Trade Union Political Funds and Political Party Funding

Lord Whitty Excerpts

Wednesday 9th March 2016 Lords Chamber

[Lord King of Bridgwater]

If the noble Lord thinks that I am overdoing it I simply ask him to read again the letter that Mr Murray sent to me. The noble Lord was a deputy general secretary himself at the time, so he has no excuse for not knowing what was said in that letter, or for not knowing the circular that was sent out by the TUC to all the unions, to which they subscribed, and on the basis of which I then accepted that assurance. I invite any noble Lord here to read the correspondence and make their own judgment as to whether I am overegging it.

That is where we are now. I had not sought to see this introduced. I hoped, 32 years ago, that the matter had been resolved. Sadly, my acceptance of the assurance that I know was given in good faith by Mr Murray on behalf of the TUC simply was not honoured and respected by the vast majority of the unions. So new members—this covers virtually all the current union members, since it has been going on for 32 years—were not made aware of the rights that they had, which they should have been, and on whose behalf the TUC had given me those clear undertakings.

[Lord Whitty (Lab)]

My Lords, obviously I accept the noble Lord’s recollection of what happened in 1984 and of the deal that was done. He will be aware that the committee had mixed information and reports on exactly what the unions were doing, and that the evidence from the Government was much challenged by the unions and by independent observers on whether the unions were following the spirit of that agreement. More importantly, over the 32 years, no Minister of any Government—the majority of whom were not Labour—has ever raised with the TUC the fact that there was a serious breach of that understanding and has never proposed, until the Bill appeared before the House, that we should change the situation again.

[Lord King of Bridgwater]

The noble Lord makes a very interesting point. I do not know where the Government were at that time. He is absolutely right that it got completely neglected. I went off to Northern Ireland and did not follow it through. Until the noble Lord, Lord Monks, produced the correspondence I had forgotten its existence. I am quite frank about that.

The simple point I want to make, having thought that nothing would come out of the committee, is that we now have a way forward, and that the opt-in for new members should be properly communicated and in legislation. I note that the noble Lords, Lord Burns and Lord Tyler, and the noble Earl, Lord Kinnoull, have tabled an amendment that is currently in the Printed Paper Office, setting out the point of opting in for new members. It is a very helpful amendment, which I have read and noble Lords will be able to read. On that basis, we have made an important start. On the difficult point of established members, we should see how we get on with the first lot and then see where we go thereafter.

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[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—

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[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.

--- Later in debate ---

[Baroness Neville-Rolfe]

If I may, I will continue and perhaps return to that point in due course.

No doubt on Report, which starts next week, your Lordships will wish to debate the further specific measures and suggestions contained in the report, but an important point is that the Government remain committed to introducing a transparent opt-in system for political funds for all union members, not just new ones. However, we will reflect on both the recommendations of the committee and the views of other Members of the House expressed in Committee on the Bill and this evening on the mechanism of the provisions.

As for the specific recommendations on the operation of Clause 11, I am pleased that the committee has endorsed the principle that union members are entitled to a reasonable amount of detail about the political expenditure of their unions, and agrees that the current level of reporting is insufficient. Again, we will reflect on the committee’s technical recommendations and, as I said, continue to engage with the Certification Officer on this and other matters.

I turn to the wider issue that the committee was asked to consider in relation to party funding: the necessity of urgent, new legislation to balance those provisions with the other recommendations made in the Committee on Standards in Public Life report. As the committee itself noted, we have a democratic mandate to introduce the opt-in for political funds. Our manifesto did not state that that depended on there being party funding reform. So the Government agree with the committee’s conclusion:

“While there is no agreement between the political parties, we see no scope for introducing urgent new legislation on party funding to balance the provisions of this Bill. We believe that the political parties should give effect to their manifesto commitments on party funding”.

The Government agree in principle, but for any talks to be productive, there needs to be a sense that all parties agree on the basis for discussion.

Let us not forget that, despite the efforts of its members, the 2011 Committee on Standards in Public Life report did not get cross-party support. Indeed, both parties opposite objected to at least some of its conclusions. It is also important to note that the report predated the Government’s 2015 manifesto.

There are clearly major stumbling blocks to progress. There is no appetite for state funding of political parties. As the noble Lord, Lord Wrigglesworth, a former treasurer of the Liberal Democrats, told the committee:

“I cannot see a time when political parties will be willing to go to the taxpayer and ask for money for their own organisations”.

So what might the approach be? The unfortunate fact is that inter-party party funding talks over the last decade have failed to reach any consensus, in part because they have focused on controversial and complex structural changes. Evidence to the Select Committee suggested moving ahead with smaller reforms that might command cross-party support, such as finding practical ways in which to encourage more and smaller donations from wider audiences. As part of the Government’s broader approach of promoting giving to good causes, the Government would be willing to take that forward for further consideration, such as publishing a discussion paper in the first instance, if there was a positive reaction to such a potential step from the political parties. I hope noble Lords will be pleased to hear that; I shall be particularly interested to hear the views of the committee chaired by the noble Lord, Lord Bew, on these issues.

To conclude, we are heartened that the committee agrees on the fundamental principle behind Clauses 10 and 11—that union members should be given an active choice to contribute or not contribute to political funds. We welcome the contribution and ideas on how that mechanism might work and commit to reflecting further on these recommendations, such as the transitional provisions for implementation and the methods of communication that a union is permitted to use in our digital world.

[Lord Whitty]

My Lords, before the noble Baroness sits down, I just reflect that that was a very disappointing performance in view of the sentiments that have been expressed all around the House. We all recognise that the present system of funding of political parties has a lot of problems and that we need a fundamental new review. Without a commitment from the Government to engage in that review, the compromise that we have come up with in this committee does not deliver what the committee wants and what I believe this House wanted in its decision to set up the committee, and what has been expressed quite widely in the debate tonight. I hope that between now and Report the Minister and her colleagues will reflect further on whether this is a sensible stance for the Government in the face of such widespread sentiment in this House.