PROVISIONS AS TO POLITICAL CONTRIBUTIONS

HC Deb 23 March 1971 vol 814 cc361-99

(1) Any organisation of workers which requires any member to make any contribution to the political fund of a trade union unless he has at some time after the commencement of this Act expressed, by notice in writing, his willingness to contribute to that fund, shall not be eligible for registration as a trade union under this Act.

(2) Any organisation of employers, any of whose member firms make, after the commencement of this Act, a political contribution in any financial year, without the written consent of a majority of all the shareholders eligible to vote, shall not be eligible for registration as an employers' federation under this Act.—[Mr. Pardoe.]

Brought up, and read the First time.

Mr. John Pardoe (Cornwall, North)

I beg to move, That the Clause be read a Second time.

Subsection (1) deals with contracting in and contracting out of the trade union levy, and subsection (2) has to do with the whole business of political contributions made by companies to the Conservative Party.

There will be some who feel that the Clause is unnecessarily restrictive, that my intention is to try to limit the sums of money available to politics, and particularly to the Labour Party. I can only plead innocence to that charge. I do so as an ex-treasurer of a political party and one who has, therefore, had the sad task of trying to raise money for politics in Britain. My aim is in no sense to limit the amount of money available for politics. It is to expand that amount of money by setting forth an alternative, though one which, unfortunately, cannot be fully set forth within the terms of an amendment to this Bill.

My other purpose is to draw attention to the grave financial-political problem which all three parties represented in the House face. While there may be hon. Members on both sides, and especially among the Labour Opposition, who feel that this is an attack on what some Conservative propagandists have called Labour's Moscow gold, this is in fact not so. I part company from the fund raisers of the Conservative Party in my belief that Labour is undoubtedly the poorer of the two parties.

Mr. Dan Jones

Very much so.

Mr. Pardoe

Very much the poorer, as the hon. Gentleman says. What I am getting at here is that, even if one believes that the Conservative Party is built on untold sums of money, it is in possession of far smaller funds than it needs to do an adequate job in our political system. I shall prove that by reference to its most recent set of accounts, those ending March, 1970, and going back some little way.

9.15 p.m.

To turn for a moment to the Labour Party, I remind the Official Opposition that all is not for the best in the best of all possible worlds in the Labour Party's cash. I hope that hon. Members on this side, in considering the new Clause, will realise that something must be done. Even if they do not accept that the Bill as it stands must be done, they ought to accept that something must be done in this connection, for they are Members of Parliament of a party which is chronically short of cash, in a desperate financial position, and quite unable to measure up to the standards of a democratic Opposition in a modern democratic society.

Here, I throw a few quotations in to the debate. The Times of 25th November, 1970, reported that the right hon. Member for Cardiff, South-East (Mr. Callaghan), who is the treasurer of the Labour Party, had warned the Finance Committee of the Parliamentary Labour Party that if the Government ran their full term of office the Labour Party could have a deficit of £500,000 by the next General Election. He said: The annual deficit on the accounts for the year 1971 was estimated at £121,000, rising to £175,000 for 1972 and £250,000 for 1973. These are substantial sums, considering that over the past few years the Labour Party's income has been of the order of £500,000. He added: Income must be doubled in the next year or it should at least be raised to £750,000 a year. That is the target, but even at £750,000 a year I believe that the Labour Party would be capable of doing far less under the present system than it should do as a militant Opposition party.

There are also the remarks of the Labour Party's fund-raising adviser, Mr. Oliver Stuchbury, when he resigned. The Times reported him as saying that financially and organisationally the Party is in a critically unhappy position. I am not surprised that he resigned. Virtually none of his proposals ever reached the National Executive, let alone got off the ground. He said: Although an increase in the union affiliation fees is expected to see the Party safely through 1971, the organisers expect a further deficit in 1972 unless ways of raising funds can be found. To translate this into the real problems of political organisation, perhaps it is as well to quote at this stage the views of Mr. Ronald Hayward, the National Agent of the Labour Party. Speaking at Taunton only a few days ago to the South-West Regional Council, he said: You are living in cloud cuckooland. It is time the kidology stopped. He said that at the end of this year, not taking into account any increased postal charges, the party would have a deficit of £82,000, adding, If that deficit runs for the next four years at that rate and in the year of the General Election assuming that the Government runs its full course, we shall be £250,000 in the red. Those are just some recent comments about the major Opposition party's finances. As I pointed out in two very detailed articles in The Times in 1969, not only the Labour Party but the Conservative Party is short of money. Those of us who live in the penury of the Liberal Party often look with covetous eyes at the huge golden coffers of Smith Square and wonder what it does with all the money.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

Does my hon. Friend agree that in accordance with the customs of the House he should declare his interest an an ex-treasurer of the Liberal Party?

Mr. Pardoe

If my hon. Friend had forsaken his tournedos Rossini as early as I did he would have been present to hear me say that. Perhaps I should also declare my interest as a contributor to the Liberal Party.

It is not just the Labour and Liberal Parties that are chronically short of cash. In its latest accounts, for the year 1970, the Conservative Party states quite clearly that its income has fallen substantially short of expenditure, and the same was true of the year ended 31st March, 1969.

Mr. James Dempsey (Coatbridge and Airdrie)

Is the hon. Gentleman taking into account the Conservative Party funds at constituency level? Does he know that in one constituency in Scotland two employers paid the Conservative candidate's total General Election expenses? Should not that money be added to the national fund of the Conservative Party?

Mr. Pardoe

Yes, indeed. It is extremely difficult to make an accurate assessment of exactly what any party's funds are—any party. I have tried to make an estimate in the past. There are substantial undercover contributions to the Labour Party by the trade unions, and, for all I know, even by certain organisations to the Liberal Party at constituency level. To answer the hon. Gentleman's point I should like to quote from a pamphlet produced by the Conservative Central Office, which sets out what it thinks is an ideal budget for a local constituency party. It amounts to about £5,570. I think my hon. Friend would agree that that is a lot of money by our standards. Of course, it is not a lot of money by the standards of the North Cornwall Liberal Association, but it is by the standards of most Liberal Parties and of most Labour Parties.

When one breaks the figure down into the recommended expenditure, as is done in the leaflet, one sees that a very large part of it goes on administration and in the contribution to headquarters. The amount available for political in-fighting and political education at local level is ludicrously small. Whether these sums are available at local constituency level, and from whatever source they are available, and whether they are available to the Conservative Party, the Labour Party or the Liberal Party, the total amount of money available to democracy in this country is far too little.

What is interesting is that this is not so in other countries. Dictators spend vast sums shoring up their own system. Is it too much to ask of British democrats that they should spend more than the price of a packet of cigarettes to make their system functiion properly? Mr. Ronald J. Heidenheimer, in his, "Comparative Party Finance", has devised a formula which links political expenditure to the number of votes cast and the average hourly wage. He shows that the index of expenditure against Britain is 0.64; in Germany, it is 0.95; in the United States, it is 1.12; in India, it is 1.25. We then come right up to countries like Italy, where it is 4.5, the Philippines, where it is 16, and Israel—the mostest—where it is 20.5 per cent. I should add that these figures are from the early 1960s. In other words, Israel is spending on its political system per head of the population, in relation to its hourly wage rate and the number of votes cast, very nearly 200 per cent. above the British. This does not seem to be a satisfactory way of conducting our politics.

I believe, from a study of these figures, that we have to change the system in some way, and that brings me to the specific proposal in the new Clause. Unfortunately, I must admit that the terms of the new Clause would undoubtedly restrict the amount of money, but it would restrict it because it would force the Labour Party to derive the bulk of its funds from those trade union members who were actually prepared—ideologically prepared, presumably—to go out and sign a form which said, "I will give my political contributions to the Labour Party." That may be most unwelcome to many members of the Labour Party, but if they feel that the present system is affording them the kind of finance they need to run a modern political party they are, as Mr. Hayward said, living in cloud cuckooland. They have not enough to run a penny-farthing machine—and they lost the last Election on postal votes alone. If they had had the amount of money they ought to have to run a modern political party, they would not have lost the last election.

The only reason we are debating this Bill is, presumably, that the Labour Party lost the last election. One might be cynical, of course, and say that the reason we are debating it is that they left it to the Conservative Party to introduce it, which they would not have done if they had had funds independent of their trade union connections. I maintain that, whatever the total amount of money available for politics in Britain, it is wrong for any political party, or for both major political parties, to be dependent on a vested interest to produce the cash.

The Labour Party is so dependent on the trade union connection for its money because of the incredible feebleness of its local constituency parties. Over 85 per cent. of its money has to come from the trade unions. If it had to depend solely on its contributions from the constituencies and from individual contributors, the money available to it would be less than the amount available to the Liberal Party from similar sources, which shows how dangerous this all is.

Mr. Denis Skinner (Bolsover)

The hon. Gentleman mentioned earlier that he should declare his interest as onetime treasurer of the Liberal Party. In view of the fact that he is talking about trade union vested interests, should not he declare his interest in respect of the National Association of Schoolmasters, from which he receives a retainer of £350 a year?

Mr. Pardoe

The hon. Gentleman has it wrong. I receive a retainer of £400. It is not a bad case, but it is possible to divine because the Liberal Party keeps a record in the Chief Whip's office and it is there for all to see. I have declared that interest in a large number of debates in the House. I did not appreciate that what I get from the N.A.S. was directly relevant to the political fund, but I do not deny it. In fact, from time to time in this House I have gloried in the fact that I derive income from a trade union source.

