11 June 2015
Peeling the Union
by J R Thomas
The unexpected surprise of the Queen’s Speech at the State Opening of Parliament was the proposal to introduce an “opt-in” rule in regard to trade union political levy systems. The political levy (readers will not be surprised to learn) is used by the trade unions affiliated to the Labour Party to support various aspects of Labour activities, including research, overheads and sponsorship of individual MPs, and also in the past has given the union leaders an ability to use members votes in (for instance) leadership elections. It is thus a major source of the power of union leaders in the Labour movement, being the Labour Party’s single largest source of income. As in most things, he who pays the piper tends to call the tune, and actual and aspiring Labour leaders have long danced elegant and sometimes obscure pirouettes to tunes played by trade union leaders.
Mr Miliband was a beneficiary of this largesse in that he was the chosen candidate of most of the unions to become leader of the Labour Party in 2010. It was this support that enabled him to win the election even though his brother David was regarded as the more popular candidate among individual Labour members and the Parliamentary party.
In spite of this, 2013 Mr Miliband commissioned Ray Collins in late 2013 to enquire into the relationship of the Labour Party with its affiliated trade unions – those unions which have entered into a formal support arrangement with the party. This led to Mr Miliband’s introduction of a series of subtle but significant changes within the Labour Party to reduce the influence of the trade union leadership in political matters and place more emphasis on individual members. This includes measures such that trade unionist members must be individual members of the Labour Party (not part of a bloc vote controlled by the trade union leadership), rules on openness of parliamentary candidate selection, and the introduction of “one member, one vote” in Labour leadership elections – which, had it been in force in 2010, would almost certainly have meant that the party would have been led by Miliband D rather than Miliband E in the May 2015 general election.
What the new Conservative Business Secretary Sajid Javid is now proposing is legislation such that the current levy system is reversed. Members of trade unions affiliated to the Labour party currently automatically pay a political levy, usually just a few pounds per month, which is used by the trade union leadership to make up the political fund. If members don’t want to do this they have to opt out, a procedure which most members do not bother with. Under the Javid changes, members will have to opt-in – the payments will only be part of their overall union subscription if they make a positive decision to pay it – to opt-in.
It might be thought that most union members are Labour supporters and thus would make the minor effort needed to opt-in. Not so. There is a practical demonstration, though, of what happens if opting out is changed to opting in: in Northern Ireland, where the system is already as Mr Javid would like it in mainland UK, only 40% of trade unionists opt-in. In the UK under the current rules, just 9% of unionists opt-out. And there is a historic precedent too – in 1927, trade union legislation after the General Strike of 1926 introduced opting in; and the number of members paying the levy dropped by nearly half.
This is potentially a very major problem for Labour Party finance managers. The party is financially struggling already, the impact of an expensive election campaign coming on top of a period of stretched finances. Nearly half of Labour’s income comes from the unions, raised from the political levy. This at a time, when, although Labour Party individual memberships have gone up, individual donations have gone down. This is largely because Labour has lost a number of high profile individual supporters and business donors (Alan Sugar for instance) who have been generous givers. Smaller donors, particularly in the South East, have also reduced their financial support.
The latest figure available show that between the 2010 election and the end of 2014 Labour received £49m from the trade unions, over £10m a year (£19m of this coming from the most influential union, Unite, led by Len McCluskey). Even if opting in produced half that, that leaves the Party £5m a year down, not the sort of shortfall that can be made up from whip-rounds at Party gatherings or jumble sales, or even benefit shows by Russell Brand.
Not surprisingly, Labour Party leaders are said to be livid. Certainly the unexpected nature of the announcement was odd – there was no mention of it in the Conservative manifesto, and it does break a long-standing convention that legislative changes which affect funding of political parties are discussed with the parties affected first. Trade union leaders are even more angry, with much talk of attacks on working people and, as Unite has expressed it, “The Tories taking Britain back to the 1920’s”– though their concern relates perhaps more to political influence than funding issues.
Indeed, a cynically inclined observer might suspect that the Labour leadership, even in the disarray it currently is, may think that the Tory Party reducing the perceived power of trade unions over Labour might be helpful as an essential plank of modernising the party for 21st century conditions. And even better, it would then allow a future resurgent Labour Party to attack Conservative Party funding from big business, always a strong card among floating voters who see the Tories as too close to bankers and business.
This announcement shows signs of a hasty and politically not very well thought-through addition to Her Majesty’s Speech. There was no particular groundswell for reform in this area and union influence is always a good stick to use on Labour when all else fails. Funding political parties is always a potential hot potato, with parties attacking each other’s sources of income, ultimately levering them towards a position where they will be dependent on funding from the public purse in some way – a sure fire winner to further provoke cynicism among the public, already fed up with political snouts in the trough of taxation. There are no particular gains for the Tories in this matter, unless helping the Blairist wing in bringing about a more electable Labour party might be seen long term as an insurance against a revival of the Liberals and a general shift of the centre ground rightwards.
Whether this was Mr Javid’s concept or one led or pushed by Mr Cameron is also not clear; it does have that air of Mr Cameron’s tendency to wing policy on the hoof without fully thinking it through. Over the last five years we have come to see Mr Cameron as a very adept holder of the ring; a natural moderate and compromiser skilled at holding both his unlikely Coalition and lots of less formal coalitions together. However, maybe what we are now seeing is finally – freed from the need for Liberal Democrat approval -the emergence of a true Cameroonian (Cameroon? Cameroonite?) political philosophy. If so, many Tory electors might think that there are better things to get underway than an attack on the unions, an attack that may well come back to haunt the Conservative Party Treasurer.
