Trade Union Political Funds and Political Party Funding

Lord Callanan Excerpts

Wednesday 9th March 2016 Lords Chamber

[Lord Callanan (Con)]

My Lords, as another member of the committee, I, too, join the paeans of praise winging their way towards the noble Lord, Lord Burns, for the job he did as the chairman of our committee. As a fellow lad from the north-east—I was delighted to discover that that is where he is from—I thought he did an excellent job in marshalling us all towards the inevitable compromises that are required in any report such as this.

This is the first Select Committee on which I have served during my membership of this House, and I greatly enjoyed it. I learned a lot from it. I freely admit that the world of trade unions was not one that I knew much about. I have never been a member of a trade union, I have no intention of ever joining a trade union and I learned a lot, particularly from the noble Baronesses, Lady Drake and Lady Dean, the noble Lord, Lord Whitty, and others about the operation of trade unions, the way they work and what they do.

A lot of points have been made, but I shall make three brief remarks. First, in essence, the principle that opt-in is the right way to proceed was accepted. It was accepted unanimously by new members of trade unions, and if you leave it over a long timescale of 20, 30 or 40 years, eventually everyone will be opted in. It will not surprise noble Lords to know that I thought that it should be accepted in a relatively short timescale by existing members. Effectively, what we are disagreeing about is the timescale. If we leave it long enough, eventually everybody will be opted in anyway, and it seems to me that the principle of opting in was agreed by the noble Lord, Lord Collins, in his report to the Labour Party.

Secondly, we were asked to examine Labour Party finances. I was somewhat surprised to discover that only 50% of union political funds go to the Labour Party. Not being an expert on the subject, I assumed that the vast majority of political funds went to the Labour Party. If this legislation results in fewer members opting in to trade unions, trade unions have the option to increase the proportion of funds that they donate to the Labour Party. I was also surprised to discover the relatively tiny contributions of members who are effectively opted in by inertia, which the noble Baroness, Lady Dean, referred to earlier. It is a matter of pence a week. If the unions make sufficient effort to get a positive choice out of people to join and to contribute to political funds, it seems not beyond the bounds of possibility that they could ask for considerably more money. If somebody makes a positive choice to join a political fund, I cannot see anybody positively agreeing to contribute 16p a week. Surely they will contribute a number of pounds, so unions will probably end up with fewer members opted in but with that smaller number making a proportionately bigger contribution; however, that is a matter for unions to determine in their own time. I fully subscribe to the recommendations that the opt-in process should be made easier and more transparent. Members should be able to do it electronically, and I hope the Government will look at extending the transition period to give sufficient time for the new reforms to bed in.



My third point is the knotty issue, which has been explored extensively, of manifesto commitments. I fully accept that the manifesto commitments on which my party is relying were not particularly well drafted, but their intention is clear. There are of course two manifesto commitments in this area: the opt-in provisions that we have been talking about, and the commitment to convene cross-party talks. I accept that I was disappointed in the committee by the failure of the Cabinet Office Minister who came along to commit to convening cross-party talks; he said that he was in favour of them happening but did not say how the three parties would magically arrange to get together in a room and start them. It is for the Minister and indeed the Government to convene those talks; it is a relatively easy and straightforward thing to do, and I hope that the Minister will take that back to her colleagues. While I accept that this legislation is not directly related to the funding of political parties, to avoid it looking vindictive it is important for the Government to take forward the issue of cross-party talks as well.

Before Labour Members become too earnest about extending their argument that it is important for political parties to legislate on political finances only with the agreement of all other political parties, I remind them that in their own manifesto there was, yes, a commitment to take cross-party funding talks but also, not linked to that, a commitment, as my noble friend Lord Leigh has pointed out, to put a cap on political donations. That was not proceeding on a cross-party basis; if Labour had been fortunate enough to win the election, I assume that it would have wanted to pursue its own manifesto commitment. That would have been pursuing political-party funding reform without cross-party agreement.

As has also been pointed out in this debate, Labour legislated on a number of political-party issues during its time in government. For example, having to record all donations meant that my own lowly little constituency branch had to start recording every dinner donation and small amount of money that we were given. That was legislation implemented by the last Labour Government. Labour also, as has been said, legislated on companies having ballots of shareholders; again, that was political-party funding legislation done without cross-party consent. So let us not have too much preaching about this.

I think it is desirable that parties in government should proceed by cross-party funding talks, but that does not alter the fact that in my view this legislation is right in principle. It is right that people should make an informed and transparent decision whether to opt in to a political fund. I hope that the Government will bring forward appropriate transitional arrangements, but ultimately the principle that members should opt in is right.