HL Deb 31 January 2005 vol 669 cc56-63

5.56 p.m.

Baroness Amos

rose to move, That the draft order laid before the House on 20 December 2004 be approved. [4th Report from the Joint Committee].

The noble Baroness said: My Lords, this order continues to exempt Northern Ireland from those provisions concerning donation controls as laid out in Part IV of the Political Parties, Elections and Referendums Act 2000 for a period of two years from 16 February. The provisions have the effect of extending the Political Parties, Elections and Referendums Act 2000 (Disapplication of Part IV For Northern Ireland Parties, etc) Order 2001.

The original order was made in 2001 to exempt the Northern Ireland parties from the requirement to comply with Part IV of the Political Parties, Elections and Referendums Act 2000 that set out the control of donations to registered parties. It was brought into force because of the special circumstances that existed in Northern Ireland as regards the continuing fear of the intimidation of donors and Ireland's special role in the political life of Northern Ireland, as set out in the Belfast agreement. Before I explain the various parts that make up this legislation, I want to say that I fully understand the concerns that many noble Lords have about this legislation, particularly in the light of recent events in Northern Ireland.

As I have already explained to some noble Lords outside the Chamber, it is our intention to introduce funding arrangements for Northern Ireland that are closer to those that exist in Great Britain, while including a facility for donations from Irish citizens in order to remain faithful to the provisions of the Good Friday agreement. We also need to ensure that the system that we introduce takes reasonable account of the very different system of regulation that exists in Ireland. That is why this order is for two further years, and not for four years like the original order.

While we are committed to greater transparency for political donations, it has not been possible, within the current timeframe, to move toward these more transparent arrangements for the following reasons. First, there is still concern across the community in Northern Ireland about an ongoing threat to donors by way of intimidation.

Secondly, sectarianism is unfortunately still prevalent in Northern Ireland society. If the names of donors were published, there is a danger that business donors could see their businesses being boycotted by customers from the other side of sectarian divide.

Thirdly, parties need some time to adjust to new arrangements that take account of what we still hope will be the ending of paramilitary activity. Finally, there is a need to find a suitable solution to the question of Irish donations that can meet the Irish Government's concerns and be made compatible with our system.

We will be undertaking detailed discussions with the political parties, the Irish Government and the Electoral Commission over the coming months to try to reach agreement on putting in place such new arrangements. My right honourable friend John Spellar has written to all the main political parties asking for their proposals in writing by early March on how a new system might work.

I turn briefly to the detail of the order. Article 2 disapplies those provisions in the Political Parties, Elections and Referendums Act 2000 that control donations to Northern Ireland-registered parties for a period of two years from 16 February. Article 3 disapplies those provisions in the 2000 Act to regulated donees resident in Northern Ireland. Articles 4, 5 and 6 place restrictions, where necessary, on the meaning of the term "registered party" in relation to parties and regulated donors in Great Britain. I commend the order to the House.

Moved, That the draft order laid before the House on 20 December 2004 be approved. [4th Report from the Joint Committee].—(Buroness Amos.)

Lord Glentoran

My Lords, I thank the Lord President for bringing the order before us today. Not so very long ago I was minded—and made it well known—to oppose the order. However, I have to tell the House that politics have worked. I have been seriously lobbied by all the Northern Ireland parties, except Sinn Fein. I have listened and believe that approval of the order today is the right move.

I am encouraged by what the noble Baroness has told us that the Government are doing in finding a new way forward in funding political parties. Previously, I made that point from your Lordships' Dispatch Box. It is very important that we should bring the funding of Northern Ireland parties more into line with that in the United Kingdom and that we should look at state funding, if that is what it takes. As many of your Lordships will know, there are many reasons why similar legislation for funding of political parties in Northern Ireland cannot be, and probably should not be, the same as those in England. I support the order.

Lord Smith of Clifton

My Lords, I, too, thank the Minister for introducing the order and for her patience with the position that I have taken. I have long indicated that we on these Benches want to see very positive steps being made to introduce much greater transparency into the financing of political parties in Northern Ireland. That is also the Government's stated aim.

Previously, I suggested that progress could be made towards this objective by requiring the parties to list the number of donations they receive in bands of £1,000 and to publish these annually. Anonymity could be maintained, but at least some transparency would be introduced—and we would be getting some movement. The Government said they would consider that and possibly discuss it in future deliberations with the Irish Government and the Northern Ireland parties.

On 11 January we debated the Statement of the Secretary of State after the Northern Bank robbery. I said that events had now overtaken my modest proposal. As a result of that robbery it was necessary to lift the exemption that the Northern Ireland parties enjoy from the provisions of the Political Parties, Elections and Referendums Act 2000. The Act requires all parties in the UK to publish details of all donations above £5,000 at central level received annually and excludes foreign donations. I am aware that the situation is different in a number of respects in Northern Ireland, but those can no longer be an excuse for a further two years' disapplication of the Act.

