Labour's Special Conference has just voted in favour of Ed Miliband's party reforms by an overwhelming majority: 86.29% to 13.71%. Party affiliates (trade unions and socialist societies) voted in favour by 48.42% to 1.58% and constituency party delegates by 37.87% to 12.13% (some London CLPs, in particular, were angered by the decision to use a closed primary to select Labour's London mayoral candidate). Given the concern that the changes initially provoked, on the left and the right of the party, the result is no small achievement. Shrewd party management by Miliband, Ray Collins (who led the review) and Simon Fletcher (Miliband's trade union liaison manager) ensured that this wasn't the bloodbath that the media wanted.
But for Labour, as Miliband knows, the really hard work begins now. The party's future financial health now depends on its ability to persuade trade union levy payers to opt into donating (their affiliation fees are currently automatically transferred by union general secretaries). If Miliband is to achieve his stated ambition to build a "movement" and to revitalise Labour, he will also need thousands of workers to choose to become associate members.
The other challenge will be managing relations between the party and the union general secretaries. As early as Wednesday, when Unite's executive meets, Len McCluskey is expected to announce that the party's largest donor is reducing its affiliation fees to Labour by £1.5m to reflect the fact that almost half of its levy payers do not support the party. With the GMB, Labour's third largest union affiliate, already having cut its funding by £1.05m, the changes could have cost the party £2.55m by next week. In total, Labour sources estimate that the reforms will cost it at least £4m (if half of the current 2.7 million levy-payers opt-in) and as much as £7m (if 10 per cent do).
The hope and expectation among Labour figures is that the unions will make up the shortfall through one-off donations (which are not affected by the reforms) to ensure that the party is in fighting shape for the general election. With only a minority of levy payers like to opt-in, the unions will be left with a surplus in their political funds. But the complication for Labour is that theysare unlikely to hand this money over without demanding something in return.
As McCluskey said in his speech to Unite following Miliband's announcement of the changes last summer, he will no longer tolerate those who "welcome our money but don't want our policy input" and expects Unite to have "enhanced" influence under the new system because "our voice and our votes are looked at as legitimate". On another occasion, he told the Guardian that while he was not "looking to bankrupt the party", future funding would depend on "the policies Labour themselves are adopting, and in the context of whether we would give donations that would be determined by my executive and my political committees. It is a collective decision".
McCluskey's policy wishlist includes an end to public spending cuts, the repeal of the benefit cap, and the building of a million extra homes. The challenge for Miliband will be adopting policies radical enough to appease the unions while also ensuring Labour sticks to its tough deficit reduction targets. Far greater battles than today lie ahead.
Here's the speech Miliband delivered after the result was announced by Angela Eagle, the shadow leader of the House of Commons and the chair of the NEC:
Well friends, first of all, thank you.
You know, I took a big risk last July but I did it because I believed, and I believe today that we can only face up to the big challenges that our country faces if we face up to the challenges in our party.
That is what we have done today and we should all be proud of the Labour party that has shown the courage to change.
I just want to say one thing very directly to the country.
Some of you left us at the last general election.
Some of you thought we lost touch.
You were right.
These changes agreed today are designed to ensure that this party never loses touch again with the British people.
And now, the vote to change our party has been won.
The fight to change our country is just beginning.
So let’s go out and fight for the young people who need a job.
Let’s go out and fight for disabled people paying the bedroom tax today in our country.
Let’s go out and fight for all the low paid workers facing a cost of living crisis.
Let’s go out and fight for those families who need better childcare.
Let’s go out and fight for the small businesses people who need someone on their side.
And let’s go out and fight for the future of our National Health Service.
Above all, let’s go out and fight with every fibre of our being for the future of this country.
It’s in our hands.
We know Britain can be better than this.
Let’s go out and prove it.
Let’s go out and win.