Exclusive: Miliband's donation cap will be £5,000

A Labour source says the party's proposed cap on donations from all sources will be set at the lower level of £5,000, not £10,000.

One notable omission from Ed Miliband's speech yesterday was any indication of what level he believes a donation cap should be set at. Miliband had previously used a figure of £5,000 but yesterday a figure of £10,000 was being widely quoted. However, I'm now told by a source close to the Labour leader that the proposed cap will indeed be £5,000. 

The cap would apply to donations from individuals, businesses and, crucially, trade unions. One criticism made of Miliband's plans by the FT's Jim Pickard (and swiftly picked up by the Tories) is that they would actually hand more power and influence to the union general secretaries. While members will have to opt-in to contribute to Labour, they will still automatically pay the political levy, which funds unions' campaigning activites and large one-off donations to Labour at election time. The charge made by the Tories is that Labour could make up for the short-fall in funding caused by the introduction of an opt-in system (the party expects to lose around £5m of the £8m it currently receives in affiliation fees) by simply receiving more in large donations from union leaders. But this ignores Miliband's pledge that any cap will also affect them. 

Despite this promise, and Labour's decision to abandon its opposition to an opt-in system (a major stumbling block in previous negotiations), a deal on party funding still seems unlikely before the election. The Tories and the Lib Dems are demanding that union members should also be required to opt-in to the political levy, a reform that would require a change in the law and that Miliband has ruled out. In response, of course, he will able to frame the Tories' opposition to a low cap on donations as entirely self-interested. As he writes in today's Daily Mirror, "When we had a problem in one of our constituencies, we acted swiftly and thoroughly. A year ago David Cameron faced the dinners for donors scandal where wealthy Tory backers were given access to Downing Street in return for huge sums. He still has done nothing about this. His party still relies on getting half its money from the bankers and the City. We cannot go on like this."

Ed Miliband with Labour's PPC for Birmingham and Yardley Jess Phillips before his speech at The St Bride Foundation in London yesterday. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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