I addressed the other House on this Bill at some length yesterday. The resources for political parties and the democratic process have been less than adequate for many years. Recently, controversy has surrounded the way political parties finance themselves. A conventional way over many years now appears, on the basis of a statement ongoing in the other House, to have become the subject of enormous controversy. That is one reason the Bill is before the House. However, it is not the only reason and I will outline its purpose before I return to the main theme of financial support for political parties.
The Bill contains a number of measures. Prior to last year, I agreed, following consultations with the Whips of all parties in both Houses, that the provision for overnight allowances was inadequate and that the rules and regulations which applied to Thursday nights were not fair because of the increased workload of Members of both Houses regarding committees. I made provision in the budget and the Estimates for an additional sum of approximately £0.5 million for extra costs associated with Thursday overnights and a new administrative system in relation to telephones.
Members are familiar with the original system which required Deputies and Senators to submit their telephone accounts. These had to be verified and checked and 75 per cent of the costs were recouped up to a maximum of £2,000. This engaged an enormous amount of administrative time which was wasteful because it involved second gussing and checking material which had been already verified by Telecom Éireann. The money involved was considered less than adequate, particularly for some Members who represent constituencies in provincial Ireland who had costs in excess of the 75 per cent limit.
It was decided to change the system and to give Members approximately £2,000 to be allocated in four quarterly instalments. The purpose of this was to eliminate the unnecessary bureaucratic second guessing of the verification. However, it was not possible to do that by regulations and a statutory basis for the new arrangements for the overnight allowance and telephones is necessary. I wanted to do this for some time. The provision in the 1996 Estimate was £0.5 million and I wanted to spend it this year.
Section 4 relates to payments indemnification in respect of certain persons in employment. Since 1980 a system of secretarial assistance for Oireachtas Members has existed, but not on a proper statutory basis. Problems in relation to its administration led to industrial relations disputes and confrontations on a number of occasions, involving issues such as whether the Deputy— Deputies have had individual secretaries since 1982—or the State was the employer. Either way the status and basis on which the system was administered was loosely linked to Article 15.15 of the Constitution which describes the delivery of services to Deputies and Senators as a facility.
The Government was advised that it was necessary to put the system on a statutory basis in order to improve the arrangements and to reach a satisfactory conclusion with the secretarial assistants representing all parties and Independents. This is why the matter is covered by the legislation. It is an enabling provision which will not deal with terms and conditions of employment. It will just provide the legal basis on which people will be able to negotiate their terms and conditions of employment from time to time. Members are aware that discussions have been ongoing for some time in this area. I hope we are close to a resolution of this matter which has been the source of conflict on a number of occasions. I assure Members on all sides that the enactment of this enabling provision does not in any way pre-empt the negotiating position of the management of the staff in this area.
The issue of the indemnification of employees and the extraordinary liability exposure that currently exists was alluded to at some length in the debate in the other House. This matter came to a head following an industrial accident which could have happened to anybody working in the Oireachtas for any particular group or political party. However, Deputy Geoghegan-Quinn was willing to offer the information herself. A person working for her suffered an industrial accident during her work and she will never be able to work again because one of her arms is partially paralysed. When she sought compensation in the normal way, it emerged the employer's liability was not the State's, which paid her salary, or Leinster House, which provided the place of employment. It was Deputy Geoghegan-Quinn and the Fianna Fáil Party. That was never the intent of the legislation or the administrative processes put in place in respect of it. Therefore, section 4 deals with the indemnification of all people who have secretarial assistants, supervisors, etc., working for them.
I appreciate the speed and alacrity with which the Seanad has addressed this legislation. I know there is disquiet in this House at the apparent haste with which we introduced this measure. It was not because we wanted to get something through by way of subterfuge nor because we had not made provision for something. Neither did we want to obscure public knowledge of the legislation. I have taken a public stance in the Dáil and chosen to take this measure through the Seanad. I will take as much time as the House orders for the matter.
The part of this Bill that has attracted all the publicity relates to the extra allowance for parliamentary parties in Leinster House. Going back 15 years, the Labour Party argued that there should be State funding similar to that in all 15 countries in the EU with the exception of Britain. The newly emerging democracies of Eastern Europe such as Hungary, the Czech Republic, Slovakia and Poland also have provisions for State funding of political parties, including provisions for election time. There are various checks and balances in all of the systems but there is a common principle. It is that the democratic process should be encouraged, transparent, open to all citizens' participation and it should not be open to distortion or manipulation by any group, class or individual by virtue of excessive monetary or economic power.
