- Report (4th Day)
- 4:39 pm
- Relevant documents: 20th and 29th Reports from the Delegated Powers Committee and 7th Report from the Constitution Committee. Scottish, Welsh and Northern Ireland Legislative Consent granted.
- Clause 59: Requirement to contribute to political fund
- Amendment 147
- 147: Leave out Clause 59 Member's explanatory statement This amendment would retain the 2016 cross-party compromise (agreed by the House without a division) whereby new members of a union contribute to the political fund only if they have actively chosen to do so. That compromise was based on the conclusions of the Trade Union Political Funds and Political Party Funding Committee.
- My Lords, my amendment proposes removing Clause 59 from the Bill. This would maintain the current arrangements whereby members joining the union since the passage of the Trade Union Act 2016 contribute to its political fund only if they give their active consent to do so. These existing arrangements stem from the compromise reached by the Trade Union Political Funds and Political Party Funding Committee in 2016. The compromise was that unions would not need to obtain active consent from existing members to continue paying into the political fund but would be able to collect the political levy from only those new members who had given their consent and made an informed choice to do so. Additionally, all members were to be reminded annually that they could change their decision.My involvement in the issue was not because of a long-standing historical interest in political funds, I emphasise; simply, I was asked to chair that committee. In the process, I gained insights into the history of trade union political funds and the arguments for and against opt-in and opt-out clauses when individuals need to exercise a choice.The 2016 compromise prevented the fear of a sudden and potentially significant reduction in the income of trade union political funds, which could have severely damaged the Labour Party’s finances. While the then Opposition welcomed the compromise, many Conservative Members in this House and the House of Commons were disappointed that the requirement for active consent was not extended to existing members.Consequently, I was taken aback when I learned that the new Government wanted to abandon the compromise and revert to the pre-2016 position. This Bill proposes returning to a position where all new members make automatic contributions to political funds unless they deliberately choose not to, with reminders only once every 10 years.During the recent debates on this Bill in Committee, several arguments were put forward from the Government Benches to justify the proposed change. I find none of them convincing. The first argument was that this was merely returning to an arrangement that had lasted between 1945 and 2016. This is a weak argument. Many things have changed since 1945, including the generally accepted view of how to treat customers fairly. It is now recognised that, in most circumstances, customers or members should give clear consent, especially in situations involving active and ongoing participation.
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- A third argument used is that trade unions are collective entities rather than businesses, and so the issue of mis-selling does not apply to them. This argument does not hold water either. Members of mutual organisations surely rightly expect to be treated with the same high standards as elsewhere. People contributing to charitable activities also expect this. Why should the unions be any different?
- In my view, we should move away from the opt-in and opt-out language. First, it is confusing to members, leading to uncertainty about their rights. Secondly, it is language from a pre-digital era, when paper-based decisions required postage stamps followed by burdensome obligations on members, given the small sums involved. As I argued in Committee, we should provide a simple digitally based arrangement, where members are given an unbiased choice at the point of joining a union, requiring them to tick either the “consent” box or the “do not consent” box. Members then either consent to make a political contribution or they do not.
- I therefore ask the Minister to accept my amendment, omit this clause and agree to find a solution that moves away from the language of opt-out and opt-in. We should recognise the importance of consent and design membership forms that are fit for the technology and standards of today. I cannot draft this solution myself, but the Government have the support of those who can.
- I thought we had put this issue to bed in 2016. Little did I think that one of the first things a Labour Government would do would be to ditch the compromise they so readily signed up to under the previous Government. Are they content to see a change in these arrangements each time there is a change of Government? For me, that makes no sense at all. I beg to move.
