Trade Union Bill: Ministers under pressure to water down plans to cut Labour Party funding

Proposal attacked as a 'partisan' attempt to cripple Labour by Liberal Democrat and Labour peers

Demonstrators attend a TUC rally to protest against the Trade Union Bill in Westminster, last December

Ministers are under strong pressure to water down plans to deprive the Labour Party of millions of pounds of funding it receives from trade unionists.

A majority on a cross-party House of Lords committee recommended a wide-ranging review of the way all political parties are funded before the Government implements its plan to force union members who currently pay the political levy to “opt in” to the payments.

The peers called for the transition period for an “opt-in” system for new union members to be extended from three to 12 months, which would limit the damage to Labour’s finances. They said trade unionists should not have to renew their decision to “opt in” every five years, as the Trade Union Bill proposes.

The report released on 2 March could force the Government to make concessions because it does not enjoy a majority in the Lords. Its proposal has been attacked as a “partisan” attempt to cripple Labour by Liberal Democrat and Labour peers.

A Downing Street spokesman said: “We will look at the detail of the report, but we set out clearly in our manifesto the proposals [on the political levy] which we want to introduce. It is a system that is already operating in Northern Ireland.” The manifesto also promised to “seek agreement on a comprehensive package of party funding reform” but there is no sign of talks.

Lords Burns, the independent peer who chaired the committee, said: “All members 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.”