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I said that I would come to the matter of trade union affiliation fees, which is exercising the right hon. and learned Member for Rushcliffe and others. I said at the outset of this speech that we all had to have a care for the health of our political parties. We should also have a care for the fact that the history and current structure of each party is different. I learned a lot about how the other two parties operate—each of them is different—and I think that those present learned a lot about my party, too. In particular, they learned that, far from sitting around at the end of the 19th century deciding which party to support, the trade unions decided with others to form their own party, which in time became the Labour party.

Helen Jones: On the question of different political parties having different structures, will my right hon. Friend turn his attention to the Tory golfing society, which appears to donate to a number of Conservative associations? May we have a transparent system for such societies, so that we can see whether any of their members actually play golf or whether they are simply funding mechanisms for the Tory party?

Mr. Straw: A very good idea.

Mr. Vara: I am grateful to the Secretary of State for giving way. Given that £127,000 has been given by trade unions to a number of Cabinet Ministers’ local constituency offices, including £10,000 to the Prime Minister’s local constituency office since the beginning of last year, does the Secretary of State not agree that the word “transparency” is meaningless unless the funding of political parties by trade unions is put on the negotiating table for full and frank discussion?

Mr. Straw: I do not know why the hon. Gentleman is busting a gasket saying that. The system is transparent—that is how he knows.

Mr. Vara: The Secretary of State seems to have missed the point. He does not seem to appreciate that the phrase “conflict of interest” comes into play and that unless the funding by trade unions is put on the table, the Cabinet and the Prime Minister will be accused of having a vested interest in the debate.

Mr. Speaker: Order. Regardless of the office that any right hon. or hon. Member holds, we must be careful when we are making an accusation or a personal attack on anyone and ensure that we do not say anything that we might regret later. I ask the hon. Gentleman to be careful—I know that he did not mean it that way, but that is the way it came out. Let us just leave it at that.

Mr. Straw: The system is completely transparent—that is how the hon. Gentleman knows, as I have said. It is a great deal more transparent than many of the dining clubs that in the past have supported the Conservative party.

Ms Dawn Butler (Brent, South) (Lab): The hon. Member for North-West Cambridgeshire (Mr. Vara) talks about contributions from trade unions, but I wonder whether he would like to declare to the House his 50:50 Club contribution of £4,980 in 2006.

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Mr. Straw: I look forward to that.

On the issue of the lack of symmetry in the constitution of different political parties, the Constitutional Affairs Select Committee warned that

Sir Hayden Phillips endorsed that recommendation and the Select Committee was referring specifically to trade unions.

Pete Wishart (Perth and North Perthshire) (SNP): On donations, can the right hon. Gentleman help me? Is it fair and credible to claim ignorance of the law as a defence, particularly when it comes from a senior legislator such as the leader of the Labour party in Scotland? The right hon. Gentleman is the Justice Secretary, so what does he say to members of the public who look at this bizarre defence and expect to get away with it, too?

Mr. Straw: What I would say directly to the hon. Gentleman, who is so keen on devolution, is that my writ does not run in Scotland.

When a trade union is affiliated to the Labour party, the individual will—as the right hon. Member for Horsham parodied earlier—normally pay a small part of his or her subscription as a political levy, which goes to the Labour party in turn, but the individual has a clear right to opt out of paying, and many thousands actually exercise it. Trade union members can opt out any day of the week: they can choose which union to affiliate with and the union itself can choose to disaffiliate.

Geraldine Smith (Morecambe and Lunesdale) (Lab): Does my right hon. Friend agree that outside the House, this debate is seen as bit like the pot calling the kettle black? What the British people want to see us do is resolve the issue of party funding. I assure him that they will not mind a cap on spending if it means getting fewer DVDs and fewer leaflets from political parties; what they would mind is state funding of political parties, which we should not introduce.

Mr. Straw: I think that there is probably widespread agreement with my hon. Friend on that matter. I am quite clear that overall party politics and our democracy would benefit if there were controls on both spending and donations, which is what Sir Hayden Phillips proposed.

Let us reflect on what Sir Hayden Phillips had to say on this issue, as it is central to the argument between our two parties. He said that

That brings me, in turn, to the talks led by Sir Hayden Phillips over the summer. In July, we agreed that we would meet again on 3 September.

