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Resist the raid on trade union finances

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18 October 2017

Tim Dawson, NUJ president

Among the nastiest pieces of legislation promoted by David Cameron’s short-lived majority government was the Trades Union Act of 2016. It is the one whose provisions David Davies (now the secretary of state for exiting the European Union) likened to the policies of the Spanish dictator general Franco. Many of the regulations it created are likely to be tested over the next few months as the government attempts to restrain public-sector pay. Among its clauses, however, is one that has been little commented on, but will soon cost workers and their representatives dear

The Trades Union Certification Office has existed since 1975. Its functions have been tweaked since then, but broadly speaking it exists to ensure that unions and employers’ associations comply with the law, and to adjudicate if there are disputes between unions and their members. Reading the Certification Officer’s recent annual reports, it would appear that this is not an unduly bothersome responsibility. Last year, for example, 39 complaints against unions were heard – which from a base of around 6 million members suggests a largely unproblematic sector.

Hitherto, the government has met the bulk of the Certification Officer’s running expenses. Its eight staff and offices cost £535,621 in the year that ended in 2016.

It is just the sort of expense, however, that George 'austerity' Osborne was intended to externalise. So, among the provisions of the 2016 Trades Union Act is the ability for the government to levy trades unions to finance the regulator. To make matters worse, the government now predicts that the cost of the Certification Office will balloon to £1.9m per annum as a result of some of the other nasty features of the 2016 Act.  

Worse still for smaller unions, the current proposal is, in effect, a flat-rate charge of £22,000 a year for every union with an income over £900,000.

The NUJ, with an annual income of approximately £5 million will pay exactly the same as the largest unions, some of whose annual receipts exceed £100 million.

The Tories will argue that other regulators are paid for by levies on those that they oversee, and in some cases this is true. Across the various regulators appointed by government, there are various models. The Food Standards Agency, for example, receives approximately half its income from the state. The Advertising Standards Authority is entirely funded by the industry it oversees.

What then should be the principles applied to trades unions?

Our case should be clear. Trades unions are mutual assistance organisations in which no one collects a profit.

We provide significant social benefits – encouraging self confidence, education, social mobility and community engagement. Most critical of all, of course, trades unions are good at ensuring that workers are paid more and treated better – something that the secretary of state Damien Green recently signalled was a priority for the Tories as well as Labour.

Unions are also currently in a vulnerable position, with aggregate membership continuing to slip – largely as a result of austerity-led job cuts. Sucking resources from unions that are already facing tight finances can only be the work of ministers whose ultimate aim is the enfeeblement of organised labour.

Even more concerning is the way that this annual levy could rise. The Certification Office’s running costs are projected to nearly quadruple overnight because of something else hidden deep in the Trades Union Act. Until now the Certification Office heard only complaints about unions made by their members. In future, however, anyone will be able to lodge a grievance. The possibility for vexatious accusations, possibly co-ordinated by shadowy right-wing bodies is immense – and for unions will deliver a double whammy. They will end up funding both the organisation that investigates them as well as picking up the costs of defending themselves. This year’s £22,000 could quickly double, treble or more.

If trades unions are to make a serious attempt to thwart these proposals we will need allies. Fortunately, we are not the only ones in this boat. The Charity Commission is on the cusp of launching a consultation itself to see what the reaction might be from charities of their being levied between £60 and £3,000 annually to fund their regulation. 

Our pitch to potential supporters in the charity sector is simple. If the proposals to levy trades unions can be defeated, or significantly improved, then charities are safe too. If unions fail to stop this proposal, then the chances of similar measures being applied to charges increase dramatically.

Put simply, it is a matter of deciding which sector will be the last victims of the austerity juggernaut. Electoral arithmetic has thrown trades unions the possibility of swerving this sneaky raid on our finances – but only if we are smart enough to use the strength of others to our advantage.

The consultation on these proposals closes on 26 October – and anyone can submit a response. Its formal questions are all about the technical operation of the proposed charges, but that should not stop anyone telling ministers what they think. If you agree that sucking scarce resources from unions to fund needless, ill-intentioned regulation then make a submission, and copy it to your MP. 

Even if we can’t stop the levy entirely, then we should call for the cost to be shared fairly among unions, with contributions to reflect our differences in wealth and membership. The current proposal is, in effect, a Poll Tax on unions.

It is only a short consultation period during which we can make our complaints heard; fail at this, we will pay twice the price for complaints made against us for years to come.

Tags: , trade union bill, trade union act, trade union freedom, trade unions, tuc, government uk, money, funding, certification office