Clause 10 - Union’s annual return to include details of political expenditure

Trade Union Bill – in a Public Bill Committee at 12:45 pm on 22 October 2015.

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Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills) 12:45, 22 October 2015

I beg to move amendment 34, in clause 10, page 5, line 39, leave out

“has expired under subsection (2) or”.

Photo of Alan Meale Alan Meale Labour, Mansfield

With this it will be convenient to discuss amendment 35, in clause 10, page 5, line 43, leave out from “unless” to the end of line 5 on page 6 and insert “it has been renewed”.

The amendment would define an opt-in notice as expired if on its expiry date it had not been renewed.

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

We are starting to make some progress through some meaty issues. Clause 10 deals with the Government’s extensive proposals around political funding and how unions operate. We discussed such matters at length on Second Reading. We heard significant evidence from the Trade Union and Labour Party Liaison Organisation and from several unions that contribute to and maintain political funds. Although there was some japery from Government Members during that evidence session, it is important to understand the historical significance of the Government’s proposals, which go well beyond what even previous Conservative Administrations have considered and well beyond the bounds of cross-party consensus on political funding. The existing legislation governing trade unions that want to contribute to political parties or engage in certain political activities is clear, rigid and tough, and rightly so. The Opposition would not want it any other way and neither would the trade unions or the trade union members with whom I have spoken or who have given evidence.

As defined by section 72 of the 1992 Act, a trade union wishing to undertake such activities must establish a political fund. Before doing so, trade unions are legally required to ballot their members to ask, through a political fund resolution, whether they agree to the union maintaining a political fund. Trade unions are also required to ballot their members every 10 years to determine whether the trade union should retain the political fund. Union members currently have the right to opt out from their subscriptions being used for political fund purposes. Let us be clear that that relates not only to union subscriptions or affiliations to the Labour party, but to all the activities covered by political funds. Members can opt out at any time. It is important that the Committee understands that, because the idea that unions are somehow giving this money away with members having no democratic role is simply not the case.

The Government’s proposals in clause 10, however, replace that arrangement with a new requirement on union members to opt in every five years if they agree to their subscriptions being partly used to fund political parties or, as could be encompassed by the Bill, party political campaigns. Union members will retain the right to opt out from paying into the political fund at any point.

The Minister said earlier that I was potentially pre-empting comments that he was going to make, and I might do so again now. He might try to dress up the clause as an attempt to bring things into line with the situation in Northern Ireland, but it is important for the Committee to understand that it goes beyond the current practice there, which requires union members to agree to paying into the political fund only once. They are not required to renew their opt-in.

The Minister might also try to argue that the clause is about levelling the playing field with the duties that apply to companies that make political donations, but, again, it goes well beyond that. Part 14 of the Companies Act 2006 requires companies to get the authorisation of a shareholder resolution before making political donations of £5,000 or more. However, shareholders do not have a right to opt out of company political expenditure, and nor is there an opting-in arrangement.

At the risk of sounding like a broken record, I ask again: what is the Government’s real intention? Committee members should be left in no doubt that the purpose of requiring trade union members to opt in to political funds as required by the clause is simply a nakedly partisan attack aimed at damaging the finances of the Labour party. Such a move is designed to ensure the inevitable by gifting the Conservative party an ever greater financial advantage than is already the case.

Photo of Chris Stephens Chris Stephens Scottish National Party, Glasgow South West

I would argue that it is more sinister than that. Does the shadow Minister agree that the clause is also about a trade union’s capacity to use its political fund for general campaigning?

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

Indeed, I believe that to be the case. I have heard some clear evidence from unions that maintain political funds and, although affiliated to the Labour party, undertake other activities, as well as from those that are not affiliated to the Labour party but maintain political funds. The Government have already taken forward extensive regulation relating to the Political Parties, Elections and Referendums Act 2000, the gagging Act and so on. A lot of unions believe that activities will fall under those provisions and are worried about how they will comply.

