Ed Miliband's trade union reforms are essential to building a fairer society

This isn't a diversion about process. Participative democracy is a key weapon in fighting poverty.

Ed Miliband’s proposed reform of Labour’s trade union funding is the culmination of an argument that’s been simmering for a hundred years. Two weeks ago it boiled over. But it began in 1909 when a notorious House of Lords ruling banned trade union from members automatically donating money to the Labour Party.  The judgement ruled that an automatic "opt-in" was illegal. Just as today, the row around trade unionists opting in or out was linked to MPs’ wages (settled at £400pa by Asquith in 1911). The House of Lords ruling threatened to remove a core source of Labour funding, and many feared for Labour’s survival. 

And so it is today. We are told Miliband risks the historic link between Labour and the trade unions, and that in financial terms, Labour may not survive. The main difference between now and 100 years ago (the House of Lords ruling was overturned in 1913) is that the call for reform comes from the Labour Party leader himself, something unimaginable even in Tony Blair’s day, never mind Keir Hardie’s. These proposals make Tony Blair’s reform of Clause IV look like timid toe-dipping. What began as a little (or a large) local difficulty in Falkirk has, on the leader’s say so, become nothing less than a debate around the nature of politics itself. 

At heart, this isn’t primarily an argument about Labour’s link with the trade unions; it is primarily about Labour’s link with democracy, and whether our internal governance is democratic. Democracy and open politics, allied to social justice, are Labour’s core values. The very first meeting of the Labour Representation Committee, created by the trade unions in 1900, voted by 102 votes to three that "this conference is in favour of working class opinion being represented in the House of Commons." Len McCluskey, general secretary of Unite, is still in favour of that. So am I. So - I imagine - is everyone else in the party.

McCluskey’s angry response to the Falkirk allegations was to say that Unite simply worked within the rules to select a working class woman as Labour's candidate. Unite – and Labour – are right to look for more diverse parliamentarians.  It is a scandal that 60% of the Tory and Lib Dem cabinet that entered Downing Street in 2010 were privately educated (compared to 32% in Labour’s last cabinet). Only 7% of British people are privately educated; in the 21st century you’d expect the other 93% of us to have a bit more say in running the country. 

Yes I want more trade unionists in Parliament. I’m one of them, I was a full-time trade union regional organiser representing low-paid workers when I became an MP in 1997. But things change: it’s not just Labour that doesn’t have enough working class MPs. Trade unions themselves are not as working class as they used to be. As David Goodhart points out "astonishingly, 52% of union members now have a degree or some other higher education qualification, compared with just 41% of the workforce as a whole. So, in their 150 year history, the unions have moved from being mainly guilds for skilled craftsmen to being mainly guilds for public sector professionals, with a phase in the middle when they also recruited poorer, less skilled workers."

Ironically, it’s the recruitment of low-skilled and low-paid workers where the trade unions and Labour now struggle most. Engaging and recruiting this group is made harder by all sorts of economic, demographic and cultural shifts. But we must engage them, not least because prosperity for the rest, including the squeezed middle – and success for One Nation – depends on it. Keir Hardie said that "Socialism offers a platform broad enough for all to stand upon. It makes war upon a system, not upon a class." And here’s the rub: the system, the process, is often as important as politics itself. 

Some say Falkirk is a diversion about process. Who cares about Labour’s selection procedures when 6.5m workers in Britain subsist on poverty pay? Dave Prentis of Unison said in response to Falkirk "the real issues are 2.5m unemployed, families relying on food banks, payday loan sharks, massive cuts to public services." And he’s right. The mistake is to forget that the way we do politics impacts on poverty itself; on the number of people in jobs, using food banks, at the mercy of loan sharks. 

At first glance this might seem doubtful. But I spent almost a decade representing the constituency with the highest density of poverty in Britain and I realised that participative democracy is a key weapon in fighting poverty. I saw it with my own eyes. I chaired a project to regenerate the council estate with the highest child mortality rate in Europe, and I saw that if you engage people to find solutions, they rise to the challenge. They set up fresh food co-ops. They acquire new skills. They create new jobs. They give their kids new lives. They become politically active. Many of them escape poverty. 

