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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.

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.

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.