Regulation of Political Funding (Hansard, 1 February 1994)

§ Mr. John Spellar (Warley, West)

I beg to move, That leave be given to bring in a Bill to regulate the system of funding of political parties; and for connected purposes. I introduced a similar Bill in the previous Session. Events since then have made such a Bill even more relevant, especially in view of the excellent work being undertaken by the Home Affairs Select Committee. Much of the material on the subject has been brought together in Martin Linton's recent well-publicised pamphlet for the Institute for Public Policy Research, although I must stress that the Bill is not concerned with the state funding of political parties.

The Bill has three main aims. The first is to prohibit donations by foreign nationals who are not normally resident in this country, and by overseas companies and overseas Governments. The second is to ensure the recording and publication of donations above a certain limit; I suggest about £1,000, but I am not too tight on that. The third is to require political parties to publish income and expenditure accounts, in the way in which companies and trade unions do.

Those objectives should commend themselves beyond the Opposition Benches. We know that many Conservatives are becoming increasingly concerned about the lack of accounts and accountability in their own party. Even the Prime Minister does not seem to be fully informed. When I asked him at Question Time on 19 October about Tory party finances, he said: There are a great many secret sources and they are all cheese and wine parties up and down the country."— [Official Report, 19 October 1993; Vol. 230, c. 144.] There was £440,000 from Asil Nadir and hundreds of thousands, if not millions, from Greek shipowner John Latsis, Hong Kong billionaire Li Ka Shing and fugitive from justice and ex-Nissan boss Octav Botnar. That is a lot of big cheeses, let alone glasses of wine.

Perhaps the Prime Minister thinks that the dinners that he has been persuaded to put on again at No. 10 are just a few chums popping by for a snack. Perhaps his party officers do not tell him how the bite is put on subsequently for party funds. The Bill would help him to know how his party is funded, even if it would not help him to know other matters about his party. After all, his attitude is that we should not ask him because he is only the Prime Minister.

The Bill would also help the Tory party to dispel unjustified accusations about its funding. Tories have been very upset recently by the allegations by my hon. Friend the Member for Hammersmith (Mr. Soley) about Saudi funding. Open disclosure would clear that matter up; my proposed ban on foreign funding would have saved them from the embarrassment in the first place. We would not have to concern ourselves with the rumours which were circulating long before the current story on the Malaysian dam that there were payments into Tory party slush funds from Malaysian arms deals. Everything would be there in the open. We would not have to worry about whether funding had come from right-wing foundations in the United States or from the Government of Brunei. Is not it ridiculous that a major political party in this country should be dependent on money from people who cannot even vote in our elections? That is why the United States, Canada and most European countries ban foreign donations; we should follow their example.

766 At one of the famous Downing street dinners, almost half those present benefited from foreign domicile tax status, a nice little loophole that costs ordinary taxpayers £1 billion a year. It makes the United Kingdom one of only four western European countries—I say "countries" in inverted commas because the others are the Channel Islands, Luxembourg and Switzerland—which has that status. The right hon. Member for Kingston upon Thames (Mr. Lamont), as Financial Secretary, initiated a review of that loophole. The initiative was stopped by the then Chanceller of the Exchequer, the present Prime Minister. I am sure that the recipients were grateful. We would like to know how grateful. How many pounds' worth of gratitude did they express?

For domestic donors, there is the honours system. The right hon. Member for Sutton Coldfield (Sir N. Fowler) rather pompously claims that honours cannot be sold because of the Honours (Prevention of Abuses) Act 1925. However, some unkind person has noticed a rather strong —how can I put it delicately?—statistical correlation between companies' donations to the Tory party and honours to their chairmen and managing directors. If we knew about individual donations, we might be able to make an even better match.

The Tory party might say that we are being unfair: we should let the public know and we should let them draw their own conclusions. It is not only Opposition Members, but the public and Tory party members, who are concerned. I do not refer only to the Charter Group, which has been most prominent in the campaign for proper accounts. After all, the House passed a resolution in 1949 saying that political parties should have proper accounts. Perhaps it is time that we put that into practice. I refer also to individual Tory party members across the country. Membership of the Tory party is collapsing.

When, for example, it was revealed that party funds had been used to pay the legal expenses of the right hon. Member for Kingston upon Thames in his attempts to evict an undesirable tenant, the vice-chairman of the Tory party estimated that the party had lost £500,000 in donations. Why should ordinary Tory party members fund such excesses? Why should they bother even with wine and cheese parties when they believe, probably rightly, that the super rich at home and abroad will bail the party out? That is why the Tories have become increasingly dependent on donations to central party funds—£7.5 million in 1989, £15.8 million in 1991 and a whopping £20.7 million in 1992.

It is also a matter of public concern that the Tories seem to be becoming increasingly cavalier about the few rules that we have. While attention has rightly been focused on the auditor's report on designated sales in Westminster, we should not forget the question marks over the financing of the Tory campaign in Westminster and the money that may have to be paid back on the instructions of the Charity Commission. My hon. Friend the Member for Wallasey (Ms Eagle) is only too well aware of a similar undercover channelling of money to her opponent's campaign.

I remember the Trade Union Reform and Employment Rights Act 1993 being debated because I was a member of the Committee. Conservative Members called for more detailed accounts. In their own affairs, however, it is clear that they claim the right to silence. In the recent debate on the Criminal Justice Bill, Tory spokesmen speaking on the so-called "right to silence" have been fond of the slogan: "Those who have nothing to hide have nothing to fear." 767 That is why they so strongly oppose these changes and that is why they claim the right to silence. They have a lot to hide.

I hope that the Bill and the Select Committee report will help to lift the corner slightly on the dark, sleazy world of Tory party finance and expose it to some scrutiny and sunlight. Sunlight, in the words of the American Supreme Court of Justice, is, in a democracy, the best disinfectant. We need to clean up political funding in this country; we need the Bill.