HC Deb 20 June 1978 vol 952 cc214-24

3.32 p.m.

Mr. Doug Hoyle (Nelson and Colne)

I beg to move, That leave be given to bring in a Bill to regulate the application of funds for political purposes and any other related purposes by companies incorporated under the Companies Act 1948. Unlike trade unions, which have been subject to such regulations for the past 50 years, companies have never been subjected to anything of the sort. Indeed, the captains of industry in their ivory boardrooms have been completely free to indulge in any whim they fancy. In the main they have supported the Conservative Party, but my Bill is designed to bring in related organisations as well as political parties.

Some related organisations are queer fish. For example, there is British United Industrialists. No one is quite sure for what that organisation stands. However, we know that when the Companies Act 1967 appeared on the statute book—it dealt with disclosure of information and amended company legislation—the chairman of the organisation said that it would dissolve itself as a limited company. When asked why it would do so, he said: To stop snoopers finding out more about us than they need to. We suspect that that organisation acts as a cover for the Conservative Party and that its funds—which are given by big business—go directly into the coffers of the Conservative Party.

There is Aims of Industry, or Aims, as it is now known. It claims to be nonpolitical but there is no doubt that its members are—

Mr. Brian Sedgemore (Luton, West)


Mr. Hoyle

My hon. Friend says that they are Fascists, but we know that they are anti-nationalisation and anti-Labour Party. We know that their campaign substantially helped the Tory Party at election time.

The Economic League is a strange body. It was supposed to be set up to provide positive and economic education from the standpoint of free enterprise However, there is a more sinister form to it. We know that Reinforced Steel Services kept secret files on employees. They were secret files that stated Check through the Economic League or No history known to the Economic League. We find companies supporting Common Cause. That is a cold-war organisation that concerns itself with Left-wing Members, crypto-Communists and occasionally even real Communists. I notice that companies are now shying away from that sort of organisation.

We are always hearing the Opposition talk about democracy in trade unions, but it is time that we brought about democracy in companies. I am here to protect the interests of shareholders. Consequently I hope to receive the complete and unanimous support of the Opposition for the case that I shall put forward.

At present if a company decides to contribute to a political party or related organisation, it is only the board of directors that takes such a decision. If the shareholders do not like it, they can lump it. A shareholder of a large company wrote to me, among others, and explained that he had written to the chairman of the company and lodged the strongest objection to the company giving £10,000 to the Conservative Party. He received a reply from the chairman stating that he, the chairman, believed that that policy was in the best interests of the shareholders of the company. The chairman wrote that if the Labour Party were elected to office, they might nationalise the company, or parts of it.

The shareholder said But when the Conservatives were in office I took shares out in the company. Those shares stood at 194p. When the Conservatives went out of office they stood at only 35p. Now under Labour they are 117p. Why cannot we give a contribution to the Labour Party? He may have a strong point, but the real issue is that that shareholder was not consulted before £10,000 was given to the Conservative Party.

I want to bring companies into line with the position of trade unions under the Trade Union Act 1913. What would happen if, under the Bill, a board of directors decided that it wanted to give a donation to a political party or related organisation? First, it would have to ballot all the shareholders. Only if a majority of the shareholders said "Yes" could it go ahead with that sort of donation. The donation would have to be made from a separate political fund. That fund would have to be set up by the company. Only the shareholders who had agreed to a percentage of their dividend being taken out and used for political purposes would have their money put into that fund.

The contribution would be made from the fund and the shareholders who did not want to contribute in that way could apply to the company's head office for an exemption form. It would be beholden on the company to let each shareholder know that he or she had that right—namely, that they could apply to head office for an exemption form so that their dividends would not be deducted for political purposes.

Surely there is nothing wrong with that sort of democracy. I do not understand how anybody could oppose the argument that what is sauce for the goose as regards trade unions is sauce for the gander as regards companies. It seems that this sort of reform is long overdue. It should have been introduced long ago. I do not think that company chairmen or directors of powerful companies should be allowed to decide to use their companies' money in this way without taking account of the views of their shareholders. It is completely wrong. This kind of democratic reform is long overdue. That is why I hope that I shall be given leave to bring in this measure. It can be only for the good of companies.

