed largely on the basis of the type of open declaration that the Scottish National party has consistently—for generations—supported.

The Government should have said that the committee was being formed not because Ministers were worried about the activities of Asil Nadir, Hong Kong money flowing into the Conservative party, or a million pounds going like a ping-pong ball between Bernie Ecclestone and the Labour party, but to discriminate against the Scottish National party—which, relatively, is one of the most underfunded political parties. As I said, last year we had to compete in an election with United Kingdom, London-subsidised Tory and Labour opponents who were able to spend many times what we were able to spend.

This type of legislation is the most sensitive legislation of all. It encompasses how the political process is conducted. The lesson and the message that the Government are sending out in this part of the legislation is very clear indeed.

I have known Lord MacKay of Ardbrecknish for many years. I have known him as John MacKay and debated with him many times, as I am sure you have, Mr. Speaker. I cannot recall many occasions on which I have agreed with him. However, I agreed with him on Monday when he said: The most obvious example from my point of view is that the Irish diaspora, predominantly that in America, will be allowed to donate to Sinn Fein but the Scottish and Welsh diaspora will not be allowed to donate to the SNP or to Plaid Cymru. In that respect at least, violence has paid.—[Official Report, House of Lords, 27 November 2000; Vol. 619, c. 1114.]

That is an unarguable and uncontestable point. Ministers should be thoroughly ashamed that they are sponsoring this part of the legislation.

Taking a reasonable view of these issues, and accepting that it was not really the Government's intention when establishing the Neill committee—as I said, I have this directly from Lord Neill himself—to discriminate against the world's most famous Scot, by preventing Sir Sean Connery from giving money to the SNP, I simply ask whether the legislation was not intended to clean up Conservative politics and Labour politics.

Even my worst enemy—believe it or not, I have one or two in this place—has never accused the Scottish National party of being subject to bought influence from mysterious donors. The SNP has never been accused, not even by the Labour party, of taking cash for questions or being embroiled in the acquisition of influence. We have arrived at this unjust position because the Government have twisted the Neill committee's recommendations so that they are not only untenable, but discriminatory.

The Government's position is not only unjust, but undemocratic. I agree with the right hon. Member for Upper Bann (Mr. Trimble) that their position may well be unlawful. I most certainly suspect that it will be tested as such. Every Bill in this place is no longer mistress of its own destiny, but must carry a declaration that it conforms to the European convention on human rights. Consequently, legislation should not be discriminatory between citizens of the state. Are the Government really confident that the legislation, despite carrying that declaration, is not discriminatory in the points that we are discussing? The legislation may well be unlawful.

Even at this very late stage, rather than make a mockery of the Neill committee, our trust in democratic politics and the human rights convention, the Government should think again about this aspect of the legislation.

Mr. Lembit Öpik (Montgomeryshire)

The Minister said that it is a slightly unsatisfactory and difficult situation. What is satisfactory is that there are Members in their places who are genuinely willing to listen to the arguments, and, I hope, willing to change their position on the basis of strong arguments. I have such arguments and I am sure that the official Opposition will not feel obliged to oppose what the Government are doing, although what they are proposing is somewhat risky.

The tricky thing about Northern Ireland is that a different sort of politics is involved. The right hon. Member for Bracknell (Mr. MacKay), who is sadly not in his place, said, "Wherever possible, Northern Ireland should be treated as part of the United Kingdom." I think that I quote him quite closely. That is absolutely right. I completely agree. I think that no one in the Chamber would feel otherwise. He also said that he always needs to be persuaded when there is to be a variation from the United Kingdom law. Again, I do not think that anyone in the Chamber would question that.

Furthermore, the right hon. Gentleman cited an example salient to the debate where, in his judgment, an exemption was valid, and that was disclosure. We have had an extensive debate about that, and it seems that no one would question the importance of protecting individuals who choose to make financial contributions to political organisations in Northern Ireland, given the specific and particular threats that they might or would experience were their identities to be revealed. That was a clear and current example of an exemption from how things are done in the rest of the United Kingdom.

As I understood it, the right hon. Member for Bracknell drew a distinction between that and the international funding of parties. Although there is no difference in principle over the aspiration to have commonality in political treatment across the United Kingdom, a difference arises when it comes to judgment. In my view there is a justifiable position on pragmatic grounds that international funding should not now be banned or prevented in Northern Irish politics.

I stress that we are not talking about an exemption for Sinn Fein. That point has almost been ignored. It may work out in practice that Sinn Fein and perhaps the Social Democratic and Labour party benefit, but any political party in Northern Ireland can benefit from the exemption. It is not a pedantic point because we must recognise that in practical terms Sinn Fein, and perhaps the SDLP, have managed to secure international funding. That happens to be the reality, but there is nothing to stop any other political party in Northern Ireland from doing the same.

Having agreed that the strategic intent of what the right hon. Members for Bracknell and for Upper Bann (Mr. Trimble) have said is in alignment with the great majority of Members in the Chamber, we need to consider why there may be justification for one area to be handled differently in terms of international funding.

The analysis is different because there is a degree of emotive language, which is difficult to justify when challenged. When the hon. Member for Hull, North (Mr. McNamara) challenged the right hon. Member for Bracknell about what he meant by dirty money, it was my perception that there was not a clear response and that there was some shifting of position. There are people in the United States and elsewhere who probably fund organisations that I would not, who do so in the sincere belief that they are supporting the peace process or a certain political aspiration.

It is unhelpful and irrelevant if we describe that funding as dirty money. We already have a mechanism to manage the concept of dirty money. It is called the rule of law, the courts, the police and international legal co-operation. The purpose is to try to hunt out the money that is being gleaned from drug-running and extortion, for example. It is not an absolutely effective technique in the sense that there is dirty money—we all accept that paramilitary organisations on both sides in Northern Ireland have benefited from organised crime. However, that is different from saying that every penny of international money that goes into the Northern Irish political environment is acquired through ill-gotten gains. I believe that a number of parties in Northern Ireland have benefited from money that has been donated—sincerely—to Northern Irish political organisations.

