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Lord Rodgers of Quarry Bank: My Lords, I do not wish to argue with the noble Baroness, Lady Young; indeed, I can certainly meet her halfway in that respect. I believe that there are matters about which we should complain. However, if they are beyond our control, then surely we should at least look at those matters with which we are able to deal. That is the context within which we should discuss the Motion before the House.

The noble Baroness, Lady Gould, said that an "unfettered" independent committee would surely be able to look into such matters. I suggest that only those who are afraid of what such an inquiry might discover and recommend can be worried about the appointment of such a committee. We heard my noble friend Lord Jenkins of Hillhead refer to the view of the Select Committee in another place. I would strongly support the idea of a committee made up of men and women who have not previously expressed a view on the matter; and, indeed, men and women who are not Members, nor have been, of either House of Parliament. It would still be for Parliament itself—that is, the House of Commons and the House of Lords—to decide, but the inquiry would be independent, unfettered and free from any ideological influences.

We are not discussing a radical new departure; we are discussing a further step in what is an incremental process designed to enable political parties within a parliamentary democracy to function more effectively. That is the main point that I should like to make to your Lordships today. In 1937, for the first time we had payment for the Leader of Her Majesty's Opposition. In 1975—and I shall return to that later—we had the payment of what is now called the "Short money" which amounts to some £2 million in the current year. In that same year, additional allowances for Members of Parliament were introduced which led to what is now called the "Members' office costs allowance" and by which MPs in the current year receive something over £42,000. Then, 20 years ago, we had the referendum on Britain's membership of the Common Market when the sum of £125,000 was paid to either side in that debate. Moreover, as has already been mentioned in our discussions this afternoon, at general election time there are free postal deliveries on behalf of the political parties and of candidates and free television time.

Therefore, it is a fiction to say that what we are suggesting such a committee might look into is something entirely new rather than an extension of a principle which has previously been accepted. The fact is that for political parties, as indeed for individual Members—and, more obviously, Members of another place—parliamentary

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work and wider political activity are seamless. A research assistant paid out of public funds prepares speeches for an MP to deliver in Parliament and speeches to be delivered outside in the political campaigning. A secretary paid out of public funds sends letters on behalf of a Member of Parliament to his constituency party, to Smith Square, Walworth Road or Cowley Street.

As we all know—and there is no reason to be embarrassed about it—telephones in the Palace of Westminster are used by MPs and their staff, and no doubt by Members of your Lordships' House, to make calls which are essentially of a political rather than a parliamentary character. All that is inescapable. There is no way of avoiding it and there is no point in pretending that it does not happen. Similarly—I refer to the Short money—financial aid to the political parties that is designed to help them in their parliamentary activities seeps out into the wider political arena. It may be used directly to employ more staff in parliamentary work, working for the leaders of opposition parties, but there is no way of segregating strictly parliamentary business from political activities outside. To put it at its least, state funding for opposition parties in Parliament recognises that if those funds are available other funds can be released for activity elsewhere.

Reference has been made to the Select Committee. However, I must say that my own text—because I think it is a most serious text—is that of the Houghton Report published in 1976. I am sure that the whole House is anxious to hear what the noble Lord, Lord Houghton, has to say through the perspective of time. There was another report—again that was referred to by the noble Baroness, Lady Young—of the Hansard Society in 1981. But a great deal has happened, certainly since the Houghton Report, although it is fair to ask whether there is anything new to be said or discovered. The very passage of time, taking the Houghton Report as the text, suggests that there are new facts to be discovered and new arguments to be rehearsed.

I shall give your Lordships one example. The key question of the report—I hesitate to interpret the Houghton Report in advance of the remarks of the noble Lord, but this is from the text of the report itself—on state aid was as follows:


    "assuming that the parties needed money, would you be prepared for some of it to be provided by the state from public funds"?

