The unions say no to Miliband's funding plan. What next?

Labour suggests it will not impose the reform by changing the law with the Tories, but if the unions resist that may be the only option.

Ed Miliband's suggestion that trade unions should be required to ask their members whether they wish to donate to Labour hasn't gone down well with those who lead them. After Unite's Len McCluskey pre-emptively rejected the reform in an article for the Guardian, CWU general secretary Billy Hayes denounced Miliband on the Today programme, accusing him of "dog whistle politics". He noted that the opt-in system proposed by Miliband was a "very old fashioned idea" introduced by Tory prime minister Stanley Baldwin under the 1927 Trade Disputes and Trade Unions Act, which the 1945 Labour government repealed. In his Guardian piece, McCluskey wrote that it would "require Labour to unite with the Tories to change the law, would debilitate unions' ability to speak for our members and would further undermine unions' status as voluntary, and self-governing, organisations."

The question now is how Miliband will respond. The party is briefing that it will not impose the new system through a change in the law, with the expectation being that the unions will introduce it voluntarily. But as Hayes and McCluskey's words show, it will have trouble persuading them to do so. CCHQ has gleefully responded by describing the opt-in proposal as "dead in the water", noting that "He [Miliband] admitted that Labour wouldn't force it on the unions-but McCluskey has already said no."

Intriguingly, however, Miliband's PPS Jonathan Reynolds has just told Sky News that McCluskey is a "little bit more supportive than that quote might suggest". He had better be right. If Miliband fails to reach agreement with the unions and then recoils from changing the law with the Tories, his epitaph will be "weak". 

Unite general secretary Len McCluskey. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.