HL Deb 07 November 1989 vol 512 cc551-73

1A The Lord Williams of Elvel to move, That this House do disagree with the Commons in their Amendment No. 1.

Lord Williams of Elvel

My Lords, I beg to move Amendment No. 1A standing in my name on the Marshalled List, That this House do disagree with the Commons in their Amendment No. 1. It will be for the convenience of the House if I also speak to Commons Amendments Nos. 2 and 14 which are consequential and to my Amendments Nos. 2A and 14A which are equally consequential.

When the Bill was in Committee, the first amendment that your Lordships accepted—against the advice of the Government—related to political contributions. We return to this theme again since Commons Amendments Nos. 1, 2 and 14 seek to negate the amendment that your Lordships passed.

The amendments deal with the rights of shareholders over political contributions made by companies. When the Bill came back to us on Report it was pointed out to me that there was a potential defect in the amendments that had been passed in Committee. It was pointed out by the noble Lord, Lord Young of Graffham, who was then the Secretary of State dealing with the Bill, that it might be difficult for a company to reclaim funds from a political party if shareholders decided against making that particular contribution. Although I do not believe that that was a serious defect—because if there is a majority against a given political contribution there is an equal majority to instruct the board of directors not to make political contributions of that nature in the future—nevertheless my Amendments Nos. 2A and 14A seek to remove that possible defect.

The present system is set out in the Companies Act 1985. It is that political contributions and charitable contributions have to be reported, over a certain amount, in the director's report and the director's report has to be submitted to shareholders along with the accounts. The report and the accounts are approved of or disapproved of by shareholders in ordinary resolution.

The system that we have proposed would single out political contributions in such a manner that shareholders would be able to vote before the contribution was made, whether or not they wished it to be made. The arguments against this which have been deployed both in this House and in another place seem to me to be as follows. First, shareholders can talk to directors. That is an argument that has been advanced; that they can write to directors, that directors are reasonable chaps and if a shareholder writes to a director he will certainly take notice of that. I know of many people who have written to directors and talked to directors and I am afraid not much notice has been taken.

The second argument is that shareholders can pass an ordinary resolution instructing directors not to do this, that or thus. Again that is true in theory, but is it truly possible in practice, because 60 per cent. of all equities are held by institutional shareholders? Institutional shareholders do not move such resolutions. Pension funds, unit trusts and investment trusts do not make those sorts of initiatives. They are passive investors unless they are required to take a view, which would be the case if my proposal were to be accepted.

The third argument is that if shareholders do not like the political contributions made by their company they can sell their shares. That seems to me to be a bizarre argument since a shareholder does not necessarily invest in a company simply because it does or does not make contributions to a given political party. Shareholders do not have the right that trade union members have to contract out and say, "I want to be a member of this organisation and a full participating member, but I do not want to have anything to do with political contributions". That, therefore, seems to be an odd argument.

The last argument deployed in another place was that the directors should decide what is in the best interests of the company. That may be so, but directors are under a responsibility to decide according to the memorandum and articles of association of their companies. By definition, political contributions cannot be commercial because if they are commercial then, my goodness me, we have much more of a problem than I thought we had. They may be designed to get a knighthood for the chairman of a company, but they cannot be designed to get a contract from the Conservative Government—at least I hope they cannot.

Assuming, therefore, that these are not commercial decisions—the Companies Act 1985 makes clear why there is a separation—the directors can only decide what is in the best interests of the company by reference to the task that is laid on them in the articles of association of the company. They cannot spend money on a project because they happen to feel it is in the best interests of their company. They cannot spend money on their local hospital, on their local sewers—whatever it might be—simply because they think it might be a good thing for the company.

In all the debates that have taken place on these amendments I have not heard any serious arguments against them. The arguments in favour seem to me to be very strong. First, there is the argument of transparency. At least if shareholders are given the opportunity to vote prior to contribution everybody knows that the shareholders agree to their funds being used in that manner. There can be no difficulty and no problem. In support of that—I am trying to help the Conservative Party—I quote from Charter News, which is published by the Charter Movement, which I understand supports the Conservative Party. It says: Over 90 per cent. of the Party's income in 1987–88 came from donations. No information is given in the accounts about these donations, which makes it all too easy for our political opponents to allege improprieties, which it is then impossible for Conservative supporters to counter". The first argument in favour of my amendment is that it would help the Conservative Party to clean up its act. The second argument is that it would be popular. According to a MORI poll, 82 per cent. of those interviewed said that they would favour greater shareholder participation in the decision to make political contributions. The third argument is that it would make it easier for boards of directors. There would no longer be any question of smoke-filled rooms or lunches in Smith Square, or wherever it might be, to ask for funds. It would all be out in the open. The board of directors would say, "This is what we propose and if shareholders like it they can have it. If shareholders do not like it they may not have it".

Lastly, it would encourage shareholder democracy, to which I thought the party opposite was committed. It would encourage shareholders taking a positive decision that they wanted their money spent in a particular manner.

It is not often that I personally and my party wish to challenge the decisions of the Commons in Commons amendments, because we generally subscribe to the view expressed by the noble Lord, Lord Harmar-Nicholls, that the elected House should have supremacy and that amendments, if they are passed by another place, should have earnest attention and, we hope, the agreement of your Lordships. But in this case I am not reluctant to press for your Lordships to disagree with the Commons amendment because however parties are to be funded the system must be fair and must be seen to be fair. Giving other people's money to finance political parties cannot be fair unless the other people agree in advance that that should be so. That is the nub of it. It is as simple as that. I beg to move.

Moved, That the House do disagree with the Commons in their Amendment No. 1.—(Lord Williams of Elvel.)

3.30 p.m.

Lord Boyd-Carpenter

My Lords, when your Lordships' House—I think with a sigh—discussed this matter for the first time as long ago as 30th January, I was the only speaker, other than my noble friend the Minister, against the amendment. I have not lacked kind friends to say that that is the explanation of the carrying of the amendment.

I have been following this issue with some interest ever since. I congratulate the noble Lord, Lord Williams of Elvel, on introducing a new argument at this stage. That is in itself a very remarkable achievement. He introduced the argument that this would be a means of helping the Conservative Party. To his credit he said that without a smile on his face. The noble Lord seems to make an enormous mountain out of what is, from the point of view of practically every company, a molehill. The contributions have not always been by way of subscription to the Conservative Party. Some companies in recent years, however misguidedly, have contributed to the parties below the Gangway on the other side.

