Trade Union Political Funds and Political Party Funding

Lord Desai Excerpts

Wednesday 9th March 2016 Lords Chamber

[Lord Desai (Lab)]

My Lords, I, too, pay tribute to the noble Lord, Lord Burns, for an excellent report. I have known the noble Lord more or less since I landed in this country, 51 years ago. I have always known that he will do whatever he does in an excellent way.

I think most things that have to be said about the report have been said. It is a good report. The recommendations are good. But I want to take a slightly broader point of view. First, we should be realistic about this. We live in a class society and it is a fact that capital has more resources than labour. Labour ultimately has to have numbers on its side because each member can make only a small contribution. So the Labour Party has always needed arrangements such as that with the trade unions to get a little, respectable sum of money together.

As we know, regardless of the nice things that the report says about all parties having exercised restraint, the record in the report shows that there has been class legislation on these questions in 1913, 1927, 1984 and so on. After all, what is political power for? Political power is to serve your people and to put the other people down—that is our system. We have had a bilateral monopoly of power between Conservative and Labour, and that is the way that we have operated. I do not really accept this idea that, somehow, political parties cannot do something because they do not have a majority of voters on their side. We have a first past the post system, where if you get a majority of the seats, you bash the other people’s face in—that is the way politics works, so I do not think there should be any surprise about that.

However, several things have happened. We have a situation in which, for various reasons, the trade unions are in decline. With production technology changing and the economy changing, trade unions are in decline. Secondly, inequality of income has increased remarkably —there is a lot of evidence about that—and so there are these contrasting forces in which the balance of power between the two major groups has changed. Also, because we had a bilateral monopoly of power, the smaller parties had suffered and, more and more, it is becoming clear that the bilateral monopoly’s hold on the electorate is weakening—they no longer command the 99% of the electorate’s vote that they had in 1945 or 1951 but have a much smaller number.

Whatever we do with this system and whatever we do with Clause 10 of the Trade Union Bill, we need to go back to some wider thinking about political funding, and I think this is where the CSPL report will come in. Eventually, we will have to transit to a system that, if not entirely, is substantially publicly funded, because only a publicly funded system—based on the votes obtained by a political party at an election, with some sort of per capita subvention in relation to the number of votes that a party got—will do justice to the smaller parties and do justice to the relative inequality of resources between the two major parties.

Whatever we do with the Trade Union Bill—and I agree, I think, with the recommendations of the committee—we need to think seriously about how we transit, if not fully at least partially, to a mixed system in which all parties have access to public funding, which might be topped up by other arrangements that would also be regulated in a strict way. We need some system like that, because the present system has broken down and, as the noble Lord, Lord Bew, has said in his report, it no longer commands public trust. Neither the trade union funding nor the corporate funding commands public trust. Therefore, we need a system in which public funding is made available to parties, and the sooner we move to that system, the better.

And here we should once again emphasise the advantages of your Lordships’ House. The Trade Union Bill would not have met this big roadblock and the Select Committee would not have been appointed, had it not been for your Lordships’ House. Because of the way that the voting strength is constructed here, we can do that kind of reforming thinking in your Lordships’ House. So, as and when the members of the ruling party have got over their little local difficulties with Brexit—somewhere in high summer, so in July or so—they ought to turn their mind to thinking about long-run reform of political funding. I would again recommend that they use your Lordships’ House for that and, since the noble Lord, Lord Burns, is a very busy man, he would be the ideal person to do the job because he will do it quickly.