HC Deb 16 April 1985 vol 77 cc146-8 3.58 pm
Mr. David Winnick (Walsall, North)

I beg to move, That leave be given to bring in a Bill to provide for a limit on the amount of money which may be spent by or on behalf of a political party during the period of a general election campaign; to require companies to establish a political fund from which all political donations shall be made; to provide for a ballot of shareholders and employees before a political fund is established; and to ensure an entitlement for each shareholder to an additional dividend from the company in lieu of any donations to which such shareholder has objected. Reforms are long overdue regarding expenditure by political parties during a general election campaign and in relation to political donations by companies.

We all recognise that it is right to limit the amount spent on behalf of a candidate standing for Parliament. A rich candidate is not permitted to try to buy votes. Therefore, on the local scene, equality and fairness prevail, and so far as I know, it has not been suggested that the ceiling on candidates' spending should be removed.

When it comes to the national scene however a different picture emerges. There, a political party can spend as much as it likes during an election campaign. Where is the logic in imposing strict restrictions on the amount to be spent by a candidate when parties can spend as much as they please? It was estimated that the Conservative party had between £15 million and £20 million available to spend during the last election. Labour had a maximum of £2.5 million. If the Tories had decided to spend the amount that they had available to them, they would have faced no restriction. They could have done so freely.

The present system underlines the way in which a candidate is limited—rightly—as to the amount that can be spent on his or her behalf. I believe that a restriction should be placed on national spending by parties during an election. An initial sum can be agreed, which can then be updated to allow for inflation. That is more or less what happens with candidates. At various times the Home Secretary suggests through an Order in Council that the amount that can be spent on behalf of a candidate should be increased. Under my Bill, the same system will apply to parties. Being a fair person, I suggest that £4 million should be the initial sum. That is a sufficient sum for a political party to spend during the next election as a legal maximum. If my Bill is accepted and if the Government decide to give time to allow the Bill to make progress, I shall be willing in Committee to listen to any suggestions about the initial sum that is to be set down.

The next matter I want to see changed refers to companies' political donations: companies should be placed in the same position in which unions have been in this matter since 1913. In order to donate for political purposes a trade union must have a political fund. That has been the position for more than 70 years. Companies, however, need no political fund and need hold no ballots. The Board just decides to make a donation. As we know, in the main, indeed almost exclusively—such donations are made to the Tory party or one of the Tory front organisations.

If companies have political funds, they will be brought into line with trade unions. It may be argued that a protest can be made at a company's annual general meeting. As we know, such a protest is unlikely to get very far. In 1978, referring to the ways in which companies operate, a Law Lord stated in a legal judgment: It sometimes happens that public companies are conducted in a way which is beyond the control of the ordinary shareholders. The majority of the shares are in the hands of two or three individuals. These have control of the company's affairs. The other shareholders know little and are told little. They receive the glossy annual reports. Most of them throw them into the waste paper basket. There is an annual general meeting, but few of the shareholders attend. The whole management and control is in the hands of the directors. That statement was made by a Law Lord who is not usually associated with ardent pro-trade union views — Lord Denning.

Recently, a survey discovered—I remind the Tory Members of what they obviously already know—that companies that donate to the Tory party receive many more knighthoods and honours than other companies dominating the economy. Clearly, the best way of going about obtaining a knighthood and the rest is by subscribing to the Tory party.

I propose that a ballot of shareholders and employees should be held in any company that wishes to donate to political causes. It would not be wrong to include employees. I do not believe that a person who has worked for more than 12 months in a company and who obviously depends upon that company to earn his living should be denied the right to decide how the company will donate for political purposes. As is the case with trade unions, a simple majority result would be needed. If a majority of shareholders and employees agreed that there should be a political fund, the company would be able to donate for political purposes. If there was no political fund, no political donations could be made.

There is little evidence for instance that the majority of people who invest in pension funds support the Tory party. Companies that have recently made large contributions to the Tory cause include the British and Commonwealth Shipping Co., Allied — Lyons, Hanson Trust, Taylor Woodrow, Guardian Royal Exchange Assurance, Plessey, Consolidated Goldfields, Marks and Spencer and Trafalgar House. When did they hold a ballot? When did they ask their shareholders to agree that such money should be contributed?

Compare companies with trade unions and leave aside recent legislation. Since 1913, no trade union has been able to donate a single penny for political causes unless it has first held a political ballot. If that is right for trade unions, why should it not be right for companies too? Why should there be a distinction? I should have thought that Conservative Members would agree. I see that the hon. Member for Southend, East (Mr. Taylor), being a fair-minded man, seems to agree with me. It is a pity that I did not include him in the list of sponsors of my Bill. It is not too late. I am willing to add his name, if he wishes.

The reforms that I have suggested should be put into operation as quickly as possible. It is difficult to understand how the Conservative party could have brought in recent legislation without attempting in any way to rectify the anomaly about which I have spoken. The only possible reason is that the Tory party, being a beneficiary of the present system, decided that it did not want its cause to be undermined. It is happy, though, to try to undermine the finances of its main political opponent. I suppose that we should not be surprised at what the Tory party does, because it is a very undemocratic party. It does not hold a ballot when deciding its chairman. At times I wonder which is the less democratic—the Communist party in the Soviet Union or the Tory party in this country.

Mr. Dennis Skinner (Bolsover)

And the SDP.

Mr. Winnick

And the SDP, of course.

We all know that, despite political funds, any trade unionist can contract out of paying the political levy. I suggest that a shareholder who does not want to be a party to political donations should be able to contract out as well. In such a case, he would receive a slightly higher dividend.

This is a modest measure. It is rather non-controversial, I believe, and I hope that it will not be opposed I shall write to the Leader of the House and the Prime Minister urging that time should be given to my Bill. I hope that the Home Secretary now in his place will ensure that his Cabinet colleagues will agree that my modest and non-controversial measure should receive Government time to make progress.

Question put and agreed to.

Mr. Speaker

Who will prepare and bring in the Bill?

Mr. Winnick

Mr. Brian Sedgemore, Mr. Ray Powell, Mr. Robert N. Wareing, Mr. Doug Hoyle, Mr. Max Madden, Mrs. Ann Clwyd, Mr. Sydney Bidwell, Mr. Eric S. Heffer, Mr. Stan Thorne and myself.

Mr. Ivan Lawrence (Burton)

And Mr. Teddy Taylor.

Mr. Winnick

I am always willing to show a nonsectarian attitude, but the hon. Member for Southend, East will not agree to such a proposal.