The chief source of funding for the Labour party – the trade union political funds – are likely to undergo big cuts as a result of a bill being introduced by the business secretary.
The trade union bill, put forward by the business secretary, Sajid Javid, will create a shift from a current system whereby union members have to contract out from paying the political levy to one in which they have to opt in. The change, from a system of inertia to one in which members actively choose to pay, is likely to lead to a big drop in income to the unions.
A similar reform, in the 1927 Trade Union Act, resulted in a fall in the number of political levy payers from 3.5million to 2million, and a drop in party income of 20%. Between May 2010 and December 2014, Labour received donations of £48.6m from trade unions, nearly half the £110m that the party took during that period, which illustrates how important the union movement remains to Labour’s electoral machine.
The Tory manifesto said in vague terms that a Conservative government “would legislate to ensure trade unions use a transparent opt-in process for union subscriptions”, but made no mention of the political levy. The legislation will also set new thresholds for union strike ballots; the Tory manifesto made no mention of changing the way in which union members pay into their political funds.
Trade union officers and the Labour party seemed to have been caught unaware of the reforms on Wednesday and were claiming that they appeared to breach the previous understanding that reforms to the funding of political parties would be conducted on a bipartisan basis.
The Department for Business briefed that the new bill would echo the practice in Northern Ireland – where trade unionists are required to contract into paying the political levy.
Trade unions pointed out that political funds were already subject to 10-year affirmative ballots and said this reform, once contemplated by the then employment secretary Norman Tebbit in the 1980s, was not discussed during the election.
The bill will introduce a 50% voting threshold for union ballot turnouts (and retain the requirement for there to be a simple majority of votes in favour). In addition, there will be a requirement that 40% of those entitled to vote must be in favour of industrial action in essential public services, such as health, education, fire and transport.
Paul Kenny, general secretary of the GMB union, said: “This is just the same old Tories who are anti-trade union, anti-working people having a voice and anti-democratic.
“It’s one rule for the Tory slush fund, hedge funds and another for trade union members. This will not deter or silence the voices of millions of working people who already give their approval for political funds through democratic ballots governed by statute.
“It will bring state funding for political parties a step nearer. It is not sustainable to allow the elite and companies unfettered and unlimited rights to fund the Tory party while shackling the bodies that have funded the political opposition to them for more than a century.”
