Nick Clegg says trade union plans are a 'spiteful' attack on party rival

Reforms set out in the Trade Union Bill would end the opt-out system whereby union members must ask to be taken out of the automatic system of payments made to the Labour Party.

It is estimated the party could lose £6m if trade union members are required instead to write directly to the party every five years to say they want to pay the levy.

Mr Clegg said: “I just think this is fundamentally wrong to do this in such a partisan way.”

The Sheffield Hallam MP said he was no ‘sepia-tinted romantic’ when it came to trade union and Labour links as he had personally suffered from ‘appalling’ use of funds for political purposes in his ‘own Sheffield backyard’.

However he said he was alarmed that Conservative proposals are directed at one party and as Deputy Prime Minister he spent years blocking such measures being introduced.

Giving evidence to the House of Lords select committee on party funding, Mr Clegg said the proposals go against the tradition of cross-party unity on decisions of party finances and introduces an Americanisation of Westminster.

He said: “In America you’ve got this very unseemly tradition of new incumbents in power then busily trying to rig every rule in sight to the detriment of their opponent. We’ve generally avoided that in our country.”

Proposed cuts to Short money, the taxpayer-funded pot handed to political parties, would see Labour lose a further £1.3m.

The Government’s reforms were criticised in the Commons with Labour veteran MP David Winnick describing it as an attempt to create a ‘one-party state’.

Mr Clegg also described the near 20 per cent cut to Short money as ‘petty and spiteful’.

Cabinet Office minister John Penrose said a consultation on changes to Short money would take place soon.

A spokesperson for the Prime Minister said the Government was committed to its plan of reducing Short funding by 19% as it was only fair political parties also share the burden of austerity.

He said: "We are still completely committed to pressing on with this. Short money between 2010 and 2015 rose from £6m to £9m. That's when Government departments, councils and public sector bodies were all having to make difficult decisions with budgets and during that period Short money went up by 50%."

In 2010 funding per MP was £20,000, and it has risen to £28,000 in 2015. Under proposals funding per member will reduce to £23,000 per MP.

He said: "This is an issue of fairness, that political parties should share the burden of dealing with the deficit. We don't think tax payers in Yorkshire would think that political parties shouldn't play a part in dealing with the deficit Labour left behind."