I am not criticising the organisations to which these funds go. All I am saying is that, if companies are to do this kind of thing, they should at least have the permission of shareholders.

Mr. Sedgemore

And the customers.

Mr. Hoyle

And the customers as well. I completely agree with my hon. Friend. At the moment it comes from the customers. We pay. I want to make the shareholders pay out of their dividends. I think that is right as well. However, only those shareholders who are willing to make these contributions should be asked to make them.

I hope that I shall have the support of the whole House for this measure, which should have been brought forward over 50 years ago when the Trade Union Act 1913 was introduced.

3.40 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)


Mr. Speaker

Order. Is the hon. Gentleman seeking to oppose?

Mr. Ridley

I am seeking to oppose most strongly, Mr. Speaker.

The hon. Member for Nelson and Colne (Mr. Hoyle) has entered on well-trodden and highly contentious ground which has been fought over for a long time and over which it would perhaps be better if the two sides could strike a bargain.

It is particularly unfortunate that it is the hon. Member for Nelson and Colne who seeks, as it were in his mind, to limit the funds available to those who are politically opposed to him. It ill behoves a Conservative Member to suggest that we should return to contracting in for the political levy just as it ill behoves the hon. Gentleman to seek to win political battles by seeking to reduce the funds made available to his political opponents. It would be akin to a Labour Home Secretary seeking to hold up the alteration of parliamentary constituency boundaries because he felt that it would not he to his electoral advantage.

There has been a balance in the sense that, since the war, Labour Governments have done two things. One was to return to a position of contracting out for the unions and the other was to make companies publish in their accounts the amounts given to political parties. So, for two moves aimed, as it were, to the advantage of the Labour Party, I am proud that there has been no move by Conservative Governments in the opposite direction—in some way seeking to get their own back—by restricting trade union funds made available to the Labour Party. I should have thought that the hon. Gentleman could have left it there.

This measure will not greatly affect the prospects for Conservative Party fund raising. The hon. Gentleman might be interested to know that we raise about £9 million a year, of which over three-quarters comes from door-to-door collections made by individuals. That contrasts ill with the fact that nearly 90 per cent. of the Labour Party's funds are provided direct by trade unions.

I am not suggesting that there should be any reform in this area, but if we had a crusading, reforming spirit it would seem more appropriate that neither companies nor trade unions should be allowed to subscribe to political parties but that it should be left to individuals, out of their own consciences, to decide to which party they should give financial support.

The hon. Gentleman has not chosen to do that. He has chosen a partial and, as I shall demonstrate, unfair suggestion to penalise only the Conservative Party. First, he suggests that there should be a ballot of shareholders. I have news for the hon. Gentleman. There is one every year. Each year at the annual general meeting, shareholders can say whether they wish to vote against the political contributions made by the company.

The hon. Gentleman referred to the Trade Union Act 1913. Will he tell the House when last there was a ballot of members of trade unions as to which political party, if any, they wished to support? He may not know the answer, but I do. The last ballot was the Durham miners in 1908. The miners were asked which political party the union should support.

This is all the more poignant, because I have further news for the hon. Gentleman. In SOGAT, 81 per cent. of the members are contracted out of the political levy. In ASTMS—the hon. Gentleman's union—63 per cent. are contracted out. In SLADE, 60 per cent. are contracted out. In TASS, the figure is 52 per cent. There must be a presumption. If the majority wish not to pay the political levy, the presumption is that they prefer either to pay no political subscriptions or at least to pay them to the Conservative Party, or conceivably to the Liberal Party for all I know.

When was the matter last tested? When was a ballot of the kind that the hon. Gentleman seeks to introduce in his Bill last imposed on a trade union? Shame on him for being a member of a union which is not practising that which he preaches for others. The hon. Gentleman should be aware of the dangers of what he is suggesting.

