Why Miliband's trade union reforms are good for the left and for democracy

If Labour is forced to compete with other progressive parties for millions in union funding, it is more likely to listen to what workers want.

It had been almost a decade since I’d last stood in Hyde Park to protest something terrible. On 20 October last year, it was bad to be back, desperately trying to stop another government ruining millions more lives, this time not with bombs but budget cuts.

Perhaps the most unusual sight that day was the leader of the Labour Party bravely taking the stage to provide, what then seemed, the first rumblings of opposition. When Miliband admitted that Labour, too, would have to implement cuts, he was loudly booed.

Today Miliband will face even louder boos as he bravely tells the TUC conference that he will press ahead with his decision to reform Labour’s link with the unions.

Another word for brave is stupid.

Miliband’s plan will do him no favours. It will lose him support from the trade unions who backed his increasingly isolated leadership, it will cost Labour millions in much-needed battle funds in the run up to what looks likely to be a closely fought general election, and it will do little to boost the party’s poll ratings among an electorate that regards Labour's internal machinations as fairly insignificant next to things like affording to eat.

But reforming Labour’s link with the unions is good for the left, both inside and outside of Labour, and, consequently, good for democracy.

The far-left has long been calling for trade unionists to break with a party that does not have their interests at heart. It is a curious irony that the link is being reformed from the Labour side, but as GMB and Unison have already moved to slash funding and party affiliations, the unions, too, are beginning to question that link.

The availability of millions of pounds of union political funds no longer being channelled into the Labour Party by default opens up space for smaller progressive parties, such as the Greens or the nascent Left Unity movement, to compete for union favour.

The Holy Grail of the left, union support, could see smaller parties wield increasing influence. But this is not just good news for those who have turned their backs on Labour. Despite their ostensibly competing priorities, a powerful movement to the left of Labour strengthens the position of the left in Labour. New Labour long ago made the tactical calculation that it could rely on its working class base no matter how far to the right it shifted. If Labour’s working class base abandons it, then the left in Labour will be able to make the case that only by reclaiming its old, progressive positions will it be able to regain the support of its base.

The reformation of the age-old link makes this ever more important. Now Labour cannot rely on some divine right to claim union support, it must compete for it by actually listening to the working class people it was founded to represent.

This, in turn, is good for democracy. For too long the main parties have fallen over themselves to trumpet the interests of big business. The concerns of multinational corporations have set the agenda, while those of the majority of British society - what Occupy might call the 99% - have gone unheard. But if Labour and other parties are forced to compete for millions in union funding, it will ensure they are at least listening to what workers want.

Miliband has done the right thing for the wrong reasons. The non-issue of Falkirk has already been forgotten, he will face a chorus of disapproval and he will cost his party millions. But he might just have inadvertently saved the left and British democracy. 

Salman Shaheen is a journalist who has written for the Times of India, New Internationalist, Liberal Conspiracy and Left Foot Forward

TUC members protest against the government's austerity measures on October 20, 2012 in London. Photograph: Getty Images.

Salman Shaheen is editor-in-chief of The World Weekly, principal speaker of Left Unity and a freelance journalist.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR