Trade Union and Employment Forum

The Osborne Judgment of 1909

History & Policy Trade Union Forum

28 November 2009

John Edmonds (JE), in the chair, made introductions.

Jim Moher

Jim Moher (JM) gave a presentation on the history of the 1909 Osborne Judgment and its continued implications today (for a full account, please see his subsequent H&P paper 'The Osborne Judgment 1909: trade union funding of political parties in historical perspective').

Key points of Jim Moher's presentation:

• In Osborne, the House of Lords in December 1909 ruled that it was unlawful for trade unions to collect and spend a levy of members for political objects.
• Walter Osborne was branch secretary of the Amalgamated Society of Railway Servants (ASRS, today's RMT), a libertarian and Liberal supporter. He brought the case against his union leadership's decision to levy members one shilling a year to support the new Labour Representation Committee (LRC).
• The original LRC was a creation of the TUC and socialist organisations (Independent Labour Party mainly) in 1900, as a broad-based labour lobbying body, which with a tiny parliamentary presence did not command exclusive support from the unions or Lib-Lab MPs.
• However, another Law Lords' ruling of 1901, (Taff Vale Railway Company v ASRS), exposed all union funds to legal attack by employers during industrial action. The unions were outraged and alarmed and so increasingly threw their weight behind the LRC.
• The LRC also tightened its rules to become a separate party with a distinct programme and Whip in the Commons. Each of its sponsored candidates and MPS had to sign a pledge to support this party only, and this drew a strong reaction from the Lib-Lab trade unionist MPs, who wanted to retain their tactical alliance with a major government party, the Liberals.
• Richard Bell MP, also General Secretary of the ASRS, refused to sign the pledge and so fell out with the LRC and his own pro-LRC union leadership. The dispute rumbled on until the 1906 general election, when ironically, as a result of an electoral pact with the Liberals, the Labour Party emerged with 29 MPs.
• It was after this triumph by what he saw as a Socialist Labour Party, that Osborne started his successful legal challenge. The set-back was short-lived however, as with 42 MPs (the miners joined in 1909), the unions and Labour Party were able to persuade the Liberal government to legislate to remove the ban with the Trade Union Act 1913.
• This law required unions to ballot all members before setting up a separate political fund, and to allow individual members to opt-out of paying the levy. It remains (as amended in 1984 to require five-yearly ballots) the legal position for union political funds today.

Discussion

Key questions, themes and points made by participants:

• Important to highlight the divisions within and between TUs at this time and to revise our view of characters such as Osborne and Bell.
• Need to be careful with terminology and labels, as 'Left' and 'Socialist' had different meanings in the 1900s to the 1960s or today.
• A period of incredible political turmoil when the new Labour Party was adjusting its position depending on the support it was getting and labels could shift daily.
• TU leaders were highly politicised and did not always distinguish clearly between their industrial and political roles.
• The tenacity of the Liberal-Labour alliance and how few socialists there were.
• 1.2m TU members eligible to vote on the political levy in 1913, of which only 298,000 voted for, and 125,000 voted against. Caution re accuracy of figures.
• Was not clear at that time that Labour would grow into the biggest centre-left party and the Liberals would decline so dramatically.
• Importance of the secret 1903 pact between Labour and the Liberals.
• Any arguments at the time for decentralising the political fund?
• Were the TUs firm about putting all their eggs in the Labour basket?
• Trade unions in 1910 (eg ASE) were very concerned about the influence of militant 'syndicalism' in their ranks.
• What happened to Osborne afterwards?

Response by Jim Moher:

• The 1903 Lib-Lab pact was crucial for Labour. The Liberal Party would probably have declined anyway due to irreconcilable internal divisions on issues such as Home Rule, tariff reform and conduct of the First World War.
• Syndicalist-inspired industrial action across occupations/industries was a strong activist tendency at that time, especially in Scotland, Ireland and the north of England (US and Continental influence, Tom Mann, Jim Larkin and James Connolly). It was boosted by the Trade Disputes Act 1906, which legalised sympathetic union action.
• The ASRS was moving in this militant direction, contrary to Bell's efforts. Osborne's reaction was against this 'socialist' control of his union and he saw the Independent Labour Party as the 'cuckoos' taking over the entire TU movement for political ends.
• Decentralisation of the political fund was not advocated from any quarter as it would have dissipated resources and undermined the aims of the new national party.
• In 1911, the ASRS union tried to expel Walter Osborne from the union and he again took them to court and was reinstated. He became Secretary of the Constitutional Association in 1913-14, but little is known of him after that. He lived until 1950 in the York area.