The hon. Gentleman suggested that individual shareholders should have the right to opt out of their share of the political contribution which a company makes. They have just that right. They can sell their shares, as the hon. Gentleman knows, if they do not wish to make the political contribution.

There is a further point. Directors are given responsibility for discharging the functions of a company in the interests of the shareholders. If they think that it is in their interests to make a political contribution to any party, they are responsible for that decision. That is absolutely the same as with trade unions. Therefore, the hon. Gentleman is wrong to suggest that there should be this right for individual shareholders to opt out just as there is great difficulty for individual trade unionists to contract out.

The nationalised industries, for example, find it inconvenient for their computer systems to deduct the political contribution from the trade union levy. Therefore, people who wish to contract out of the political contribution have to claim the money back from the unions. Of course, when they make claims for the political contribution, they find that the unions do not answer their letters. We all know that it took Mr. Jack Cleminson 12 years before he got a penny back, although he made frequent annual applications to the Union of Post Office Workers to be given his political contributions which were deducted at source. He had no alternative. He cannot change his job. He cannot switch. But the shareholder can.

Finally, the hon. Gentleman seemed to be short on a matter of fact. He seemed to suggest that political contributions were paid by companies out of pre-taxed income. They are not. They are paid out of taxed income. Therefore, there is the further unfairness that trade union donations to the Labour Party are made out of untaxed money, whereas company contributions to any political party are made out of taxed income.

Companies and trade unions cannot be treated similarly. Over the years, over the battlefield of industrial dispute in these matters, a balance has been worked out which may not be entirely fair one way or the other, but it is a kind of rough justice solution. I think that it would be just as wrong for the hon. Gentleman to

seek to proceed with his Bill as it would be wrong for the Conservative Party, when in office, to seek to limit the ability of the Labour Party to raise funds from the trade unions and to upset that balance. It seems to me that the status quo should be allowed to remain.

I hope that the House will not give the hon. Gentleman leave to bring in his Bill.

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 190, Noes 127.

