HC Deb 05 May 1964 vol 694 cc1117-26

3.38 p.m.

Mr. Dingle Foot (Ipswich)

I beg to move, That leave be given to bring in a Bill to provide that no funds of any company shall be contributed to the support of any political party or to the furtherance of any political objects unless the support of such party or the furtherance of these objects has been approved by a resolution passed at a meeting of the company, and to provide further that all shareholders shall be informed when such contributions are made. My proposed Bill should commend itself to hon. Members on both sides of the House. It is designed for the protection of shareholders. Its purpose is simply to ensure that their money shall not be contributed without their knowledge or consent either to a political party or to an organisation which carries on political propaganda.

Since one political party in the State refuses to publish its accounts or the names of its contributors, we cannot tell how widespread this practice may be. From time to time, however, examples come to light. Only last November, during the Sudbury and Woodbridge by-election, the Labour candidate received a letter from a correspondent who lives in Kenya. The letter said: I am a shareholder of Messrs. Fisons Ltd., who have headquarters at Felixstowe, Suffolk. For some time I have been trying to obtain from Messrs. Fisons details of contributions made by the company to the Conservative Party. After initially refusing me this information the company has now sent me details as follows: 'Amounts ranging from £50 to £250 have been donated to local Conservative Association offices in those constituencies in which the company or its subsidiaries operate factories or branch offices. Taking the group as a whole the total of all such donations last year amounted in aggregate to £2,320.' That was not denied by the former chairman of the company, who was interviewed by the Press. He said: One of the reasons"— and the House will note that phrase—— we made these subscriptions was because we thought that the nationalisation of our company was not in the interests of our customers the farmers, nor of those who work for us, nor of our shareholders.

Hon. Members

Hear, hear.

Mr. Foot

I see that that quotation arouses the enthusiasm of hon. Mem- bers opposite. I will go on to an even more remarkable case, concerning a company called Allied Ironfounders. Here I quote from a report in the Guardian of 15th April last, which stated: The company, Allied Ironfounders, of Brook Street, Mayfair, sent its last contribution (to the North Ealing Conservative Association) through the Conservative Central Board of Finance towards the end of the last financial year, probably during the last week in February. The sum was £150, and seems to have been an instalment of a larger sum, not yet disclosed, paid into the Central Board in October, shortly after the company had filed its latest return with the Board of Trade. This showed that the company's major shareholders included the Prudential…the Church Commissioners…and the Co-operative Insurance Society. Other shareholders included the National Bank, headed by Lord Pakenham, the Labour Peer, Baring Brothers, and the Minister of Agriculture. A spokesman for the Ministry said that the Minister's stake in the company (7,680 Ordinaries) was not Government money. It was being held in trust by the Minister for the colleges and universities of Oxford, Cambridge and Durham under authority granted by Parliament in 1925. The University of Nottingham had a smaller separate stake of its own and so had Brasenose College, Oxford, University College Hospital, London, the Central Finance Board of the Methodist Churches, and a limited company registered in Sweden. Asked for his comments yesterday the Conservative Agent for Ealing, North, said that it was a matter for the central board. The relevant official of the central board, Mr. G. G. Carlyle, said that it was a matter for the Conservative Central Office. The Central Office was not in a position to discuss the question further yesterday. I appreciate that not every board behaves in this way. I am sure that we would all like to commend the example of Mr. Paul Chambers, the chairman of I.C.I. who, a few weeks ago, said: We do not make any contributions to any political party funds. We as a Board represent something like 500,000 shareholders and we do not know which way they vote. It must be a great relief to the shareholders of I.C.I. to feel that, at any rate, their money is not being thrown down the drain.

My Bill would not be confined to contributions made direct to political parties; it would also be concerned with contributions to political campaigns. Only a few days ago a body called Aims of Industry published an article—it was really more in the nature of an opinion—by the hon. and learned Member for Northwich (Sir J. Foster), entitled, "The Legal Right of Directors to Defend the Assets and Trade of Companies".

