§ Mr. Piers Merchant (Beckenham)I beg to move,
That leave be given to bring in a Bill to restrict the power of trade unions to dispose of their funds for certain purposes.My Bill would regulate and limit the power of trade unions to dispose of their funds in ways other than for the direct benefit of their members. It builds on the Trade Union and Labour Relations (Consolidation) Act 1992, which requires union officers to keep proper accounting records of transactions and assets and liabilities and to establish and maintain a satisfactory system of control of its accounting records, its cash holdings and all its receipts and remittances.Essentially, my Bill is about transparency. It is based on the reasonable assumption that trade union members are entitled to know where their money goes, and that, in general, that money should be spent to their direct benefit.
I say at the outset that my Bill is not intended as an anti-trade union Bill. I am not against trade unions, and I have always believed that they have an important part to play in modern industrial society. As proof of that belief, I should say that I was an active trade unionist for many years. On two occasions, I was elected as a father of the chapel—shop steward, in other words—for the National Union of Journalists by one of the biggest NUJ chapels. I led several times in tough pay negotiations, and at one time I even found myself leading a strike—something that later resulted in an unfortunate experience for me at the hands of Baroness Thatcher.
Many people today, of course, have no time for trade unions. There is therefore an onus on unions to show that they have broken with the more questionable practices of the past. I believe that my Bill will thus help them in moving on to higher ground.
In essence, my Bill would tackle two areas of trade union spending. It seeks first to limit the extent to which unions can operate to the financial benefit of their leaders rather than of their members. The House will remember the extraordinary financial manoeuvrings of Arthur Scargill as he spirited his members' funds from one country to another in pursuit of his goals, which in the process cost ordinary miners a huge amount.
More recently—last month—The Independent reported that members of the Amalgamated Engineering and Electrical Union executive had awarded themselves what was termed "golden goodbyes" amounting to up to half a million pounds each. Those would enable executive members to retire up to 10 years early, to be paid around £40,000 a year, to receive a cash payment of £50,000 each and to keep their BMW or Rover cars, which are worth about £20,000. Not surprisingly, the union's newly elected president was then banned by his executive from saying anything about it.
It is one thing to use negotiating skills for the benefit of members, but it is quite another to use those same skills to divert members' funds to benefit self-appointed union fat cats so that they can live in idle luxury for the rest of their days. My Bill would make such deals transparent and subject to the approval of those unions' membership—approval that I suspect would not be forthcoming.
169 Secondly, my Bill would bring complete transparency and limits to trade union funding of outside organisations, including the Labour party. All money going to such organisations would have to be separately accounted for in far more detail than at present, its ultimate destination and purpose would have to be fully described, and, in total, it could not amount to more than a fixed percentage—to be agreed after consultation—of total membership dues.
Of course, some would argue that such funding should be ended altogether, and that trade unions should look after only their members, and not political parties. There is a case for that, but I am not advocating it. I am not advocating it in order to do the Labour party a favour— to protect the Labour party—for it is obvious that, without such funding, it would collapse.
The Labour party depends for more than 50 per cent. of its funding on the trade unions. It cannot sustain itself naturally because of a lack of any fundamental popular support for its policies, which is not surprising, as most people have no idea what they are. Indeed, the 1994 national executive committee funding statement made it clear that the unions provided 57 per cent. of the party's income in return for more than half the say in the party's affairs and policies.
Even more vital for Labour are the contributions made by unions to sustain the election campaigns of Labour Members. They are listed, clearly and properly, in the Register of Members' Interests. Member after Member reveals that he or she was able to stand only because of generous union funding.
The Transport and General Workers Union, the Manufacturing, Science and Finance union, the GMB, Unison, the National Union of Mineworkers, the Amalgamated Engineering and Electrical Union, the National Union of Rail, Maritime and Transport Workers, and the Communication Workers Union—to mention just some of them—are all at it, often with dozens of Labour Members in tow, their generosity no doubt closely coupled with reciprocal obligations.
In such circumstances, transparency is the key. If the Labour party would not be viable without the trade unions, and if it has to sell its soul, at least we should all know about it. That is particularly true as devices are uncovered which reveal hidden funding.
