Call for 'urgent' talks on party funding

http://www.bbc.co.uk/news/uk-politics-35710489

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Planned changes to the way unions fund political parties will have a "significant" impact on Labour, peers have said, and called for urgent talks.

A Lords committee said it was time to reach a "fair settlement" on the "vexed" issue of party funding.

The Trade Union Bill would require members to opt in to, rather than opt out of, paying a levy to Labour, which fears it will lose £6m a year.

The government said peers had endorsed the plan for a union opt-in levy.

The Lords committee was set up to examine the Trade Union Bill proposals after peers defeated the government and backed a call by Labour - which opposes the plans - for further scrutiny.

Conservative and Lib Dem peers have also suggested the government should rethink its proposals.

'Tit-for-tat'

The bill, which is going through Parliament, would require Labour-affiliated union members to "opt in" to paying a levy to the party instead of having it automatically deducted.

But the committee said the changes would hit union political funds in general, and Labour in particular - which is said to receive 20% of its core funding from unions.

Labour is also reported to be set to lose out on £1.3m a year when state funding for opposition parties - known as Short money - is cut.

The committee proposed several changes to the government's plans which, it said, would allow it to meet its manifesto pledges "while mitigating the worst impacts on the trade unions and the Labour Party".

It recommended:

The committee did not reach agreement on whether the new system should apply to existing union members.

But committee chairman Lord Burns said: "All members of the committee strongly backed the call for the government to convene cross-party talks as soon as possible, in order to reach a fair and long-lasting settlement to the vexed issue of party funding."

The report warned: "If any government were to use its majority unilaterally to inflict significant damage on the finances of opposition parties, it would risk starting a tit-for-tat conflict which could harm parliamentary democracy."

'Real reform'

Responding its findings, employment minister Nick Boles said: "There might be differences of opinion about how and when this should be implemented, but the principle... that union members should make an active and transparent choice to contribute to political funds has been supported by the committee."

Labour's leader in the Lords, Baroness Smith of Basildon, hoped the recommendations would "pave the way for a fair, reasonable and lasting agreement on party funding".

She said nothing was being done to address "big donations" to the Tories and accused the government of a "partisan attack on Labour and the trade unions, and by extension democracy itself".

Meanwhile, TUC general secretary Frances O'Grady said union money "is the most transparent in politics" and the public were more concerned about the influence of the wealthy on politics.

The Electoral Reform Society said welcomed the call for talks on party funding, saying the public wanted to see "real reform" of parties' finances.