Unions — the financial hand in Labour’s glove

It’s no surprise that union contributions help to keep the Labour Party afloat, but … have you seen the graph by the Electoral Commission via The Spectator?

Strong stuff, at any time of day. Unfortunately, I’m unable to copy it, so have a look at the aforementioned link.

Between 2009 and 2012, unions have been Labour’s main source of donations. In 2012, out of a total of approximately £12m from their top four donor groups, trade unions gave the party nearly £9m!

Individuals are the next largest tranche, however, by comparison, their contributions that same year amounted to a paltry £1.3m.

The Spectator says that Labour received an overall total — from unions, individuals and so on combined — of £19m. A reader, AnotherDaveB, broke down the Electoral Commission’s figures as follows:

Labour 2012 (central party)
Membership: £5,500,000
Donations: £5,200,000
Fundraising: £650,000
Commercial activities: £3,400,000
Grant Income: £6,650,000
Affiliations: £7,900,000 (unions?)
Miscellaneous income: £3,500,000


Of the other two main parties, the article says:

For comparison, the Conservative party received £14 million in 2012 and the Liberal Democrats £3 million.

Yet, despite Labour’s largesse, they are actually in debt! Well, that probably doesn’t come as much of a surprise, either.

The author of The Spectator piece, Sebastian Payne, explains:

3. Is Labour in debt?
Yes. Untangling the statement of accounts for any party is tricky but from the last quarterly report in March 2013, the Electoral Commission informs me the party has outstanding loans of just under £10 million. Their loans have remained around the £9.8 million mark since September 2012.

However in April 2013, two new loans were taken out, worth £1,217,500 each, from the Co-op and Unity Trust bank. This brings the total to £12.8 million. With these loans on their book, the possibility of the changes to how Labour is funded leaving the party going bankrupt, as Len McCluskey has suggested, does not look entirely implausible.

So, the party with the most donations by far could go bankrupt? Anyone considering voting for them must have rocks in his head.

The Len McCluskey article is behind the Times paywall, but Payne also points us to the September 9 Financial Times‘s ‘Your cut-out-and-keep-guide to the Labour union reforms’ by Jim Pickard.

There we discover the following (more at the link):

The unions seem very angry at Ed Miliband’s proposed funding reforms. Why would Labour want to alienate its comrades?

Ed Miliband won the leadership as a direct result of the votes of union members, heavily encouraged by their general secretaries. Proving that he is not “Red Ed” is seen by some aides as a tactical necessity.

But at what cost? Chuka Umunna, shadow business secretary, said on Monday that there would be a “financial hit”.

Yes in theory. Some £8m is at stake. For complex reasons that money could still come sloshing back to Labour – albeit through a different route. But it suits everyone involved to pretend that the cash will be lost.

So how would the changes work?

The affiliation fee paid by about 3m union members would no longer automatically go to Labour. It would only be paid by those who decided to “opt in” and in effect sign up to the party. Labour would then get access to data about these individuals for the first time.

Presumably most members won’t bother to join Labour? Thus the financial calamity?

There would be a big fall in “affiliation” money, for sure. The question which most pundits haven’t asked is where the cash will go instead. Members will not stop paying the money. Instead the payment – usually around £3 out of an annual political levy of £6 or £8 – will now go to the unions’ political funds instead.

And what will the unions do with the extra cash?

They can use it for one of their generic “issue” campaigns, for example in favour of the Living Wage or against hospital closures. But they can also simply give it back to Labour in big slugs of donation. The unions will continue to give millions of pounds to Labour – aside from affiliation fees – in this way.

That sounds like the unions could end up with even more financial power over Labour?

Correct. The Labour leadership would have to be even more polite to the brothers. General secretaries could threaten to follow the likes of the RMT and PCS and disaffiliate from Labour if Miliband refuses to do what he is told. The GMB, for example, is calling on him to promise to legislate against companies that prevent unionised workplaces.

So, despite ‘reforms’, Labour is still spinning half-truths (and raking in cash). Yes, there could be reforms, but the trade unions will still be funnelling the party money and be more powerful than before.

Unions — the financial hand in the Labour glove. Suits you, Ed.

2 comments for “Unions — the financial hand in Labour’s glove

  1. Ed P
    September 25, 2013 at 11:50 pm

    Like Ed Milli, I’m speechless. They get £5M more than Dave’s Con-Lite shambles, yet still have no clue. Thus proving you cannot trust socialists to manage anything.

    • September 26, 2013 at 11:42 pm

      Precisely! All the more reason to be cautious with the 2015 vote.

      I find it interesting they are referring to ‘writing a blank cheque’ so often. (shudder) It must be in their blood. 😉

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