Trade Union Bill — House of Lords, 2016-02-10
Topic: Macroeconomics
Dale Norman Campbell-Savours (Labour, Centre-left): My Lords, Amendment 65 is on the question of tax relief on the trade union levy. This is not the first time that I have raised this issue in this House. I first raised it on the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill in 2014. On that occasion, I sought to insert into the Political Parties, Elections and Referendums Act 2000 a new section which provided tax relief on small donations to any political party, and the response of Ministers was to point to the stalled inter-party talks on political funding and the need to find a consensus. There had been seven discussions on political funding, culminating in no reform and a Statement in July 2013 from the Deputy Prime Minister in the last Parliament, in which he said, "it is now clear that reforms cannot go forward in this Parliament".—[Official Report, Commons, 4/7/13; col. 62WS.] That Statement effectively blocked off any sensible discussion on the issue that I wish to raise today of tax relief on the trade union political levy I am arguing today that the political levy should be paid out of pre-tax income and not post-tax income. I have to admit that there is some confusion as to whether the levy, as it currently stands, is in or out. My latest advice is that it is out of net income, whatever the circumstance. I am seeking a standardised practice among all trade unions. The proposal I make is built on the gift aid scheme, which applies to donations to charities. I argue that there is much in the work of trade unions which is essentially charitable, as is the case with much of the work carried out by political parties In reality, the political levy, per member, is quite small—very often in the region of £10 per member or less. It would therefore be for the convenience of all concerned if the opt-in notice included the application for tax relief on the levy, signed by the applicant member concerned. It would be even more helpful to the whole administrative process if trade unions could opt to have group submissions to HMRC on behalf of each of their members, thereby avoiding the burden for both the Revenue—I keep referring to the Revenue, as I am very old-fashioned on these matters—and the union of handling the tax relief applications individually I suppose it could be argued that a very small minority of members do not meet the standard rate threshold for the payment of tax. This, I suggest, could be dealt with by a special Revenue concession based on the presumption that the applicant is a basic-rate taxpayer. Otherwise, dealing with such cases would be administratively burdensome. A tax relief on the levy would certainly help incentivise the take-up of opt-in notices. I would like to think that the Government would not be so malevolent as to resist my amendment on the basis that it would be an incentive for the submission of opt-in notices. There is a great danger that the change from opt-out to opt-in will reduce the donor base. That should not be the objective. We should all be signing up to the widest possible donor base and making every attempt to foster active forms of political engagement, with money and contributions paid to political parties. That is precisely what President Obama set out to do in America inviting, as he did, a system of mass but smaller donations to his political campaign, as indeed has Mr Bernie Sanders Now the Government might again argue the need to resume talks on political funding—that is to say, talks that complement those going on in the special Select Committee currently considering these clauses. I believe we need to break the logjam and begin legislating now. What better to start with than the union levy, which under this Bill is a voluntary contribution to a political party? The breakdown and the inevitable stalemate that followed led to the 2007 review undertaken by Sir Hayden Phillips. It was hoped that this review would lead us out of the impasse but its report indicated only the nature of the problem and did not provide a solution. However, the review did pave the way for further talks between the three main political parties under Hayden Phillips himself. Again, the inevitable happened as the talks broke down in October 2007 In May 2010, after aborted discussions and a general election, a reference to the problem surfaced in the coalition agreement, where it said: "We also agree to pursue a detailed agreement on limiting donations and reforming party funding" The coalition agreement was followed in July 2010 by the Committee on Standards in Public Life, which re-energised the debate with its 2011 report. The report was accompanied by caveats in the appendices from both Labour and Conservative party representatives. Indeed, we were back on the old merry-go-round, with caps on contributions and trade union donations, and the usual differences and suspicions. Two months later the Political and Constitutional Reform Committee despairingly called for a resolution of the problem to help avoid further party funding scandals, not that that plea had much of an effect Then, Mr Francis Maude—now the noble Lord, Lord Maude, at that stage a Minister in the other place—announced a new series of talks. In his statement establishing the talks he said: "We could also look at how to boost small donations and broaden the support base", for the parties. There were seven meetings in 2012 and 2013 which, as I have already explained, predictably collapsed. My amendment does exactly what the noble Lord, Lord Maude, called for in his statement. It seeks to broaden the support base by preserving and boosting small donations, in this case through the machinery of trade union political levies. I beg to move.