Unions are not legally allowed to support a political party in any way out of the general fund raised from members’ subscriptions.
They have to set up a separate political fund.
Today union members are assumed to want to pay into this fund unless they ask to “contract out”. This is what Miliband wants to change.
The political fund is used for affiliations to parties and campaigns.
Some unions, such as Unison, have a general political fund for campaigning on political issues and another fund for those who specifically want to back Labour.
The history of union funding for Labour is linked at every stage to the class struggle:
- 1875 Unions were given legal protection for their funds. Some gave money to political parties—first the Liberals and then Labour.
- 1909 WV Osborne, a Liberal who was an official in the Amalgamated Society of Railway Servants, took the union to court for paying members’ subscriptions to Labour. This meant unions could not fund parties, and caused huge problems for the early Labour Party.
- 1913 In the middle of a period of many strikes, the unions won a new law. This allowed political donations as long as a ballot confirmed setting up a fund and members were allowed to “contract out”.
- 1927 After the 1926 General Strike the Tories introduced anti-union laws. These included forcing every individual member to give specific permission if they wanted any of their subs to go to a political fund—“contracting in”.
- 1946 The post-war Labour government restored the rights that had existed before 1927 and gave limited new ones.
- 1984 Margaret Thatcher’s Tory government forced unions to hold ballots if they wanted a political fund. This rebounded on it as union members voted overwhelmingly in favour of political funds.