HC Deb 10 July 1968 vol 768 cc508-10
33. Mr. Whitaker

asked the President of the Board of Trade whether he will introduce legislation to ensure that companies who intend to divert shareholders' money to political causes give advance warning of the fact in their prospectus and articles of association.

53 and 54. Mr. Bidwell

asked the President of the Board of Trade (1) if he will introduce legislation to oblige joint-stock companies to seek permission from annual shareholders' meetings before making contributions to political party funds;

(2) if he is aware of substantial sums being donated to the funds of political parties from joint-stock company finances; and if he will introduce legislation to enable shareholders to contract out of such practices.

Mr. Dell

As I informed my hon. Friend the Member for Hampstead (Mr. Whitaker), on 29th May, I think that the provision in the Companies Act, 1967, which requires political contributions to be disclosed, is sufficient for the purpose.—[Vol. 765, c. 1800–1.]

Mr. Whitaker

Is my hon. Friend aware that I have had protests from members of all three political parties whose money, subscribed to a commercial concern, has been diverted without their consent to a political end? Is it not unfair that directors should be allowed to do this with money which does not belong to them?

Mr. Dell

I hope that there are many more protests. The object of giving publicity to these contributions was precisely to enable shareholders to take action if they wished. It is up to the shareholders.

Sir D. Walker-Smith

Has the hon. Gentleman any evidence as yet as to whether there have been any protests or other action by shareholders? If he has not, is that not evidence that they realise that this expenditure is in the best interests of their company and an important way of defending their interests against Socialist economic practices which jeopardise the economic prosperity of the country?

Mr. Dell

I have certainly heard objections by shareholders. It is up to the company to decide, subject to challenge if the shareholders think it appropriate, as to whether such contributions are in the interests of the company.

Mr. Orme

Is my hon. Friend aware that more; information should be given? Could not trade union money invested through unit trusts be used for a form of investment against the interests of the basic aims of the trade unions and thereafter perhaps be subscribed both to Aims of Industry Limited and to the Tory Party?

Mr. Dell

The position is that all the information is given. It is required by law that political contributions shall now be revealed. The suggestion that is being made in these Questions is that the shareholders should have a right to prevent their companies making political contributions. Shareholders now know what the facts are.

Mr. Dudley Smith

Will the hon. Gentleman bear in mind that, if a shareholder thinks that his company is being run badly he can always contract out?

Mr. Dell

Certainly, it is up to the shareholders to sell his shares if he thinks that the company is being run badly.

Mr. Hynd

While shareholders may contract out from membership of a company, a trade unionist has to contract in or out from a political contribution. Why should not the same conditions apply to a private company as apply to the unions? Will my hon. Friend introduce legislation to this effect?

Mr. Dell

There is a difference in position between companies and trade unions, apart from the administrative problems which would be involved. The difference is that it is easy for a shareholder to contract out if he thinks fit.

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