To a certain extent we had that up to 1965. If one goes into the history of the limited franchise of the last century, one finds, for example, it was an offence to buy a prospective voter a drink. That would probably disqualify every Member of the House but there were then 300 to 500 electors in particular constituencies. In T.P. O'Connor's book, Parnell and the Irish Movement, T.P. O'Connor was the only Irish Nationalist MP elected to the Houses of Westminister from a Liverpool constituency. The other members of Parnell's parliamentary party came from Ireland. He goes into great detail on the allegations and charges of corruption against an MP called Keogh from the constituency of Westmeath who was based in Athlone.
Buying votes and the associated corruption is not new and goes back to the time of limited franchises. As the Acting Chairman may be aware, these were male franchises. Up to 1965, the first general election I participated in as a foot soldier, there was a restraint on how much could be spent in elections. It was subsequently removed by the then Minister for Finance, Mr. Haughey. Arthur Mitchell was director of elections for Michael O'Leary, the successful candidate, and I recall him struggling with the accounts which had to be returned to the returning officer of Dublin city, the City Sheriff. Since 1965 concern has been expressed by different groups at different times which culminated in the controversies about the 1992 election and which suggested that the process of politics had to be put on a different footing. To be partisan, the Labour Party, of which I am Deputy Leader, campaigned on a slogan of "Ethics in Government and justice in economics". A number of measures were part of our programme for the consolidation of ethics in Government. There was ethics in office legislation, the freedom of information proposal which is to be published on Monday and the electoral Bill that was to deal with funding of political parties. It would deal with funding during election time, caps on expenditure and funding for parties between Oireachtas elections.
I go into this extensive history to nail the suggestion that, burning the midnight oil during the declining days of December in the penultimate year of a general election, we got a sudden rush of blood to the head and decided to write ourselves big cheques. Nothing could be further from the truth. The Electoral Bill was initiated in the Dáil but stalled in committee because, between agreeing it in Cabinet and the Minister for the Environment, Deputy Howlin, publishing it, we had a change in administration. We also had the Supreme Court judgment known as the McKenna judgment. That fundamentally altered the basis on which that Bill was constructed. The judgment said in effect we could not distinguish between parties and Dáil Deputies in general elections but each candidate had to be treated on an equal basis and we could not give money for political parties out of the Oireachtas allowance. It meant that if we wanted to increase the Oireachtas allowance for parliamentary purposes, we would have to ensure the proceedings of the allowance to parliamentary parties would be limited and restricted for bona fide party activity. In essence, we were obliged to return to the drawing board following the McKenna judgment because of that judgment's implications. Members will be familiar with the controversy that surrounded the divorce referendum and affected, in part, the way the bail referendum was subsequently conducted by the Government.
We said we wanted to give political parties the kind of money we had always intended to give them and to do so on a basis that would be seen as equitable, fair and as addressing the concerns of ethics in office, access to the parliamentary process and, in particular, equality of access. Deputy Howlin announced a three part package some 10 days ago of which this legislation forms the middle part. I will describe the other two parts first to give Members a comprehensive picture.
The proposal by way of new amendments to the existing electoral Bill which is before a Dáil committee is that there would be a limit of £18,000 on what a candidate can spend in a general election as a prospective Deputy whether the candidate is independent representing no group other than himself, or a member of a political party. If the candidate saves the deposit, this is the threshold of qualification and the candidate can then reclaim up to a maximum of £5,000 from the taxpayer provided he produces vouched receipts. The £18,000 will have to be administered in the following way, as per a very strict legal interpretation given to us by the Attorney General. Political candidates running on a party ticket in a constituency can decide that they will only spend £10,000 each. That will release a sum of £16,000 which can be spent nationally by their party. Parties will draw up a budget based on the number of candidates they field in the 41 constituencies and will then decide what portion of the £18,000 will be retained for the national campaign and what portion will be spent locally. The accounts of the party, nationally and locally, must be lodged with the Electoral Commission at the end of an election. There will be a series of penalties and fines associated with breaches of expenditure.
The philosophy behind this is clear and this House will have an opportunity to debate it in detail. It is exclusively for election purposes and designed to ensure that participation in the electoral process is not confined, as it currently is in the United States and increasingly in other jurisdictions without proper funding of political parties, to people who are either independent, independent and wealthy or wealthy. Being wealthy means one is also independent. There is also a limit on what can be spent, something which did not exist before. That is the first part of a three component package upon which the Government has decided. Funding will be based on the Lower House and this is not intended to show disrespect to the Seanad.
We then asked how parties handle their affairs and how one deals with the issue of funding political parties. I will return to the issue of donations at the end of this exposition. Political parties are currently funded between Dáil elections by the provision of a leaders' allowance decided upon by Mr. de Valera who had either the foresight, wisdom or a combination of both never to express it in any Estimates which go before the House. It is taken out of the Central Fund. A leader is not obliged to account for it. It is paid in instalments during the year and is designed for a two and a half party system. It is based in favour of the Opposition on the correct assumption that parties in Government have the support of the infrastructure of office, now reinforced by the provision of programme managers and special advisers.
