STATE AID TO POLITICAL PARTIES

HL Deb 31 January 1979 vol 398 cc173-222

4.21 p.m.

Lord HOUGHTON of SOWERBY rose to call attention to the need for State aid to political Parties; and to move for Papers. The noble Lord said: My Lords, I shall begin with an announcement made by the Lord President of the Council, Mr. Edward Short—now my noble friend Lord Glenamara—on 29th July, 1974 in another place, when he announced that financial aid would be provided for Opposition Parties in Parliament; secondly, that a Select Committee of Members of Parliament would be set up to examine the support facilities available to Back Bench Members and, thirdly, that an independent committee would be set up to look at the question of financial assistance for political Parties in respect of their work outside Parliament.

The first step was taken on 20th March, 1975 when the House of Commons approved financial aid to Opposition Parties in carrying out their work inside Parliament. Qualifying conditions and limits were imposed on the financial aid to be given, but the outcome was that the Conservative Opposition in the House of Commons received the maximum grant of £150,000 a year and the Liberal and at least one other Party received a proportionate amount totalling, I think, altogether an annual expenditure of something over £200,000. That financial aid has been in operation in another place since the early part of 1975. In May 1975 the independent committee—the third proposal of the then Lord President of the Council—was implemented and the committee was appointed to look at the question of financial assistance for political Parties in respect of their work outside Parliament. I had the honour to be appointed chairman of that committee and two of my noble friends, Lord Wall and Lord McCarthy, were members. We reported in August 1976 but our report has not been debated in either House until now, so I thought I would take the opportunity of giving your Lordships' House 2½ hours to have a look at this difficult and possibly contentious subject.

My committee was divided and a social survey that we took of public opinion revealed that members of the public were divided, too. On the committee we favoured State aid to political Parties by two to one. In the country there was a marginal majority in favour of aid to political Parties, though I am bound to admit that many people in the survey held such a poor opinion of political Parties and Party politics that some of them wished to spend no time or money on them. But the majority of the more thoughtful people in the survey took the subject seriously and were concerned about the dependence of the Labour Party on the trade unions for money and of the Conservative Party on businessmen and companies for money.

I shall not go into the detail of the recommendations that we made because there was no real disagreement about the method if one could once overcome the difficulties about the principle. The majority of the committee made certain recommendations, with which I think the minority of the committee did not quarrel, as regards their financial provision, but they were still unable to overcome their objection to state aid to political Parties as a matter of policy and of principle. I will summarise what we did by saying that we proposed a modest injection of public funds into the resources of the political Parties under certain strict conditions and a modest contribution towards the election expenses of all candidates, irrespective of Party, who polled enough votes to save their deposit. As regards the candidates, we included local government elections as well as parliamentary elections and we indicated that our proposals should extend to candidates for the European elections as well.

The first proposal, the modest injection of funds into the central resources of the political Parties, was a grant of roughly 25 per cent. of their then existing income from the then existing sources. The second proposal, to assist candidates irrespective of Party was really more electoral reform, assisting the democratic process, rather than aid to political Parties because the candidates could qualify if they saved their deposit whether they stood in any Party interest or not. The aid to Parties was aimed to improve efficiency and organisation, which on the whole we found rather poor. Compared with European political Parties, our political organisation and activities are virtually nondescript. They are really very bad indeed when compared with the scale and efficiency with which European political parties conduct their affairs. But the aid to candidates was to make candidature less dependent upon Party finance, and what we proposed for the candidates was that they should be reimbursed up to one-half of the maximum permitted expenditure laid down by law for the conduct of elections and that would have amounted to roughly £800 per candidate. The aid to the political Parties which we proposed was also—and I must be frank about this—to lessen the dependence of the two main political Parties on what we described in our report as their "traditional supporters".

Class divisions in this country are really deeply entrenched in our social, industrial and political life and we wanted to break them down a little. The divisions in this country really go very deep indeed—much deeper, I think, than many people realise. They are not so much differences of opinion as divisions of history, upbringing, education, outlook, and group or self-interest. The vision of what sort of society or what sort of country we want is much blurred in the Party conflict these days. We are now in a secular and an acquisitive society with a vengeance, and we are seeing the manifestations of that at this present time.

We pride ourselves on the voluntary principle in many activities: voluntary bodies, voluntary efforts, voluntary this, voluntary that. How pure and undefiled can voluntary be? How pure and undefiled is it? Even the closed shop is voluntary trade union membership. You do not have to join; you merely lose your job if you do not. The political levy is voluntary, but you do not volunteer to pay it; you merely contract out of something you have never volunteered to do. The Labour Party depends heavily upon the trade union political levy. The Conservative Party is supported by donations, a noble word which we heard so much of in the course of our inquiries; donations, some from companies, fewer than there used to be, still in my opinion too many, bearing in mind that there is no democratic assent to much of the money that companies give particularly to the Conservative Party. Donations are, of course, voluntary too. I have from time to time seen them being collected in first class compartments on railway journeys, and I have been impressed by how persuasive this exercise is.

I am not criticising. I am, however, in favour of doing something to neutralise to a limited extent dependence of the two main political Parties on their traditional sources of financial support. I would like to see some money go into the political Parties which is neutral money, free of all bias, without strings, tangible or imaginary. We were frequently told by political Parties in Europe that State money was the only neutral money to come into politics; all the rest had some strings attached. This may not be the moment to talk about more Government expenditure, but this surely is the moment to consider whether our political and parliamentary institutions are in some way failing the nation. At least I think we can all agree that the authority of Government and Parliament is scarcely being enhanced by current events. If our system of parliamentary democracy and our basis of electoral representation begins to crumble, if it shows signs of becoming unstuck, then I think the whole system of our parliamentary democracy is in peril.

Political parties are of great importance and should be of deep concern to all people. Political Parties formulate the policies of government. They supply the candidates and the candidates become Members of Parliament, and Members of Parliament become Ministers and they therefore constitute Her Majesty's Government. What hazards there are; what half-baked policies or incompetence can find their way to Westminster. Where do all the great debates go to, the forum of the nation? They all seem to fizzle out. What is the true nature of the sovereignty of Parliament? How much is mythology and how much illusion, how much reality of power? We have been having questions about that in the last few minutes. Something should be done by somebody, but it is not; probably it cannot be because there is no authority to do it. It is incredible to me how scornful and indifferent people can be about the only institutions of political power in the country today, the political Parties.

If we do not take politics seriously we do not take the government of the country seriously, and we do not take the future of the country seriously, either. We apply no audit of efficiency, diligence of research, wisdom of policies, competence of personnel or fitness to govern. All this is taken on trust. All this is left to the vague concept of what we call the democratic process, and there is no guarantee that it will yield the quality of Parliament or of government that the country requires. We in Parliament pontificate to the nation at large about productivity, efficiency, forward planning and all the rest of the requisites for success in the modern world, yet we leave our politics to the confrontation between the political levy of the trade unions and the cheque book of the businessman.

Who among us can look forward with any confidence to the state of Britain ten years from now, especially if we continue to regard our political institutions as purely private concern and best left to the pipers who will undoubtedly call the tune? And who will look even to the end of this year, with elections to Parliament, to Assemblies, to Europe, to local authorities, all in this year, with an unpredictable result of a parliamentary Election yet to come? Who can see how political Parties are going to get through this year without some consideration for their financial stability and ability to deliver what the nation requires in constructive thought and policies? We cannot treat political Parties as if they were some charity supported entirely by voluntary contributions. I conclude, what a way to run a country! How far are our prejudices going to stand in the way of a more realistic and a more rational approach to the question of our political Parties, on whom the fate of Britain really depends? My Lords, I beg to move for Papers.

4.38 p.m.

Lord THORN EYCROFT

My Lords, it may be convenient if I reply briefly to the remarks of the noble Lord. I am, as the House knows, Chairman of the Conservative Party, but I am not the master of the Conservative Party: I am its servant. I advise it and from time to time it may take my advice, but by no means always. I want to make my status absolutely plain. My advice to the Conservative Party on this matter is that it should depend upon its own resources and not rest upon the back of the taxpayer. I therefore differ from the noble Lord, but may I say, in differing from him, that that in no way detracts from my belief in the sincerity of the carefully reasoned speech which he has delivered or the quite admirable report which he has published, which is indeed a masterly study of a difficult and complex argument.

I reject for a number of reasons a suggestion that we should depend more upon the State. I feel that the role of a political Party is, among other things, and importantly, to provide a bulwark against the ever-rising power of the State and the bureaucracy. I do not want to over-state this argument. All I would say—and I think I might carry your Lordships with me—is that the more they depend on the State and the bureaucracy for money the less able are they really to criticise those who are giving them the money. I therefore prefer, and so advise, that we should maintain as great an independence from the State and the bureaucracy as possible.

I know the Treasury well and the noble Lord knows the Inland Revenue. J have never known the Treasury to part with cash without an audit and I find it hard to believe that public money will be scattered among political Parties without some attempt to watch what is going on and how it is used. I am not impressed with the precedents. I am aware, as the noble Lord said, that arrangements were made some years ago whereby the respective Whips' Offices and the Leaders' Offices are maintained by a parliamentary grant. I am aware that some European Parties, and may be Parties in other parts of the world, are in receipt of public funds. I do not think that we know enough about the effect on those other Parties and we may learn more from our contacts with Europe. I would only say that from the contacts that I have had so far I have not been very favourably impressed with the effect of State aid to Parties, wherever I have seen it.

There is another practical reason why I oppose the suggestions of the noble Lord—namely, that in truth the money is not there. If we look at this country at present we see that we are taxed to the limit; we are borrowed to the hilt and there are pressures being brought to bear which are pushing the interest and mortgage rates up. Effectively, if anyone anywhere suggests increased expenditure, they mean printing more money. That is an argument which applies more widely than to aid to political Parties.