In opening this article, the hon. and learned Member said: Many companies are worried about the renewed political threats to expand nationalisation and State control over industry. But they are not sure what they can do about it. Are they within their rights in subscribing to campaigns for free enterprise and against nationalisation? Will such expenditure be allowable for tax? Some companies are hesitating to subscribe to bodies undertaking such work for industry because such payments have recently been subject to political attacks in the press and on television. It is becoming a common experience for the Boards of public companies to receive questionnaires from politically active shareholders, asking for disclosure of any contributions their company may be making to Aims of Industry and other organisations. That makes it abundantly clear that there are many cases in which shareholders simply do not know—and are not allowed to know—whether their companies are contributing to political propaganda. The Bill would not prevent contributions of this sort. It would merely provide that they could not be made without a vote at the meeting of a company and without the knowledge of the shareholders. In other words, what I propose to do is to put companies under virtually the same obligation to their members as applies in the case of trade unions.

Hon. Members will recall that by the Act of 1913 a trade union may not apply its funds to political objects, as defined in the Act, unless three conditions are satisfied. The first is that the furtherance of the political objects in question must have been approved on a ballot by a majority of the members; the second is that the payments have to be made out of a separate fund; and the third is that any member may contract out from contributing to such a fund.

Those objectives set out in the Act are not all-embracing, but I have made very careful inquiries and I am assured that no payments to a political party or for any political object are made by any of our trade unions except out of a separate political fund established after a vote of the members. In other words, no trade union uses its general funds unknown to its members for a purpose for which those funds were not subscribed. What the Bill would pro- pose is that the same rule should apply to companies. If the Bill became law they would still be able to subscribe, if they wished, to political organisations. But they would no longer to able to do so behind the backs of their shareholders.

I imagine that the House will have no doubt about the purpose of the Motion. I say quite bluntly that it is intended as a challenge to the party opposite. Everyone knows that it is that part, and that party alone, which benefits from secret contributions of this kind. I do not know whether it is right, but I am told that hon. Members opposite intend to vote against the Motion today. So be it. Let them use their majority while they can. It is already well known that after the next General Election a Labour Government will amend the Companies Act to provide that contributions of this sort to political parties and political organisations shall be disclosed in companies' published accounts.

I want to put to hon. Members opposite a question which some of my hon. Friends and I intend to go on repeating, unless it is answered, between now and the next General Election. Will the party opposite disclose the names of the companies which have contributed to its funds since the last General Election, and the amounts that they have subscribed? Alternatively—if it feels that any breach of confidence might be involved in so doing—will it disclose the number of those companies, without the names, and the total amount of subscriptions?

I say that we intend to try to get an answer to that question before the next General Election. If the answer to both those questions is "No", then the electors will certainly draw their own conclusions.

Mr. Speaker

Sir John Foster.

Hon. Members

Stranger.

3.50 p.m.

Sir John Foster (Northwich)

The hon. and learned Member for Ipswich (Mr. D. Foot) has proposed in his Motion that the contributions to political parties made by companies should be approved by the shareholders. I do not think that the hon. and learned Gentleman realises what he is doing with regard to the registration of political parties. He has not faced the difficulty that by the introduction of legislation which has to define or incorporate political parties he is striking at the roots of the freedom of our democracy.

If a section of the Socialist Party seceded, would that be a political party? Does a political party have to have candidates in the field? How many members must it have? If we are to look into the constitution of a political party, we have either to register it or to incorporate it. What shall we do when certain persons constitute themselves into what they think is a political party? Must they come under the provisions of the Companies Act and resister as a political party? We should get a situation in which a political party, according to this proposed legislation, would have to be defined and picked up.

It is impossible to prevent contributions to a political party unless there is a system of registration or incorporation——

Mr. Anthony Wedgwood Benn (Bristol, South-East)

Will the hon. and learned Member permit me to intervene?

