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Mr. Robert Hughes (Aberdeen, North) : On a point of order, Madam Speaker. Is not it an ancient tradition in the House and in the country that the civil service is non-political and apolitical? During the speech of my right hon. Friend the Member for Derby, South (Mrs. Beckett), eight civil servants sitting in the Box have been passing notes to the Minister on political points. Is not that an example of the stinking corruption of the Government and do not you, Madam Speaker, have the power to remove civil servants who are being tainted by such an example?

Madam Speaker : The hon. Gentleman will not expect me to give credibility to what he has just said. We must bear in mind the fact that those to whom he refers cannot answer for themselves.

Mr. Hughes : Further to that point of order, Madam Speaker. I understand perfectly that those who serve the Government cannot answer for themselves. That is all the more reason why they themselves should make it clear that they are not associated with the Government's political fortunes. If you, Madam Speaker, have no power to remove them and if the Government do not have the decency to remove those civil servants from temptation, might not it be better if the civil servants took their own action to protect their own order?

Madam Speaker : That is not a matter for me.

4.35 pm

The Secretary of State for Employment (Mr. David Hunt) : I beg to move, to leave out from House' to the end of the Question and to add instead thereof :

believes that the principle of voluntary funding underpins the strength of democratic political parties in this country ; records its concern at the purchase by trade unions of votes in the election of the Labour Party leadership, the selection of candidates and of votes on policy at Labour's Party Conference sufficient to secure binding commitments ; and calls upon the Labour Party to end the control over its policy, organisation and leadership wielded by a small number of trade union leaders.'.

I have been in this House for about 17 years, but I do not believe that I have ever heard such a shabby, irresponsible, miserable speech. What a waste of an Opposition day this is. Gone suddenly are the demands by the right hon. Lady for debates on public expenditure, Bosnia and unemployment. It is amazing what a little good news will do. The right hon. Lady calls herself the deputy Leader of the Labour party. I believe that she will grow to

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be quite ashamed of her speech, which was riddled with rumour, innuendo and smear. She referred to an atmosphere of sleaze. The only atmosphere of sleaze that exists after her speech is to be found among Opposition Members.

Why are we debating political funding today? I know the answer. From the depths of Walworth road has come some rather bad news. The general election defeat has left the Labour party with the most serious financial crisis in its history. I hear someone say that that is not true. I have here the report of the national executive committee of the Labour party, which says :

"The general election defeat has left the Labour party with probably the most serious financial crisis in its history." Now we know why we are having this debate. The Labour party wants to get its paws on the public purse. It wants the taxpayer to bail out its sinking ship. Enough of the pretence. That is really what this debate is all about. It is about the Labour party's desire to have state funding of political parties. But the confidence trick is exposed for what it really is--just a ruse by that party to get its hands on taxpayers' money. That is the party's secret agenda. The saddest aspect of this debate so far is the willingness of the main Opposition party to strike at the heart of our political system and our democracy. They are trying, by a series of slurs and innuendos, to bring our democracy into disrepute. In recent years they have not only opposed the Conservative Government but sought to undermine the very foundations of our political system. In doing so, they destroy their own credibility. They now attack everything. They do not have policies any more ; they just manufacture political smears.

Let me give some examples. Despite the words of the Lord President at Prime Minister's Question Time todawn to be completely without foundation. A statement issued earlier today, which was referred to by the Lord President, made it clear not only that no such meeting as had been alleged took place but that neither Prince Bandar Bin Sultan nor anyone connected with the Saudi Arabian Government has made donations to the Conservative party, directly or indirectly, or has been asked for such donations. Why, then, did not the right hon. Lady withdraw that disgraceful imputation?

Mr. D. N. Campbell-Savours (Workington) : Will the Secretary of State give way?

Mr. Tony Banks (Newham, North-West) : Will the Secretary of State give way?

Mr. Hunt : I will give way later.

In her speech, the right hon. Lady sought not only to uphold the credibility of that baseless allegation, but to raise a number of other unsubstantiated allegations. I believe that Labour Members will fail in their attempt, because the integrity of our system shines through all that they say.

Mr. Campbell-Savours : Will the Secretary of State give way?

Madam Speaker : Order. The hon. Gentleman must resume his seat ; the Secretary of State is not giving way now.