Leaving aside the obvious connections between the north and the south of Ireland, I maintain that the right hon. Member for Upper Bann was right to point out that nationalist and republican organisations have benefited more from international funding than have unionists and loyalists. However, my second point on this subject is that the political and financial environment would not be distorted by the Bill, which would simply maintain the status quo. That status quo might not be desirable in the long run but it has existed for some time.

My third point has to do with the nature of the funding. The right hon. Member for Upper Bann rightly described the present situation as an imbalance. Although he did not say so in so many words, his implication was that the system favours nationalist and republican political groups.

However, I do not believe that the Bill presents additional obstacles that would make it harder for Northern Ireland to matriculate in the rest of the British political system. Conversely, I believe that it represents the beginning of convergence in an important area: at long last, we are enshrining in law an acceptance that things are different when it comes to political funding in Northern Ireland, compared with the rest of the UK. The crucial point is that we are imposing a time scale during which the situation must be normalised.

It is worth recalling that the Government initially intended to establish a 10-year review period. I hope that Liberal Democrat Members were to some extent influential in reducing that review period to four years. That means that there is a maximum of four years in which the question of international political funding for parties in Northern Ireland must be normalised.

In four years, if the Government want to renew the exemption, they must come to the House and justify that decision, given that allowing it to fall would normalise the situation in Northern Ireland with regard to the rest of the UK. That is a crucial point, as the default position is normalisation and convergence—not the indefinite maintenance of differentiation with regard to the rest of the UK.

Mr. Walter

Will the hon. Gentleman enlighten the House regarding his conversion on the road to Damascus? On Third Reading in March, he and his party leader voted with Conservative Members against the proposals. Has the Liberal Democrat party fundamentally changed its policy on this matter?

10 pm

Mr. Öpik

I take it that the hon. Gentleman is referring to the Bill's Report stage, rather than Third Reading. What has changed is that the Government have moved on this matter. We have caused them to move from a 10-year review period to one of four years—in other words, we have reduced by six years the period during which convergence should be achieved. Those hon. Members whom I can hear praising the Liberal Democrats for securing that reduction—and they include the hon. Member for Banff and Buchan (Mr. Salmond), whom I thank—are right to do so.

Mr. McNamara

I, too, congratulate the Liberal Democrats on that achievement. After the great fury that

Conservative Members displayed on this matter, no Conservative Back-Bench Member is present to support the three hon. Members on the Opposition Front Bench. I leave it for the House to decide whether it was secured through boredom or the power of their arguments, but I congratulate the Liberal Democrats on what they have managed to achieve.

Mr. Öpik

No doubt Conservative Back-Bench Members are busy putting out press releases to thank the Liberal Democrats, just as the Scottish National party has done.

Mr. Grieve

The hon. Member for Hazel Grove (Mr. Stunell) spoke on Report on 14 March, and set out eloquently why his party took the view that the Conservative party now takes. He said:

I do not want terrorists parties on either side of the argument in Northern Ireland to flourish, but I recognise that a significant amount of funding of some of those parties, on both sides of the divide, comes not from foreign sources but from rampant protection rackets in the Province. There are other sources of money flowing into the political body. The hon. Gentleman concluded by saying that he would vote against the Government on the amendment that was being debated. How can the hon. Member for Montgomeryshire (Mr. Öpik) explain that complete volte-face?

Mr. Öpik

I may be a simple country boy with Estonian parents, but for the second time in seven days I find myself giving official Opposition Front-Bench Members a brief lesson on the politics of third alternatives and evolving a position. The difference between the official Opposition and the Liberal Democrats is that sometimes we try to negotiate for a better resolution than the one brought before the House.

Mr. Grieve

Will the hon. Gentleman give way?

Mr. Öpik

I am on a bit of a roll, and I do not want to be interrupted. If the hon. Gentleman will bear with me for 30 seconds, I will give way to him then.

I recognise that that is a difficult concept for such a confrontational party as the official Opposition to acknowledge. I am here to do whatever is best for Northern Ireland. Sometimes that means developing one's position if, in our judgment, it is in the greater interest of peace in Northern Ireland and, more to the point, it helps it to normalise Northern Ireland with the rest of the United Kingdom, according to a time scale. History will show whether we are right or wrong. I do not need to hide that fact, because I have made the point before.

Mr. Grieve

I have noted very carefully what the hon. Gentleman has said. The hon. Member for Hazel Grove actually said of the matter:

This clause is based on the wrong underlying philosophy and the wrong legislative theory.—[Official Report, 14 March 2000; Vol. 346, c. 196.]

That seems to have nothing to do with the changes or the cosmetic adjustments presented by Government. Are we to understand that the Liberal Democrats have completely changed their view of the Bill's philosophical basis?

Mr. Öpik

I am not surprised that the hon. Gentleman is scared of the almost irresistible force of reasonable politics coming from the Liberal Democrats. However, as the hon. Gentleman is being a little naughty with regard to my hon. Friend the Member for Hazel Grove (Mr. Stunell), I will now give way to my hon. Friend.

Mr. Stunell

It is always good to have one's words of wisdom drawn to the House's attention, not just once but twice. I said very clearly on Report that the proposals then in front of the House were not satisfactory, and we voted against them. Let us be clear: they have been changed and improved on their return to the House. Let us also be clear, however, that the Minister has acknowledged that the change is not the best job that could possibly have been done. Does my hon. Friend agree, however, that some progress is better than no progress, and nowhere is that more true than in Northern Ireland?

Mr. Öpik

I cannot say how pleased I am that my hon. Friend is explaining his position and the points that were made on behalf of us all on the previous occasion—an evening when I was busy and unable to be here to influence the debate in person.

Mr. William Thompson (West Tyrone)

Instead of the hon. Gentleman arguing that we have got a great concession and that there will be a review in four years, not 10, does not he agree that it would have been better for the Minister to come to this House and say that the arrangement will end in four years, after which there will be normality throughout the whole of the United Kingdom? The chances are that when the review takes place, the Government will argue that matters should continue as they are.

Mr. Öpik

There are two answers to that. First, I said that the default position, as I understand it—the unusual and exceptional arrangement, the exemption in Northern Ireland—will fall unless it is reaffirmed by the House. I hope that the Minister will confirm that in his summation.