Mr. David Steel

While the Liberal Party publishes such interests, neither the Labour Party nor the Conservative Party has followed suit.

Mr. Pardoe

The Liberal Party keeps an open register of all its vested interests. If anyone wants to see which trade unions I advise—

Mr. Skinner

God help them!

Mr. Pardoe

—they can easily find out. Despite what the hon. Member for Bolsover (Mr. Skinner) says, those unions have been remarkable in increasing their membership. But I will not get sidetracked into that aspect. I apologise to the hon. Member for not declaring my interest to him. I did not know that I had an interest in this debate in such terms.

Mr. Skinner

Get on with it.

9.30 p.m.

Mr. Pardoe

The hon. Member interrupted me; I did not interrupt him.

It is true that the Bill would restrict income, because if the Labour Party were to rely entirely on the contributions of those who physically sign a form to say that they want to contribute, it might get much less money than it now gets. Similarly, I strongly suspect that if the Conservative Party had to depend on the wishes of the shareholders of the companies which subscribe to it, it, too, would derive a much smaller income.

I have looked at the system carefully to see why the suggested alternative is necessary. The system ensures that individual giving is made easy for the individual. Both the Labour Party and the Conservative Party greatly depend on giving because of the sheer difficulty of raising individual contributions. Every party treasurer does these calculations in his bath. The right hon. Member for Bristol, South-East (Mr. Benn) said the other day that every Labour supporter should give a day's wages to the Labour Party. We had the 10-bob Tories of the right hon. Member for Taunton (Mr. du Cann) when he was Chairman of the Conservative Party. The General Secretary of the Labour Party, Sir Harry Nicholas, suggested £5 per Labour Party member. That follows the genre of the party treasurer who sits in his bath and conjures up figures saying, "If only everybody would give me the price of a pint of beer once a week, all my problems would be solved".

The problem is the sheer difficulty of collecting the money, and so the Labour Party inevitably collects its money from the trade unions and 65 per cent. of the Conservative Party's money comes in contributions—I cannot swear to the figures for 1970, because I have not yet had time to do them, but that was the amount for 1969.

Mr. Gower

The hon. Gentleman has clearly gone into this matter with considerable care. No doubt he will concede that in the average constituency the Conservative association probably collects more by door-to-door collection from individual members of the party than does any other party.

Mr. Pardoe

What the Conservative Party collects from its members is a moot point. It is difficult to assess it exactly. Research conducted by the Conservative Central Office in 1967 showed that about 15 per cent. of Conservative Party supporters, those who said, "I would vote for the Conservative Party if there were a General Election tomorrow", said that they contributed to the party and about one-third of all Conservative supporters said that they would contribute if asked.

The problem is the asking. The Conservative Party is so dependent on its big business contributions and the Labour Party so dependent on its trade union contributions because of the difficulty of asking. That is why I should like the Government to step in, although not to provide money from the tax revenue as such to political parties. The idea of a Government subsidy to political parties raises a feeling of horror in this country, although we ought to admit that in our democracy substantial sums are now paid to it by the Government. The cost of the returning officer's expenses, of the electoral register and of the postal ballot papers runs into millions of pounds and this money must be raised under the American system by individual parties and individual contributions. The State is already paying a substantial slice of the cost of elections partly through the free post, partly by free television and by other methods. If we could devise a system which enabled the individual to contribute to a political party through a State system, it would free us from the problem of the over-dependence of our two major parties on their vested interests.

Let us not get this wrong. It is not universal in the world that political parties depend on vested interests. The Canadian political parties do not depend on vested interests for their political funds. The majority of companies in America contribute to both major political parties. Some contribute to all three. The majority of Canadian trade unions contribute to both political parties.

Mr. Dan Jones

What is the difference between them?

Mr. Pardoe

I have no doubt that Canadians believe passionately that there is a difference between Trudeau and the other mob.

Mr. Dan Jones

Will the hon. Gentleman assure us that we are discussing the Industrial Relations Bill and not the Political Relations Bill?

Mr. Pardoe

The hon. Gentleman has, I suppose, virtually raised a point of order which perhaps—

Mr. Speaker

Order. The hon. Gentleman has raised a point of order which was passing through my mind.

Mr. Pardoe

That does not entirely surprise me, Mr. Speaker. The difficulty of discussing party finances in the House is extreme, as any hon. Member who tries to raise the issue will find.

The new Clause clearly states that it would be a qualification for registration that a trade union should behave in the way referred to in the Clause—that it should opt for contracting in rather than contracting out. It states in the second part that no employers' association could exist if one of its members refused to toe the line and give its shareholders an option on whether they wanted to contribute to a political party. I accept that these two things are not equivalent and exactly comparable.

However, the major point of the new Clause is that the principle of contracting in rather than contracting out is right, not only for trade unions and the Labour Party but for shareholders and the companies which contribute to the Conservative Party. Democracy in this country would be far healthier if that system were accepted and if the two major parties ceased to have such a close financial connection with their vested interests group. Political parties in other countries already function under this system. There is no reason to suppose that our political parties would not be able to do so.

I hope that the hon. Member for Burnley (Mr. Dan Jones) and his colleagues realise that their party is in desperate financial trouble and is doing far less than the proper job of opposition because it is in financial trouble. One of the main reasons why the Government have come to power with a series of half-baked, half-thought-out policies to put into practice is that they did not have the funds capable of setting up a proper and adequately serviced research department. This situation is dangerous in opposition and in government.

This is a fundamental problem of British democracy which we should solve. Whether we can solve it as a result of a debate on a new Clause to the Industrial Relations Bill is open to question. But if the hon. Member—

Mr. Speaker

Order. What is not open to question is whether the hon. Gentleman can continue with this line. He must stick to the new Clause.

Mr. Pardoe

Mr. Speaker, I had hoped that it was clear that my remarks had reached their peroration. I was trying to say that, although the Clause has in the view of some people undoubted disadvantages, to our way of thinking it accepts the basic principle which should be enshrined in any democratic political financing system, which is that individuals should be given the right to contract in rather than to contract out and that individual shareholders should be given the right to say whether their company should contribute to a political party.

Mr. Nicholas Scott (Paddington, South)

We are having a slight digression from the main argument about the Bill. I congratulate the hon. Member for Cornwall, North (Mr. Pardoe) on his ingenuity on managing with the Clause to raise this subject for debate. I should like to have a longer debate on this subject at another time, and it might have been more appropriate to have done so. However, we have the time and we might as well spend it discussing the Clause.

I have much sympathy with much of what the hon. Gentleman said about the financing of political parties and political activities in Britain, but where the Clause falls down is that, having argued that all three political parties are desperately short of money, the Clause would, if it were added to the Bill, make them even more short of money and thus bring them up against the reality of the need to finance themselves in a different way. This adds fuel to the point that we need a different approach to this outside the terms of the Bill.

The Clause falls down because, in addition to its shortcoming of reducing the money which would be available to political parties, it seems also to question whether politics is a legitimate activity for trade unions to engage in on behalf of their members by supporting a political party and for a company to embark on on behalf of its interests. I question this approach.

Whatever other arrangements we were to come to about the financing of political activities, I do not believe that it is not a legitimate activity for a company or for a trade union to support a political party if it believes that it is in the interests of that company or that union to do so.

The basic principles of contracting in and contracting out have been discussed for a long time, certainly for as long as I have been involved in politics. It has been a matter for discussion within my party whether members of trade unions should have to contract in or contract out of the political levy. I have always resisted the idea that the Conservative Party ought to amend the law in this way. In any case, I believe that it would boomerang if the Conservative Party sought to do so.

The Labour Party, with its act of political spite, or what it imagined to be an act of political spite, in forcing the disclosure of company contributions led to a situation in which the Conservative Party raised more money in the following year than it had ever done before in its history. This shows how these things can rebound.

Partly because it would boomerang, and partly because I believe that it is a legitimate activity for a trade union to be able to support a political party if it believes that it is in the interests of its members to do so, I have always resisted this change.

Whether it is in the interests of the trade union movement to support almost exclusively one political party rather than to support different candidates in different constituencies who they think have an interest in trade union matters is another question and one which the trade unions alone can decide. Now that under the terms of the Bill the closed shop has been virtually abolished except for very narrow exemptions which we have allowed, the whole question of contracting in and contracting out becomes much less serious and much less fundamental.

9.45 p.m.

As for companies, of course, a shareholder has a way out in that, if he does not like the company in which he holds shares subscribing to the Conservative Party or any other fund, he can sell his shares and invest in another company. Some hon. Members hold strong feelings about activities of firms which have interests in other parts of the world. If a shareholder in such a firm feels sufficiently strongly about its policy, he may even sell his shares at a loss, and the financial loss resulting will probably not influence his decision.

In my view, this Clause is not a serious attempt to overcome the problem of financing political parties and controlling their expenditure. We have absurdly stringent controls on expenditure at local constituency level, but no control over the national expenditure of a party. That has always seemed to me to be an immense anomaly.