When these contributions are made they are absolutely trivial in proportion to the revenues and accounts of the company concerned. I speak as one who has served on a great many boards of directors and I have also been the chairman of one or two companies. Contributions are made because it is thought by the board, rightly or wrongly, either that it is in the interests of the company that a particular political party should prevail or sometimes because it is equally strongly thought that it would be disastrous for that company if another political party prevailed. In other words, it is a judgment similar to innumerable others which boards of directors have to make as to what is in the interests of their company.

That is the basis for the decision, as it is of all the hundreds of other decisions which fall to be made by the board of directors of a company. Yet it is this one generally financially quite trivial item that noble Lords opposite and their honourable friends in another place have sought to pick out and subject to very peculiar and special treatment. The noble Lord, Lord Williams, did not even spell out fully what that treatment was. The amendment which another place has rejected introduced the rule that the authorisation of a political contribution should not be included in the general report and accounts of the company, but should be the subject matter of a special resolution taken at the annual general meeting separately from all the other expenditures of the company. Does the noble Lord wish to intervene?

Lord Williams of Elvel

My Lords, perhaps I may correct the noble Lord: it is not a special resolution but just an ordinary resolution.

Lord Boyd-Carpenter

My Lords, I am much obliged. In the technical and commercial sense it is not a special resolution, but it is a separate resolution and, as the noble Lord knows, that is the point. It is separate from the whole general motion that the report and accounts be adopted.

This procedure would give the matter a peculiar and special importance. When dealing with the affairs of a company whose expenditure runs into tens of millions of pounds, to solemnly hold up the annual general meeting with a resolution authorising a donation of £250 to a political party is really wholly disproportionate and is apt to give an impression of undue importance to this one item of expenditure.

The noble Lord said that such a contribution was outside the normal expenditures of the company. So are gifts to charities and no amendment has been put forward to apply this special treatment to such contributions. There are also contributions to trade associations, and no suggestion has been made here of a separate resolution. Only party political contributions are singled out. Frankly, one would be very naive if it were not perfectly obvious to every one of your Lordships why that has been done and what is the reality of the feeling behind the proposal.

This elaborate treatment would introduce one area of practical difficulty in the case of a board of a company that desired to make a political contribution when a general election has been announced. Unless that general election were announced a little time before the annual general meeting, the board would have no power to make a contribution at the material time when such a contribution could be of significance; namely, in the immediate pre-election period. That would be not a wholly accidental restriction, but quite a serious one, on the rights and capacity of the board to make that contribution.

The noble Lord referred to the position of the shareholders. Under the present procedure they can question and object to political contributions being made. The shareholders can speak at the annual general meeting and, if they so desire, they can put forward proposals to cancel the contribution. It is not only that the making of a contribution is disclosed at the annual general meeting, because under the present law it is put into the annual report and accounts which are circulated well in advance of the annual general meeting, as the noble Lord knows. Therefore any shareholder who wishes to object to this payment has the opportunity to consider it, to discuss it with others of like mind and, if necessary, raise the question at the annual general meeting.

I anticipate the noble Lord because he will say that the shareholders will not go to the extent of seeking to reject the motion that the report and accounts be adopted. Of course they will not. The noble Lord has experience of business and he knows perfectly well that any board which knew that a substantial number of shareholders was unhappy about this or any other expenditure would pay very serious attention to that situation.

I come back to the fact that, though the board will pay very serious attention to the matter, it still has responsibility for the wellbeing of the company. I ask the House and the noble Lord opposite to consider the position of a board which believes that the declared policy of a political party would be disastrous for the company. Is the noble Lord really suggesting that the board is wrong in taking such steps as it can by way of a political contribution to avert the coming into power or the defeat of a government, where the consequences would be disastrous to the company for which the board is responsible?

Placed in that position himself I cannot believe that the noble Lord would do other than say that, on the facts, the success of one political party or the other is of major importance to the company and therefore the company must support it. Therefore, this apparently small amendment involves eroding in one particular the clear general responsibility of members of a board of directors for the wellbeing of the company.

The noble Lord referred to the different treatment of trades unions from the point of view of political contributions. It is a totally different system. A ballot has to be taken and then for ten years a political fund can operate very largely at the discretion of the executive of the union. There is the distinction, in the case of trades union contributions to the Labour Party, that in proportion to the resources of the unions they are very much larger than any political contribution made by a company in relation to the resources of that company.

There is also the point, which was made on a previous occasion but never answered, that if a shareholder passionately disagrees with the board's decision to contribute to a political party, he can sell his shares and buy some others. Indeed, shareholders sometimes do that. Some shareholders who disapprove of a company's dealings in, for example, South Africa, have done precisely that, whether misguidedly or not, but honourably and honestly. Equally, if a shareholder is seriously upset because a £100 million company gives £500 to the Conservative Party, he is perfectly free to sell his shares and invest in a company that does not.

The same is by no means wholly true of members of a trade union. Either there is a closed shop, though mercifully that has been diminished as a result of the sensible measures of this Government in recent years, or there is a strong pressure in many cases and in many employments for a worker to remain in his union. Therefore he has not anything like the same freedom and discretion that a shareholder has to clear out from a body of whose actions he disapproves. It is a false argument to suggest that, because of legislation some years ago to deal with the political contributions of trade unions, one should introduce a measure of this kind.

It is wholly disproportionate to the importance of the matter to companies. It would involve some erosion of a director's responsibility. On the question of timing, it could involve considerable inconveniences in a general election year. I hope therefore that noble Lords, having discussed the matter and having no doubt speculated in their own minds as to the motives and reasons behind the amendment, will reject it.

Lord Dormand of Easington

My Lords, before the noble Lord sits down, will he comment on what appears to be a parallel? If I understand him correctly, he seems to omit it as the logical conclusion of his argument. He knows that the Government compelled trade unions to have ballots about the establishment of political funds. Most contributions were going to the Labour Party. The Government did that because they felt quite sure that there would be a change. If I follow the noble Lord correctly, the board of directors has the responsibility for deciding whether a contribution should be made to a political party. Does he not feel that there is a parallel between the national executive of a union and a board of directors in that respect? After all, the national executive of a union deals with 99.9 per cent. of a union's business, though there has to be a ballot for a strike. Is there not a parallel between the work of the national executive in this respect and a company's board of directors?

