Political Parties (Income and Expenditure) Bill

– in the House of Commons at 4:30 pm on 13th March 1990.

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Photo of David Winnick David Winnick , Walsall North 4:30 pm, 13th March 1990

I beg to move, That leave be given to bring in a Bill to provide for a limit on the amount of money which may be spent by or on behalf of a political party during the period of a general election campaign; to require companies to establish a political fund from which all political donations shall be made; to provide for a ballot of shareholders and employees before a political fund is established; to ensure an entitlement for each shareholder to an additional dividend from the company in lieu of any donations to which such a shareholder has objected; and to require political parties represented in the House of Commons to publish reports and accounts. I am proposing in my Bill some limited measures, including a limit on the amount of money that a political party can spend nationally during a general election campaign. That must make sense when there has been, rightly, a tight restriction on what may be spent in a constituency on behalf of a candidate. We are all aware of what happens—[Interruption.] Perhaps I may have the attention of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark)——

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. It would be helpful if the chat across the Chamber, between the Front Benches below the Gangway, ceased. Let us listen to what the hon. Member for Walsall, North (Mr. Winnick) has to say.

Photo of David Winnick David Winnick , Walsall North

We know what happens if there is an overspend. The candidate and agent involved can be made to appear before the High Court and, in such circumstances, a successful candidate can be disqualified. On the national scene, a party can spend without limit and thus undermine the established concept applying to candidates. The rule applying to candidates was brought in to ensure some equality between those standing for election to this House. In other words, the fact that one has considerable money should not entitle one to spend as much as one likes on the local scene.

The situation is, however, different nationally. At the last general election my party spent some £4 million. The Tories spent £14 million during the three weeks of campaigning, and they had much more cash available had they been in doubt about the outcome of the election.

If my proposals are accepted, an initial sum could be agreed and it could be updated from time to time. That applies now to the expenditure of candidates; the Home Secretary proposes in an Order in Council that the sum be increased. As a starting sum, I would suggest £4 million nationally for a general election campaign. If my Bill gets a Second Reading, I would be willing to listen to all the arguments in Committee and, being a charitable person, would be willing to increase that figure if an adequate case for doing so were made out.

I am also anxious to make changes in the method by which political donations are made by companies. I want to establish equity between trade unions and companies. For nearly 80 years, from 1913, unions had to establish by ballot a political fund before any donations of a political nature could be made. In recent times the Conservatives have, as we know, legislated to the effect that such ballots must take place every 10 years. Ballots were held and all trade unions with political funds re-established the right to have them, and a few unions that did not previously have funds held ballots, won the day and established political funds.

The situation with companies is totally different. The board of a company may simply decide to make a political donation. There is no ballot, no political fund and not even consultation with shareholders and employees. It is a mockery to insist that trade unions must be tightly controlled over political funds whereas companies can make donations in that way.

It may be argued that at annual general meetings of companies shareholders can protest about what is being done, but a former Law Lord said: It sometimes happen that public companies are conducted in a way which is beyond the control of the ordinary shareholders. The majority of the shares are in the hands of two or three individuals. These have control of the company's affairs. The other shareholders know little and are told little. They receive the glossy annual report. Most of them throw them in the wastepaper basket. There is an annual general meeting, but few of the shareholders attend. The whole management and control is in the hands of the directors. That was said, in the giving of a legal judgment, by Lord Denning, who cannot be accused of any pro-Labour bias.

The way in which companies conduct their affairs reminds one of the way in which the Conservative party organises its internal affairs. I suggest that companies must hold a ballot of shareholders, plus employees who have been with the company for longer than 12 months. Let them decide whether a political fund should be established If it was, provision would have to be made for those opting out—as anyone in a trade union can, rightly, opt out from political donations if he wishes.

We are talking not about peanuts—£200 or £400—but about rather larger sums. In 1988 alone Taylor Woodrow donated £111,000, P and O Steamship Company £100,000, Allied Lyons £95,000, United Biscuits £85,000, Hanson Trust £80,000, Whitbread £76,000, Consolidated Gold Fields £75,000, Trusthouse Forte £61,000, Hambros £61,000, British Airways—once privatised—£50,000, General Electric Company £50,000 and Trafalgar House £40,000.[Interruption.] A number of my hon. Friends are asking me about certain brothers. I have looked through the list, and I concede that I cannot find the House of Fraser, but who knows what may happen next year? They may make a handsome contribution to the Conservative party.

It is not only companies that donate the money that I have mentioned. Tory front organisations—the British United Industrialists, the Industrialist Council, Aims for Industry and the Economic League, which carries out a policy of victimisation against active trade unionists—all receive large sums from companies where no ballot on political donations has taken place. That is totally wrong and unfair.

I believe—and it is contained in my Bill—that all parties represented in the House should publish full accounts of their finances. My party has always done that. However, that is not the case with the Conservative party. Labour Members are not the only people who say that. I had never heard of the river companies until the story appeared in a national newspaper. They are organisations that were set up after the war to secrete funds from companies to the Tory party. Peter Hardy is a prominent dissident and a member of the Charter movement [HON. MEMBERS: "Who?"] If Conservative Members have not heard of him they may have heard of Eric Chalker. They are both campaigning for greater openness and democracy in the Tory party. Peter Hardy—who is no less a Conservative than are Tory Members—said: we have long suspected the party has hidden reserves in secret bank accounts … The almost obsessive secrecy of the party organisation combined with the total lack of accountability of the party treasurers makes the Tory Party a soft target for its opponents. When I last spoke on that subject I said that I was not sure whether the Conservative party or the Communist party in the Soviet Union was less democratic. That was four or five years ago. Given the changes on the Soviet scene, I think that the Soviet Communist party is at long last beginning to become a little more democratic. As we near the end of the 20th century it is about time that the Conservative party became fully democratic, published its accounts and made itself accountable in the way that all political parties should

Question put and agreed to.

Bill ordered to be brought in by Mr. David Winnick, Mr. Tony Banks, Mr. Terry Davis, Mr. Don Dixon, Mr. Harry Ewing, Mr. Derek Fatchett, Mrs. Maria Fyfe, Mr. James Lamond, Mr. Rhodri Morgan and Ms. Marjorie Mowlam.