I am grateful to the noble Baroness for repeating the reasons why Northern Ireland is special, but we have heard that all before. We heard that during the passage of the Act in 2000. There were undertakings to have consultations with everyone. Here we are, four years later, with no more progress. I predict that we will be here in two years' time for another disapplication order because things will not have changed. Sectarianism will not go away in the next two years and many of the other conditions will still obtain.

If disapplication were to be extended, as the order intends, the laundering of illegal moneys into the coffers of Sinn Fein—or any other party for that matter—is made that much easier and more difficult to trace. For that reason the Liberal Democrats cannot positively support the passage of this order today. I should like to make a more general point. While direct rule obtains, most Northern Ireland legislation—and there is a lot of it—comes mainly in the form of secondary legislation, such as the present order. The convention is that such orders are not normally opposed. I have to say that, now there is no prospect of a return to devolved government for a long time, it cannot be satisfactory for the convention to be followed in all circumstances. It would be highly undesirable if it were observed because it seriously impairs the operations of democratic parliamentary procedures. Those procedures provide for opposition in the form of amendment or outright rejection or reversal of government proposals. Why should Northern Ireland continue to be denied that?

The Government must recognise the unsatisfactory nature of the present situation and suggest other ways for Northern Ireland business to be dealt with by Westminster. When may we expect some new proposals to improve the transaction of Northern Ireland business?

Lord Laird

My Lords, I cautiously welcome the introduction of this disapplication of Part IV of the Political Parties, Elections and Referendums Act 2000 order 2005. There is no doubt that in the present circumstances some restrictions on the publication of financial donations to political parties in Northern Ireland are necessary. Sadly, should such information be made public at this time, some donors would be likely to suffer intimidation and feel threatened by such exposure. This is the nature of the political situation still facing us in the Province.

Of course, like many issues in Northern Ireland, the disapplication question is a double-edged sword. One of the major problems facing democratic or constitutional parties in Northern Ireland is that the huge amount of unregulated financial donations that arrive from the United States badly distort the electoral process. It is well known that the IRA today spends much of its spare time raising money for its political wing—Sinn Fein—often using the most innovative of methods, as I am sure your Lordships are well aware. That, of course, creates a very uneven playing field when it comes to electoral politics, and provides a springboard for paramilitaries to engage in the sort of continuous electioneering and self-publicity that is simply not feasible for Northern Ireland's constitutional parties.

This point should not be lost on the Republic of Ireland's Government, nor their electorate for that matter, as they too face the same growing problem in their jurisdiction where Sinn Fein is concerned. They too have an interest in ensuring that parties wedded to criminality, money laundering and illegal fund raising do not convert this into an unfair advantage on polling day. Recent political figures in the republic reveal that in spite of their unorthodox fund-raising activities, Sinn Fein still enjoys around 10 per cent of the electorate's support. The Dublin Government do not seem unduly perturbed by that fact. I am sure that Members of this House will agree with me that they should be.

That brings me to the point that I wish to place on record this evening. There is a clear need, and, in fact, a necessity, for the future introduction of parallel legislation in the United Kingdom and the Republic of Ireland to address this issue of party funding and donations. The UK and the Republic of Ireland now form one common travel area, one common economic zone within the EU, and share ever-increasing economic interests. The Government should work with Dublin and press the Irish Government to introduce legislation that will address this problem both here, in Northern Ireland and in the Irish Republic. If they fail to do so, they may be faced with a situation where we have to consider the restriction on the movement of monies from the Republic of Ireland to the United Kingdom.

Lord Kilclooney

My Lords, I welcome very strongly this order and the conversion of the noble Lord, Lord Glentoran, in that he now supports it. As we have been told in the debate, all democratic parties in Northern Ireland unanimously support the order. That is more important today than it was two years ago.

The omens in Northern Ireland are not good. I hope everyone is paying attention to what is happening on the ground in Northern Ireland. Sectarianism has decreased but the activity of paramilitaries is on the increase. The IRA is recruiting once again. If that turns into republican terrorism, there will be loyalist terrorism again. Those who contribute or subscribe to political parties will be identified and they will have a problem. Therefore, they will stop supporting the different political parties—Ulster Unionist Party, Democratic Unionist Party, Alliance Party and the Social Democratic and Labour Party.

I therefore strongly welcome the measure, because I feel that it may be required for more than two years. I am very disappointed that the noble Lord, Lord Smith of Clifton, feels that the time is now opportune for people to be identified as subscribing to political parties. That will be very dangerous if the situation on the ground in Northern Ireland begins to deteriorate.

Finally, I would love to see the declaration of funding for political parties if times were normal; and I hate the phrase that Northern Ireland is a special case, because I would particularly like to see where the money from America for IRA/Sinn Fein is coming from. Let us not forget that, during the past 30 years, the United States of America has been the main financier of terrorism in the island of Ireland—a sad reflection of what goes on in the USA.

So I certainly welcome the measure, but I say to the Minister, be cautious about any measure to finance political parties within Northern Ireland from state funds. We could in practice end up financing the IRA and, certainly, Fianna Fail.

