Employment Rights Bill

Lord Barber of Ainsdale Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

[Lord Barber of Ainsdale (Lab)]

My Lords, this is an issue with a long history. In 1909 the Osborne judgment ruled that trade unions could not legally use their general funds for political purposes. Subsequently, the Trade Union Act 1913 was passed by the Liberal Government led by HH Asquith to allow trade unions to establish and maintain political funds. These political funds had to be supported by a ballot of a union’s members and maintained separately from its general funds, and union members had the right to opt out of contributing without facing penalties or disadvantages.

Remarkably, apart from the period from 1927 until 1946, the opt-out rights of trade union members—rather than more onerous opt-in requirements—persisted all the way up to 2016, when new trade union members were required to decide whether they wanted to opt in. This history lesson is a long way of explaining that, for well over a century, the prevailing system of regulating union members’ rights in respect of their union’s political fund has been through their individual right to opt out if that is their choice.

The variation to this dominant model came in 2016 as a result of the excellent work of the noble Lord, Lord Burns, chairing a Select Committee of this House convened to consider this issue. Under his skilful leadership, that Select Committee hammered out a consensus that a change should be made by moving to an opt-in decision to be made by every new member of a union on the point of joining. The noble Lord, Lord Burns, makes the argument today that the Bill should not disturb that 2015 consensus. In particular, he fears that making a change now, after a change of Government, would provide an excuse for a new Government to disturb these arrangements yet again. I must say that I do not have the confidence to anticipate the make-up of that alternative Government, let alone their inclination to tamper again with this issue.

It is no criticism of the 2015 report by the Select Committee, or the decisions made by its members, to note that the agreement that was made was forged in a particular political context, with the alternative to the compromise likely to be the declared intention of the Conservative Government of the day to go for opting in right across the board, including for the millions of existing members. Not surprisingly, for trade unions that was regarded as a highly threatening possibility. The political context today is very different, and proposing returning to the opt-out model that has been so dominant for more than a century is reasonable and fair. Lightening some of the administrative burdens associated with the running of the funds is also desirable in this view.

Much of the debate on this part of the Bill has centred on the role of political funds in supporting the Labour Party. That is one issue, of course, but it is not the only issue. Only 11 of the TUC’s affiliated unions also affiliate to the party and make financial contributions to it. Ten other TUC affiliates have also decided to establish political funds, as the only way they can feel confident that they will be insulated against legal challenges. Just like Labour-affiliated unions, their members see a host of issues in the political sphere in which they have an interest and want their voices to be heard, with the views articulated decided through the unions’ democratic procedures. They too have been burdened by the additional administrative requirements of the 2016 Act and will benefit from the provisions of this Bill.

Looking all the way back to 2013, where I started, I wonder how it came to be decided to single out activity in the political world for this complex set of arrangements around political funds. Unions have a host of functions: they support members in collective bargaining, promote greater opportunities for skills development, represent individuals in grievance and disciplinary issues and provide legal representation when needed. Naturally, they want to play their part in civil society, in contributing to the debates in the sectors in which their members work, where they are deeply invested, and all the other issues that shape the world around us. Why this area of work for democratic organisations has to be so closely and differently regulated in an age when people can now choose to join or not is, to me, something of a curiosity. But that is not the issue before us today, and I hope that the noble Lord, Lord Burns, may be prepared to reconsider and not press his amendment.

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[Lord Leigh of Hurley (Con)]

With great respect, every shareholder gets a mailed piece of paper with a box to tick—every single shareholder every single year. If that is not a ballot, what is?

[Lord Barber of Ainsdale (Lab)]

Do shareholders get an opt-out facility from political donations that the company is making on behalf of the owners of the company?

[Lord Leigh of Hurley (Con)]

They can certainly vote against it, and that happens quite regularly. The situation is exactly the reverse of the one put forward by the Benches opposite.

My focus is on Clause 77, which the noble Baroness, Lady Fox, highlighted. It is a complicated clause. It refers us to the Trade Union and Labour Relations (Consolidation) Act 1992, which was itself amended by subsequent Acts, and to the famous aforementioned Section 32ZB, which relates to details of political expenditure in the political fund. The political funds, as I think has been said, were set up to protect the unions because the law did not allow them to make donations directly, so the political fund allows donations to political parties. But this clause requires details of any political expenditure to be disclosed in the annual return to the certification officer, and that is what the Bill wants to get rid of. It was brought in as Section 12 of the Trade Union Act 2016.