Labour’s growing dependence on the unions

The unions were responsible for nearly 90 per cent of all donations in Q4 2010.

The latest political donation figures are out and they show how financially dependent Labour has become on the trade unions. In quarter four of 2010, the party received £2,545,611 in donations (excluding public funds or "short money"), £2,231,741.90 or 88 per cent of which came from the unions, compared to 36 per cent in the final quarter of 2009. Private donations have all but collapsed since Ed Miliband became leader, with just £39,286 raised from individual donations to CLPs.

In total, the unions were responsible for 62 per cent of all Labour funding last year (up from 60 per cent in 2009), with one union, Unite, providing nearly a quarter (23 per cent) of all donations. Back in 1994, when Tony Blair became Labour leader, trade unions accounted for just a third of the party's annual income. But, as the graph below shows, Labour's dependence on the unions has increased hugely since he left office.

A

As I've argued before, there is no comparison between the unions and the big-money donors the Tories rely on. For instance, donations from Unite are taken from the union's political fund, to which 1,291,408 members contribute voluntarily. But it remains unhealthy for the party to be so reliant on only a few sources of income. Widening Labour's funding base remains a critical challenge for Ed Miliband – one that he must now address.

NB: To those of you who think I've let the Tories off the hook, I refer you to my recent blog on the Conservatives' growing financial dependence on the City. Since David Cameron became party leader, donations from the Square Mile have risen from 24.67 per cent of all donations (£2.7m) in 2005 to 50.79 per cent (£11.4m) in 2010.

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

0800 7318496