Bill likely to reduce Labour funding, but Committee proposes way forward

02 March 2016

In its report published today, the Select Committee on Trade Union Political Funds and Political Party Funding concludes the Trade Union Bill will have a significant impact on union political funds and in turn on Labour Party funding, but offers a way forward which would mitigate that impact. The Committee also urges the Government to convene urgent cross-party talks on party funding reform.

Way forward

The Committee unanimously agrees on the following way forward:

  • On joining a union with a political fund, new members should be asked to make an active choice about whether or not to opt in to the fund. This should be possible on paper or electronically, rather than on paper only as proposed in the Bill. 
  • The proposed transition period to an opt-in system for new union members should be increased from 3 months to a minimum of 12 months.
  • Trade union members should not be required to renew a decision to opt in every 5 years as proposed in the Bill. The members should continue to contribute to the political fund unless they take a conscious decision to opt out.
  • The Certification Officer should be required to issue a statutory code of practice setting out how unions should communicate with their members about their right to opt out of contributing to the political fund, and to monitor compliance with it.
  • New reporting duties in clause 11 of the Bill which require unions to report on all spending from their political funds should be revised in consultation with the Certification Officer to ensure they are not overly burdensome.
  • The parties should give effect to their manifesto commitments on party funding, and the Government should convene cross-party talks with a view to making a renewed and urgent effort to reach agreement.

The majority of the Committee supported the following recommendation:

  • The question of whether to extend the opt-in to existing union members must only be considered as part of the cross-party discussions on party funding reform which we have recommended, and should not be dealt with in this Bill. The discussions should be convened as soon as possible.

A minority of the Committee supported an alternative recommendation:

  • The Government should apply the proposed opt-in system to existing union members, but perhaps on a longer transition period than for new members.

Chairman's comment

Lord Burns, Chairman of the Committee, says:

"Following extensive evidence and lengthy discussions, the cross-party Committee is pleased to have reached unanimous agreement on most aspects of the trade union and party funding issues which were referred to us.

We have made a series of recommendations to the House which would allow the Government to fulfil its manifesto commitments while mitigating the worst impacts on the trade unions and the Labour Party.

The Committee failed to agree only on whether or not the Government's provisions should be extended to existing union members, and it will be for the House to make its mind up on that point.

All members of the Committee strongly backed the call for the Government to convene cross-party talks as soon as possible, in order to reach a fair and long-lasting settlement to the vexed issue of party funding."

Further information 

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