Miliband's party funding sacrifice has opened the door to real reform

If Labour can hold its nerve, Miliband's plan could finally get big money out of British politics.

The GMB’s decision to slash its affiliation fees to Labour – by top-down decision rather than by asking their members – certainly might seem to support George Eaton’s fears about Ed Miliband’s proposed changes to the union link. Eaton fears the Tories and Lib Dems may even impose statutory change on us. A different view would be that Miliband has started a process which, if we can hold our nerve, could finally get 'big money' out of British politics.

Every attempt to reform party funding has been blocked by two golden rules. First, change must be agreed, not unilaterally imposed by the governing party. Labour observed this scrupulously during its long years of huge majorities. Second, no one party would weaken its own position without getting concessions from the others. Between them, Paul Kenny and Ed Miliband have torn up the second rule.  It’s this which opens the door to change.

Contrary to briefings from Nick Clegg’s office, the recent cross-party talks did not fail, let alone collapse due to Labour intransigence. Texts of a possible draft agreement on principles were still being exchanged when Clegg unilaterally ended the talks. His dishonest decision to switch attention to union funding is a political tactic which suits both the Lib Dems and the Tories. And it may well be that they will try to use the Lobbying Bill to impose changes on Labour’s relations with the unions.

But consider Labour’s current position. Labour is committed to getting big money out of politics. (So, according to the Coalition Agreement, are the Tories and the Lib Dems). Trade union money has very different origins to that of wealthy individuals but discretionary union donations must be seen as big money. Today’s events have surely driven home that union leaders are among the few hundred powerful individuals who effectively determine how much money British political parties get and what they get it for. With his recent initiative, Ed Miliband has said he wants members of union political funds to positively affirm that they want their money to go to Labour. But for over a year he has been also saying he is willing to limit discretionary donations from union general secretaries or political committees – as part of an overall agreement to limit donations from individuals, companies and unions to £5,000 per annum. In other words, Labour has a tough and credible position which really would take big money out of politics.

This leaves the Tories defending, in principle, big private donations as the best way of funding democracy. Their idea of a limit is £50,000 per annum, or £250,000 per individual every Parliament, which only goes to show that the Tory idea of what constitutes big money is completely out of touch with the average voter. And most voters find the Tories' immersion in the vested interests of private donors far more offensive than Labour’s public and historic union links. While Labour’s union link is at root political and will survive whatever the financial links, Conservative dependence on private finance goes to the core of how its supporters see power and influence operating in government. Labour should ruthlessly expose this central weakness in the Tories’ DNA.

It’s always been assumed - in the Hayden Phillips negotiations, the Kelly Report and the cross-party talks – that donations could only be capped if large sums of public money came in to compensate. The unpopularity of that idea has been the reason parties have used to keep things as they are.

We now have a chance to change that logic and campaign straight forwardly for an unconditional £5,000 donation limit. To win the politics, the risk has to be taken that we give up big money and make do with much less. This logjam has blocked reform for too long and Ed Miliband’s initiative has changed the rules of the game. Maybe the public would be more open to support finance for a functioning democracy if they first knew we were determined to wean ourselves off big money and all it represents.

Meanwhile, if the coalition do impose change on Labour they will have set aside the first golden rule – proceed by agreement. If they do, they could hardly complain if Labour campaigned on a manifesto promise to impose a £5,000 donation limit and much tighter controls on spending. 

John Denham is the Labour MP for Southampton Itchen and a former cabinet minister

Ed Miliband delivers his speech on reforming the Labour-trade union link at The St Bride Foundation in London earlier this week. Photograph: Getty Images.

John Denham was a Labour MP from 1992 to 2015, and a Secretary of State 2007 to 2010.

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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle