Labour’s cash crisis

By Mark Ferguson / @markfergusonuk

The Refounding Labour consultation has now come to a close. Thousands of submissions have been made. The potential changes that you want to see in your party are sat in files and folders in Victoria Street and on Peter Hain’s desk. The coming weeks will be decisive in terms of creating a movement party (rather than a machine party) that can deliver the next election for Labour.

And yet there’s a much greater challenge ahead for the party – something absolutely fundamental. As well as refounding labour, we need to refund it.

It’s no secret that the party is currently too reliant on union donations, but as I’ve argued before, it’s not the size of the union donations that’s the problem, it’s the lack of other donations.

The latest party fundraising data shows that we are being out fundraised by the Liberal Democrats by more than three to one in terms of corporate and individual donors. Thinks about that for a moment. We are the only signifiant opposition party in the UK. They are are on 9% and their leader is a hate figure. We raised £248,577 and they raised £871,019. Our biggest single donor was Alastair Campbell.

My mind would boggle if it wasn’t so busy weeping and scrabbling around in an underpass for pennies for the party. The financial gulf between the parties grows by the day.

So yes, the party is too reliant on union donations, but largely because of the party’s abject failure to develop alternative funding streams. We should be making a genuine, long-term investment in online fundraising and campaigns. A fledgling organisation like 38 degrees already has a small donation fundraising capacity that far outstrips our own. We should be building a supporters network, with donations targeted towards issues that those supporters care about. Love the NHS? Donate £10 to Labour’s health campaign.

And this kind of innovation is not separate from the Refounding Labour consultation – it is intrinsic to it. Only by building a stronger, more vibrant and responsive party will we engage with the membership. And only through that engagement will we get the regular, small and sustainable donations that we need to survive. Would you give £5 a month to something that you don’t trust, and doesn’t trust you?

That’s Labour’s real funding dilemma. And one that must be dealt with. And soon.