Regulation of Funding of Political Parties Bill (Hansard, 19 April 1996)

§ Mr. John Spellar (Warley, West)
I beg to move, That the Bill be now read a Second time.
I am pleased that the Government have created the opportunity for a fuller discussion of the Bill; after all, leave was given to introduce it by the margin of 163 votes to 62. I am not sure why the Government pulled the rug from under the Pensioners Earnings Bill, which was introduced in 1994, but the change is extremely welcome. I do not know whether the change represents a thawing in the ice age of stone walling by the Government. We hope that they do not try to talk the Bill out and prevent further detailed consideration in Committee of this vital democratic measure.
While paying tribute to those who helped to bring the measure to today's debate, we must pay tribute to the Prime Minister. In January, before I sought leave to introduce the Bill, he put the issue of political funding firmly and squarely on the political agenda. He said: We know who pays 50 per cent. of the money that the Labour party gets".—[Official Report, 25 January 1996; Vol. 270, c. 476.] He was absolutely right. We do know. It is all on the public record. Party accounts make it clear, as do the records of the certification officer for trade unions. Under strict regulations, unions must file their accounts and they are open and on the public record. Indeed, an annual report is published by the certification officer.
It is regrettable that no such transparency applies to Conservative party funding, which is shrouded in mystery and obscurity. A host of secretive companies and organisations, which I shall mention later—some created after the second world war—funnel secret funds into the Tory party. It appears that the Government are keen to keep it that way. It is, to use a phrase that was fairly common in January, a case of saying one thing and doing another.
When I sought leave to introduce the Bill, I referred to its three main aims. An extremely important one, which I shall discuss later, was that of prohibiting foreign donations. Hon. Members will note that there is no specific provision in the Bill to cover that, because we need to consider the fine detail. That is why you will see in the Bill, Mr. Deputy Speaker, that we have created a mechanism for examining the detail, reporting back and taking the matter further.
First, I shall expand on clause 1, regarding publication of donations. Many people, not only in the House but outside, may find it odd that, although as individual Members of Parliament we rightly have to declare our earnings, the Tory party machinery, which elects very many Members of the House, is able to maintain a wall of silence around the source of its funds. Essentially, the principle—

§ Lady Olga Maitland (Sutton and Cheam)
rose—

§ Mr. Bernard Jenkin (Colchester, North)
rose—

§ Mr. Spellar
I give way to the hon. Lady.

§ Lady Olga Maitland
Is the hon. Gentleman aware that there is no secrecy about the funding of the Conservative party? Seventy per cent. of donations come from our supporters throughout the country from teas, coffee mornings, luncheons, fairs, fêtes and the like. There is nothing secret about that. Any money that comes via a company must be declared in the company accounts, for everyone to see. Where is the secrecy? There is no secrecy. The hon. Gentleman is trying to cast slurs on and make innuendos about the Conservative party.

§ Mr. Spellar
I suspect that Mr. Asil Nadir must have bought an awful lot of teas and buns with £400,000 to have obtained value for money—unless he was seeking something else.

§ Mr. Richard Ottaway (Croydon, South)
The lavender list was secret.

§ Mr. Spellar
The Whip mentioned secrecy. The reason for those donations from Mr. Nadir was unclear at the time that they were made. Only subsequently, after his other financial troubles and after he had fled the country, did it become clear. Indeed, the reason was so obscure that, when the matter came to court, the accountant for the Conservative party, Mr. Paul Judge, who took an unfortunate legal action against The Guardian at a cost of £300,000, said that, even though it was only two years later, the Conservative party had cleared out the records relating to the donation.
I shall take the hon. Lady's point further. I think that the Bill will help her and the Conservative party to clarify the matter. If the Conservative party had to publish proper accounts and make it clear where money came from, there would be no opportunity for the slurs and smears claimed by the hon. Lady, as the matter would be out in the open.

§ Mr. Tom Cox (Tooting)
My hon. Friend has raised the name of Mr. Nadir, about whom we have not heard very much for the three years since he fled the country overnight. I hope that my hon. Friend will develop the point, because we are entitled to know about such matters. Mr. Nadir met senior members of the Conservative party—chairmen of the party—who, with their close associates, have made it clear that Mr. Nadir was seeking a knighthood and was willing to pay whatever it cost. We know that he paid about £500,000 in the hope of achieving a knighthood.

§ Mr. Spellar
I thank my hon. Friend. I thought that the hon. Member for Colchester, North (Mr. Jenkin) wanted to intervene, but he seems to have decided not to do so in the face of my robust reply to the hon. Member for Sutton and Cheam (Lady Olga Maitland).
The case of Mr. Nadir highlights strongly the sleazy sources of some of the money that goes into the Conservative party. My hon. Friend the Member for Tooting (Mr. Cox) rightly mentioned the strong correlation between donations to the Conservative party and the receipt of knighthoods and peerages. Obviously Mr. Nadir believed that his donations were the way to achieve those goals, even though the authorities caught up with him and the Conservative party reneged on its pledges to him—as it reneged on the tax claims that it made to the electorate at the last general election.

§ Lady Olga Maitland
The hon. Gentleman is not accepting the fact that, yet again, he wrongly interprets events and makes false slurs. There was no question of Asil Nadir being given a knighthood. He may have wished for one, just as some people wish for the blue moon. The Labour party is trying to place an interpretation on events which simply is not right: Mr. Nadir did not get his knighthood.

§ Mr. Spellar
The hon. Lady has reinforced my point: the Conservatives do not always deliver—Mr. Al Fayed was under the same misapprehension. One can understand how Mr. Nadir may have come by his misapprehension. When we examine donations from companies and major individuals—when they come to light—we discover that there is, to put it at its kindest, an extremely strong correlation between donations and the receipt of knighthoods and peerages for the managing directors, chairmen or board members of the companies involved.
The Bill makes a strong argument for the principle of transparency and the public's right to know the facts and to make an informed judgment. We can have a debate on whether the conclusions are right or justified, but for the debate to be informed, we need information.