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Mr. Hunt : Like so many good things in this country, that integrity is recognised everywhere else in the world, but not on the Opposition Benches.

Several hon. Members rose --

Madam Speaker : Order. Hon. Members know very well that, if the Secretary of State will not give way, they must resume their seats in good time. Hon. Members must be patient.

Mr. Hunt : I am proud to be part of a British political system that has stood the test of time throughout the ages, despite the Labour party's attempts to undermine it.

Mr. Tony Banks : Will the Secretary of State give way?

Mr. Bryan Davies (Oldham, Central and Royton) : Will the Secretary of State give way?

Mr. Hunt : Just one moment.

I thought that the right hon. Member for Derby, South made a very serious error of judgment when she attacked the honours system.

Mr. Campbell-Savours : Will the Secretary of State give way?

Mr. Hunt : One moment.

The Labour party alleges that, in this country, money can buy honours and favours. That may have been so some years ago, but it is not true today. In fact, on 4 March my right hon. Friend the Prime Minister announced a series of measures to improve the system, including making the means of nomination for honours much more open and widely known. What is not sufficiently well known is the rigorous scrutiny that is conducted to maintain the integrity of the system.

Mr. Bryan Davies : Will the Secretary of State give way?

Mr. Clive Soley (Hammersmith) : Will the Secretary of State give way?

Mr. Hunt : Just one moment. Let me finish what I wish to say about the honours system.

Our honours system gives the nation an opportunity to recognise the enormous contribution that so many people make to our way of life. The award of honours for service and achievement has been a valued part of British life for many years. That whole system is subject to a series of safeguards, which I will explain to the House. Scrutiny is carried out independently and impartially. If the right hon. Member for Derby, South or any of her chums doubt that, let them come out and say so. Let me explain how the system works. All recommendations for policital honours are examined carefully by the Political Honours Scrutiny Committee, which is composed of distinguished Privy Councillors ; all three major parties are represented. Its members are Lord Pym, Lord Cledwyn of Penrhos and Lord Thomson of Montifieth. It is no accident that two former Labour Cabinet Ministers are among their number--although one has now joined the Liberal Democrats.

When the leader of any party nominates any individual for a political honour-- [Interruption.] I shall come to the other honours in a moment. It is important that I put the record straight, in view of the right hon. Lady's disgraceful attack on the system. In those circumstances, it is the duty of the Chief Whip of any party to provide the Scrutiny Committee with a

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statement detailing any payments--or expectation of payment--given to any party by any individual concerned, directly or indirectly, with such payments. In addition, the Chief Whip must provide an assurance that those donations were made without expectations of an honour. All other names--apart from those receiving political honours--come forward through a system of repeated scrutiny, on which political interests are not represented.

Mr. Campbell-Savours : Will the Secretary of State give way?

Mr. Hunt : Just one moment.

My right hon. and noble Friend Baroness Thatcher and my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) extended the system so that all names added by the Prime Minister for senior honours should also be scrutinised, in the same way as political honours.

Mr. Tony Banks : Will the Secretary of State give way?

Mr. Hunt : Just one moment.

That system is founded on a combination of non-partisanship and inter-party consensus. Let me tell the Leader of the Opposition and his Front Bench that any attempt to undermine it will have profound constitutional consequences.

Mr. Campbell-Savours : The right hon. Member for Sutton Coldfield (Sir N. Fowler) gave the House an absolute undertaking that the Conservative party had not received any moneys from the Saudi authorities-- the Saudi Government. Will the Secretary of State now answer a question? Has any Saudi-sponsored agency, any Saudi-based business man or any Saudi national arranged to lend, lent or given large sums to the Conservative party--or any Conservative party funding organisation--in the past three years?

Mr. Hunt : I am not aware of any such circumstances. Let me tell the hon. Gentleman that I consider it disgraceful for Opposition Members to throw out accusations in this way without naming the individuals concerned.

Mr. Campbell-Savours : Answer.

Madam Speaker : Order. The hon. Gentleman has put his question ; he must now contain himself.