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Mr. Jonathan Djanogly (Huntingdon) (Con): Can the right hon. Gentleman explain why more union members are affiliated than actually pay the political subscription?

Mr. Straw: We accept that there are some defects in the system, and we have made that clear. That is why we were ready to sign up to these proposals. If the hon. Gentleman and his party were prepared to do so, we could agree. This is a comprehensive package, as set out in Sir Hayden Phillips’s proposals at the end of August. A meeting was due on 3 September, of which all parties had good notice. It is a matter of record that the Conservative party cancelled that meeting at short notice and it then took eight weeks to resurrect it. As the hon. Member for Somerton and Frome (Mr. Heath) made clear, when we finally met on 30 October, the Conservative party walked away from the talks. I very much hope that the official Opposition will think again. We announced in the Gracious Speech that we would bring forward proposals in respect of party funding and regulation.

Ms Dari Taylor (Stockton, South) (Lab): My right hon. Friend may be interested to know—I am sure the House will—that Lord Ashcroft says on his website:

Would my right hon. Friend like to comment on that?

Mr. Straw: Given that and all the unanswered questions raised by Rachel Sylvester, I am not surprised that the right hon. Member for Horsham was so unwilling to give a direct answer to a direct question.

Finally, let me deal with the issue of state funding. There has long been a significant element of state funding for political parties, through the free post and similar means and through the Short money, which we as a Government ensured was trebled and which now runs at £4.5 million a year for the Conservative party.

Mr. Andrew Tyrie (Chichester) (Con): The Secretary of State has referred to various Hayden Phillips proposals. In fact, he has elided a number of proposals made by Hayden Phillips over a number of months. At the end of the talks in which I participated, I asked for all the papers produced by Hayden Phillips—including the background working papers and earlier proposals—to be published and put before the public. Why did the right hon. Gentleman flatly refuse to allow them to be published? Why will he not allow the public to see all Hayden Phillips’s work?

Mr. Straw: I should be perfectly happy for people to see it, but as the hon. Gentleman knows very well, the reason is that this was a matter for Hayden Phillips and not for us. [Interruption.] The hon. Gentleman knows that. Hayden Phillips was running the inquiry, and we were not.

Mr. David Gauke (South-West Hertfordshire) (Con) rose—

Mr. Straw: The Neill committee noted that the arguments for and against state funding were “finely balanced”. The Phillips review concluded that there should be a degree of state funding, and presented proposals based
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on electoral support and the recruitment of members. We made good progress on three of the pillars outlined by Hayden Phillips in his draft agreement: on spending limits, on donation caps and on reform of the Electoral Commission. As the Prime Minister has said, we are yet to be persuaded of the case for a significant extension of state funding, but we recognise that it will be a source of continuing consultation.

Notwithstanding the clear and partisan decision of the official Opposition to walk away from the Hayden Phillips talks, I very much hope that they will think again. In the Gracious Speech, we announced that we would produce proposals in respect of party funding and regulation. The case for a comprehensive and fair package is overwhelming. It is set out in the report by the Constitutional Affairs Committee, and in Sir Hayden Phillips’s report and his later draft agreement. My right hon. Friend the Prime Minister expressed his backing for it at the weekend. A White Paper is currently being prepared; we shall publish it as soon as possible, and present legislation thereafter.

Mr. Gauke rose—

Mr. Straw: We came very close to a consensus before, and I believe that with good will and with the assistance of Sir Hayden Phillips we can achieve one for the future. In any event, it is clear that we need the legislation. I commend the amendment to the House.

5.27 pm

Mr. David Heath (Somerton and Frome) (LD): I suspect that any member of the public watching the debate and entertaining the perverse hope that he or she would be edified will have been sadly disappointed by what has been said so far. I think the country reasonably expects the House to treat a serious matter that underlies our democratic system with a degree of sobriety and perhaps, in some parts of the House, remorse.