Secondly, these matters could well be in the Liberal Democrats' hands. There will be an election, at which point I confidently believe that the new Liberal Democrat Prime Minister will consult me, should he provide me with the Northern Ireland Cabinet position that I hanker for, and we will look at it again. However, the serious point—one that the general public should realise too—is that the default position is that this is an interim arrangement and that it will fall unless it is reaffirmed by the House. If that is incorrect, perhaps the Minister will intervene.

Mr. Mike O'Brien

To clarify the matter, the four-year period is an initial one. After that, we want to review the situation; I very much hope that we could move to what the hon. Gentleman describes as a greater default position—to a process of greater convergence. It remains to be seen whether the peace process will enable us to do that.

Mr. Öpik

At the moment, I cannot confirm the exact details in the Bill, but my interpretation of the Minister's response is that that would be the desired outcome. In four years, the Government, whether red, yellow or—conceivably—blue, will have to work extremely hard to justify to the House the idea that international funding for Northern Irish political parties should continue as it is—[Interruption.] The hon. Member for Beaconsfield (Mr. Grieve) assures me that in the event of the Conservatives forming a Government, they will not continue it. As they have told me many times that they will win the next general election, I do not know what they are so worried about. If they win, I shall make a lot of money out of Ladbroke.

I have enormous respect for the right hon. Member for Upper Bann. He expressed the justified concern that in a referendum—for example, on the unification of Ireland or the disconnection of Northern Ireland from the UK—there could be an unfair funding bias in favour of those who received international funding; let us assume that it would help the nationalists. That assumes that, between now and such a referendum, the funding arrangement would be maintained.

I do not think that there will be a referendum in four years. In the light of both the debate so far and the Minister's inference, we shall review the arrangement after four years with the presumption of eliminating it. If such a referendum were to be held in about 20 years, there would be five opportunities to eliminate the preferential funding arrangement. I stress that, meanwhile, there is nothing to stop those who are against unification from putting forward their case and receiving international funding to make it.

The right hon. Member for Upper Bann expressed the valid concern that the differential in funding arrangements requires slightly different treatment of parties that might otherwise choose to operate UK-wide. That is correct. However, my interpretation of that point is that, at long last, there are convergence criteria; we are recognising present reality, while setting up a process whereby the differences can be resolved and eliminated.

Those people who are concerned about the money imply that the increase in beneficial funding to republicans or nationalists would convince many people to vote for them. However, if I gave the right hon. Member for Bracknell or the hon. Member for Beaconsfield £1 million, I do not think that they would vote for a republican or nationalist party. The general public in Northern Ireland are extremely well informed politically; they tend to make judgments based on their varied points of view.

There has been enormous progress in Northern Ireland. Individuals whose participation in the political process we might never have anticipated have laid down their guns and tried to participate. The objections of the official Opposition are reasonable—these are matters of judgment—but they put an unnecessary and distracting strain on a process that has, to date, shown signs of leading to a lasting peace. History will prove whether we are right.

I respect the views of the right hon. Member for Upper Bann, but it is exciting that we at least have the opportunity to resolve the key issues—to park issues such as these and not introduce them now, and make a commitment to return to them in four years. If those of us who accept that the pragmatic outcome of our deliberations should be to leave the funding issue as it is for now and return to it in future are right, history will prove it. If we are wrong, I shall be the first to say so.

10.15 pm

We happen to agree with the Minister on this matter of judgment. We have secured a change. I hope that the Minister accepts that the reduction in the review period from 10 years to four was partly due to Liberal Democrat influence on the Government. We have now chosen to support the Government's proposal. I thank the House for listening to my arguments.

Mr. Walter

I presume the hon. Gentleman is speaking on behalf of the Liberals, who have tabled an amendment in this group. Will he speak to that amendment as well?

Mr. Öpik

If my hon. Friend the Member for Hazel Grove catches your eye, Madam Deputy Speaker, he will speak to that amendment, but I am limiting myself to the matters that I have discussed.

I ask those who are not inherently sympathetic to the Government's proposal to think about what we are trying to do. Politics in Northern Ireland is an extremely complicated business, and the proposal deals with the realities, strains and tensions not just between communities, but within them. If we are serious about acting in good faith, once in a while we may have to do what seems out of kilter in the short-term interest; but in my judgment, it will lead to a promising convergence in the long term.

Mr. William Ross (East Londonderry)

I have listened with interest to the last two or three contributions, but living as I do in Northern Ireland and knowing exactly how such proposals are put into effect there, I shall not use the gentle words that some hon. Members have used in an effort to persuade the House of the rightness of their cause. Frankly, at this stage in the consideration of any Bill, the chances of changing the Government's mind are somewhat less than nil, and we all appreciate that.

The bottom line and philosophy of the Bill was that the Labour party wanted to prohibit the foreign funding of political parties. That is what Labour said, and I believe it was in its manifesto. That is the thesis underlying the Bill, yet an exception is being made that will primarily help Sinn Fein/IRA—a murderous, terrorist and thuggish organisation, which is responsible for many thousands of deaths; for untold misery, damage and pain not only in Northern Ireland, but throughout the kingdom; and for racket after racket, intimidation, violence, beatings, thuggery and mutilation, which continue day by day.

By and large, hon. Members—except those who live in Northern Ireland—await stories about road accidents, mild crimes or something that the Government have or have not done, or problems with their local councils, but when my radio goes on in the morning, the first thing I hear is that a young man of 21 has been beaten up in the night by several people who broke into his house; that a young man has been found shot through the elbow, wrists or knees and found bleeding in an alley; or that someone has been beaten up. That is terrorism in action, and it does not happen once a week or once a month, but every flipping morning.

The Government tell me that we must make a concession, but we all know that the concession is being made at the behest of Sinn Fein/IRA. The concession is nothing more nor less than a capitulation to its demands, backed up by its weapons, its thuggery and its willingness

to return to violence if it does not get what it wants. For that reason in this matter, as in others, I and my right hon. and hon. Friends would prefer it if Northern Ireland parties were part of the United Kingdom system.