If one looks at the scene today—and we discussed some of it a few minutes ago—virtually every power block is pressing for more cash, cash that has not been earned and that is not backed by production. It is hard to exaggerate the gravity of that scene, whether one looks at it from these Benches or from the point of view of the Government.

I accept that the amounts about which the noble Lord is talking are minuscule compared with the vast sums which we were discussing a short time ago as regards local government, lorry drivers and so on. However, I believe that political Parties are under some obligation to show an example in these matters. I do not think that this is a good moment for the political Parties to join the queue of all the other people who, effectively, are asking for more and more money from the State. Therefore, I believe that they should hold back and whatever the noble Lord's view may be I suggest that he waits a year or two before pressing it too far.

I believe this suggestion to be wrong for another reason—it is very bad for the Parties. Of course we need money and I am grateful to the noble Lord for giving me the opportunity to stand here and say how much money we do need. I am happy if any assistance or any words of mine, in so dignified an assembly as this, can encourage subscriptions to the Conservative Party, even. We need the money and it is always tempting when one is offered money from the public purse. There is no effort involved, just a vote in the House, and then the money comes in and one spends it. Actually, the things one spends it on tend to grow almost as fast as the rate that the money goes in. In my view the noble Lord has been taken slightly astray in some of the lusher pastures he has been examining. I do not believe that great offices and so on are necessary for political Parties. The people who work for them should be properly paid, but a certain decent austerity in a political Party is not a bad thing to go for as well, and it earns rather more respect from the public.

I have listened carefully to the case and obviously I have, as the noble Lord knows, read with great care the very full report and the minority report that were issued. It is interesting to note what the case is not. The noble Lord at no point suggests that any political Party was in urgent need of funds. No Party at present, thank God! is teethering on the edge of bankruptcy. Indeed, he does not say that it is and he does not urge that it is. The Conservatives have told him that they do not want the money. The Liberal Party no doubt will be offering us its views in a few moments. The Scottish Nationalists turn it down. Plaid Cymru reject it and the Ulster Unionists have no need for it. Therefore, it is not some desperate demand that is being put forward. Apart from what the Liberals may say, at present the only real claimant is the Labour Party.

Therefore, let me look for a moment at the financial situation. The Conservatives—and this was not really made plain in what the noble Lord said—in fact raise three-quarters of all the money they spend from small donations by private people; not donations from companies at all. Three-quarters of everything that we spend is raised by people holding coffee mornings, going from door to door collecting, and so forth. It is hard work and the fact that we do it is one reason why we have three or four times the membership of the Labour Party. We face up to it, we go out and we seek to raise these funds. The remaining quarter comes from industry and institutions, but the average subscription, even from those sources, is only £200. We cannot match the massive donations that come to the Labour Party. We cannot match the hundreds of thousands of pounds that come from some unions.

Over the past three years the Labour Party has been financed with over £7 millon by the unions. The Conservative Party has raised under £5 million from industry and institutions. Therefore, the Labour Party is, if I may say so, over-funded. I would ask the noble Lord to contemplate the fact that if only the trade unions had not treated the Labour Party with such lush generosity it would have been compelled to do what the Conservative Party has to do—namely, go out into the highways and byways and recruit members, raise small sums and finance its own constituencies. I hesitate to raise these matters because if the Labour Party follows my advice it will be a very much more efficient Party than it is at present. Perhaps I had better stop here. However, over-financing of that kind is, on the whole, a bad thing. The very necessity that has forced the Conservative Party to search for money has also had, I think, a very good effect in raising the membership.

The Labour Party is certainly spending money. It is just about to have a new headquarters south of the river in a very pleasant location, I am told, with all the conveniences that go with new buildings and offices of that kind. I think that it is doing it on a lease-back arrangement with its bankers, but at any rate it is not short of a headquarters. In this coming February the Labour Party plans to spend about a quarter of a million pounds in one month on poster sites, posters and advertising. I ask noble Lords to contemplate the scale of expenditure that goes on. The posters which are being put up at present say: Keep Britain Labour and it'll keep getting better". I am told that in Shafestbury Avenue and Horseferry Road there are Labour Party teams out trying to pull them down; on the whole, they think that perhaps those words could have been slightly better chosen. I am not criticising their policies in public relations. I am simply saying that I do not see why I should assist in funding them; that is all. However, they are not alone in these things; I do these things myself. One must be a realist about this and see what one is paying for. Our poster saying: Britain isn't getting any better", was actually designed before the present crisis, but it is peculiarly apt today as we see people queuing outside the hospitals even before the pickets were standing round them. People can criticise, applaud or do what they like about these things, but I do not ask the noble Lord to help finance it. I think that responsibility for that should fall fairly and squarely on the shoulders of the Conservative Party, its members and its supporters, and I think that that is right.

The noble Lord, Lord Houghton of Sowerby, said that there would be many other elections. It is a tough year for those at the top in political organisations. There are the European elections. The Labour Party has the cash—it has more cash than I have; it has enormous resources behind it. What it lacks is the will. If it really wants to fight the European campaign, it has plenty of resources with which to do so. A story has reached me of a certain doubt as to its freedom to spend the money on it. However, there can be no doubt whatever that the money is there.

In those circumstances, I would advise my Party not to touch these schemes. If legislation is ever introduced to try to enable public largesse of this kind to be made available to political Parties, my advice to the Conservative Party would be to vote against the Bill. If the Bill was passed, my advice to the Party which I am proud to represent is that it should reject the money even if every other Party took it—for I believe in freedom and independence in political Parties—and when it came to office I would advise it to repeal the Bill.

4.53 p.m.

Lord BANKS

My Lords, I am grateful to the noble Lord, Lord Houghton of Sowerby, for raising this important matter this afternoon. I think that the House owes a debt of gratitude to the noble Lord and his committee for their report on financial aid to political parties. I am glad that at last we are finding time to discuss that report this afternoon. I must say that I agreed with a great deal of what the noble Lord said in opening the debate.

The first important factor to consider when we approach this subject is the very great change which has taken place in the role of political Parties gradually over the last 100 years. During that time there has been the development of what is termed the "mass Party". The political Party has been brought from the periphery of politics right to the very centre. Unknown for so long to the Constitution, it has now found recognition in a number of different ways. Party affiliation of candidates is now shown on the ballot paper. In a General Election in this country electors are not really choosing between local candidates; they are choosing between different national political Parties and their leaders. We may regret that that is so, but it is a fact. In his book, An Introduction to Contemporary History, Geoffrey Barraclough says this, and I think it is relevant: Those who rebel against the modern mass Party and hanker for a return to earlier forms of representative democracy are indulging in a dangerous form of nostalgia. They ignore the fact that the only practical alternative to the two-Party or multi-Party State under present conditions, is the single-Party State". The importance to democracy of well-organised Parties is clear. They are needed to articulate the views of large numbers of people; they are needed to educate people in the different alternatives open to society, to represent attitudes and philosophies and to develop policies related to them; to provide alternative teams for Government and to take on the tasks of opposition. But the Party system should not be too rigid, too highly disciplined or too centralised.

How many political Parties do we require in order to see that those functions are carried out? Does one political Party represent oppressive tyranny but two political Parties represent perfect freedom? I think that we need as many political Parties as the electorate are prepared to support. But should they all be represented in Parliament? Most electoral systems have a threshold: the 5 per cent. that a Party must score in Germany before it secures any of the topping-up candidates to make the result proportional; the quota under the single transferable vote which, for example, in Ireland a candidate must get, which would be about 17 per cent. of the vote in a five-Member constituency; or in this country, the need to come top of the poll in a single-Member constituency. That is the highest, steepest and most difficult threshold of all, and one which is a strong barrier against a third Party or a new Party breaking through, and one which makes it difficult—but not impossible—to change the existing political set-up.

If we were to adopt any system of financial aid to political Parties, I think: that it would be important to make sure that that system did not bring about any ossification of the situation, any institutionalising of the existing Parties, as has happened in the United States, where the Republicans and the Democrats are not so much Parties as Party machines. We must not accentuate the present bias against change.

Are the present financial resources adequate for a political Party to carry out the tasks to which I referred a moment or two ago? I am glad to say that I have never held the exacting office of treasurer of the Liberal Party, but I have had two spells as its chairman and one spell as its president. I have been fairly closely associated with the central direction of its affairs for some 20 years. I have no hesitation in saying that the resources available to the Liberal Party during that time have been totally inadequate for those functions to be as efficiently performed as they ought to be. In 1974 the Liberal Party may have polled more votes than ever before—that is, of course, a fact—but the real value of the Party's income has declined. Indeed, we see from the report of the committee over which the noble Lord, Lord Houghton of Sowerby, presided that the staff of the Liberal Party is now about one-half what it was 10 years ago. Also from that report we can see that it is very restricted on the research side. The research department is now very much smaller than it was when I was chairman of the Research Committee in the middle 1960s.

I think the Party has made a remarkable contribution to the political life of this country in view of the very slender resources on which it has had to operate. Finance has been a constant anxiety and a continuous distraction, for national leaders and for constituence officers alike. The authors of the minority report of the Houghton Committee say this: In no way could we justify proposing a nationwide scheme of State aid solely in order to meet the needs of the Liberal Party". I can understand that, but it is important to emphasise that we are considering here not only the Liberal Party but any third Party which challenges the big two on a nationwide basis and whose support is not concentrated but spread throughout the country.

I am certainly not suggesting for a moment that the Liberal Party, or any other Party, should be aided if no one votes for it. But, if for example, the Liberal Party continues to secure between 10 per cent. and 20 per cent. in General Elections—it may not; it may get less or it may get more—then surely its continued existence and effective functioning is a healthy thing for our political life, whatever may be thought of the policies which it is pursuing.

