Political Parties: Funding (Hansard, 15 November 1990)

The Minister of State, Home Office (Earl Ferrers)
My Lords, none.

§ Lord Holme of Cheltenham
My Lords, I thank the noble Earl for his admirably brief Answer. Is he aware that there is an election coming up soon?

Noble Lords
Which one?

§ Lord Holme of Cheltenham
My Lords, I do not refer to the election which exclusively preoccupies the attention of the party opposite. I refer to the election which involves everyone in the country. Is the Minister aware that at that election there will be a serious double standard? This House and Parliament generally requires companies, trade unions, businesses and charities to publish their accounts and for them to be open and accountable. Does he not agree that there is a double standard in that political parties alone are exempt from this requirement and, when the election comes, voters will be deprived of information that is relevant to their decision?

Earl Ferrers
My Lords, no, I do not think so. Company law requires that political contributions in excess of £200 in any financial year must be mentioned in a company's annual report, together with a note of the recipients. The law does not define political parties and as such they are not recognised by electoral law —only the candidates are recognised. If parties are in receipt of gifts which are freely given, I do not see that there is any reason to say where the gifts have come from.

§ Lord Mayhew
My Lords, does the noble Earl agree that there is another example of double standards? The Government have rightly required unions to hold ballots before making political levies, but they oppose any requirement of shareholders to hold ballots before making political donations. Does the Minister agree that that is a rather discreditable example of partisanship?

Earl Ferrers
My Lords, I do not think so at all. People can buy shares in whatever companies they choose and they can remove their shareholdings. If one is a member of a trade union one can remain a member of it and pay the funds irrespective of where they go.

The Viscount of Oxfuird
My Lords, the Question on the Order Paper says that there should be a declaration of all their sources of funding and to publish full accounts". Does not that mean that a proper audit has to take place which will automatically involve an audit of membership? Can the noble Earl comment on the membership of the Liberal Democrat Party?

Earl Ferrers
My Lords, that is a very interesting question indeed. I do not think that I shall venture into that quarter.

§ Lord Morris of Castle Morris
My Lords, can the noble Earl tell the House whether any foreign-based companies are currently making donations to any British political party? If so, can he advise the House how many companies there are and what are the funds involved?

Earl Ferrers
My Lords, the answers are no, no and no to all three questions.

§ Lord Bonham-Carter
My Lords, is the reason why the noble Earl is so reluctant to answer any of these straightforward questions straightforwardly that the Conservative Party is profoundly ashamed of the sources of its funds and of the influence that its funders bring to bear on its policies?

Earl Ferrers
My Lords, I do not understand the noble Lord, Lord Bonham-Carter, and not for the first time. He said that I have not answered the questions straightforwardly. I answered the last three questions with a "no, no and no". I do not think that anyone can be more straightforward than that. However, coming to the substance of the question asked by the noble Lord, Lord Bonham-Carter, the answer to that is no, too.

§ Lord Wade of Chorlton
My Lords, does my noble friend agree that, as far as the Conservative Party is concerned, there has been a no more honourable organisation as regards the raising of funds? Surely, any company that makes a donation to a political party makes quite clear in its accounts that it does so and such information is public. Does not my noble friend agree that when a private individual gives his own money to anyone, that should be his own private business?

Earl Ferrers
My Lords, in deference to the noble Lord, Lord Bonham-Carter, the answer is yes.

§ Lord Monkswell
My Lords, after 11 years of a Conservative Government, is not the noble Earl aware that there has been a change in the way that money is available for disbursement? Is he further aware that until fairly recently the sources of funds for political parties were, in the main, the trade unions and companies? However, since the successes—if one likes to describe them in that way—of the Conservative Government, individual wealth has increased. That wealth has become a major potential source of funding for political parties. Does not the Minister agree that that is a reason for the Government to review the regulations that pertain to the funding of political parties?

Earl Ferrers
My Lords, I am very grateful to the noble Lord, Lord Monkswell, for having acknowledged that over the past 11 years individual wealth has increased. That is a very good reason why companies should give donations to the Conservative Party.

§ Lord Molloy
My Lords, many people in this country are concerned about financial contributions by trade unions to the Labour Party and by the City to the Conservative Party. I am not too sure who contributes to the Liberal Democrat Party. In so far as this concern has been reflected in the House today — and the noble Earl has taken full cognizance of it— will he consider with the Leader of the House the possibility of one day having a full debate on this particularly important subject so that the matter can be cleared up for the benefit not only of Members of this House but for the people of this country?

Earl Ferrers
My Lords, if noble Lords wish to have a debate on this subject it is for your Lordships to arrange it through the usual channels. The position is absolutely crystal clear. Those companies which give over £200 to a political party are obliged to say so. Any individual who wishes to give of his own money can do so quite freely. There is no reason why these donations should be declared by a political party of any kind for the very good reason that political parties are not described or prescribed in law.

§ Baroness Oppenheim-Barnes
My Lords, will my noble friend educate the parties opposite by telling them that the biggest donation to the Conservative Party is time which is given by people in the party organisations who work to raise a very large proportion of the money that is given to the party?

Earl Ferrers
My Lords, my noble friend is absolutely right. Money is one thing, but actual work and dedication is another. Both of those factors are very important. The party of which I am a member is very good at both.

§ Lord Whaddon
My Lords, does not the noble Earl agree that it is simple justice that individual shareholders should be given similar rights to those enjoyed by individual trade unionists; namely, the right of opting out individually without shareholders being obliged to contribute to the Conservative Party as a condition of holding shares?

Earl Ferrers
My Lords, if an individual does not like the way in which his company is dealing with 448 matters, he can raise it at the annual general meeting or he can sell his shareholding. I know of one company which subscribed at a general election to all three parties, presumably because the company did not wish to upset anyone and in order to keep the hounds off them. I thought that was rather wet.

§ Lord Brookes
My Lords, does my noble friend agree that for many years it has been much easier to opt out of a company by selling one's shares than to opt out of a union in order to keep one's job?

Earl Ferrers
My Lords, my noble friend is entirely correct.

§ Lord Molloy
He is not.

Earl Ferrers
My Lords, my noble friend asked me a question. If the noble Lord, Lord Molloy, wishes to answer it he had better come to this side of the House.

§ Lord Molloy
My Lords, I am perfectly willing to swap and to go to the other side of the House and ask my question right now.

§ Lord Underhill
My Lords, does the noble Earl agree that we generally take pride in the way our elections are conducted through the Representation of the People Act? Does he further agree that this failure of openness in political affairs does great harm to the provisions of the Representation of the People Act? I am a member of a party which for nearly 60 years has always published its accounts. Surely that is an example for other parties. The public would like to know and to have full details.

Earl Ferrers
My Lords, that may be an example, but there is no reason to change the law.

§ Lord Nugent of Guildford
My Lords, is my noble friend aware that I had the honour to represent a constituency? We had a membership of more than 10,000. They subscribed in order to engage an agent and keep the office going and they also made a contribution to headquarters. That is quite common form in most constituencies in the country. We published our accounts every year. Is my noble friend further aware that I have yet to see the publication of the accounts of Labour Party constituency organisations? They might show the contribution local union officials make in the running of them.

Earl Ferrers
My Lords, my noble friend is entirely correct. Once one goes down that path the matter becomes extremely complicated. It could be impractical to require political parties to declare all their sources of funding, which include large numbers of small individual donations. As my noble friend said, one also becomes involved with paid employees as well.