On 18 May, for example, The Independent exposed the Labour party's commercial unit, which receives an income by organising conferences and exhibitions for friendly unions. One union official was quoted as saying:
If it wasn't for us the fund-raising figures would not look half so good.Unions also give covert help in other ways, such as the provision of free or cut-price facilities, buildings, printing, manpower, subventions to regional Labour party organisations, and constituency support. All that should be clearly and transparently declared, too.Then there are the rather mysterious funds, whose status I have previously questioned, which finance the offices and activities of key Labour Front Benchers. In the current register, there is the clandestine John Prescott Campaign/Research Trust which is, not surprisingly, described as giving support to the office of the deputy 170 Leader of the Opposition. Do some trade unions provide money to that trust? If so, their members are entitled to know, and would do under my Bill.
The hon. Member for Dunfermline, East (Mr. Brown) receives support, according to the register, from the Industrial Research Trust/Fair Tax Campaign, but who funds that? My Bill would require that, if unions were involved, their membership should know all the details.
Of a similar but more mysterious nature are the exciting idea of the Mo Mowlam Research Fund, which fleetingly appeared in the Register, and reported financial support from Unison for the hon. Member for Peckham (Ms Harman), which did not appear in the register. Previously, the Labour leadership received funding from the Industrial Reform Trust, run by Lord Haskel, an associate of Lord Kagan, which sounded as if it might have union connections. It seems recently to have been superseded by the Labour Leader's office fund, a pedestrian name if ever there was one, but we do not learn much about its funding.
According to the hon. Member for Glasgow, Garscadden (Mr. Dewar), the Labour Front-Bench research fund has now been set up. The hon. Gentleman says that all will be revealed—but it has not been yet. Until it is, suspicion will continue, as my right hon. Friend the Prime Minister made clear in the House on 21 May. He said:
In the Labour party, the trade unions provide the funds in return for votes at Labour's party conference and the party's trade union paymasters still have a say in Labour's election manifesto. That is the real scandal in party funding and the Labour leader cannot duck it."—[Official Report, 21 May 1996; Vol. 278, c. 96.]Fundamentally, I am trying to help the Labour party. My Bill would bring transparency not just to trade union finances, but to the relationship between the Labour party and the trade unions. Recently, the Labour leadership has been saying that it wants that too—that it wants to break the shackles of the past. For that reason, I look forward to Labour's support for my Bill.
§ Mr. David Winnick (Walsall, North)What we have just heard from the hon. Member for Beckenham (Mr. Merchant) was nothing more than malicious drivel. The fact that he spoke about political donations without any reference to the money that the Conservative party received from Asil Nadir demonstrates the impertinence of his proposals—[Interruption.] I do not know what the hon. Member for Lancaster (Dame E. Kellett-Bowman) is shouting, but I suggest that the hon. Member for Beckenham persuades his friends in the Conservative party to make sure that Mr. Nadir returns the stolen money. Moreover, the Tory party should return the money that Mr. Nadir donated, and as quickly as possible.
In respect of political donations, it is important to bear it in mind that trade unions can donate for political purposes only if they have established a political fund. They have no automatic right to make such donations. That has always been the case, even before recent legislation came into effect. No trade union can donate a penny for political purposes without the approval of its members in a ballot. Surely that is the honest way in which matters should be arranged, but there are no such rules for companies that make political donations to the Conservative party.
171 There may be a case for a change in the law—indeed, I would advocate one—but certainly not along the lines proposed by the hon. Gentleman. We want a level playing field, equity and the same conditions to apply to trade unions and companies. I do not mind companies contributing to the Conservative party, if they so wish. Surely that is right in a democracy. I question not their right to do so, but the method by which it is done. There is no ballot of shareholders or employees.
If trade unions have been required since 1913 to ballot their members on political funding, why can companies donate millions of pounds to the Conservative party without any reference whatsoever to their shareholders? There is a reference in the accounts, and nothing more. They require no ballot of their shareholders, and certainly no ballot of their employees.
