Is Labour’s general election fund about to take a “massive hit”?

The GMB have already cut their affiliation fees to Labour by £1 million as a result of Ed Miliband’s party reform proposals. Are Unite about to do likewise? The Guardian reports this morning:

Unite, Labour’s biggest affiliated union, is to meet next week to discuss a possible £1.5m cut in its annual affiliation fees to the party in what would be a serious blow to Labour’s financial security

Unite officials said the issue is likely to be discussed next Wednesday, five days after a Labour special conference is expected to back plans to reframe the link between Labour and the unions, including requiring individual union members to opt into paying an affiliation fee to the party..

Addressing students at Cambridge University , Unite’s general secretary Len McCluskey said almost half of Unite members did not vote for Labour but were affiliated, which was an “untenable” position. The union gives around £3m to Labour every year by affiliating 1 million members. A Unite spokesman said: “We regularly review the level of the affiliation to the Labour party. It is a matter for the executive which will discuss it next week.”

Unite sources indicated to LabourList this morning that next week’s executive committee meeting are likely to back McCluskey’s proposal to reduce Unite’s affiliation fee, which would be reduced by around 50% but should still leave Unite as Labour’s largest affiliate (slightly ahead of Unison). Meanwhile senior Labour figures have warned that although the party’s long-term finances are looking stable, such a cut could be a “massive hit” to Labour’s election campaign finances and could leave a “hole” in the campaign budget.

This has led to a number of possibilities being mooted to solve a potential funding gap. One possibility might be increasing the affiliation fee per member (currently £3) that unions pay to the party (although this is something that several unions rejected during the Collins Review talks). Another idea that has been floated would see affiliates investing in campaigns at a local level rather than through affiliations to the party centrally.

When the subject of Unite’s donations falling has been raised in the past, McCluskey said that he was not “looking to bankrupt the party”. The same goes for other General Secretaries of affiliated unions. Assuming that’s still the case (and everything points to that being the case), then a solution will need to be found swiftly before the election campaign gets into full swing – preferably one that doesn’t give succour to the Tory claim that unions are “buying policies” from Labour, which wouldn’t be helpful for anyone.