Lord Boyd-Carpenter

My Lords, the proposal in this amendment is quite distinct and different from the state of the law as regards political contributions to trade unions. It does not propose the same arrangements as Parliament has laid down for trade unions. I do not wish to weary the House with my next point because I spent a little time on it during the course of my speech. A union has to have a ballot if it is to have a political fund. But having succeeded in a ballot to establish such a fund, for 10 years afterwards political contributions can be and are made, and can be and are made on a much larger scale in proportion than political contributions are made by companies. Therefore there is no comparison. These are totally different situations. There is also the point—I repeat it if the noble Lord did not take it on board—that, whereas in many cases a member of a trade union cannot without sacrificing his job leave a union of whose policy in this respect he disapproves, shareholders can.

3.45 p.m.

Lord Lloyd of Kilgerran

My Lords, on these Benches we strongly support the amendment so ably and comprehensively moved by the noble Lord, Lord Williams of Elvel. I shall be brief as I was in supporting similar amendments at earlier stages of the Bill. For the purposes of brevity I hope that the noble Lord, Lord Boyd-Carpenter, will forgive me if I do not follow him in his historical account of ages past. I say to him with the greatest respect that in his speech he clearly enunciated fly-blown phylacteries of an age that is past.

We must come up to date in these matters. Under this Government there has been a great extension of share ownership and this course is bound to continue. Consequently, responsibilities must arise from that course, responsibilities which did not arise so clearly in the past. Shareholders should now be allowed to have their say in how funds are spent by their boards of directors when those funds are being used for other than commercial matters.

Party political contributions, whatever the noble Lord says, are clearly a special case in this age of shareholder democracy. It is therefore bordering on being contrary to public policy that companies should be permitted to make contributions for political purposes to whatever party—without shareholders having the right to consider the matter carefully and clearly in a specific resolution before that political contribution is made. It is no use the noble Lord saying that shareholders can come along and complain. That is not sufficient. All we ask is that in order to bring company law up to date shareholders should be allowed to consider a specific resolution before a political contribution is made.

I submit that the proposals are simple and fair. Above all, they are necessary to bring the law up to date.

Baroness Oppenheim-Barnes

My Lords, I congratulate the noble Lord, Lord Williams of Elvel, on resisting on this occasion the temptation to turn this debate into a full-scale political one. He was extremely generous in offering the Conservative Party the opportunity to clean up its act. I return the compliment and, equally generously, offer the Labour Party the opportunity to clean up its act by turning down the trade union contributions that it receives. They are far larger than any contributions companies receive.

I do not intend to make a political speech. It is not necessary. A number of technical and practical points arise from the amendments to which I should like to draw the House's attention. The first point is an extremely technical one. It relates to the date of the annual general meeting of the company in which the special resolution is to be put before the shareholders and the financial year of the company itself. In many companies these will not coincide. Even if it were possible to achieve a completely democratic decision from the shareholders at the annual general meeting, it might be nearly a year before that decision was implemented. Anything might have happened in order to change their minds, because it would no longer be a retrospective decision. That is just one technical difficulty.

I now turn to what I see as an insurmountable practical obstacle to the stated objective of these amendments; namely, to widen shareholders' democractic power. There has been a great extension of share ownership under this Government. The noble Lord, Lord Williams, was kind and generous enough, once again, to pay tribute to this factor on the first day of the Committee in this Chamber.

Of course there is much wider share ownership under this Government, but, I fear, not enough for the purposes of these amendments. I say that because what they overlook, but what the noble Lord, Lord Williams, has not overlooked, is that whereas it is perfectly practical and possible to circulate separate resolutions before an annual general meeting and to get the proxies returned in good time as well as taking account of the views of those shareholders who actually attend the meeting, the fact is—I personally regret this—as the noble Lord so rightly said, a very substantial shareholding will often be in the hands of the institutions. It is they who will vote, stating their case, as the noble Lord said, not on behalf of their investors but on behalf of their contributors, but without consulting them and without knowing what are their views on the matter.

Therefore where are we as regards shareholders' democracy if that is to be the case and if a substantial vote is to be placed without any consultation? I do not think that travelling down that track will get us very far. Moreover, there may be a predator with a substantial shareholding who just wants to make things difficult for the board and who has therefore voted either for or against a political contribution and who held a substantial enough shareholding to make sufficient waves so that the board felt it had to take note of such votes.

There is another objection to these amendments of equal importance. For example, why has the noble Lord stopped at extending the shareholders' democracy to political contributions? What about all the other political matters to which my noble friend referred? What about the people who feel most strongly about their company's practices in relation to environmental matters, to South Africa and to animal experimentation? Would they want separate resolutions on each of those items at an annual general meeting? They may consider that such issues were as important as, if not more important than, political contributions. They would therefore want separate resolutions on each of the issues.

Thank goodness, in our democracy people with strong feelings on any matters, including political contributions, can influence companies most effectively. The two factors which will influence a company most are the investors who will not buy its shares and the consumers who will not buy its goods. That will influence companies more than any resolution which is passed at an annual general meeting.

But above all those considerations is the one to which my noble friend referred. It is a substantial one. It is the responsibility of the directors and the board to run the company in the best interests of the company and its shareholders. They must do so in their judgment. The responsibility is theirs and if they fail in their duty they will have to answer for it.

Companies cannot be run by referenda any more than can countries. These amendments, if carried, will not achieve their stated objective for the practical reasons which I have given. I urge your Lordships to resist them.

Lord Hatch of Lusby

My Lords, there have been some remarkable descriptions of what the party opposite considers to be shareholding democracy. Shareholding—yes; but where is the democracy? Neither the noble Lord, Lord Boyd-Carpenter, nor the noble Baroness, Lady Oppenheim-Barnes, said anything about the democratic rights of shareholders. That is something about which the party opposite has boasted. It is accorded to the public by widening, as we have agreed, the number of shareholders in our community. What relationship has the holding of shares to the determination of company policy? Is that not the nub of democracy?

In this amendment, which follows along the lines of an amendment which was passed previously in this House, we are stating that democracy involves the shareholders having the right to play a part in influencing company policy before—not after—it is put into operation. When the noble Lord, Lord Boyd-Carpenter, brushes aside the comparison with the position in the trade unions, he obviously does not know his trade unions. He said that a trade unionist who goes along to a meeting and takes part in a ballot for a political levy cannot then get out of paying such levy. Has the noble Lord never heard of opting out?

Lord Boyd-Carpenter

My Lords, perhaps I may intervene at this point. I said absolutely nothing of the sort suggested by the noble Lord. I rather resent his trying to attribute such a foolish remark to me. I ask him to refer to Hansard.

