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Trade Union Bill: It's Time for Real Cross-Party Funding Talks

03/03/2016 11:38 GMT | Updated 04/03/2017 10:12 GMT

Changing how parties are funded isn't the sort of this which should be done by a government to its opposition. So democracy campaigners were pleased to welcome a key report on the Trade Union Bill on Wednesday - a Bill which as it stands would do just that.

The report, from the catchily-titled 'Select Committee on Trade Union Political Funds and Political Party Funding', makes the case for some important changes to the Union Bill, which could seriously affect the Labour's Party's income every year - without reforming other parties' finances.

It follows Peers voting to set up a cross-party select committee in January on party funding reform, amidst growing concern that the Trade Union Bill was 'dangerously one-sided' in its approach to the issue.

Why? Clause 10 of the Trade Union Bill, as it stands, would ask union members to 'opt in' to unions' political funds (the pots that go to political campaigning, some of which may go to Labour in affiliated unions) - instead of the current arrangement where they can choose to 'opt out' and vote for the existence of a political fund every 10 years.

The move, while making this aspect of Labour's income more transparent, would significantly cut the party's income without balancing it for other parties. So there was clearly a case for a cross-party conversation on the matter.

Frankly, the public are sick to death of scandals involving big donors. Recent polling by BMG Research for the ERS showed that 77% of public think that big donors have too much influence on parties.

Of course, basically everyone wants to see real reform of the way parties are financed (after all, it was in all the main parties' manifestos). But as this committee has explicitly recognised, changing the way one party is funded without looking at the wider picture is not the route to a sustainable settlement.

There are some good concrete proposals made by the committee - particularly for a minimum 12-month period for unions to move to the new arrangement, instead of the currently proposed three months. This gives parties a window of opportunity to get round the table and sort out their funding issues once and for all.

And we also welcome the committee's recommendation to exclude existing union members from the new opt-in arrangement until cross-party talks on party funding reform have been established. It isn't right that one party which happens to be in government should be able to move unilaterally against its opponents' source of funds.

The Lords have rightly pointed out that a one-sided approach could start a tit-for-tat funding war that would only serve to damage our representative democracy and further undermine public faith in political parties.

Now is the time for parties to get together and agree a settlement which ends big donors' perceived influence and restores people's trust in the process. This report is a welcome first step towards that goal - and we hope the government gets behind it.

Read the ERS' briefing on the Trade Union Bill here

In 2014 the ERS published 'Deal or No Deal: How to put an end to party funding scandals'. Read the full report and recommendations here.