But of course it is not only the Liberal Party which has financial problems. According to the noble Lord, Lord Thorneycroft, the Labour Party has no financial problems. Perhaps we shall hear from members of that Party whether they agree with that, but at least there are some of them who do not agree with it, because I read in the papers that Mr. Reg Underhill, the Labour Party's national agent, contemplating the European elections which will come on top of a General Election, the local elections, and possibly the Assembly elections in Scotland and Wales, has said: We must have State aid to allow the elections to be carried out on a healthy basis". George Clark, reporting in The Times towards the end of last year before The Times disappeared from view, said: Mr. Norman Atkinson, Treasurer of the Labour Party, plans to tell the Party's finance committee today that by the end of the year there will be a deficit of £100,000 in the General Fund". We read that the National Executive wants legislation on State aid as a matter of urgency. So assuming that those pleas are justified, I come to the conclusion, bearing in mind what I have already said about the Liberal Party, that what the noble Lord called a modest injection of State aid is necessary. After all, the same economic difficulties beset most voluntary organisations today.

The Wolfenden Report on voluntary organisations connected with the personal social services and the environment declared: The failure of private giving to keep pace with inflation is striking though really understandable". The Wolfenden Committee recommended greater reliance on statutory funds, although they insisted that private giving will remain an important safeguard of independence. It seems to me that the majority of the Houghton Committee have come virtually to the same conclusion about political Parties. From what they say about the evidence which they have secured from abroad, where State aid has been implemented, there has been no great falling off in voluntary giving, and indeed membership has tended to rise. So I welcome the support which the Houghton majority gives for a limited measure of State aid.

As the noble Lord, Lord Thorneycroft, said, we are here discussing a proposal for a limited amount of money; and it is proposed in two ways. It is proposed, as the noble Lord, Lord Houghton, told us, first as a grant which would be based on votes cast in the previous Election and subject to a certain threshold which the Party would have to pass. But the Houghton Committee wished this money to be given for general purposes. We on these Benches would have preferred it to be given for specific objectives—for research and for regional organisation—feeling that by doing that we are avoiding putting too much power into the hands of the central organisation of Parties.

The second method was by the reimbursement of expenses, up to half the maximum, to candidates who secure one-eighth of the poll. We are not happy about the limit to those who save their deposit. Those who do not manage to do it may fail by a very narrow margin, having secured many thousands of votes. I myself lost a deposit by 200 votes, but I had over 6,000 votes. I do not think that anybody in that Election could have regarded me as a frivolous candidate. So we have doubts about that one-eighth of the poll, and we should prefer that the candidates should have to have a much larger number of nominations than they now have in order to qualify to stand.

We also feel that if there is to be State aid there ought to be a limit on the contributions of companies and trade unions; perhaps a top limit on contributions from any one source in any one year. I was much impressed with what Lord Houghton said about neutral money, and the way in which abroad the State aid is welcomed because it is felt that it increases, rather than decreases, the independence of the political Parties by making them less reliant on the money obtained from contributions from companies and trade unions.

With the reservations that I have mentioned, we support the recommendations of the Houghton majority. Experience abroad in a great many democratic countries has not shown any undermining of the independence of the parliamentary Parties concerned. Some people assume that in every sphere, and in all circumstances, our British system must be superior to all others. They ought to think carefully whether that view is sustainable any longer. We can learn from others in this sphere as in other spheres. There is in my view an increasing financial problem for political Parties; one which I think will grow. For the sake of our democratic system we must face that fact. A modest injection of State aid could go far towards solving that problem.

5.7 p.m.

Viscount MASSEREENE and FER-RARD

My Lords, in May 1974 I put down a Motion and moved a debate in this House on the advisability or not of State financing of political Parties. I am pleased that the noble Lord, Lord Lord Houghton of Sowerby, has now brought this subject to the fore again. So far as I am aware, this matter had not been broached in Parliament at all before I put down this Motion in 1974. I put the Motion down then because I was of the opinion that it was worth while to make an attempt to make political Parties as free as possible from financial pressure from organisations, or individuals, to pursue policies which might not always be in the public or the national interest.

I have always been a great admirer of our democratic process, our political system, but I was hoping that perhaps by having State aid in some form the fairness of our democratic system, of our political system, might be improved. I fully realise that there are advantages and disadvantages in having State aid. I do not know whether it was as a result of that debate, or whether it had anything to do with it that Opposition Parties in their Parliamentary duties now get quite a lot of help from State aid in clerical assistance and research, et cetera. While on the question of research, I should like to compliment our Library staff in this House for the very efficient research that they now provide for this House. Whether any of that comes from State aid I do not know, but it is a great improvement on the previous research facilities.

In the debate in 1974 I concentrated on the question of whether the State should subsidise the general expenditure of political Parties. This procedure is followed by six West European countries and by Israel, Canada and, to a certain extent—in presidential elections—by America. It is a highly controversial question and I am fully aware that my Party does not at present approve of it. However, one advantage would be that the political Parties would be free from financial pressures that might make them do something that was not in the public interest.

Consider the crisis we have in this country today; near anarchy or one might even call it anarchy. I am convinced that if the Labour Party was not a child of the unions and was not to such a large degree dependent for its funds on the unions we should have had stronger policies from the Government on strikes and on the refusal of many union members to obey their executives.

As for the Conservative Party, I was astounded to hear the noble Lord, Lord Houghton of Sowerby, say we get a lot of funds as a result of people canvassing in first-class train compartments. My experience of first-class train compartments is very limited, because I usually travel second-class, but such experience of them as I have had leads me to believe that a great many of the people using them are civil servants, trade union executives and the like. So if we get some collections from that source, I am only too happy.

I was interested to hear my noble friend Lord Thorneycroft, who is chairman of the Party, say in a forceful manner that we get three-quarters of our donations from fund-raising in local constituencies and from private individuals. There appears to be some criticism from the Benches opposite that we also receive funds from companies. There is nothing dishonourable about that. After all, if it were not for private companies managing their affairs efficiently we could have no Welfare State, because it is the private sector which produces the wealth to support the Welfare State.

West Germany adopted a policy of the State financing of Parties because it was considered that it would be fairer all round if all the Parties drew their financial requirements from the same source, namely, the electorate. I shall not call it the State: I prefer to call it the electorate for the purposes of this debate.

In the debate of nearly five years ago I suggested that if the political Parties here were to receive, say, £5 million between them per year from an electorate of 40 million, it would cost the public half a packet of cigarettes per annum. That would have been the cost then and while J do not know the total requirements of the political parties today, I suppose the figure must have increased to £10 million, which would mean a cost to the electorate now of round about a packet of cigarettes or 50p–60p per head. I would not call that a great burden on the electorate to ensure that their political Parties were really up to date on research.

Having been a constituency treasurer and having held virtually every other post in local constituencies, I know how hard it is—and it is becoming harder—to collect funds. I also appreciate that the basic foundation of at any rate my Party—I should like to see it applied to all Parties—is the constituency work, the fund raising and all the wonderful work done by the local agents. That is really the cornerstone of our system of democracy.

It could happen that, owing to inflation, no matter how efficient fund raising is, we may not be able to pay our constituency agents—I am speaking of all Parties—and do our research in a sufficiently expert manner to do justice to democracy. I feel that no expense should be spared in trying to explain to people the real meaning of our democratic system and the political questions of the day. I fear that many members of the electorate do not fully understand these matters.

I should mention a danger which could arise from the State financing of the central organisations of our Parties and constituencies; namely, that the dividing line between the independence of the political Parties and the State might become merged, and that could be dangerous. For example, we might have a Government in power who might reduce the funds or deny funds to every Party other than their own, though of course that would be totalitarian government. I think, in order to prevent that, it would be necessary to have a written Constitution; that is the danger here if there is not a written Constitution.

I wish to congratulate the noble Lord, Lord Houghton of Sowerby, upon his report, which I found extremely interesting. I hope that one day there will be a Royal Commission on this subject. As so many members of the EEC have this kind of aid I feel sure that one day it will come to this country, for better or for worse. I appreciate my Party's point of view. It would probably be unwise to do anything about the matter for a year or two, but, in my opinion State financing of political Parties will come.

5.21 p.m.

Lord MCCARTHY

My Lords, I should declare an interest. I speak as a mildly puzzled member of the Houghton Committee who signed the majority report, and I began as a mildly curious opponent of State aid to political Parties for three reasons. First, I was concerned that State aid might affect the structure of political Parties and over-centralise them, and that it might ossify their development. Secondly, I believed that the British electorate would be overwhelmingly against State aid and might be resentful of any political Party, or Parliament, which introduced it; and, thirdly, at that time I was not sufficiently aware, as I fear not everyone in this House appears to be sufficiently aware, of the very considerable additional burdens which political Parties in this country will have to undertake as a result of the forthcoming Assembly and EEC elections.

I have changed my mind partly because I have been reassured on those three counts, and partly because of the arguments which have been put up by the opponents of State aid. In the first place, on the first argument, it seems to me that the Houghton Committee found a way of financing State aid which was acceptable on the grounds mentioned to all members of the committee, which did not affect the structure of political Parties, and which did not ossify their further development. That was generally accepted, and I think that it has been generally accepted by most people who have commented upon the report.

Secondly, in our survey of electoral opinion we discovered, quite surprisingly, that 45 per cent. of those whom we surveyed said that if the Party needed the money they would be willing to agree to State aid, 44 per cent. said that they would not be willing, and 11 per cent. did not know. So there was not the overwhelming resistance to State aid to political Parties which I thought had existed. Thirdly, I came to realize what will be the very significant burden which all political Parties will have to bear as a result of the two new sets of elections: the Assembly elections, and the EEC elections.

