21 January 2016

A motion by Baroness Smith of Basildon that Clauses 10 and 11 of the Trade Union Bill – pertaining to restrictions on the funding of the Labour Party – are scrutinised by a Select Committee has been approved by the House of Lords.

Some unions use a proportion of their members' subscription funds to support the Labour Party – a levy that members can opt-out of at any time – but the government wishes to pass a new law forcing members to proactively "opt-in" in writing every five years. The new rule would also apply to existing members, meaning that those already paying the levy would have to provide renewed consent when the Bill is passed. It is anticipated that such hurdles would discourage people from continuing to provide the donation and cost the Labour Party an estimated £6 million.

The government has denied that the new law will have an impact on party-political funding.

Yesterday, Baroness Smith – a Labour peer – noted in her speech to the Lords that a Select Committee would be able to take independent evidence on the impact of the clauses.

"The Committee on Standards in Public Life made four recommendation on party-political funding, and only one of those is proposed by the government in this Bill. The others are being ignored," she explained.

"By rejecting out of hand, as the government have, that there is any such impact on political funding and despite it being so similar to the committee recommendation, the government are seeking to avoid proper examination and consideration of any such potential impact," she added.

Her motion was carried by 327 to 234 votes, a majority of 93, and embarrassingly for the government, the debate revealed opposition to the changes to the political levy from Conservative peer Lord Forsyth of Drumlean.

"This will take away funding from the Labour Party at a time when the Labour Party is perhaps not at its strongest…our parliamentary system depends on having a strong and effective Opposition," he said.

In addition to the proposed restrictions on trade unions' collection of political funding, Labour is also reported to lose around £1.3 million a year when state funding for opposition parties, known as "short money", is cut.

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