§ Lady Olga Maitland
I am glad that the hon. Gentleman has brought up the subject of transparency. He should look to his party. Perhaps he might like to reflect on the comments made by the general secretary of the Labour party, Larry Whitty, who told the Select Committee on Home Affairs that even if regulations requiring disclosure were not introduced, he would recommend that the party's national executive committee should voluntarily disclose larger donations. In the next breath, however, he said that the Labour party had received only 15 donations in excess of £10,000 a year and he confounded everyone by refusing to declare the source of that money. Is that not a case of saying one thing and doing another? It is typical hypocritical cant.

§ Mr. Spellar
I am grateful for the hon. Lady's support for the Bill. She said that it is desirable for political parties—she gave a different example—to declare the sources of donations to them. That is the correct course of action.

§ Lady Olga Maitland
The Labour party does not do it.

§ Mr. Spellar
The hon. Lady, yet again, makes a case—this time from a sedentary position—for legislation to deal with the issue. The Bill refers to the desirability of transparency so that all political parties may make clear the sources of their funding. The electorate can then draw its own conclusions.
We must look not only at the Conservative party, but at some of the shadowy organisations associated with it, such as British United Industrialists and the infamous river companies that were set up after the war to channel money to the Tory party. A new outfit, the City and Industrial Liaison Council, is now in business. Its purpose is to tap into the workings of the City and of industry and it is able to arrange for meetings between potential donors and senior Ministers. Other fund-raising organisations offer invitations to Downing street as part of their attractive packages.
1002 Although the City and Industrial Liaison Council was established as a separate body, its address is 32 Smith square—which I believe is also the address of the offices of the Conservative party. Although the Tories do not own the premises, which they sold some time ago, they have managed to lease them at a very favourable rate. I see that the hon. Member for Colchester, North now wishes to participate in the debate.

§ Mr. Jenkin
I refrained from intervening a few moments ago as I wanted to see whether my suspicions about the debate would be confirmed. The debate is simply a string of innuendos and slurs assembled in such a way as to create a completely false impression about the way in which politics works within both the Conservative party and the country as a whole. All the Bill's sponsors are Labour Members and it is obvious that it is purely a party political exercise. The majority of people will be mystified as to why the hon. Gentleman believes that there is a secret conspiracy simply because an organisation has the same address as the Conservative party.

§ Mr. Spellar
I am not surprised that the hon. Gentleman is mystified: it is a permanent condition for him—particularly with regard to his party's European policy. The organisation's invitation says that a short opening statement by the Secretary of State for Trade and Industry will be followed by a question-and-answer session. Prospective donors are then invited to remain and meet those present over a drink. Access, influence and donation—these are not smears; they are the facts. That is what is happening and I think that the electorate has a right to know about it. The electorate has the right to make up its mind—perhaps people will accept the hon. Gentleman's charitable explanation of events—based on the facts.
Some of those who make donations are very clear about their motives. Two prominent donors to the Conservative party stated their motives clearly in an article in The Sunday Times last year. They said: We consider donations to party funds to be similar to buying a round of drinks. If you want to be welcome at a party or a pub, it is policy and polite to pay your round.

§ Mr. Nirj Joseph Deva (Brentford and Isleworth)
The hon. Gentleman asserted that the liaison council that he discovered to be registered at 32 Smith square was a mysterious organisation. How on earth can it be a mysterious organisation if that is its address? He spoke about people meeting Ministers to put forward their points of view. Is he saying that he never meets anyone from the trade unions, which are the largest donors to the Labour party, that he is not impressed or influenced by them or that he does not listen to them?

§ Mr. Spellar
As the hon. Gentleman was not entirely sure of the name of the organisation to which I referred, perhaps the Bill will assist him as to what is happening in the party of which he is a member. Perhaps long-standing Tory Members would also like to know about the charter movement in their party, to which I shall refer later.
I referred to the fact that potential donors to the Conservative party were invited to meet the Secretary of State for Trade and Industry. The Tories are confusing their role in government with their role as a party. 1003 They have fallen deeper into mixing and merging those roles and do not recognise the key difference between the role of a Government and the role of a political party. The Bill will not stop that, but it will ensure that there is transparency in all those operations.

§ Mr. Edward Garnier (Harborough)
Where are the hon. Members for Hornsey and Wood Green (Mrs. Roche), for North Warwickshire (Mr. O'Brien), for Wallasey (Ms Eagle), for Walsall, North (Mr. Winnick), for Workington (Mr. Campbell-Savours), for Paisley, South (Mr. McMaster), for Thurrock (Mr. Mackinlay), for Sunderland, South (Mr. Mullin) and for Rotherham (Mr. MacShane)—the sponsors of the Bill?

§ Mr. Spellar
The hon. and learned Gentleman is obviously seeking a place in the Whips Office, where he can track down hon. Members. If he had been taking note at the beginning of the debate, he would have noticed that the Bill was due to be further down the list in the order of business but, as a result of Government action—for reasons that I cannot guess—in pulling other legislation, it has moved up the list. We are fortunate to be able to discuss it today, but it was not easy to predict today's debate and hon. Members with considerable constituency duties will have undertaken to look into the problems of their constituents.

§ Mr. Alun Michael (Cardiff, South and Penarth)
My hon. Friend is absolutely right. Many hon. Members were expecting to take part in a debate on the Prisoners' Earnings Bill, which was on the Order Paper until yesterday, when it was mysteriously removed from the agenda by the hon. Member concerned, no doubt under pressure from the Government Whips Office, which then had to bring in waifs and strays from the corridors to pad out the previous debate and thus delay debate on my hon. Friend's Bill.