If the Government really want to know what to do, the Minister should consider the fact that the Bill contains a system called "accounting units", which could have been used in constructive, clever fashion to enforce the law and make Northern Ireland parties ring-fence their accounts. Primarily, Sinn Fein, which claims to be an all-Ireland party, could be made to ring-fence its accounts in the United Kingdom. Perhaps that would not stop the inflow of money from the rackets and intimidation and the money that is collected by folk rattling boxes on street corners in Boston. A friend of mine lives there. He told me that some years ago he was accosted in the street and asked to give a dime to shoot a British soldier.

That is the reality of where that dirty, bloody money comes from and what the money handed over into the boxes and in pubs and raised in all Sinn Fein/IRA's fund-raising activities is aimed at. It is aimed at changing the constitution and the territory of this nation—at diminishing the area of this nation and the writ of law. Ministers and many Labour Members exhibit a total unwillingness to understand that reality and to do what is necessary to thwart the activities of those people.

We should demand clarity about where money entering the United Kingdom political system from abroad comes from—not necessarily by publishing names, although the Opposition have tabled an amendment that would accomplish that. We could have a secret register if we wished. At least those in authority would have some idea of what was going on. Perhaps that could be done. I would prefer more clarity and transparency, but that said, 1 would be satisfied with that solution.

Where does most of the Sinn Fein/IRA money come from? My right hon. Friend the Member for Upper Bann (Mr. Trimble) referred to the amount of money that the Social Democratic and Labour party got and the fact that the proportion of Sinn Fein/IRA money coming from abroad was quite small. Where does the rest of it come from? It comes from rackets and drugs, but above all from fuel smuggling.

This week, I received a written answer to a parliamentary question from the Minister responsible. The question was: what was the Chancellor's estimate of the loss to the Revenue as a consequence of fuel smuggled into Northern Ireland? I was referred to a written answer given on 20 March, which said that the loss was estimated to have been £100 million in 1998. Am I to understand from that answer that the Government have cravenly decided not to estimate the loss in 1999, never mind in 2000? That is the only conclusion that can be drawn from the answer. The Government do not know what the loss to terrorism due to fuel smuggling is, and they do not want to know. If the loss were determined and became public knowledge, there would be an outcry in the House, in newspapers and throughout the country about the amount going straight into the hands of terrorist organisations which is used not only for political, but for all sorts of matters.

A large Mafia-type society has been created as a result of Government willingness—it did not start with this Government, I regret to say—

Mr. Speaker

Order. The hon. Gentleman should deal with the amendments. They have nothing to do with the criminal element in society; they concern political parties.

Mr. Ross

I appreciate what you are saying, Mr. Speaker, but there is a fine line. I think that "inextricably linked" is the term that is applied to Sinn Fein/IRA, so what is political and what is terrorism in that respect?

Rev. Martin Smyth (Belfast, South)

Has my hon. Friend noticed that one hon. Member said that Sinn Fein had turned away from violence? Does he remember that when a bomb was apprehended in County Fermanagh, the local councillor said that the council was not in the process of condemnation?

Mr. Speaker

Order. The hon. Members for East Londonderry (Mr. Ross) and for Belfast, South (Rev. Martin Smyth) are straying from the matters in hand. We are considering the Lords amendments.

Mr. Ross

I accept that, Mr. Speaker, but my hon. Friend has drawn attention to political links and to the political protection that Sinn Fein offers to the terrorist organisation to which it is inextricably linked. In those circumstances, the links are not just terrorist but political.

I have said enough about fuel smuggling and the amount of money that is lost through that. If the Minister thinks that it is a laughing matter, perhaps the Chancellor of the Exchequer will not. The Chancellor could do quite a lot with the £100 million, £200 million, or God knows how many hundreds of millions that have gone missing. However, the money is not really missing; someone has got it. I conclude my remarks on this issue, but we shall return to it time and again in other debates until we get a sensible answer or, more importantly, sensible action from the Government.

The Conservative party tabled amendment (a) in lieu of amendment No. 132, which would mean that the exemption will apply not to all Northern Ireland parties, but only to some of them. When the Minister moved the amendments, I thought that he was trying to tell us that all the parties would be covered. However, clause 65(2) says that a Northern Ireland party means:

1. (a) a registered party of which one or more members are members of the Northern Ireland Assembly; or
2. (b) a registered party of which one or more members are Members of the House of Commons elected for constituencies in Northern Ireland.

So if one starts a new party, one is not covered. One would have to declare the donations made to it and produce the facts and figures. If that is true for new parties, why should it not be true for existing ones? That is another inequity to which the hon. Member for Banff and Buchan (Mr. Salmond), who spoke for the Scottish National party, and my right hon. Friend the Member for Upper Bann referred.

The Minister mentioned the four-year period. However, as he well knows, that involves the pious hope that the provision will not be necessary at the end of four years. In reality, at 11 or 12 o'clock one evening, an order will be introduced in the Chamber that will be accepted on the nod. The period will be extended for another four years, and then for another four years after that. It is an endless process. The arrangement will not end after four years. It is one of those temporary arrangements that tend to become permanent.

The way out of the problem is to ring-fence the United Kingdom for the purposes of this part of the Bill. We should treat Sinn Fein in Northern Ireland as an accounting unit. Although I would not be prepared to go to court to stand by any figures that it produced—I do not trust it that far—we should try our best to make the financing of that party as transparent as possible so that we have an idea about where it and other parties get their money from. It would be interesting to find out whether other Governments are funding the parties. Many people in Northern Ireland would like to have a clear idea of where the various nationalist parties receive their money from. Above all, the real solution to the problem is to destroy terrorism, not to give in to it.

Mr. Stunell

This group contains about 60 amendments, and the majority of them do not relate to Northern Ireland. I hope that the House will not mind if I address my remarks to two other issues. I am delighted that my hon. Friend the Member for Montgomeryshire (Mr. Öpik) had the opportunity to speak on Northern Ireland on this occasion, just as I know that he was delighted that I had the opportunity to speak about it on Report.

I draw the House's attention to amendment No. 39 and to several related amendments. The Minister will recall that, in the House and in Committee, I drew his attention to the grave difficulties that the Bill's original drafting had for the Liberal Democrats, as a federally organised and structured party.

