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Trade Unions (Political Funds) Reform

15th June 2004

I oppose the Bill. A trade union that wishes to spend money on party political activities must set up a separate political fund for financing any such expenditure.

12.38 pm

Mr. Jonathan Djanogly (Huntingdon) (Con): I oppose the Bill. A trade union that wishes to spend money on party political activities must set up a separate political fund for financing any such expenditure. Trade unions must comply with specific statutory requirements in setting up and running such funds and union members have rights in relation to the requirements. For example, no member is obliged to contribute to a union's political fund. The Trade Union Act 1984, which is now the Trade Union Reform and Employment Relations Consolidation Act 1992, made it a legal requirement for unions to reballot their members every 10 years to keep a political fund in operation.

An explanation of how a trade union political fund should be set up is provided by Microsoft, on its very helpful online site for small business customers. It says:

"To set up a political fund, a union must first ballot its members to adopt 'political objects' as a union objective.

The rules for conducting that ballot must be adopted as rules of the union and approved by the Certification Officer for Trade Unions and Employers' Associations before the ballot takes place. Approval will only be given if the political fund ballot rules meet certain requirements. In particular, entitlement to vote must be given to every member of the union, the ballot must be held by post, and the ballot must be conducted and supervised by an independent scrutineer.

Once a political fund is established, a trade union must adopt 'political fund rules', and these must be approved by the Certification Officer. These rules must safeguard the rights of members by permitting individual members to contract out of contributing to the political fund"

and providing

"that contributing to the political fund shall not be made a condition for admission to the union."

So what are the unions saying about the proposal of the hon. Member for Bassetlaw (John Mann)? [Hon. Members: "They like it."] Oh, they do like it; indeed they do. According to the trade union co-ordinating committee, there has so far been no evidence of union members wanting to lose their political funds. In the 1980s, 83 per cent. of them voted yes; in the 1990s, the yes vote was 82 per cent. Currently, 35 unions representing 4.5 million members have political funds. Many of them have recently had, or are soon due to have, ballots.

In April 2003, the communications union Connect voted by 81 per cent. to 19 per cent. to keep its fund, in a turnout of 38 per cent. Also in 2003, Amicus voted to retain its fund, with a yes vote of 71 per cent. At the TUC conference in September 2003, 20 unions joined up to launch the trade union co-ordinating committee, combining their resources in fighting political fund ballots. The TUC argument is that the unions are happy with the political funds and that we should leave them to get on with it, on the assumption that, despite there regularly being turnouts of less than 50 per cent. in these ballots, most union members who have voted have supported continued political activity when asked.

I would suggest, however, that that argument is deeply flawed for three reasons. First, it has been shown that many union members want to vote on whether their union gets involved in political campaigning. Only this year, an attempt by some members of the National Union of Journalists to set up a political fund was voted down in a secret ballot, with 53 per cent. of the vote going against the proposal. It has been suggested that that would have been enough to head off a schism, because several high-profile members had threatened to resign if the fund were instituted.

Union members, including the former NUJ president, now the Minister for Europe, the hon. Member for Rotherham (Mr. MacShane), and media figures such as Jon Snow and Jeremy Paxman had all expressed concern that the fund would prejudice the union's proud political independence. The NUJ had argued that all money in the fund would be used to finance campaigning on behalf of NUJ members, and not to support political parties. That proposal was defeated.

The second reason is that, under legislation introduced by this Labour Government, companies now need to approve political donations. Not only that, but they need to ballot their members on the matter annually rather than once a decade. So I would suggest that, rather than making things easier for the unions by cancelling their once-in-a-decade vote, we need to equalise the position with companies by making unions vote on their political donations annually, as companies currently have to.

The third reason is the changing nature of political funding in this country. As we saw in the Employment Relations Bill, which is now making its way through the other place, the Government are proposing to set up a so-called modernisation fund involving an uncapped amount of money. The Government say that it could be up to £10 million, but it could be three or four times that amount because the Bill currently makes no provision in that regard, although I hope that it will do. That money will be given to unions for so-called modernisation proposals-things that I would have thought their membership subscriptions should be paying for anyway. Even if those funds are not going to be used for political activity, they will certainly leave the unions with more money that could be used in that way. Again, therefore, given the way in which the Government propose to change the law, it is even more important that union members have the right to say how unions should be able to spend their money in terms of politics.

We should also note the changing nature of the Labour party's funding. It has a collapsing membership, its base of new Labour entrepreneurs is rapidly disappearing, and it is becoming increasingly dependent on trade union funding, which, I believe, was some £6.5 million last year. The Labour party is not becoming less dependent on union funding, but a lot more dependent on it. In fact, it is becoming almost totally dependent on trade union funding. I do not see that as a reason for getting rid of union members' ability to vote on political funding but as a reason for giving them more rights as to how their union funds are spent.

As Labour becomes more reliant on such funding, the hon. Member for Bassetlaw asks for less answerability and more opaqueness, when there should be more accountability, more openness and annual debates, as companies must now have. The Employment Relations Bill ratchets up union rights significantly. This would be another attempt to ratchet up those rights even further, but this time to the detriment of union members, who should be given more rights to decide on their funds, not less, as proposed by this Bill, which I oppose.

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