§ Mr. Deputy Speaker (Sir Geoffrey Lofthouse)
Order. This is the fifth time that the hon. Gentleman has referred to that matter. I drew his attention to that fact earlier and it is now becoming tedious repetition. Obviously the hon. Gentleman did not take note of my previous remarks.

§ Mr. Deva
On a point of order, Mr. Deputy Speaker. Is it parliamentary for the hon. Gentleman to describe other hon. Members, including myself, as waifs and strays?

§ Mr. Deputy Speaker
It is not a description that I have heard before, but I do not deem it to be unparliamentary.

§ Mr. Garnier
Further to that point of order, Mr. Deputy Speaker. Is it in order for an hon. Member unwittingly to mislead the House by suggesting that the Prisoners' Earnings Bill was removed from the Order Paper yesterday when, apparently, it was pulled three weeks ago?

§ Mr. Deputy Speaker
There are all sorts of orders and disorders in the House, but nothing this morning has been out of order. If it was, I would not have allowed it to continue.

§ Mr. Michael
rose—

§ Mr. Deputy Speaker
Order. I call Mr. Spellar.

§ Mr. Spellar
Apart from helping some Conservative Members who are present, the publication to which I was referring might also be useful to Conservative central office. It might even assist the Prime Minister who, like the hon. Member for Sutton and Cheam, seems to believe that the sources of Tory funding, as he said in October 1993, are all cheese and wine parties up and down the country."—[Official Report, 19 October 1993; Vol. 230, c. 144.] I should like to enlighten him—it would also help Conservative central office to have second thoughts and be far more discriminating about the origin of its funds and the motivation of some of its donors.
My hon. Friend the Member for Tooting spelled out at some length the case of Mr. Asil Nadir. If he had been a one-off, isolated case, one could regard the matter as an unfortunate accident, although £400,000 was a considerable sum. But he is by no means alone. Donations were made by Mr. Jack Lyons and by Mr. Gerald Ronson, another person who had to spend some time at Her Majesty's pleasure. There was Mr. Nazmu Virani, who was involved in the Bank of Credit and Commerce International scandal, and there were a number of others who made donations and who were subsequently found to be less than desirable persons.

§ Lady Olga Maitland
Does the hon. Gentleman intend to refer to the support that his party received from Mr. Robert Maxwell, the greatest robber of all time?

§ Mr. Spellar
I thank the hon. Lady for her support. That point was made by the hon. Member for Welwyn Hatfield (Mr. Evans) on a previous occasion when I sought to introduce the Bill. Indeed, I welcome that support for transparency about donations to all political parties.
I think that the creditors of Polly Peck would be pleased if the Conservative party arranged to give back the moneys that it received from Mr. Nadir, because it is doubtful whether the money came from Mr. Nadir or from the company. The creditors would be extremely—

§ Mr. Garnier
On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Gentleman to refer to matters that are in controversy in a criminal trial? An associate of Mr. Asil Nadir has recently been convicted, but has yet to be sentenced for matters connected with Mr. Asil Nadir. I ask you, Mr. Deputy Speaker, to give guidance to ensure that the hon. Gentleman does not stray too closely into the details of that case.

§ Mr. Deputy Speaker
All hon. Members should avoid matters that are sub judice. I hope that the hon. Member for Warley, West (Mr. Spellar) will do so.

§ Mr. Spellar
Obviously I accept your ruling, Mr. Deputy Speaker, although I do not think that these moneys are the subject of the court case. It is interesting that the hon. and learned Member for Harborough (Mr. Garnier) does not wish those matters to be discussed.

§ Mr. Garnier
On a point of order, Mr. Deputy Speaker. The hon. Member for Warley, West is misconducting himself. He attributed motives to me in a wholly unworthy way. I have no ulterior motive in drawing to your attention the need for care when we are talking about current criminal cases.

§ Lady Olga Maitland
My hon. and learned Friend is a QC.

§ Mr. Garnier
I will ignore that point. If the hon. Member for Warley, West (Mr. Spellar) wishes to make personal remarks, he should confine himself to doing so outside the Chamber.

§ Mr. Deputy Speaker
I thought that I had made that point a moment ago. What we shall now do is get on with the debate.

§ Mr. Spellar
The Conservative party might be concerned not just about the identities of those who are making the donations but about their motives. Conservative Members might be concerned that the public and some of us here will put two and two together. Earlier, we discussed knighthoods and peerages. The record of appointments to quangos over a number of years—I refer not only to company officers but to their relatives—shows strong links between donations to the Conservative party and appointments to quangos. One sees the creation of a Conservative client state.

§ Mr. Deva
I am trying to be helpful to the hon. Gentleman. He made the good point that he was worried that people who were in business or in the City had been invited to places such as Downing street and the Department of Trade and Industry to have their opinions heard and perhaps to have a cup of coffee or tea with a Minister. That has caused the hon. Gentleman great concern; I understand where he is coming from. Am I therefore to believe that if, God forbid, a Labour Government ever came to power, no trade unionist would ever be allowed to go into Downing street and that no trade unionist would ever be allowed to go into the Department for Education and Employment? Am I to believe that there would be no beer and sandwiches in smoke-filled rooms?

§ Mr. Deputy Speaker
Order. That must be the last of the long interventions. Interventions are supposed to be brief and to the point.

§ Mr. Spellar
The hon. Member for Brentford and Isleworth (Mr. Deva) has missed the point of the measure, which is to create transparency, as I said at the outset. I am sorry to have to repeat that point, but it is worth while if the hon. Member for Sutton and Cheam has not taken it on board. The public will draw their conclusions from the facts and arguments by political parties, but the public should do that on the basis of knowledge.
As I mentioned earlier, donations from trades unions are properly recorded under the law. The Bill would ensure that other donations to political parties were made public. That is not exceptional in other democracies, and most democracies have a requirement for the publication of donations and, in many cases, registration of donations and computer print-outs to ensure that the public are making an informed choice. That is the key issue.