In a nutshell, participative democracy reaches the parts the welfare state cannot reach: it engages the mind. In time we may find that inclusive governance and active citizenship are more effective in reducing poverty than increasing the top rate of income tax. The Labour Party, of all parties, must be genuinely democratic from the roots up. That is why it is so vital that Ed Miliband presses ahead with these reforms.  

If machine politics are the death throes of the old order, the old order is nowhere near dead. It’s alive and well on the left and right of the party. I’ve seen it up close in Tower Hamlets. I saw it during the London Mayoral selection (and although it’s not the reason I lost, it’s the reason I nearly didn’t stand; yet surely we want democratic contests, not coronations). I joined the Labour Party when I was 14, and I’ve spent my entire adult life campaigning for the party I love. But here’s what I hate: I hate knowing a contest is stitched up before it’s begun.  Or that a contest is fought where resources are massively unequal.  Most people feel the same.

The challenge for politicians is to re-imagine politics so that it appeals to the many, not the very few. Ed Miliband’s audacious attempt to directly engage millions of trade union members, and to actively persuade them to "opt-in", rather than opt-out, reflects the best of Labour’s values. It’s not the easy path. His audacity would have astonished members of the House of Lords in 1909 who wanted to destroy the Labour Party. Yet the prize will be a democratically robust party, energised and fit for purpose in the 21st century. Labour’s trade union founders would be proud.

Oona King is a Labour peer and a Diversity Executive at Channel 4. She was MP for Bethnal Green and Bow from 1997 to 2005

Ed Miliband delivers his speech on the Labour-union link at The St Bride Foundation in London on 9 July. Photograph: Getty Images.
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Chuka Umunna calls for "solidarity" among Labour MPs, whoever is voted leader

The full text of shadow business secretary Chuka Umunna's speech to Policy Network on election-winning ideas for Labour's future, and the weaknesses of the New Labour project.

There has never been an easy time to be a social democrat (or “democratic socialist” as we sometimes call ourselves in Britain). Whereas the right can demonise the poor and extol the virtues of the market, and the hard left can demonise the market and extol the role of the state, our position of constraining the domination of markets and reforming the state is, by definition, more complex.

It is nonetheless the case that social democracy has a historic responsibility, in every generation, to renew democracy and preserve a civic culture. This is achieved not through soundbites and slogans, but through the hard-headed development of a progressive politics that reconciles liberty and democracy, new comers and locals to our communities, business and workers, in a common life that preserves security, prosperity and peace.  This historic mission is all the more urgent now and my determination that we succeed has grown not weakened since our election defeat last May.

But, in order to be heard, it is necessary to make balanced and reasonable argument that both animates and inspires our movement, and which is popular and plausible with the people.  The first is pre-requisite to the second; and there is no choice to be made between your party’s fundamental principles and electability. They are mutually dependent - you cannot do one without the other.

We are in the midst of choosing a new leader and it is clear to anyone who has watched the UK Labour Party leadership election this summer that amongst a significant number there is a profound rage against Third Way politics – as pursued by the likes of Bill Clinton, Tony Blair, Gerhard Schröder and others - as a rejection of our fundamental values.

In the UK there is a view that New Labour accepted an uncritical accommodation with global capital that widened inequality, weakened organised labour and we were too close to the US Republicans and too far from the European left.

I do not believe this is fair, not least because we rescued many of our public services from the scrap heap when we came to office in 1997 and there were very significant achievements  we should celebrate.  New Labour renewed our National Health Service in a fundamental way; we built new schools and improved existing ones; we set up new children’s centres all over the country; we brought in a National Minimum Wage; we worked with others to bring peace to Northern Ireland; we introduced civil partnerships.  Just some of our achievements.

However, though we may take issue with the critique, I do not think we can simply dismiss out of hand those who hold critical views of New Labour. Like any government, the New Labour administration made mistakes - it could and should have achieved more, and done more to challenge the Right’s assumptions about the world. In the end, it is not unreasonable to be ambitious for what your party in government can achieve in building greater equality, liberty, democracy and sustainability. It is far better we acknowledge, not reject, this ambition for a better world, as we seek to forge a new politics of the common good fit for the future.

Realising our values in office has been disrupted by globalisation and the surge of technological forces that are displacing and reshaping industry after industry.

