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.


The TUA 16 contains new restrictions on the political fund, to come into force following a twelve-month transition period starting on 1 March 2017 (section 11, TUA, section 327, TULRCA, Trade Union Act 2016 (Transition Period) Regulations 2017).


During the passage of the TUA 16 through parliament, the political fund proposals were strongly resisted in the House of Lords, where the changes were recognised as a political attack by a government on opposition party funding, with serious constitutional implications. The government’s original proposals would have resulted in a very significant decline in the volume of contributions to the fund.


The House of Lords appointed a cross-party select committee to investigate the impact of the proposals on party political funding, as a result of which the government’s proposals were modified in part.


Here is a summary of the key features of the new political fund regime under the TUA 16:


• the old rules (pre-TUA 16) will 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, any new members who join the union after 1 March 2018 will be required to “opt in” to the political fund in order for them to make contributions to it. It will be against the law for unions to require new members to contribute to the political fund unless they have submitted an “opt in” notice. They 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 under the new rules, members will be allowed to use email or online forms provided by the union;


• unions with political funds will have to 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 will have to 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 be 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 changes are in addition to other restrictions on union political campaigning already introduced under the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, which limited unions’ power to campaign during elections. There has always been a cap on election spending by third parties including unions, but this Act cut the maximum spending cap on election campaigning by third parties in the run up to a general election by around 60%.


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