So I believe that we have found here an effective, fair-minded way of introducing a modest, or, as has been said, a minuscule, amount of State aid to British political Parties. I am puzzled by the opposition and the objections to this extremely mild, modest, moderate proposal. One of the objections we have had today—and we hear it consistently—is that State aid is in some sense an offence against our voluntary principle. Almost any proposal in this country can be opposed by saying that it is an offence against the voluntary principle. An appeal to the voluntary principle is usually a series of confusions. I believe that in this instance the confusion is to confuse voluntary with privately funded. What people are in favour of is a privately funded system of running political Parties; what they are against is a partially publicly funded system of running political Parties. It has nothing to do with the voluntary principles. Nobody is suggesting that it should be compulsory, and, as has been said by previous speakers, there are a very large number of voluntary organisations in this country—many of them were mentioned in the Wolfenden Report—which assist in running the social services, the arts, race relations, and indeed a whole variety of social functions; and they are State aided. They are increasingly State aided. Nobody suggests that the State aid given to the Royal Opera House affects the Friends of Covent Garden.

So this is a confusion, and if people really believe what is argued here they would reject the State aid that is given now. As we discovered in the Houghton Committee, there is a very substantial amount of State funding being put into political Parties at this moment. There is free postage in General Elections, free election broadcasts, and, as the noble Lord, Lord Houghton, said, £150,000 a year is given to the Opposition. For all I know some of the very speeches made against this proposal may be State aided. I note that we spent £1½ million of State aid on the referendum for Europe. So I cannot understand objection to the proposal on the basis of the voluntary principle.

The second point which I cannot understand, and which I am puzzled by and curious about, is that we are told that State aid for political Parties will kill the voluntary effort which goes into political Parties at the moment. The fact is that the amount of money which is being suggested is not at all likely to enable the political Parties to operate without voluntary help, in exactly the same way as all the other bodies which are used to assist the social services, and so on, are not able to get enough aid to run without voluntary help. All the evidence which we have had from other countries, and all the evidence in the report, indicates that in those other countries the injection of State aid—in many cases at levels far above what we are proposing in the report—has not had the effect of killing voluntary effort. If one understands the kind of motivation of people who work for political Parties, one sees that it is extremely unlikely that State aid will have any such effect.

It is also said that State aid will kill the independence of political Parties. Again, if we look at other countries we see that this does not happen. It was stressed to us over and over again in our foreign visits that at first there is a certain amount of opposition and concern that State aid will affect the independence and the running of political Parties, but that very soon, within a year or so, nothing is left of such objections and people begin to realise that State aid for political Parties is a convenient device, like the forms of State aid which we give to other voluntary institutions.

I do not regard as curious, but, rather, I find most reasonable, the argument that even if this is a minuscule amount of money, we in this country are in such a serious economic position that we cannot afford to spend any more money at this time, and in particular any more money on political Parties. I believe that the answer to that is the answer that is given in the Houghton Report itself. If I remember aright, it is an answer given by the chairman in his introduction, where he says that the only form of increase in public expenditure which can be justified at this time is something which can be shown to raise and to improve the efficient operation of the political or economic system. I do not want to go into this point, nor argue it because it has been fully debated by previous speakers, but it seems to me to be the argument which can be put forward under that heading.

The final point, which I find not simply curious but, I think, somewhat worrying, is the ease with which opponents of this measure dismiss the experience of other countries. Canada, Israel, Denmark, Finland, France, Italy, Sweden, Germany, Holland and Austria—none of these countries has anything to teach us, it appears! The fact that all these countries have had different kinds of State aid over different periods, and that virtually all the objections, fears and concerns that have been put forward by opponents of this measure have been found to be totally groundless, has no effect whatever, it appears, on the opponents of this argument! I find that degree of insularity worrying.

I may say that I even find it worrying in the minority report, which I think is a brilliantly argued opposition to our position but which, when it comes to dismissing the international arguments, seems to be less than just. We are told by the minority that we cannot learn from Sweden, it is too rich; we cannot learn from Germany or Austria because they have not been democratic long enough; and, as for Holland, one of the authors of the minority report actually met a man in the street in Holland who had never heard that they had State aid. This kind of refusal to learn from the experience of other countries is, I think, very typical of the kind of problems we in this country face. Even when we have relatively simple difficulties which have in fact been overcome and dealt with in other countries, we are so insular that we fear that that would not apply in this country. That I find profoundly worrying.

Finally, I would say that there is one objection, of course, which can be made to this—and I do not suggest it was put forward by the noble Lord, Lord Thorney-croft. I do not suggest that this was his argument, but there is one objection which can be made. It is, of course, that the present system benefits one Party—and I must say this because it is the case: it benefits the Conservative Party. It is not the case that only the Liberal Party and the Labour Party want State aid. If you read the chapter in the Houghton Report, you will see that the Labour Party is for it; the Liberal Party is for it; the Scots Nats, say they would be in favour of our paying the cost of printing and distributing electoral material and improved research; the Communist Party, for what it is worth, is in favour of it; and two Parties in Northern Ireland are against it. The two Parties which are most clearly against State aid in any form are the Conservative Party and Plaid Cymru.

I can appreciate why, if I was a member of the Conservative Party, I would argue against State aid. The fact is that the Conservative Party is the richest of political Parties. According to the Houghton Committee it has an income twice the size of that of the Labour Party and six times the size of that of the Liberal Party. It is, of course, quite true that most of the donations for running the Conservative Party come from individuals, but they have a better class of individual. But anybody who does not take that narrow view, anybody who looks at a reasonable solution to a serious problem, at very little cost, would, I think, support the majority of the Houghton Committee.

5.34 p.m.

Lord HARMAR-NICHOLLS

My Lords, the innocent Motion that the noble Lord, Lord Houghton, has put on the Order Paper for debate really raises a very fundamental matter indeed, and I think it carries with it fundamental dangers. I think we ought to look at it very carefully before, even by half praise, we give any encouragement for it to be pursued. Despite the eloquence of the noble Lord, Lord McCarthy, I am afraid I lost sympathy with what he was saying when his main argument seemed to be, "It is minuscule; it is tiny; it is not very big; it cannot do much harm." That was the implication. The principle of the snowball that gets bigger and the principle behind Parkinson's law has been so almost inevitable in everything that I have seen in my life that when somebody uses the excuse, "It is tiny", that is half an argument, so far as I am concerned, to show that they are not altogether enamoured of the fundamental behind it.

My Lords, why do I think it is fundamental and dangerous? It is because I believe that, unlike an ordinary job, those following a vocation should not have material security or easy comfort as their main aim; and I think that being a Member of Parliament should be a vocation, and not a job. If you wish to be in governmental arenas but you pine for fixed office hours and a rigid pattern of operations, with good pay and, eventually, a pension, if you want to play your part in government with those very understandable feelings in mind, then you ought to be a civil servant, because you are civil servant material; you are not of Parliamentary character, as I see Parliament would have to work. Just like the Member of Parliament, the same applies as regards the framework and the machinery for getting into Parliament; that is, in this country, a Parliamentary system based upon a Party system.

The formation of a Party and the preservation of a Party should depend upon its appeal and its self-help, and it should not be made easy or secure by way of an impersonal State subsidy. Unless its own strength and its own appeal can generate its own resources, then I do not believe that it has the base for having the great responsibilities that being the Government of the day, over people's lives, carries with it. For, paradoxically—and we find this outside politics, too—the insecurity arising from the cost of preserving and maintain- ing a Party is itself one of the safeguards for preserving democracy and the freedoms which go with democracy. The fact that you have to fight hard and work hard, be keen and produce ideas which are acceptable to the mass of the people, and that in order to get that over you have got to have the funds to propagate your ideas and the urge to get the money to do that, is one of the safeguards for ensuring that the views and the policies which come out at the end as a consequence of that are the ones which are more likely to be right.

If a Party's income is safe and certain by way of a Treasury grant, instead of being at risk if they should fall out of step with people whose views they claim to represent, then, when that happens, one of the levers for obtaining a Parliament and a Government truly acceptable to the people will have gone. Because what is the process for building a Parliament based upon the Party system, such as has grown up here? Does it not happen just like this? Recognisable groups of people interested in the art or the vocation of governing combine. They do not know one another, but they happen to have the same views on this important job of how a country should be governed; and, because they have similar views, they come together and work out their course of action.

When, as a group, they get together thinking about the type of government they want to have, what they have to decide upon and agree is how people should be disciplined, because Governments do not give you anything. Governing is how much discipline is needed to get society to work together; how much people want to give up to help the more unfortunate, and all that sort of thing; how much discipline can you attain without interfering with the impetus of getting the wealth and the good things that people need to share if their standard of life is to be good. That is what is aimed at by the groups getting together. Inevitably, each group is different from the other recognised groups, who have different ideas as to how the country should be disciplined in order to get the right sort of effort.

When the groups are big enough to begin to be recognised, and when they are powerful enough, as a result of getting together, that they can apparently get representation in Parliament, then they become a Party. It is only at that point, when the groups have satisfied their neighbours that their ideas are good and that they are prepared to finance it themselves, and not to have it underwritten by some money which they have not had to get together, that they become an established Party; and the different groups have differing and different ideas as to how the disciplining shall be done. So there develops the need for the Party to propagate their agreed policies in a way which will induce the voters at the next election to give them the power to govern.

At that point, the cost comes in. They have got together because they have the same ideas, they have the policies; but before they can turn those policies into governmental action they must get people into Parliament; and to do this costs money. To get pamphlets printed and so on requires money. Today, as always, the battle of propagating by Parties needs money and it needs a lot of money. It is this necessity to get the money which is the first safeguard of its being the people's genuine choice. If the group cannot enthuse a sufficient number of people to support it with cash as well as by instinct, it has not got to the point where it becomes a bona fide Party. As a consequence of that difficulty we are saved from having a lot of nuisance, crank Parties and we are saved from irresponsible splinter groups. They must have ideas and they must be able to impress sufficient people with them to give them not only their instinctive support but their cash in order to back those ideas. It is the lack of the final thing, of cash, which keeps at bay many of the irresponsible groups which many other countries have had and which would grow in this country if there was not that safeguard which is tied up with the need for their point of view to enable them to get the cash.