Some argue that globalisation as an ideological construct of the right. But we must recognise that we live in an increasingly integrated world in which markets have led to an unprecedented participation of excluded people in prosperity, a rise in living standards for hundreds of millions  of people and a literacy unprecedented in human history – this is particularly so in emerging economies like my father’s native Nigeria. And the internet has led to a level of accountability that has disturbed elites.

Yet, this has been combined with a concentration of ownership that needs to be challenged, of a subordination of politics that requires creative rather than reactive thinking, and these global forces have exacerbated inequalities as well as helped reduce poverty.

So it is important that we understand the sheer scale and impact of new technologies. At the moment we are engaged in a debate about Uber and its threat to one of the last vestiges of vocational labour markets left in London, those of the black taxi cabs and their attainment of 'The Knowledge'. But the reality is that within the next decade there will be the emergence of driverless cars so we have to intensify our exploration of how to support people in a knowledge economy and the realities of lifelong learning, as well as lifelong teaching. As people live longer we will have to think about how to engage them constructively in work and teaching in new ways.

Once again, I'm addressing all of this, Social Democracy requires a balanced view that domesticates the destructive energy of capital while recognising its creative energy, that recognises the need for new skills rather than simply the protection of old ones. A Social Democracy that recognises that internationalism requires co-operation between states and not a zero sum game that protectionism would encourage.

Above all, Social Democratic politics must recognise the importance of place, of the resources to be found in the local through which the pressures of globalisation can be mediated and shaped. Our job is to shape the future and neither to accept it as a passive fate nor to indulge the fantasy that we can dominate it but to work with the grain of change in order to renew our tradition, recognising the creativity of the workforce, the benefits of democracy and the importance of building a common life.  Sources of value are to be found in local traditions and institutions.

This also requires a recognition that though demonstration and protest are important,; but relationships and conversations are a far more effective way of building a movement for political change.

One of the huge weaknesses of New Labour was in its reliance on mobilisation from the centre rather than organising. It therefore allowed itself to be characterised as an elite project with wide popular support but it did not build a base for its support within the party across the country, and it did not develop leaders from the communities it represented. It was strong on policy but weak on strengthening democratic politics, particularly Labour politics.

Over half a million people are now members, supporters or affiliated supporters of our party, with hundreds of thousands joining in the last few weeks. Some have joined in order to thwart the pursuit of Labour values but many more have joined to further the pursuit of those values, including lots of young people. At a time when so many are walking away from centre left parties across the Western world and many young people do not vote let alone join a party, this is surely something to celebrate.

So it is vital that we now embrace our new joiners and harness the energy they can bring to renewing Labour’s connection with the people. First, we must help as many them as possible to become doorstep activists for our politics. Second, I have long argued UK Labour should campaign and organise not only to win elections but to affect tangible change through local community campaigns. We brought Arnie Graf, the Chicago community organiser who mentored President Obama in his early years, over from the U.S. to help teach us how to community organise more effectively. We should bring Arnie back over to finish the job and help empower our new joiners to be the change they want to see in every community – we need to build on the links they have with local groups and organisations.

I mentioned at the beginning that in every generation Social Democracy is besieged from left and right but the achievements of each generation are defined by the strength of a complex political tradition that strengthens solidarity through protecting democracy and liberty, a role for the state and the market and seeks to shape the future through an inclusive politics. Solidarity is key which is why we must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office.

Yes, these are troubled times for social democrats. All over Europe there is a sense among our traditional voters that we are remote and do not share their concerns or represent their interests or values.  There is surge of support for populist right wing parties from Denmark to France, of more left wing parties in Greece and Spain and in Britain too. There is renewal of imperial politics in Russia, the murderous and abhorrent regime of ISIL in the Middle East, volatility in the Chinese economy and in Europe a flow of immigration that causes fear and anxiety.

But, the task of Social Democracy in our time is to fashion a politics of hope that can bring together divided populations around justice, peace and prosperity so that we can govern ourselves democratically. We have seen worse than this and weathered the storm. I am looking forward, with great optimism to be being part of a generation that renews our relevance and popularity in the years to come.

Chuka Umunna is the shadow business secretary and the Labour MP for Streatham.