Lord Hatch of Lusby

My Lords, I am sorry, but according to the noble Lord the difference between a shareholder and a trade union is that whereas the shareholder can move his shares to another company the trade union member is unable to get out of paying the political levy if he does not like it. However, he is entitled to do so. There has been a system of contracting out since 1913. Any trade union member who disapproves of the political levy is fully entitled to refuse to pay it. That has been trade union law since 1913. Therefore, whether or not the noble Lord considers the accusation I made to be a foolish suggestion, that is the full implication of what he said regarding the comparison between shareholders and trade union members.

Lord Boyd-Carpenter

My Lords, I do not wish to take up any more of the time of the House, but the noble Lord persists in misrepresenting me. I said nothing about contracting out. I said that whereas a shareholder could sell his shares and get out, in many cases a trade unionist could not leave the union, however much he disapproved of what it was doing, because that might endanger his job. Has the noble Lord got the point now?

Lord Hatch of Lusby

Yes, my Lords. I got the point that the noble Lord did not mention contracting out. He did not do so because that would destroy his case. It is not a question of moving from one union to another. The member of the trade union is fully entitled to refuse to pay a political levy. The member would be concerned about the political levy. However, he would still keep his job and his membership of the union; but he would not have to pay the political levy. The shareholder, on the other hand, if he stays within the company—and many shareholders will wish to remain within the company for reasons quite different from political levies—is compelled to contribute to the political levy because the directors have decided that the company shall pay such a levy.

The noble Lord, Lord Boyd-Carpenter, expressed some surprise that my noble friend Lord Williams should suggest that this amendment would be good for the Conservative Party. It would. But much more important, it would be good for the political health of this country. That is a non-party political statement. Moreover, it is supported by members of the party opposite. I shall prove my point presently.

I am not certain that I agree completely with my noble friend Lord Williams. He said, in answer to the continued claim from the opposite side of the House that directors have the responsibility of making decisions for their company, that the political levy has no commercial significance. It depends upon how one defines "commercial". It is commercial interest when a government remove the top 20 per cent. of income tax. It is a commercial interest for those who benefit from having that tax removed. It is a commercial interest when company directors and executives see their remuneration increased by over 20 per cent. in a year when the Government are trying to keep wage claims down below the 7 to 8 per cent. rate of inflation. That is a commercial interest for those involved—in that case, the directors.

Is the party opposite then saying that the directors should be left in charge of company policy with respect to the political support that that company gives to different political parties; that the directors have no interest; that they are interested only in the companies' welfare? They have a personal interest in government policy, and that is not good for this country's political health. That has been commented upon from all sides and from no side. It is not good because, whether it is true or not, that is what the public perceives to be happening. What the public perceives is happening with the amendment is that the Government have double standards.

Under the 1984 law, the Government insist that trade unions ballot as to whether there should be a political fund but that companies should not be forced to follow the lines laid down by the shareholders with regard to political funds. That perception by the public is bad for this country's political health. It is bad when those political donations are made furtively and in a murky way through British United Industrialists or the river companies. It is far better for the Conservative Party and the country's political health for companies to decide as trade unions do.

The Government thought that they were undermining the Labour Party when they enforced the ballot, but they were not. They strengthened the Labour Party. If it is confident, the Conservative Party will see that open debate and decision by shareholders will be in its own interests and, as I say and what is much more important, in the interests of this country's political health. That is not just a partisan view. It was put forward in another place by the honourable Member for Aldridge-Brownhills who said, and I quote—

Noble Lords

Order, order!

4 p.m.

Lord Trefgarne

My Lords, I apologise for interrupting the noble Lord but I am afraid that he is out of order in quoting a Back-Bench Member of another place.

Lord Hatch of Lusby

My Lords, all right, then I shall paraphrase. The honourable Member for Aldridge-Brownhills said in another place that it would look partisan if rules and regulations were imposed by the Government on the Government's political opponents which would not apply to the government party. Later in the same speech he addressed himself to the Conservative Party and said that it was important that it should be seen to be fair-minded. He warned the Government of the danger that, by rejecting the measure that we had passed here, they would be seen to be unfair and that the public perception would be that the Conservative Party had become so particular in that affair that all it wanted was to reinforce its own finances.

That view was repeated in the debate in another place. So I suggest to those Members of the House who query whether my noble friend Lord Williams of Elvel was being sincere when he said that the amendment was good for the Conservative Party that there are members of their own party who think the same. There are many of us who think that the measure would be good for the cleanliness of British politics, and that only when it is seen that Parliament is using the same set of values for companies that support the Conservative Party as it uses for trade unions that support the Labour Party will the public consider that the Government are acting fairly and in a non-partisan way.

The alternative is public funding for political parties on both sides or, as was pointed out by the honourable Member for Aldridge-Brownhills, the Conservative Party will be seen to be the party of big business receiving underhand handouts, whereas the Labour Party, although it obtains much of its finance from the trade union movement, does so above board with the full consent of the members of those unions. Such consent is essential if we are to talk with any sincerity of a shareholding democracy. It is essential that the rules should apply also to company shareholders.

Lord Chelmer

My Lords, I shall refer briefly to the last remarks made by the noble Lord, Lord Hatch, about the public funding of political parties. The noble Lord, Lord Houghton, will remember that about 12 years ago he was chairman of a committee set up by Parliament to consider that point. I was then treasurer of the Conservative Party. We presented to the committee a complete breakdown of our income. It might put this debate into some perspective if one recalls that at that date—I feel sure now, too—about two-thirds of our party's income came from private subscriptions or ladies doing bring-and-buy sales and all those other worthy things one does to raise money. One-third came from corporate gifts.

One should bear those figures in mind when considering the proportion of its income which the Labour Party produces and that which it receives from the trade unions. One should consider them more carefully before being over-impressed by what the noble Lord, Lord Williams, said.

Lord Hatch of Lusby

My Lords, before the noble Lord sits down, will he tell the House how he knows those figures when the Conservative Party does not publish a breakdown of its finances?

Lord Chelmer

My Lords, I believe that I explained to the noble Lord that we openly produced the figures to the committee.

Baroness Seear

My Lords, there is a great sense of unreality about the debate. The truth of the matter is that of course the Conservative Party wants to keep things as they are because they bring it in a great deal of money. I do not blame any political party for wanting to obtain a great deal of money. I should like a lot of money for my political party but we do not get it. Perhaps that is why I feel rather strongly about what is going on at present.

