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23 February 2011

Labour’s growing dependence on the unions

The unions were responsible for nearly 90 per cent of all donations in Q4 2010.

By George Eaton

The latest political donation figures are out and they show how financially dependent Labour has become on the trade unions. In quarter four of 2010, the party received £2,545,611 in donations (excluding public funds or “short money”), £2,231,741.90 or 88 per cent of which came from the unions, compared to 36 per cent in the final quarter of 2009. Private donations have all but collapsed since Ed Miliband became leader, with just £39,286 raised from individual donations to CLPs.

In total, the unions were responsible for 62 per cent of all Labour funding last year (up from 60 per cent in 2009), with one union, Unite, providing nearly a quarter (23 per cent) of all donations. Back in 1994, when Tony Blair became Labour leader, trade unions accounted for just a third of the party’s annual income. But, as the graph below shows, Labour’s dependence on the unions has increased hugely since he left office.

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As I’ve argued before, there is no comparison between the unions and the big-money donors the Tories rely on. For instance, donations from Unite are taken from the union’s political fund, to which 1,291,408 members contribute voluntarily. But it remains unhealthy for the party to be so reliant on only a few sources of income. Widening Labour’s funding base remains a critical challenge for Ed Miliband – one that he must now address.

NB: To those of you who think I’ve let the Tories off the hook, I refer you to my recent blog on the Conservatives’ growing financial dependence on the City. Since David Cameron became party leader, donations from the Square Mile have risen from 24.67 per cent of all donations (£2.7m) in 2005 to 50.79 per cent (£11.4m) in 2010.