GMB head feigns innocence over £1m Labour funding cut

Paul Kenny claims he's just doing what Miliband wants but his move was an unambiguous vote of no confidence in the Labour leader's reforms.

GMB general secretary Paul Kenny chose to feign innocence when he arrived at Portcullis House for his meeting with Ed Miliband earlier today, the day after his union announced that it was cutting its affiliation fees to Labour from £1.2m to £150,000. "What's all the fuss over? All we're doing, if you like, is going towards what Ed says he wants," he remarked

But as Kenny knows, the objection is that he has pre-emptively disaffiliated 88% of the union's political levy-payers from Labour, rather than trying to persuade more to sign up once an opt-in system is introduced. It was an unambiguous vote of no confidence in Miliband's reforms.

In its statement yesterday, the GMB, the third-largest union, also warned of "further reductions in spending on Labour party campaigns and initiatives". For Labour, which relies on large one-off donations from the unions to fund its general election campaigns, it was an ominous threat. 

Privately, however, some in the party are more sanguine. They regard Kenny's move as a negotiating tactic designed to deter Miliband from reducing the unions' voting power in leadership elections and at party conferences. The GMB is not due to implement the funding cut until January, leaving Miliband wtih time to reach an agreement. But the dilemma is already becoming clear: does Miliband pursue comprehensive change and risk losing even more funding, or does he compromise and risk being accused of bottling reform? 

 

A GMB member protests outside parliament over cuts to public sector pensions. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Budget 2017: What announcements will Philip Hammond make?

What will the first budget after Brexit hold for the economy?

This spring’s Budget - set to be announced on Wednesday 8 March 2017 - will be forced to confront the implications of last June's Brexit vote, along with dealing with issues of reliance on consumer spending, business rates and government borrowing. The government also (quietly) announced on Monday night that it will be asking ministerial departments to outline cuts up to 6 per cent, a potential nod for what’s to come next week.

All these things, along with the fact the Chancellor Philip Hammond is scrapping the spring Budget, meaning this announcement should be an interesting one.

The big story at the moment focuses on borrowing. The Resolution Foundation has predicted that healthier-than-expected tax revenues and the lack of a Brexit effect so far will lower Budget borrowing forecasts by £29bn between 2015-16 and 2020-21. 

The FT reports a possible £3bn reduction in borrowing, to £67bn. They also pin this optimistic prediction to higher-than-average self-assessment tax receipts, after changes in the taxation of dividends.

The Chancellor will potentially stick to the three key changes he made from George Osborne’s former financial commitments, according to The Sun. These consist of not predicting a surplus in 2019/20, slightly relieving the cap on welfare spending and no longer committing to reducing debt. The paper also predicts he’ll announce a change to the controversial business rates that were recently released, that could leave “shopkeepers and publicans clobbered with tax hikes of up to 400 per cent".

What do we know for sure?

The government has announced a few key changes in in advance of the Budget.

  1. The Spring Budget 2017 will be the final Budget held during springtime
  2. Finance Bill will follow the Budget, as it does now
  3. From 2018 "Legislation day" will move to the summer
  4. An Autumn Budget means tax changes will be announced well in advance of the start of the tax year
  5. 2018 will see the first Spring Statement