§ Lady Olga Maitland
Will the hon. Gentleman tell us about the price tag that the trade unions have over their political bosses? Trade unions buy power over the Labour party. They buy 33 per cent. of the votes in Labour's leadership election and candidate selection and 70 per cent. of the votes at Labour's party conference. Frankly, that is a bribe.

§ Mr. Spellar
I give way to my hon. Friend.

§ Mr. Cox
I am sure that my hon. Friend will adequately respond to point made by the hon. Member for Sutton and Cheam (Lady Olga Maitland). In 1992, when my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) was the Labour shadow spokesman on employment, he asked many questions about the visits of Ministers to Hong Kong and whether they were engaged in party activities. If I remember rightly, some 13 were found to have been using their official capacities as Ministers to go touting for funds in Hong Kong.

§ Mr. Deputy Speaker
Order. I assume that the hon. Member for Warley, West will reply to both interventions. Before anybody makes another intervention, he must be given an opportunity to reply.

§ Mr. Spellar
It is unfortunate, given that I spoke quite slowly when I explained the purpose of the Bill to the hon. Member for Brentford and Isleworth, that not one jot of that explanation entered the head of the hon. Member for Sutton and Cheam, who read out her Conservative central office brief again. She still does not understand the basis of the Bill, which is unfortunate.
I shall deal with the question of overseas donations, which was raised by my hon. Friend the Member for Tooting, a little later when I have dealt with clause 1.

§ Lady Olga Maitland
Answer my question.

§ Mr. Spellar
It is unfortunate that, in spite of much repetition—I am sure that you, Mr. Deputy Speaker, have become slightly bored by it—the basis of the Bill has still not got across to the hon. Member for Sutton and Cheam.

§ Lady Olga Maitland
On a point of order, Mr. Deputy Speaker. Is it in order, when I put a question to the hon. Member for Warley, West (Mr. Spellar), for him to dodge it?

§ Mr. Deputy Speaker
Order. That is not a point of order and the hon. Lady knew that full well before she raised it. I will deal with genuine points of order. Points of order that are not genuine—they are common in this place—should not be raised and hon. Members should not test the Chair's patience by repeatedly doing so.

§ Mr. Spellar
Clause 1 would require political parties to publish accounts. That requirement is so unremarkable that as far as back as December 1949 the House passed a resolution that political parties, and all other organisations having political action as one of their aims, should publish annually full and adequate statements of their accounts. Unfortunately, although there have been some minor improvements from the Conservative party, it has not seen fit to implement that resolution.
I referred earlier to the charter movement in the Conservative party. Concern at the failure to implement the resolution is not confined to Opposition Members. Conservative Members will be aware of the charter movement in the Conservative party, which has argued, on a broader front, for a formal party constitution. Extraordinarily, the main defence of the Tory party a few 1007 years ago, in a case involving the Inland Revenue, was that the party did not exist at all. The Conservative charter movement wants proper accounts and, it says, full control over the party's money must be exercised by the elected officers who must be accountable to the membership. That seems unremarkable, but to the mandarins of the Conservative party it is fearsomely democratic. Conservative party members need real accountability.
The charter movement posed some interesting questions to the former party chairman, the right hon. Member for Sutton Coldfield (Sir N. Fowler). It asked: Why has there been a consistent refusal to publish a balance sheet? If we are incorrect in our estimate of the balance sheet position at 31st March 1992, what other funds are there directly or indirectly controlled by the party which covered in whole or in part the deficit of £17 million and where are they located? Both the charter movement and the public want to know whether the funds held in this country are the only funds under the control of the Conservative party or whether there are funds in Jersey and elsewhere—

§ Mr. Jenkin
It is no secret that the Conservative party has a whacking great overdraft, let alone funds in Jersey or anywhere else.

§ Mr. Spellar
It is certainly no secret that at that time the Conservative party had a £17 million overdraft. That begs the question why the Royal Bank of Scotland so easily allowed an overdraft of that size to build up with no immediate way of its being repaid. Again, transparency would enable the Conservative party to dispel the argument that the overdraft was carried by the bank because it had an assurance of other sources of funds being held in reserve elsewhere. That may or may not be true, but if the Conservative party were open about its accounts it could confirm or deny that impression.
The charter movement asked: What were the sources of the said £7 million received from abroad in 1991–92? My hon. Friend the Member for Tooting mentioned that matter and I shall return to it later. The charter movement also asked: From how many sources were individual sums in excess of £1 million received in those years? It then asked questions about loans and borrowings.
All those are extremely important questions both for members of the Conservative party and for the electorate. It is worth noting that recommendations on the publication of funds were included in the report of the Home Affairs Select Committee in 1994. It was not a particularly good report; it covered up a number of matters. However, on the publication of funds it was clear and unequivocal. It said: We believe that every party should make published accounts available to all those who request them. That is fairly straightforward and of interest to hon. Members, the public and members of the Conservative party.
The issue does not involve just income. I suspect that Conservative party members would like to know what happens to their money. Indeed, there was uproar when members discovered that it was being used to finance the 1008 legal costs of the then Chancellor of the Exchequer, the right hon. Member for Kingston upon Thames (Mr. Lamont). It is estimated that the party lost about £500,000 in donations from its ordinary members because of their outrage at that action.
Conservative party members might be interested to know how much it cost to finance the legal action of Mr. Paul Judge against The Guardian. The estimate is £300,000. That does not seem to be an effective use of party funds.

