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Viscount Cranborne: My Lords, during the course of the passage of the Political Parties, Elections and Referendums Bill through your Lordships' House it became clear that one of its main purposes, as we knew it would be, was to impose a general rule that no one from abroad should contribute to political parties in

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the United Kingdom. I shall not comment on the general effects of the legislation, except to say that this order appears to be yet another example of what that Act will do to the political culture in this country by institutionalising and bureaucratising political parties and effectively rigging the system in favour of Whitehall and whatever government happen to be in power at the time.

As I understand it, two main exceptions to that general rule were imposed by the Government. The first was that companies with headquarters in other European Union countries could contribute to British political parties. I understand that the exception to that rule lay, above all, in EU law and regulation. If I correctly understood my then noble friend Lord Mackay of Ardbrecknish, he pointed out that the first exception--the second is the subject of this order today--made the general rule meaningless, since anyone could establish a company in, say, Amsterdam or anywhere else in the European Union, and pour money into it which could then be disbursed to the coffers of United Kingdom parties unhindered. If my then noble friend was right, he demonstrated clearly that that made a nonsense of the whole thing. On the other hand, if he was wrong, clearly it would also enable European Union nationals, or corporate nationals, to influence our internal politics in a way that no other foreign nationals could.

The second exception is the subject of this order. Quite apart from anything else, that exception is as objectionable as the first, partly on the same grounds. It gives non-United Kingdom entities, but also individuals, an opportunity to influence the politics of a part of the United Kingdom. But what makes the second exception infinitely worse than the first is that basically it licenses terrorist organisations to finance their terrorist political fronts in Northern Ireland at a particularly delicate time when it is clear that the process of peace, for which the Province in particular but also the rest of the United Kingdom are so grateful, teeters on a knife-edge. Not only does it license such donations from abroad, particularly to terrorist organisations and parties which are their political front, but it does so by providing that such donations should be kept secret. We went through that issue at various stages during the passage of the Political Parties, Elections and Referendums Act. I do not propose to weary your Lordships with my arguments again. I merely observe that, as your Lordships well know, terrorism flourishes on secrecy and fear. Secrecy and fear go together. I am sorry to have to say this to the noble and learned Lord, but it is a pity that the Government are proposing a measure which does an enormous amount to encourage that plight.

By way of mitigation and in anticipation that this point would be made not only by my noble friend Lord Cope but also by others during the course of our discussions today, the noble and learned Lord said that parties should keep accounts and that those accounts would be subject to audit. I am sure that they will. If the noble and learned Lord believes--to take

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one example--that Sinn Fein or the Protestant parties affiliated to Protestant terrorist organisations are so lacking in ruthlessness or, indeed, in guile, that they are not able to hide those donations from the attentions of auditors for fear that those donations and their sources might not make them look very good in public, then I am afraid he is more naive than the House has understood him to be during the course of his distinguished tenure of a seat on that Front Bench.

For that reason alone we would be very foolish not to look carefully at every aspect of the order before we go any further and approve it.

I hope that the noble and learned Lord will be able to comment on this next point, because, if it is not true, it needs denying. I understand that there is a rumour current in Northern Ireland and that that rumour has actually been articulated by government Ministers in trying to persuade people in the Province to accept the need for this provision. The rumour is that the main beneficial effect of the order will not be to support Sinn Fein, but will be to provide a much needed source of funds for the moribund SDLP, which could not expect to find any support from elsewhere. I hope the Government realise that that is disingenuous--to put it mildly--if that is indeed being said.

Your Lordships will be well aware that one of the tragedies of the politics of the Province in the past few years, and particularly in the past few months, has been the decline in the political support enjoyed by the parties of the centre--basically the SDLP and the official Ulster Unionist Party. We all know that the present Government's policy, and particularly the previous government's policy, has been designed, above all, to help to support the moderate centre on both sides of the sectarian divide. I fear that what has happened is that the policy has had exactly the opposite effect. Instead of supporting the moderate parties of the centre, the effect has been to weaken them. If your Lordships doubt what I say, I have to remind you only of the results of the recent South Antrim by-election.

Therefore, this policy has achieved diametrically the opposite effect of what it was designed to achieve. The way that it has been implemented has pandered to the extremes on both sides, thereby weakening the centre, because no one is really prepared to go to the stake for it. The terrorists and their representatives are therefore enormously strengthened.

