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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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.