Don't waste your time, Lord Nolan

Any individual should have the right to make anonymous donations to political parties

The old saying that "you can't take the pants off a Scotsman" - referring, of course, to the fact that Scotsmen are alleged to wear no pants under their kilts - seems not inappropriate when considering Lord Nolan's remarks about investigating the finances of the Conservative Party.

"Where do they get their money from?" he asked. What a bizarre question, considering that the Conservatives are at least £17m in debt. Incompetence has become the vice of that party, not financial corruption. I cannot imagine a greater waste of Lord Nolan's time, not to mention that of his committee. It will only be a moment or two before another committee is set up to look into the waste of public money by committees that exceed their briefs. Perhaps they, like local councillors, should become liable for reimbursing the public purse with the costs of investigating their exotic ideas.

The funding of political parties has in the past been straightforward. Conservatives have given to the Conservative Party and Labour supporters likewise to the Labour Party. Each political party, and I do not exclude the Liberals or the Social Democrats from this, have had their share of embarrassments. Bad apples like Asil Nadir - who was given the Queen's Award for Industry. For heaven's sake, why does Lord Nolan not investigate the giving of the Queen's Award for Industry? It was, after all, rumoured last weekend that he and his committee would inquire into the activities of the masons.

The late Sir Eric Miller provided accommodation for numerous officials of the Labour Party. He even gave a smart new computer to the Labour Party's headquarters. Lord Kagan was a valued supporter of the Labour Party, at least until he went to jail. The list is not endless, but it is substantial. The bad apples have always been there but to suggest that they have affected the democratic system is ludicrous.

In Britain people have the right to give money privately to the political party of their choice. It is their money and their right to do with that money as they wish. To change that would be an affront to democracy. The law, however, clearly states that should they desire to give someone else's money - the money of a company's shareholders which is in their charge - then they should declare that they have done so. Not for the benefit of Parliament or political parties, politicians, or even democracy, but solely because the money does not belong to them and it is only right that they should inform the owners of how that money has been used.

It is not a question of asking first, for directors are appointed to direct. Should they consider that giving money to the Conservative Party was in the interest of their company then they have the perfect right to give that money. The trade unions sponsor Labour MPs because they would rather have a Labour member in Parliament than a Conservative. This is a perfectly respectable view and I see nothing wrong with this system.

Should the politicians weaken and allow Lord Nolan's inquiry, Conservative Central Office will be faced with two choices: to give Lord Nolan the names of those who have made private donations or to keep silent on the matter. The latter course would leave it open to the charge of wrongdoing, the former would be an act of treachery, for these anonymous donors gave their money within a law that allowed them to give anonymously.

But what about foreigners who give large sums? True, there are foreigners who give money to the Tories. There may even be foreigners who give money to the Labour Party or the Social Democrats for all I know. When I was treasurer of the Conservative Party between 1975 and 1990 there were rumours of rich Arabs or Chinese donors that surfaced from time to time. I applied a single rule to collecting funds: what do we need these funds for? To win as many votes as possible. Would money from this particular source damage us at the polls? If the answer is likely to be yes, do not touch the stuff. If the answer is no then all should be well.

Margaret Thatcher, for whom I worked was the MP for Finchley, a constituency that has the largest proportion of Jewish voters in the country. Could any action be more calculated to harm her than to take Arab gold? The answer was obvious.

The Hong Kong Chinese? They were British citizens, without a vote but at the mercy of the British government. From time to time Hong Kong Chinese did contribute to the Conservative Party and I was grateful for their support. It would, however, be hard to argue that they have received any benefit from their donations.

The occasional American donated, but never sums of any consequence. They sent their money as a gesture of admiration for Margaret Thatcher. Others who were not born here but lived and earned their money in Britain helped. The brothers Al Fayed were among them. I feel free to mention their names for they have declared that they gave money to support the Conservatives. There can be few people who have tried as hard as the Al Fayeds to become British citizens. There can be few people who have been as generous to British charities as those brothers. I see no great miscarriage of democracy in their activities.

As for the chairmen of companies receiving honours, there can be no more obvious recipient of an honour than a chairman of an immensely successful British company. Chairmen have received honours under both Labour and Tory governments. I quote the names of only two from among many: James Hanson and James Goldsmith both received knighthoods from Harold Wilson. The late Peter Thorneycroft, a politician and former chairman of the Conservative Party, received his peerage from the same source.

All that I have written is already in the public domain, and far more besides, so why on earth does Lord Nolan wish to waste the time of his committee and our money rehearsing this all again? There are no secrets; private money was always properly taken by the Conservatives and receipts properly issued for that money.

Often when I read of so-and-so who gave this and that I just wondered whether the receipt for the gift was ever shown to the journalist concerned. If it had been, the figures would have looked very different. I raised large sums of money for Margaret Thatcher's party because her policies were right and the people knew them to be so. John Major's party is nearly bankrupt because his government's policies are wrong and that fact is obvious to the Conservative Party's financial supporters.

The danger that the Conservative Party is in is not the danger of taking money immorally acquired, but rather of having a dearth of money, which will restrict its ability to deploy political arguments.

If Lord Nolan wishes to know about party political funding let him read the Houghton report produced in 1975, there is no finer document on the subject. The Houghton committee set out to recommend state financing of political parties but it was frustrated by the arguments of one man, Ian Aitken, a journalist who spoke out against public funding. He pointed out that although all parties wanted state funding, that course would not shore up democracy. That course can only lead to corruption and a further alienation of the public from politicians and their parties, who will be seen to have their noses in the public trough.

Lord Nolan, your investigations can only lead to state funding. Forget them before you're tricked into wandering down a path that will only please politicians and make the plight of democracy worse.

Lord McAlpine is a former treasurer of the Conservative Party.