Ed Miliband has saved the union link

15th April, 2012 12:06 pm

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.

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  • John Palethorpe

    And to stymie the Tory howls about the £3 annual subs (less than half the cost of 12 first class stamps!) both Labour and the union leaders must ensure that union members know that they have a choice to opt out. Do that clearly and openly, and it’ll reform Labour funding.

    It’ll also screw the Tories with their trousers on, which I am comfortable with.

    • why not just make donations opt-IN?

      • John Palethorpe

         Good point. Ed can call for a cap in donations through legislation, but I expect that it’ll be up to the Union’s themselves to make the changes to the subs system.

      • Mr Chippy

        I have some sympathy with your position Kevin but political funds have to be established by vote. Then there is the opt out. Further the fund is held collectively accountable through conference and the NECs of the respective unions. What checks and balances exist in corporate funding of parties?

      • That is a matter for the membership of affiliated trade unions – trade unions are democratic organisations with well-established and rigourous institutional practices. There’s no need to for union leaders to ask “How high?” whenever Tories shout “Jump” – the membership of the unions are capable of deciding these matters.

        • Dave Postles

           Exactly.  Unions are the only advocates for working people.

        • Dave Postles

           Scutcher for mixing waste cotton (hard, soft and comber waste) for new cotton mixture.  Does byssinosis ring any bells?

          • It does. And that’s a reminder of the importance of H & S legislation. I’m a northerner by birth, still have some mill relics in the bottom drawer! Family vocations, as well as cotton mills, included ship building (Barrow) and military service.
            I’m now down south, catching up on education I didn’t get when younger. Was previously in construction so, related to my experience, would say asbestosis is a contemporary equivalent.

          • Dave Postles

            … and we’ve seen the attitude of a few insurance companies about asbestosis (as to whether they are liable).  It’s all inter-related – H&S, how we treat our older generation who have been exposed to these hazards, and how the unions have improved working conditions.
            I’m glad that you now have the opportunity which you didn’t have earlier for a different kind of education.  My education is here on LL, learning from people like you.

      • Winston_from_the_Ministry

         Because they’d dry up.

        • Dave Postles

          Actually, probably not, because union density is highest amongst the professions at a mean of 43.7%.  They are the most likely, right now, to be in a position to pay the political levy and to consider themselves under attack from this government, although some of these unions have not previously had a political levy or been affiliated to the Labour Party.  The sad fact is that only 46% of the workforce have access to a union in their workplace.  Those most in need of representation – in low-paid retail – have a density of only 12.9% because there is no union function in their workplace, because they would be hardest hit by paying union dues, and because they probably can’t afford the political levy in addition to union dues.  In the circumstances of low pay, people avoid any additional cost.

          • treborc1

             I would say the problem is in the last twenty years when i spoke to people about joining the Union most  would say either I will not be here that long, or it’s not worth it they are political, or I cannot afford it, and the main one was I cannot be bothered.

            My Union for

          • Dave Postles

            Yes, I see that.

    • treborc1

      My job as a Union rep when asking New employees if they wished to join the Union was to tell them what they had, death insurance, accident insurance, extra sickness payments, insurance if you had an accident, lump sum payment if you could not work again.

      Then I would explain  that  your dues would have a part which was the political levy, and I would tell them they could if they wish pay this to a charity, the reason for this some people did not back Labour, some were Tories, some liberals.

      If you want to know about the levy it’s on the Web site, and you get a notice when you vote every ten years, but you normally get a ballot paper which will have information about payments and the levy sent  as well.

      It’s not some secret paymenty

  • jaime taurosangastre candelas

    This seems to be a bit premature.  I don’t see how Ed Miliband making a pre-emptive offer has yet “saved Labour’s historic link”.  The offer of a cap of £5,000 is currently a negotiating tactic, not the settled and agreed result.

