From the TUC

What are the Lords debating on trade union political funds?

16 Mar 2016, by in Politics

While the big news today has been the Budget, debate has also been taking place in the Lords, where the first Trade Union Bill report stage debate is underway. Among the issues the Lords are debating are amendments which would implement the recommendations from the Lords Select Committee on Trade Union Political Funds and Political Party Funding. This is not the technocratic debate that it sounds: today’s vote could have significant impacts both for trade union campaigning and for Labour party funding.

How did we get here? In brief, last year the government published its Trade Union Bill which contained proposals for reforming how trade union political funds operate. These funds allow unions to run political campaigns and to provide support to political parties. While substantial numbers of unions make donations to the Labour party, political funds also support other political parties.

Currently union members have the right to opt-out of contributing to the funds at any time, and need to be informed of their right to do so. But under the Bill, the government’s proposals are that:

  • The automatic opt-out will end – trade union members will have to opt-in.
  • Union members will have to opt-in to make a political fund contribution.
  • If they do opt-in they will have to renew their decision every five years.
  • Opt-ins can only be made using a written form.
  • Unions will only have three months to bring all of these changes in.

The House of Lords has rightly been dissatisfied with these proposals, and during the Bill’s Committee Stages defeated the government in a vote to set up a special Lords committee to give the measures more consideration. This cross-party Committee was appointed in late January and, working to hugely challenging deadlines, reported on the 2nd March. Chaired by the eminent Lord Burns, it made a number of conclusions which included:

  • Instead of simply ending the opt-out government should require unions to ask their members to opt-in or to opt-out, with this choice specified on union membership forms.
  • The transition period for any changes should be extended from 3 months to 12 months.
  • Union members who choose to opt-in should not be required to renew the decision in five years’ time.
  • Union members should be able to opt-in electronically rather than only by use of a written form.
  • A statutory code of practice on communication with union members over the opt-out should be established.
  • Unless wider agreement is secured on political party funding across the board, the changes should only apply to new members.

Why did the Committee reach this view? Well its concerns were significant.

Firstly, it concluded that the government’s proposals:

could have a sizeable negative effect on the number of union members participating in political funds.

It was also concerned about the costs that the government’s measures would bring for unions, stating that:

The scale of the administrative and financial burden on unions will be considerable—all the more so given the requirement to apply the opt-in provisions to all existing members who are paying a political fund contribution. The costs per member look disproportionate against the small size of the political levies. Even if electronic opt-in is permitted, a proportion of these costs will still be incurred. This will be particularly unwelcome at a time when it is expected that the number of participants in political funds will have fallen.

And it felt that there would be significant impacts for the Labour Party, which would move to reduce Opposition funding without wider party funding reform.

So where are we up to now? Well, Committee Chair Lord Burns, and Liberal Democrat peer Lord Tyler, have laid amendments enacting these proposals and they are being debated in the Lords tonight.

For the TUC’s part, of course we continue to call on the Government to withdraw the entire Bill. But as an alternative to the government’s approach as it stands, the Committee’s proposals are far preferable. We hope the government listens to the views of peers from all parties and none, and moves to amend its Bill.


UPDATE 6.35pm: The amendment has been put to a vote and passed, 320 votes to 172. Gratifying that Lord Burns and so many Peers have been solid in standing behind this, despite being asked by the Minister to withdraw, and it marks the second Government defeat of the evening, following Lord Kerslake’s successful amendment to hold an independent review into online voting for strike ballots.

One Response to What are the Lords debating on trade union political funds?

  1. Triple whammy defeat for government over #TUbill
    Mar 16th 2016, 8:12 pm

    […] The votes concerned substantial amendments to the bill over electronic balloting for strike votes, central government-imposed caps on facility time for union reps in local public services (both introduced by crossbench Peer Lord Kerslake), and restrictions on the funds used by unions for political campaigning (introduced by fellow crossbencher Lord Burns, following the recommendations of his select committee – more detail from Nicola here). […]