Miliband faces backlash after union links reform

Labour leader Ed Miliband plans to make changes to union funding. Picture: PA

Mr Miliband made the biggest gamble of his Labour leadership in a speech pledging to end the system that sees trade unionists automatically contribute to party funds. The move will almost certainly see Labour lose millions of pounds.

The measures set out in a speech in London yesterday were designed to draw a line under the biggest crisis of Mr Miliband’s leadership, sparked by claims that Unite tried to fix the selection of Labour’s general election candidate in Falkirk by packing the constituency with 100 or more of its own members, some of them without their knowledge. An internal party report on the allegations has been handed to police.

In a hard-hitting address, Mr Miliband said events in Falkirk represented “part of the death-throes of the old politics”, and he hoped to usher in an “open, transparent and trusted” system, which would engage more union members directly.

Rather than being automatically affiliated to Labour unless they opt out, union members should be asked to make an active decision to join, he said.

“I do not want any individual to be paying money to the Labour Party in affiliation fees unless they have deliberately chosen to do so.”

Mr Miliband hoped introducing an “opt-in” system would lead to thousands of working people signing up to Labour, increasing its membership beyond the current level of 200,000.

The Labour leader announced plans to establish a code of conduct for would-be election candidates and to introduce primary elections for Labour’s next candidate for London mayor.

Mr Miliband also announced a Labour government would impose a limit on MPs’ earnings from second jobs and called for the reopening of stalled talks on the funding of political parties.

Yesterday, MPs and union leaders expressed reservations about Mr Miliband’s attempt to dilute the link between trade unions and Labour.

Katy Clark, Labour MP for North Ayrshire and Arran, said: “There is no appetite from most people in the Labour Party to break the links with the trade unions.”

Brian Donohoe, MP for Central Ayrshire, said: “Unless we grow our party to a mass membership party to the extent where we have enough money to run elections, I would go softly, softly on this one.”

Some union leaders warned of a financial risk.

GMB general secretary Paul Kenny said: “The changes Mr Miliband seeks will mean none of the funds that would have gone in political affiliation fees will be available to fund Labour Party operations.”

Bob Thomson, former chairman of the Labour Party in Scotland, said: “This really is a Blairite coup and I think it is a very profound mistake.”

Although Mr Miliband faced stirrings of discontent, the angry response many had expected from Unite leader Len McCluskey failed to materialise.

Although he and Mr Miliband were at loggerheads last week over the decision to bring in the police, the Unite leader described yesterday’s speech as “bold and brave”, adding: “It may well be a historic one if Ed’s vision comes to fruition.”

Mr McCluskey found himself in the unusual position of being in accord with former Labour prime minister Tony Blair, who said: “Frankly, probably I should have done it when I was leader.”

Analysis by John Curtice: Gamble may lose Labour cash – but it could prove costly for Cameron too

What do you call a proposal from a politician that appears to bite the hand of those that feed him? Brave or foolhardy? Which adjective applies to Mr Miliband’s speech may not be evident for some time.

Money raised by the trade unions’ political funds has long been Labour’s financial lifeblood. Not least of the reasons why it has proved so lucrative is that those trade union members who do not wish any of their dues to reach Labour’s coffers have to go to the trouble of explicitly opting out from paying. Most simply do not bother.

Until now Labour has doggedly defended this practice, which it itself introduced after 1945, thereby reversing much-hated 1920s Conservative legislation that had required trade union members to opt into the political levy.

The trade unions value the arrangement too. The more members a union affiliates to the Labour Party via its political fund, the more votes it has at conference.

Meanwhile, these members get the chance to vote in the election for Labour leader, votes that in 2010 the trade unions helped push decisively in Ed (rather than David) Miliband’s direction.

Now Mr Miliband says he wants to end a much-prized symbiosis that proved crucial in enabling him personally to win the Labour crown.

Much would seem to rest on Labour’s ability to persuade trade union members to sign up to the party.

If they do, not only will Labour still get their money, but also a much larger membership in each and every constituency. Constituency parties with low memberships are always be vulnerable to takeover through recruiting new members – as allegedly was happening in Falkirk.

However, as Mr Miliband acknowledged, joining a political party is not very fashionable nowadays. Persuading people to sign up and stay may well prove difficult.

And if, as in London, people are to get the chance to help decide Labour’s mayoral candidate without paying any dues, then what incentive will there be for them to do so?

Still, Mr Miliband may have been more canny than seems at first sight.

He is not proposing that trade unions should scrap their political funds. He is simply saying that they cannot use those funds to make their members individual “affiliates” of the party. He did not say that trade unions would not be able to use their political funds to send Labour a donation – should they wish to do so.

All this could have one big advantage. It will make it easier for Labour to argue big business donations should be capped too. And that could prove rather expensive for Mr Cameron.

• John Curtice is professor of politics at Strathclyde University

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• Comment: Labour Falkirk cynicism the real scandal