Division No. 232] AYES [3.49 p.m.
Allaun, Frank Fernyhough, Rt Hon E. McMillan, Tom (Glasgow C)
Archer, Rt Hon Peter Fitt, Gerard (Belfast W) Madden, Max
Ashton, Joe Flannery, Martin Magee, Bryan
Atkins, Ronald (Preston N) Fletcher, Ted (Darlington) Mallalieu, J. P. W.
Atkinson, Norman (H'gey, Tott'ham) Foot, Rt Hon Michael Marks, Kenneth
Bain, Mrs Margaret Freeson, Rt Hon Reginald Marshall, Dr Edmund (Goole)
Barnett, Rt Hon Joel (Heywood) Freud, Clement Marshall, Jim (Leicester S)
Bates, Alf Garrett, John (Norwich S) Maynard, Miss Joan
Beith, A. J. Garrett, W. E. (Wallsend) Mellish, Rt Hon Robert
Bidwell, Sydney George, Bruce Mikardo, Ian
Bishop, Rt Hon Edward Ginsburg, David Mitchell, Austin (Grimsby)
Blenkinsop, Arthur Golding, John Morris, Alfred (Wythenshawe)
Boothroyd, Miss Betty Gourlay, Harry Morris, Rt Hon Charles R.
Bottomley, Peter Graham, Ted Newens, Stanley
Boyden, James (Bish Auck) Grant, George (Morpeth) Noble, Mike
Bray, Dr Jeremy Grocott, Bruce O'Halloran, Michael
Brown, Hugh D. (Provan) Hamilton, James (Bothwell) Orbach, Maurice
Buchan, Norman Hamilton, W. W. (Central Fife) Orme, Rt Hon Stanley
Butler, Mrs Joyce (Wood Green) Harper, Joseph Owen, Rt Hon Dr David
Callaghan, Jim (Middleton & P) Harrison, Rt Hon Walter Palmer, Arthur
Campbell, Ian Hoffer, Eric S. Pardoe, John
Canavan, Dennis Hooley, Frank Park, George
Cant, R. B. Hooson, Emlyn Parry, Robert
Carter, Ray Howell, Rt Hon Denis (B'ham, Sm H) Pavitt, Laurie
Cartwright, John Howells, Geraint (Cardigan) Penhaligon, David
Castle, Rt Hon Barbara Hoyle, Doug (Nelson) Perry, Ernest
Clemitson, Ivor Huckfield, Les Price, C. (Lewisham W)
Cocks, Rt Hon Michael (Bristol S) Hughes, Rt Hon C. (Anglesey) Price, William (Rugby)
Cohen, Stanley Hughes, Robert (Aberdeen N) Radice, Giles
Coleman, Donald Hughes, Roy (Newport) Rees, Rt Hon Merlyn (Leeds S)
Concannon, Rt Hon John Hunter, Adam Roberts, Albert (Normanton)
Conlan, Bernard Jackson, Miss Margaret (Lincoln) Robertson, George (Hamilton)
Corbett, Robin Janner, Greville Robinson, Geoffrey
Cowans, Harry Jay, Rt Hon Douglas Rodgers, George (Chorley)
Cox, Thomas (Tooting) Jeger, Mrs Lena Rooker, J. W.
Crowther, Stan (Rotherham) Jenkins, Hugh (Putney) Rowlands, Ted
Cryer, Bob Johnson, James (Hull West) Ryman,John
Dalyell, Tam Johnson, Walter (Derby S) Sedgemore, Brian
Davidson, Arthur Jones, Alec (Rhondda) Sever, John
Davies, Bryan (Enfield N) Jones, Barry (East Flint) Shaw, Arnold (Ilford South)
Davis, Clinton (Hackney C) Judd, Frank Sheldon, Rt Hon Robert
Dean, Joseph (Leeds West) Kaufman, Gerald Shore, Rt Hon Peter
Dempsey, James Kelley, Richard Short, Mrs Renée (Wolv NE)
Dewar, Donald Kilroy-Silk, Robert Sillars, James
Doig, Peter Lamborn, Harry Silverman, Julius
Dormand, J. D. Lamond, James Skinner, Dennis
Douglas-Mann, Bruce Latham, Arthur (Paddington) Smith, Cyril (Rochdale)
Duffy, A. E. P. Lee, John Smith, John (N Lanarkshire)
Dunn, James A. Lewis, Ron (Carlisle) Snape, Peter
Dunnett, Jack Loyden, Eddie Spriggs, Leslie
Dunwoody, Mrs Gwyneth Luard, Evan Stallard, A. W.
Eadie, Alex McCartney, Hugh Steel, Rt Hon David
Edge, Geoff McDonald, Dr Oonagh Stewart, Rt Hon Donald
English, Michael McElhone, Frank Stewart, Rt Hon M. (Fulham)
Evans, loan (Aberdare) MacFarquhar, Roderick Stoddart, David
Evans, John (Newton) MacKenzie, Rt Hon Gregor Stott, Roger
Taylor, Mrs Ann (Bolton W) Wainwright, Richard (Colne V) Wise, Mrs Audrey
