Ed Miliband has saved the union link

Ed Miliband saved Labour’s historic link with the trade union movement today. That might sound like a bit of a push on a day when the Labour leader announced that he favours a £5k cap on union donations (and all donations) – but it’s true.

To understand why, you have to look at Miliband’s announcement in the context of the ongoing talks on party funding. The Tories and the Lib Dems are determined to tear Labour away from the unions. A few weeks ago I was concerned that our opponents would use a crisis in their funding to create a crisis in ours. They attempted that in public – Francis Maude took a break from starting a run on fuel to try – but it is behind the scenes where this has really happened.

The Tories “negotiating position” is that they want to eliminate the union link. Their yellow friends are of the same opinion. The Tories want to keep big money in politics by pushing for a £50k cap on donations (or around twice the pre-tax average national salary). The Lib Dems want to do whatever they can to ensure everyone else is as poor as they are.

The union link is facing an existential threat. The Tories want Ed Miliband to defend the system as it currently stands and be driven away from the negotiating table. Then the Tories and their yellow sidekicks can legislate for whatever they want with impunity. And that legislation would almost certainly include the end of the union link in any meaningful sense.

So Ed Miliband should be applauded for getting out ahead of the other two parties this morning and setting the agenda on party funding. Rather than being cowed – in fact Miliband went out of his way to defend the union link today – Ed has taken the initiative and put the ball back into Cameron’s court. Cameron thinks a donation of up to £50k is reasonable – but for most people that’s an unthinkable sum. And it shows how out of touch he is.

Will Cameron now defend one off donations from the wealthy that are ten times as large as those Labour is pushing for? If he does then he is more foolish that I’d thought.

But the reason Miliband’s intervention is particularly important is that it splits so called “union money” into two distinct types. There are the one off sums that are used to bail out the party at election time and pay for big ticket funding (billboards, adverts, direct mail etc). These kind of donations are the ones easily mischaracterised as “union barons” writing “big cheques” to the party.

Then there’s union affiliations. Millions of ordinary working people giving around £3 a year to the Labour Party. Not controlled by union leaders, not a bail-out at election time. Solid. Reliable. Regular. And easy to justify. Not a one off cheque. Not a “union baron” in sight. But plenty of cleaners, PCSOs, teaching assistants and nurses giving a small amount to a party that shares their values. And this funding pays for the kind of thing that actually wins elections in the long term – like organisers on the ground and the day to day running of the party.

There is a downside to Miliband’s proposal of course. The party will miss the one off donations, especially at election time. There are also a substantial number of Labour donors who have given far more than £5k to the party who will now be unable to give more (although the damage to Labour from the cap will be far less than the damage to the Tories).

To square the funding circle, the party needs to get smart about fundraising and commercial opportunities. It clearly sees commercial revenue as important, but has yet to appoint an Executive Director to take charge of that – the only position on Labour’s executive board that is currently vacant. This needs to be remedied quickly.

Party funding is a tricky topic for all parties, because it unwittingly asks us to look at what our parties are really about, and how far we are from our ideals. At its heart, Labour is a party of ordinary working people. But as time has gone on we’ve become far removed from that. Taking big money out of politics is a lofty and laudable aim, and one that helps us lay claim once again to the mantle of the people’s party. And retaining what matters most about the union link – the affiliation of millions of people – helps keep alive the hope that we can become a real people’s party again.

A party for the many, not the few.