Who will pay for Labour's next election campaign?

Ed Miliband has now sacrificed millions in donations, as well as one of his party’s main bargaining chips, without securing any concessions in return.

At a recent private meeting at Labour’s London HQ, Ed Miliband warned party staff that his planned changes to trade union funding were a “risk” that would entail redundancies. Miliband’s plan to require union members to opt in to joining the party, rather than being automatically enrolled by general secretaries, is expected to cost Labour around £7m of the £8m it received in affiliation fees last year. Labour officials privately estimate that just 10 per cent of the current 2.7 million levypayers will choose to donate to the party, a figure confirmed by Michael Ashcroft’s recent poll of Unite members.
 
What few anticipated, though, was that the changes would hit Labour’s funds even before being introduced. On 4 September, Westminster woke to the news that the GMB, the UK’s third-largest union, plans to reduce its funding of the party from £1.2m to just £150,000. The union, which endorsed Miliband’s leadership bid in 2010, currently affiliates 420,000 of its members to the party but will reduce this number to 50,000 from January. In a terse statement, it expressed “considerable regret” at the “apparent lack of understanding” demonstrated by Miliband’s proposals and warned of “further reductions in spending on Labour Party campaigns and initiatives”.
 
More significant than the loss of funding was the timing. By pre-emptively disaffiliating 78 per cent of its members, rather than seeking to recruit more to the party, the union has cast a vote of no confidence in Miliband’s reforms. “Dream on . . . it’s fantasy land,” a GMB source declared when asked whether the union could persuade more than 12 per cent of its levy-payers to join Labour.
 
After a week in which Miliband had regained authority as the man who prevented a precipitous rush to war in Syria, the GMB’s decision reopened internal divisions over Labour’s relationship with the unions. Tom Watson, the party’s former campaign co-ordinator, who resigned in the wake of the Falkirk debacle, wrote in a blog on his website: “If this is the beginning of the end of that historic link, it is a very serious development that threatens a pillar of our democracy that has endured for over one hundred years.”
 
While Miliband speaks romantically of forging a “direct relationship” with “shopworkers, nurses, engineers, bus drivers, construction workers, people from the public and private sector”, others in the party are asking who is going to pay for the election campaign. In the second quarter of 2013, the unions were responsible for 77 per cent (£2.4m) of all major donations to Labour, with the party receiving just £354,692 in individual donations. Unless Labour can significantly widen its donor base before 2015, the concern is that the Conservatives will enjoy an even greater funding advantage than in 2010.
 
Lord Ashcroft’s largesse may not have secured the Tories a majority last time round but the party’s targeting strategy still enabled it to win 32 more seats than it would have done on a uniform swing. The hope among the Tories is that a similar approach at the next election will at least allow it to remain the largest party.
 
By promising to introduce an opt-in system, Miliband has sacrificed millions in donations, as well as one of his party’s main bargaining chips, without securing any concessions in return. After the GMB’s announcement, his judgement is once again being called into question.
 
George Eaton is the editor of the NS politics blog The Staggers 
Ed Miliband's recent speech on reforming Labour's links with trade unions. Image: Getty

George Eaton is political editor of the New Statesman.

This article first appeared in the 09 September 2013 issue of the New Statesman, Britain alone

Photo: Getty Images/AFP
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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.