All this arguing about the detail of how it is done and how practical or unpractical it is is so much pie in the sky, if I may use a rather unparliamentary phrase. The Conservatives want the money, of course they do. We on these Benches, no doubt partly because we do not get the money, think that that is a bad way of doing things. We thought and still think that the trade union contributions to the Labour Party are not particularly healthy either. The members have a right to contract out, that is perfectly true. For myself, I would rather they could contract in since it would give members a much better opportunity of not subscribing if they did not wish to do so.

This is an unhealthy way of financing both the parties. We all know that to be true. The Conservatives want to hang on to it because they want the money. We think that they ought not to have it and fund-raising ought to be carried out in a more democratic way. I shall repeat, before somebody else does, that that is in part no doubt because we do not obtain it.

For those reasons I support the amendment of the noble Lord, Lord Williams. I would do so with more enthusiasm if he believed in contracting in instead of contracting out, but as the lesser of the two evils on this occasion, I support the amendment.

4.15 p.m.

Lord McAlpine of West Green

My Lords, as treasurer of the Conservative Party, I have an obvious interest in this debate which I am happy to declare to your Lordships. I believe that the Opposition's proposals are not compatible with the normal principles of company law.

It would be absurd to require shareholders at their annual general meetings to vote for the disbursement of sums of money so insignificant in comparison with the turnover of their businesses. It would also conflict with the directors' freedom to run companies in the interests of the shareholders. Management actions can already be questioned at a company's annual general meeting.

The 1967 Companies Act makes such questions as political donations easier by requiring that companies identify their political donations. That seems to me to be a sensible arrangement. Surely no serious and detached observer of British company law can believe that it needs any amendment in this area. I wish to address the question of why a measure so obviously incompatible with the principles of company law should be put forward at all. With respect, is it not a little disingenuous for the noble Lord, Lord Williams, to claim that his proposals are driven by a high-minded desire to improve company law?

The real motives seem to lie elsewhere. First, the measure is a response to the legislation passed in 1984 requiring trade unionists to vote on the political levy for the Labour Party. Secondly, it is a step towards state funding of political parties. Thirdly, it arises from a series of mischievous reports on Conservative Party fund-raising.

I hope that your Lordships will permit me to consider each of these arguments briefly in turn. It may appeal to the fair-minded instincts of noble Lords to assert that the Labour Party depends for its funds on trade unions, that the Conservative Party depends in the same way on big companies and that if the law on trade union political levies was changed in 1984, so company law should also be changed.

However, such apparent even-handedness is an illusion. For most trade unionists the political levy is large in relation to the value of the benefits they receive from their trade unions. A political levy totalling 5 per cent. of a member's contribution is not unusual. By contrast, if a company makes a donation to the Conservative Party, it is likely to be trivial in relation to the shareholders' dividends, perhaps 10p for every £100 of dividend or 0.1 per cent. of the dividend.

Trade unions have an explicit constitutional position in the Labour Party. Their established role as the paymasters of the Labour Party is matched by their power as king-makers, electing the leader and voting on policy at conference. We are proud that companies have no such role in the Conservative Party. I do not therefore believe that there is any comparison between the measures in the 1984 Trade Union Act on political levy and company contributions to the Conservative Party.

I now turn to the second concern which may be driving those who support this measure—a desire to see state funding for political parties. If the Opposition's proposals were ever passed, and if they succeeded in their objective of reducing the flow of company donations to the Conservative Party, it would move us one step closer to state funding for political parties. We have always been opposed to that and would remain so, whatever the financial circumstances of the Conservative Party. However, the fact is that the Labour Party's proposal would put such an idea back on the political agenda. We should not find ourselves being pushed towards it by this measure, cynically tacked on to a Bill intended for quite another purpose.

Thirdly, I wish to reject as strongly as possible the disgraceful slurs cast on Conservative finances in another place. It shocked me that Labour spokesmen debating this measure referred to a murky and somewhat grubby relationship between the companies and the Conservative Party, great subterfuges and clandestine procedures. These are outrageous allegations, and I hope that nobody will be moved to support this ill-conceived clause as a result of such false charges.

We in the Conservative Party know that our financial arrangements must be clear and above board, as anything else would damage our party's reputation. We scrupulously follow all our obligations on disclosure of information. We conscientiously publish audited accounts of the party every year.

One charge is that the so-called river companies were set up after the war as some sort of cover for fund-raising operations. Not so, my Lords; not so. They were established because it was necessary to have a proper corporate framework to enable people to bequeath money to the party in their wills without fear of challenge. They were also necessary for the party to hold leases or own property. That is why the river companies were set up. To claim that it was a secret operation is frankly rubbish. The details were released to the press by Central Office and reported by the Daily Telegraph when the companies were originally set up in 1949. The river companies have always filed their annual audited accounts at Companies House, as they were obliged to do.

Another charge is that the Conservative Party is somehow encouraging companies to hide the true scale of their donations. The Labour Party research department claimed to have identified company donations of about £5.75 million, as against £15 million total party income during 1987. I cannot vouch for the accuracy of the Labour Party research department's figures but the Companies Act is quite clear on the obligation to reveal company donations.

Of course we also receive funds from many tens of thousands of people from all over the country. They support us because they believe that it is essential that the Conservative Government continue to remain in power. We have not and will not disclose the names of those people. If they wish to announce that they are supporters of the Conservative Party and indicate how much they have given to the party, that is entirely up to them. The Opposition are in such a muddle that they claim that British United Industrialists is some sort of Tory front organisation. It is not; absolutely it is not. It is an independent organisation with a charter, supporting parties and organisations that believe in free enterprise.

The Opposition think that Aims of Industry is a cover for Tory Party donations. It is not. It is an independent pressure group and think-tank. What is more, the Opposition claim that our bank account called the Free Enterprise Account is some sort of special concealed fund. It is not. It is the name on our cheque book. It stands there because free enterprise is what the Government stand for. It is what my right honourable friend the Prime Minister stands for.

We are clearly committed to the creating of conditions in which business can thrive and we can all become more prosperous. Many businessmen who have seen their companies grow and prosper during the past 10 years know that this is due to the economic and industrial policies of this Government. That is why they give money to the Conservative Party. They are serving the interests of their shareholders and their employees and they are quite right to do so.

Lord Houghton of Sowerby

My Lords, if there were any members of the parliaments of Europe listening to our debate, they would think that we were still in the primary stage of our political development. I am glad that reference has been made to the committee of which I had the honour to be chairman—alas, now 20 years ago—which was formed to study in depth for the first and last time the financing of our political parties. Where do our political parties get their money from? How do they get it? Is it desirable that they should continue to be financed in that way? We produced a report. It was not a unanimous one, but I doubt whether anyone on the committee was satisfied with what was discovered about the financing of our political parties, whether from one side of industry or the other.