Mr. Burns : Does my right hon. Friend agree that the credibility of the right hon. Member for Derby, South (Mrs. Beckett) as an authority on sleaze would have been strengthened if, during her disgraceful speech, she had had the courage to refer to the "lavender list" of resignation honours published in 1976 and the bankrolling of the private office of the then Labour leader, Harold Wilson, by private subscription? I believe that some of the people on the Opposition Benches featured on that lavender list.

Mr. Hunt : I just happen to have a copy of the lavender list. Let me tell the Leader of the Opposition that he continues attacks of this kind at his peril. If Labour Members wish to get into the sewer of politics, they should hardly complain when they find that they are up to their necks in it.

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Let me put one or two questions to Labour Members. I am growing increasingly impatient with their hypocrisy on the subject of Mr. Robert Maxwell.

Mrs. Maria Fyfe (Glasgow, Maryhill) : Will the Secretary of State give way?

Mr. Hunt : Just one moment.

I will not embarrass Labour Members by asking how many of them were given free lunches, dinners and drinks by Mr. Maxwell.

Mr. Robert Hughes : Will the Secretary of State give way?

Mr. Tony Banks : Will the Secretary of State give way?

Mr. Hunt : The hon. Member for Newham, North-West (Mr. Banks) may be proud of that, but I am not giving way.

For many years, the Labour party enjoyed the sponsorship of Mr. Maxwell and his Daily Mirror newspaper. There was a very public cheque, accepted with grovelling gratitude, by a Labour party conference. How much more money was involved and was that money his to give? It has certainly not been repaid. We hear from the right hon. and learned Member for Monklands, East (Mr. Smith) that he is very happy about that money. I wonder whether the Maxwell pensioners are happy about it. The right hon. and learned Gentleman seems confused as to how much was given. First, Walworth road put out an authoritative statement that £43,000 had been given by Mr. Maxwell. That figure then became £41,000, then £38,000 and when the right hon. and learned Gentleman spoke on the radio a short time ago, it had sunk to £31,000.

Mr. Tony Banks : The cheque bounced.

Mr. Hunt : I have it on good authority that that particular cheque did not bounce. Will the Labour party tell us exactly how much was received?

Mrs. Beckett rose --

Mr. Hunt : I am happy to give way to the right hon. Lady if she will tell us exactly how much was received by the Labour party from the late Mr. Maxwell.

Mrs. Beckett : The Labour party received £31,000 from Mr. Maxwell--rather less than even one of the many donations made by Asil Nadir.

Mr. Hunt rose --

Mrs. Beckett : I have not finished yet. The right hon. Gentleman asked a question and I am giving the answer.

No other money was received. That money was given because Mr. Maxwell matched a collection made at the Labour party conference. It must have been one of the most public donations ever given to a British political party since it was given on prime time television. The right hon. Gentleman now has his answer. That is all that the Labour party received.

Mr. Hunt : I can hardly wait to respond. We know about that donation only because it was on television. If it had not been on television, we would never have known about it.

Several hon. Members rose --

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Mr. Hunt : The Labour party does not reveal details of high value donations. If the late Mr. Maxwell had not chosen to make his highly public gesture on television, the House would never have known about it.

I have another point to make to the right hon. Member for Derby, South. What about all the other payments? What about the £38,000 paid by Mr. Maxwell towards the costs of a legal action to overturn the Boundary Commission's proposals in 1982? That was undertaken on behalf of the then leader of the Labour party and it is acknowledged in the many books on the subject that he was exceedingly grateful for that £38,000. It has been well documented on many occasions and I will provide all the extracts. Also, it was recently reported in the newspapers. I hope that the right hon. Member for Derby, South will make inquiries.

I am sad that the hon. Member for Bolsover (Mr. Skinner) has left us for a moment. I pay tribute to his integrity because he believes that all the money should be repaid by the Labour party.

Mr. Bryan Davies : Does the Secretary of State recognise that the issue concerning my constituents--he has not yet begun to address it--is that Lord King made it clear that he was withdrawing support from the Conservative party because a discrete area of policy no longer pleased him? What is the country to conclude about all the other contributors to the Conservative party, both declared and secret, who continue to pay money to that party?

Mr. Hunt : That was a baseless allegation, but the hon. Gentleman will not divert me. He held the post of secretary to the parliamentary Labour party and he will know the extent of the late Robert Maxwell's support for the Labour party. I have not even begun to deal with trade union funding.

