McCluskey shows how Miliband's reforms will increase his bargaining power

With Labour more reliant on large one-off donations from unions, the Unite general secretary is in a stronger position to push for policy changes.

Ed Miliband's decision to introduce a new opt-in system for donations to Labour from members of affiliated trade unions was spun as a move to reduce the power of union general secretaries but in his interview in today's Guardian, Len McCluskey shows why it could achieve the reverse. 

With the party likely to lose around 90% of the £8m it currently receives in affiliation fees (Miliband aims to recruit 300,000 of the 3 million political levy payers to Labour), it will likely fall to unions like Unite to make up the shortfall through separate donations from their political funds (which are unaffected by Miliband's plan). And this, as McCluskey signals, has increased his bargaining power. He tells the Guardian that he is not "looking to bankrupt the party" but adds that future funding will depend on "the policies Labour themselves are adopting, and in the context of whether we would give donations that would be determined by my executive and my political committees. It is a collective decision". His wishlist includes the repeal of the bedroom tax, a rejection of the benefit cap, a break with "austerity spending", 1m extra homes and a £1.50 increase in the minimum wage.

Depending on your political persuasion, McCluskey's increased power may be viewed as no bad thing (all of the policies I listed above are ones Labour should support) but it leaves Miliband vulnerable to the Conservative charge that his party is more dependent on the "union barons" than ever and undermines his pledge to take big money out of politics.

It's for this reason that the Labour leader desperately needs a deal on party funding reform. His proposed donation cap of £5,000 would apply to unions as well as individuals, eliminating any danger that McCluskey and others could hold the party to ransom. But while Miliband has removed one obstacle to a deal by promising to introduce an opt-in system, the Tories and the Lib Dems want him to go much further. As Nick Clegg outlined following Miliband's speech, he would like the political levy to be reformed so that union members are given the choice to donate to other parties. After all, as McCluskey concedes in the interview, Unite's own internal polling demonstrates that "a large chunk" of his members vote for parties other than Labour (the union's June 2013 political report stated "We can estimate that around 35-40% of our members voted Labour at the last election, with around 50-55% voting.")

Whether Miliband is prepared to go this far, at least without significant concessions from the coalition parties, remains unclear, but without a deal he could face an unpalatable choice between "bankruptcy" or another trade union bail-out. 

Unite general secretary Len McCluskey. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Theresa May defies the right by maintaining 0.7% aid pledge

The Prime Minister offers rare continuity with David Cameron but vows to re-examine how the money is spent. 

From the moment Theresa May became Prime Minister, there was speculation that she would abandon the UK's 0.7 per cent aid pledge. She appointed Priti Patel, a previous opponent of the target, as International Development Secretary and repeatedly refused to extend the commitment beyond this parliament. When an early general election was called, the assumption was that 0.7 per cent would not make the manifesto.

But at a campaign event in her Maidenhead constituency, May announced that it would. "Let’s be clear – the 0.7 per cent commitment remains, and will remain," she said in response to a question from the Daily Telegraph's Kate McCann. But she added: "What we need to do, though, is to look at how that money will be spent, and make sure that we are able to spend that money in the most effective way." May has left open the possibility that the UK could abandon the OECD definition of aid and potentially reclassify defence spending for this purpose.

Yet by maintaining the 0.7 per cent pledge, May has faced down her party's right and title such as the Sun and the Daily Mail. On grammar schools, climate change and Brexit, Tory MPs have cheered the Prime Minister's stances but she has now upheld a key component of David Cameron's legacy. George Osborne was one of the first to praise May's decision, tweeting: "Recommitment to 0.7% aid target very welcome. Morally right, strengthens UK influence & was key to creating modern compassionate Conservatives".

A Conservative aide told me that the announcement reflected May's personal commitment to international development, pointing to her recent speech to International Development staff. 

But another Cameron-era target - the state pension "triple lock" - appears less secure. Asked whether the government would continue to raise pensions every year, May pointed to the Tories' record, rather than making any future commitment. The triple lock, which ensures pensions rise in line with average earnings, CPI inflation or by 2.5 per cent (whichever is highest), has long been regarded by some Conservatives as unaffordable. 

Meanwhile, Philip Hammond has hinted that the Tories' "tax lock", which bars increases in income tax, VAT and National Insurance, could be similarly dropped. He said: "I’m a Conservative. I have no ideological desire to to raise taxes. But we need to manage the economy sensibly and sustainably. We need to get the fiscal accounts back into shape.

"It was self evidently clear that the commitments that were made in the 2015 manifesto did and do today constrain the ability to manage the economy flexibly."

May's short speech to workers at a GlaxoSmithKline factory was most notable for her emphasis that "the result is not certain" (the same message delivered by Jeremy Corbyn yesterday). As I reported on Wednesday, the Tories fear that the belief that Labour cannot win could reduce their lead as voters conclude there is no need to turn out. 

George Eaton is political editor of the New Statesman.

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