Party funding to be investigated: Secret finances will come under scrutiny of select committee

AN INVESTIGATION into the secret funds for political parties is to be mounted by the cross- party Commons Select Committee on Home Affairs.

The inquiry, which will look into state funding for political parties, the methods by which they are financed and the desirability of statutory controls, is certain to cause controversy.

Tory leaders are unlikely to co-operate with the committee in disclosing the names of the party's private benefactors. Some can be traced through company accounts, but the Independent disclosed the secret establishment of companies to act as conduits for fund-raising for the Conservative Party.

However, the Conservative Charter Movement, which has campaigned for more democratic control over the party's finances, is expected to give evidence to the inquiry, one of its leading members said last night.

The committee is seeking written evidence from every party represented in the Commons, and the Greens, in addition to the Confederation of British Industry, the Trades Union Congress and interested groups. The committee, which has the power to call witnesses and papers but no powers to force witnesses to disclose confidential information, will take oral evidence in June.

During Prime Minister's Question Time, John Major challenged the sponsorship of the entire Opposition front bench by the trade unions, after Labour allegations of corrupt political patronage in appointments to quangos.

Labour also receives state funding through 'Short money' named after Lord Glenamara, the former Labour leader of the Commons, Ted Short. The latest figures, for 1991, show Labour was paid pounds 839,709 and the Liberal Democrats pounds 187,176. But nothing has been paid since the election because negotiations have been deadlocked.