My Lords, I should first indicate a non-pecuniary and past interest as a member of the cross-party informal advisory group to the Electoral Commission. I should also apologise at the outset on behalf of my noble friend Lady Hamwee, who will table some important amendments at a later stage on elections to the London Assembly, but who is unfortunately not able to be with us today.
I have begun to realise that this House takes great notice of experience. I should put it on record that I am the veteran of 12 parliamentary and county elections, and I have perhaps also to recall that I won half of those, which is a better record than some of my colleagues on these Benches. Experience is important, and I note with interest that there are in the House a number of noble Lords who obviously will be able to contribute very substantially from that experience to our discussions on the Bill. The noble Lord, Lord Bates, has had perhaps less experience in that respect and that may explain why he started his speech with tones of comparative complacency about the state of British politics, which I do not share.
It is rare that we are given the opportunity to improve not just one piece of legislation, but the public perception of our whole political system. We are going to have to use this Bill to take up that opportunity, even if the Government at present have failed to do so. After all, Minsters have trumpeted this as a great opportunity—a great vehicle— to take big money out of British politics and to increase the transparency of donations and spending from what remains. The Bill does not do that. It does not return political influence from the cheque book to the ballot box and it still places a cloak of secrecy around many large donations. In short, the Bill has gone through an elephantine period of gestation, but we have ended up with a mouse. It is a failure, and we in this House have a particular responsibility to turn it around and make it into a success.
The public surely are demanding cleaner politics. The incidence of cash for peerages, loans for Lords, bungs for amendments: all these episodes have tarnished the reputation of Parliament, this House as well as the other House. However, these are merely symptoms of a much more insidious disease—the reliance of the party system on big political donations. It is a rotten system. Contrary to popular perception, it places Britain in an even worse position than the United States. American election campaigns are expensive—astonishingly expensive—but they are also reliant on a broader base of funding. Donations are limited to $2,400 per election from individuals to any given candidate. Even the higher limits of $30,400 for donations to national party committees are much lower than the amounts now given to British political parties. Surely we should be aiming for our legislation to be at least as stringent as that in the United States.
There are three ways in which we on these Benches think that politics can and should be purged of narrow special interests brought about by big donations and the sharp focus on a small number of marginal constituencies. The first—no Liberal Democrat could come to a debate of this sort without referring to it—is electoral system reform. We must have reform to ensure that every vote, everywhere, counts. The second is certainty about the timing of general elections, to make it absolutely clear when spending limits will begin. The third is an end to what is currently referred to so regularly as the party-funding arms race. We cannot use this Bill to do the first two but we can make real progress on the third. I trust that this House will take the lead in that respect.
Surely we must adopt an all-embracing cap on the individual donations to political parties. If we do not, we will be in danger of slipping back to the worst, corrupt excesses of the 19th century when the wealthy could buy seats and political influence. Surely we must also give every constituency an equal spending limit regardless of its marginality, by dividing the national spending limit by the number of seats. If we really are to end the arms race in marginal seats, we have a duty to amend this legislation in such a way that it covers not only local spending to promote a candidate but national spending which has been used to promote his or her party in any given constituency.
If billboards saying, "Britain—Forward not back", or, alternatively, "Mum's eyes. Dad's nose. Gordon Brown's debt", are plastered all over a specific constituency, it should be attributed to the party's election expenses in that constituency, not just to the national limit. That principle was accepted at the end of the 19th century and surely it must apply now. I am quite willing to accept that if my right honourable friend Nick Clegg writes to a group of electors in a specific constituency, that expenditure must also be the responsibility of the local agent and recorded against the local limit.
Some Members of your Lordships' House have great experience in this and have been involved in constituency campaigning for many years. They will be only too well aware of the expenses limit on the specific candidate and his or her agent in that constituency and how important it is to observe those ceilings. However, if we do not make a real change to the Bill as it stands, we will be ripping up all the constraints and safeguards that have been in place ever since the 1883 Act. That would be a terrible retrograde step. We must also look again at the recording and reporting thresholds specified in the Bill.