- My Lords, I support the amendment in the name of the noble Lord, Lord Burns. Several noble Lords, including me, spoke at some length in Committee, so I will not repeat the powerful arguments in favour of maintaining the outcome agreed in 2016 that new members should be explicitly asked to make an active choice about whether they wish to contribute to their union’s political funds.I agree with what the noble Lord, Lord Burns, said about moving away from the language of opt-in and opt-out and towards discussing the principle of making an active choice. The principle of moving from the opting out of making such contributions to opting in was unanimously accepted in the report from the cross-party Select Committee on Trade Union Political Funds and Political Party Funding in 2016. Support for the principle of making such an active choice has only grown in subsequent years. Opt-out has become the less preferred option, as it relies on people’s inertia and, as such, most companies and organisations offer their customers an active choice. Indeed, my noble friend Lady Cash has highlighted the potential legal issues of an opt-out policy. As such, it is astonishing that the Government would wish to revert to a policy of opting out and take such a regressive step.The compromise agreement in 2016 that subsequent opt-in would apply only to new members was a sensible and proportionate way to deal with the potential cliff edge in the reduction of funds to the Labour Party. Importantly, it ensured that, in the future, members joining a trade union would be asked to make an active decision about whether they specifically wished their money to support the Labour Party or other political campaigns. This was, as the noble Lord, Lord Burns, has suggested, supposed to be a lasting solution to the issue of contributions to political funds.The 2016 Select Committee report warned of the risk to parliamentary democracy if the then Government used their majority unilaterally to inflict significant damage on the finances of opposition parties. There is a danger now that the Labour Party, in order to improve its own finances by seeking to unwind the unanimously agreed principle that new members should make an active choice—this has been the case now for almost 10 years—could potentially be open to the accusation of abusing entrusted power for private gain.
- My Lords, I would like to correct, in a sense, the impression given by the noble Lord, Lord Burns, of the activity of his Select Committee at the time. I was a member of that Select Committee, along with my noble friend Lady Drake, representing the interests of the Labour Party. We did agree on a compromise, but it was not seen as a long-term compromise. It was seen as a holding position until we had an overall review of the financing of political parties in general. Both my noble friend Lady Drake and I made that point clearly, and it is reflected in part in the report.As the noble Lord, Lord Burns, says, we wanted to get away from the chances of having new Governments switch every few years between the opt-in and opt-out options. I agree that it needs to end, but only at a time when we take account of the way in which political parties, including the Labour Party itself, can be financed by other organisations and institutions. Unless we look at the financing of political parties as a whole, any decision by a particular Government is likely to be biased towards the interests of their own political party’s funding.I hope that this Government will set up a commission looking at political funding as a whole. Until that point, we should recognise, as we recognised at the time, that the long-term effect of removing the opt-in decision would be, in effect, to bankrupt the Labour Party. We therefore need to look at the totality of political funding, and not at unravelling this particular proposition until we have done so. To be frank, some of the ways in which the Conservative Party accepts funds without the consent of company shareholders, and in which individuals give contributions to all political parties, need examination. I would like the Front Bench to commit this Government, and I hope the other parties will also commit, to such a comprehensive review before we swing one way and the other on opt-out as against opt-in. I hope the Government can give me some comfort that they will do just that at some time in this Parliament.
- 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.
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- My Lords, I oppose Amendment 147. The compromise formula that my noble friend Lord Barber has just talked about was a very practical solution to a tricky problem in the period when the noble Lord, Lord Burns, and his committee did such good work. However, I take issue with his claim that it was some kind of permanent solution, any more than was an agreement on contracting out reached by the Thatcher Government in 1984, headed by the noble Lord, Lord King of Bridgwater, who I am sorry is not in his place today, with the TUC. The provisions of that meant that the unions would be obliged to notify people regularly about the right to contract out, in the union journal and on the website, along with all the kinds of things that unions communicate with members about.It is worth briefly dwelling on that. It stipulated obligations on unions, as I said—and we thought that we had a lasting settlement then, but we were wrong. In 2016, the then Government came along with a Bill to provide for general contracting in; they did not initially mention the King-TUC agreement and gave no initial examples of union abuses of it. They had made no approaches to the TUC or to any unions about things that were not quite working. The certification officer was happy with what was going on. It seemed to me that the Government at that time were either forgetting about the agreement—which they might have done, I guess, given the interval—or ignoring it. Only when I gave notice to the noble Lord, Lord King, that I was going to raise the question of the agreement in this Chamber in the initial debates on the Bill did the Government embark on a frantic quest to find examples of union non-compliance, which were later challenged by the TUC.The Burns committee did its work and came up with a good deal—but why should it be regarded as permanent, any more than the TUC-King agreement was regarded as permanent? There is another problem with the Burns formula being regarded as permanent. Initially, in 2016, the bulk of union members remained contracted out only; it was only the new members that unions had to actively recruit. Of course, in the past nine years, the relative proportion of contracted-out and contracted-in members has changed considerably. If we give it another nine years, as in the period from the 2016 agreement to now, there will not be many contracted-out members left. In effect, what we will have seen is that the Burns formula in practical terms becomes a phased introduction of contracting in—and that is just not acceptable.