I pointed out that in the form in which it then was, the Bill would have made it illegal for a political party to practise federalism. Although I accept that it is not popular to be federalist, for us that is a philosophical concept that we are keen to maintain. I acknowledge that, despite the bafflement of the Minister, the Committee and various civil servants at one time or another, my noble Friends at the other end of the building have worked with the Minister to produce sensible ways forward on the issue.

10.30 pm

I know that federalism is still misunderstood, but at least it is now not illegal for a political party. It will still be somewhat clumsy for us to operate, but as we made clear from the beginning, we are keen to implement the legislation fully and comprehensively and seek no special loopholes. All we sought was a structure that allowed us to practise our federal principles. I thank the Minister for moving some way to allow us to do that.

I shall comment on amendment No. 71 and the related amendments, which were the subject of the intervention by the hon. Member for North Dorset (Mr. Walter). These amendments deal with the funding of the transitional arrangements, and the amount of money that could, should or might be made available for political parties to implement the changes.

The situation is complex. When the Bill left this place on its way to the House of Lords, £500,000 was the ceiling of the transitional amount available. In the other place, that ceiling was raised to £700,000. We have before us three proposals, two from the Conservatives—one that the ceiling should revert to £500,000, and another that would reduce it to nil but allow access to an electronic register—and one from my right hon. and hon. Friends and me, which would raise the ceiling to £1 million. As far as I know, the Government still have on the table the sum of £700,000, so there are four figures—zero, £500,000, £700,000 or £1 million—as the possible ceiling for the transitional spending.

The Liberal Democrat view is that implementing the Bill will entail significant transitional costs for all the mainstream political parties. The Bill is drawn in such a way that the money is not dished out willy-nilly. It is to be paid only against claims for actual spending, so it will be necessary for any political party to justify the sum that it is claiming against actual activity completed.

Why is transitional spending necessary? The first reason is that the Bill requires quick implementation. The Government want it in place for the general election, and the political parties are anxious to make sure that various loopholes are blocked. The provisions must be implemented carefully, as they entail many snags, difficulties and novelties for all the main political parties, which are essentially based on volunteer effort.

In Committee we spoke a good deal about the volunteer nature of politics; that applies as much to the Conservative and Labour parties as to the Liberal Democrats, and no doubt to others. We are not, on the whole, a professionalised and fully paid party. That is certainly the case at the constituency and branch level. We will need quick, careful implementation in hundreds of locations throughout the country by volunteers with different skills and qualifications. To ensure all that, we will require training and equipment, and careful deployment of resources.

If we had two years to implement the Bill, the transitional costs might be less, the training burden might be smaller and some equipment might be acquired as part of the normal replacement programme. However, that is clearly not the case, so we were keen for the House to consider the ceiling imposed by the Bill. We certainly agree with the increase that the House of Lords has introduced, and we have tabled an amendment that would place an even higher ceiling on the amount. Judging by events so far this evening, that amendment will not come to the attention of the House for a vote. However, I want to make it clear that we support the transitional arrangements and believe that they are an important and valuable way of ensuring that the Bill is implemented quickly, effectively and accurately throughout the United Kingdom.

Mr. Walter

We have had a serious debate about the Northern Ireland provisions, and latterly we have come on to other subjects that were dealt with in a point of order made by my hon. Friend the Member for Beaconsfield (Mr. Grieve) earlier today when he said that the order of amendments is not always especially logical. Amendment No. 71, which I am sure we will come to vote on later, after amendment No. 70, must be debated now. In a moment, I shall sum up the position on the amendments affecting Northern Ireland, but I shall deal first with amendment No. 71 and the amendments in the names of my right hon. and hon. Friends.

I correct the hon. Member for Hazel Grove (Mr. Stunell), who said that our amendments would reduce the figure for assistance to zero. They would bring it down to £500,000, which was the Bill's original provision.

There is a serious point here. The Bill will require all political parties to verify that all donations over £200 come from permissible sources, and that will place a heavy burden on political parties. The Bill will require them to verify that the individual donor appears on an electoral register. That might sound simple enough, but it is not, because there are hundreds of electoral registers throughout the country which are handled by different electoral registration officers.

My party raised the issue with the Home Office in June when we wrote to ask what plans it had

to provide parties both locally and nationally with a central, collated and up-to-date version of the electoral register.

On 11 August, the Home Office responded positively and said that it was working with the Association of Electoral Administrators to commission a study. It said that it would keep us in touch with developments.

We then realised that the Labour party had also written to the Home Office on the subject. It had received a reply dated 3 October, which is in the public domain and was copied to us. It said:

The simplest solution would be some form of "on line" access so that parties and the Electoral Commission could check whether a donor was on a register when the donation was made. The letter continued:

The aim would be to have such a system in place for next October— that is, October 2001. Unfortunately, the restrictions on donations will come into force eight or nine months before that. We look to the Minister to reassure us or to accept our amendment (a), which would replace amendment No. 71.

I come now to our interesting debate on the amendments affecting Northern Ireland. In response to the Under-Secretary, my right hon. Friend the Member for Bracknell (Mr. MacKay), in a moving speech, made the point that Northern Ireland political parties should be treated on an identical basis with parties in the rest of Great Britain. We had a key speech, particularly on the absence of Northern Ireland Ministers, from the right hon. Member for Upper Bann (Mr. Trimble), the leader of the Ulster Unionists, who went on to express his concerns about referendums.

The hon. Member for Hull, North (Mr. McNamara) gave a rather unacceptable justification for the separate treatment of Northern Ireland political parties. Then we had what I can only describe as a slightly amusing contribution from the hon. Member for Banff and Buchan (Mr. Salmond) about the anomalous position of expatriate Scots compared with the expatriate Irish, which he saw as discrimination, particularly against the Scottish National party, a matter which led him to threaten to take the Bill to the European Court of Human Rights because he felt that it was unjust. I look forward to that action.

Mr. Salmond

The hon. Gentleman will have studied the proceedings in the other place and he will be fully aware that I was repeating an argument used not just by Lord MacKay of Ardbrecknish, but by Lord Rees-Mogg, who I think carries the Tory Whip in the other place. The hon. Gentleman is aware of that, is he?