However, there is an alternative solution to the one put forward by the hon. Member for Cornwall, North. It is one which I understand is being considered seriously in the United States. Some sort of subvention might be made to the par- ties, possibly based on their seat strength in this House—

Mr. Gower

Is not there a serious danger that that will discourage the emergence of new political parties and give a wrong persistence in the existence of an older party?

Mr. Scott

This is straying from the new Clause. If it discouraged the emergence of new political parties, it would be only a slight extra disincentive. Our whole political system operates against not only the creation of new parties but even the resurgence of old parties which have fallen on hard times.

I cannot support the Clause. It is not that I do not believe that the question of financing political activities is a serious one to which we as a democracy should turn our minds. It is that I do not think that the Clause goes any way towards it. It makes the situation worse rather than better. For that reason, while I appreciate the ingenuity of the hon. Member for Cornwall, North, I shall have to vote against the Second Reading of his Clause if it goes to a Division.

Mr. Joseph Ashton (Bassetlaw)

It is remarkable that we should have to resort to these sorts of tactics on an Industrial Relations Bill in order to debate a matter like this. I appreciate that the Liberal Party has few opportunities to obtain publicity, but it seems to manage very well in terms of its size. It is understandable that the leader of the party has to use a party political broadcast to hold out the begging bowl and ask his audience to send him £1.

The hon. Member for Cornwall, North (Mr. Pardoe) divulged his sponsorship and his vested interests. I will do the same. I am a member of the Draughtmen's and Allied Technicians' Association, which pays my constituency £420 a year. I ask hon. Members to note that it does not pay me. The money goes to the constituency. It was said that the schoolmasters' association paid the hon. Gentleman. In the case of trade union Members, none of them gets a penny from his union. The money is paid directly to the constituencies.

If anyone thinks that it is possible to run a constituency on £420 a year, he has another think coming. I have a full-time agent and, together with premises and attendant expenses, the constituency costs between £3,000 and £4,000 a year. Clearly, £420 cannot cover the expenses of a constituency like mine. Let us put the matter into its proper proportion.

Mr. Gower

Is not it a fact, however, that the N.U.T., for example, assists hon. Members on both sides in much the same manner as that described by the hon. Member for Cornwall, North (Mr. Pardoe)?

Mr. Ashton

That is probably true. However, I was talking about our respective sponsorships.

I want to take up a point which the hon. Member for Cornwall, North raised about contracting in. Contracting in already exists. Whenever a man joins a union, in effect he contracts in. He is given a form which says that the subscriptions are so much a week and that it will be a penny a week if he wishes to pay the political levy. At the time of joining a union a man can decide whether to contract in or not. Incidentally, in my trade union only 38 per cent. of the membership pay the political levy. I think that if we changed the system that percentage would not alter very much. The average trade unionist is no fool. When he joins the union and is told that it is so much extra to pay the political levy, he decides then whether to contract in or out.

Mr. Russell Johnston (Inverness)

If it is a matter of such small import, why did the Labour Party when in power between 1945 and 1951 bother to change the law?

Mr. Ashton

We bothered to change the law because the unions thought that it would be better from an administrative point of view to reverse the procedure. I do not want the hon. Gentleman to think that trade unionists never contract out. Throughout discussions on the Bill an atmosphere seems to have been created that trade unionists are fools, morons and mugs who do what their shop stewards tell them to do, just like a bunch of sheep—[HON. MEMBERS: "No."] They are not. Many people disagreed with the strike last Thursday, while accepting that it was within the unions' rules to strike. There is a lot of talk about ballots before strikes. No union can ask its members to come out on strike if it is breaking the rules. If the rules say that there must be a ballot then they can only be changed at annual conference.

If a trade unionist does not like what the Labour Party is doing, he can contract out of paying the political levy. Many trade unionists contract out. In fact, 2,000 members of my union contracted out when the right hon. Member for Wolverhampton, South-West (Mr. Powell) was making his famous river Tiber flowing with much blood speech of two or three years ago. They may have thought that he was right. He may have conned them all the way down the line. I do not dispute this. But most of them joined again and contracted in about six months afterwards.

This is the way things go. Percentages go up and down. The average political levy paying member is no fool. He takes all these things into account when deciding whether to contract in or out. The hon. Member for Cornwall, North would find that if these proposals were carried out they would not make one per cent. difference. They never have. There have been ups and downs over many years concerning the percentage of union members who contract in or out. The percentage varies very little. There are ebbs and flows of 2 to 3 per cent., but in the main the average stays about the same.

The major parties have a much better system than that used by Lloyd George when he used to sell honours. He used to tout around saying, "For £10,000 I will give you a knighthood".

Mr. Speaker

Order. We cannot get on to the sale of honours.

Mr. Ashton

I should like to point out some of the other political purposes for which trade union funds are used. The hon. Member for Cornwall, North seems to have the impression that if a trade union collects a penny from each member as political levy it automatically goes to the Labour Party. It does not. The funds collected as political levy by trade unions are retained by them. Those funds do not go directly to the Labour Party.

If a trade union wishes to affiliate to the Labour Party then a proportion of that penny a week which is collected is retained by the branch. Not all unions are affiliated. The N.U.T., which the hon. Member for Barry (Mr. Gower) mentioned, N.A.L.G.O. and such unions might be affiliated to the T.U.C. and pay their affiliation fees, but they are not affiliated to the Labour Party. However, they do have a political fund.

My union, which collects political levies on the percentage of its members, retains that fund. In most constituency and union affiliates to the local Labour Party, it is left to the local branch. The head office does not say to the union branch in Bournemouth, "Affiliate to the Bournemouth Labour Party". The branch itself chooses whether to affiliate or not. If it affiliates, then, as I say, a proportion of that penny a week which is collected is retained by the branch.

The hon. Member said that these things are not published, but they are. It is common knowledge in my union that perhaps only half the money collected for the political levy actually goes to the Labour Party. The other half is retained and given to many other organisations, like Shelter, for instance.

Mr. Orme

Would my hon. Friend not agree also that many of the educational activities undertaken by unions—political education, but covering a wide field—which involve members of all political persuasions, are carried out by unions from this fund?

Mr. Ashton

This is true. We welcome this debate to clear up many false assumptions made by the Press. If we had had more notice, I could have read out a list of the political contributions made by many unions. But only 50 per cent. goes to the Labour Party. Much of the rest goes to political parties abroad, fighting for their existence in countries like Greece—

Mr. Orme

Or South Africa.

Mr. Ashton

Yes, South Africa, where donations are made to people involved in politics.

I have some sympathy with what the hon. Member said about the financing of politics. I have a personal theory that Members of Parliament should be paid a fixed sum to help with constituency work. Many of us need to employ an agent and a typist and to hire an office, and that is for the benefit of Parliament and the public, and not for the benefit of politics. Many hon. Members on our side, and perhaps in the Conservative Party, have to pay out of their own pockets to rent an office or a school where constituents can come to see them.

Hon. Members on this side have to make a contribution out of their own pockets to party funds, which is not morally right but is often necessary. It is probably the same for hon. Members opposite—

Mr. Speaker

Order. The hon. Member is making a very interesting point, for which I think there may be a lot of sympathy, but I do not think that it is strictly relevant to the new Clause.

Mr. Ashton

I take the point, Mr. Speaker.

This question of sponsorship by unions and of funds in general should be examined further by a Select Committee. As the Liberals say, they divulge their interests. I would divulge mine, as would many on this side of the House, and this would remove the continual sniping. But I am certain that reducing the funds of the other two parties to the level of the Liberal Party, or to the state at which we were dependent on knocking on doors and begging sixpences to run a political campaign or an election, would not benefit the country or elections. It might be more democratic, as the hon. Member said, and there are some constituencies which could manage without it, but in the long run, this suggestion would do politics no good at all.

10.0 p.m.

Mr. Grylls

On the face of it, new Clause 15 is attractive and I agree with many of the things which my hon. Friend the Member for Paddington, South (Mr. Scott) said about it. On the surface, it might seem to many people that there was justice on the side of making people have to opt in rather than out. But there is sometimes unjustified criticism of the way in which unions use their political funds, but they are already under considerable control under the 1913 Act. They have to have a ballot before they can support a parliamentary candidate or similar political activities.

But many people think that contracting out would probably be fairer. History has been ambivalent. After the General Strike, it was made necessary for people to contract in to the political levy rather than out of it. As hon. Members opposite have said, in 1946 the then Labour Government reversed the process, and it was entertaining to hear the hon. Member for Bassetlaw (Mr. Ashton) say that that change was made for administrative convenience. The House must draw its own conclusion about that.

I believe that there would be pressure on the Government to look again at this point if political strikes against the Government were allowed to continue and get out of control. It would be unfortunate if the sort of strike we saw on Thursday against the Bill were to be repeated, but the proposal in the new Clause would receive more support from the public as a whole. I therefore hope that the trade union extremist minority which has engaged in these political strikes will draw the lesson.

Mr. James Tinn (Cleveland)

Will the hon. Member tell the House what form of protest against this legislation is legitimate? Political strikes are apparently ruled out, speeches from this side have been criticised, as has voting through the night—all these things are said to be wrong: what are we supposed to do against the Bill?

Mr. Grylls

Not many on this side have criticised the Opposition for making us vote throughout the night. That is a right which the Opposition have. And they have an absolute right in this House to put forward their case, and no one on this side has ever denied that right. What we have criticised and, I believe, will continue to criticise, is the action of trade union militants, without any question of a ballot, putting trade unionists under the pressure of having to suffer fines or even losing their jobs for refusing to go on one-day political strikes against, for example, this Bill—

Mr. Speaker

Order. That may or may not be true, but I do not think that it is in order on this Clause.

