Unions review links with 'new Labour'

Since mid-2001, a number of UK trade unions affiliated to the Labour Party have begun to question their continued financial support for the party, particularly in the light of union opposition to the Labour government's plans for reforming public services.

The spring and summer of 2001 witnessed a flurry of debate about the relationships between the trade unions and the Labour Party, focusing in particular on the unions' financial support for the party. A number of trade unions, in particular those in the public sector, openly started to wonder why they should continue to provide financial support for a governing party committed to expanding the role of the private sector in public service provision, a policy they strenuously oppose (UK0105132F).

Trade unions and Labour Party funding

The Labour Party, created by the trade unions in the early years of the 20th century, has always received the bulk of its finances from the unions. (In the UK, unlike many other European countries, there is no provision for state support, direct or indirect, for political parties; all their income must be raised through voluntary private donations.) Trade unions may decide to affiliate to the party, to which they then pay an affiliation fee. Such fees must be paid from a trade union's political fund, which must be collected and administered separately from other union funds. Under UK law, most explicitly political activity, including party affiliations, can only be funded this way; it cannot be resourced from union general or other funds.

A political fund can be established only if supported by a majority vote in a secret ballot of union members, and once it is established members have the right to choose whether or not to pay the so-called political levy through an 'opting-out' mechanism. That means that, in unions that have chosen to establish a political fund, members are deemed to wish to pay the political levy unless they formally indicate in writing that they do not. Critics of this system argue that it should be reversed to one of 'opting-in', triggered by a positive individual decision to pay. On the other hand, the system's advocates argue that the intimate historical relationship between Labour Party and unions means that it is legitimate to assume that members share the presumption of support.

In the 1990s, the Conservative Party government indicated that it might legislate to introduce an 'opting-in' system but it did not do so. It did however introduce legislation in 1984 requiring unions to hold membership ballots at least every 10 years to reauthorise the political fund. The many ballots held under this legislation have not only reconfirmed membership support for the political funds but have stimulated several unions to establish them for the first time.

At present 23 of the 76 unions affiliated to the Trades Union Congress (TUC) are also affiliated to the Labour Party. These unions include most of the largest and hence account for a majority of union members. However, most TUC unions, including several large ones organising white-collar and professional employees in the public sector, such as the National Union of Teachers, are not affiliated although they often have a political fund. The TUC itself is not affiliated to the Labour Party.

When the giant public service union UNISON was created in 1993 it merged one non-affiliated union with two that were affiliated. To resolve the tensions this might create it established two political funds - one used for Labour Party affiliation and the other used for other political activity - and gave those members who pay the political levy the right to indicate which of the two they wished to join. This remains a unique arrangement.

The great majority of Britain's trade union members are organised in unions affiliated to the Labour Party, and the majority pay the political levy. Despite declines in union membership and changes in political preferences, the proportion of union members paying the levy has remained remarkably stable over the years. Throughout the 1970s and 1980s, it was just over 80% in unions that had a political fund; in 1998 it was 86%. Absolute numbers who pay have, however, declined in line with union decline generally. In 1980, 7.7 million union members paid the levy, while by 1997 this number had fallen to 4.7 million.

More significantly, the extent to which the Labour Party relies on trade union funding has changed considerably. Until the early 1980s, trade union affiliation fees accounted for as much as 90% of Labour Party income; by 1995 this had fallen to 50%. The Labour Party now receives a significant part of its funding from wealthy individuals. During the 2001 election campaign, union donations of GBP 6 million were outstripped by donations totalling GBP 6.1 million from three wealthy individuals alone - Lord Sainsbury (supermarkets), Lord Hamlyn (publishing) and Sir Christopher Ondaatje (a philanthropist who had previously provided financial support to the Conservative Party).

Recent events

During the long period of Conservative government from 1979 until 1997, the Labour Party introduced a number of measures to reduce the constitutional power of trade unions within the party. In part this was informed by a view that the close association between unions and party was an electoral handicap, since it might create the impression of a party too closely allied to a particular interest group (UK9709163F). Despite the reduction of their formal influence, the trade unions, desperate for the return of a Labour government, continued to fund the party.

However, the dissatisfaction at the state of union-party relationships voiced in the spring and summer of 2001 reflected the frustration in some parts of the trade union movement that the Labour Party into which they had paid so much appeared, in their eyes, to be pursuing policies to which they had been long opposed.

  • In May, the Fire Brigades' Union conference supported a resolution to support political parties other than Labour, provided that their policies were in line with those of the union. The main short-term beneficiary was seen as being the ultra-left Socialist Alliance. Conference delegates linked their decision to the 'creeping privatisation' of the fire service and the introduction of 'private sector-style management'.
  • In June, the UNISON conference approved, against leadership advice, a motion to review its financial support for the Labour Party. Once again, this was strongly linked to complaints against the greater involvement of private companies, this time in the health service in particular.
  • In July, the GMB general union announced that it was reducing its funding of the party by GBP 1 million over four years, cutting its annual donation from GBP 650,000 to GBP 400,000. According to newspaper reports, the union's executive committee simultaneously announced a GBP 250,000 advertising campaign to oppose the introduction of private sector management into the public sector.

Calls for similar action in the Communication Workers' Union and the Transport and General Workers' Union (TGWU) were, however, defeated, although the fact that they were made at all is significant. The press also reported meetings between union leaders, including the general secretaries of the TGWU and the GMB, and the leader of the Liberal Democrats to discuss, among other matters, campaigns in defence of public services, and electoral reform.

The Labour Party, in response to all this, proposed a change to its rules that would result in the expulsion from the party of any organisation that supported, financially or otherwise, candidates or political parties opposing the Labour Party.


The expected row over these issues at the Labour Party conference in September 2001 (UK0110104N) did not take place, partly because it was overshadowed by the terrorist attacks on the USA on 11 September and partly because of speeches by Prime Minister Tony Blair and others that dampened down some of the unions' immediate concerns. However, it is unlikely that the story will end there. Unions remain concerned at many aspects of the 'new Labour' policies pursued by the government, and the temptation to use the threat of withdrawing financial support will remain.

Behind this lies the unions' fundamental concern that the party they brought into being to advance their interests and those of their members is being 'captured' by business interests. The general secretary of the TGWU was reported to have called the present government 'the most pro-business government I can ever remember', and these concerns are amplified by the shift in party funding from unions to corporate donors. In a recent pamphlet, Coping with post-democracy (Fabian Society, 2000), Colin Crouch suggested that British unions should consider following the American model of using their financial and electoral leverage in a more opportunistic manner, supporting whichever party or candidate was prepared to advocate policies close to their own. This would run counter to many UK unions' long-established beliefs and traditions. However, as has been recently reported, a new generation of union leaders is emerging, whose loyalty to the Labour Party may be less deeply entrenched than that of their predecessors. (Michael Terry, IRRU)

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