Political Parties (Income and Expenditure) (Hansard, 29 April 1986)

§ 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. For more than 70 years it has not been possible for unions to donate money for political purposes without balloting their membership about whether a political fund should be established. There was never any controversy about that, and unions never complained that a political fund was required by law. However, the Government were not satisfied with the position, so legislation was introduced to require unions to ballot their members every 10 years if they wish to retain a political fund. The first such ballot had to take place by the end of March this year.
The legislation was, understandably, clearly seen as a rather crude and clumsy attempt by the Conservative party to undermine financial support for its main opponents. In the event, every union with a political fund secured a massive majority for a "Yes" vote. Indeed, two unions which did not have political funds won majorities to establish them. Who knows, other such unions may secure such a majority.
If it is right for unions to have to establish a political fund to contribute to a party, why should not the same apply to companies? Why the glaring difference in law? Today, I am seeking leave to introduce a Bill—an extremely modest measure— to ensure that companies must ballot shareholders, and employees with more than 12 months service—that is only fair—on whether a political fund should be established. Under the measure it would be illegal to donate to a political cause without such a fund. In this matter the law should apply to companies and unions alike.
It is also right and proper that in any such arrangement provision should be made for shareholders who do not want to contribute to a political fund to be compensated by some extra shareholding, in the same way as during the past 70 years trade unionists who did not want to donate for political purposes could contract out. I am merely seeking the same provisions for companies as apply to trade unions.
The Economist of 22 June 1985 commented: In practice, the directors of a company now arbitrarily decide how much to give to a party—usually the Conservative party or one of its front organisations. Their decision is simply noted in the directors' report, which is usually passed on the nod at the company's annual meeting. In the same article The Economist said that, unlike the Labour party, the Tories, Liberals and SDP do not publish a full set of financial accounts. As we all know, the truth is that the whole area of Conservative party finance is rather murky. It is understandable that there are some Conservatives, such as Mr. Eric Chalker, who believe and have campaigned that the Conservative party should publish full accounts. I also note that Mr. Chalker is keen on democratic accountability in the Conservative party, and on the chairman being elected.
803 A recent MORI poll on public attitudes to political donations found that 51 per cent. of those asked felt that companies should not be allowed to make political donations and only 35 per cent. were in favour. In the same poll, 82 per cent. believed that companies making donations should first consult their shareholders. So public opinion on this particular issue is very clear. I see no reason for discrepancy between trade unions and companies which make contributions in the political sphere.
Since this Government took office seven years ago—I do not want to be personal, but I think that this information should come out—64 industrialists have been awarded knighthoods. Of these, 69 per cent. are directors of companies which have given £4.5 million to the Tory party since 1979.

§ Mr. Tony Banks (Newham, North-West)
It is a fiddle.

§ Mr. Winnick
Of the 11 industrialists who have gone higher, who have been given peerages, six are directors of companies which are among the top 10 financial donors to the Tory cause.

§ Mr. Tony Banks
Come back, Lloyd George.

§ Mr. Winnick
These companies give money either directly to the Tory party or to front organisations like British United Industrialists. I am not sure on occasion which has more front organisations, the Conservative party or the Communist party.
In turn the Government favour their friends and financial backers, as in the Finance Bill, which is to be debated today, and in previous Budgets. There is a clear need for reform as quickly as possible.
The next reform that I seek in this very modest measure is to ensure a limit on expenditure by political parties during a general election campaign. We all know that there is a limit on expenditure on behalf of parliamentary candidates. There is no controversy about that. It is right and proper that no very rich candidate is able to secure election by buying votes. If it is correct for there to be quite a tight limit on expenditure by candidates, why should there not be a limit nationally for political parties? Why should a political party be able to spend as much as it likes? Here again there is a clear discrepancy between the national and local scene. In the last election the Tories had some £15 million to £20 million to spend. It may well be that they decided not to spend the lot, but they could have done so, and they could have spent much more. My party had as its maximum some £2.5 million. So we need to ensure that this reform is effected.
804 If I am asked what should be the ceiling on political party spending during a general election campaign, being a generous-minded sort of person I would say that, at present-day prices, it should be around £5 million. This amount could always be updated just as the amount of money that can be spent on behalf of a candidate is periodically updated to take account of inflation.
I do not know whether my Bill is to be opposed. If there are Conservative Members who oppose in any way what I have put forward, I hope that they will have the guts to oppose it today. That is far better than to get the Whips to oppose me and to shout "Object" one Friday afternoon.
If the Conservative party believes that my proposal is wrong, why does it not oppose me and vote against it today? If I am to be defeated in a Tory-dominated House of Commons, so be it, but if I am to be given leave, it is only right that the Cabinet should find time for me to process my Bill. I see no reason why, at the Cabinet meeting, say, on Thursday, this item should not be top of the agenda, or why the chairman of the Conservative party and perhaps the Leader of the House should not ensure that, having been informed that this Bill has been passed without opposition, I have sufficient Government time to make progress and to ensure that my proposals become law before the next general election.
That is only right and fair, so I shall assume that if there is no opposition today the Cabinet will decide along the lines that I have suggested.

§ Mr. David Winnick
It is clearly the unanimous wish of the House of Commons to support the Bill, Mr. Deputy Speaker, and that only strengthens what I have said about being given Government time to progress the Bill.
Bill ordered to be brought in by Mr. David Winnick, Mr. Tony Banks, Mr. Dennis Canavan, Mr. Terry Davis, Mr. Derek Fatchett, Mr. James Lamond, Mr. Austin Mitchell, Mr. Allan Rogers, Mr. Brian Sedgemore and Mr. Robert Sheldon.