§ Mr. Jenkin
On a point of order, Mr. Deputy Speaker. My understanding is that the Bill would regulate the funding of political parties, which most people would accept includes donations. Indeed, I am happy to discuss party donations. However, the hon. Member for Warley, West (Mr. Spellar) is exploring at length how parties spend their money. I wonder whether that is in order.

§ Mr. Deputy Speaker
It is in order. Second Reading debates are quite wide.

§ Mr. Spellar
If the hon. Gentleman had got a copy of the Bill—

§ Mr. Jenkin
I have one here.

§ Mr. Spellar
It would help if, instead of waving it, the hon. Gentleman read it. Clause 1(2) refers to duly audited accounts of income and expenditure in a prescribed form. That seems fairly self-evident, and it should cover his point.
At least the donations that I have just described could be regarded as in-house and from within this country. What about the really sordid part of Conservative finances which my hon. Friend the Member for Tooting mentioned—overseas donations? Several of our fellow democracies are clear on this. They proscribe donations from overseas whether from individuals, companies or Governments. In our consultation it appeared that there were some difficulties in formulating the exact words to handle the matter. However, if we are able to do so in time before the Committee stage, the matter could be dealt with by means of a new clause.
What are the scandals with which we seek to deal? One is the question of tax exemptions. One of the benefits given to a number of donors was a tax break for foreign business men. They were given tax exemptions while resident in the United Kingdom equalled only in Switzerland, the Channel islands and Luxembourg. Estimates of the cost to the public purse of that benefit run to more than £1 billion a year. We are aware that there was a fund-raising dinner for some of those individuals and that the question of tax-exempt status was raised.

§ Mr. Deva
Is the hon. Gentleman aware—I am sure that he is—that about 45 per cent. of inward investment into the European Union comes to Britain and that many foreign companies are interested in investing in Britain and creating employment? If they believe that the Conservative party would create the best climate and best look after their interests, what is wrong with their investing here and also supporting the Conservative party if they so wish?

§ Mr. Spellar
Companies in Britain would not be covered by the exemption. That is an issue that the hon. Gentleman might like to take up. So far as I am aware, none of the major investors into Britain, such as Toyota, Nissan, Honda, Sony and Fujitsu, is a donor to the Conservative party. I am talking about rich individuals and their tax-exempt status. That is nothing to do with inward investment. Incidentally, if the hon. Gentleman talks to companies that invest here, he may find that the most attractive feature is that we speak the English language, which is their language of business. I have spoken to several companies about that. If I go any further on that, you will pull me back, Mr. Deputy Speaker.
The key area is donations not from those who may be temporarily resident in this country and take advantage of tax-exempt status but from those who are overseas. Ministers, including the Prime Minister, visited Hong Kong. It appears that the then high commissioner in Hong Kong was extremely concerned that some official engagements were turned down so that Ministers could go to a major fund-raising dinner in Hong Kong. Why was Mr. Li Ka-Shing, a major figure in Beijing as well as in Hong Kong, such a major donor to the Conservative party? One of the problems of the Conservative party is that, with the cooling of relations with China, some of those donations have ended.

§ Mr. Jenkin
A business man in Hong Kong might have regard to the fact that the ultimate responsibility for the Government of Hong Kong lies with the elected Government of this country. Therefore, he has an interest in ensuring that a sensible Government are elected in Britain, instead of a silly one from the Opposition Benches.

§ Mr. Spellar
That argument might convince the hon. Gentleman but no one else would agree that people who do not live, or have the right to vote in, this country should be able to give huge sums to a political party. People find that proposition extraordinary, as they do in many other major countries.
It is interesting that it can still be argued that people who are not resident, or who are not voters, in this country should seek to be able to buy influence and policy. The hon. Member for Colchester, North is saying that they should be able to buy the Government they want by donating money to enable a party to compete in elections. That involves not only Hong Kong but United States foundations and even, possibly, overseas Governments. They are all potential or alleged donors. In the case of Hong Kong, there are more facts about donations designed to keep one party in power in Britain.

§ Mr. Cox
We have already touched on Asil Nadir, but I hope that we have not left him completely. It is all on the record; this is not, as Conservative Members are suggesting, just innuendo. We know from parliamentary answers from the Attorney-General that when Mr. Nadir, before he fled the country, was being investigated by the serious fraud squad, Cabinet Ministers, who were not his parliamentary representative, met the Attorney-General. We can only guess why, when they were not his parliamentary representative, they should go to see a Law Officer. We know from replies to parliamentary questions that seven Back Benchers approached the Attorney-General about the serious fraud case against Mr. Nadir.

§ Mr. Spellar
My hon. Friend has spelt out strongly the problems that were associated with that case and why we believe that the Government were so reticent about it. It comes back to the principle that is sometimes enunciated by Home Office Ministers in discussing the right to silence, when they say that those who have nothing to hide have nothing to fear. We suspect that the Conservative party has much to fear.

§ Mr. Garnier
Is the hon. Gentleman aware that, in its evidence to the Home Affairs Select Committee, the Labour party conceded that it was not against its principles to receive foreign donations, and admitted receiving them from citizens of the United States? Does he think that that was wrong?

