Thursday, 24 September 2015

Don't let your capital cut your own throat

Across the world we can see conservative political parties engaged in an attempt to destroy the power of unions in the workplace, weaken their resources and squeeze their financial support reformist political parties. This is a concerted attempt to destroy industrial and political opposition. Even the FT described the Trade Union Bill as crossing the road to pick a fight.

It is clear that these attacks are as much about political funding as they are about unions themselves. Unions remain an important source of funding for socialist / social democratic parties and extreme elements on the Right want to cut this off in order to weaken political opposition.

The labour movement should should learn a lesson here. Every day we allow workers' capital, our deferred wages in pension funds and other vehicles, to be used to cut our own throats. There are union trustees on the boards of funds that employ asset managers, hedge funds etc that finance those who want to destroy organised labour and its political allies. This cannot be allowed to continue, especially in an era in which conservative parties have, as the FT says, decided to pick a fight with us.

Pension funds and other benefit schemes should - at the least - adopt policies or write mandate agreements that require any firm employed to make an explicit statement before appointment on any donations to political parties or campaigning organisations made by the firm or its senior executives. Once appointed, firms should be required to make an annual statement to the board on any such activity. Let trustees decide if they want to appoint asset managers that lobby against their interests. There is a role for policy here too - in the retail market why not firms to make a statement on the front page of their website about any political activity, in order that customers can make an informed choice?

There is no need to bar donations outright - though individual funds might wish to adopt a policy of not employing firms that do. Rather this can be approached as an issue of disclosure, choice and avoidance of conflicts of interests. The Right has got away for far too long with skimming money off our pensions and savings to fund attacks on us, our unions and our political allies. It's time to stamp this out.

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