    There are all sorts of counters that the tories or Liberal Democrats may make (I don’t know if the other parties are involved – they should be, for reasons of inclusiveness).  If one party were to suggest that every single donation has to be made individually and directly to a party, and to be publicly accountable, then that would hit Labour with a huge administrative overhead in processing 3 million separate small donations*, if indeed the party attained a 100% transfer of union member bank details from union to party.  The tories may calculate that inertia, inefficiency and administrative overheads could easily consume £5 million of the current £9 million raised.

    And yet, in the matter of party funding, what could be fairer than asking all donations to be made directly, and not via an intermediary organisation?  

    {EDIT deletion – I made a wrong statement about the union modernisation fund, which I now see has been stopped}

    * I got the figure of 3 million political levies from the Guardian.  I presume it is accurate.

    • As you suggest, this can be interpreted as a “negotiating tactic”. But it can only become a negotiating position – rather than a solution – when counter proposals are forwarded. As Mark wrote in his lead-off (did you read it?):

      “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.”

      • Bill

        Hi Dave,
        It’s more likely that the conservatives will tale a position that includes donations channelled through Unions in the cap and both sides will then take strong rhetorical positions which the press report for a few days before getting bored and allowing both sides to quietly drop the issue.

        Alternatively, as I’ve said below, they may take the view that opt-in (though not opt-out) donations are okay, but work simultaneously to dismantle the channelling of funds from taxpayer to union which has allowed union subs to be freed up for political donations.

        Either way, if you think the conservatives have no cards to play here then you’re likely to be surprised.

        • Hugh


          • Dave Postles

            If you say so, but the political levy, where it obtains, has a long history well before the modernization fund, so, IMHO, it’s a distortion to make that statement.  The union movement in general benefited from the modernization fund, but many unions are not affiliated nor have a political levy.  Let’s remember too the victimization of union members and activists by some employers.  It seems that the employers often need a modernization fund to improve their industrial relations (construction industry and UCATT).  There is a wider perception.

  • Bill

    I think the public will be quite happy with this provided it also coincides with a severing of the large subsidies given to the union for pilgrims and through other hidden methods.

    Like the parties the unions should work with the contributions of members and not use political influence to win large involuntary contributions from the taxpayer.

    • Dave Postles

       Bill, I think you would have to reduce drastically the limit on election expenditure to avoid any state contributions to the funding of political parties.  Actually, I not averse to that, but it would be necessary to convince the Tories and LibDems, from whom there might be resistance.   You would also need to factor into the expenditure the amount spent by private individuals (Ashcroft) and ‘think tanks’ who undertake constant ‘research’ for party political purposes.  I’m not averse to that either.  What cannot be countenanced, IMHO, is effectively the ‘buying’ of the electorate through unequal expenditure on the model of the USA.  The proposals – I expect by Clegg and so on – for state funding seem to rely on the number of votes cast at the previous election, which is, to me, a flawed methodology.  It assumes that people’s intentions have not changed, but they manifestly do.  It also disfranchises some of the electorate (not only those who did not bother to vote, but also those attaining the age of political majority).  Since we now have in effect fixed parliaments, it would seem more effective, if we have state assistance, to give each elector a voucher in advance of the election to ‘plump’ for a party’s electoral funding.
      On the ‘link’ with the unions, there are many nuances.  Not all unions have a political levy.  Not all unions are affiliated to Labour.  Some unions have a constitution which allows them to direct their political levy to any party (GMB, I believe).  If you insist that union members should opt in, then you should equally insist that every member of the employers’ organizations should authorize contributions; that every shareholder should actively assent to every corporate donation.  If you insist on donations only from individuals, then every corporate organization – businesses, employers’ organizations etc – cannot donate.  If you insist on individual donations, then you are privileging the affluent over the poor, if there is no state assistance.  For example, a donation of £5k by an affluent person might be the equivalent of 500 donations of £10 (if that can even be afforded) by 500 poorer electors.  That equation just doesn’t seem justifiable.  It still represents the ability to exercise more influence. 