In regard to my first comment, when we travelled round Europe to find out what other countries were doing concerning the financing of their political parties, speaking from memory I believe we failed to discover any country whose activities could give rise to such a debate as this. Corporate donations to political parties in Europe are banned, and ours should be too. In West Germany it was found that tax-deductible contributions to political parties by industry had become so unhealthy an influence in the financing of politics generally that they were banned altogether in return for a measure of state aid to all political parties which qualified for a certain measure of public support.

When we went to Austria we discovered that the Austrians had banned a practice which had long been established there apparently, whereby government contractors always made by tradition a donation to the governing party. The Austrians banned those donations in return for state aid to their political parties. We are just simply out of date. We are discussing the microscopic end of a thoroughly ramshackle piece of machinery. Financing our political parties in this way cannot be justified on any grounds whatsoever. For one thing it perpetuates the class and industrial division between one section of the community and another, as the donations are financed by two enormous sectional interests: the boss class on one side and the worker class on the other.

I know that it is too late in this long study of this long Bill to begin to go back to first principles. We have an amendment in front of us. We are fiddling about with this matter and playing tiddly-winks without looking at the major rules of the game. We have a system now which fails to give any public support to new elements in our political organisation. It is all left, so to speak, to the voluntary effort. All money going into political parties whether from trade unions or from industry is tainted money. It all springs from self-interest. It is not there in the national interest.

The noble Lord, Lord Boyd-Carpenter, referred to the fact that a particular political party might best serve the interests of a company and that a company may consider whether there was anything in the programmes of other political parties which might harm its interests. It is a matter of putting one's money where one's interests lie. The trade unions do the same. But who will say that the political levy can be justified? It is corrupt. It is as corrupt as all the rest of the financing of our political parties for the simple reason that it is organised and canvassed for. It certainly has a measure of control on the trade union side but very little on the company side.

However, it is not good going on like this. If we are to face the future in Europe I believe that we must bring some of our political and parliamentary institutions up to date. It is astonishing how backward we are. The report that we produced, challenging as it was for the majority, aroused no interest in the political parties. As far as I recall, there has been no debate on the report in either House. No one wanted to touch it. They were all afraid that if they began to give public money to political parties, the public would say, "Ah, such and such a party is going to use public money to finance its politics". But the proper financing of political parties goes to the very root of our parliamentary democracy.

Some assistance should be provided to political parties apart from the large sums of money they obtain from particular sources. Who is studying the present financing of some of our smaller political parties at this moment? There are indications of substantial support coming from one quarter. That is thoroughly unhealthy, as the noble Baroness said a moment or two ago. However, we must get on with the amendment.

Noble Lords

Hear, hear!

Lord Houghton of Sowerby

My Lords, I know that noble Lords opposite will dodge this subject whenever it is raised. Whenever an opportunity occurs, they try to get on with the tiddly-winks. That is what we are doing again this afternoon. From my point of view, it is not of profound importance whether we stick to what is in the Bill or whether we put something else in its place. That is the smallest beer in relation to the major issue of who is financing our politics. This measure is one little nudge forward to get one little bit more democracy into the method of financing political parties from public companies when we should not receive money from that source of vested interest at all.

I support the amendment moved by my noble friend on the Opposition Front Bench because it is a little nudge forward. However, that is all it is. One day, however, we shall come round to this matter because I do not believe we can continue financing political parties in the way we do, especially when we are trying to free trade unions on one hand and companies on the other from the incubus of being expected to support the political parties which may or may not satisfy the aspirations of their members.

I thank noble Lords for listening to a lecture. Why is it that I have to try to precipitate our debates into the future, look at the time ahead, look at where we are going and how we are going to fulfil our obligations in Europe? Can the House not find someone younger to do that?

Lord Young of Graffham

My Lords, I have two interests to declare this afternoon. First, I wish to say that I have the honour to be the deputy chairman of the Conservative Party. For that reason alone I doubt whether I would have intervened in your Lordships' deliberations this afternoon. However, I have a second interest which I believe overrides that.

The noble Lord, Lord Williams of Elvel, has already this afternoon confessed that these days he has difficulty in recognising noble Lords opposite. I should remind him that until a few months ago I had the privilege to sit where my noble friend the Minister sits now. During that time I was able to conclude our first major review of company law since the Companies Act 1981. That was a very full review. This Bill embodies the results of that review and contains, for example, Community directives that impinge on company law. It amends the law relating to insolvency, insurance and building societies. It even covers insider dealing. It is a very serious measure, and one that in its present shape is welcomed by all in industry.

The amendment proposed by the noble Lord, Lord Williams of Elvel, has nothing to do with this serious review of company law. It is, I fear, only a mischievous attempt to gain party political advantage and is not motivated by any desire to improve the workings of a company. Indeed, if it were carried out, it would make the conduct of business more difficult and not less. The procedure which the noble Lord proposes for voting at an annual general meeting to give retrospective approval to political donations would create no more than a time-wasting model.

The whole concept of part of a directors' report being sent to shareholders and to the annual general meeting without the directors having signed it is, to say the least, curious. It is hardly surprising that the advocates of this rather silly measure have tied themselves into knots because it conflicts with the existing principles and practices of our company law. Directors must be free to manage companies in the interests of their shareholders. That is the clear principle on which our whole system of company law is based. Shareholders must have the information that enables them to question the performance of directors. That is why we have accounts and that is why earlier companies legislation specified that information on charitable and political giving should be specified, and it is on each occasion. But if we have to start identifying individual commercial transactions, no matter how small, then we are on the edge of a slippery slope. We shall end with the directors losing their power to act commercially in the interests of their shareholders. The whole of our company law is based on the differing roles played by shareholders and by directors. Let us not, pray, for some shortsighted political gain, confuse the two and undermine the commercial structure on which the wealth of this country is based.

4.30. p.m.

Lord Trefgarne

My Lords, as your Lordships may recall, the amendments that were originally accepted by this House would require that where a political donation was disclosed in the directors' report, that part of the report should not be signed, but should be put to the general meeting retrospectively for approval by ordinary resolution. We made clear our opposition to the original amendments at the time and we accordingly supported the back-bench amendment in another place which resulted in their reversal.

Our reasons for taking this position are quite straightforward. The existing Companies Acts have required companies since 1967 to disclose in the directors' report any gifts of money for political purposes that exceed a specified sum, currently £200. Both the amount of the donation and the name of the recipient must be shown. The directors' report of course has to be sent to shareholders before the company's general meeting.