§ Mr. Brian David Jenkins (South-East Staffordshire)They buy themselves a knighthood.
§ Mr. WinnickAs my hon. Friend says, money given to the Tory party can serve quite a good purpose. Since the present Prime Minister moved into No. 10 Downing street in November 1990, 68 per cent.—or more than two thirds—of the five peerages and 53 knighthoods that have been awarded to industrialists have gone to those whose companies made the largest donations to the Tory party. I consider that a scandal. It is as if we were returning to the days of Lloyd George, when peerages and knighthoods were for sale.
The hon. Gentleman said not a single word about that. Why not? If he is so keen to change the law applying to political contributions, he should recognise the need for equity. That is why my hon. Friends and I are keen that the issue of political donations to be referred to the Nolan committee. The committee was set up to establish decent standards in political life, so why was the Prime Minister so opposed to it examining political donations? Conservative Members know as well as I do that the right hon. Gentleman did not want the Nolan committee to examine the furtive, secret and underhand way in which the Tory party receives its funds.
I consider it a scandal that the Conservative party can be funded in such a manner. No one knows where the money comes from, as they are so reluctant to publish their accounts. It could be said that this was all political bias from a Labour Member, so let me remind the hon. Member for Beckenham that Mr. Eric Chalker, a leading Tory activist, has said time and again that the Conservative party should bring its practices up to date, become more democratic, and publish in full the sources of its funding.
I oppose the Bill because it is a bit of mischief-making and drivel from Conservative Members who are opposed to trade unions. The hon. Gentleman has told us that he was once a trade union activist, but it is absolutely clear that he is concerned with undermining the right of trade unions to donate for political purposes.
I want equity. I want a change in the law so that companies would have to hold ballots and the Conservative party could no longer be financed in secret, underhand ways. All such matters should be above board. Everyone should be able to see what is going on and the donations that are being made—to the Labour party and, certainly, to the Conservative party. There should be no 172 more selling of peerages and knighthoods to those who give money to the Tory party. Those are the necessary reforms and changes, and that is why my hon. Friends and I will oppose the Bill.
§ Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
§ The House divided: Ayes 38, Noes 134.
173| Division No. 155] | [4.39 pm |
| AYES | |
| Arnold, Jacques (Gravesham) | Monro, Rt Hon Sir Hector |
| Booth, Hartley | Montgomery, Sir Fergus |
| Bottomley, Peter (Eltham) | Neubert, Sir Michael |
| Brown, M (Brigg & Cl'thorpes) | Porter, David (Waveney) |
| Budgen, Nicholas | Riddick, Graham |
| Cash, William | Skeet, Sir Trevor |
| Chapman, Sir Sydney | Stanley, Rt Hon Sir John |
| Dunn, Bob | Stewart, Allan |
| Gallie, Phil | Sweeney, Walter |
| Gill, Christopher | Thomason, Roy |
| Gorman, Mrs Teresa | Townend, John (Bridlington) |
| Greenway, Harry (Ealing N) | Viggers, Peter |
| Hampson, Dr Keith | Walker, Bill (N Tayside) |
| Jessel, Toby | Whittingdale, John |
