Cap on donations won’t apply to unions

By Mark Ferguson / @markfergusonuk

After reports yesterday that suggested Ed Miliband was seeking to place a cap on donations of £500 – effectively putting an end to union funding of the Labour Party – the leadership have been quick to deny that this is the case. The Times (£) reports today:

“Labour’s submission to the Committee on Standards in Public Life, which is holding an inquiry into the future of party funding, suggests that Mr Miliband is unwilling to make significant changes to the [union] relationship. Ray Collins, the outgoing General Secretary of the Labour Party, says in the letter: “Any proposals for reform should be respectful of the different traditions, backgrounds and structures of the various political parties. Party funding reform should not be used as the means to alter the internal constitutional arrangements of individual political parties.””

“The letter goes on to suggest a cap on donations as low as £500. The Tories have suggested a ceiling of £50,000. There is currently no upper limit, and during the general election the Conservatives spent £16 million – double the sum available to Labour. However, a spokesman for Mr Miliband said yesterday: “The limit will not apply to affiliated societies, including trade unions.””

Clearly any proposal that a £500 limit (or even a £50,000 limit) could apply to individuals and businesses but not trade unions is likely to be a complete non-starter for other parties. As cross-party support has always been considered a pre-requisite for party funding reform, then we shouldn’t expect any proposal of this kind to have any real impact.

However, the party may seek to recategorise union donations as “bundled” small donations, as they come from hundreds of thousands of voters. Doing this may mean that union members need to opt-in (rather than opt-out) of the political levy imposed by affiliated unions, which would also need to be considered alongside proposals for bringing union members into the party as either full or affiliated members.

Until Ed Miliband makes his position clear tough, the entire debate is reliant on rumour, counter rumour and press briefings – which is by no means the best way to engage members in such crucial decisions on the future of the party.