HC Deb 30 January 1985 vol 72 cc272-4
11. Mr. Winnick

asked the Secretary of State for Trade and Industry if he will introduce legislation to place contributions by companies to political parties or for other political purposes on the same legal footing as contributions by trade unions to political parties or for other political purposes.

Mr. Tebbit

I have no plans to do so.

Mr. Winnick

Will the Secretary of State explain why trade unions need to have a political fund and are now required to have a ballot, but companies do not need a political fund before contributing to political parties? Does he recognise that the way in which the Government have used their majority in this Parliament can only be described as a form of political corruption?

Mr. Tebbit

I do not recognise that at all. The hon. Gentleman fails to recognise that companies and trade unions are governed by completely different statutes and are set up for completely different purposes. He would be the last person to want standards of company law applied to trade unions. If they were so applied, I can think of at least one prominent trade unionist today who would probably have been prosecuted for the way in which he has debased the union for which he works, destroyed its power, corrupted its members and wasted its money.

Mr. Ward

Does my right hon. Friend agree that the annual general meeting of a company allows shareholders to express their opinions each year? Does he further agree that it would be a good thing if trade union members had the same right to express an opinion in that way each year?

Mr. Tebbit

Yes, I do. Again, however, my hon. Friend must not assume that unions and companies should be run in the same way or governed by the same kind of statute. One must also keep a sense of proportion in these matters. In 1981, for example, in respect of their political funds trade unions spent £4.8 million or 12.8 per cent. of the amount that they spent on benefits to their members. When companies donate money to political parties it is more like 0.02 per cent. of profit or turnover. [HON. MEMBERS: "What is the total?"] According to The Economist, the total is about £2.5 million. Moreover, the figure that I gave for trade unions excludes spending such as the £1 million campaign to "Kill the Bill" — a Bill which is now in good health as an Act of Parliament and helping to democratise trade unions. My figure also excluded £1 million spending by NALGO on another fruitless exercise against the interests of its members.

Mr. Wrigglesworth

If the Secretary of State is ever tempted to go down that road, will he stop the nonsense of having ballots on the existence of political funds and instead introduce ballots for the party to which the funds should be donated? Is he aware that that would prevent the current attempt by the Labour party to camouflage the fact that 80 per cent. of the political funds of the trade union movement go straight into Labour party coffers?

Mr. Tebbit

The hon. Gentleman makes an interesting point, but I wish there was more consistency in these matters. Perhaps he will tell us at some time whether the president of the SDP, Mrs. Shirley Williams, asked for ballots of members of APEX when it was giving money to the Labour party, and whether the SDP has sought and obtained donations from companies without requiring the companies to ask their shareholders.

Mr. Merlyn Rees

Accepting the Secretary of State's point about the need for a sense of proportion on the matter and the fact that the laws for trade unions and companies are different, would it not be a good idea to consider this from the point of view of the House? If it is right to control political expenditure by trade unions, surely it is equally right to control it by companies. If he considered it that way, could we not have an interesting argument and dialogue and come to a conclusion that accepts both sides and is not based on party dogma?

Mr. Tebbit

It is always a sign of a pretty rocky case in the House when an hon. Member says, "Let us decide this without reference to party dogma". One knows that the hon. Member is trying to slip a quick one in somewhere.

There are no controls on the amount that trade unions may spend on politics. Much of the money that they spent on what the man in the street would see as a political campaign, such as "Kill the Bill" was not regarded as political spending. Equally, when a company's board of directors decides that money should be spent in the interests of the shareholders, it is surely reasonable that they should be able to do so, and that is done against the background of the Companies Acts and the requirement for a meeting of shareholders.

Mr. Peter Bruinvels

Does my right hon. Friend agree that there is nothing wrong in any company giving a political donation? If Opposition Members care to read any annual report, they will realise that all declarations in excess of £500 are already declared.

Mr. Tebbit

My hon. Friend is right. Once again one has to look at these things in the round. I am indebted to the New Statesman of 30 November 1984, in which I read that part of the Labour party's jobs and industry campaign for this year includes a strong recommendation that the Labour party should approach companies for political donations. Perhaps the right hon. Member for Morley and Leeds, South (Mr. Rees) should speak to his own party about these matters.

Mr. John Smith

Despite all the attempts by the Secretary of State to cloud the issue, is it not crystal clear to any fair-minded person that what the Government want to see is special controls on the political funds operated by trade unions but none whatsoever on the companies and corporate forces that support the Conservative party? Is that not blatantly and grossly unfair from any standpoint?

Mr. Tebbit

No. There are controls in each case, but because of the different natures of the organisations they are different controls. The right hon. Gentleman knows full well that the 1908 Act, which first arranged the compact, as one might call it—

Mr. Smith


Mr. Tebbit

I think that the 1908 Act was the first. The right hon. and learned Gentleman may well be right on the date. The Act in question provided that the union had to have a ballot of its members to authorise the setting-up of a fund. Whether those ballots were held just after 1908 or 1913, there cannot be many of that electorate who are still left around and it is about time there was another ballot.