| Johnson Smith, Sir Geoffrey | Wiggin, Sir Jerry |
| Jopling, Rt Hon Michael | Winterton, Mrs Ann (Congleton) |
| Kellett-Bowman, Dame Elaine | Winterton, Nicholas (Macc'fld) |
| Lawrence, Sir Ivan | |
| Marland, Paul | Tellers for the Ayes: |
| Marshall, John (Hendon S) | Mr. Patrick Nicholls and |
| Moate, Sir Roger | Mr. Edward Leigh. |
| NOES | |
| Adams, Mrs Irene | Davies, Bryan (Oldham C'tral) |
| Ainger, Nick | Davies, Chris (L'Boro & S'worth) |
| Ainsworth, Robert (Cov'try NE) | Davies, Ron (Caerphilly) |
| Allen, Graham | Dixon, Don |
| Anderson, Donald (Swansea E) | Dunwoody, Mrs Gwyneth |
| Austin-Walker, John | Eagle, Ms Angela |
| Barnes, Harry | Eastham, Ken |
| Barron, Kevin | Ewing, Mrs Margaret |
| Benton, Joe | Flynn, Paul |
| Berry, Roger | Foster, Rt Hon Derek |
| Betts, Clive | Fyfe, Maria |
| Bray, Dr Jeremy | Galloway, George |
| Brown, N (N'c'tle upon Tyne E) | Garrett, John |
| Bruce, Malcolm (Gordon) | Golding, Mrs Llin |
| Byers, Stephen | Grocott, Bruce> |
| Callaghan, Jim | Gunnell, John |
| Campbell, Menzies (Fife NE) | Hain, Peter |
| Campbell, Ronnie (Blyth V) | Hall, Mike |
| Campbell-Savours, D N | Hanson, David |
| Canavan, Dennis | Hattersley, Rt Hon Roy |
| Cann, Jamie | Heppell, John |
| Chidgey, David | Hill, Keith (Streatham) |
| Chisholm, Malcolm | Hinchliffe, David |
| Clapham, Michael | Hodge, Margaret |
| Clarke, Eric (Midlothian) | Hogg, Norman (Cumbernauld) |
| Clelland, David | Hoyle, Doug |
| Clwyd, Mrs Ann | Illsley, Eric |
| Cohen, Harry | Jackson, Helen (Shef'ld, H) |
| Connarty, Michael | Jamieson, David |
| Cook, Robin (Livingston) | Jenkins, Brian (SE Staff) |
| Corbyn, Jeremy | Jones, Barry (Alyn and D'side) |
| Corston, Jean | Jones, Jon Owen (Cardiff C) |
| Cousins, Jim | Jones, Lynne (B'ham S O) |
| Cunningham, Jim (Covy SE) | Jones, Nigel (Cheltenham) |
| Cunningham, Roseanna | Kaufman, Rt Hon Gerald |
| Dafis, Cynog | Kennedy, Charles (Ross, C&S) |
| Dalyell, Tam | Khabra, Piara S |
| Davidson, Ian | Kirkwood, Archy |
| Lewis, Terry | Pope, Greg |
| Liddell, Mrs Helen | Prentice, Bridget (Lew'm E) |
| Loyden, Eddie | Purchase, Ken |
| Lynne, Ms Liz | Radice, Giles |
| McAvoy, Thomas | Raynsford, Nick |
| Macdonald, Calum | Roche, Mrs Barbara |
| McFall, John | Rooney, Terry |
| McKelvey, William | Rowlands, Ted |
| Mackinlay, Andrew | Salmond, Alex |
| Madden, Max | Sheerman, Barry |
| Mahon, Alice | Spearing, Nigel |
| Marshall, David (Shettleston) | Squire, Rachel (Dunfermline W) |
| Marshall, Jim (Leicester, S) | Steel, Rt Hon Sir David |
| Martin, Michael J (Springburn) | Stevenson, George |
| Martlew, Eric | Stott, Roger |
| Meale, Alan | Strang, Dr. Gavin |
| Michie, Bill (Sheffield Heeley) | Sutcliffe, Gerry |
| Michie, Mrs Ray (Argyll & Bute) | Taylor, Mrs Ann (Dewsbury) |
| Miller, Andrew | Taylor, Matthew (Truro) |
| Mitchell, Austin (Gt Grimsby) | Trickett, Jon |
| Morley, Elliot | Turner, Dennis |
| Morris, Rt Hon Alfred (Wy'nshawe) | Tyler, Paul |
| Morris, Estelle (B'ham Yardley) | Wareing, Robert N |
| Mowlam, Marjorie | Welsh, Andrew |
| Mullin, Chris | Wigley, Dafydd |
| Murphy, Paul | Williams, Rt Hon Alan (Sw'n W) |
| O'Brien, Mike (N W'kshire) | Winnick, David |
| O'Brien, William (Normanton) | |
| Olner, Bill | Tellers for the Noes: |
| O'Neill, Martin | Mr. Dennis Skinner and Mr. Alan Simpson. |
| Orme, Rt Hon Stanley |
§ Question accordingly negatived.