𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Labour is set to funnel millions of pounds from union members into its own coffers through a back door scheme hidden in its Employment Rights Act, the Daily Express can reveal. Analysis seen by this paper shows that Labour could gain an extra £4.3 million a year from a clause buried in the 2025 Employment Rights Act which comes into force next month.

The clause would mean Union members would need to opt out of political donations, rather than the current system which sees them choose to opt in, in a move critics have branded a “stitch-up”.

Former Tory Leader, Sir Ian Duncan Smith told the Express: “The so-called Employment Rights Act isn’t about protecting workers – it’s about quietly funnelling millions of pounds to Labour through the back door.”

He added: “By auto-enrolling union members into political funding, it takes money from working people without proper consent and turns it into a taxpayer-subsidised Socialist war chest. It’s a stitch-up that undermines already fragile businesses and erodes trust in our democracy.”

The Act removes the requirement for trade unions to remind members of their right to opt out of contributing to the union’s political fund. It also automatically opts-in new members by default, meaning workers will have to actively choose not to contribute rather than actively choosing to contribute.

Political funds are legally ring-fenced accounts held by unions and used for political activity, with many trade unions donating huge sums to the Labour Party. The move could put Labour in line to receive a vast influx of donations.

When the opt-in policy was introduced in 2016, experts projected it could cost Labour as much as £6million in foregone donations, as political fund balances were expected to fall dramatically.

Nearly a decade on, data seen by this paper now suggests that requiring union members to opt out rather than opt into paying the political fund levy could make over £4million in additional political fund cash available to be donated to Labour.

In 2024, the 11 affiliated unions to Labour had combined income to their political funds from members of £18.5million, and a collective political war chest of £43.7million.

On average, 63% of union members opted in to contributing to the political fund, down from the 90% average in 2016.

If opt-ins return to the 2016 rate of 90% under the new automatic enrolment system, that would project as an additional £4.3million in political fund revenue for trade unions.

All of that cash could be passed on to Labour in the form of affiliation fees or donations.

The Act is under increasing scrutiny from the public and politicians, including over measures which would see businesses with as few as 21 employees forced to grant unions access on a weekly basis.

Section 62 of the Employment Rights Act 2025 alters arrangements for new members joining a trade union, so they are automatically opted in to contributing to the union’s political fund unless they expressly opt out by providing an opt-out notice.

It also removes the requirement for unions to remind members of their right to opt out of contributing to a political fund within eight weeks of submitting their annual return to the Certification Officer.

Unions are required to use their political funds for any political activity, including paying affiliation fees to Labour and any other donations.

Labour did not respond when approached for comment.