      • Bill

        Hi Dave,

        Various random points and then a more structured reply:
        Firstly, I don’t have a problem with people who didn’t bother to vote being disenfranchised. It seems to me that that’s a choice they made. I do take your more general point that funding parties by size tends to have a ‘lock-in’ effect though.

        I don’t think that limits on election spending are required to limit state funding. It seems to me that quite the opposite is true. If individual donations are capped and state funding is limited to that which is absolutely necessary for the political process to function, then parties require genuine member enthusiasm both for large volumes of small donations and for volunteer activities which feel much more in line with a healthy democratic process.

        You also missed my specific point about funds flowing in the other direction. The clearest distortion that political donations buy are the direct flow of money back to the donor in subsidies, tax breaks and clandestine funding. If it’s true that ‘opt-in’ donations represent thousands of small donations rather than a channelling of funds from union to party with the narrow goal of rent seeking then there should be no problem legislating against pilgrims and other flows of government funds to the unions.

        The key point here is that government should not be a process of party funding in exchange for favours to narrow interest groups and this process is precisely what erodes the democratic legitimacy of any government that spends too long in office. Whether it’s actually possible to acheive this is questionable given the proliferation of soft money and non-party single issue campaigns in the US after funding restrictions were put in place, but that doesn’t make it less worth trying.

        • Dave Postles

          The disfranchising of people does concern me.  They may have made that choice not to vote once, but wish to exercise their vote next time because of their intervening experience.  It is a political right to be represented and to vote.  (That goes to the issue as well of the methodology for recasting constituencies).  So, if there is state funding, it should take them into account.

          I’m quite prepared to countenance the abolition of the counter-flow that you mention, such as it is, but it obtains in all contexts – overt and covert.  We’ve been through the issue of Pilgrims here before.  In the experience of most of us who have been union reps and branch organizers/secretaries, it is an aberration, if one that seems to obtain in the civil service/NHS.  The rest of us, even in public service, had an entirely different experience.  Indeed, in my local branch of (what was) the AUT, we were not allowed organizing time and all our meetings (local branch and members’ AGMs/EGMs) took place in lunch break or after 6 p.m.  It just seems that the civil service is privileged in many ways that other public services are not.  The civil service/NHS itself could tackle this issue.  I’ve never been clear about the modernization fund.  By the same token, it strikes me as odd that the government resorts to the likes of Beecroft and Green for advice. 

          If there is no reduced cap (and there is a cap now, as you know) on electoral expenses, then the same disparities may well continue.  Ways will be found to circumvent the ‘rules’.  By the nature of capping the amount of any donation, the parties will receive less income and so the ceiling of expenses will have to be reduced.  I’m quite happy for there to be no state funding, provided that the ceiling of expenses is curtailed. 

          If you have opt-in for the political levy, then you must make illegal corporate donations (business and employer organizations) making contributions.  Sadly, you may then enter into the situation in the US where the supreme court has defined corporations as persons who can make donations.

          With respect, it seems to me that you are concentrating on one direction, but absolving the other.

  • Erikallan

    The only “people” Labour represents is it’s own members , MP’s and Councillors. Look at one ex-PM who gets away with a miniscule tax bill on a £12 million profit and has money coming out of his ears. I thought socialism (communism) was all about equality in material terms, as it is based purely on materialism?

    • AlanGiles

      There are no “Communist” MPS  in the British Parliament. I know the ex-PM you are referring to, but it is debateable whether he was a real Labour supporter, and his cabinet was a cabinet full of right-wing ministers, so please don’t judge everybody on the left by that very narrow criteria.

