Monday, June 09, 2008

The Tories and the Union Modernisation Fund

Richard Balfe's call for the Conservatives to maintain the Union Modernisation Fund is utter foolishness:

"When the Government set up the multimillion-pound modernisation fund three years ago for unions to draw upon, the Tories criticised the fund as a payback to the Labour Party’s main source of funding. But they are now debating whether to continue with the fund if they form the next government.

To approve the fund would be departure from the days when Margaret Thatcher was leader and the Conservative Party was partly defined by its antagonism towards the unions. And by forging a relationship with the unions, it could ultimately threaten Labour’s exclusive ties."

This is a bad idea on a number of grounds:

1) Political abuse of taxpayers' money - directing taxpayers' money to secure political advantages is disreputable and erodes public trust in politics. Whether it is the Labour party channelling money to their donors or the Conservatives using the same fund to try and break Labour and the unions apart.

2) Building up structural problems in the public finances - Our report (PDF) on a looming winter of discontent set out how, in the last year, public sector staff have gone on strike 100 times as much as those in the private sector. The unions are holding government to ransom in the knowledge that, playing with other people's money and with little accountability, politicians will often fold in the face of a strike.

Over the medium to long-term this is reducing flexibility and increasing wages in the public sector which will push up costs, make reform more difficult and reduce the chances of taxpayers getting good value for money.

3) Bad politics - In the long term any political party that hopes to advance free-market policies and secure value for taxpayers' money will often clash with unions attached to centralised, big government organisation of the pubic services and after big pay increases for their members. If the Conservatives are really attached to ushering in a post-bureaucratic age and shrinking the state they are likely, sadly, to have to do so in spite of the unions. Maintaining Labour's bung to the unions won't change that.

Cross-posted from the TaxPayers' Alliance blog.

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