Trade Union Political Funds and Political Party Funding

Lord Robathan Excerpts

Wednesday 9th March 2016 Lords Chamber

[Lord Robathan (Con)]

My Lords, having been a member of the committee, I pay tribute to the Cross-Benchers, such as the noble Earl who has just spoken, for their measured contributions. I particularly thank the noble Lord, Lord Burns, for his skilful handling of the committee, which must not have always been easy, and his very good humour. As a new Member of this House, I have noticed that people are sometimes reluctant to intervene. I shall make a short speech and if anybody wishes to challenge me, I would be very happy for them to intervene.

First, I will address the question of opting in or out, and then the second, linked issue of how this will affect Labour Party funding. This discussion of the trade union political levy hinges on one issue alone: is it right in principle for trade unionists to opt in or out of the political levy? I know why the situation is as it is. I know the history. But the world has moved on since the second half of the 19th century.

Nick Boles, the Minister, came to our committee and gave us some very eloquent evidence, which I shall quote at length. He said that,

“there has been a very substantial shift across a whole range of areas of public life and consumer activity towards the idea that it is important, when you are asking someone to make a contribution to some other organisation—it could be a supplier of a good or a charity—that they should actively consent to do so … the consumer rights directive, which was implemented in the UK in 2014 and which applies across the European Union for contracts between a trader and a consumer, reinforces the concept of express consent … pre-ticked boxes are no longer permitted under that directive … Turning to the charitable sector … a review of the approach to self-regulation of fundraising in charities and strongly encouraged that, again, all fundraising organisations should take steps towards adopting a system of ‘opt-in only’ in their communications to donors … The FCA is very clear that when signing up to a financial product, consumers should be provided with clear information and be offered an opportunity to actively consent to a new commitment”.

Would anyone in the Chamber disagree about the principle of active consent—opting in, in this and indeed other fields—in the second decade of the 21st century?

The contributions to the political levy are, frankly, trivial, as we have heard already from the noble Baroness, Lady Dean, so the result is that people do not challenge them. It is just not worth the candle. It is not worth the hassle, after all, for an average of 9p a week—less than £5 a year. But if you multiply that, which the noble Baroness did not do, by nearly 5 million union members, you get not far shy of £24 million a year, of which around half goes to the Labour Party. Can anybody in the Chamber defend that system, where those who vote Conservative, Liberal Democrat or whatever unwittingly give money to a party that they do not support? I opt in to join the Conservative Party, and Conservative associations up and down the land sweat blood each year trying to get members and their subscriptions.

Turning to Labour Party funding, it is not my place to advise the Labour Party, it will be pleased to know, but I would suggest that it gets out and gets more members. We were told by the Guardian in January this year that membership of the party has increased from 202,000 to 388,000 since the general election, so perhaps the party is doing exactly that. I am told that more than 100,000 people paid £3 to vote in the leadership election by becoming registered or affiliated supporters. However, trade union membership is falling rapidly. It is less than half what it was in the winter of discontent. I might again advise the Labour Party: it is not wise to rely on these funds. The party needs to get more trade unionists who are committed to the Labour Party to subscribe properly. Perhaps the standard sub of £47 puts them off. In the Conservative Party it is only £25. I think that is too little, but there you go. The noble Lord, Lord Collins, is in his place, and his review has already started the process of opting in. I will quote—not to him because he will know it backwards—what he said:

“After a transitional period of five years, affiliation fees shall only be accepted on behalf of levy payers who have consented to the payment of such fees”.

Notwithstanding the Motion setting up the committee, the issue of trade union reform is separate from party funding. Indeed, all noble Members will have received the joint union briefing on the Trade Union Bill, which included briefing by USDAW and the NASUWT, both of which have political funds. The briefing did not even mention the opt-in or the opt-out, or political levies or political funding. So those unions saw it as separate. It is, frankly, immoral and unacceptable for any party to be funded unwittingly and unwillingly by people who do not support it. I believe that even those opposite must agree.

[Lord Forsyth of Drumlean (Con)]

Is there not a bit of a dilemma here with company donations made, say, to the Conservative Party, where some of the shareholders may not take the view that they support the Conservative Party?

[Lord Robathan]

My noble friend is absolutely right, although he may be slightly—dare I say?—living in the past. We heard evidence—somebody who was on the committee may correct me—that the amount of public company donations has dropped to a negligible level because of legislation brought in by the last Labour Government.

[Lord Forsyth of Drumlean]

My noble friend is absolutely right that the amount has certainly gone down but I thought he was making an argument of principle, not of quantity.

[Lord Robathan]

My noble friend is absolutely right, but of course, in principle, shareholders vote at a company general meeting and the result is that they do not vote for political donations. Of course, one can sell one’s shares, as indeed one can leave a union, but leaving a union may have implications for one’s employment.

[Lord Whitty]

My Lords, I am sorry to interrupt the noble Lord—we crossed swords in the committee—but, further to the point made by the noble Lord, Lord Forsyth, does he not recall the evidence before the committee that over the past five years trade unions gave roughly £64 million in political donations? Other organisations gave £80 million, predominantly to the Conservative Party. None of those organisations is required to have a political fund and therefore the issue of opting in or opting out by shareholders or members of those organisations does not apply. Does he regard that as either moral or fair?

[Lord Robathan]

The noble Lord and I did indeed cross swords but in the committee we heard that these are personal donations. They may be from rich people and one can knock that—

[Lord Whitty]

My Lords, I am talking about organisations. There are also very rich donors—to all parties but, again, predominantly to the Conservative Party. But I am not talking about individuals, I am talking about other organisations which together donate more than the trade unions do to the Labour Party—to all parties.

[Lord Robathan]

Perhaps the noble Lord might like to tell me which organisations, without asking their members, donate to the Conservative Party, because I think he may be mistaken.

[Lord Whitty]

My Lords, the point is this: public companies have to have a vote but there is no requirement to have a political fund and therefore those who oppose the majority vote have no option to opt in or opt out. That is a requirement that applies to trade unions only and it will continue to do so in a rather harsher form if the Bill is passed. Why does the noble Lord not regard that as necessary for other organisations if he is indeed trying to make a point of principle?

[Lord Robathan]

Funnily enough, I would be very happy to examine that but we did not do so in our committee. I think the noble Lord is saying that he will defend the principle of making people opt out rather than having the opportunity to opt in.

Finally, the recent discussion has just illustrated how well the noble Lord, Lord Burns, did, with good humour, in handling our committee.