Mr. Walter

I am informed that Lord Rees-Mogg is a Cross-Bencher, but Lord MacKay led for the Opposition on the matter. As I and some of my hon. Friends have pointed out throughout, the Bill contains enormous contradictions when it comes to the human rights convention. They will be tested, particularly in referendums, when foreigners will be able to spend as much as they like, while poor British people will be limited by this legislation.

We then moved on to what I can only describe as the completely contradictory position of the Liberal Democrat Front-Bench spokesman. The hon. Member for Montgomeryshire (Mr. Öpik) told us that he supported the Government position. On Report, when the Opposition disagreed with the Northern Ireland provisions, the hon. Member for Hazel Grove said:

I support the amendment moved by the hon. Member for North Dorset (Mr. Walter). He went on to say:

The Government have finally bitten the bullet and, through this Bill, have introduced provisions that will control national expenditure on elections. It is perverse therefore that we should say that there is one part of the United Kingdom where we cannot find a way of getting on top of the problem and that we need clause 63— as it then was—

to run away from it. This clause is based on the wrong underlying philosophy and the wrong legislative theory.—[Official Report, 14 March 2000; Vol. 346, c. 195-6.]

I leave the House to decide where, at the end of the day, the Liberal Democrats—

Mr. Öpik

In that case, is the hon. Gentleman opposed to the fact that we have achieved some form of convergence criteria in the four-year upper limit?

Mr. Walter

I shall come to that in a moment, so I ask the hon. Gentleman to be patient.

We had a passionate speech from the hon. Member for East Londonderry (Mr. Ross) about real life on the ground in Northern Ireland, and I was delighted with some of the comments made by the hon. Member for Hazel Grove, who, in Committee, supported the Opposition on many issues.

Opposition amendments (c) and (d) to Lords amendment No. 133 concern the four-year limit that has just been raised by the hon. Member for Montgomeryshire. I refer the Minister to a statement made by the Parliamentary Secretary, Privy Council Office when we raised the matter in Committee and tabled an amendment that would have restrict any exemption made by the Secretary of State to a period of not more than 12 months. The Parliamentary Secretary said:

I do not discount the period suggested in the amendment, but I would ask the Committee to reject it at this stage, so that we may see what emerges from the discussions.—[Official Report, Standing Committee G, 27 January 2000; c. 183.] 10.45 pm

The spokesman for the Liberal Democrats in the other place was Lord Goodhart, who had been a member of the Neill committee and had detailed knowledge of the matter. The Neill committee originally proposed a statutory four-year maximum exemption period, but Lord Goodhart came round to our view that we should look at a one-year period. We have had a lot of discussions and there has been much cross-party discussion. We have heard about views expressed in the other place and in the House. Will the Minister reflect on those discussions and accept amendments (c) and (d) to Lords amendment No. 133 at this late stage?

We have spent many hours in other debates discussing the situation in Northern Ireland. Both sides of the House agree on the necessity of the peace process. We also agree that we wish to see a normal economic and political climate return to Northern Ireland. While I do not wish to go into the Northern Ireland debate again, I must say that the fragile nature of the peace process—which is part of what we are debating—would be damaged if we were to make special provision for those who support and sympathise with terrorism. It is an affront to political parties in Northern Ireland that are represented in the House of Commons, whose members have taken the oath and taken their seats, to allow others who are the friends of terror special privileges that are denied to parties in the rest of the United Kingdom.

The basic premise of our amendments is that, as far as possible, there should be no special provisions for Northern Ireland. Lord Neill suggested that provisions should exist because there were special circumstances in Northern Ireland, but I do not accept all his arguments because the game has moved on since the Neill report was published in October 1998. It reached us before Sinn Fein—to name but one Northern Irish political party—became an effective part of the political process. The rest, as they say, is history.

If Great Britain is to be subject to the requirements for financial propriety and transparency that are enshrined in the Bill, it is unacceptable that part of the United Kingdom with a vivid history of political corruption should be excluded from the provisions of the Neill report. I do not want to go over Northern Ireland's political history, but it would be wrong to turn a blind eye, in effect, to practices that have been declared unacceptable in the rest of the United Kingdom.

There are many contradictions in the way in which the Bill deals with Northern Ireland. Will the Minister confirm, as I believe that he did in a written parliamentary answer yesterday, that political parties in Northern Ireland can use foreign money in a referendum campaign, but that other organisations registered in Northern Ireland as third parties in a referendum cannot use foreign money in such a campaign? Is that fair, and is the Minister prepared to live with that contradiction?

Finally, on Tuesday 30 May 1995 The Daily Telegraph stated:

Labour has made clear that if it wins the next election it will outlaw contributions to party funds from overseas donors. While this would not prevent Sinn Fein leader Gerry Adams raising funds for their new Washington office, it would stop his party using the money in Northern Ireland. The article added that

senior party sources have confirmed that

the gentleman who is now Home Secretary

believes that these rules would apply to any party contesting elections in the United Kingdom.

Sources have indicated that Mr Straw is "relaxed" about the fact that it would now extend to the republican party.

The Opposition have tabled a number of amendments and we are considering amendments from the other place. I give notice to you, Madam Deputy Speaker, that the Opposition would like Lords amendment No. 32 to be treated as separate from the other amendments.

Mr. Mike O'Brien

We have had a good debate on some difficult issues and have heard closely argued and sensible contributions from a number of distinguished sources. I shall deal first with the speech of the hon. Member for Montgomeryshire (Mr. Öpik) and then with those of the hon. Member for Banff and Buchan (Mr. Salmond), of the right hon. Member for Upper Bann (Mr. Trimble) and of Conservative Front Benchers.

Mr. Bercow

What about the hon. Member for East Londonderry (Mr. Ross)?

Mr. O'Brien

I hear a sedentary comment from the hon. Member for Buckingham (Mr. Bercow). Where I can, I shall pick up other contributions of equal importance.

The hon. Member for Montgomeryshire made an important and good contribution, and I thank him very much for his support on this issue. His arguments were sound. I also thank the Liberal Democrats—in particular, Lord Goodhart, for his contributions in the other place. The Neill committee did not recommend a specific maximum period for the different approach in Northern Ireland to apply. Lord Goodhart suggested four years. The Government considered that and were able to agree that that approach most commended itself to us. I can confirm to the hon. Member for Montgomeryshire that amendment No. 133, which, I think, was tabled by the Conservatives, refers to four years. In a sense, that is the default position—we are seeking convergence. The hon. Gentleman deserves great congratulations for the fact that, during his speech, for the first time in the House, I heard a reference to convergence criteria that was not met with a sharp intake of breath by Conservative Members; he has achieved that tonight, if nothing else.