Then, even if the group passes the first test and if they become a Party, they must not be made to feel safe forever or to feel that, just because during one period their policy fitted in with the nation's need, they can go on as a Party and get a Government grant keeping them in automatic existence in perpetuity. We must not have that. The world changes, new conditions and inventions call for philosophies and policies which are not outmoded by these inevitable changes. If a Party has policies or personnel to present those policies which do not change or which change in the wrong direction so that they no longer attract the contributions from their past admirers, then that lack of cash is a safeguard for true democracy. Artificially, to keep in being a Party that has lost the enthusiasm and the financial support of its past admirers, to keep it in being by taking taxes that have been paid by its opponents, must bring about a phoney democracy. So I believe that making Parties earn their corn is a safeguard against that phoney development.

We have seen this in action during the lifetime of many noble Lords who are attending this debate today. We have seen how the Mosley Party came into existence when they presented an appeal which caused people to want to give them funds, but they did not last very long. It was lack of finance at the end of the day which ended the Party. If they had been enabled to remain in existence by Treasury grants, they would not have faded away as they did. We remember that after the war we had the Commonwealth Party. The same thing happened. The Hulton Press supported it. Their appeal was attractive at a certain time and for a short period, but it was not fundamental enough to generate finance in order to keep it in existence; so, thank Heaven! it faded. If it had had a Treasury grant it would not have done so.

Lord BANKS

My Lords—

Lord HARMAR-NICHOLLS

My Lords, I was coming to the Liberal Party. It may well be that that is happening to the Liberal Party today. Despite the Liberal Party's glorious past and despite the great contribution it has made to the development of our country in the past, it could be—and they perhaps would not be able to understand it—that their policies have been so diverse and so irresponsible on occasions that they have not been able to attract the necessary finance for them to keep their policies and principles on the move. It could well be, where they advocated in Liverpool a pavement policy and, somewhere else, a policy which was completely different, and in another constituency again a completely different one, that that irresponsible appeal which had had its attractions for a particular constituency lost its appeal as that of a recognisable Party which ought to be kept in existence. That is why they did not get the funds.

Lord BANKS

My Lords, all that I would say about that is that we had the largest vote in our history in 1974; and it was in the period in which we had this very acute financial difficulty. The point I wanted to put is this. Would not the noble Lord agree that the decline of the Commonwealth Party had nothing to do with finance but was due to the ending of the Party truce and the competition that it had to face from the Labour Party?

Lord HARMAR-NICHOLLS

My Lords, the Commonwealth Party declined, I believe, purely because of finance. I think that if they had had the funds they would have gone on; they would have been in existence. I think they did not pass the first test.

In reverse, my Lords, we have seen the "Scots-Nats", who have an appeal, and who have enthused it and have been able not only to get the support of the people but also their money. If they take the wrong direction and do not get their money they will fade away. If they keep on having an appeal to the mass of their people they will get support and their money. The noble Lord said that the Liberal Party had their best representation in 1974. They had! I thought that the Liberal Party were well on the way to growing again and I hoped that they would. It gives me no joy that they are sinking. But I believe there is a reason that they missed their opportunity. If their leader and their Chief Whip in another place at the time had accepted the invitation from Mr. Heath and had accepted a Cabinet post which was offered to them and had shown a sense of responsibility and realism, their funds and their power would have grown and they would not be in the position where I am able to say at this moment that I think they are fading away.

The strength of our system until now is that only the will and enthusiasm and the cash from the people, willingly given, has allowed this evolution from groups into Parties. I believe that to dilute this genuine growth by injecting money, not naturally produced, will lead to an ersatz, imitation democracy.

Lord DENAHM

My Lords, I hope that my noble friend will forgive me, but this is a strictly limited debate and there are three more speakers before the noble Lord the Leader of the House winds up.

Lord HARMAR-NICHOLLS

My Lords, I noticed that the three speakers who preceded me were showing on the clock more than I am at present showing.

A noble Lord: I do not think so.

Lord HARMAR-NICHOLLS

I think so. One was 16 minutes. In any case, while I agree that we are going to debate shorter speeches later—

Lord DENHAM

My Lords, it is a limited debate.

Lord HARMAR-NICHOLLS

My Lords, it is a 2½-hour debate; and now we have wasted three or four minutes of that. At the end of the day, is it just a school debate that we have come to here, where we take rigidly our allotted minutes? I know that one wants to confine one's words as much as possible. The last election was my 12th and, if you take local government elections, it was my 18th. I have been able to find time, while looking after my own businesses, to do that. I have been chairman of 42 constituencies in the Conservative Party and a member of the Conservative Party Executive for years. One has a certain experience. When a debate like this is taking place, I think one ought to be on the record. It may be pompous of me to say that, but I happen to think it, and I shall take advantage of having it on the record.

As to the present subject, those who are failing complain that it is unfair that the Socialists should have their cash collected and handed to them by the unions and that the Conservative Party should have a quarter of their funds in contributions from private enterprise organisations. What is unfair about that? The Socialists made it crystal clear that they will nationalise when they can; that they will tax for egalitarian reasons; that they will give trade unions preferential treatment under the law. If people want this, then they are entitled to finance its implementation, either directly or through the channel of the unions. If they want to be in trade unions but do not want nationalisation, egalitarian taxes or union domination in politics, then they should contract out of the levy. That is the way in which it should be done, not by trying to drive them out by bringing in this phoney Treasury grant.

Similarly with the Conservative Party. The Conservative Party are the only ones who are likely to preserve the free enterprise system as we see it with lower taxes. If people believe that that is good for the country, if they believe it is in their interests to do what is good for the country and they make their contributions either as individuals or from their companies, then what is wrong with that? The very fact that they give their money is a confirmation that the policies are the ones that the people want. Nothing that has been said so far has shown that on the score of the allocation of money that there has been any weakness in the way that our Parliamentary system has worked. There are many weaknesses in the policies being pursued, but this is not the weak point. To present that it is, and to change it in the way that Lord Houghton of Sowerby's Motion suggests, would be both dangerous and wrong. I hope that whether it is discussed now or, as my noble friend who preceded me said, whether it is discussed in a few years' time, it will be turned down.

Viscount MASSEREENE AND FER-RARD

My Lords, before my noble friend sits down, as regards State aid enabling a lot of irresponsible parties to spring into being, I do not think that would happen. One would have to have a certain percentage of the vote before receiving any State funds—some 10 per cent. I should like to make that point, but I agree with a lot of what my noble friend has said.

5.52 p.m.

Lord WALL

My Lords, may I add my thanks to my noble friend Lord Houghton of Sowerby for making this debate possible. The report sets out fully the case for and against State aid to political Parties, and I have no intention of repeating what is so adequately stated in the report. Instead, with your Lordships' forbearance, I should like to explain why I, as someone who joined Lord Houghton's committee with a totally open mind—and, indeed, a totally ignorant mind— should have reached the firm conclusion that some State aid to political Parties was both necessary and desirable. So I supported, and I still support, the views of the majority of the members of the committee which recommended State aid under certain clearly defined conditions. My reasons can be expressed very simply, though the process of reaching these conclusions was far from simple. Like so many people, my knowledge of what we call parliamentary democracy was very limited. This may sound strange from someone who spent nearly a third of his working life in Government service. But during those 15 years, I came to regard politics mainly as a reason given by Ministers when they could find no other grounds for rejecting excellent advice.

During the course of the committee's meetings, there seemed to be a widespread opinion that parliamentary democracy, as we understand it in this country, was in growing danger. Political Parties had failed to adapt themselves to the massive expansion of Government activities, and to the impact of this upon the daily life of the public. Many people seemed to feel that never in the history of this country had Government, Parliament, political Parties and the national and local public organisations stood in such low esteem in the eyes of the public. I was not greatly impressed by the arguments of some of our political witnesses that if one leaves things alone they will come right in the end, so I joined those who thought that at least we should make some effort to restore the health of parliamentary democracy. I was strengthened in this view by looking round the world at alternative forms of Government. What I saw I did not like.

I realise that the reasons why Government, Parliament, the political Parties and the public sector as a whole, stand in low esteem are many and complex. One reason does stand out, as the Committee itself emphasised. Since the war, successive Governments have taken far-reaching measures which involve Government, Parliament and the public sector more and more deeply in the daily lives of each and every one of the 55 million people in this country. It is no longer a question of general policies but of the detailed day-to-day execution of so many things which affect our daily lives. In these circumstances, when things go wrong—as go wrong they do—the public has no one to blame but Government, Parliament and the public sector; they have the authority, they have the responsibility, they are to blame.

At the same time, the public sector—both national and local—has found it increasingly difficult to deal effectively and efficiently with its enormously increased tasks. In the eyes of the public, the public service—for so long a feature of this country—has been replaced by the public sector. This is a very sad development. All this was happening at the time when the rate of change in all aspects of our lives was accelerating at a disturbing speed. There is little hope that these developments can be reversed; it is hard enough just to stop them going further.

Against this background, the task of seeking to restore at least some of the public esteem which has been lost is formidable indeed. The committee's report, which is concerned only with the political Parties, obviously covers only a part of the problem. But there must surely be general agreement that action must be taken if Parliamentary democracy is to demonstrate that it remains the only acceptable form of government for this country. Admittedly any kind of action—essentially education and information—will be expensive. After all, the market we are seeking to influence is made up of some 40 million electors. Moreover, the process of education and information must not be restricted to the months just before an election. We need it all the time.

