Mark Pritchard, Tory member for The Wrekin rose to urge Jack Straw to ensure that any new rules on funding of political parties should apply to trade unions, as well as the private sector.
Jack fired back, accusing Mr Pritchard of “leading with his chin” on the issue, since he benefited from donations from the “shady” Midlands Industrial Council and the Tories were exploiting a loophole.
The exchange prompted Labour MP David Winnick to call for an inquiry into what he called “a sinister organisation”.
Here’s Jack’s reply to Mr Pritchard taken from Hansard:
May I point out to the hon. Gentleman that, as the Neill Committee on Standards in Public Life said in 1998, the trade unions are the most regulated of all donors?
During the 18 years of the Conservative Government, the trade unions suffered one adverse change after another in their financing regimes, while nothing whatever was done in respect of companies.
I am surprised that the hon. Gentleman is leading with his chin on the issue, because there is one unquestionable improvement that we must make in regulation, which is to ensure that the unregulated funding of local parties by unincorporated associations such as the Midlands Industrial Council is brought to an end.
I note that although he spent just £11,000 during the four-week election period in 2005, he received a total of £55,000 in the eight months before the election was called from Lord Leonard Steinberg and the Midlands Industrial Council, and I assume that he spent that, too.
That shows that there is a glaring loophole continuously exploited by the Conservative party, enabling them to spend large sums of money and not account for them before the election period kicks in.
Mr. David Winnick (Walsall, North) (Lab):
Does my right hon. Friend agree that there is scope for political parties to spend less before there is any question of further funding, particularly from the state? In addition, is there not a strong case for an immediate inquiry into the midlands industrial council? It is a sinister organisation—it is not accountable in any way, and it makes a mockery of the reforms that the Government have brought about.
I strongly agree with my hon. Friend’s latter comments. I recall that when the Political Parties, Elections and Referendums Act 2000 was considered in the House, there were high-sounding comments from the Opposition, who said that they wished for as much transparency as we and the Liberal Democrats wished for.
Such comments have been repeated, but I note, too, that the Conservative party exploited a loophole in the law that allowed unincorporated associations, such as the Midlands Industrial Council, to give thousands and thousands of pounds to local constituency associations without the latter accounting for that or providing any details about who was behind those shady organisations until it was forced out of them.
For anyone interested, I’ve pulled information on Midlands Industrial Council together into a dossier – and updated it as more comes to light