      • Generally I agree with you on the first sentence Alan (not the rest, obviously!), but what I would say is that the Labour Representation Committee has several MPs on its board – one of LRC’s affiliate organisations is the New Communist Party of Britain.  Clearly at some point the Communist Party applied for affiliate membership and the MPs on the board accepted their application.  This is troubling, as clearly these MPs felt the Communist Party were worthy allies.  So whilst you’re right that there are no communist MPs in Parliament, there are a small handful of MPs with some basic level of sympathy for the philosophy.

        • Dave Postles

          Well, you can still listen to Eric Hobsbawm talking to Simon Schama on Radio 4. 


        • AlanGiles

          Hi Jon. Surely you can’t deny that the cabinet of you-know-who was stuffed with right-wingers – Straw, Blunkett, Purnell, Hutton, Byers. I won’t go on but you see the point.

          If there are any communist sympathizers in the PLP, they have no voice, or if they have a voice it is not as loud of that of Labour Uncut/Fifth Column PR Ltd. Personally I find the latter much more troubling than the former.

          •  Hi Alan, well i guess my argument is that their voice is through the LRC – but yes, I readily and happily admit it is a body with no influence.

            You know how I feel about the rest so let’s not debate it. Your list, I would say is on the right wing of the Party, not rightwing overall. But I know you disagree!

  • Johndclare

    I have always argued that it is more important – and probably better in the long term – to place a much fiercer caps on election campaign spending (perhaps linked to the number of members a party has). 
    It would force all parties to find cheaper, more low-tech, less-media-heavy – more local-level – ways to communicate their message, and take politics ‘onto the street’ again.
    And it would encourage them to spread their campaigning more evenly across the Parliament, so that they didn’t just turn up at elections – as we are always lambasted on the #labourdoorstep.

    • Yes. I think that we need to nip the huge-spending American style politics urgently. There needs to be a downsize overall

  • Amber Star

    I’m wondering if Ed Miliband’s team has been even cleverer than you are giving them credit for, Mark. Because I think that it may not be possible for the UK government to further legislate against the political levy &/or whether the Unions have an opt-in rather than an opt-out. I think the levy & opt-out may be protected under EU & International Law, which could be why Kelly is looking for all Party agreement to his proposals.

    • Dave Postles

      That’s interesting, indeed.

  • Your distinction is one which has always been used to say that people use to justify having a current opt out system as opposed to an opt in political levy. It also will mean that party funding will never be resolved as Conservatives can always say this shows were not serious and we are just trying to shaft the Conservatives.
      Evidence of this can be see as Guido Fawkes has stated that our own accounts would still only have limited our funds by 1%. Now this simply will not wash.
       So, let us (and I say this as a Unite member) have and opt in system to the political levy and we will either be able to say  “Look at how many millions of people have made an individual decision to support the Labour party” or we will have to face up to the fact that some Union members don’t think that the Labour (and I would add our Unions) are supporting us.

    • Interesting, but it could conceivably go against the point of funding reforms (to reduce the extent to which parties are accountable to “big money” & sectional interests, rather than the public). Labour would have to convince tens or hundreds of thousands of union members to opt-in, which could influence Labour strategy & policy in order to ensure that union members felt that Labour was worth opt-in donations. Obviously, this outcome would be better for union members, and even from an impartial perspective it’s fairer- union members will be getting their individual money’s worth. But it does nothing to counter the image that Labour is “in hock to the lefty unions” from the standpoint of the wider public and the opposition, and could even make the charge more valid.

    • aracataca

      This is the way forward Edward. But to iterate- the Tories won’t wear it they’re too dependent on their Phillip Greens and Ashcrofts.

  • Holly

    So how would it pan out if the Tories & Lib Dems accepted this proposal for a General Election year, as election year is the only example year given/debated, and changed everything else for the rest of a parliament?
    Just a thought.

  • MarkPolden

    To take the high ground Labour has to go for an opt in system renewed on a yearly basis

    • Dave Postles

      I wouldn’t recommend that unilaterally without a rule that corporations and employers’ organizations are not people and cannot make political donations.

