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.

New Statesman
Ed Miliband's recent speech on reforming Labour's links with trade unions. Image: Getty
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