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. He is Director of the Centre for English Identity and Politics at Winchester University

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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