There is a real danger that the Bill will allow a series of impermissible donations to be made from beyond these shores. The Electoral Commission itself draws attention to a real question mark by saying that the Bill as it stands,
"may encourage impermissible donors to seek to increase their influence on UK political parties, for instance by making regular donations just below £500".
It would therefore seem to be possible for someone from Belize, for example, to contribute £499 every day of the year without it being necessary to report it. That is absurd. Clause 13, by increasing this limit, is in fact a dangerously retrograde step.
What is most extraordinary is that the Conservative Members in another place sought to increase the reporting limit still further. That is the point at which donations not only have to be verified as permissible but their source declared on the public record. The Conservative Members sought to increase the limit for reporting donations to £3,000. That, surely, would be a backward step. What is more, I am confused by the position of the Conservative Party. I looked at Hansard for December 2007 when Conservative MPs were so exercised by the need to introduce an overall cap on donations that they called a special Opposition Day to debate their call for,
"a comprehensive package of reforms to restore public trust and to support a vibrant local democracy and voluntary activism, which must include an across-the-board cap".
Yet those same MPs considered the Bill on Report at the end of last year and were unable to support my honourable friend David Howarth's amendment to introduce such a cap, arguing that it was "for another day". Why was it so essential to restore public confidence in 2007, but it is too early to do so in 2009?
I and my colleagues in both Houses believe that the Hayden Phillips proposals on party funding were well considered and we endorse them. We were bitterly disappointed when in the autumn of 2007 the other parties pulled the plug on the discussions, apparently in pursuit of their own special interests. However, we have a responsibility now to build on those proposals, not only to deal with the current crisis of confidence in our political system, but to make sure that we deal with it in a way that stands the test of time.
The Phillips proposals to which the Minister referred dealt with, first, caps on donations and loans to national political parties; secondly, the introduction of sensible safeguards for individual union members' political contributions; thirdly, spending ceilings for the whole Westminster electoral cycle; and fourthly, the suggestion of a broadly based scheme to encourage local campaigning with limited public funding. The Phillips package offers an essential starting point for discussing this Bill.
Sadly, however, the Bill as it stands will certainly not achieve the changes on which all parties were originally agreed. We cannot use this Bill, obviously, to introduce the sanity of a fixed-term Parliament, much though that might be desirable, but we should at least amend the Bill to make sure that there is a level playing field on campaign finance for all elections, not just for the special circumstances of the present time. It is manifestly wrong at any time to legislate only for the existing situation in the full knowledge that this Parliament is likely to last 60-plus months. Very few Parliaments in recent years have gone beyond 48 months; in fact only two elections in the past 12 have gone full term. Imagine the free for all in those other 10 if there were no restrictions at all under this Bill.
I was first elected in February 1974 and the next election was in October 1974. What would happen in those circumstances? We would not have got anywhere near the 55-month trigger point; it would have kicked in 48 months too late. The measures in the Bill will apply only when a tired old Government are desperately hanging on and not daring to face the electorate. That is surely absurd; that is making the rule for the exception rather than the generality. We must investigate ways in which the investment in campaigning for all general elections can be effectively monitored and limited. Ministers must rethink the contortions that they have put themselves in over the issue of a proper fixed-term Parliament.
Some Members of your Lordships' House may recall that as long ago as 1992 Labour recognised this problem in its election manifesto. It summed up the problem in this way:
"Although an early election will sometimes be necessary, we will introduce as a general rule a fixed parliamentary term".
I see the noble Baroness, Lady Gould, echoing those words; for all that I know, she may have written them. What has happened to that promise in the intervening period?
Other issues will have to be dealt with. I give notice to the Minister that we will seek to remove Clause 17. This was based on a clause produced by a Conservative Back-Bencher, which managed to produce an extraordinary situation in the other place whereby there was a Division without the new clause being moved. I draw the Minister's attention to the House of Commons Hansard, 2 March 2009, col. 678.