Mr. Grylls

I apologise, Mr. Speaker.

There is something in what was said by the Society of Conservative Lawyers in its evidence to the Donovan Commission—that it would be a good and fair idea that the trade union membership application form should make it perfectly clear that if applicants did not wish to contribute to the political levy they could opt out from doing so. That seems to be an attractive idea.

Subsection (2) refers, presumably, to contributions made to the Tory Party by employers. It suggests that there should be a ballot, as it were, of shareholders before any such money was handed over to the Tory Party, or it may well be—

Sir Edward Brown (Bath)

Does my hon. Friend agree that at some company levels substantial sums are manifestly contributed to the Labour Party? Contributions are not made only to the Conservative Party.

Mr. Grylls

It would be very rash for anyone to say that all money donated by companies automatically went to the Tory Party. It is quite possible that money is given to the Liberal Party, and perhaps to such organisations as the Fabian Society as well.

If one accepted the proposal in subsection (2) and left the matter entirely in the hands of shareholders, a lather strange thing would happen. In a number of big public companies where large blocks of shares are owned by institution funds and by pension funds we would have the managers of those funds taking, as it were, a political decision, which would be very unfortunate.

The directors of companies should be free to make the decisions which they consider are in the best interests of their companies and shareholders. If the decisions they make are, in the opinion of the shareholders, not the right decisions, then they have the option of attending annual general meetings and sacking the directors. Directors should be free, within the law, to take whatever decisions they believe are best. If they feel, for example, that a Labour Government would be to their advantage, they should be free to make contributions to the funds of that party.

There is a strange quirk here. If the proposal of hon. Gentlemen opposite were accepted and if it were left to shareholders to decide what amount should be contributed to which political party, the Conservative Party would probably receive more, because I concede that the vast majority of shareholders are probably sympathetic to Conservative policies.

Mr. Arthur Lewis

Tell that to the Rolls-Royce shareholders.

Mr. Grylls

Many directors have probably held back from giving money to the Conservative Party or any other party because they do not want to become involved in politics. Despite these remarks, I agree with my hon. Friend the Member for Paddington, South that it would be useful for the House to have a general debate on this subject. However, it is not convenient to have such a debate at this stage.

Mr. Emlyn Hooson (Montgomery)

I support the new Clause for reasons other than those so far advanced. It is relevant to the Bill and to the debate which has occupied so much of our time in recent weeks if for no other reason than the saying that he who pays the piper calls the tune.

It is significant that since the General Election the big debates have not been about the cut-down in the social services or the changes that have taken place in the social atmosphere of the nation but about the basis of industrial relations. It is, therefore, important to consider the new Clause in that light and to ask why the Labour Party has particularly selected industrial relations for the big debate when the people generally are far more interested in, for example, cuts in the social services and the different approach to the social services which the Government have announced.

First and foremost, we must remember that the Labour Party is the political arm of the trade union movement—[Interruption.]—which subscribes to the funds of the party. If any Labour hon. Member wishes to be perfectly honest, he will not only agree with that but will not support the new Clause because if it were adopted, and if contracting in came about instead contracting out, the Labour Party could not function in the way it does.

Mr. Norman Buchan (Renfrew, West)

The hon. and learned Gentleman has committed the sin of the undistributed middle, as it were. The point is not our selecting this Bill for attack. The Government are, by the Measure, forcing people to accept future alterations and cuts in various services in such a way that they will not be able to demonstrate against those cuts. In other words, we are fighting the Bill not just for the sake of putting up a fight but to strengthen, rather than weaken, as the Bill would do, the ability of the working class to put up a fight.

Mr. Hooson

Nevertheless, the Labour Party is the political arm of the trade union movement, just as the Tory Party is largely the political arm of capital. [Interruption.] We are discussing—

Mr. Speaker

Order. I want to hear what the hon. and learned Gentleman has to say. I am having some difficulty at the moment.

Mr. Hooson

I am glad that you do, Mr. Speaker.

Mr. Speaker

Order. A modicum of politeness is expected, even from the Chair.

Mr. Hooson

I am grateful for those small crumbs of comfort. As I was saying before I was interrupted—

Mr. Arthur Lewis

The Chair never interrupts.

Mr. Hooson

I was not referring to the Chair, as the hon. Gentleman knows. We have to face reality. One of the great problems is that the country is split between "them" and "us" in the sense that the cleavage between capital and labour is becoming deeper because both capital and labour are concentrating on having a political arm as an extension of their industrial base. It can be argued the other way, that the trade unions are the industrial arm of the Labour Party and that the employers' associations are the industrial arm of the Tory Party.

We are discussing something that goes to the very root of our industrial relations, namely the enormous vested interest that has built up over the years. Whatever the merits of the case, there is a blind attitude towards industrial relations, governed to a degree by the vested interests already established.

I understand perfectly the Labour Party attitude towards contracting in. If in 1906 the Liberals had not allowed contracting out as opposed to contracting in, when the balance of power was completely in favour of capital and against labour, the Labour Party could never have built up its base in the first place. It would have been very difficult to do it then. But the situation today is totally different. We are in an educated country where earnings are very much higher and where the disparity between the power of labour and the power of capital is nothing like what it was in those days.

Sir E. Brown

rose—

Mr. Hooson

I will give way in a moment. I understand the attitude of the Labour Party, which does not want contracting in because it fears that with contracting in, the party could not exist on the base that it does today.

I want to turn attention not so much to contracting in and contracting out, which has been argued so often over the years, but to the position of the Conservative Party, because they are the people who have maintained in the Bill that they are concerned with the rights of the individual. They have said that we need more democracy, that the group approach is wrong basically and that it is time to redress the balance between the power of the group and that of the individual.

How can they justify their attitude towards the Amendment and say that they are now in favour of contracting in as opposed to contracting out? That is what they are saying in reply to the Amendment. What is good for the goose is good for the gander. To get the kind of State in which we have true democracy, in which a man is not forced to support what the majority want and is entitled to make his own political contribution, why should he be required by a trade union simply to pay the political levy, the result being that all are paying for the politics of the majority? It also follows that it must be wrong for directors to decide which political party should receive contributions from limited companies. Why should they be allowed to decide this? Why should not shareholders, very often involved in charities, and so on, be consulted on political contributions to the Tory Party?

While we have a situation in which 80 per cent. of Labour Party funds come from the trade unions, the trade unions will control the thinking and acting of the Labour Party. While 65 per cent. of Tory Party funds come from big industry, big industry will control the thinking and acting of the Tory Party.

10.15 p.m.

Mr. David Mitchell

Nonsense.

Mr. Hooson

Of course it is true. The two major parties have a joint vested interest in opposing this democratic Amendment which would ensure that democracy would work and no longer would people be compelled to contribute to something to which they do not subscribe.

Mr. Grylls

It is nonsense to say that we are not concerned with the rights of individuals. I tried to make it absolutely clear that I favoured the idea that anyone applying to join a trade union should be able to contract out and that that right should be printed on the application form. That is protecting the rights of the individual.

Mr. Hooson

The hon. Member no doubt tried to make it absolutely clear, but his effort was a total failure. I could not follow it at all. Any realistic trade union member on this side of the House will know that with contracting in, as opposed to contracting out, the Labour Party would be in the greatest difficulty.

Mr. Bidwell

Does not the hon. Gentleman agree that in practice his argument is contradictory? There appear to be a lot of people who have contracted out of the Liberal Party during the last 20 years.

Mr. Hooson

I will tell the hon. Member a fact, which is that more people contribute individually to the Liberal Party than individually contribute to the Labour Party. The Liberal Party raises more funds voluntarily than does the Labour Party.

The new Clause goes to the root of the evil whereby the country is getting more and more divided between capital and labour, and that will continue while we have a financial political control over the industrial aims of the political parties.

Mr. Kinsey

We have just heard the third vested interest to speak in the debate, and the debate has been reduced to a sordid political squabble. I am disappointed that the Liberals, who have shown good sense and whose speeches I have admired in these debates should have introduced this topic, which is irrelevant to the matters we are discussing. The Liberals have introduced a jarring political note of a financial nature. This shows the total incomprehension of the mover of the Amendment.

We appreciate that there is a political divide, but no political note of financial interest has until now been introduced—

Mr. Hooson

Is the hon. Gentleman still under the impression that the Bill is a non-political Bill?

Mr. Kinsey

I said that the Liberals had introduced a jarring political note on a financial basis which has not so far been brought in. So far a great political issue has divided us, but it has not been connected with finance.

It would have been easy for the Government to have introduced a Clause concerned with contracting out or contracting in had they wished to do so. That the Government have not done so is an indication of their good intentions. With so much still to discuss, it is a pity that we should have a discussion about the political funds of the parties. I do not know what the country will think about introducing this subject at this time. It is wrong that we should be debating the political levy when we should be dealing with much more nationally important issues.

It is wrong that the trade unions should be the source of contributions for one political party when the democratic makeup of the membership of trade unions is a cross-section of all parties, and, what is more, since we are a democratic nation, a cross-section of a changing pattern of political thought.