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

Will the hon. Gentleman clarify something? He seems fearful that the clause will result in less funding for the Labour party, but if that is the case, there must be people who are currently donating through this mechanism but do not want to.

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Business, Innovation and Skills)

It certainly will lead to less money for the Labour party—that is very clear—but not because people do not want to give money. Union money is some of the most transparent and openly gifted in politics. Were I to discuss the funding of the Conservative  party at length, I am sure you would rule that out of order, Sir Alan, but it well merits a debate on the Floor of the House. If I remember correctly, in the previous Parliament, the former Member for Banbury could not read out his entire Register of Members’ Financial Interests because it would have taken him longer than the 10 minutes he was allotted.

The fact is that the Government are seeking to frustrate the genuine giving of money to political funds, some of which is then used to contribute to the Labour party. The reality is that people lead busy lives or, for example, are part of a widely dispersed workforce, as USDAW made clear to me. The fact that the transitional period to comply with one of the most major changes in trade union law for generations is only three months underlines the Government’s true intentions.

My right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) was absolutely right to raise this issue with the Prime Minister while she was acting Leader of the Opposition. She asked him to commit not to go ahead with these changes unless there was cross-party agreement. Is the Minister prepared to get to his feet and withdraw these measures and engage in genuine cross-party talks about the funding of party politics? I suspect not.

It is not acceptable for the Prime Minister to be curbing funds given transparently to the Labour party by hard-working people throughout the country while turning a blind eye to donations to the Tories from various corporate sources and hedge funds. If the clause stands part of the Bill unamended and the Bill receives Royal Assent, it will mark the abrupt end of the long-standing consensus in British politics that the Government should not introduce partisan legislation unfairly to disadvantage other political parties.

As Members will be aware from the oral evidence sessions, in 1948 Winston Churchill cautioned against taking such steps. He said:

“It has become a well-established custom that matters affecting the interests of rival parties should not be settled by the imposition of the will of one side over the other, but by an agreement reached either between the leaders of the main parties or by conferences under the impartial guidance of Mr. Speaker.”—[Official Report, 16 February 1948; Vol. 447, c. 859.]

Even Margaret Thatcher, a Prime Minister whose term was defined by her opposition to the trade union movement, considered proposals such as those set out in the Bill to be too extreme. She said:

“legislation on this subject, which would affect the funding of the Labour party, would create great unease and should not be entered into lightly.”

[Interruption.] I know you are asking me to come to a conclusion, Sir Alan. I will be there in a matter of moments. She was right. The Bill and the clause are creating great unease, and I find myself agreeing with the person who I suspect spurred the Minister and I into politics in the first place, although of course for very different reasons. In the light of that, we are looking carefully at the SNP’s new clause, which we will come to in due course, and which would put the Churchill convention into the Bill.

In conclusion, the clause will restrict unions’ right to freedom of association and their ability to engage in political debates, and it will create huge administrative burdens. It is widely known that opt-in processes reduce participation—for example, our approach to auto-enrolment for pensions is based on an opt-out model, given the clear economic evidence.

Amendments 34 and 35 are probing amendments that can be used to argue that members should not be required to submit repeated opt-ins. I hope the Minister will give us his thoughts on them in due course.

Photo of Alan Meale Alan Meale Labour, Mansfield

Before the Committee rises, I repeat that we are only up to clause 10 of 22, and we have a host of important discussions to come. The point of Committee stage is to question parts of the Bill before it goes back to the Floor of the House on Report. There are a lot of important things on the Government and Opposition sides that have to be dealt with.

Before the next Committee, I want the Whips to talk to each other. It is likely that this Committee will rise early this afternoon because there are a number of votes taking place from 4.30 pm. That restricts the Committee’s time and means that we have only two more sittings next week to deal with the remainder of the Bill, which I am not sure will be satisfactory. I ask the two Whips to meet in consultation with the other Opposition group to see whether we can get a bit of speed, so the questions can be answered as fully as possible.

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Two o’clock.