The committee was assured by some witnesses that any money required would always be forthcoming if it was really needed. I wonder whether this is so except perhaps at election time. It is worth recalling that the total contribution to all political Parties is only about 25 to 30 pence per elector per year; that is to say, one half the price of a gin and tonic or less than the price of a pint of beer a year is the value the electorate appears to put on our political Parties. This is a measure of the task which lies ahead. Moreover, I fully support the views of the committee that it is most undesirable to increase the dependence of the two large Parties on their two major sources of income: the unions for the Labour Party, and business for the Tory Party. It does not make sense to increase this polarisation. If Parliamentary democracy is to flourish, we surely want more workpeople (including trade union members) to support the Tory Party, and more businessmen and managers to support the Labour Party. This will make both Parties more representative and more effective. So I am more than ever convinced that if the political Parties really wish to improve their public standing, they will have to spend a lot more money and I do not see where that money is to come from year by year rather than just at election time, unless it is from State aid.

The opposition to State aid is substantial. After all, the committee itself was divided. But I personally do not find that opposition convincing. May I make just two points: first, we still hear a lot about the various form of "British disease". The disease of our political system is undoubtedly resistance to change. Many witnesses before our committee came with their minds made up and no amount of argument or discussion was going to change them. While listening to some of the evidence, I was reminded of my days in Unilever, when I was privileged to serve under that remarkable businessman, the late Lord Heyworth. Unilever decided to devote one of its world senior management conferences to the topic "Resistance to Change", and I had to write the main paper. I still recall Lord Heyworth saying: "Be on your guard against two kinds of managers, those who say: ' We have always done it that way ', and those who say: ' Anyway, we are different '".

It seems to me that the opponents of State aid fall neatly into both of these classes. And look where we are because we have always done it that way, or because we claim we are different. I repeat that it cannot be disputed that parliamentary democracy in this country stands low in public esteem: look at our voting record at elections and at the small financial contributions to the Parties. Let us also recall that parliamentary democracy as we know it is in a small minority among the various forms of government in the world. Why cannot the political Parties accept that the time to be worried is not when change happens, but when it does not?

My second point is that there are certainly risks in giving State aid to political Parties, but the evidence from the democratic countries which do give State aid suggests that these risks are much less than the risk of doing nothing. May I remind your Lordships that State aid abroad is not confined to countries like Sweden. It is found also in the United States, which is still the bastion of private enterprise and less Government interference in our daily lives. There substantial public funds are given to political candidates, both at the Federal and at the State level.

I was myself unable to visit Europe with the committee but during a visit to the United States I did spend a little time in Washington. With the help of the Embassy, I met the Party managers of the two Parties and other people concerned with political affairs, and I also spent a day with the Federal Election Commission. No one I met seemed to be worried about State aid as such. What mattered was not whether you gave State aid—not the principle—but how much and how you did it. That view seemed to be shared by leading political scientists and observers. Professor Alexander, for example, said as long ago as 1972: American society has no excuse to tolerate a debt-ridden obligation-bound political system … there can be no question that the country can afford the amounts required". And so we had the 1974 amendments to the 1971 Federal Elections Campaign Act, and these amendments recognised that the cost of running the political Parties was increasing substantially and that the traditional methods of financing had proved inadequate.

One feature of the American system, let me say right away, seems to me undesirable. Their system of State aid to candidates virtually prevents the emergence of any third Party. On the other hand, there are two features which deserve some favourable comment. State aid there takes the form of "matching funds": that is to say a candidate for public funds cannot afford to relax in any way his efforts to raise contributions from the traditional sources. This has met the objection that giving State aid might discourage private giving. There was no evidence in any country we visited that this was the case.

Secondly, the disclosure provisions are severe indeed. As an example, when I was discussing with the Federal Election Commission the extent of the disclosure requirements, I was invited by the chairman to think of a name and then go downstairs and find out for myself. Needless to say, the first name which came to mind was that of the President, and so I went down to the ground floor, where any member of the public may inspect the files, and opened the drawer marked "F". Here I found the most complete statement of all the campaign funds received by President Ford from all sources. If we go ahead with State aid, I now think that it is worth while looking again both at matching funds and at the disclosure of sources of contribution; but these, my Lords, are only points of detail.

In conclusion, it is now two and a half years since the committee finished its work. The standing with the public of Parliament and the political Parties has certainly not improved since then. On the contrary, the polarisation of the main contributors to the two large Parties is greater than it ever was; questions like sponsorship are in the air, and so on. Our whole political system is very much on trial. It will take much time and effort to restore public respect for that system, and it will also require money. I repeat, my Lords, that the risks of doing nothing are, in my opinion, far greater than the risk of injecting some modest amount of State aid along the lines of the committee's recommendations. I hope, therefore, that my noble friends on the Front Bench will persuade the Government that something has to be done and done quickly.

6.4 p.m.

Lord GISBOROUGH

My Lords, I believe that the financial success of a Party surely is a measure of its strength or support. If few people are interested enough to support it, it is an indication, as was mentioned by the noble Lord, Lord Harmar-Nicholls, that there are few people who are interested enough in having that Party at all. Where there is no enthusiasm for fund-raising in an area it is perhaps an indication that the Party may be fighting a lost cause or, more likely, a cause that appeals to a small group of activists and not to the great majority—people who may nevertheless turn out and vote on the day. Rather than bewail that lack of support, I believe that the Party in such areas should consider broadening its appeal by the adoption of moderate policies.

As the Scottish Nationalists and Plaid Cymru said in that report, if a Party cannot survive by its own efforts it should not be shored up by subsidies. To my mind, that is a very compelling argument. The inability to foster voluntary support indicates disillusion—that is another statement—and State aid would further this disillusion. Even if only a little aid is given, it would be difficult to avoid public misunderstanding of the situation. They would assume there was full Government finance, and that would reduce their efforts undoubtedly.

There are many strong reasons against State aid put by the various organisations which gave evidence. I believe it would certainly lessen voluntary participation by workers, notwithstanding what other people have said to the contrary. I think it would reduce the independence of constituencies of the Central Party too, despite the concept of the neutral money. It has also been stated that it would force people who hate politics to contribute, and they are already over-taxed. In addition to that, of course, there are many cases—among them, I believe, the Seventh-Day Adventists, although I am not sure of that—in which politics are against religious convictions.

Another factor about injecting public money is that inevitably it encourages waste. We have seen that wherever public money is involved it tends to be squandered. State aid is asked for in respect of better election expenses, for rate relief and for better this and for free this and that. Too much can be free. What is free is never appreciated and it only teaches man, boy or even dog to want more.

Some argue that it would overcome difficulties, particularly in a year of three elections, and sometimes more in some parts of the country; but I do not believe that a principle should be changed for the sake of a one-off situation. The answer, of course, is to get on with it and raise money. Most constituencies can, so why not the others? If people will not give, then the Party's policies should be made more attractive to them so that they actually want to work and to see that Party in power. It has been said it would help relieve the time-consuming burden of fund-raising; but it is just this that chiefly holds local Party workers together between elections, so that when elections come the team is ready there to work.

The report states that it is not in the best interests of maintaining a popular basis of democratic government when so many local constituencies do not have a full-time official. That may be so, but now, with television, all the political, information is presented to the public in their own living rooms; so I do not believe there is a necessity for a local agent or an office for the dissemination of political information in a locality. I think the need is highly doubtful. Indeed, where political meetings are held to instruct the public, we all know how few people in fact attend, because they are all busy watching television. It is estimated that to employ a full-time agent in each constituency in 1975 would have cost an extra £2.3 million to the Tories and an extra £4.7 million for Labour. Perhaps that would now be doubled at £10 million. In no way does the aid proposed in the report reach that sort of figure.

However, there is no doubt about it that the political Parties have a part to play—indeed, an increasing part—to compete with the Parties which are strong in Europe and which will be providing and supporting their Members in the EEC, where about £10 million annually is given to the political Parties. Undoubtedly these large sums would seem to put them at an advantage in regard to research for their elected Members.

There is also the factor in support of public funds of the sponsored Members, who are liable and tempted, and indeed often seen, to speak and act as much at the dictation of and in the interests of their sponsors as in the national interest. The more dependent a Party is on sponsored representatives, the less able they are, obviously to govern in the national interest, which is a factor in support of public finance and of election expenses particularly. However, the recommendation is for only a modest injection; not too high to discourage voluntary effort. I think that a figure of some 20 to 25 per cent. of raised funds is suggested. The trouble is that a further increase after that is inevitable. One sees that in the figures for Germany, where £1.1 million was given to the Parties in 1959 and, according to the report, this reached a figure of no less than £38 million in 1965, before these payments were ruled unconstitutional.

Such sums as are paid to the Parties in Germany would be totally unacceptable in this country, even if they were to be available. They would sap at the enthusiasm of the local Parties, despite what has been said, and create little need to maintain the strength of the Party workers between elections, which would contribute to ruining all local effort. They would very much reduce citizen participation. Furthermore—and this is the important factor—when money is produced by the State, it becomes much more difficult to raise funds for the balance. The report has not suggested a large public supply of money; but even if it remained small the effects would be the same, and the danger of the precedent is that, once started, the sums would inevitably creep up. Abroad, there is not only this vast State aid, but also a higher subscription by individuals who are members of the Parties. Subscriptions for Parties in this country are very low compared with the European Parties—25p for the Conservatives, 30p for the Co-operative Society and £1.20 for Labour are mentioned. This compares with the figure for the Netherlands of £2.25, and of Germany which is of the order of £5.

I believe that there is great scope for an increase here. It is important to press this source, not only from the point of view of fund raising. So many branches have few members and, as a result, activists can rule them. The last thing some of them want is more members who may, by their moderation, cause the curbing of the extremist arrangements at the branches. So that there is every reason to make more of this source, and for Parties actively and genuinely to increase their membership not only for the funds, but for the sake of democracy as well.