Mr. Tony Banks : So far, we have heard about Robert Maxwell. The Secretary of State keeps saying that all this is well documented. That is fine, because everyone can examine the documents and draw their own conclusions. Since he has told us how much Mr. Maxwell gave directly and indirectly to the Labour party--we have never tried to hide that--will the Secretary of State tell us how much Asil Nadir gave to the Conservative party? How much was given by Mr. Latsis, Mr. Botnar, Mr. Yiren and Mr. Ka- Shing? We will do a deal. If the Conservative party pays back the money to those people, we will club together and pay back the money from Robert Maxwell.

Mr. Hunt : Before the hon. Gentleman has a whip round among his hon. Friends, let me tell him about that list of names. Statements have been made making it clear, for instance, in the case of Mr. Li Ka-Shing, that the allegations are completely baseless. I understand that the next edition of Business Age magazine will contain a detailed retraction and an apology. I should like the hon. Gentleman to consider doing the same.

I have given details of moneys donated by the late Robert Maxwell that have reached public scrutiny. I should like to know--I hope that the right hon. Member for Derby, South will consider this--what other sums have not seen the light of day.

Let me blow away the smokescreen surrounding the Opposition's motion. When the Polly Peck group made a series of donations totalling £440,000 to the Conservative

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party during the 1980s there was no evidence of any malpractice. We have always made it clear that the Conservative party will return any stolen funds to their rightful owners. The chairman of the Conservative party has made it clear that the party does not accept contributions where there is any suspicion that they have been obtained illegally. We do not accept contributions where there is any question of strings being attached and we certainly do not accept contributions from foreign Governments.

Several hon. Members rose--

Mr. Hunt : If Opposition Members addressed them-selves to the substance of their motion, they would see that a fundamental quesiton arises. If they were ever to regain power, would they make it illegal for individuals to make anonymous donations to political parties? [Interruption.] If they would not, the motion is spurious, but, if they would--and they seem to be saying "yes"--some important democratic principles are at stake. Political activity, like charitable activity, is voluntary. The Conservative party at least upholds the principle that contributors should be entitled to privacy. I believe that the principle of voluntary funding underpins the strength of our democracy and the party political system in this country and we destroy it at our peril.

Mr. Robert Hughes : Will the right hon. Gentleman give way?

Mr. Hunt : I will not give way to the hon. Gentleman. He cast a disgraceful slur on the integrity of our individual civil servants and condemned them collectively.

The critical difference between the funding of the two main parties is that when companies donate to the Conservative party they do so because they share and support Conservative principles and policies. When trade unions give to the Labour party cause they do so because they want to decide its principles and policies.

It is striking that there is no obvious queue of enterprises or entrepreneurs waiting to fund the Labour party. The only queue at Walworth road is of Labour members quitting the party en masse ; according to the figures that I have read in the accounts of the Labour party, its membership went down by 50,000 between 1990 and 1991. Indeed, some reports now put it as low as 100,000. This means that the membership of the Labour party is now equal to that of the Liberal Democratic party. Labour Members should ask themselves why. On the subject of the disclosure requirements of the Companies Act 1985, which the right hon. Member for Derby, South mentioned, I shall make some important points so that Opposition Members can desist from making ill-informed comments. I do so, unavoidably, in the absence of my right hon. Friend the President of the Board of Trade. I hope that I speak for hon. Members on both sides of the House when I send him, on behalf of the House, our best wishes for a speedy recovery. Members of the Opposition seem to misunderstand the role of the Department of Trade and Industry in enforcing the disclosure requirements. It is primarily the duty of companies and their directors to comply. Having said that, however, the DTI takes its responsibilities very seriously by, for example, following up allegations of non-compliance, except where the matter is more appropriately handled by another agency.

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In the case of Polly Peck-- [Interruption.] This is an important point. In the case of Polly Peck, the Serious Fraud Squad Office has taken the lead.

Mr. Rhodri Morgan (Cardiff, West) : Can the Minister say, therefore, why, late last week, the companies division of the DTI asked Companies house in Cardiff if it would research the box of one group of companies only--the group of companies associated with Robert Maxwell--to see whether the directors had properly declared all such contributions? In the light of the controversy this afternoon already about the possible abuse of civil servants and politics, will he say whether he thinks that that request was a proper use of civil servants' time?

