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Second Reading

Part of Trade Union Bill – in the House of Lords at 8:23 pm on 11th January 2016.

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Photo of Lord Rennard Lord Rennard Liberal Democrat 8:23 pm, 11th January 2016

My Lords, this Bill has been generally characterised today as an anti-trade union Bill. It is, and I think that the many criticisms of it being made are fair. There was an excellent debate in the House last November led by the noble Lord, Lord Foulkes, which highlighted the positive contribution made to our society by trade unions. I believe that they should be recognised as a force for good in this country and that they have played a major role in making our society much fairer. In the past, however, there were significant problems with how they were run and how strikes could be undertaken. I agree with the noble Lord, Lord King of Bridgwater, that it would have been better if the “in place of strife” proposals had been implemented by Harold Wilson’s Government before 1970. Perhaps then the so-called winter of discontent could have been avoided. Reform eventually came from the Conservative Government’s changes to employment law in the 1980s. At the time there was much opposition to those changes from the trade unions and the Labour Party, but I believe that they were necessary and that they are now generally accepted. The Labour Governments of 1997 to 2010 did not seek to reverse the changes.

However, the case for many of the changes proposed in this Bill has not been made; quite the contrary. The scale of turbulence shown by the number of working days lost through labour disputes in the 1970s and 1980s has not been repeated in the more than a quarter of a century since then, which suggests that there is not a great problem to address. The noble Lord, Lord Dobbs, referred frequently to the three-day week and the blackouts of 1972 and 1974. I remember them as well because I had just started secondary school. But they were more than 40 years ago, so that was then. Industrial relations and employment law have moved on over that time, and so should the Conservative Party.

The concern I want to address about the Bill today is its basic anti-democratic nature. In my earliest contributions to this House, when I led for my party on the Political Parties, Elections and Referendums Act 2000, I suggested that something must be done to hold back the arms race in party spending on elections. If we look at the growth of expenditure at the national level by the Conservative Party between 1974 and 1997, we can see the problem. In each of the 1974 elections, the Conservative Party was calculated to have spent less than £100,000 on each of its national campaigns. By 1979, it was estimated to have spent £2 million nationally. By 1983 it was £4 million; by 1987 it was £9 million; by 1992 it was £11 million; and by 1997 it was a staggering £28 million. The legislation in 2000 was supposed to have halted the arms race by imposing for the first time a limit on national party spending in the year before a general election. I argued then that a limit of approximately £20 million for a party contesting every seat in Great Britain was too high, but the real problem with that legislation was that the warnings that I and others made about the consequences of allowing supposedly national spending to be incurred in individual constituencies were not heeded. This meant that a party that was able to raise almost £20 million for a general election campaign nationally could in effect spend almost as much as it liked in individually targeted marginal constituencies. I believe that the Conservative majority of last year was obtained by spending sums of up to £250,000 in seats that it gained. The legislation of 1883 that for more than a century effectively limited expenditure in individual constituencies so as to prevent the buying of a seat in Parliament was rendered useless once national spending targeted at individual voters in individual seats was allowed.

In the recent general election, there was virtually no limit on what could be spent promoting the case for Cameron’s Conservatives, while tight limits still applied to what could be spent by individual candidates, including those defending their record as MPs. Such expenditure by the Conservatives was effective. If it had not been, we would not have seen Sir Lynton Crosby’s knighthood announced in the New Year Honours. So money does count, and a major aim of the Bill is clearly to prevent the biggest opposition party ever having the finances to match what the Conservatives are doing.

Many opportunities to re-establish the principles of the 1883 legislation, based on preventing the buying of individual constituencies, have been missed since the Committee on Standards in Public Life was established following the sleaze allegations that arose in the 1990s. Nothing really effective was ever done during the 13 years of the Labour Government because Labour Ministers were reluctant to act without the agreement of the Conservatives. But that agreement is not now being reciprocated. The Conservatives are mindful of their small majority of 12, and the fact that they won an overall majority for only the first time in 23 years and polled only 37% of the vote.

In this Bill, we see the Conservatives acting to halt the arms race in party spending by unilaterally disarming their biggest opponents, while leaving their own funding sources untouched and able to be spent in ways that ensure that the playing field in politics is anything but level. Looking at what is proposed, it is not the change from an opt-out system to an opt-in system for trade union members making payments to the Labour Party that is wrong in principle. What is wrong in principle is making a change to block your major opponents’ funding while doing nothing to impose any limit on the size of donations that can be made by multimillionaires and which finance your own party’s campaigns.

All political parties, my own included, have suffered embarrassment from their dependency on donors who can make million-pound donations. In our legislation, we need to reassert the principle that, in a democracy, thousands of votes should count for more than thousands of pounds. As my noble friend Lord Tyler said, a great opportunity again to level the playing field in politics was also missed in the last Parliament when the coalition failed to fully support the proposals in the 2011 report by the Committee on Standards in Public Life. This committee made fair and balanced proposals to limit donations and provide instead for a modest extension in state funding.

It is not out of any love for the Labour Party that I oppose the measures effectively to disarm it by removing such a substantial portion of its income. It is because the Conservative Party wants to prevent democratic opposition so much so that it seeks to reduce the power of this House to challenge unfair and anti-democratic measures that have not been subject to proper scrutiny in the Commons. It wants fewer of its opponents to be registered to vote in elections while ensuring that there will be fewer constituencies that can be won by opposing parties. It is now trying to ensure that opposing parties suffer a reduction in the funding that enables them to scrutinise legislation in Parliament and to challenge the Conservative Party in elections.

Changes to party funding arrangements are bound to cause controversy but those in this Bill weaken our democracy. On 3 December, I asked Her Majesty's Government,

“what plans they have to introduce a limit on the size of personal, or company, donations to political parties”.

I received the following reply from the noble Lord, Lord Bridges of Headley. He wrote:

“We remain committed to negotiating a comprehensive cross-party reform agreement, including donations from all funding sources including trade unions”.

If the Government are indeed committed to negotiating a cross-party reform agreement, they must withdraw the proposals on party funding in this Bill.