But we should not be talking about that tonight, and. I am only sorry that such matters have been introduced. I suppose that, in one sense, my whole political being would urge me to support the new Clause, but I reject it as wrong and out of context with the great matters which we are debating now. This House should be rising above such petty party matters. [HON. MEMBERS: "Oh".] It really should. This is a bigger discussion than that. The Bill is designed to improve industrial relations. It will be one of the greatest Measures which the House has passed, and it is wrong to downgrade it by politically motivated spite.

Several Hon. Members

rose—

Mr. Speaker

Order. I remind the House that we began the debate on this new Clause at five minutes past nine, and that there are many other matters which the House would wish to discuss.

Mr. Buchan

I promise to be brief, Mr. Speaker. The Liberal Party has gone wrong because it has not read its own new Clause. It says that unless people are allowed to contract out—this is not a debate about contracting in or contracting out—a trade union would not be allowed to register under the Bill. But what on earth makes the Liberal Party think that trade unions want to register? It seems ridiculous. The Liberal bench have produced a paper tiger, and the hon. Member for Cornwall, North (Mr. Pardoe) and his hon. and learned Friend the Member for Montgomery (Mr. Hooson) do not understand what the last three months of debate have been about. That is their first gross error.

Their second error is even more serious, that is, their curious equating of the trade union movement, with its individual members, with the monied interests of the Tory Party. There is no relationship. On the one hand, it is a question of cash, of big finance—£100,000 from the brewers, £100.000 from the ironmasters, and so on. There is no equivalence between that and the individual members of the trade union movement. The one is an expression of aggressive power, power which is used by the faceless men in the board rooms, for instance, the power to hire and fire. That is where the money comes from, and it is used to strengthen that power.

Mr. Scott

rose—

Mr. Buchan

I will give way in a moment.

Hon. Members

Give way.

Mr. Buchan

I have some respect for the hon. Member for Paddington, South (Mr. Scott) and I will give way to him. On the other hand, there are the activities of the trade unions, which are widely known to everyone. Much has been said about big business being the political arm of the Tory Party, equating that somehow with the concept of the trade unions as the industrial arm of the Labour Party. Again the analogy is totally false.

The trade unions are composed of individuals, as is the Labour Party. It is another method of organisation among exactly the same people within our move- ment. There is no difference between Johnnie Smith who attends the Labour Party conference on behalf of the Transport and General Workers' Union and Johnnie Smith who attends on behalf of his local Labour Party. [Interruption.] If there is no difference, there is no point in setting them up in different wings. We are dealing with human beings. This is where the Liberal Party is wrong. The leader of the Liberal Party, who is muttering away—no doubt, it is one of his famous impressions—does not understand that we are dealing in our movement with human beings, and, on the other side, with the power which comes from cash.

Mr. Scott

If the right to hire and fire is the root of the power of those who are supposed to control the Conservative Party, is it not strange that within this Bill the Conservative Party, for the first time in the history of industrial relations, is providing for appeals against unfair dismissal?

Mr. Buchan

I am sorry I gave way, because the hon. Gentleman has not understood the argument. We are saying that the apparent equality created in the two subsections is no equality, that on the one hand the Clause is concerned with a small number of people with a great deal of power and on the other with a large number of individuals whose only power is in the fact that they come together to be organised. That is the fundamental difference.

The second difference which I was pointing out when the hon. Gentleman intervened was the enormous power given to a small number of people by their wealth. Through the power of hire and fire, they can control the lives of individual people, whose power is made up by getting together in their organisations. It is nonsense for the hon. Member for Paddington, South to suggest—the backwoodsmen behind him would be astonished to hear it—that what the Bill tries to do is to protect the rights of the workers against the type of people who have been financing the Tory Party. When we mention trigger words like "shop steward", we hear Tory backbenchers baying. There is no love for the ordinary people expressed by them. The hon. Gentleman is an honest lad. As I have told him before, he should give that gang up.

It is not a question in the Clause, any more than in the Bill, of the problem of contracting out or contracting in. As the months have gone by, the people have realised the enormity inherent in the Bill and the fantastic infringement of individual liberty it brings about. They have realised that one of the safeguards against the faceless ones whose contributions to the Tory Party we saw being totted up before, during and after the election, is precisely the right to form their protective organisations, whether through a political party or a trade union, and to come together to defend their common rights against the power of the Tory Party and their supporters.

It is sad to find the Liberal Party throwing itself into this vacuum of thought. They should think back to their radical past. They should not worry about one or two black spots in Lloyd George's record, with the sale of honours and so on, but should think back to that past and join in the real fight in this country, which is against the Tory Party.

Mr. Dudley Smith

I do not want to be rude to the Liberals, who up to now have shown a good deal of political acumen in the way in which they have judged the Bill and have voted in the Division Lobby. Some of the speeches from the hon. and learned Member for Montgomery (Mr. Hooson) have been among the best in our series of debates. Hon. Members will agree about that, even if they do not agree with the philosophy which he expounded.

The speech of the hon. Member for Cornwall, North (Mr. Pardoe) proved that the proposed new Clause had very little to do with the Bill. At times, it seemed almost tantamount to special pleading. They say that those who are obsessed with money are often near bankruptcy. I do not know whether that is the Liberal Party situation, but it has undergone a good deal of financial difficulty. If that is the situation, I sympathise with it, because the hon. Gentleman made the point—and it was one of the few things he said with which I agree—that in reality all political parties are fairly poor, particularly compared with those in other countries. Perhaps we should do something about that.

The hon. Gentleman said that he was not seeking to limit the funds available to political parties. There is a good deal of liberal illogicality about that, because, apart from what the second part of his proposed Clause would do, there would certainly be a severe limitation on the Labour Party's funds if it came into operation.

I agree with the shrewd observations of my hon. Friend the Member for Paddington, South (Mr. Scott). In some ways we have discussed this matter rather superficially, but it is healthy for a democracy that properly-established political parties should have reasonably good incomes to keep them efficient. It is right that we should have an efficient Government party and an efficient Opposition party and also minority parties like the Liberal Party. It would be a sad day for democracy if one or more of the political parties went more or less out of politics because of insufficient funds. It is a point that we should all bear in mind.

10.30 p.m.

A number of hon. Members referred to company contributions. One of my hon. Friends referred to what he called the political spite of the Labour Government in making necessary disclosure of the political contributions of limited companies. I do not know whether it was political spite, but the Labour Government did us a good turn because donations have gone up since then. Fortunately, companies have had the courage of their convictions and have been able to say, "This money has been made freely available to a political end." The information has to be shown in the annual report and it is open to any shareholder who disagrees to move his shares to another company. Quite often, the companies which make these donations are efficient and doing very well, so the man who sells his shares may well be penalising himself.

There is an even bigger point about this. The individual shareholders can attend the annual meeting and challenge the decision. I have seen it done. It happened to be a member of the Liberal Party who did it. She declared herself to be a Liberal and said she wished that the Liberal Party could have a donation from the company. There is nothing wrong in that. It is open to any individual shareholder to make his protest at the right time.

Mr. Buchan

The hon. Gentleman says that companies have had a good return for their investments in the Tory Party through the return of a Tory Government. Would he extend that principle also to the brewers, who gave £100,000 and are now getting State pubs flogged to them?

Mr. Smith

I am coming to that point. I was saying that the individual shareholder is free to opt out if he disagrees with a political donation. It is a judgment of management as to whether a company should make a donation, and I believe that the majority of the companies which make contributions do so because they accept that the country and industry will be more efficiently run by a Conservative Government and that it is obviously in the interests of industry that there should be a Conservative Government. It is a matter of judgment. Hon. Members opposite think it is the wrong judgment; I think it is the right judgment. The individual shareholder can contract out if he wishes.

I would like to see more trade unionists contributing to Conservative Party funds. There are more Tory voters and supporters among trade unionists than hon. Members opposite sometimes suspect. There is a contentious point on the question of whether there should be contracting in or contracting out. I hope that as time goes on more and more people will contract out. It is their democratic right to do so.

Mr. Harold Walker

The hon. Gentleman says that individual shareholders can contract out of paying political donations to the Conservative Party. How can a shareholder in a unit trust contract out? How can a local authority superannuation fund contract out? How can all the other institutional shareholders —sometimes trade union superannuation funds—contract out from paying political contributions to the Tory Party in these circumstances, even though it is in opposition to the principles they hold?

Mr. Smith

I have explained that the individual can sell his shares. But by doing so he may be penalising himself because if it is a flourishing and successful company it will not be to his advantage to sell. I say that there is nothing to stop trade unionists contributing to the Tory Party or the Labour Party or the Liberal Party. There is nothing to stop companies from contributing to the Labour Party or even to the Liberal Party if they can be persuaded to do so. It is important that there should be a free flow of donations to all the various parties from those who are prepared to support them and who think that they can do a good job in a democracy.

We must resist the new Clause. It is the Government's view that political fund issues are unconnected with industrial relations and should therefore not be dealt with in the Bill. The Bill makes only marginal changes in the procedure set out in the 1913 Act for safeguarding the rights of members. I appreciate and understand the arguments of the Liberal Parts as a publicity exercise, and I do not criticise them for that, but this is not the way in which to tackle the problem.

