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

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Want to beat child poverty? End the freeze on working-age benefits

Freezing working-age benefits at a time of rising prices is both economically and morally unsound. 

We serve in politics to change lives. Yet for too long, many people and parts of Britain have felt ignored. Our response to Brexit must respond to their concerns and match their aspirations. By doing so, we can unite the country and build a fairer Britain.

Our future success as a country depends on making the most of all our talents. So we should begin with a simple goal – that child poverty must not be a feature of our country’s future.

The Institute for Fiscal Studies projects that relative child poverty will see the biggest increase in a generation in this Parliament. That is why it is so troubling that poverty has almost disappeared from the political agenda under David Cameron, and now Theresa May.

The last Labour Government’s record reminds us what can be achieved. Labour delivered the biggest improvement of any EU nation in lifting one million children out of poverty, transforming so many lives. Child poverty should scar our conscience as much as it does our children’s futures. So we have a duty to this generation to make progress once again.

In my Barnsley constituency, we have led a campaign bringing together Labour party members, community groups, and the local Labour Council to take action. My constituency party recently published its second child poverty report, which included contributions from across our community on addressing this challenge.

Ideas ranged from new requirements on developments for affordable housing, to expanding childcare, and the great example set by retired teachers lending their expertise to tutor local students. When more than 200 children in my constituency fall behind in language skills before they even start school, that local effort must be supported at the national level.

In order to build a consensus around renewed action, I will be introducing a private member’s bill in Parliament. It will set a new child poverty target, with requirements to regularly measure progress and report against the impact of policy choices.

I hope to work on a cross-party basis to share expertise and build pressure for action. In response, I hope that the Government will make this a priority in order to meet the Prime Minister’s commitment to make Britain a country that works for everyone.

The Autumn Statement in two months’ time is an opportunity to signal a new approach. Planned changes to tax and benefits over the next four years will take more than one pound in every ten pounds from the pockets of the poorest families. That is divisive and short-sighted, particularly with prices at the tills expected to rise.

Therefore the Chancellor should make a clear commitment to those who have been left behind by ending the freeze on working-age benefits. That would not only be morally right, but also sound economics.

It is estimated that one pound in every five pounds of public spending is associated with poverty. As well as redirecting public spending, poverty worsens the key economic challenges we face. It lowers productivity and limits spending power, which undermine the strong economy we need for the future.

Yet the human cost of child poverty is the greatest of all. When a Sure Start children’s centre is lost, it closes a door on opportunity. That is penny wise but pound foolish and it must end now.

The smarter approach is to recognise that a child’s earliest years are critical to their future life chances. The weight of expert opinion in favour of early intervention is overwhelming. So that must be our priority, because it is a smart investment for the future and it will change lives today.

This is the cause of our times. To end child poverty so that no-one is locked out of the opportunity for a better future. To stand in the way of a Government that seeks to pass by on the other side. Then to be in position to replace the Tories at the next election.

By doing so, we can answer that demand for change from people across our country. And we can provide security, opportunity, and hope to those who need it most.

That is how we can begin to build a fairer Britain.
 
 

Dan Jarvis is the Labour MP for Barnsley Central and a former Major in the Parachute Regiment.