There is a host of different fund raising methods, of which we all know. Constituencies have only to get down to it. This, in itself, generates further enthusiasm and more efforts, as I know from experience. My constituency was brand-new at the last reorganisation and was highly marginal. We had no funds, no agent and no officers. In fact, we had absolutely nothing in that new constituency. We employed an agent, whom we could not afford because we had no money, but we worked very hard. Now, five years later, we must be, financially, one of the strongest constituencies in the whole country. It can be done all right. We had no sponsors and every penny we have was raised out of our efforts. No constituency is physically unable to raise money, whether by events, lotteries, diaries and all the gamut of methods which we know so well.

There is one suggestion about a tax concession of up to £50 in respect of donations from individuals. That suggestion has many adherents and it may be a good one. But it would be unreasonable for political Parties to be able to take advantage of that and to be singled out, unless the concession was also given to all other voluntary bodies which are equally hit by inflation. There are many suggestions regarding mechanics and the use of funds. There are two recommendations in the report, one at central level and the other at local level, which are subject to various qualifications in relation to votes, successes and so on. Those suggestions would very much help the larger Parties, but would be of no help to new or small Parties. This might be a good thing or a bad thing. It seems to me that the figure would work out at about £1,000 per constituency.

One suggestion was that there should be aid for local government elections, and I was very sorry to see that. One thing that bedevils local government is politics. Councillors should be as non-political as possible, and should have at heart the interests of their members and not the Party Whip. Therefore, I should be very sorry to see anything that encouraged further Party politics in local government. There is enough already, and funding it would destroy the independence of those councils which are still independent. There is a very strong case against, and there is a very convincing case for; but having read the report carefully, I come down very firmly against any State aid of any kind.

6.15 p.m.

Lord CHITNIS

My Lords, like other noble Lords, I am grateful to the noble Lord, Lord Houghton, for introducing a debate on this important subject. My interest in it derives from the fact that I have long been concerned with the provision of financial aid to political Parties, from both ends of the spectrum. First, I once worked for 10 years for a political Party, the Liberals, one of the least wealthy Parties, and thus was continuously concerned with the provision of funds for it. Then, for the last 10 years, I have been administering one of the few grant-making bodies which can, and does, make grants to various political Parties; indeed, every Party, or individual member of every Party, represented in the other place, with the strange and somewhat inexplicable exception of Plaid Cymru, has received grants from the Rowntree Social Service Trust over the past few years, for one purpose or another. I have therefore seen this problem from the perspective of both beggar and benefactor.

The first point which occurs to me, particularly as a benefactor, is the potentially deadening effect of block funding on pressure group type organisations, whether political Parties or not. A frequent case which we come across is that of a small group, perhaps analogous to a local political Party, which starts with a good idea, with a gleam in somebody's eye, which builds up a lively base of volunteers, many of whom have to spend a lot of their time raising funds to keep the organisation going. It then asks a grant-making body for a grant, because it feels that the time has come to institutionalise itself, to staff it professionally, and this is over-generously and rather foolishly given.

As a result, as I find from my experience, which I understand differs from that of some other noble Lords, the volunteers have a tendency to down tools, leaving the work to the hired professional, and a lot of the spark goes out of the organisation. I suspect that this could be true of local Party organisations as much as of any other group. I think, therefore, that even those who have the interests of their Parties at heart should perhaps have some hesitation about providing them with too easy funds.

Secondly, drawing on my experience as a Party agent and organiser, I am absolutely convinced that a lot of money spent on election campaigns is wasted. Expenditure is incurred on activities which have no better rationale than that such things have always been done, or simply because your opponents do something and you therefore feel obliged to do the same. Indeed, I suspect that most agents would agree with me that half of their activity is wasted, but would merely say that they have no idea which half. If that is so, then one thing which somebody could undertake is research into the effectiveness of various elements in an election campaign, at any rate before State funds are spent on that kind of support. When it is also taken into account that election time is, in my experience, the best time to raise funds, when there is an air of excitement about politics, my conclusion is that election campaigning should not be funded, or have its costs refunded, by the State.

It might be worth adding, as my contribution to the research that I suggest needs doing, that I found this view confirmed when, at the last General Election, having nothing better to do, I visited some 47 constituencies in the North of England, not to participate in the campaigns but merely to observe the activities of the Parties in them. After the election, I related the results there to what I had seen. With the exception of the tightly marginal seats, the results in all the others, which formed the vast majority, related almost exactly to the national norm or swing, irrespective of the scale of activity and expenditure incurred by various Parties in those seats, wide though the differences were. So I think we should be hesitant about providing funds for general campaigning between elections, poster campaigns and so forth. Again, I suspect that there is a fair amount of waste in these activities, and the provision of State funds would merely increase the number of car stickers, buttons and other such things which Parties increasingly produce, and which cancel each other out.

The third general point is one which other noble Lords have mentioned and it is that the giving of funds to the existing political Parties will, to some extent, ossify the existing political system. There is no reason to believe, because our political system has been well organised into the existing political Parties in the past, that this should remain so in the indefinite future, but surely State funding would encourage this. So, in other words, I reluctantly conclude that I am opposed to the major innovation suggested by the noble Lord, Lord Houghton, in that he wants funds available for campaigning, both centrally and locally.

The only exception I can think of would be the quite unusually difficult, from a campaigning point of view, elections to the European Parliament; but even if this particular case were provided for out of public funds, there would be no need for the election system decided on for the huge constituencies of the European Parliament to be extended downwards. But what I do support is an extension of the present system of giving aid to political Parties represented in Parliament and to Parliamentarians, once elected. This is not a new principle; it is not even new since the introduction of aid to political Parties in 1974. Even before then, there were provisions for giving aid to Opposition Parties—such as, for example, the salary paid to the Leader of the Opposition.

At present, the Leader of the Opposition very properly receives a not very large salary and is provided with a car. I wonder whether other Front Bench Members of the official Opposition, or, indeed, the Leaders of other Opposition Parties should not also receive financial support. Perhaps I can assuage my conscience about Plaid Cymru by saying that the Leader of Plaid Cymru has expenditure which he incurs as a Party politician and as the leader of a significant Party for which he should receive financial support.

Then, so far as the 1974 provision of State funds to Opposition Parties is concerned, I just wonder whether enough has been done. It is surely desirable that the Parties should have research facilities, not just to brief Members of Parliament on current Parliamentary business, which I understand is meant to be the terms of reference for the money that they at present receive, but to produce longer-term counter-proposals to those which are produced by the Government of the day and which have the full backing of the resources of the Civil Service. The only point I make is this: if funds are to be made available outside the existing scheme, to what central organisation should such funds be paid? The noble Lord, Lord Houghton of Sowerby, will remember that when years ago I was discussing with him giving assistance to one of the major Parties, the first question which had to be resolved, and which caused considerable argument, was whether it should go to the Party in Parliament or whether the central offices of the mass party in the country should receive it; and I am sure that that Party was not unique in having that difficulty.

In conclusion, may I say that I am sorry that I cannot agree with the noble Lord, Lord Houghton of Sowerby, on the main thrust of his proposals, which is that funds should be made available for extra-Parliamentary activities. I feel this particularly, because the noble Lord taught me most of what I know about the subject. Nevertheless, I am grateful to the noble Lord for having given to the House the opportunity to discuss this subject.

6.22 p.m.

Lord PEART

My Lords, the noble Lord, Lord Houghton of Sowerby, has already put everyone interested in this question in his debt. He made a very fine opening speech. The noble Lord is responsible for the report of his committee on financial aid to political Parties. It is a comprehensive and detailed analysis of an important and fascinating subject. Apart from the expression of views which the report contains—which to some extent are bound to be subjective—I think that the report is a remarkable mine of statistical and other material. Much of it, I believe, had previously never been available—certainly never in such a convenient form. Whatever opinion noble Lords may hold about the conclusions which the majority of the committee draw from their researches, it will be impossible for anybody weighing up this issue not to rely to a great extent on the work done by the committee. The noble Lord has this afternoon added to our indebtedness by providing this opportunity to discuss the subject generally and the specific recommendations made in his committee's report.

May I say that the Government have not yet finalised their consideration of those recommendations. Therefore the views expressed this afternoon have an effective part to play. Naturally, the noble Lord, Lord Thorneycroft, who is chairman of the Conservative Party, made a characteristically rumbustious speech which explained a point of view which wished to reject the giving of State aid to political Parties. On the other hand, we have had speeches from the Liberal Party and also a recognition even by the noble Viscount, Lord Massereene and Ferrard, that some day it may well be that political Parties will receive State aid. My noble friends Lord Wall and Lord McCarthy also made powerful speeches, and there was an excellent speech made by the noble Lord who has just spoken. I shall carefully consider the views that have been expressed because, as I have said, the Government have not yet finalised their consideration of the recommendations of the Houghton Committee. Therefore it is important to study the views which have been expressed. The report has provoked controversy and this is good.

As the noble Lord has reminded us, the majority of his committee came down in favour of the principle of State financial aid to political Parties in this country and put forward a combination of two schemes that would cost jointly something in the region of £2¼ million annually. Under the first part of the committee's proposals, annual grants would be paid to the central organisations of the Parties for their general purposes, the amounts being related to each Party's support at the preceding General Election and subject to a minimum level of support. It was proposed that the amount payable should be calculated on a basis of 5p for each vote cast in favour of the Party concerned.

The Committee's other proposal was that at local level a limited reimbursement should be made of the election expenses of parliamentary and local government candidates. So far as parliamentary candidates are concerned, this would be restricted to those who saved their deposits. In either case, the amount to be reimbursed would be the candidate's actual election expenses, subject to a limit of half his legally permitted maximum expenditure. In this way, the committee propose that the Parties might be strengthened financially at the centre, and also that the electoral process as a whole should be reinforced by the reduction of the actual election expenses which a local party or an individual candidate has to bear.