We are grateful for the light relief which Liberal Members have provided. For those of us who have toiled on the Bill for many hours over 16 or 17 days and who may not have had to concentrate so hard on this issue, this debate has been a bit of a rest.

Mr. Hooson

Surely the hon. Gentleman is wrong to say that this is not a matter to be dealt with in the Industrial Relations Bill. Contracting out was dealt with in the Trade Dispute Act, 1906, which is the whole foundation of trade union law.

Mr. Smith

It is the Government's view that this question ought not to be dealt with in this Bill. There are other ways of tackling issues of this sort, and perhaps Parliament will have the opportunity to do so in due course, but I agree that it does not do any harm to ventilate these matters in this way. I know that Liberals have consderable feelings on the subject. I hope that, having ventilated their feelings, they will stay the rest of the night to vote, preferably on my side, but, if they cannot do that, on the other, at least not going home to bed as they usually do.

Mr. Heffer

Unlike the Under-Secretary, I do not mind being rude to the Liberals. To use the term used by my hon. Friend the Member for Penistone (Mr. John Mendelson), I thought the speech of the hon. and learned Member for Montgomery (Mr. Hooson) impeccably reactionary from beginning to end. The speeches from the Liberals were better Tory speeches than we have heard from hon. Members opposite. There is no reason why I should not be rude to the Liberals because on this Bill their basic traditions have been jettisoned.

I do not regard this proposal as offering light relief. It has some importance, even though it is only dimly related to the Bill. We could have a valuable discussion on the whole subject of political financing on another occasion. I hope that the Under-Secretary did not mean to imply that we could expect a Bill introducing something like the Liberal proposal. I assure him that the trade union movement will take clear note of that possible implication. I hope that he did not mean it, but we shall watch it carefully.

Mr. David Steel

Would the hon. Gentleman like to add to that expression of hope that we may debate the subject on a future occasion that the Opposition will give a Supply Day for the purpose?

Mr. Heffer

I am neither the Leader of the Opposition nor in the Shadow Cabinet, and I cannot say what the likely position about a Supply Day will be.

Mr. Harold Walker

Not next week.

Mr. Heffer

That may be well understood.

The hon. Member for Cornwall, North was absolutely correct when he admitted that there is no comparison between the trade union contributions, the political levy, and the contributions made by the shareholders of companies to Tory Party funds. I want to make clear why there is a political levy. Let us look at the historical reasons for the political levy. An hon. Member opposite said that the Labour Party was the political arm of the trade union movement. That is partly true and partly untrue. But the Labour Party was created as a result of actions of the trade union movement in association with a number of political Socialist groups, and the reason for that arose directly from industrial struggles. To that extent, this matter has a definite relevance to the Bill.

What led to the development of the Labour Party was the Taff Vale decision. Until then, the trade unions had put their trust in the Liberal Party, and they discovered that their trust was not entirely safe. They had to recognise that it was necessary for the trade unions to have people in the House who would speak and act on their behalf.

Mr. Jeremy Thorpe (Devon, North)

I hope the hon. Gentleman is not suggesting that the Liberal Party was responsible for the Taff Vale judgment and that he will recognise that one of the first things the Liberal Government did was to reverse it.

Mr. Heffer

If the right hon. Gentleman had been in the Chamber during our debates he would have heard me make the point that the people who were members of the Liberal Party at the beginning of this century would be spinning round in their graves at the attitude taken by the Liberal Party today in view of what the Liberal Party did for the trade union movement. I have made that point so many times that I am reluctant at this late hour to make it again, but perhaps it must be made from time to time.

I return to the argument that the trade union movement felt it necessary to have representatives in the House. The Labour Party is not a purely trade union party. It is a trade union party up to a point. But it is basically a socialist party because there was a merging of a number of organisations to create and form the Labour Party.

The political levy arises out of that situation. The political levy is not paid by every trade union member. One of my hon. Friends made it clear that when a person joins a trade union the branch secretary or whoever is responsible for his enrolment informs him that if he does not want to pay the political levy he can contract out. But because of the policies adopted by hon. Members opposite from 1927 until they were repealed in 1946, when I joined the trade union movement I had to contract in to the Labour Party. We reversed the situation only because it was administratively right to do so and because it put the Labour Party back in the position it was in when it was created by the trade union movement. Why not? We have nothing to be ashamed of. We are proud of the history of the Labour Party and of the trade union movement in creating it. So let us get that clear.

There are one or two other points that I need to make—

10.45 p.m.

Mr. Bidwell

Before my hon. Friend leaves the historical seminar, may I ask him to bear in mind that it was the Osborne judgment which brought about the separation of union funds, because one trade unionist took that action finally to the House of Lords? It was no wish of the trade union movement, as my hon. Friend has correctly said, that there should be such a separation of funds. It certainly does not apply to company activities. There is no comparison.

Mr. Heffer

I did not want to go too far into the historical seminar. I felt that the House could bear only so much about that.

For our part, concerning the question of political funds, there are certain obvious attractions in some of the suggestions made by the hon. Gentleman and, no doubt, at some future time political parties will look at the question of subsidies or subventions. Something may well come out of this in the dim and distant future.

Whatever comes out of that idea, however, I hope that no one will suggest that we should adopt the American method because, if we did the chances of ordinary working people ever entering the House of Commons would be nil. If we believe in democracy we should dismiss any such idea. I hope that no hon. Member would like to go along with that proposal.

We say that the Amendment is totally irrelevant to the Bill. We have some Amendments down which are relevant to it, and I trust that we can get on to them at the earliest possible moment.

Mr. Russell Johnston

I make no apology for speaking. I deny totally the suggestion which has just been made by the Front Bench spokesman for the Labour Party that the matter is totally irrelevant. Equally, I deny what the Minister said about its being light relief. It is not a question of light relief, nor is it irrelevant to industrial relations in any way.

For us on the Liberal Bench the position of the Conservative Party is extraordinary. Anyone who went to any Conservative meeting over the last five, 10 or 15 years and asked the Conservative spokesman what he thought about contracting in and contracting out would have got a definite and decisive answer. It would be in favour of our Amendment.

Mr. Dudley Smith

I realise that there are strong feelings on these issues both on the Opposition side and on this side of the House, but they are not relevant to our discussion about reforming industrial relations.

Mr. Johnston

My hon. and learned Friend the Member for Montgomery (Mr. Hooson) has alluded to the Trades Disputes Act, 1906, and the fact that it appeared to be of some relevance then. Its relevance has not diminished greatly with the passage of the years.

I want to make only three brief points. What hon. Members of both parties must, and should, recognise tonight is that the Amendment is about the fact that we in this party believe that political contribu- tions should be made without any question of pressure. It is quite simply that.

The hon. Member for Bassetlaw (Mr. Ashton), who is shaking his head slightly—

Mr. Reg Prentice (East Ham, North)

Vigorously.

Mr. Johnston

It was not very vigorous. The hon. Member said earlier that his trade union did not make a personal contribution to him—it was nothing as sordid or personal—but made a contribution instead to his constituency association. It seems to be that there is a deep and profound moral difference. Fiddlesticks, I would say to the hon. Gentleman.

Mr. Ashton

I made that point because the hon. Member for Cornwall, North (Mr. Pardoe), when challenged about the fact that he had not disclosed that he received £400 from the Schoolmasters Association, admitted it but did not say whether he received it personally.

Mr. Johnston

The two things are unrelated. My hon. Friend the Member for Cornwall, North was talking about a contribution that he received as an individual Member of the House, which had nothing to do with his constituency. Nevertheless, he made it public. The contribution in the case of the hon. Member for Bassetlaw is directly directed to getting him elected.

For the hon. Member for Liverpool, Walton (Mr. Heffer), who is usually a very honest and forthright character, to say apparently without blushing that the Labour Party in 1946 reversed the position of contracting out and made it contracting in because it was administratively right to do so—

Mr. Buchan

And?

Mr. Johnston

Because it was administratively right to do so, was the argument the hon. Member for Walton adduced and the argument that the hon. Member for Bassetlaw adduced, and there was no "and".

Mr. Buchan

There was.

Mr. Johnston

If the hon. Gentleman wants an "and" he must stand and say so.

Mr. Heffer

I suggest that the hon. Gentleman gets a hearing aid from the National Health Service. After saying that it was administratively correct, I went on to say that it put the position back to the position that existed before 1927 and this was the traditional position of the Labour Party and it was right to do that.

Mr. Johnston

Simply because people have an urge to re-create a conservative position does not seem to me particularly acceptable. However, we are digressing. The fundamental point here is that we know that the political contribution made to a trade union is frequently made for reasons of apathy or disinterest and sometimes—we all know that this is true—because of communal pressure within the union which makes an individual member very reluctant to contract out. [HON. MEMBERS: "Nonsense."] It is not nonsense. It is much less nonsense than for the hon. Member for Walton to say that the Labour Party reversed the position in the 1940s, for administrative convenience. That is a ridiculous argument.

It was surprising to hear the Under-Secretary defending the status quo in this instance, though not perhaps generally. The hon. Gentleman said that it is important that all political parties receive finance in some way. We know that this is a very important element in the financing of the Labour Party. I do not deny that. Nevertheless, I say that it is a wrong way of getting money.

Turning to the question of companies and the Conservative Party—

Mr. Heffer

It should be made clear that this is not a matter of raising money. By paying the political levy, members of trade unions join the Labour Party as affiliated members. This is a matter of party membership, and not merely a means of raising money.