This issue has been around for a good many years. Indeed, it was one of the subjects of the talks between the late Robin Cook and my noble Friend Lord Maclennan before the advent of this Labour Government, and there was a clear expectation that legislation would be presented to deal with what were perceived to be clear and mounting irregularities in our system. That was given added impetus by the Neill Committee. Let us remember why the Neill committee was engaged. It was engaged because of the Bernie Ecclestone affair—again, an example of clear abuse. The Neill Committee made a series of recommendations that eventually formed the basis of the Political Parties, Elections and Referendums Act 2000, the legislation on which all this is based.

It may be valuable to look back at what was said by the Lord Chancellor in his previous position as Home Secretary in a statement on the funding of political parties back in 1999. He said:

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He went on to say that

and he concluded by saying:

I entirely agree with every word that the Lord Chancellor said on that occasion, and the tragedy is the degree to which we have fallen short of those expectations.

Mr. Spellar: The hon. Gentleman can help that process by telling us on behalf of his party when it will give back the dodgy £2 million it received from the convicted criminal, Michael Brown.

Mr. Heath: I expected that intervention at some stage, so I thought I might as well give way to the right hon. Gentleman right at the beginning.

Mr. Jeremy Browne (Taunton) (LD): It was boringly predictable.

Mr. Heath: My hon. Friend is absolutely right: it was boringly predictable. There has never been any question about disclosure of that sum; as a right hon. Gentleman, the right hon. Member for Warley (Mr. Spellar) will, I hope, accept that there has never been any attempt not to disclose the provenance of that money.

Let me read out the Electoral Commission’s statement, because that is the body set up under the provisions of the recently mentioned legislation to look into such matters. It says:

It goes on to say:

If the Electoral Commission takes a different view—it has indicated that it will revisit this once law cases are complete—we will abide by whatever it says. That is the end of the matter. We have been perfectly open.

Mr. Spellar: Will the hon. Gentleman give way?

Mr. Heath: No; the right hon. Gentleman had his chance and he blew it.

The concern is not only that the Government have fallen short of the expectations they themselves set out when introducing that legislation. I do not blame the Lord Chancellor for this, nor do I blame the plurality of Members of his party, just as I do not blame the plurality of Members of any party for the actions of a few within their parties. There is, however, a concern
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that the party of Government have systematically subverted their own legislation, and that is a very serious matter indeed.

The levity that has been displayed on the current occasion is entirely inappropriate. This latest episode has been described in the newspapers as a fiasco and a farce, and one commentator was prompted to employ a word I would not normally use in a debate: “dégringolade”. I have no idea whether it is a dégringolade, but I do think it is a tragedy. It is a tragedy not because of the particular circumstances, but because the consequence is further to undermine confidence in, and the standing of, not only the Labour party, but all the parties represented in this House, and that is a matter of concern to all of us.

Let me briefly deal with the present situation. There are questions that still need to be asked; the Lord Chancellor, or whoever replies to the debate, will probably not be able to give the answers, but they are questions that the country is still asking. I have no idea whether this is incompetence on a grand scale in the higher echelons of the Labour party or conspiracy—I think that the investigations will show that. I must say, however, that if it is incompetence, that is very difficult to believe given the calibre of some of the people involved and given the very clear instructions in the law.

The right hon. Member for Horsham (Mr. Maude) was right to say that what we are talking about is not to do with just some petty rule book—this is about not the rules of a game, but the law of the land. There is not only a prima facie case of it having been broken in this instance, but that is also by the admission of the Prime Minister.

We hear that the Prime Minister’s party leadership campaign team rejected the donations from Janet Kidd. Why did it do that, and did it tell anyone else in the party when it did so?

Mr. David Clelland (Tyne Bridge) (Lab): Is the hon. Gentleman aware that the hon. Member for Eastleigh (Chris Huhne) has recently been pursuing his leadership campaign in the north-east, and that in doing so he has asked Durham police to look into certain planning applications without a shred of evidence that anything is amiss with any of them? Should the costs to Durham police of pursuing those investigations be considered to be a donation to the hon. Gentleman’s election campaign or should he be prosecuted for wasting police time when nothing is found?

Mr. Heath: The investigation will be a matter for the Durham police. If they feel that there are matters to be investigated, they will investigate them, but if they feel that there are no such matters, they will not investigate. That is the answer to the hon. Gentleman’s question.

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