The initial reactions to the report, both Press and public, were, as noble Lords will recall, divided and, I think, largely hostile. I think that this is a fair description of the views expressed in today's debate. It is also reasonable to say, however, that a considerable amount of common ground has emerged or has been confirmed regarding the basis upon which this extremely important issue needs to be considered. In the first place, it would seem that there is broad agreement that if—and I emphasise "if"—the principle of State financial aid to political Parties were to be accepted, then the schemes put forward by the committee under the noble Lord's chairmanship would appear to provide an appropriate and fair basis on which to proceed. This, too, was the view taken by the minority of the committee in their own report.

Second, I do not think there is any dispute regarding the views expressed by the noble Lord, Lord Houghton, about the crucial importance of the role that political Parties play in the political institutions of the country, both with regard to the electoral process and in more general ways. It is, accordingly, of critical importance to the working of our institutions that the political Parties have the means to carry out that role in an effective way. If, for lack of funds, they were to withdraw from these activities, the effects would be incalculable.

Third, I do not think there can be any doubt that the financial burdens placed on political Parties and their need for additional funds, whether from private or public sources, have greatly increased in recent years. Like every other organisation and individual, political Parties have been faced with increasing calls on their resources. That will be particularly so this year. As noble Lords have said, this is the year of a General Election, of local government elections, of the devolution referenda and of the direct elections to the European Parliament. Tremendous stress will be placed upon our organisations in the country.

As noble Lords will be aware, the Government are still considering whether to introduce legislation to provide financial assistance in the special case of candidates in the impending direct elections for the European Parliament. In the course of their consideration, the Government will need to take account of the financial assistance which the European Assembly is itself making available to political Parties in connection with the elections. But this forthcoming series of elections apart, there can be no doubt that the financial burdens on political Parties have increased a great deal in recent years. In particular, this has made it increasingly difficult for them to maintain or recruit the staff they need if they are to carry out their work satisfactorily. So much I would see as common ground among both those who advocate and those who oppose the introduction of financial assitance to political Parties.

It is also, I think, common ground that there is a need to continue the present scheme of financial assistance to Opposition Parties at Westminster in order to provide some counterpoise to the assistance which the Civil Service gives to Ministers. But, as today's debate has shown, there is a wide division of principle between those who would see the acceptance of the Houghton Committee's proposals, or something akin, as a necessary and welcome strengthening of our democratic institutions, and those who would see such a step as a major breach of the political traditions of this country. The broad grounds on which opposition to State aid is based emerged very clearly in the minority report of the Houghton Committee and I think it has emerged equally clearly in our debate today.

I see the opposition to State aid as coming under two main heads. In the first place, there is a group of arguments which is to a large extent based on doubts as to the validity of various aspects of the analysis of the present situation on which the committee's proposals were based. The second group are of a more fundamentalist kind—what the minority report describes as a "gut reaction". These are essentially grouped round the fear that the introduction of State financial aid for political Parties in this country would undermine essential and desirable features of our political life and that, sooner or later, the independence of our political Parties would be eroded. In addition there are special and particular fears, such as the fear that State aid might go to extremist groups and might indeed encourage their expansion, or that it would unduly favour Party headquarters.

Taking first the doubts expressed about the foundations on which the case for State aid is based, it is argued that it is impossible, in any objective way, and without telling political Parties how to go about their business, to specify the jobs that a political Party needs to carry out. Every politician has his own vision of how he can best make his contribution to public life. I am sure this will appeal to the noble Lord, Lord Harmar-Nicholls, who spoke very effectively. The same is true of Parties. Some attach more importance to certain functions than others. But unless it were possible to come to some generally accepted minimum standard, both in range and level, of the activities which a political Party ought to be carrying out, it is not easy to see how one can arrive at any agreement as to the appropriate level of financial provision required, either from private or public sources, in order to carry out these duties.

There is also the argument that while the committee under the chairmanship of the noble Lord have brought together a good deal of factual material about the actual incomes of the Parties, and their sources, there remains the imponderable of how far these incomes could be significantly raised if it were thought by their members that the Party's future, or its effectiveness, as they saw it, were really seriously at risk. As with other great institutions, one suspects that in practice there could be a substantial degree of elasticity about the potential incomes of the major Parties. And it might accordingly be thought by some that at least part of the financial difficulties encountered by the Parties in recent years are a temporary reflection of public disenchantment rather than a permanent problem calling for fundamental change.

I think that the third focus for doubt would be the assumptions made in the Houghton Committee's report that the present structure of Party financing—and the important role played by union and business financial support—prejudices the independence of the political Parties. But some would argue that there is little evidence of this. They would say that these links are rooted in the reality of the political situation, and that they help to prevent the political Parties from losing touch with their support. If political Parties were primarliy financed by the State, they might become abstract and divorced from their supporters. I think that view has been expressed this evening.

As a final ground for doubt about the committee's proposals, I think opponents of State aid would probably challenge—as the minority report does—the relevance of schemes already operating in Europe, on the grounds that their political background and history was in important respects different from our own. But as I have said earlier, the principal argument put forward against State aid is that it might in time erode the independence of the political Parties. Political bodies in this country have until now been traditionally voluntary bodies, and their financing has been organised on a voluntary basis. Clearly, the introduction of State financial aid would breach this principle, and it might also have considerable repercussions on the activities of political Parties which at present centre round voluntary fund raising.

As today's debate has shown, there are wide and important differences of principle involved here. The introduction of State financial aid would undoubtedly mark an important change in the political life of the country. What, I think, we are all agreed upon is that any scheme that might be introduced in this field would need to command the widest possible measure of general support, both in Parliament and in the country as a whole. As I have said earlier, we have not, as a Government, come to a conclusion on this matter. We continue, however, to take note of the development of parliamentary and public opinion. It has, therefore, been of considerable value to hear the views expressed this afternoon, and I can assure the House that what has been said will be carefully considered and taken into account before any proposals in this matter are put forward.

6.42 p.m.

Lord HOUGHTON of SOWERBY

My Lords, I should like to thank all noble Lords who have taken part in this debate, and especially my noble friend Lord Peart for the first analysis of the report and its recommendations and the arguments for and against them that we have heard from the Front Bench in either House so far. I think that is a bonus as a result of this debate and I hope that it will continue.

The noble Lord, Lord Harmar-Nicholls, provided ammunition for those who oppose State aid and he provided ammunition also to the noble Lord, Lord Somers, who is about to open the following debate on the desirability of short speeches. The noble Lord, Lord Gisborough, just qualified for his place on the list of speakers in the subsequent debate on the desirability of short speeches, and J congratulate him upon that. Now I come to enemy No. 1, who is the noble Lord, Lord Thorneycroft. He provided ammunition for the opponents of televising this House. After all, he is against State aid; he does not want bureaucratic interference in the affairs of Parties; he does not want to take advantage of any resources whatsoever except those provided by the stalwarts of the Conservative Party. But he exhibited a Tory Party poster and showed it round the Chamber. My Lords, he will be a dangerous man if television cameras ever enter this Chamber. He will need to be kept out of debates unless he has been searched beforehand to see whether he has some free propaganda for the Tory Party which he wishes to exhibit to your Lordships' House and to the nation at large, free, gratis and for nothing.

I must tease the noble Lord a little further. At the end of his speech he ascended the pulpit and in a loud voice he rebuked sin. "We will have none of it," he said. "If sinful people propose this iniquity we will oppose it, and if money is on offer we will reject it." Ah, my Lords, but what happened in another place in 1975 when a proposal was before the House that grant in aid should be given to the Opposition Parties? There were murmurings and there were mutterings on the Conservative Benches from people who made to wound but were afraid to strike—if one dare mention that word just now!—and at the end of the day no Division was called. And what happened, my Lords? They took the money, and the £150,000 a year is going into the office of the Leader of the Opposition at the present time. When we on the Labour Benches were in Opposition we had to rely on the noble Lord, Lord Chitnis, and the Rowntree Trust to scramble together enough money—£25,000 a year maximum—to provide assistance to the then Shadow Cabinet. Now the Conservative Opposition in the House of Commons absolutely bask in the sun- shine of State aid to Opposition Parties. So there is a little humbug in all this, and I think we must guard against it.

I do not wish to delay the next debate more than a minute more, because we did start very late. I remind the House that State aid was given for the conduct of the referendum on the Common Market. I think it was the first time, and it appeared to be fully justified at the time. I realise the distinction between money to have that debate on a referendum against aid to specific political parties. Nevertheless may I say to my noble friend that I believe there is a big problem arising in connection with elections to the European Parliament. It will be a great shame if we make a mess of those, and there is considerable danger that that may be so. We have never seen constituencies of the size that we shall have for elections to the European Parliament. No one will have had experience of fighting elections or conducting Party political activities over such a wide area and with such a large electorate. I urge the Government seriously to consider that particular matter in the coming weeks.

Finally, I do not accept the view of the noble Lord, Lord Thorneycroft, that to accept State aid in some way brings bureaucracy in by the back door. We had a former Comptroller and Auditor-General, Sir Edmund Compton, a distinguished civil servant and a member of the Committee, who took very good care of the question of accountability; and that is fully explained in our report. I think the noble Lord, Lord Thorneycroft, will find that there is no more difficulty about accountability for the money which it was proposed should go to political Parties than there is about the money that already goes to the Leader of the Opposition. Great care was taken to ensure that money was properly cared for and properly spent without fussy interference by bureaucracy.

My Lords, I conclude by saying that in my opinion money is behind politics here, as everywhere else in the world, and money power is corrupting. State aid reduces the power of vested interests and in my view would make for the liberation and the independence of political Parties and relieve them of some of the shackles that exist at the present time under our present system. Noble Lords opposite romanticise party Political activity and politics generally. There is a reality here of vested interests on both sides of the great divide in this country to which we must have regard in considering this matter. Anyhow, I thank noble Lords once again. I think the debate has been well worthwhile, and in this period I think we have packed quite enough for the Government to consider. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.