Tories 'exploited inside knowledge' at election: Think-tank says poster sites booked in advance, writes Patricia Wynn Davies

THE CONSERVATIVES have blatantly exploited business connections, a favourable Tory press and 'inside' knowledge to gain election campaign advantages, a critical study has claimed.

The report, from the Institute of Public Policy Research, the left-of-centre think-tank, accused the Tories of taking advantage of their position as the governing party at the last election by allowing prime poster sites to be booked by Saatchi & Saatchi, the advertising agency, three weeks in advance in the name of another client. The support of most tabloid newspapers was worth up to pounds 37m with the free publicity prompting Chris Patten, the then party chairman, to cut Central Office spending on press advertising.

An informal committee should be created to buy up adequate hoarding space on the day an election is called, the report says, adding that Labour only secured good pitches in 1992 after Benetton cancelled a 2,000-site campaign. Each political party should receive a quota of free party election advertisements to place in newspapers of their choice.

Mr Patten, now governor of Hong Kong, also comes under fire for courting overseas finance for the election campaign, which could now threaten UK foreign policy.

Li Ka-Shing, a big donor and dinner host to John Major during a September 1991 visit, and Tsui Tsin-Tong, another donor, became members of the 'committee of 44' nominated by Beijing to succeed Mr Patten. The report urges a ban on foreign donations and disclosure by political parties of all domestic donations above pounds 5,000.

Company annual reports collated by the Labour Research Department showed little correlation with honours during the Heath years. But executives of 10 of the 12 firms that gave most to the party between 1979 and 1992 received knighthoods or peerages or both.

Shareholders should be balloted on donations, the report urges. The National Freight Corporation, of which Sir Norman Fowler, the party chairman, is a director, is the only company known to have balloted shareholders on whether to make political donations of any kind. Ballots in 1984 and 1989 rejected the idea.

The report says Britain could learn lessons from Germany and introduce tax relief to encourage ordinary individuals to contribute to the party of their choice. The move could also help Labour to build up a mass membership instead of relying on union funding.

Money and Votes; IPPR, 30- 32 Southampton Street, London WC2E 7RA; pounds 9.95.