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Second Reading

Part of Trade Union Bill – in the House of Lords at 4:16 pm on 11th January 2016.

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Photo of Lord Tyler Lord Tyler Liberal Democrat Lords Spokesperson (Constitutional and Political Reform) 4:16 pm, 11th January 2016

My Lords, I start with a text:

“It has become a well-established custom that matters affecting the interests of rival parties should not be settled by the imposition of the will of one side over the other but by an agreement reached either between the leaders of the main parties or by conferences under the impartial guidance of Mr. Speaker”.—[Hansard, Commons, 16/2/1948; col. 859.]

That was Mr Winston Churchill, leader of the Conservative Opposition, speaking in the Commons on 16 February 1948. I agree with him. That is why there is a Motion in my name on the Order Paper relating to the Commitment Motion today.

It was one of the great disappointments of the coalition period that more progress was not made in this area because funding scandals are a running sore in British politics for all parties. In 2011, the independent Committee on Standards in Public Life offered the political system a way out of its own mess through a carefully considered, well-balanced package sitting fairly on the foundations of the recommendations in the Hayden Phillips review set up by Labour in 2006. The committee’s proposals were so helpful that, alongside Conservative MP Andrew Tyrie and Labour MP Alan Whitehead, I had them turned into a draft Bill for consultation. That is still available and I commend it to the Minister for her reading before we reach Committee.

In proffering its recommendations, the committee said that,

“this situation is unsustainable, damaging to confidence in democracy and in serious need of reform. This was also the view expressed by the three major parties at the last election. All three made commitments in their manifestos to reform the big donor culture. They now need to deliver those commitments”.

It continued:

“It is critical too that the proposed reforms command the support of all parties. They will not otherwise prove to be sustainable. It would be unfortunate if the parties looked at them only in terms of political party advantage. It would also be a lost opportunity. All share a common interest in public confidence in the integrity of the democratic system. Their manifestos for the last General Election recognised that fact. Implementation of our proposals will, however, require political courage”.

What we have before us today in Clauses 10 and 11 is not so much an example of political courage but of naked political opportunism.

It is worth recalling precisely what the recommendations of the CSPL were. First, that there should be a cap on individual and corporate donations of £10,000; secondly, a 15% reduction in campaign spending limits; thirdly, a new system of public support to political parties to be introduced, relating to support at the ballot box; and, fourthly, changes to ensure that donations through trade union political funds by individual trade union members are all on an “opt-in”, transparent basis. This Conservative Government are taking just the fourth of the recommendations and ignoring the other three. Instead of taking the comprehensive, balanced package, and seeking to implement this without paying any attention to the others, they are being selective; they are cherry picking.

Ministers are also taking only one of their own manifesto promises on this subject, which read clearly in two consecutive sentences as an even-handed objective as follows,

“we will legislate to ensure trade unions use a transparent opt-in process for subscriptions to political parties. We will continue to seek agreement on a comprehensive package of party funding reform”.

Are they? It is the first I have heard of it. The question of opting into or out of political fund levies is absolutely central to the overall balance of rules on party political funding. It cannot, with an even hand, be extricated from the other questions of a donation cap, reduced spending limits and some measure of public funding to make up the difference. To try to do so represents a nakedly partisan attempt to rig the system against one party—the Labour Party—and, by extension, in favour of the other. It is exactly the kind of unilateralism that Winston Churchill warned us against.

For all that, the need for comprehensive funding reform has become a great deal bigger since the report in 2011. Jim Messina, who was a key adviser to the Conservatives in their 2015 election campaign, recently told the Spectator that the party spent £30 million on the campaign. That is quite an admission since the legal limit for parties contesting all GB seats is just under £19 million. We do not yet know whether the figures are correct because we have not seen the Electoral Commission’s report, but I suspect that it will be a lesser sum than his boast. However, what we do know is that the scale of donations to each party—the ammunition in the arms race—during the four quarters running up to and including the 2015 election, shows that the Conservative Party raised £38.1 million. That is about 60% more than Labour, which was on £23.8 million, including all the trade union donations which this part of the Bill attempts to undermine. So there is already a huge disproportion of advantage between the two major parties. The Bill would make it eye-wateringly worse, and no fair-minded person could think that that is reasonable.

Before concluding, I want to make it clear that my party and I agree with the Government that it is right in principle for trade union funding of political parties to be made transparent. That is not what my amendment is concerned with. Indeed, we should know who is donating through a political levy, how much represents block donations and so on. But we should not impose such rules without some balancing provisions in the form of a donation cap, which would affect all parties, including my own. To accept the Government’s partisan proposals is to give in to the tendency that the CSPL specifically warned us against in its 2011 report. How prescient the committee was when it said:

“It is important that proposals are regarded as a package. Failure to resist the temptation to implement some parts, while rejecting others, would upset the balance we have sought to achieve”.

That is precisely the temptation that motivated the authors of this Bill.

Your Lordships will recall that the CSPL was set up by the last majority Conservative Government and it was given seven key principles of public life: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. The committee has served the nation and this Parliament well, but this legislation in its present form offends just about all those seven guiding principles. It is difficult to imagine a proposal that is more clearly selfish and subjective, or one for which the case has been made with more opacity and dishonesty.

Your Lordships’ House has a special role in identifying power grabs by the Executive and, in this case, by one party for its own interest against that of its rivals. In this House, we have the benefit of independent Cross-Benchers to act as honest brokers. I feel sure that colleagues on those Benches will see the partisan nature of these proposals for what they are. We have a responsibility to ensure that the motives behind and the consequences of legislation such as this are properly scrutinised. I can think of no better place than a Select Committee of your Lordships’ House to ensure that that scrutiny happens. I hope therefore that the House will join me in referring these controversial sections of the Bill to a special Select Committee of your Lordships’ House and that the Government will then deliver on their full manifesto promise for a comprehensive package of party funding reform.