Mr. Hunt : That is typical of the sort of allegation that is being made. I am not aware of any such circumstances. I believe that the hon. Gentleman is misinformed, but I will, of course, investigate. The hon. Gentleman should not make allegations of that nature without checking thoroughly in advance. It is wrong to seek to involve civil servants in a party political battle.

Mr. Robin Cook (Livingston) : Since the right hon. Gentleman referred to Polly Peck a moment ago, may I remind him of what he said five minutes earlier, which I wrote down at the time? He said that the Conservative party does not accept contributions where there is any suspicion that they were illegally obtained. Is the Secretary of State asking the House to accept that there is no suspicion that the money received from Polly Peck and Asil Nadir was illegally obtained? If he is not saying that, why does not he agree to give it back to where it belongs?

Mr. Hunt : I do not know whether the right hon. Gentleman chose to misinterpret what I said and what has been said by my right hon. Friend. Let me make it absolutely clear that the Conservative party does not accept contributions if there is any suspicion that they were illegally obtained. That applies to all the donations that the Conservative party receives. I also said that the Conservative party does not accept donations where there is any suspicion that there are strings attached. That is not the case with trade union donations to the Labour party.

Mr. Edmonds recently showed the red card to the leader of the Labour party and the right hon. Gentleman knows it. He said : "We pay for the Party, we have the right to democracy in the Party."

Democracy usually means one member, one vote ; in the Labour party it means one trade union leader, 1 million votes.

The trade unions--meaning, in practice, a small handful of trade union leaders--control 40 per cent. of the electoral college for the party leader ; they account for 70 per cent. of the votes at the annual conference. No fewer that 175 Labour Members of the House are sponsored by unions.

I remember that the late Joe Gormley said that they had a certain number of Members of Parliament in their bank, because they funded them through the National Union of Mineworkers. And Tom Sawyer, of the National Union of Public Employees, said on 2 June last year that while they continued to fund the party,

"we will have a say. It is as crude as that. No say, no pay."

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Trade unions now supply over 70 per cent. of the Labour party's finance.

In many ways I am a strong believer in trade unions, but I believe that they do themselves a great disservice by identifying themselves with one political party only and allowing it to be a parasite living off trade union funds.

We have heard very little evidence from the Labour party and what evidence we have heard I have refuted. I remind the House that the hidden agenda for today's debate is Labour's desire to have its political campaigning funded by the taxpayer. The reason behind that is obvious and it is a paradox for Opposition Members.

Mr. Dennis Skinner (Bolsover) : The Minister referred earlier to the late Joe Gormley and implied that sponsored members of the National Union of Mineworkers went along with what he had to say. Let me just put him straight. At the time that Joe Gormley was president of the NUM, he was in favour of the Common Market ; I was not. He was in favour of the Labour Government's pay policy and I voted against it. He was in favour of proportional representation and I was not. Joe Gormley has gone and I am still here.

Mr. Hunt : The hon. Member for Bolsover was not here earlier when I paid a tribute to him for his integrity by saying that, if he had his way, the Maxwell money would be repaid. He is nodding in agreement.

Mr. Skinner : I am in nobody's pocket.

Mr. Hunt : Exactly. I am saying exactly what the hon. Member for Bolsover is saying. He is in nobody's pocket, but the rest of his party is in the trade union pocket.

There is a paradox for right hon. and hon. Gentlemen. While Labour remains in the grip of the trade union movement it is unelectable. If it tries to escape from the trade unions, it will become bankrupt. How on earth can is square that circle? As usual with the Labour party, it is the taxpayer who provides the answer. I shall tell the Labour party the problems about state financing, which are all too obvious. It is wrong in principle to fund political campaigning. Why on earth should the taxpayer,who already has to fund the health service, education and defence, fund the Labour party's political campaigning?

How are the moneys to be allocated between the parties? If it is by seats won, we should hear protests from the Liberal Democratic party, which is one of the strongest advocates of the state financing of political parties. If the money was allocated on the basis of votes cast at an election as far back as four years previously, what equity would there be? No doubt the Labour party would allocate funds according to the latest opinion poll. It allocates policies according to the latest opinion poll, so why not do that with its finances as well?

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