Mr. Johnston

With respect, that may be clear to the hon. Gentleman, but still I deny it. I cannot accept that the Labour Party feels that it is as simple as that. Occasionally, I act as an administrator and a bureaucrat, and I cannot see any difference between allowing a person to contract in and allowing him to contract out when he signs a form. It is rubbish to suggest that there is some great fundamental difference.

The Labour Party depends for much of its money even upon the indolence of people or the communal pressure that is put upon them—

Mr. Bidwell

To get any feeling of the historical background of the situation, one has to go back to the Lib-Lab period, when Members of Parliament were not paid and when the trade unions made it possible for working men to come to this House. At that time, the Liberal Party supported the present situation of political funds. It is because the Liberals are no longer true to their liberal traditions that they are such a shambles in this House and amount to so little.

Mr. Johnston

With respect to the hon. Gentleman, the position at the beginning of the century and that today are very different. The financial disparity was very different. There was a real necessity for monetary support to be given to Lib-Lab trade union Members of this House. I do not accept that that is valid today.

The argument adduced by the hon. Member for Paddington, South (Mr. Scott) that a shareholder who objected to a political contribution being made could easily withdraw his shares is not a very valid one. There is a distinction between the commercial activity of a company and the political activity of a company. It is an important distinction. If an individual looks at a company commercially and sees that it is doing well and bringing him a relatively good income, obviously its commercial undertaking is sound and he is willing to leave his money with it. But he is placed in an invidious and unreasonable position if the directors of the company decide upon a political act which he finds unacceptable and which is not related to the commercial progress of the company.

In this Amendment, which is very fair to both sides, all that we seek to do is to allow a shareholder in such a position to have a say in what is being done.

Mr. Thomas Swain (Derbyshire, North-East)

May I draw the hon. Gentleman's attention to the fact that he may safely conclude his speech now since 100 per cent. of his party membership is present?

Mr. Johnston

The hon. Gentleman's perspicacity is boundless.

This is a two-part Amendment designed very simply to try to ensure that contributions to political parties are made freely and without any pressure. That, surely, in this House is a desirable objective.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 5, Noes 272.

Division No. 275.]	AYES	[8.55 p.m.
Adley, Robert	Bryan, Paul	Drayson, G. B.
Alison, Michael (Barkston Ash)	Buchanan-Smith, Alick (Angus, N&M)	du Cann, Rt. Hn. Edward
Allason, James (Hemel Hempstead)	Buck, Antony	Dykes, Hugh
Archer, Jeffrey (Louth)	Bullus, Sir Eric	Eden, Sir John
Astor, John	Burden, F. A.	Edwards, Nicholas (Pembroke)
Atkins, Humphrey	Carr, Rt. Hn. Robert	Elliot, Capt. Walter (Carshalton)
Awdry, Daniel	Cary, Sir Robert	Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Baker, Kenneth (St. Marylebone)	Chapman, Sydney	Emery, Peter
Baker, W. H. K. (Banff)	Chataway, Rt. Hn. Christopher	Eyre, Reginald
Batsford, Brian	Chichester-Clark, R.	Farr, John
Bali, Ronald	Churchill, W. S.	Fell, Anthony
Bennett, Sir Frederic (Torquay)	Clark, William (Surrey, E.)	Fenner, Mrs. Peggy
Bennett, Dr. Reginald (Cosport)	Clarke, Kenneth (Rushcliffe)	Fidler, Michael
Benyon, W.	CIegg, Watter	Finsberg, Geoffrey (Hampstead)
Berry, Hn. Anthony	Cockeram, Eric	Fisher, Nigel (Surbiton)
Biffen, John	Cooke, Robert	Fletcher-Cooke, Charles
Biggs-Davison, John	Coombs, Derek	Fookes, Miss Janet
Blaker, Peter	Corfield, Rt. Hn. Frederick	Fortescue, Tim
Boardman, Tom (Leicester, S. W.)	Cormack, Patrick	Foster, Sir John
Body, Richard	Costain, A. P.	Fowler, Norman
Boscawen, Robert	Critchley, Julian	Fox, Marcus
Bossom, Sir Clive	Crouch, David	Fraeer,Rt.Hn.Hugh(St'fford & Stone)
Bowden, Andrew	Crowder, F. P.	Fry, Peter
Braine, Bernard	Curran, Charles	Gardner, Edward
Bray, Ronald	d'Avigdor-Goldsmid, James Maj.-Gen.	Gibson-Watt, David
Brewis, John	Dean, Paul	Gilmour, Sir John (Fife, E.)
Brown, Sir Edward (Bath)	Dixon, Piers	Glyn, Dr. Alan
Bruce-Gardyne, J.	Dodds-Parker, Douglas	Godber, Rt. Hn. J. B.
Goodhart, Philip	McCrindle, R. A.	Russell, Sir Ronald
Gorst, John	McLaren, Martin	St. John-Stevas, Norman
Cower, Raymond	Maclean, Sir Fitzroy	Scott, Nicholas
Gray, Hamish	McNair-Wilson, Patrick (New Forest)	Scott-Hopkins, James
Green, Alan	Madel, David	Sharpies, Richard
Grieve, Percy	Maginnis, John E.	Shaw, Michael (Sc'b'gh & Whitby)
Griffiths, Eldon (Bury St. Edmunds)	Marples, Rt. Hn. Ernest	Shelton, William (Clapham)
Grylls, Michael	Marten, Neil	Simeons, Charles
Cummer, Selwyn	Mather, Carol	Sinclair, Sir George
Hall, John (Wycombe)	Maude, Angus	Skeet, T. H. H.
Halt-Davis, A. G. F.	Mawby, Ray	Smith, Dudley (W'wick & L'mington)
Hamilton, Michael (Salisbury)	Maxwell-Hyslop, R. J.	Soref, Harold
Hannam, John (Exeter)	Meyer, Sir Anthony	Speed, Keith
Harrison, Brian (Maldon)	Mills, Peter (Torrington)	Spences, John
Harrison, Col. Sir Harwood (Eye)	Mills, Stratton (Belfast, N.)	Sproat, Iain
Haselhurst, Alan	Miscampbell, Norman	Stainton, Keith
Hastings, Stephen	Mitchell, Lt.-Col. C. (Aberdeenshire, W)	Stanbrook, Ivor
Havers, Michael	Mitchell, David (Basingstoke)	Steel, David
Hay, John	Moate, Roger	Stewart-Smith, D. C. (Belper)
Hayhoe, Barney	Molyneaux, James	Stodart, Anthony (Edinburgh, W.)
Heath, Rt. Hn. Edward	Money, Emle	Stoddart-Scott, Col. Sir M.
Hicks, Robert	Monks, Mrs. Connie	Stokes, John
Higgins, Terence L.	Monro, Hector	Stuttaford, Dr. Tom
Hiley, Joseph	Montgomery, Fergus	Sutcliffe, John
Hill, John E. B. (Norfolk, S.)	More, Jasper	Tapsell, Peter
Hilt, James (Southampton, Test)	Morgan, Geraint (Denbigh)	Taylor, Sir Charles (Eastbourne)
Holland, Philip	Morgan-Giles, Rear-Adm.	Taylor, Edward M. (G'gow, Cathcart)
Holt, Miss Mary	Morrison, Charles (Devizes)	Taylor, Frank (Moss Side)
Hooson, Emlyn	Mudd, David	Taylor, Robert (Croydon, N.W.)
Hornby, Richard	Murton, Oscar	Tebbit, Norman
Homsby-Smith,Rt.Hn.Dame Patricia	Nabarro, Sir Gerald	Thatcher, Rt. Hn. Mrs. Margaret
Howe, Hn. Sir Geoffrey (Reigate)	Nicholls, Sir Harmar	Thomas, John stradling (Monmouth)
Howell, David (Guildford)	Normanton, Tom	Thompson, Sir Richard (Croydon, S.)
Howell, Ralph (Norfolk, N.)	Oppenheim, Mrs. Sally	Tilney, John
Hunt, John	Orr, Capt. L. P. S.	Trafford, Dr. Anthony
Hutchison, Michael Clark	Osborn, John	Trew, Peter
Iremonger, T. L.	Owen, Idris (Stockport, N.)	Tugendhat, Christopher
James, David	Parkinson, Cecil (Enfield, W.)	Turton, Rt. Hn. R. H.
Jenkin, Patrick (Woodford)	Percival, Ian	van Straubenzee, W. R.
Jessel, Toby	Peyton, Rt. Hn. John	Vickers, Dame Joan
Johnson Smith, G. (E. Grinstead)	Pike, Miss Mervyn	Waddington, David
Johnston, Russell (Inverness)	Pink, R, Bonner	Walder, David (Clitheroe)
Jones, Arthur (Northants, S.)	Pounder, Ration	Wall, Patrick
Jopling, Michael	Powell, Rt. Hn. J. Enoch	Walters, Dennis
Joseph, Rt. Hn. Sir Keith	Price, David (Eastleigh)	Ward, Dame Irene
Kaberry, Sir Donald	Prior, Rt. Hn. J. M. L.	Warren, Kenneth
Kellett, Mrs. Elaine	Proudfoot, Wilfred	Weatherill, Bernard
Kimball, Marcus	Pym, Rt. Hn. Francis	Wells, John (Maidstone)
King, Evelyn (Dorset, S.)	Quennell, Miss J. M.	White, Roger (Gravesend)
King, Tom (Bridgwater)	Raison, Timothy	Whitelaw, Rt. Hn. William
Kinsey, J. R.	Ramsden, Rt. Hn. James	Wiggin, Jerry
Kirk, Peter	Rawlinson, Rt. Hn. Sir Peter	Wilkinson, John
Kitson, Timothy	Reed, Laurance (Bolton, E.)	Wolrige-Cordon, Patrick
Knight, Mrs. Jill	Rees, Peter (Dover)	Wood, Rt. Hn. Richard
Knox, David	Rees-Davies, W. R.	Woodhouse, Hn. Christopher
Lambton, Antony	Renton, Rt. Hn. Sir David	Woodnutt, Mark
Lane, David	Rhys Williams, Sir Brandon	Worsley, Marcus
Langford-Holt, Sir John	Ridley, Hn. Nicholas	Wylie, Rt. Hn. N. R.
Legge-Bourke, Sir Harry	Ridsdale, Julian	Younger, Hn. George
Lewis, Kenneth (Rutland)	Rippon, Rt. Hn. Geoffrey
Lloyd, Ian (P'tsm'th, Langstone)	Roberts, Michael (Cardiff, N.)	TELLERS FOR THE AYES:
Longden, Gilbert	Roberts, Wyn (Conway)	Mr. Victor Goodhew and
Loveridge, John	Rodgers, Sir John (Sevenoaks)	Mr. Paul Hawkins.
McAdden, Sir Stephen	Rossl, Hugh (Homsey)
NOES
Allaun, Frank (Salford, E.)	Boyden, James (Bishop Auckland)	Coleman, Donald
Allen, Scholefield	Brown, Bob (N'c'tle-upon-Tyne, W.)	Concannon, J. D.
Archer, Peter (Rowley Regis,	Brown, Hugh D. (G'gow, Provan)	Conlan, Bernard
Ashley, Jack	Brown, Ronald (Shoreditch & F'bury)	Corbet, Mrs. Freda
Ashton, Joe	Buchan, Norman	Cox, Thomas (Wandsworth, C.)
Atkinson, Norman	Buchanan, Richard (G'gow, Sp'burn)	Crewshaw, Richard
Bagier, Gordon A. T.	Butler, Mrs. Joyce (Wood Green)	Cronin, John
Barnes, Michael	Callaghan, Rt. Hn. James	Crosland, Rt. Hn. Anthony
Barnett, Joel	Campbell, I. (Dunbartonshire, W.)	Cunningham, G. (Islington, S.W.)
Beaney, Alan	Cant, R. B.	Dalyell, Tam
Bern, Rt. Hn. Anthony Wedgwood	Carmichael, Neil	Darling, Rt. Hn. George
Bennett, James (Glasgow, Bridgeton)	Carter, Ray (Birmingh'm, Northfield)	Davidson, Arthur
Bidwell, Sydney	Carter-Jones, Lewis (Eccles)	Davies, Denzil (Llanelly)
Bishop, E. S.	Castle, Rt. Hn. Barbara	Davies, G. Elfed (Rhondda, E.)
Blenkinsop, Arthur	Clark, David (Colne Valley)	Davies, Ifor (Gower)
Boardman, H. (Leigh)	Cocks, Michael (Bristol, S.)	Davies, S. O. (Merthyr Tydvil)
Booth, Albert	Cohen, Stanley	Davis, Clinton (Hackney, C.)