The hon. Gentleman also made the important point that we all want to ensure that, in due course, the situation for political parties in Northern Ireland is the same as that in Great Britain. We want to ensure that the same controls on political funding operate throughout the United Kingdom. In our view, however, we have not arrived at that situation, although the Bill contains a default approach and there is an assumption that we will move towards convergence. The hon. Gentleman was right to say that, should it be necessary, we intend that the Government should come to the House to demonstrate that the period of difference needs to continue. The House would have to be convinced that that was the right approach.

I shall deal with several other points. The hon. Member for East Londonderry (Mr. Ross) mentioned clause 65, and quoted the definition that it contains. I refer him to amendment No. 134, which sets out a different approach that may result in a change to clause 65.

The hon. Member for Banff and Buchan was worried that the Bill would discriminate against the Scottish National party. He knows that that is not the

Bill's intention. My hon. Friend the Member for Hull, North (Mr. McNamara) regretted that we had to pass a Bill to prevent the diaspora of England, Scotland and Wales—never mind Northern Ireland—from contributing to political parties. I understand his arguments. However, donations from abroad caused great public disquiet about standards in public life. We therefore believe that it is necessary to enact such a measure.

Although the hon. Member for Banff and Buchan has some anxieties, I am sure he accepts that when we entered government, there had been a period of serious concern about standards in public life. The way in which donations from abroad were made to some political parties caused the public to feel that the standards that they had a right to expect were not being maintained.

Mr. Salmond

The most controversial donations were not from the diaspora but from people with no connection with Scotland, England, Ireland or Wales, who sought to gain advantage in the United Kingdom political system.

Will the Under-Secretary answer a straight question? Why, under the Bill, is it right for an expatriate Irishman to support Sinn Fein financially, but illegal for an expatriate Scot to support the Scottish National party, which has a 70-year record of attachment to the peaceful democratic process? How can that be right?

Mr. O'Brien

There is public anxiety about foreign donations, even when the donors have some contact with Scotland, England or Wales. We are trying to tackle that and to improve standards in public life. We therefore need to pass measures such as those in the Bill. The debate has made it clear that circumstances in Northern Ireland are manifestly different from those in Scotland, England and Wales.

The hon. Member for Banff and Buchan also asked whether we were satisfied that the Bill complied with the European convention on human rights. We are satisfied; we have certified the Bill to that effect. The House remains master of its own destiny; it will not automatically be overruled by the Human Rights Act 1998. Courts may issue a declaration of incompatibility but the House remains sovereign in relation to the legislation that it passes.

Mr. Gerald Howarth (Aldershot)

Will the Under-Secretary give way?

Mr. O'Brien

I shall not give way; I want to make progress, if the hon. Gentleman will forgive me.

I want to consider the important contribution of the right hon. Member for Upper Bann. He asked several questions, and I shall do my best to deal with some of them. He asked what was the basis in the Good Friday agreement for treating Northern Ireland differently. I accept that his understanding of the agreement in general, of the specific detail and of the subsequent negotiations is much greater than mine. However, there is recognition of the need for the southern Ireland Government and the UK Government to accept that, whatever the issues of sovereignty, southern Ireland is clearly interested in the future of Northern Ireland, including its political process.

Mr. McNamara

rose—

Mr. O'Brien

I shall not give way, if my hon. Friend will forgive me.

There are special circumstances in Northern Ireland. The right hon. Member for Upper Bann is First Minister in a Government that includes Ministers who have close links with the south.

11 pm

Mr. McNamara

On a point of order, Madam Deputy Speaker. The Minister keeps referring to "southern Ireland". Does he mean Clare island, or does he mean the Republic of Ireland, as he should in terms of recognition of an independent country?

Madam Deputy Speaker (Mrs. Sylvia Heal)

That is a matter for general debate, not a matter for the Chair.

Mr. O'Brien

I assure my hon. Friend that I am referring to the Republic of Ireland.

The right hon. Member for Upper Bann asked whether it was feared that the Government of the Republic would provide money to influence the outcome of a referendum. Let me make it clear that we would not welcome an attempt by any Government to influence the outcome of a referendum in the United Kingdom—whether on the euro or on any other issue—by giving large amounts to a particular political party.

May I deal with the matter in a slightly different way? Clause 105 provides for the Electoral Commission to allocate a grant to a designated umbrella organisation on each side of any referendum campaign. I remind the right hon. Gentleman that there would be limits on expenditure in any referendum in Northern Ireland. The impact of any foreign donations would therefore be limited to some extent. I hope that that reassures the right hon. Gentleman somewhat, although I realise that I have not been able to convince him on every point.

The right hon. Member for Bracknell (Mr. MacKay) said—and to an extent I do not disagree—that we should seek to treat Northern Ireland like Great Britain, except when the case is proved for treating it differently. Whether the case is proved for the right hon. Gentleman or for me may well be a point of difference between us. We say that particular circumstances must apply there; the right hon. Gentleman does not necessarily accept all the arguments.

I think that, in terms of the long-term aim, we would want the same sort of rules to apply across the United Kingdom, but we do not accept that we have reached that point. I have explained why we take that view, and I do not think that I need rehearse the arguments. I understand the right hon. Gentleman's serious concerns, but we have relied on the way in which the Neill committee has told us we ought to proceed.

