FT.COM

BY: Jim Pickard and Elizabeth Rigby

The bill is expected to receive its first reading in late July and its second in September — with the timing designed to cause maximum embarrassment to the Labour party as its lengthy leadership race reaches its finale.

The new legislation will be making headlines just as a senior party figure makes the customary address to the TUC gathering in September.

The impact of the funding reforms, which will hit all existing members of Labour-affiliated unions, will be more far-reaching than expected. They revolve around a “transparent opt-in process” for the political fund element of trade union subscriptions. At present, many workers automatically pay into their unions’ political funds on an “opt-out” basis — requiring them to actively choose not to contribute.

When the policy was announced, ministers were unable to say whether the changes would apply to all members or only to new ones. According to Conservative sources, however, the changes will be imposed on all 6m union members, who will have to reaffirm their desire to donate to Labour on a regular basis. That is likely to be every few years, although the final rules have not yet been decided.

The move will delight the Conservative grass roots but prompt fury among union general secretaries, who believe the new measures are politically motivated.

“These proposals amount to nothing more than a shamelessly partisan attack on the funding of the opposition party,” said a spokesman for the Unite union. “Political funds are already subject to approval being given in regular ballots by unions. Tory hedge fund and multimillionaire donors will face no similar restrictions, leaving boards free to write hefty cheques backing the Tory party.”

Another union official said that opt-ins usually failed to work, citing the low take-up of volunteers for organ donations.

“This is going to do in the Labour party,” he said. “You can’t defy the law of gravity.”

Labour depends heavily on the biggest unions, taking more than £30m from Unite, the GMB and Unison in the last Parliament. In total the unions made up 72 per cent of recorded donations to the party from 2010 to 2015.

Most unions ballot their members every decade on whether they want to keep a political fund. However, the Conservatives believe that many members are paying money towards a party they do not support. In Scotland, for example, a large proportion of union members now back the SNP rather than Labour.

The bill will also please business groups by tackling the “intimidation” of non-striking workers and introducing time limits on strikes.

The law will require a minimum 50 per cent turnout of union members for a ballot to approve a strike. There will also be a new threshold of at least 40 per cent of those entitled to vote required for strikes that affect public services.

Dave Prentis, head of Unison, has threatened to challenge the move in the European courts and if necessary act outside the law to halt the new legislation.

Critics of the proposals point out that days lost to strikes are at a minimal level compared to the 1970s. Meanwhile union membership has fallen to just 14 per cent in the private sector and 54 per cent in the public sector.

-top of page-