§ Mr. Spellar
I think that we should proscribe donations from abroad. I thought that I had said that clearly not only in this speech but when I sought leave to introduce the Bill. I am pleased to have the support of the hon. and learned Gentleman, who obviously favours such a provision.
The attraction of money from Hong Kong and other dubious sources for Conservative Members was well expressed by a previous leader of the Conservative party, Mr. Stanley Baldwin, in 1927 when he said: Our one great advantage: wealth. Let us use it. Its expenditure should be regarded as an insurance premium. That insurance premium is coming not only from business in Britain, but, worse, from business abroad.
We must consider the matter in further detail so that we can get it right. I hope that the commission will be able to draw on the experience of the United States and Australia in particular. That will be its role. I hope that it will make a better job of it than the Select Committee did.
Let us be clear what the Bill is seeking to introduce. Many thoughtful Conservatives realise that the situation in which they find themselves is untenable and indefensible. They understand that a valid, sensible measure should be introduced, which will open up the matter to public scrutiny.
In the words of an American Supreme court justice, Sunlight is the best disinfectant in a democracy. The Bill will benefit not only the wider electoral democracy in this country but democracy in the Conservative party. If the Government try to prevent the matter from being brought to a vote today or to frustrate the will of Parliament, which was clearly expressed on 31 January, we and the electorate will rightly conclude that they have a lot to hide and to fear. That is why I have no hesitation in commending the Bill to the House.

§ Mr. Edward Garnier (Harborough)
I listened with as much interest as I could summon to the arguments of the hon. Member for Warley, West (Mr. Spellar). He is probably the only Member of Parliament who has been known to introduce a Bill and talk it out himself. He has been on his feet for nearly an hour, knowing very well that he had limited time. If he had been keen to get the measure on to the statute book, he would have been more succinct and would have dealt with the interjections of his hon. Friends and Conservative Members with greater celerity, but there we are.
1011 It may be of interest to the hon. Member for Warley, West to learn that the Bill has come up for debate today, not because of some speedy and nefarious deal done yesterday to confuse the other sponsors, but because the Bill between this one and the Sexual Offences (Conspiracy and Incitement) Bill was withdrawn on 3 April. The hon. Members for North Warwickshire (Mr. O'Brien), for Walsall, North (Mr. Winnick), for Wallasey (Ms Eagle), for Workington (Mr. Campbell-Savours), for Paisley, South (Mr. McMaster), for Sunderland, South (Mr. Mullin), for Thurrock (Mr. Mackinlay) and for Rotherham (Mr. MacShane), all of whom sponsored the Bill with the hon. Member for Warley, West, are absent and have failed to look at the business papers to ascertain that the Bill in front of this one was withdrawn from discussion on 3 April. That gives us some indication of the seriousness with which the Bill was introduced.
The way in which the hon. Member for Warley, West handled the Second Reading debate gives yet further evidence for and support to my suggestion that the Bill is nothing more than a political stunt. Let us compare the way in which the Sexual Offences (Conspiracy and Incitement) Bill was introduced by my hon. Friend the Member for Hendon, South (Mr. Marshall) and the way in which he dealt with it this morning and in Committee. One can draw no other conclusion than that this Bill is a cheap and silly little stunt and a waste of parliamentary time. One only has to consider the way in which that earlier Bill was dealt with to realise what can be done with a sensible and well-meaning Bill that needs to be brought into play.
Since I think that I am the only hon. Member present who was on the Home Affairs Select Committee that dealt with the funding of political parties I must also point out that, if the hon. Member for Sunderland, South—a sponsor of the Bill, who was also a member of our Select Committee—had thought the Bill of such great importance, he would have been here for to give it a fair wind, if that is the right expression when dealing with the remarks of the hon. Member for Warley, West, not least because he and his colleague the hon. Member for Hornsey and Wood Green (Mrs. Roche), along with the research department at Walworth road, drafted the minority report, most of which was regurgitated in his speech.
Since the hon. Member for Warley, West chose to concentrate only on that minority report, it is fair that the House should learn a little more about the majority report that dealt with the sourcing of political funds with which clause 1 of the Bill deals. I cannot remember whether the hon. Gentleman bothered to refer to clause 1 in detail, but it states: The Secretary of State shall, by regulations, require each political party to publish annually details of the source and amount of every donation of £1000 or more made to it in the course of the year. There are two issues there—source and amount. The cut-off amount seems to be £1,000.
In its report, the Select Committee considered evidence from a great many people on this subject, and the arguments for and against disclosure have been succinctly set out. I shall summarise the arguments for the House's benefit, so that it can have them in mind—not only the hon. Gentleman's rantings—when reaching its conclusions about the good sense of the Bill.
1012 My right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), who was then the chairman of the Conservative party, argued that privacy in donations was as fundamental a right when giving to political parties as it was when giving to any other charitable organisation. I should hope that the hon. Member for Warley, West would have the decency to accept that that point is not only arguable but right.

§ Mr. Spellar
indicated dissent.

§ Mr. Garnier
Does the hon. Gentleman wish to intervene?

§ Mr. Spellar
The hon. and learned Gentleman asked if we would agreed to that proposition, and I say certainly not. In a democracy, the electorate have a right to know who is donating to the political parties that are seeking to run the country and then to draw their own conclusions. That is the Bill's essence.

§ Mr. Garnier
I think that we have the beginnings of a reasonable argument; the hon. Gentleman has put forward his case, and I shall remind the House of what the then chairman of the Conservative party said in response to that line of argument.
My right hon. Friend the Member for Sutton Coldfield said that what individuals do with their money is entirely a matter for them, and I suggest that it is not a legitimate interest for inquisitive journalists, political opponents or even the state to know what private individuals give to Oxfam, for example, or to the Labour party, the Conservative party or the Royal Society for the Prevention of Cruelty to Animals. The interest pretended by the hon. Gentleman is merely prurient and has no genuine public interest basis.
I agree with my right hon. Friend the Member for Sutton Coldfield that to reveal the name of an individual donor would be a breach of that donor's right to privacy, although there is nothing to stop an individual donor making his name known if he chooses to do so. Perhaps one of the differences between the interfering, statist Labour party and the Conservative party, of which I am a member, is that the Conservative party respects and hopes to protect the individual's rights, and perhaps that is why a gulf is emerging across the Floor of the House in this debate.