Mr. Speaker

Order. Our practice does not allow an intervention under the Standing Order.

Sir J. Foster

I can understand the hon. Member for Bristol, South-East (Mr. Benn) seeing the difficulty.

The hon. and learned Member for Ipswich and I belong to a very praiseworthy institution called "Justice". If he does not belong, I hope that he will join, but I believe that he is a member. That is not a political party. What he is requiring, by his proposed legislation, is that every time a company subscribes to organisations like "Justice", or the Fabian Bureau, or African Affairs the shareholders must know. [HON. MEMBERS: "Why not"] He would find that this would so affect the sinews of war of many of these organisations that they would be unable to work, because, according to his proposal, a company must notify its shareholders every time it makes a contribution to such organisations as the Federation of World Government.

We should find that any splinter group which set itself up could be stopped by the Government of the day, who would say, "We will not register you as a political party". If a section of the Socialist Party broke away, or if the Socialist Party found that its Left-wing members were trying lo constitute themselves as another party, should we find that the registrar of political parties would object? Suppose they refused to register or incorporate themselves. We should find that a company would be in difficulty in deciding whether it could subscribe or not.

I believe that the hon. and learned Member for Ipswich would subscribe to the view that any co-operative society which elects Communists is free, without Government interference, to subscribe to the Communist Party. I believe that this freedom is very valuable in this country, and that they should not be required to notify every member of the co-operative society. Also, the proposed legislation of the hon. and learned Gentleman would not catch partnerships.

Let us look at the principle behind this, which is that when a company has entrusted the direction of its affairs to the directors of the company, it is a matter for the company itself, apart from its shareholders, to decide what is best in the interests of the company. The chairman of Fisons said that he would make subscriptions in every direction which was best for the interests of the company. In my submission, that is the justification for the present freedom.

If we take the other view, and the legislation proposed by the hon. and learned Gentleman is introduced, we should find that the Government would be interfering with the freedom of association of persons for political ends—[HON. MEMBERS: "Nonsense."] What hon. Members opposite want is regulation for regulation's sake. They want to make it a criminal offence for people to constitute themselves as a party without registration or incorporation. They want to make it a criminal offence for a company to subscribe to parties. They want to make it a criminal offence for any company not to notify its shareholders when it subscribes—[HON. MEMBERS: "Hear, hear."]—for example, to the C.N.D. They want to make it a criminal offence in every case where a political party constitutes itself without the leave of the Companies Act. There will be a registrar who says "No". The hon. and learned Member for Ipswich and one other hon. Member would not constitute a political party. But if there were several, they could become a political party.

I do not think that the hon. and learned Member realises how far-reaching is this proposal. This proposal has been debated by the House on several occasions, and it has been pointed out time and again that what we value in our democracy is freedom of association. The hon. and learned Member is trying to prevent freedom of

association for political purposes and objects.

I understand the reason for the interruptions from hon. Members opposite. They do not like to face the fact that a proposal to regulate parties and political objects is a grave attack on democracy. It is for these reasons that I urge the House to reject the Motion.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 159, Noes 220.

