Political Parties: Donations (Hansard, 25 February 2002)

§ The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton)
My Lords, we have no current plans for a cap in the size of donations to political parties or to establish a new system for state funding. This is in line with the recommendations of the Committee on Standards in Public Life, chaired then by the noble Lord, Lord Neill of Bladen. The Electoral Commission has indicated previously its intention to consider the argument for a cap on political donations and state funding for political parties before the next 1224 general election. We shall want to look very carefully at any recommendations it makes. We would welcome a debate on the funding of political parties.

§ Lord Goodhart
My Lords, will the Government accept that, if public confidence in the political process is to be restored, it will be essential to put a cap on the size of donations to political parties from any single source? Will the Government also accept that the corollary of that is that there will be a need for increased public funding for political parties, either by direct grants or by means of tax relief?

§ Lord Falconer of Thoroton
No, my Lords, I do not accept that. The Neill committee examined the issue and concluded neither that there should be a cap nor that there should be public funding of political parties. As to a cap, the Neill committee concluded that individuals have the freedom to contribute to political parties. At the same time, the committee made it clear that there should be disclosure of substantial donations. So far as concerns the public funding of political parties, the view has been taken that it would be wrong for the state to finance political parties. There are other matters which are more important in terms of financial priorities. So I do not accept the noble Lord's premise. As I said in my original Answer, it would be useful to have a debate on the issue.

§ Lord Peyton of Yeovil
My Lords, given the Minister's last observation, will he and his colleagues be very careful indeed before they are induced by the seductive words of the noble Lord, Lord Goodhart, to enter the morass of feeding political parties with public money—at least until political parties become much nicer and wiser than they presently are?

§ Lord Falconer of Thoroton
My Lords, the "morass" as regards public funding for political parties was a point examined by the Neil committee. The committee's response to that as a solution was a decisive "No". As I said, we should have a debate on the matter, but we are not presently persuaded that it would be a sensible way in which to spend public money.

§ Lord Campbell-Savours
My Lords, when will we ever learn? Yet again, we have been through a very difficult period in terms of publicity for the Labour Party. The same has happened to other political parties over recent decades. Why do we not now consult the public and find out what they believe and not presume in advance that our views as to what they believe are correct? We may well be wrong—as indeed may have been the noble Lord, Lord Neill.

§ Lord Falconer of Thoroton
My Lords, I underline the point: let us have a debate on the issue. Let us hear what people say about it. I accepted at the outset that we should welcome such a debate. However, the Neill committee examined the matter and concluded that there should not be a cap and nor should there be public funding. Changes were introduced that have 1225 made a significant difference, including the publication of any significant level of funding by private individuals. As my noble friend suggests, let us have a debate on the matter.

§ Baroness Williams of Crosby
My Lords, the Neill committee reported some time ago. Does the Minister recognise that since then a number of cases have aroused great public concern about the funding of political parties? In particular, in the light of what the noble Lord, Lord Peyton, said, should not the Government recognise that the loophole for those domiciled in this country who fail to pay our taxes but who make donations to political parties is precisely the sort of issue that concerns the public deeply and undermines faith in our political system?

§ Lord Falconer of Thoroton
My Lords, I recognise the public concern on that. The Electoral Commission is to look at caps and public funding and a Select Committee in another place will be looking at the funding of political parties generally. I have set out the Government's present position, but I have made it clear that we welcome a debate on these issues. Some time has gone by since the Neill committee reported and there have been various incidents. However, currently we are not persuaded of the need for a change.

§ Lord Tebbit
My Lords, have we not heard a new version of Goodhart's law today—the naive hope that good money will drive out had?

§ Lord Falconer of Thoroton
My Lords, that is a matter for the noble Lord to take up with the noble Lord, Lord Goodhart, who unquestionably has a very good heart.

§ Lord Strathclyde
My Lords, in the great debate that the noble arid learned Lord wishes to have, I hope that he will take an early decision to advise the Prime Minister and the Labour Party to hand back Mr Mittal's £125,000 donation, given his active lobbying against the United Kingdom's steel industry.

§ Lord Falconer of Thoroton
My Lords, no doubt the noble Lord took advice from the noble Lord, Lord Ashcroft, before he asked that question.