§ Mr. Jenkin
Did my hon. and learned Friend notice that the hon. Member for Warley, West implied in his intervention that he thought that political parties are elected to the Government to represent the electorate in the House of Commons? Individuals, of course, are elected to the House of Commons. Individuals might stand for election and raise their election funds under a party label, but the electorate vote for individuals in elections. We sit in the House of Commons as individuals, and it is as individuals that we represent our constituents. We do not elect a party apparatus to Government—we elect individuals.

§ Mr. Garnier
My hon. Friend has made a very telling point, and he made it very well. It is not surprising that the Labour party is the recipient of a huge amount of trade union funds because the trade unions buy policy. The trade unions buy up the Labour party—it is as simple as that. The trade unions attempted between 1974 and 1979 1013 to buy up that Labour Government, and no doubt they are intending and hoping to buy up a future Labour Government. That was the point made by my hon. Friend, and it is a legitimate point, about which the public should continually be reminded.
I am glad that this debate is providing us with an opportunity to remind the public what the Labour party is about—not only through the mechanics of this Bill but through their general philosophy of action, which is to buy up blocks of influence in any way possible to determine the country's future. Individuals and interest groups in this country would be well advised to bear in mind the rather nasty nature of the Labour party that hides behind the smile of its current leader. That lesson will no doubt be learnt more clearly in the next year as the Labour party begins to unravel and to distract itself by its own divisions.
The Home Affairs Select Committee went on to discuss the threshold at which disclosure ought to be made, assuming that it should be made. It was common ground, apparently, that small donors had a right to privacy because no-one could allege that their gift had been made with any ulterior purpose. I query that, to the extent that many members of trade unions individually make small donations by way of the political levy which go into a much larger pot, which hammers on to the side of the directing mind, if that is the right expression, of the Labour party.

§ Mr. Cox
I do not know what the hon. and learned Member knows about the trade union movement, but he referred to the political levy. Is he aware that, under trade union legislation, all trade unionists have to ballot whether they wish to contribute to the political levy of a political party? Does the hon. and learned Gentleman know that?

§ Mr. Garnier
I not only knew that, but the hon. Gentleman missed the point that I was making—that many people make small donations. It was common ground in the Home Affairs Select Committee that those who make small donations should not be interfered with because the size of their donation could have no real bearing upon the management and policy making of the party to which they were making donations. The point I was making, and I shall say it again slowly so the hon. Member for Tooting (Mr. Cox) can take it in [Interruption.]—

§ Mr. Cox
You are not in court now.

§ Mr. Garnier
The small donations that are brought into an agglomeration through the political levy of the trade union system, once agglomerated, create a huge power of influence. That financial influence is applied to the Labour party to get it to produce policies and go in a direction that is sympathetic to the desires of the membership of the trade union. That is the point, and if it embarrasses the Labour party, so be it.
The evidence given by the parties to the Home Affairs Select Committee on the question of threshold relates directly to the issue of source and amount in clause 1. The Committee noted that, at the top end of the scale, the Green Party proposed that the names of individuals giving over £50,000 per annum (and the names of all organisations giving gifts) should be disclosed; the SNP suggested that all donations above £20,000 should be published in a party's accounts"— 1014 a Professor Harrison proposed £10,000— the Labour Party suggested various figures between £10,000 and £1,000 for individual donors, though, according to Mr. Whitty— then general secretary of the Labour party— revealing donations of around £150 'would not cause us great difficulty'.; the Liberal Democrats proposed £5,000 as a figure which might be acceptable to other parties, though they were also prepared to reveal donors down to a much lower level; the TUC favoured donations of over £1,000 by individuals and £200 by companies being disclosed". The Transport and General Workers Union argued for disclosure above 'say £500 or £1,000'. The Committee also noted: Among those who favoured a disclosure limit but did not mention a particular amount were the SDLP"— is that the Northern Irish party?

§ Mr. Jenkin
Yes.

§ Mr. Garnier
—and Charter 88 and the Charter Movement. The Institute of Public Policy Research, which I believe is a body sympathetic to the Labour party, suggested that '5 or 6 figure' sums were of considerable importance to the United Kingdom's relatively impoverished political parties.
The witnesses were asked whether as low a threshold for disclosure as just over £150 would be acceptable, and both the officials from the Labour and Liberal Democrat parties emphasised that there would be, as the general secretary of the Labour party, Mr. Whitty, said 'a lot of bureaucratic hassle' in doing so. It may be that the philosophy behind the figure of £1,000 mentioned in the Bill promoted by the hon. Member for Warley, West has nothing to do with the wider principle of disclosure, about which we obviously disagree, but is simply one of administrative convenience.
Anything below £150 or £500—take whatever figure one likes—would grossly inconvenience individual members of the Labour party because it is likely, according to the historic nature of the Labour party's membership, that individual donations from Labour party members would come at the lower end of the scale, whereas those at the higher end of the scale would be likely to be given, again according to historical evidence, by members of the Conservative party. A nasty little piece of party political discrimination, dressed up as a matter of high principle, is coming in under the fence.
A number of issues concern us. Questions of privacy are involved, as I mentioned earlier, as are questions of administrative practicality. The more donors that a party will be required to list, the more cumbersome the procedure will become. Eighteen months ago, the Home Affairs Select Committee learned that, in the United States—where funding is principally directed to individual candidates rather than to political parties—the candidates must register the name, address and occupation of all people who donate more than $200 to them.
The inquirer at the Federal Election Commission can obtain a computer print-out that lists, for example, all female physicians in Florida who donated more than $200 to candidate X. A considerable bureaucracy is involved, even if the system is based on the citizen's right to know—which I think is the principle that, at best, the hon. 1015 Member for Warley, West was trying to use in support of his case. The hon. Gentleman cannot get much comfort from what occurs in Germany, because parties there need reveal details only of donors who contribute more than DM20,000 in a year.
The thrust of the hon. Gentleman's Bill has to be borne in mind because we are not talking about a two-party Conservative-Labour system—there are a number of small parties, some of which he and I might tolerate and some of which he and I would jointly abhor. For a small regional party, a donation of £1,000 might be a substantial sum and have some significance locally, but given that small parties do not have much influence by and large it would have no significance nationally. Therefore, a £1,000 donation would have no bearing on the movement of the constitution.
In the case of the larger political parties, a £1,000 donation might be welcome, but it will not exactly move the ship. British Airways withdrew its donation when it was cross with the Conservative Government for not doing what it thought was in its interests. That had absolutely no effect on the Conservative party—I do not know how much money British Airways used to donate, but it would have been more than £1,000. That is an example of how a huge donation to a political party—contrary to what the hon. Gentleman might suspect—has absolutely no influence on its philosophy, policies and direction.
Another example is the Duke of Westminster. The hon. Gentleman may remember the Housing and Urban Development Bill of 1993, which was renamed the Leasehold Reform, Housing and Urban Development Bill. Now that it is safely into law, I can say that it is the nearest thing to theft that I have seen pass through the House. I was a new Member of the House in those days and I thought that what we did was always wonderful. The Duke of Westminster withdrew his support from the Conservative party because he believed that the Bill was antipathetic to his property interests—and he was quite right. His threat of removing his donation from the Conservative party had no bearing on the passage of the Bill through Parliament. However, he decided to vote against it or to abstain.

