The Labour Party, the labour movement and money

By Mark Ferguson / @markfergusonuk

Happy International Worker’s Day. The bank holiday is tomorrow of course, but today is May 1st, an important day for the Labour movement that can often slip by unnoticed.

It is, however, a useful opportunity to reflect on the Labour Party’s role in the wider labour movement.

At a recent debate, a fellow panelist argued that the Labour government had “done nothing for trade unions.” Now on one level that’s patently ridiculous. Whilst I would have been much happier to see the party be more proactive in defending workers, few can argue that Labour’s legacy was a positive one for those in work.

Yet that’s not what they meant. The argument I was up against was that trade unions – as organisations – had not benefited from Labour’s time in government.

That’s a firmly held view within many trade unions, and it lies at the heart of the party’s relationship with organised Labour.

Central to the debate – as is so often the case – is money. There is an understandable feeling within many trade unions that since they fund the vast majority of what the Labour Party does, they should have a greater influence over political direction and policy formation. That’s a fair and reasonable assertion.

What should Ed Miliband’s reaction be then? How should he work with organised Labour? Can he forge a compromise now that he has been labeled (albeit somewhat unsuccessfully) as “Red Ed”. If he moves towards the unions to reward their financial support he is finished politically. If he moves away from the unions then the Labour Party is finished financially.

But is there a “third way” for Ed?

It is clearly unsustainable for trade unions to provide the vast majority of party funding, and the party will need ever greater sums in the years to come. So the party should professionalise their fundraising efforts as a top priority in the coming years to bring in additional funds for the party, and they should focus on small donations as an absolute priority. Any spare capacity within the party (if there is any) should be spent on raising further funds. This has the benefit of both decreasing the percentage of party funds that are union donations and increasingly the available pool of money for the party. Furthermore, the more people who donate to the party – even in small amounts – the more people who are invested in its success.

Once Ed Miliband has shown that he has broad appeal outside of the party and the unions – by raising external funds (in addition to union funds) – he can shed the “Red Ed” tag once and for all. Yet of course it will be necessary to reach out to organisations who represent large proportions of British workers as we look to finalise our policy platform ahead of the new election. And who better to work with than some of Britain’s largest trade unions, who represent millions of ordinary workers?

Paradoxically, only by raising significant sums of money separately from the trade unions will Labour gain the sense of political and financial independence necessary to embrace the trade unions without fear of political (or more precisely media) backlash. Union donations are of course effectively the donations of millions of individual union members, but aligned to the donations of millions of other workers (union members or otherwise) the impact could be both powerful – and liberating – for the Labour Party, and the labour movement.

Yet making that step change will require a leap of faith for both the Labour Party and trade unions. It’s a daunting task, but it’s a leap both should be willing to make. Success for both strands of the labour movement depends on it.