Why Miliband should support an opt-in system for trade union donations

It would give greater legitimacy to Labour funding and force trade unions to make a positive case for supporting the party.

Ahead of Ed Miliband's speech tomorrow on the Labour-union link, one change rightly under discussion within the shadow cabinet is reforming the funding system so that members of affiliated unions are required to opt-in to paying the political levy (a portion of which goes to Labour, with the remainder spent on campaigning and other causes), rather than having to opt-out. 

At present, of the 15 unions affiliated to Labour, Unison is the only one to allow new members to choose whether or not they contribute to the party. Only two others, the Musicians’ Union and USDAW, mention the existence of a political fund (but do not mention Labour) and six affiliated unions, including Unite and the GMB, don’t mention Labour on either the "about us" or membership sections of their website. As a result, while all members have the right to opt-out of paying the levy, it is not easy for them to do so and many will not even be aware of its existence. It is this arrangement that allows the Tories to argue that unions such as Unite (just 37.5 per cent of whose members vote Labour) dupe their members into subsidising Labour.

In recent party funding talks, Labour has opposed an opt-in system, principally due to concern that it would lead to a fall in donations (the party receives around £8m a year in affiliation fees). But if Ed Miliband's support for transparency and accountability is to be consistent, it can no longer do so. (Similarly, shareholders should be required to give approval to company donations to the Conservatives and other parties.) In a post last year on Labour List defending the opt-out system, Luke Akehurst pointed out that workers could join a non-affiliated union, that they are balloted every 10 years on whether to maintain a political fund and that they can bring disaffiliation motions to their union conferences. All of which is true, but hardly represents a model of transparency. 

But as well as right in principle, an opt-in system would have political benefits for Labour. It would make it easier to justify exempting union affiliation fees from the £5,000 cap on donations proposed by Miliband on the grounds that they should be treated as an aggregate of individual members' contributions, rather than as one lump sum, removing one of the stumbling blocks to cross-party agreement. As a Labour source told me: "It would allow us to frame the Tories as the party of big money and us as the party of millions of working people." 

Requiring trade unionists to opt-in would also force unions to make a more explicit and positive case for supporting Labour, with the possibility of greater engagement with the party. In the 2010 leadership election, turnout among trade unionists was just 9 per cent, with 15 per cent of ballots spoilt, in most cases because workers failed to state that they agreed with "the aims and values" of the party. Partly for this reason, another reform under consideration is to make those who pay the political levy full members of the party, rather than merely affiliated ones. At a stroke, this would dramatically increase Labour's total membership (around three million pay the political levy) and would make it impossible for the Tories to dismiss trade unionists as the plaything of the union "barons". It would be a logical continuation of the "one member, one vote" reforms introduced by John Smith in 1993. 

After the worst week of his leadership since 2010, Miliband needs to recast the relationship between the unions and the party and redefine the terms of debate in Labour's favour. These two reforms would be a good place to start. 

Ed Miliband addresses TUC members in Hyde Park at the end of a march in protest against the government's austerity measures. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Richmond is a wake-up call for Labour's Brexit strategy

No one made Labour stand in Richmond Park. 

Oh, Labour Party. There was a way through.

No one made you stand in Richmond Park. You could have "struck a blow against the government", you could have shared the Lib Dem success. Instead, you lost both your dignity and your deposit. And to cap it all (Christian Wolmar, take a bow) you self-nominated for a Nobel Prize for Mansplaining.

It’s like the party strategist is locked in the bowels of HQ, endlessly looping in reverse Olivia Newton John’s "Making a Good Thing Better".

And no one can think that today marks the end of the party’s problems on Brexit.

But the thing is: there’s no need to Labour on. You can fix it.

Set the government some tests. Table some amendments: “The government shall negotiate having regard to…”

  • What would be good for our economy (boost investment, trade and jobs).
  • What would enhance fairness (help individuals and communities who have missed out over the last decades).
  • What would deliver sovereignty (magnify our democratic control over our destiny).
  • What would improve finances (what Brexit makes us better off, individually and collectively). 

And say that, if the government does not meet those tests, the Labour party will not support the Article 50 deal. You’ll take some pain today – but no matter, the general election is not for years. And if the tests are well crafted they will be easy to defend.

Then wait for the negotiations to conclude. If in 2019, Boris Johnson returns bearing cake for all, if the tests are achieved, Labour will, and rightly, support the government’s Brexit deal. There will be no second referendum. And MPs in Leave voting constituencies will bear no Brexit penalty at the polls.

But if he returns with thin gruel? If the economy has tanked, if inflation is rising and living standards have slumped, and the deficit has ballooned – what then? The only winners will be door manufacturers. Across the country they will be hard at work replacing those kicked down at constituency offices by voters demanding a fix. Labour will be joined in rejecting the deal from all across the floor: Labour will have shown the way.

Because the party reads the electorate today as wanting Brexit, it concludes it must deliver it. But, even for those who think a politician’s job is to channel the electorate, this thinking discloses an error in logic. The task is not to read the political dynamic of today. It is to position itself for the dynamic when it matters - at the next general election

And by setting some economic tests for a good Brexit, Labour can buy an option on that for free.

An earlier version of this argument appeared on Jolyon Maugham's blog Waiting For Tax.

Jolyon Maugham is a barrister who advised Ed Miliband on tax policy. He blogs at Waiting for Tax, and writes for the NS on tax and legal issues.