Deakins, Eric	Kelley, Richard	Prentice, Rt. Hn. Reg.
Dempsey, James	Kerr, Russell	Prescott, John
Doig, Peter	Kinnock, Neil	Price, J. T. (Westhoughton)
Dormand, J. D.	Lambie, David	Price, William (Rugby)
Douglas, Dick (Stirlingshire, E.)	Latham, Arthur	Probert, Arthur
Douglas-Mann, Bruce	Lawson, George	Rankin, John
Duffy, A. E. P.	Leadbitter, Ted	Reed, D. (Sedgefield)
Dunnett, Jack	Lee, Rt. Hn. Frederick	Rees, Merlyn (Leeds, S.)
Eadie, Alex	Lestor, Miss Joan	Rhodes, Geoffrey
Edwards, William (Merioneth)	Lewis, Arthur (W. Ham, N.)	Richard, Ivor
Ellis, Tom	Lewis, Ron (Carlisle)	Roberts, Albert (Normanton)
English, Michael	Lipton, Marcus	Roberts, Rt. Hn. Goronwy (Caernarvon)
Evans, Fred	Lomas, Kenneth	Robertson, John (Paisley)
Fernyhough, Rt. Hn. E.	Loughlin, Charles	Roderick, Caerwyn E. (Br'c'n&R'dnor)
Fisher, Mrs. Doris (B'ham, Ladywood)	Lyons, Edward (Bradford, E.)	Roper, John
Fletcher, Raymond (Ilkeston)	Mabon, Dr. J. Dickson	Ross, Rt. Hn. William (Kilmarnock)
Fletcher, Ted (Darlington)	McBride, Neil	Sheldon, Robert (Ashton-under-Lyne)
Foot, Michael	McCartney, Hugh	Silkin, Rt. Hn. John (Deptford)
Ford, Ben	McElhone, Frank	Sillars, James
Forrester, John	McGuire, Michael	Silverman, Julius
Fraser, John (Norwood)	Mackenzie, Gregor	Skinner, Dennis
Garrett, W. E.	Mackie, John	Small, William
Gilbert, Dr. John	Mackintosh, John p.	Smith, John (Lanarkshire, N.)
Ginsburg, David	Maclennan, Robert	Spearing, Nigel
Golding, John	MacPherson, Malcolm	Spriggs, Leslie
Gourlay, Harry	Mahon, Simon (Bootle)	Stallard, A. W.
Grant, John D. (Islington, E.)	Mallalieu, J. P. W. (Huddersfield, E.)	Stoddart, David (Swindon)
Griffiths, Eddie (Brightside)	Marquand, David	Strang, Gavin
Hamilton, James (BothweII)	Mason, Rt. Hn. Roy	Strauss, Rt. Hn. G. R.
Hamilton, William (Fife, W.)	Meacher, Michael	Summerskill, Hn. Dr. Shirley
Hamling, William	Mellish, Rt. Hn. Robert	Swain, Thomas
Hardy, Peter	Mendelson, John	Thomas, Rt. Hn. George (Cardiff. W.)
Harrison, Walter (Wakefield)	Mikardo, Ian	Thomas, Jeffrey (Abertillery)
Hart, Rt. Hn. Judith	Millan, Bruce	Tinn, James
Hattersley, Roy	Miller, Dr. M. S.	Tomney, Frank
Heffer, Eric S.	Milne, Edward (Blyth)	Torney, Tom
Horam, John	Morgan, Elystan (Cardiganshire)	Tuck, Raphael
Houghton, Rt. Hn. Douglas	Morris, Alfred (Wythenshawe)	Urwin, T. W.
Huckfield, Leslie	Morris, Charles R. (Openshaw)	Wainwright, Edwin
Hughes, Rt. Hn. Cledwyn (Anglesey)	Morris, Rt. Hn. John (Aberavon)	Walker, Harold (Doncaster)
Hughes, Mark (Durham)	Moyle, Roland	Wallace, George
Hughes, Robert (Aberdeen, N.)	Mulley, Rt. Hn. Frederick	Watkins, David
Hughes, Roy (Newport)	Murray, Ronald King	Weitzman, David
Hunter, Adam	Ogden, Eric	Wellbeloved, James
Irvine, Rt. Hn. Sir Armur (Edge Hill)	O'Halloran, Michael	Well, William (Walsall, N.)
Janner, Greville	O'Malley, Brian	White, James (Glasgow, Pollok)
Jeger, Mrs. Lena (H'b'n&St.P'cras. S.)	Oram, Bert	Whitehead, Philip
Jenkins, Hugh (Putney)	Orbach, Maurice	Whitlock, William
John, Brynmor	Orme, Stanley	Willey, Rt. Hn. Frederick
Johnson, James (K'stonon-Hull, W.)	Oswald, Thomas	Williams, Alan (Swansea, W.)
Johnson, Walter (Derby, S.)	Owen, Dr. David (Plymouth, Sutton)	Williams, W. T. (Warrington)
Jones, Barry (Flint, E.)	Palmer, Arthur	Wilson, Alexander (Hamilton)
Jones, Dan (Burnley)	Parker, John (Dagenham)	Wilson, William (Coventry, S.)
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Parry, Robert (Liverpool, Exchange)
Jones, Cwynoro (Carmarthen)	Peart, Rt. Hn. Fred	TELLERS FOR THE NOES:
Jones, T. Alec (Rhondda, W.)	Pendry, Tom	Mr. Joseph Harper and
Judd, Frank	Pentland, Norman	Mr. Kenneth Marks.
Kaufman, Gerald

[For Division List 276 see col. 453.]

Mr. Kenneth Lewis

On a point of order, Mr. Deputy Speaker, I hope that it will be noted that in the last Division all good Tories came to the help of the Labour Party.

Mr. Deputy Speaker

Order. The hon. Gentleman knows quite well that that is not a point of order for the Chair.