Division No. 89.] AYES [3.59 p.m.
Ainsley, William Henderson, Rt. Hn. Arthur (Rwly Regis) Peart, Frederick
Albu, Austen Holman, Percy Pentland, Norman
Allaun, Frank (Salford, E.) Holt, Arthur Prentice, R. E.
Allen, Scholefield (Crewe) Hooson, H. E. Price, J. T. (Westhoughton)
Bacon, Miss Alice Houghton, Douglas Probert, Arthur
Baxter, William (Stirlingshire, W.) Howell, Charles A. (Perry Barr) Pursey, Cmdr. Harry
Beaney, Alan Howie, W. Rankin, John
Bellenger, Rt. Hon. F. J. Hoy, James H. Rees, Merlyn (Leeds, S.)
Bence, Cyril Hughes, Emrys (S. Ayrshire) Rhodes, H.
Benn, Anthony Wedgwood Hughes, Hector (Aberdeen, N.) Roberts, Albert (Normanton)
Blackburn, F. Hunter, A. E. Roberts, Goronwy (Caernarvon)
Blyton, William Hynd, John (Attercliffe) Robertson, John (Paisley)
Bottomley, Rt. Hon. A. G. Johnson, Carol (Lewisham, S.) Rodgers, W. T. (Stockton)
Bowden, Rt. Hn. H. W. (Leics, S. W.) Jones, Dan (Burnley) Rogers, G. H. R. (Kensington, N.)
Bowles, Frank Kelley, Richard Ross, William
Braddock, Mrs. E. M. Key, Rt. Hon. C. W. Royle, Charles (Salford, West)
Bray, Dr. Jeremy King, Dr. Horace Shinwell, Rt. Hon. E.
Brown, Rt. Hon. George (Belper) Lawson, George Short, Edward
Butler, Herbert (Hackney, C.) Lee, Frederick (Newton) Silkin, John
Cliffe, Michael Lee, Miss Jennie (Cannock) Silverman, Sydney (Nelson)
Collick, Percy Lewis, Arthur (West Ham, N.) Skeffington, Arthur
Crossman, R. H. S. Lipton, Marcus Slater, Mrs. Harriet (Stoke, N.)
Cullen, Mrs. Alice Loughlin, Charles Slater, Joseph (Sedgefield)
Dalyell, Tam Lubbock, Eric Small, William
Darling, George McBride, N. Smith, Ellis (Stoke, S.)
Davies, G. Elfed (Rhondda, E.) McCann, J. Snow, Julian
Davies, Harold (Leek) MacColl, James Sorensen, R. W.
Davies, Ifor (Gower) MacDermot, Niall Soskice, Rt. Hon. Sir Frank
Deer, George Mackie, John (Enfield, East) Spriggs, Leslie
Delargy, Hugh MacPherson, Malcolm Stewart, Michael (Fulham)
Duffy, A. E. P. (Colne Valley) Mallalieu, E. L. (Brigg) Stones, William
Ede, Rt. Hon. C. Manuel, Archie Strauss, Rt. Hn. G. R. (Vauxhall)
Edwards, Rt. Hon. Ness (Caerphilly) Mapp, Charles Swingler, Stephen
Edwards, Robert (Bilston) Marsh, Richard Taylor, Bernard (Mansfield)
Evans, Albert Mason, Roy Thomas, Iorwerth (Rhondda, W.)
Fernyhough, E. Mayhew, Christopher Thomson, G. M. (Dundee, E.)
Finch, Harold Mellish, R. J. Wade, Donald
Fitch, Alan Mendelson, J. J. Wainwright, Edwin
Fletcher, Eric Mitchison, G. R. Warbey, William
Foley, Maurice Monslow, Walter Weitzman, David
Foot, Michael (Ebbw Vale) Moody, A. S. White, Mrs. Eirene
Galpern, Sir Myer Morris, John (Aberavon) Wigg, George
Ginsburg, David Moyle, Arthur Willey, Frederick
Gordon Walker, Rt. Hon. P. C. Mulley, Frederick Williams, W. T. (Warrington)