So what we are seeing in the Province now is the progressive destruction of the SDLP and the united Ulster Unionists. I am afraid that that destruction has been the direct result of policies pursued by governments of both complexions. If this order is designed to give a financial lifeline to the SDLP, I fear that that will not work. The SDLP can be revived only by a robust defence of the ballot box against the Armalite, and an understanding that the British Government will always go to the stake for that principle, rather than honour it more in the breach than the observance.

Whether or not the rumour that I described in the latter part of my remarks is true, this policy will continue a process that gives comfort to the terrorist

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and gives official protection to the darkness in which terrorism flourishes. On those grounds alone noble Lords should oppose the order.

4 p.m.

Lord Fitt: My Lords, I rise early in the debate to support the amendment. I rise early to give my opinion to this House of what I really believe is happening in Northern Ireland in advance of any member of the Unionist party speaking, so that it will not be reported in newspapers in Ireland tomorrow morning that I was speaking in support of what the unionists may contribute.

I have just returned from Belfast. I was there over a week ago. I spoke to many people about the order and its implications. I can only say with great honesty and certainty that the order does not have the support of democrats in Northern Ireland. If we are ever to reinstate democracy in Northern Ireland, it will not be done by making further concessions to anti-democrats. That is exactly what the order is doing.

Let us analyse the issue in language that we will all understand. It is about political parties. Political parties exist because they want to get candidates elected to whatever the political forum may be. In this case it is to the House of Commons, to the Northern Ireland Assembly and to Europe. The parties say that they need financial support to have their candidates elected. All the political parties say that. I can say this afternoon which candidates are likely to be returned to the parliamentary seats in the forthcoming election. One can say with a great deal of accuracy who those candidates may be and which parties they may represent. There may be one or two seats in question that one cannot predict. Yet I would not be very far off if I were to make a prediction as I stand here today.

The political parties in Northern Ireland are not, as they say in Northern Ireland, "exactly on their uppers". I fought 22 elections in Northern Ireland. In all the elections that I fought I had to go outside and get my own financial backing to fight them. It did not take thousands and thousands of pounds to win seats in Northern Ireland. At the moment, one of the main political parties in Northern Ireland is Sinn Fein. It is reputed to be the richest political party in Europe because of the donations which it receives--for which it sometimes intimidates.

The candidates who will be fighting the next European election and the Assembly elections are already well known because many of them are "two-jobbing". Many of the SDLP candidates who will be defending their seats in the forthcoming election to this country's Parliament are already there, and in the Assembly. The UUP candidates will be defending their seats, and they are already sitting in the Assembly also. They are in receipt of a ministerial salary and a salary from this Parliament. The candidates who will be fighting the next election are already in receipt of over 100,000 a year. One might think that with that sort of income they might be able to make provision for a rainy day, and they might be able to save something to finance the forthcoming elections. It is not the case

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that the political parties are in such a penurious state that they have to obtain money from either the Republic, Socialist International or America.

Sinn Fein will not abide by any restrictions placed on it by the withdrawal of this legislation. Sinn Fein will get its money wherever it gets its money. There have been many involuntary donations to the Sinn Fein election kitty over the past 30 years, mostly from banks and post offices in Northern Ireland. Sinn Fein will get its money and nothing will stop that.

The SDLP has an annual collection hosted by the political parties in the Republic of Ireland. I think that I attended two of them during my term as leader of the SDLP. It was well known who were the personnel making these donations to the SDLP, and no one killed them. We are now being told that we have to introduce exclusion to prevent subscribers to political parties in Northern Ireland being murdered. What a convenient way this is for all the political parties in Northern Ireland to hide their finances.

I am not sure where the Official Unionist Party obtains its finances. I have no doubt it receives some subscriptions from Orange Lodges in Canada and elsewhere. The SDLP receives subscriptions from political parties in the Republic and from Socialist International. How Socialist International can recognise the SDLP as being a socialist party is far beyond me. Paddy Devlin and myself were responsible for having the SDLP admitted into Socialist International. That was a big undertaking. Since Paddy Devlin died and I left the SDLP, there are very little remnants of socialism left in that party.

