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Donations, insinuations and tactical votes

Labour's increasing dependency on trade union donations may yet become a campaign issue

The Conservatives' advertising blitz is unlikely to be matched by Labour, not least because of the parlous state of the ruling party's finances. The Tories are thought to have built up a £25m war chest to fight the coming election but Labour is expected to raise only between £8m and £10m. David Blunkett, the chair of Labour's election development board, admitted: "We are trying to be careful so we don't end up bankrupt after the election if this all goes pear-shaped."

As donations from the rich have dried up, the party has become increasingly dependent on trade union money (see graph). In the first nine months of 2009, trade unions accounted for 77 per cent of the total £10.3m in donations to Labour, up from 54 per cent in 2008. Back in 1994, when Tony Blair became Labour leader, trade unions accounted for just a third of the party's annual income.

george graph

The Tories have threatened to turn Labour's reliance on the unions into a campaign issue: the Conservative chairman, Eric Pickles, recently declared that Gordon Brown's dependence on the "union barons" had left him "utterly incapable of making the right decisions for the country". Labour is likely to retaliate by attacking the billionaire Tory donor Lord Ashcroft over his tax status. Jack Straw gave a first glimpse of this strategy when he accused the Tories of attempting to "buy the next general election".

Meanwhile, the unions may begin to question whether they are getting value for money. The tightest squeeze on public spending since the 1970s and a cap on public-sector pay rises may lead members to challenge union heads over donations.

Then again, the unions' financial clout may afford them a central role in a future Labour leadership election. Whether in power or not, Labour is likely to look to the unions to help pay off debts estimated at £11.5m.

After the gloom of Copenhagen, Green activists were cheered by a poll showing that their leader, Caroline Lucas, is on course to become the party's first MP. An ICM poll of voters in Brighton Pavilion put the Greens on 35 per cent, 10 points ahead of Labour and 8 points ahead of the Tories. Lucas requires a 7 per cent swing from Labour to take the seat. Many have predicted that the next election will bring the death of anti-Tory tactical voting but the poll suggests Labour and Liberal Democrat supporters are prepared to vote Green to keep the Tories out. Almost two-thirds (63 per cent) of Labour and Lib Dem voters in the sample said they would be likely to switch their vote to prevent a Conservative victory. In 2005, the Green candidate, Keith Taylor, won 22 per cent of the vote, finishing third behind the Tories and Labour.

The possibility of a March election has kept the media occupied for weeks. But after Gordon Brown told Andrew Marr, "I believe there'll be a Budget this spring," most reported that the Prime Minister had suggested that a March poll was unlikely. In fact, a spring Budget would guarantee that a March election could not be held.

A law passed by Labour in 1998 states that there must be at least three months between the pre-Budget report (PBR) and the Budget. With the PBR delivered on 9 December, the earliest possible date for this year's Budget is 9 March. That's after the last possible date - 1 March - on which Brown could call a March election. Labour strategists are likely to have advised Brown to go to the country on 6 May - the same day as the local elections - in the hope that this will maximise Labour's turnout.

George Eaton is senior online editor of the New Statesman.

This article first appeared in the 11 January 2010 issue of the New Statesman, Obama: the year of living dangerously