McCluskey's warning to Miliband: if you want Unite's money, change your policies

The Unite general secretary signalled that he would no longer tolerate those who "welcome our money but don't want our policy input".

Those who watched the webcast of Len McCluskey's speech to Unite's executive and rank and file members this lunchtime were not left disappointed. The Unite general secretary turned his guns back on Labour over the Falkirk selection row, declaring that the union had "done nothing wrong", that the party's report into the contest was a "shoddy farce" and that he would ensure that "the truth" came out. He went on to denounce the "unelected millionaires" (in this case, Lord Sainsbury) who wanted to "stuff the Parliamentary Labour Party with Oxbridge Blairites" and "the Tory media and New Labour spin doctors" who would "never understand the solidarity of working people". 

But far more significant was the clear signal that he intends to use Ed Miliband's planned reforms to the Labour-union link to maximise Unite's influence over policy and shift Labour to the left. The introduction of a new opt-in system for trade union members will cost the party millions in individual affiliation fees, leaving it even more dependent on one-off donations from unions' political funds. But rather than casually doling out the cash as in the past, McCluskey intends to extract a price. He will longer tolerate those who "welcome our money but don't want our policy input" and expects "enhanced" influence under the new system because "our voice and our votes are looked as legitimate". 

This would not mean a party "that is a pinkish shadow of the present coalition" and that "embraces the austerity agenda" but one that "offers real hope, that stands up for the poor and vulnerable, that puts growth at the heart of its agenda, that confronts privilege." McCluskey's speech was short on specifics but his wishlist has previously included a break with "austerity spending" (defined as no further cuts in public spending), the repeal of the benefit cap, a million extra houses and a £1.50 increase in the minimum wage. 

The question now is how far Miliband will go to appease McCluskey's demands (most of which are worthy of support) and how the Unite head will respond if the party falls short. It's important to remember that Miliband has called for a cap of £5,000 on all political donations precisely so trade unions and others can no longer buy influence. But with no sign of a cross-party deal in sight, he will be forced to go cap in hand to the unions unless he wants to gift the Tories an ever bigger advantage in the funding race. 

For Miliband, whose planned reforms to the Labour-union link have been spun as a move to reduce the power of the general secretaries, it is a perilous situation. If he does shift policy in line with McCluskey's wishes, he will be accused by the Tories of caving in to the Unite "baron" and of undermining his own pledge to take big money out of politics (regardless of the the obvious hypocrisy of this charge). If he doesn't, the danger is that Unite, by far Labour's biggest financial backer, will respond by curtailing its funding.

In this game of chicken, who will blink first? 

Unite general secretary Len McCluskey. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The three big mistakes the government has made in its Brexit talks

Nicola Sturgeon fears that the UK has no negotiating position at all. It's worse than she thinks. 

It’s fair to say that the first meeting of the government’s Brexit ministers and the leaders of the devolved legislatures did not go well.

Scotland’s Nicola Sturgeon told reporters outside that it had all been “deeply frustrating”, and that it was impossible for her to undermine the United Kingdom’s negotiating position as “I can’t undermine something that doesn’t exist, and at the moment it doesn’t seem to me like there is a UK negotiating strategy”.

To which cynical observers might say: she would, wouldn’t she? It’s in Sturgeon’s interest to paint the Westminster government as clueless and operating in a way that puts Scotland’s interests at risk. Maybe so, but Carwyn Jones, her Welsh opposite number, tends to strike a more conciliatory figure at these events – he’s praised both George Osborne and David Cameron in the past.

So it’s hard not to be alarmed at his statement to the press that there is still “huge uncertainty” about what the British government’s negotiating position. Even Arlene Foster, the first minister in Northern Ireland, whose party, the DUP, is seen as an increasingly reliable ally for the Conservative government, could only really volunteer that “we’re in a negotiation and we will be in a negotiation and it will be complex”.

All of which makes Jeremy Corbyn’s one-liner in the Commons today that the government is pursuing neither hard Brexit nor soft Brexit but “chaotic Brexit” ring true.

It all adds to a growing suspicion that the government’s negotiating strategy might be, as Jacqui Smith once quipped of Ed Miliband’s policy review, something of “a pregnant panda – it's been a very long time in the making and no one's quite sure if there's anything in there anyway”.

That’s not the case – but the reality is not much more comforting. The government has long believed, as Philip Hammond put when being grilled by the House of Lords on the issue:

"There's an intrinsic tension here between democratic accountability of the government and effective negotiation with a third party. Our paramount objective must be to get a good deal for Britain. I am afraid will not be achieved by spelling out our negotiating strategy."

That was echoed by Theresa May in response to Corbyn’s claim that the government has no plan for Brexit:

 “We have a plan, which is not to give out details of the negotiation as they are being negotiated”

Are Hammond and May right? Well, sort of. There is an innate tension between democratic accountability and a good deal, of course. The more is known about what the government’s red lines in negotiations, the higher the price they will have to pay to protect. That’s why, sensibly, Hammond, both as Foreign Secretary during the dying days of David Cameron’s government, and now as Chancellor, has attempted to head off public commitments about the shape of the Brexit deal.

But – and it’s a big but – the government has already shown a great deal of its hand. May made three big reveals about the government’s Brexit strategy it in her conference speech: firstly, she started the clock ticking on when Britain will definitely leave the European Union, by saying she will activate Article 50 no later than 31 March 2017. Secondly, she said that Brexit meant that Britain would control its own borders. And thirdly, she said that Brexit meant that Britain would no longer be subject to the judgements of the European Court of Justice.

The first reveal means that there is no chance that any of 27 remaining nations of the European Union will break ranks and begin informal talks before Article 50 is triggered.

The second reveal makes it clear that Britain will leave the single market, because none of the four freedoms – of goods, services, capital or people – can be negotiated away, not least because of the fear of political contagion within the EU27, as an exit deal which allowed the United Kingdom to maintain the three other freedoms while giving up the fourth would cause increased pressure from Eurosceptics in western Europe.

And the third reveal makes it equally clear that Britain will leave the customs union as there is no way you can be part of a union if you do not wish to accept its legal arbiter.

So the government has already revealed its big priorities and has therefore jacked up the price, meaning that the arguments about not revealing the government’s hand is not as strong as it ideally would be.

The other problem, though, is this: Theresa May’s Brexit objectives cannot be met without a hard Brexit, with the only question the scale of the initial shock. As I’ve written before, there is a sense that the government might be able to “pay to play”, ie, in exchange for continuing to send money to Brussels and to member states, the United Kingdom could maintain a decent standard of access to the single market.

My impression is that the mood in Brussels now makes this very tricky. The tone coming out of Conservative party conference has left goodwill in short supply, meaning that a “pay to play” deal is unlikely. But the other problem is that, by leaving so much of its objectives in the dark, Theresa May is not really laying the groundwork for a situation where she can return to Britain with an exit deal where Britain pays large sums to the European Union for a worse deal than the one it has now. (By the way, that is very much the best case scenario for what she might come back with.) Silence may make for good negotiations in Brussels – but in terms of the negotiation that may follow swiftly after in Westminster, it has entirely the opposite effect. 

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