Government defeat over Trade Union Bill in Lords on party funding

The UK Government’s plans to reform Trade Union laws was dealt a blow last night after the House of Lords voted to set up a committee to examine its impact on party funding.

Peers voted 327 to 234 for a Labour motion to set up the select committee to look at how the proposed bill would create a one-sided political system in the UK.

Under the new laws members of Labour-affiliated unions would be required to "opt-in" to paying a levy instead of it being automatically deducted. It is thought this will see Labour’s funding fall by as much as £6m.

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Labour’s Baroness Angela Smith of Basildon tabled last night’s motion.

“Our genuinely held concern is that this aspect of the Bill will have a significant impact on the resources of one major political party - my party, the Labour Party.

“And in doing so, it will both disrupt the political balance in the UK and have a damaging effect on the electoral process and our democracy," she said.

The Electoral Reform Society – an organisation which would like to see the House of Lords replaced with an elected chamber – welcomed the decision.

Chief executive Katie Ghose said it was an opportunity to examine the influence big donors have over party politics.

“Our new polling shows that that 77 per cent of the public think that big donors have too much influence over our politics, and 57 per cent believe that a state-funded political system would be fairer than the one we currently have – up from 41 per cent in 2014. We need serious cross-party action on this – not tit-for-tat partisan attacks.

“We strongly welcome Peers’ important decision on this Bill and we hope parties engage constructively with this new committee to sort out the mess that is Britain’s party funding system,” she said.