Mr. MacKay

rose—

Mr. O'Brien

I will give way to the right hon. Gentleman in a moment. First, let me quote from a letter that we received from the Neill committee, dated 15 October 1999, which relates to the Northern Ireland issue. The committee said:

We are pleased that you have felt able to accept our recommendation in relation to an exemption from the reporting requirements in respect of donations made to political parties in Northern Ireland. It then set out some of the arguments. It continued:

One matter of concern arises…The protection afforded by clause 63 of the draft Bill is to be made available only to those political parties which have succeeded in winning seats either in the Northern Ireland Assembly or in the Westminster Parliament…We are concerned for two reasons. First, your proposal implies that a political party which, for example, achieves only one seat in an election and loses it in the next will, in losing that seat, lose the clause 63 protection. We believe it to be unsatisfactory that the protection should, in these circumstances, vary in this way. Second, we believe that as regards those parties which have (so far) unsuccessfully fielded candidates at elections, their exclusion from clause 63 would place them at an unfair disadvantage. I hope that, in due course, both the right hon. Gentleman and I will be able to accept a situation in which circumstances in Northern Ireland and the rest of the United Kingdom are fairly much the same, but we are not there yet.

Mr. MacKay

Before that long quotation, the Minister said that there were particular circumstances in Northern Ireland that made it fine for political parties there to accept foreign donations, whereas that was not the case here. Will he explain what those particular circumstances are?

Mr. O'Brien

I do not think that the right hon. Gentleman needs me to set out the circumstances that prevail in Northern Ireland. They are well known both to him and to me. We need to ensure that we do not treat this as a party political debating point. I accept that, up to now, the right hon. Gentleman has not done so, but it is important that we recognise that we are debating the proposals against a background of serious violence in Northern Ireland and a peace process that has developed from the Good Friday agreement. We hope that that peace process will develop further. That is a shared wish. The right hon. Gentleman knows as well as I do that the circumstances are difficult. I have already set out with some clarity the arguments as to how we have reached the conclusions that we have, and the Neill committee has indicated that special circumstances do, indeed, apply in Northern Ireland.

Mr. MacKay

I do not believe that there are particular circumstances that affect the situation in such a way as to allow foreign donations to parties in Northern Ireland and not to parties elsewhere. What are those particular circumstances? As far as I can tell, all the Minister has said is that there is paramilitary violence in Northern Ireland. I agree, but that is not a reason for allowing foreign donations.

Mr. O'Brien

The right hon. Gentleman knows that there are arguably two reasons. There are two political parties that have close links with what my hon. Friend the Member for Hull, North (Mr. McNamara) calls the Republic of Ireland and others call southern Ireland. Certainly, there are close links across the border. Therefore, a special circumstance applies in Northern Ireland which does not apply in Scotland, England or Wales. In those circumstances, we believe that it is appropriate to take the action that we have taken.

Let me deal with amendment (a) to Lords amendment No. 132, which puts forward an alternative to exempting Northern Ireland parties from the disclosure requirements in part IV. Under the amendment, Northern Ireland parties would be required to disclose recordable donations to the Electoral Commission in the normal way, but the information would not then be put into the political domain.

That is a solution that the Government themselves have previously considered. It may be a halfway house that could be put in place in due course but we do not see it as an acceptable way forward at present. Concerns have been expressed that any external reporting of donations, even if confined to reporting to the Electoral Commission, would not provide sufficient reassurance to donors that their names would not fall into the wrong hands. That is not to suggest, as has been argued, that there is reason to doubt the discretion of the Electoral Commission. It is simply a matter of perception.

As the situation improves, we will certainly look again at the option of the disclosure of donations to the Electoral Commission and not to the wider public. However, such an option should be seen as additional to, and not a substitute for, the wider powers in clause 65.

The amendments to Lords amendment No. 133 address two further aspects of clause 65: the time limit on any order that is made under subsection (1); and the effect of the exemption in respect of the ban on foreign funding in a referendum campaign.

Amendments (b), (c), (d) and (e) relate to the time limit on any order that is made under subsection (1) of clause 65. Amendment No. 133 limits the life of such an order to four years. It is right and proper that an exemption should be subject to regular review. We believe that once every four years or so is about right.

Amendments (c) and (d) would require an annual review. That is too frequent. We hope that the political climate in Northern Ireland will continue to improve year on year, but that is not the same as saying that the political situation will have changed sufficiently one year after another to justify an annual review of a clause 65 order. I invite the House to stick to four years, albeit with the possibility of an interim review should the climate materially change, in which case the order in force could, if appropriate, be revoked.

I cannot support amendment (e), which seeks to create a sunset provision in the clause. There may come a time when we can repeal the provisions in the clause, but it is premature to be thinking of that now. Of course, if no order is in force, the clause would effectively be dormant. One would hope that it would not have to be reawakened, but we should not burn our boats now.

Amendments (f) and (g) are concerned with the impact of a clause 65 order on a referendum campaign. I think that, to some extent, I have addressed the issues with which they deal.

I shall attempt to address the issues raised by the hon. Member for North Dorset (Mr. Walter). The Government are entirely sympathetic to the idea that both the political parties and the Electoral Commission should have easy access to the electoral register, and, if we were starting from scratch, a national register would be one way of achieving that. Currently, however, legislation places the duty of maintaining a register of electors on local registration officers. Altering those arrangements would be a significant legislative task, and this Bill is not the place to do it.

That means that checks will have to be carried out on up-to-date registers maintained locally but, given the nature of the controls provided in the Bill, it would make sense for

there to be a central access point to all 600-plus local registers. The Electoral Commission project team is in discussion with the Improvement and Development Agency for Local Government and the Association of Electoral Administrators about the way in which online access to all local registers for the commission and the political parties can be arranged. Ensuring the compatibility of local registers is likely to assist in making those registers more accessible. However, that is no small undertaking, and, as the hon. Member for North Dorset said, the arrangements will not be in place before next October.

We are trying to determine whether, as the hon. Member for North Dorset suggested, an interim solution could be in place in time for commencement of part IV of the Bill. It has not, however, proved possible to find a value-for-money solution that could be relied on to be in place for next February. Instead it has been agreed to increase from £500,000 to £700,000 the total sum available to meet parties' start-up costs, including the costs associated with making extra checks locally against the electoral register.

I fully expect, in the long-term, to return to the commission's role in the registration of electors, but it is not a matter to be resolved in the context of this Bill. I therefore urge Opposition Members to accept the Government's view that the Lords amendments are the best way of approaching the matter. I commend the Lords amendments to the House, and ask Opposition Members not to press theirs.

Lords amendment agreed to.

Lords amendments Nos. 27 to 31 agreed to.

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