Thomas, Ron (Bristoll NW) Walker, Harold (Doncaster) Woodall, Alec
Thorne, Stan (Preston South) Watkins, David Woof, Robert
Thorpe, Rt Hon Jeremy (N Devon) Weitzman, David Wrigglesworth, Ian
Tilley, John White, Frank R. (Bury)
Tinn, James White, James (Pollok) TELLERS FOR THE AYES:
Tomlinson, John Whitlock, William Dr. M. S. Miller and
Torney, Tom Wigley, Dafydd Mr. Tom Litterick.
Wainwrignt, Edwin (Dearne V) Wilson, Gordon (Dundee E)
Adley, Robert Higgins, Terence L. Neubert, Michael
Amery, Rt Hon Julian Holland, Philip Newton, Tony
Arnold, Tom Howe, Rt Hon Sir Geoffrey Nott, John
Atkins, Rt Hon H. (Spelthorne) Howell, David (Guildford) Page, Rt Hon R. Graham (Crosby)
Atkinson, David (B'mouth, East) Hunt, David (Wirral) Page, Richard (Workington)
Bennett, Dr Reginald (Fareham) Hunt, John (Ravensbourne) Paisley, Rev Ian
Benyon, W. Hutchison, Michael Clark Parkinson, Cecil
Berry, Hon Anthony Irving, Charles (Cheltenham) Percival, Ian
Biogs-Davison, John James, David Powell, Rt Hon J. Enoch
Blaker, Peter Jenkin, Rt Hon P. (Wanst'd&W'df'd) Price, David (Eastleigh)
Boscawen, Hon Robert Johnson Smith, G. (E Grinstead) Rathbone, Tim
Boyson, Dr Rhodes (Brent) Jopling, Michael Rees, Peter (Dover & Deal)
Bradford, Rev Robert Joseph, Rt Hon Sir Keith Renton, Rt Hon Sir D. (Hunts)
Brooke, Hon Peter Lamont, Norman Renton, Tim (Mid-Sussex)
Brotherton, Michael Langford-Holt, Sir John Rhodes James, R.
Buck, Antony Lawrence, Ivan Ridsdale, Julian
Budgen, Nick Lawson, Nigel Rifkind, Malcolm
Bulmer, Esmond Lester, Jim (Beeston) Roberts, Michael (Cardiff NW)
Chalker, Mrs Lynda Lewis, Kenneth (Rutland) Roberts, Wyn (Conway)
Clark, William (Croydon S) Luce, Richard Rost, Peter (SE Derbyshire)
Clegg, Walter McAdden, Sir Stephen Sainsbury, Tim
Cope, John McCrindle, Robert St. John-Stevas, Norman
Cormack, Patrick McCusker, H. Shepherd, Colin
Crouch, David MacGregor, John Silvester, Fred
Davies, Rt Hon J. (Knutsford) MacKay. Andrew (Stechford) Sims, Roger
Dean, Paul (N Somerset) Madel, David Smith, Dudley (Warwick)
Douglas-Hamilton, Lord James Mates, Michael Smith, Timothy John (Ashfield)
Drayson, Burnaby Mather, Carol Stanbrook, Ivor
Durant, Tony Maude, Angus Stanley, John
Elliott, Sir William Meyer, Sir Anthony Stewart, Ian (Hitchin)
Fairbairn, Nicholas Miller, Hal (Bromsgrove) Stradling Thomas, J.
Fairgrieve, Russell Miscampbell, Norman Temple-Morris, Peter
Fowler, Norman (Sutton C'fd) Mitchell, David (Basingstoke) Wakeham, John
Glyn, Dr Alan Molyneaux, James Walters, Dennis
Goodhart, Philip Monro, Hector Weatherill, Bernard
Goodhew, Victor Montgomery, Fergus Whitney, Raymond
Goodlad, Alastair Moore, John (Croydon C) Winterton, Nicholas
Gow, Ian (Eastbourne) More, Jasper (Ludlow) Young, Sir G. (Ealing, Acton)
Gower, Sir Raymond (Barry) Morgan-Giles, Rear-Admiral Younger, Hon George
Gray, Hamish Morris, Michael (Northampton S)
Grist, Ian Morrison, Hon Peter (Chester) TELLERS FOR THE NOES:
Hamilton, Archibaid (Epsom & Ewell) Mudd, David Mr. Nicholas Ridley and
Hamilton, Michael (Salisbury) Neave, Airey Mr. Ray Mawby.
Hannam, John Nelson, Anthony

Question accordingly agreed to.

Bill ordered to be brought in by Mr. Doug Hoyle, Dr. M. S. Miller, Mr. Norman Buchan, Mr. Jack Dunnett, Mr. Robert Kilroy-Silk, Mr. Edwin Wainwright, Mr. George Rodgers, Miss Joan Maynard, Mr. Harry Cowans, Mr. Frank Allaun, Mrs. Audrey Wise, Mr Bruce Grocott and Mr. William Molloy.