04 March 2016

By Keith Ewing, President of the IER

Clause 10 of the Trade Union Bill contains a pernicious and vindictive attack on trade union political freedom.

At the moment, trade unions are already prohibited from incurring political expenditures unless they have a political fund (endorsed by secret ballot every 10 years), financed by a separate levy of members. Individuals have a right to opt out of the levy, which is currently paid by about 85% of members of trade unions with political funds. Together they raise about £24 million annually, which is used for a wide range of political causes, including Labour party affiliation fees and donations.

Clause 10 will change these arrangements and take us back to the position operating between 1927 and 1946, so that members who want to pay the levy will have to opt in. This will lead to a decline in the number of levy-payers, as no doubt intended. The extent of the decline is at present unknown, but a well-informed Labour party source puts the anticipated number of levy paying members at 10%, a Doomsday scenario which will see a collapse in annual political fund income.

These provisions have rightly been widely condemned as designed deliberately to distort the democratic process, along with the equally egregious plans to reduce the number of MPs and redistribute parliamentary boundaries in the Tories’ favour. Clause 10’s transparent attack on democracy led the House of Lords paradoxically to assume the mantle of people’s champion (sic) by requiring these provisions to be examined by a special Select Committee, which reported on 01 March.

The 12 member committee was asked to consider the impact of the political funding aspects of the Bill, and unsurprisingly found that Clause 10 ‘could have a sizeable negative effect on the number of union members participating in political funds’, a finding that hardly needed the wits of a Select Committee to work out. What is disappointing, however, is the Committee’s response after having made this finding: raw politics clearly getting in the way of logic or reason.

The Committee failed to address the basic question of why trade unions should not be governed by the principles and practices that apply to all other membership organisations. The normal democratic principle is that members are bound by the majority decisions, properly taken under the rules. If this is good enough for Marks and Spencer plc, the National Trust, the Carlton Club, or political parties, why is not good enough for trade unions?

Members of these organisations unhappy with collective decisions have no option but to ‘like it or lump it’. There is no system of government or any organization where the properly taken decision is binding only on those who subsequently affirm their willingness to comply with the decision in question. What is being proposed for trade unions is the equivalent of a new corporate tax being introduced by Parliament, binding only on those who subsequently want to pay.

As it is, those trade union members who object to the political levy are not bound by the result of ballots in which they participate. Uniquely, they have a right to opt out of the collective decision. The Committee has failed to explain why this is not enough, claiming implausibly that ‘that the Government has a democratic mandate, referring to the Tory manifesto commitment ‘to ensure trade unions use a transparent opt-in process for union subscriptions’.

But in my view, the latter is about the check off and has nothing to do with the political funds, in relation to which a separate passage stated that ‘we will legislate to ensure trade unions use a transparent opt-in process for subscriptions to political parties’. That, however, is redundant in the light of what I believe to be the Labour party’s ill-judged decision under Miliband to change its affiliation arrangements so unions affiliate only levy paying members who express a desire to be affiliated.

In my view, there is no justification for the Select Committee’s apparent endorsement of the Clause 10 proposal to move to opting in: it is unjustifiable on grounds of principle and is not supported by a manifesto which claims democratic legitimacy by being supported by 36% of those voting. The initiative also violates one of the fundamental conventions of the British Constitution, which is that party funding reform should proceed on the basis of consensus, which is clearly lacking here.

So having accepted that the Bill will have a major impact on trade union political funding, but having failed to confront the central question of justification for the main proposal, the Select Committee fell back on what in retrospect will look like modest changes designed to soften the impact of the devastation that is likely now to take place. Are we really to be thankful for implementation after 12 rather than three months, and that there will not be a need for opt in renewals every five years?

The impact of the latter will in any event be greatly diminished by proposals for a statutory code of practice in which unions (under close Certification Officer supervision) will be required on a regular basis to remind their opted in members of their right to opt out, and the means by which this can be done. The only other concession is far from sealed, given that it is supported by an unspecified majority, though it is to be presumed that the Tories formed at least part of the minority.

This is the recommendation that the opting in arrangements should apply only to new members and not also to existing trade union members, who would continue to opt out. Any inclusion of existing members is to be the subject of all-party political funding discussions, which the Select Committee recommends should take place urgently. Fat chance. But while an exemption for existing members may soften the landing, several administrative headaches will have to be nursed as a result.

Although some may celebrate short-term concessions, as great ‘political’ victories (for those who live in this kind of ‘political’ space), the truth is that trade unions have been given little help by the Lords’ Committee. The latter has failed to divert the real damage of Clause 10, and has failed to avert what – together with the Collins’ review – will be a very much diminished union voice in the Labour party. Perhaps it does not matter, though I fear we will find out soon enough just how much it does.

In the meantime Labour needs to work out how to strike back – hard. Although the party is going to have a long time to think about its response, revenge is a dish best served cold, as they say. But the first priority should be to ban all political donations and expenditures by private companies, the device by which the very rich hide their very rich gifts. Small step, big impact.