Tony Dubbins

Tony Dubbins (TD), former Chair of Trade Unions for Labour (TULO) and ex- General Secretary of GPMU/UNITE, gave a presenation on Political Funding today.

Key points from TD's presentation:

• 1906 Labour Party was formed of organisations and not open to individuals. Question of individual versus collective rights remains relevant.
• More recently, 'Loans for honours' scandal (David Abrahams) re-opened the whole question of political funding, though union donations the most transparent and least tainted in seeking honours. Supervised closely by Certification Officer.
• The Labour (Blair) leadership was panicked into holding the Hayden-Phillips' Review of party funding. Their response to the Conservative agenda (donation capping at £50k), was not thought-through and did not take account of the distinct history and nature of party democracy, structure or financing, despite the 2006 Labour Conference policy decision.
• Hayden-Phillips' recommendations: i) proposal for 1-1 affiliation without taking account of TUs' differing existing arrangements ii) the discrepancy between individuals' affiliation fees and what the Labour party charge the TU iii) the £50,000 flat cap on all donations. TUs very unhappy with them and the all-party talks collapsed as Labour leaders backed off.
• Conservative party's funding base is very different and, by international standards, the £50,000 cap is very high for individual donations.
• Conservatives intent on breaking link between Labour and TUs.
• Likely to be fewer TU-linked MPs in Commons, TU activists distanced from political activity at constituency level and left out of discussion.

Discussion

Key themes, questions, points made by participants:

• State's constitutional role - to what extent should it assist or interfere in the funding of political parties?
• Future of trade union affiliation to the Labour Party? - value for money? Some, smaller TUs have disaffiliated or threatened to, what do the major ones really think of their future links?
• Importance of TU and labour link in constituencies - e.g. Oxford.
• Not just financial support - organisational help during elections.
• Is there still much bargaining terrain for TUs with Labour today? A new Labour Representation Committee?
• Alternatives for TUs? Local support of other parties - e.g. Liberal Democrats, the SNP or Plaid Cymru?

Response by Tony Dubbins:

• TUs have to agree on the core issues, otherwise they get picked off.
• The bargains on offer from the Labour leaders (e.g. Lord Mandelson's postponement of employment relations measures during recession) are not sellable to TU members and activists. Similarly with the abandonment of other Manifesto promises, e.g. on temporary workers' rights.
• Liberal Democrats are not the answer.
• Unions still a popular voluntary force in society (unlike Labour and the political parties), but not treated with sufficient respect, as for example, in the Hayden-Phillips review.

Conclusions

• Trade Union political funds have a controversial history, internally and externally, as their essentially collective aims and partisan nature make them liable to much scrutiny and challenge, both legal and political.
• Yet they have made a very positive contribution to society in promoting public and social benefit, as well as their sectional interests, for over a hundred years. Any legislation seeking to regulate their collection and disbursement must be based on a clear understanding of their dual nature and distinguish union from private political funding.
• Unions' traditional links with the Labour Party are a product of a special but longstanding British historical development of social and parliamentary politics. Inevitably, these links have encountered severe strains from time to time with Labour in government required to represent the wider society as well as the aspirations of their supporters. Yet the responsible union record in supporting the Party leaderships and these governments in fulfilling this dual role is considerable.
• Other parties and union members with other political allegiances, inevitably question the legitimacy of this special relationship. Yet it has been the considered policy of most party leaderships that these links should not be undermined for narrow party advantage. With the traditional party system again in crisis, this would not seem the time to change that policy.

James Moher and Alastair Reid