§ Mr. Spellar
The hon. and learned Gentleman, like a number of Conservative Members, regularly cites these two cases as though they somehow disprove the proposition. In fact, in many ways they are an endorsement of it. British Airways and the Duke of Westminster, like many other donors to the Conservative party, had an expectation that matters that were going to be in their interests would be decided in their interests. We do not hear from the hon. Gentleman about people who get their knighthoods, get their peerages and get the decisions in their favour. We hear about people who had that expectation but had it frustrated.

§ Mr. Garnier
The hon. Gentleman should do us the courtesy of reading—and, if he has read it, understanding—the evidence that was given to the Home Affairs Select Committee. The same canards were produced by Labour members of the Home Affairs Select Committee in the hearings before us 18 months ago. It beggars belief how those hon. Members who asked those 1016 questions could do so with a straight face, bearing in mind the history of abuse of the honours system engineered by the Labour party in the past 50 or 60 years—but let us leave that aside.
The simple point, and the answer to the question by the hon. Member for Warley, West, was given clearly by my right hon. Friend the then chairman of the Conservative party, my right hon. Friend the Member for Sutton Coldfield.
Perhaps the Labour party has been out of Government for so long that Labour Members do not realise it, but there is a thing called the Honours Committee, which scrutinises all applications for honours. Every time that an application is made for a political honour, the Committee scrutinises it to ensure that it is a proper application. Every time that there is a "big business" application, the Committee, which is made up of members of all parties—or at least the three big parties—scrutinises it to ensure that the honour is being awarded, not for political skulduggery, as the hon. Gentleman would have it, but for public service or for service to industry, to exports or to charity.
The suggestion that is constantly repeated by Labour Members simply to make childish-sounding debating points does them no credit. It would do the hon. Member for Warley, West a great deal more credit if he were to take the trouble to read not only his hon. Friend's minority report but the all-party majority report, which is here for all to see.
The conclusion that the Home Affairs Select Committee reached on this aspect of its report was that we"— the Committee— do not believe that a case has been made out for requiring disclosure of the identity of donors; where donations are made from identifiable and legitimate sources known to the party they should be allowed to remain private. That is a sensible working arrangement, which accepts and respects the privacy of the individual to donate money to whomever and to whatever organisation he or she considers appropriate.
The Committee said that it did not believe that any limit on the amount a donor could give would be acceptable in British circumstances. It dealt with company donations; I invite hon. Members to read the passages about that, because I know that the hon. Member for Tooting wishes to speak and I am reasonably sure that other Conservative Members wish to catch your eye, Mr. Deputy Speaker.
Having demolished as politely as I can the good sense of the Bill, I leave the Floor to others.

§ Mr. Tom Cox (Tooting)
I shall not waste the time of the House commenting on the previous speech.
The debate has been very interesting. My hon. Friend the Member for Warley, West (Mr. Spellar) has done a service by bringing the matter to the attention of the House, even though time has been limited, because the general public obviously wish to know who funds political parties.
We heard, as we always do, about the trade union movement. I am a sponsored trade union Member, and all the moneys that are allocated to my political party are very clearly recorded.
1017 I wish to speak about Mr. Asil Nadir. I am chairman of the Commonwealth Parliamentary Association Cyprus group in the House, so this issue is of very great interest to me.
Before people start to criticise the length of the speech by my hon. Friend the Member for Warley, West, they should read the Official Report on Monday and see the fanatical interventions that he faced.
Mr. Nadir met very senior members of the Conservative party many times over a very long period. We know that they have admitted that he gave very substantial sums to the Conservative party. I understand that the former party chairman, the right hon. Member for Sutton Coldfield (Sir N. Fowler), has never denied that. All he has said is, "I am not really sure, and we are not really sure, whether that money was stolen. Until we are certain, we will hang on to it." We know that Mr. Nadir had the opportunity to meet senior Conservative Cabinet Ministers and senior Back-Bench Members. We are in no doubt—Mr. Nadir said it himself—that he was looking for a knighthood. He did not receive one and he must have been extremely disappointed.
It became known that Mr. Nadir was a crook—I choose my words carefully: he was and is a crook and is sheltering in occupied northern Cyprus. We learned more about Mr. Nadir's failed business activities. All hon. Members know that, under parliamentary convention, one hon. Member does not interfere in another hon. Member's constituency unless he or she is asked about constituency issues—