Political funds




A union can only spend resources on political activities if it has first established a political fund. Section 72, TULRCA lists the political activities that can only be carried out by a union if they use the fund. They include:


• donations to political parties or providing facilities and funding conferences; and



• producing or distributing literature, documents, films or adverts designed to persuade people to vote (or not) for a particular candidate.



To establish a political fund, unions must first secure member support through a postal ballot. Fresh political fund ballots must be conducted every 10 years. The law on political fund ballots is found in Chapter VI of TULRCA. A complaint can be made to the CO if any member believes a ballot has not followed the rules. Any member is free to opt out of making contributions to the political fund.



New restrictions on the political fund in the TUA 16 came into force on 1 March 2018 (section 11, TUA 16, section 84. TULRCA). It is now unlawful for a trade union to require new members to contribute to the political fund unless they have given prior notice of their willingness to contribute with an opt-in notice (see below). There is revised government guidance on the political fund, available from the GOV.UK website. 


Here is a summary of the key features of the new political fund regime:


• the old rules (pre-TUA 16) continue to apply to any member who joined a union with an existing political fund before 1 March 2018. They have the right to opt out of the political fund at any time;



• where a union already has a political fund, all new members who join the union after 1 March 2018 must “opt in” to the political fund in order for them to make contributions to it. It is against the law for unions to require new members to contribute to the political fund unless they have submitted an “opt in” notice. Members can withdraw their “opt in” notice at any time, by giving one month’s notice;



• opt-in and opt-out notices must be in writing, but members can use email or online forms provided by the union;



• unions with political funds must spell out, on membership forms, that members have a choice whether to opt in, and that they will not suffer any detriment if they decide not to;



• unions must inform new members annually of their right to opt-out of the political fund. In practice, unions are likely to inform everyone, rather than just new members, for example, using newsletters or journals, or the annual financial statement to members. Members must be notified of this right within eight weeks of the Annual Return to the CO;



• unions must send the CO a copy of the notification to members;



• union rule books must have been changed to reflect the new regime, and these changes must be approved by the CO; and



• if a union decides to have a political fund for the first time after 1 March 2018, all members, existing and new, must opt in before making contributions to the political fund.



These are highly partisan changes, designed to undermine Labour Party funding. Their serious constitutional implications were recognised by the House of Lords who appointed a cross-party select committee to investigate their impact on party political funding. These interventions resulted in some modification of the original proposals, but the broad proposals have been implemented, with no corresponding limit on individual or corporate donations to political parties by wealthy donors. 


Other restrictions on union political campaigning are found in the Lobbying Act 2014, which dramatically limit unions’ power to campaign during elections. There has always been a cap on election spending by third parties including unions, but this Act has effectively cut the maximum spending cap on election campaigning by third parties in the run up to a general election by around 60% as well as introducing a chilling lack of clarity as to what is and is not permissible. Failure to comply with the Lobbying Act 2014 is a criminal offence.


In addition, any union must register with the Electoral Commission if it intends to spend more than £20,000 in England (£10,000 in Scotland, Wales or Northern Ireland), and must account in detail for its spending to the Commission.