Greenwood, Anthony Neal, Harold Willis, E. G. (Edinburgh, E.)
Grey, Charles Noel-Baker, Francis (Swindon) Wilson, Rt. Hon. Harold (Huyton)
Griffiths, David (Rother Valley) Noel-Baker, Rt. Hn. Philip (Derby, S.) Winterbottom, R. E.
Griffiths, Rt. Hon. James (Llanelly) O'Malley, B. K. Woodburn, Rt. Hon. A.
Grimond, Rt. Hon. J. Oram, A. E. Woof, Robert
Gunter, Ray Owen, Will Yates, Victor (Ladywood)
Hamilton, William (West Fife) Paget, R. T.
Harper, Joseph Pannell, Charles (Leeds, W.) TELLERS FOR THE AYES:
Hayman, F. H. Pargiter, G. A. Mr. Dingle Foot and Mrs. Castle.
Healey, Denis Pavitt, Laurence
NOES
Agnew, Sir Peter Godber, Rt. Hon. J. B. Nugent, Rt. Hon. Sir Richard
Allan, Robert (Paddington, S.) Goodhew, Victor Orr, Capt. L. P. S.
Amery, Rt. Hon. Julian Gower, Raymond Osborn, John (Hallam)
Arbuthnot, Sir John Grant-Ferris, R. Page, Graham (Crosby)
Ashton, Sir Hubert Green, Alan Pannell, Norman (Kirkdale)
Atkins, Humphrey Grosvenor, Lord Robert Pearson, Frank (Clitheroe)
Barter, John Gurden, Harold Peel, John
Batsford, Brian Hamilton, Michael (Wellingborough) Percival, Ian
Beamish, Col. Sir Tufton Harris, Frederic (Croydon, N.W.) Pike, Miss Mervyn
Bell, Ronald Harris, Reader (Heston) Pitt, Dame Edith
Bennett, F. M. (Torquay) Harrison, Brian (Maldon) Pounder, Rafton
Bennett, Dr. Reginald (Gos & Fhm) Harrison, Col. Sir Harwood (Eye) Powell, Rt. Hon. J. Enoch
Berkeley, Humphry Hay, John Proudfoot, Wilfred
Bevins, Rt. Hon. Reginald Henderson, John (Cathcart) Pym, Francis
Biggs-Davison, John Hiley, Joseph Quennell, Miss J. M.
Bingham, R. M. Hill, J. E. B. (S. Norfolk) Rawlinson, Rt. Hon. Sir Peter
Birch, Rt. Hon. Nigel Hobson, Rt. Hon. Sir John Redmayne, Rt. Hon. Martin
Black, Sir Cyril Hocking, Philip N. Rees, Hugh (Swansea, W.)
Bossom, Hon. Clive Holland, Philip Ridley, Hon. Nicholas
Bourne-Arton, A. Hollingworth, John Roberts, Sir Peter (Heeley)
Box, Donald Hopkins, Alan Robson Brown, Sir William
Boyd-Carpenter, Rt. Hon. John Hornsby-Smith, Rt. Hon. Dame P. Roots, William
Braine, Bernard Howard, John (Southampton, Test) Ropner, Col. Sir Leonard
Brewis, John Hughes Hallett, Vice-Admiral John Royle, Anthony (Richmond, Surrey)
Bromley-Davenport, Lt.-Col. Sir Walter Hughes-Young, Michael Russell, Sir Ronald
Brooke, Rt. Hon. Henry Hutchison, Michael Clark Scott-Hopkins, James
Brown, Alan (Tottenham) Iremonger, T. L. Seymour, Leslie
Brown, Percy (Torrington) Irvine, Bryant Godman (Rye) Sharpies, Richard
Buck, Antony Johnson, Dr. Donald (Carlisle) Skeet, T. H. H.
Bullard, Denys Johnson, Eric (Blackley) Smith, Dudley (Br'ntf'd & Chiswick)
Bullus, Wing Commander Erie Johnson Smith, Geoffrey Smyth, Rt. Hon. Brig. Sir John
Burden, F. A. Kerans, Cdr. J. S. Spearman, Sir Alexander
Butcher, Sir Herbert Kerr, Sir Hamilton Stainton, Keith