The DUP has Ministers in the Executive in Northern Ireland and it has seats over here. Many of those politicians are in receipt of two salaries, one from the Assembly and one from here, and one of them has a ministerial salary. They are in receipt of over 100,000 a year. If they cannot finance their own election, what are they going to do with this money? Dr Paisley's party has three seats--one each at the Assembly, Westminster and Europe. We all read in our newspapers about the fiddles that go on with expenses in Europe. Dr Paisley should have enough to finance his candidates in the forthcoming elections--not forgetting the bucket collection he has every Sunday in the Martyrs Memorial church. There is no shortage of money.

Some people say that they are frightened that people who would make donations to the Women's Coalition are in danger of being intimidated or killed. Who would kill anyone making donations to the Women's Coalition Party in Northern Ireland? Who will carry out these assasinations and intimidations? Will it be the Real IRA, the Continuity IRA and all the other IRAs which assasinate persons making contributions to the Unionist parties? Will it be the UVF or the UDA which will kill persons making donations to the SDLP? The whole thing is ridiculous. It reminds me of some people from this House and some from another place who have spent time in Northern Ireland. Some of those people have spent lunchtime there and they believe that that entitles them to bodyguards and free

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transport for the rest of their lives. I do not believe that any political party will cease to exist if people refrain from making donations because they are in danger of being killed.

The reason for the exclusion of Northern Ireland does not bear scrutiny. Any political party can say that people who give it money are in danger of being killed. It is a very convenient way of hiding financial support.

The money from America may not be an issue at the moment; but it is liable to be an issue in the future. The money that has come to Sinn Fein and the SDLP--mostly from Democratic sources--may be called into question. The Bush Administration are intent on discrediting ex-President Clinton and some of the financial upheavals that took place then. Some of that money was going to Sinn Fein, and from Sinn Fein to the IRA. We may not have heard the last of that matter.

The Minister said that the order will be looked at again in four years. In Northern Ireland we know that there is nothing more permanent than that which is temporary. We have seen border polls and we were told that they were going to be brought back. We have seen the Prevention of Terrorism Act and the Northern Ireland (Emergency Provisions) Act. The emergency provisions were supposed to last for two or three weeks. Here we are now, 20 years later.

If the order is passed as it stands, it will be seen as a total surrender to those who would deny democracy and threaten those who are trying to bring about democracy in Northern Ireland.

I heard what was said by the noble Viscount, Lord Cranborne. Representations are being made far and wide--particularly to me as a founder member of the SDLP--not to do anything that may prevent the SDLP receiving financial support from abroad. If I had a violin, I would play it. There are only 17 seats in Northern Ireland. There is enough slush-fund money coming from America to finance all of those seats. This order violates the democratic principle of elections as it applies to the United Kingdom. I do not think that it is necessary. I do not think that anyone will be intimidated, assasinated or harassed by making a donation to any of the democratic parties in Northern Ireland. Saying that is a total exaggeration of the situation. Many people have used the emergency situation in Northern Ireland to make their lifestyles very comfortable. To whoever spent lunchtime in Northern Ireland and now has transport for the rest of his life, I repeat that what is proposed is a total and absolute waste of taxpayers' money, which should not be misused to such an extent.

I support the amendment. I do so because I believe that it is unnecessary to exclude Northern Ireland from all the provisions of the Act that apply to other parts of the United Kingdom.

4.15 p.m.

Lord Campbell of Alloway: My Lords, it is perfectly plain from the speech of the noble Lord, Lord Fitt, that, on the merits, there is no justification for the order. Putting it very briefly, if one or two seats--that

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is all--are in question, this is really nothing more than to legitimise a channel for foreign funds to reach Sinn Fein for the purposes to which we know they are put.

I shall say no more about the merits but look at the powers. The order is produced under Section 70(1)(b) of the Act, which states:

    "The Secretary of State may by order make provision ... for disapplying"--

that is the word--

    "any specified provisions of this Part, for such period as is specified, in relation to a Northern Ireland party".

This is not strictly a disapplication. What it does is to remove something contrary to the general intendment of the provisions of the Act, which is designed to control foreign donors. I am far from certain what the High Court would say about the legality of this proposal. I am not sure whether it is within the vires conferred by the Act. That is apart from the merits, of which there are none.

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