Shareholders who are concerned at the nature or scale of such donations can raise the subject in the discussion of the accounts at the annual general meeting. Moreover, shareholders have the right to put an ordinary resolution to the general meeting under the normal procedures to give voice to any worries that they may have on the subject. The Government think that these existing safeguards of the shareholders' interests are wholly adequate. If shareholders do not want their company donating money to political parties, they have the chance to say so at the annual general meeting.

As I have said, we believe that these arrangements are adequate. Accordingly, we do not agree with the amendment proposed by the noble Lord, Lord Williams of Elvel. I hope that the House will agree to the amendments proposed by the other place.

Lord Williams of Elvel

My Lords, I am most grateful to noble Lords who have taken part in this debate. It has been a very lengthy debate but, as I remember, the last time we discussed the subject there was a fairly short debate and it seemed sensible for us now to go over this topic in some detail. I must say at the outset of my wind-up that, in essence, I agree with what the noble Baroness, Lady Seear, said. There can be arguments technically one way or the other, but ultimately—I see the faces ranged opposite me, and I congratulate the noble Lord the Government Chief Whip on his efforts—I can understand that it is in the interests of the Conservative Party that these amendments that I am proposing should not go through.

On the technical points, if I may answer these, the noble Lord, Lord Boyd-Carpenter, and a number of other noble Lords made the point that the directors should manage a company in the best interest of their shareholders, their workforce and others in accordance with the Companies Act. That is true, as I said in my opening speech, provided the directors stick to the memorandum and articles of association.

Certain companies have had votes on political contributions; for example, the Rank Organisation had a vote and Marks and Spencer and British and Commonwealth also had a vote. I do not remember the directors of those companies saying that they were in any way derogating their responsibilities of managing the companies commercially in the interests of their shareholders. So that is not a very forceful argument.

So far as the political levy is concerned —I think there has been an exchange between the noble Lord, Lord Boyd-Carpenter, and my noble friend Lord Hatch—it seems to me perfectly clear that trade unionists can contract out of the political levy. Shareholders cannot contract out of political donations. That is the law as it stands. So there is not a comparison between the two.

The noble Baroness, Lady Oppenheim-Barnes, raised what I thought was one of the most interesting technical subjects about the date of the AGM. I do not think it is a very serious point—

Baroness Oppenheim-Barnes


Lord Williams of Elvel

I will argue about that, if that is what the noble Baroness wants, but I shall have to go on for 10 minutes; I know about dates of AGMs. But the argument is about institutional investors and whether they would have the opportunity to consult their trustees. Once the question is put they would have to consult their trustees, and the trustees of the institutions would have to take a view. I remind the noble Baroness that many pension funds have trade union trustees and it would be very interesting to see, were the question put, which way the trustees of pension funds would instruct their managers to vote. They might decide that they all wanted to give money to the Conservative Party. Alternatively, they might not. That would introduce a very important element of democratisation of institutional investors. I believe that institutional managers should contact their trustees more often, and trustees should consult their members. I am all in favour of that.

In, I thought, a slightly defensive manner, the noble Lord, Lord McAlpine, took us through the river companies and the other great things that the Conservative Party stands for. I was not making the points that he was trying to answer. The only point I would make is that I do not think the amendments I am proposing are contrary to company law. The legal advice I have had does not indicate that they are. They are perfectly in order and perfectly consonant with existing company law and could be incorporated quite easily into the Companies Act.

So far as other contributions are concerned, my noble friend Lord Houghton of Sowerby came back to the very important study which he made, and talked about state funding. I see a certain amount of virtue in this. I would go a long way with what he said, because I believe we are very primitive in our funding of political parties at the moment. We shall have more to say on that as we get closer to the next general election.

Ultimately, may I assure the noble Lord, Lord Young of Graffham, that I did recognise him, because I had the honour to stand opposite him when he was in his place as Secretary of State, and I remembered his features as he walked into the Chamber this afternoon. But I must say that I do not think his contribution today was up to the standard of the previous contributions he made when he was at that Dispatch Box. I hope that he will not mind my making that remark.

The noble Baroness, Lady Seear, is right. The Conservative Party want the money and they think that the effect of these amendments might be to diminish the amount of money coming to the Conservative Party. If they vote against my amendment, then noble Lords will be demonstrating the noble Baroness's argument that they have no serious interest in shareholder democracy or fairness or honourable behaviour. They will simply troop into the Lobby in blind obedience to their Whip, because the Conservative Party needs the money, and I hope that they will be suitably ashamed. My Lords, I beg to move.

4.38 p.m.

On Question, Whether this House do disagree with the commons in their Amendment no.1.

Their Lordships divided: Contents, 110; Not-Contents, 223.