      • I’d say that’s the only intellectually honest position, though I wonder whether it would lead to individual donations routed through individual board members/employees etc. instead, which could be worse depending on the caps. However, it should be raised. I would also love to see if Cameron would “Romney” himself trying to oppose it- “corporations are people, my friend!”

  • Good post, and I like your take- I feared the proposals, but maybe you and Ed are right about this.

    This a complex issue, because there’s fundamentally only two ways two have a truly “impartial” funding system: either ban all donations and have all party funding come from taxpayers (absurdly costly, and would still require some judgement as to how the tax funds were distributed) or the current system, which while letting in corruption is at least fair in that it just lets the chips fall where they may and doesn’t attempt to arbitrate as to the “value” of different contributions, with the inevitable result of distorting our party politics in some way. Anything in the middle involves both judgements as to the relative rights and social impacts of different types of donors and the government’s right to regulate them (TUs, businesses, individuals, “wealthy” individuals) which are gonna resemble standard ideological debates over these matters, and will also have to impose certain (5/10/50,000 on individual donations, state funding if you have more/less than 2 MPs etc) that are basically just gonna be arbitrary. In some ways, I was starting to wonder just living it as it is remains the fairest thing to do, but that isn’t a Labour answer- it’s a libertarian response, and like they generally do, it’ll lead to chaos.

    No clue what I think of TU funding, other than thinking we need to compromise a bit. One thing I wonder though- why has no one (Ed Miliband or Christopher Kelly) proposed 7,500 as the individual cap? Although this, again, is inherently an arbitrary line, it is the line already decided for the level at which donations have to be reported, reflecting a prior judgement that this level of donation is “big money” enough to be in the public interest.  It’s also halfway between Ed Miliband and Sir Kelly’s proposed caps of 5,000 and 10,000, maybe making it a good aim for Ed once negotiations are underway (although it would still give the Tories heartburn).

  • jonathanmorse

    So there’s a £5000 limit and you’re holding a supporters meeting where normally a few pound coins get dropped in the bucket only on one occasion you check it when everybody’s left and you find £5000 in notes and those few coins.

  • jonathanmorse

    I like the idea of expenditure limits but surely the Tories will find a way round it – buy a newspaper maybe. Then again, they already seem to work for them anyway, including i suspect ITN.

    • Dave Postles

      If it is suspected that a party has spent more than the cap allowed for each constituency, then it can be referred to the Electoral Commission for adjudication.
      The current regulation is:

      ‘All parties contesting a relevant election are subject to limits on expenditure incurred in the period before an election. This period, defined as the ‘regulated period’, varies
      according to the type of election and during this time parties are
      limited as to the amount of expenditure they can incur.
      For the UK Parliamentary election this
      period is 365 days before the general election while for the European
      Parliamentary election is 4 months before polling day. The 2009 European
      Parliamentary and the 2010 UK Parliamentary elections were held on 4
      June 2009 and 6 May 2010 respectively. This means that the regulated
      periods for these two elections overlapped. Therefore parties who contested both elections were subject to a combined expenditure limit

      Spending limits are calculated as follows:

      European Parliamentary elections: parties are permitted to spend £45,000 multiplied by the number of MEPs returned per region(s) they are contesting. UK Parliamentary elections: parties are permitted
      to spend £30,000 per constituency contested, or £810,000 in England,
      £120,000 in Scotland, and £60,000 in Wales (whichever is higher). In the
      case of candidates standing on behalf of two parties, the expenditure
      limit for each party is halved (to £15,000).’

      To maintain parity between constituencies and thus proper regard for all electors, the limit per constituency should be lowered if parties receive less income – IMHO.

  • Dave Postles

    Off topic, but good luck to the people of Redcar with the reopening of the SSI slab plant for exports to Thailand and thanks to Tata again for promising to invest in Wales (incidentally, the programme on Port Talbot with Martin Sheen was excellent).  

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