Lord Dubs

My Lords, if the world in Northern Ireland were as we would like it to be, we would not need the measure and everything would be fine. Unfortunately, the noble Lord, Lord Smith, talks as if the world were as he would like it to be, rather than as it is. Sadly, the measure is a necessity. It reflects the reality of Northern Ireland and allows the main democratic parties to have some assurance that their donors will not be intimidated from giving money. It is sad that that is the case; but it is the case. Therefore, I support the order; the Government have no choice.

Lord Fitt

My Lords, there have been many past occasions when I have disagreed with the noble Lord, Lord Smith of Clifton. Reading the order, I did not know what line to take on it. I take my line from my understanding of the question of funding from outside sources in Northern Ireland. I recall the debates that took place in this House, which had serious content, when I warned that the people who would gain most from being allowed to take outside subscriptions would be Sinn Fein and the IRA. Certainly, Fianna Fail, Fine Gael—to some extent—and the SDLP receive some funding from America, but it is minuscule compared with the funding that the IRA receives.

As we know, the IRA has no difficulty in funding its organisation, as we saw from the Northern Bank affair recently. I hesitate to help legislation to stay in existence that will allow further contributions to come from the United States. It may be that, with a second term of the Bush Administration, a different line will be taken from that under President Clinton. We hear that Bush is so opposed to extremism and terrorism. He must be well aware of the terrorist tactics now being employed in Northern Ireland.

Only today, there are rumours in the press in Northern Ireland—indeed, in today's News Letter, I believe; a newspaper in Dublin; and a news report in the Daily Mail—to the effect that there is a split within the IRA and Sinn Fein between those who would pretend and make us believe that they were taking the path of peace and the others, who are determined to resurrect their violent war tactics. Either those reports are irresponsible or they have been deliberately placed. I noticed that some of them read, "our correspondent says", when no one knows who is the correspondent and we are told little. But there seems to be an implied threat in those reports, if they are true, that if Sinn Fein does not get its way, there may be a resort to violence.

When the Prime Minister met Gerry Adams at Chequers last week, a few weeks after the Northern Bank raid, I wonder whether they discussed the order. Did Gerry Adams demand to get the order, otherwise there would be a return and resort to violence? There is no doubt that that is the ace card played by Sinn Fein and the IRA on each and every occasion when it is necessary: "If we do not get another concession from you, we will give you another Canary Wharf".

This legislation gives the IRA and Sinn Fein another concession of further approval to get money from outside sources. I repeat that any money that other political parties from Northern Ireland receive is minuscule, a drop in the ocean, compared with the subscription that Sinn Fein gets from the United States, which has certainly helped Sinn Fein to build a political machine that is now the biggest in Northern Ireland. I hesitate to give my approval to an order that will help Sinn Fein along the way.

6.15 p.m.

Lord Hylton

My Lords, when the Lord President of the Council replies, will she be kind enough to say whether the Government considered a delay of one year? Would that not be far more satisfactory from the democratic point of view—and, indeed, from an all-United Kingdom point of view—than a two-year delay?

Baroness Amos

My Lords, I recognise the difference of opinion around the Chamber. The Government had hoped to resolve this matter at the end of the four-year period. However, that has not been possible, for the reasons that I described in my opening remarks. I thank those noble Lords who have said that they will support the order and recognise the context in which the Government are advancing it.

I appreciate the concerns raised by the noble Lord, Lord Smith of Clifton. We have of course been in correspondence on the matter. The reason for the two-year extension—this is also, in part, a response to the noble Lord, Lord Hylton—is that a considerable amount of consultation must take place in relation to the order. We chose a two-year period as a recognition of the need to keep the pressure on to resolve the matter, while recognising that one year may not have been sufficient to take us forward.

The point made by the noble Lord, Lord Smith of Clifton, about the need for new proposals to deal with the transaction of Northern Ireland business, is even more pressing in the current context. I will of course be discussing that with my right honourable friend the Secretary of State for Northern Ireland. I have one other point to make to the noble Lord, Lord Smith of Clifton, which is that the parties let the Electoral Commission have the figures for the total amount received through donations for the financial year. I recognise that that does not meet the proposal made by the noble Lord, but we feel that introducing our current arrangement for Great Britain would hurt those parties in Northern Ireland which believe in the rule of law.

The noble Lord, Lord Laird, talked about the need to work with the Irish Government. The new arrangements will take into account the UK/Irish dimension and we will of course be working closely with the Irish Government during the coming months, as I made clear in my opening remarks.

The noble Lord, Lord Kilclooney, advised caution with respect to introducing measures relating to state funding. I hear the noble Lord and will feed that into the consultation process. We have asked the political parties for their proposals by early March.

The noble Lord, Lord Fitt, raised the issue of the discussions that have been taking place. I am unable to say anything about the nature of those discussions. However, I will say that I had discussions with a number of Peers last year about the representations that we received from political parties in Northern Ireland on this order. So I hope that I have indirectly answered the points that the noble Lord made in concluding his remarks. I hope that that has addressed the points raised. I thank the noble Lord, Lord Glentoran, for his support. I know that he was concerned about the order.

On Question, Motion agreed to.