Addington, L. Jenkins of Putney, L.
Airedale, L. John-Mackie, L.
Amherst, E. Kearton, L.
Ardwick, L. Kilmarnock, L.
Attlee, E. Kirkhill, L.
Aylestone, L. Leatherland, L.
Banks, L. Listowel, E.
Beaumont of Whitley, L. Llewelyn-Davies of Hastoe, B.
Birk, B.
Blackstone, B. Lloyd of Kilgerran, L.
Blease, L. Lockwood, B.
Bonham-Carter, L. Longford, E.
Boston of Faversham, L. Lovell-Davis, L.
Bottomley, L. McIntosh of Haringey, L.
Broadbridge, L. Mackie of Benshie, L.
Brooks of Temorfa, L. Mayhew, L.
Bruce of Donington, L. Meston, L.
Callaghan of Cardiff, L. Milner of Leeds, L.
Campbell of Eskan, L. Molloy, L.
Carmichael of Kelvingrove, L. Mountevans, L.
Mulley, L.
Carter, L. Nicol, B.
Cledwyn of Penrhos, L. Northfield, L.
Cocks of Hartcliffe, L. Ogmore, L.
Crook, L. Oram, L.
Cudlipp, L. Parry, L.
David, B. Perry of Walton, L.
Davies, L. Peston, L.
Dean of Beswick, L. Pitt of Hampstead, L.
Diamond, L. Ponsonby of Shulbrede, L. [Teller.]
Donaldson of Kingsbridge, L.
Donoughue, L. Rochester, L.
Dormand of Easington, L. Sainsbury, L.
Falkender, B. Seear, B.
Falkland, V. Sefton of Garston, L.
Fisher of Rednal, B. Shackleton, L.
Foot, L. Shepherd, L.
Gallacher, L. Soper, L.
Galpern, L. Stallard, L.
Gladwyn, L. Stedman, B.
Glenamara, L. Stewart of Fulham, L.
Grey, E. Stoddart of Swindon, L.
Grimond, L. Strabolgi, L.
Hampton, L. Taylor of Gryfe, L.
Hanworth, V. Taylor of Mansfield, L.
Harris of Greenwich, L. Tordoff, L. [Teller]
Hatch of Lusby, L. Underhill, L.
Hirshfield, L. Wallace of Coslany, L.
Houghton of Sowerby, L. Walston, L.
Hughes, L. Wedderburn of Charlton, L
Hunt, L. Whaddon, L.
Hutchinson of Lullington, L. Wigoder, L.
Irving of Dartford, L. Williams of Elvel, L.
Jacques, L. Willis, L.
Jay, L. Wilson of Rievaulx, L.
Jeger, B. Winterbottom, L.
Jenkins of Hillhead, L.
Airey of Abingdon, B. Goold, L.
Alexander of Tunis, E. Gormanston, V.
Alexander of Weedon, L. Gray of Contin, L.
Allenby of Megiddo, V. Greenway, L.
Allerton, L. Gridley, L.
Alport, L. Grimston of Westbury, L.
Annaly, L. Grimthorpe, L.
Arran, E. Haig, E.
Ashbourne, L. Hailsham of Saint Marylebone, L.
Astor, V.
Auckland, L. Halifax, E.
Barber, L. Halsbury, E.
Beaverbrook, L. Hardinge of Penshurst, L.
Belhaven and Stenton, L. Harlech, L.
Beloff, L. Harmar-Nicholls, L.
Belstead, L. Harvington, L.
Benson, L. Havers, L.
Bessborough, E. Henley, L.
Biddulph, L. Hertford, M.
Birdwood, L. Hesketh, L.
Blake, L. Hives, L.
Bolton, L. Holderness, L.
Borthwick, L. Home of the Hirsel, L.
Boyd-Carpenter, L. Hood, V.
Brabazon of Tara, L. Hooper, B.
Braye, B. Huntly, M.
Brentford, V. Hylton-Foster, B.
Brookeborough, V. Ingrow, L.
Brougham and Vaux, L. Jenkin of Roding, L.
Buccleuch and Queensberry, D. Johnston of Rockport, L.
Joseph, L.
Butterworth, L. Kaberry of Adel, L.
Caithness, E. Kemsley, V.
Camden, M. Kimball, L.
Campbell of Alloway, L. Kimberley, E.
Campbell of Croy, L. Knutsford, V.
Carnegy of Lour, B. Lauderdale, E.
Carnock, L. Layton, L.
Carr of Hadley, L. Lindsey and Abingdon, E.
Chelmer, L. Liverpool, E.
Clanwilliam, E. Lloyd of Hampstead, L.
Colnbrook, L. Long, V.
Constantine of Stanmore, L. Lonsdale, E.
Cork and Orrery, E. Lothian, M.
Cottesloe, L. Lucas of Chilworth, L.
Cowley, E. Luke, L.
Crathorne, L. Lurgan, L.
Crawshaw, L. Lyell, L.
Crickhowell, L. McAlpine of Moffat, L.
Cullen of Ashbourne, L. McAlpine of West Green, L.
Dacre of Glanton, L. McColl of Dulwich, L.
Daventry, V. Mackay of Clashfern, L.
Davidson, V. [Teller.] Macleod of Borve, B.
De Freyne, L. Macpherson of Drumochter, L.
Denham, L. [Teller]
Dilhorne, V. Malmesbury, E.
Dundee, E. Mancroft, L.
Eccles, V. Manton, L.
Elibank, L. Margadale, L.
Ellenborough, L. Marley, L.
Elles, B. Marshall of Leeds, L.
Elliot of Harwood, B. Masham of Ilton, B.
Elliott of Morpeth, L. Merrivale, L.
Elton, L. Middleton, L.
Erne, E. Morris, L.
Erroll of Hale, L. Mottistone, L.
Faithfull, B. Mountgarret, V.
Fanshawe of Richmond, L. Mowbray and Stourton, L.
Ferrers, E. Munster, E.
Forbes, L. Murton of Lindisfarne, L.
Forester, L. Nelson, E.
Forte, L. Norfolk, D.
Fortescue, E. Norrie, L.
Fraser of Carmyllie, L. Nugent of Guildford, L.
Fraser of Kilmorack, L. Onslow, E.
Gainford, L. Oppenheim-Barnes, B.
Gardner of Parkes, B. Orkney, E.
Gibson-Watt, L. Orr-Ewing, L.
Gisborough, L. Oxfuird, V.
Glenarthur, L. Peel, E.
Pender, L. Southborough, L.
Platt of Writtle, B. Stanley of Alderley, L.
Plummer of St. Marylebone, L. Stevens of Ludgate, L.
Stockton, E.
Polwarth, L. Stodart of Leaston, L.
Porritt, L. Strange, B.
Portman, V. Strathclyde, L.
Pym, L. Strathcona and Mount Royal, L.
Quinton, L.
Rankeillour, L. Strathmore and Kinghorne, E.
Reay, L.
Redesdale, L. Suffield, L.
Rees, L. Swinfen, L.
Renton, L. Swinton, E.
Renwick, L. Terrington, L.
Rippon of Hexham, L. Teviot, L.
Rochdale, V. Thomas of Gwydir, L.
Rockley, L. Thomas of Swynnerton, L.
Rodney, L. Thurlow, L.
Romney, E. Torphichen, L.
Rootes, L. Tranmire, L.
Rotherwick, L. Trefgarne, L.
Sackville, L. Ullswater, V.
Sainsbury of Preston Candover, L. Vaux of Harrowden, L.
Waldegrave, E.
St. Aldwyn, E. Watkinson, V.
St. Davids, V. Wedgwood, L.
St. John of Fawsley, L. Whitelaw, V.
Saltoun of Abernethy, Ly. Windlesham, L.
Sanderson of Bowden, L. Wise, L.
Sandys, L. Wolfson, L.
Sempill, Ly. Wyatt of Weeford, L.
Shannon, E. Wynford, L.
Shrewsbury, E. Young, B.
Skelmersdale, L. Young of Graffham, L.

Resolved in the negative, and Motion disagreed to accordingly.

4.47 p.m.

Lord Trefgarne

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1.

Moved, That the House do agree with the Commons in their Amendment No. 1.—(Lord Trefgarne.)

On Question, Motion agreed to.

[Amendment No. 2A not moved.]