We were advised on foot of the McKenna judgment that the party leader's allowance was probably unconstitutional in that it gave taxpayers' money to political parties which were not accountable for how it was spent and it could be used to assist the financing of political parties' head offices. It could, therefore, be open to legal challenge by a disaffected citizen or defeated election candidate on the grounds that, on foot of the McKenna judgment, a candidate had the benefit, directly or indirectly, of taxpayers' money to the disadvantage of the plaintiff. The same legal frailty was associated with secretarial assistants because there was no statutory basis for them.
As an election year was approaching with a crowded legislative programme, problems which had already been identified had to be addressed because they could have left the election process open to challenge. The current allocation of moneys in the party leader's allowance which is unaccountable and comes out of the Central Fund is approximately £580,000. I will make the figures available to Deputies and Senators during the debate and they can be examined in detail tomorrow on Committee Stage.
To address the second component of the package, the financing of political parties during the life of the Oireachtas, we have decided to put the parliamentary Oireachtas allowance on a statutory basis payable to the parliamentary leaders of parties because it must be made payable to a designated person. There are also provisions for paying Independent Deputies. It will be payable quarterly and can be used only for parliamentary activities and not for electoral purposes, especially the funding of political parties. This does not preclude a political party from providing services for a parliamentary party which can be paid for out of the parliamentary leader's allowance. However, the allowance will be transparent, accountable and clear which it is not at present. If the Bill is passed into law, it will also be legal which is not the current situation. Sums of money were negotiated on the basis of what political parties reckoned they needed to operate. Contributions will be limited. In summary, the second component of the financing package is to provide guaranteed and regular funding for the operation of political parties during the life of the Oireachtas.
The advice of the Attorney General on foot of the McKenna judgment was that a distinction could not be made in law without being open to challenge between a citizen who stood for election and received a mandate in terms of votes but was not elected and one who was elected. The Attorney General, the only legal adviser to whom the Government can listen, said there was another category of citizen that must be addressed if the first two components were addressed. Political organisations or groups of people who stand for election and get support must have equality of treatment with other groups which benefit from the first and second components of the package.
To address this, a third component is contained in the Electoral Bill, 1996, which will be introduced by the Minister for the Environment, Deputy Howlin. That component is State funding for political parties as political parties, irrespective of whether they are in the Oireachtas.
How will this function? As it is currently designed and written in the Bill, subject to whatever changes both Houses make, a fund of £1 million per annum will be available to support political parties, payable in quarterly instalments on the basis of the percentage support they received from the electorate at the previous general election. This provision will not, therefore come into play until after the next general election which must take place in 1997. There will be a qualifying threshold of 2 per cent of the vote. The concept and precedent of qualifying thresholds is clear in this jurisdiction in that we have the requirement of a deposit and the forfeiture of that deposit if 25 per cent of the quota is not reached. That knocks on the head the idea that people would instantly form political groupings to stand at elections to get the money.
The qualifying threshold has two components. The first is the one to which I have just referred, obtaining an aggregate minimum support of 2 per cent in a general election. The second requirement is that the group be a registered political party. There is much jurisprudence associated with this. Many actions have been taken by groups and organisations who wanted to register as a political party. Some were successful, others were not. Some of us are old enough to recall Seán Dublin Bay Loftus's herculean attempts to get the Christian Democratic Party of Ireland registered on his behalf and on behalf of two other people, one of whom lived in Donegal. There is therefore a test as to what constitutes an organised political party against which there is now a body of jurisprudence.
What would happen with this £1 million based on the last general election? Our calculations suggest that Kevin Street or Parnell Square Sinn Féin would get some money as it received over 2 per cent of the vote in the last general election. The Green Party, which has a representative in the Dáil, would also get money. Christian Solidarity, which I understand is now a registered political party, could also qualify if it received the vote Nora Bennis did in the European elections. We would then have at least one and possibly two registered political parties which demonstrated that they could get over 2 per cent of the vote in a national election, which would receive £20,000 for the four or five years during the period of that election. At the next general election they would retain that amount, lose it if they were below the threshold or increase it.
This in essence is the overall approach to the funding of political parties by the State. The total cost in a non-election year will be £2.7 million. Leaving aside the capital account of £1,500 million, the annual current account budget of this country is £13,038 million and out of that sum, we are looking for £2.6 million to fund political parties.
How are political parties funded at the moment? At present their money comes from mandatory membership fees, voluntary subscriptions by friends and supporters, donations from corporate Ireland or particular organisations such as trade unions in the case of the Labour Party and by levies on public representatives. For example, in the Labour Party I, as a Minister, pay a monthly standing order of £125 towards party funds; Ministers of State pay £110, Deputies £90 and Senators £75.