That was a question asked in a survey conducted on behalf of the Houghton Committee. The result was an almost equal division of opinion. Some 45 per cent. said "Yes" and 44 per cent. said "No". Given the question that was asked, 45 per cent. seems to me to be a high figure of people saying "Yes". That question included the words,


    "assuming that the parties needed money".

There was no reference to the public interest or to our parliamentary democracy. There was no reference to the problems which were referred to by my noble friend Lord Jenkins of Hillhead. What if the question were different? What if the question were,


    "If it would reduce the financial dependence of political parties on business and the trade unions, thus helping to raise standards in public life, would you be prepared to see an increase in the funding currently available to political parties"?

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If that were the question, I think we would see a much more positive response, not only to the original question of 20 years ago but also a more positive response than the present question would have elicited that long ago. I make that point because I believe it is perfectly reasonable to ask whether this would be acceptable to public opinion. What I am seeking to put before your Lordships is: given the issue we are facing surely there is at least a very good chance that the public might be persuaded that this was one way of safeguarding our democracy and was a worthwhile route to follow, given that it would only be an incremental stage in the funding of our parliamentary democracy.

I do not believe that we should expect or should contrive to bring about an absolute equality of resources available to parties. My own view is that they should bear a relationship to the ability of the parties themselves to win members and attract electoral support. It is also the case—which all of us know—that there is a diminishing return from expenditure over a certain limit. Therefore an absolute equality is not, I think, what we should be looking for. What we should be saying is that the funding of political parties prima facie, and subject to the work of the independent inquiry, would free political parties from an unhealthy dependence on corporate donors and a handful of rich people with, as a result, the public interest substantially safeguarded.

I was looking the other day at the defence estimates. We spend £21,720 million on defending Britain and our democracy from those who might endanger it. We spend a large sum trying to restore peace and perhaps a democratic way of life in Bosnia. Surely it would be a small price indeed to spend £10 million more of public money to continue strengthening the processes of our own parliamentary democracy.

4.5 p.m.

Lord Boyd-Carpenter: My Lords, I am afraid I cannot accompany the noble Baroness, Lady Gould, in thanking the noble Lord, Lord Jenkins of Hillhead, for introducing this subject. I think, frankly, it is a pity that he decided to do so, not least from the point of view of the very sensitive issue of our relations with another place. Another place is much more concerned with this matter than we are. After all, election expenses are directly in this category and they are, of course, of direct and continuing concern to every Member of another place. This is therefore a subject which it is natural that another place should be concerned about.

Moreover, as the noble Baroness, Lady Young, told us, another place has already had a committee of inquiry into this issue and has had a perfectly clear and comprehensive report. Therefore I find it difficult to see that there is any argument why we should go further and set up yet another independent committee to inquire into this matter. I start, I must admit, with some bias against the setting up of more and more committees of inquiry. They are of course enormously expensive. When one sees the actual figures of their cost, one is generally quite horrified. Therefore I would suggest to your Lordships that unless there is an overwhelming case on merit for setting up a committee of inquiry on a subject, we should not do so. Is there such

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an overwhelming case here? What useful purpose in fact would be served by so doing other than meeting some of the political prejudices of certain noble Lords opposite?

I hope that we shall decide that we do not want to set up such an inquiry and that we regard it as unnecessary. What is it in fact to do? Is it intended that it should recommend public expenditure in support of election expenditure? I do not know whether it would do that. I profoundly hope it would not. I think it is essential that the funds of political parties should in general be raised by public subscription, by people who believe in the views that that party is expressing and who therefore desire to subscribe to it. Surely that is the wholesome democratic basis for the financing of political parties in our democracy. That approach is entirely inconsistent with the approach of one or two noble Lords opposite who seem to think that this is the sort of matter that should be raked over by a public committee of inquiry, which will of course take a year or two, will spend a lot of public money and at the end of the day is very unlikely to produce anything of real public value. I therefore hope that your Lordships will not be convinced by the noble Lord, Lord Jenkins of Putney, although of course I am the first to admit—


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