Leading Article: When secrecy must cease

BRITISH politics is fairly clean by international standards - and that is why the Conservative Party's refusal to disclose the sources of its income has become a national scandal. The background to British political funding is reassuring. There are strict rules about how much candidates may spend in elections, and they seem to work: not a single person was prosecuted for breaking them in either of the last two elections. Inside Parliament, there has been a formal register of members' interests since 1975; only one MP has ever been disciplined for failing to report an interest.

The sums spent on British general elections are modest by the standards of other industrial countries. In the United States, candidates for both Congress and presidency are distracted from the job of campaigning by the need to raise money. Supporters inevitably claim their pound of pork later, which helps to explain why Washington has proven unable to come to grips with the federal budget deficit. Japan, where the parties spent pounds 2bn during the last general election, is even more open to corruption.

Yet Britain has no grounds for complacency. Labour's dependence on union money has not only damaged its political authority, but also perpetuated the absence of a political grouping on the left credible to voters. The Conservatives' arrangements are worse still: although the Tory party is known to be in the pocket of big business, it publishes almost nothing about where its money comes from. Interested outsiders have to turn to the independent Labour Research Department for the best guess as to its accounts.

The underlying problem is that British election law is out of date. When the Corrupt Practices Act became law in 1883, most election spending was in the constituencies, and national parties were still in their infancy. That is no longer true. In last year's election, one in four MPs underspent the constituency limit by 20 per cent, while millions were dished out on advertising in London. There is only one significant limit on national spending by political parties: television time is not for sale.

Rules about central spending and political donations are part of a broader debate on funding of political parties. A Commons committee, taking evidence on this, has been told public subsidies might well help finance better research departments, and thus raise the level of debate.

But there is a more immediate concern. No political donation is entirely disinterested. When a scandal-tainted financier like Asil Nadir has his case taken up by no fewer than three government ministers, it is legitimate to ask if the extensive donations made by his businesses to the Conservative Party helped win him a hearing. When a foreign government contributes to party funds, voters need to know that it has done so if they are to make an informed assessment of British foreign policy.

The secrecy surrounding the Conservatives' accounts, long indefensible, is in danger of further undermining the Government's authority. Sir Norman Fowler should now publish a set of accounts for the Conservative Party's latest financial year. This autumn, legislation should be put before Parliament to require all parties to do the same.