Campbell, Gordon Kitson, Timothy Stanley, Hon. Richard
Carr, Compton (Barons Court) Lagden, Godfrey Stoddart-Scott, Col. Sir Malcolm
Carr, Rt. Hon. Robert (Mitcham) Lancaster, Col. C. G. Storey, Sir Samuel
Cary, Sir Robert Langford-Holt, Sir John Studholme, Sir Henry
Channon, H. P. G. Leather, Sir Edwin Summers, Sir Spencer
Chichester-Clark, R. Leavey, J. A. Talbot, John E.
Churchill, Rt. Hon. Sir Winston Legge-Bourke, Sir Harry Teeling, Sir William
Clark, William (Nottingham, S.) Lewis, Kenneth (Rutland) Thatcher, Mrs. Margaret
Clarke, Brig. Terence (Portsmth, W.) Lilley, F. J. P. Thomas, Sir Leslie (Canterbury)
Cleaver, Leonard Linstead, Sir Hugh Thomas, Peter (Conway)
Cooke, Robert Litchfield, Capt. John Thompson, Sir Richard (Croydon, S.)
Cooper-Key, Sir Neill Lloyd, Rt. Hn. Geoffrey (Sut'n C'd field) Tiley, Arthur (Bradford, W.)
Cordeaux, Lt.-Col. J. K. Longbottom, Charles Tilney, John (Wavertree)
Corfield, F. V. Loveys, Walter H. Touche, Rt. Hon. Sir Gordon
Coulson, Michael Lucas, Sir Jocelyn Turner, Colin
Courtney, Cdr. Anthony Lucas-Tooth, Sir Hugh Turton, Rt. Hon. R. H.
Craddock, Sir Beresford (Spelthorne) McAdden, Sir Stephen Tweedsmuir, Lady
Crawley, Aidan MacArthur, Ian van Straubenzee, W. R.
Cunningham, Sir Knox McLaren, Martin Vane, W. M. F.
Curran, Charles Maclean, Sir Fitzroy (Bute & N. Ayrs) Vaughan-Morgan, Rt. Hon. Sir John
Currie, G. B. H. McLean, Neil (Inverness) Vickers, Miss Joan
Dalkeith, Earl of Macleod, Rt. Hn. Iain (Enfield, W.) Walker, Peter
Dance, James Macmillan, Maurice (Halifax) Walker-Smith, Rt. Hon. Sir Derek
Deedes, Rt. Hon. W. F. Madden, Martin Wall, Patrick
Donaldson, Cmdr. C. E. M. Maginnis, John E. Ward, Dame Irene
Doughty, Charles Maitland, Sir John Wells, John (Maidstone)
Douglas-Home, Rt. Hon. Sir Aleo Marshall, Sir Douglas Whitelaw, William
Drayson, G. B. Marten, Neil Williams, Dudley (Exeter)
Elliot, Capt. Walter (Carshalton) Matthew, Robert (Honiton) Wills, Sir Gerald (Bridgwater)
Elliott, R. W. (Newc'tle-upon-Tyne, N.) Matthews, Gordon (Meriden) Wise, A. R.
Emery, Peter Maude, Angus (Stratford-on-Avon) Wolrige-Gordon, Patrick
Emmet, Hon. Mrs. Evelyn Maudling, Rt. Hon. Reginald Wood, Rt. Hon. Richard
Farey-Jones, F. W. Mawby, Ray Woodhouse, C. M.
Fell, Anthony Maydon, Lt.-Cmdr. S. L. C. Woodnutt, Mark
Finlay, Graeme Mills, Stratton Woollam, John
Fisher, Nigel… Montgomery, Fergus Worsley, Marcus
Fletcher-Cooke, Charles Moore, Sir Thomas (Ayr) Yates, William (The Wrekin)
Forrest, George More, Jasper (Ludlow)
Gammans, Lady Morrison, John TELLERS FOR THE NOES:
Gilmour, Ian (Norfolk, Central) Neave, Airey Sir Godfrey Nicholson and
Glover, Sir Douglas Nicholls, Sir Harmar Sir John Foster.
Glyn, Dr. Alan (Clapham) Noble, Rt. Hon. Michael