Employment Rights Bill

Lord Whitty Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

[Baroness Finn (Con)]

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.

These are the compelling arguments in support of the amendment from the noble Lord, Lord Burns. I will end with another important observation. In Committee I listened carefully to the excellent speech by the noble Lord, Lord Prentis—I am not sure whether he is in his place today. I pay tribute to the noble Lord for his tireless and brilliant negotiations over many years on behalf of the members of UNISON. He and the noble Lord, Lord Barber, who is in his place, were formidable in their defence of their members in the negotiations with the coalition Government on the reform of public sector pensions.

I totally understand the concern of the noble Lord, Lord Prentis, that unions need political funds to run their campaigns. However—and I think the noble Baroness, Lady Fox, made this point in Committee—it is not right that trade union leaders should be able to pursue their own political issues without the need to actively ask their members whether they are willing to fund them. People who join trade unions believe they are joining an organisation that exists to defend their rights in the workplace. Many are not paid large salaries. It is surely wrong not to ask those who can potentially least afford it to pay into a political fund without necessarily realising that they are doing so. Trade union leaders do their members a disservice by relying on their inertia; they have a duty to make the case for the use of their members’ money for political campaigns. This is another reason why I support this amendment, which makes the case for retaining an active choice so that the preferences of members can be reflected more accurately.

[Lord Whitty (Lab)]

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.

--- Later in debate ---

[Lord Leigh of Hurley (Con)]

My Lord, I will speak to the amendment from the noble Lord, Lord Burns, and to my own Amendments 152A and 152B. In so doing, I congratulate the noble Lord, Lord Burns, on this amendment. I remember the debate we had at that time. There is no question about it: every side of the debate compromised. I remember Ministers from the other place telling us that we had to compromise and we had to make concessions that we did not feel were right. The deal was done, and the deal still holds.

The point made by the noble Lord, Lord Whitty, that we should do things in the round and in one is exactly right, rather than making this piecemeal change that the Bill proposes, if there are to be dramatic changes. I accept that times have moved on and that funding for the Labour Party is largely from individuals rather than from unions. None the less, if we are to make changes, then let us look at them in the round rather than observing the piecemeal change proposed in the Bill.

I have to correct the noble Lords, Lord Whitty and Lord Hendy. Companies cannot make donations to any political party without prior shareholder approval in the period of a year—not 10 years, but one year. That approval lasts only one year and has to be refreshed at the annual general meeting. Noble Lords are encouraged to look at the accounts of any company—certainly a public company—to see that that is the case.

[Lord Whitty (Lab)]

That is true, but it does not require a ballot of individual shareholders. There is a vote once a year, or whenever, so that a donation can be made at the annual general meeting. It is not a ballot.