Posts Tagged ‘party funding’

Ed Miliband’s speech on Tuesday was another example of why he will make a fine prime minister

11/07/2013, 07:00:26 AM

by Ian Lucas

I enjoy how much Ed Miliband is underestimated.  I am not at all surprised that Ed has taken a bold and visionary step in seeking to redefine the historic link between Labour and trade unions. After all, he has taken similar steps before.

First, Ed talked about the “squeezed middle”.  Opponents chortled at first.  But when people understood what the phrase meant, they agreed that there are indeed more and more people in Britain who are being asked to work harder, for longer hours, and are being put under severe financial pressure.  They are the ones paying the price for the cost of the world crash, whilst, for the bankers, it seems to be business as usual.

Second, Ed spoke in his Liverpool Conference Speech in 2011 about “responsible capitalism”.  Whilst some of the initial reaction from the media was negative, when the dust settled, most recognised that Ed had a point.  Our economic system is not working for the majority of people, with many paying the high cost of subsidising profits for, amongst others, international utility companies.

Next, he spoke out for the innocent, vulnerable victims of appalling media intrusion by one of the most powerful businesses in the UK, News International.  I know that many will have told him not to take on Rupert Murdoch.  After all, he was acting against the received political wisdom of the last thirty years.  This timorous approach had debased not just our politics, but our national life.  But when it needed to be said that things had to change, Ed said it.

Now, Ed has said that he wants machine politics to end – the politics that demeans us all.   And Ed has gone further.  He also wants MPs to concentrate on doing the job we are paid to do.  At a time when the Government is freezing public sector pay and private sector pay is flat, how can any MP think it is right to draw an MP’s salary from the public purse and have an income of up to £400,000 too?

Contrast these steps with the approach of David Cameron, the man who held private dinners for Tory political donors in Downing street, promised to come clean on it, and, a year later, is yet to publish the report he promised to publish.

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Why is Ed playing into the Tories hands on the union link?

10/07/2013, 06:06:30 PM

by Ian Stewart

Before I get flamed here, let me declare two interests – I am a member of both the Labour party and Unite. I am as concerned as anybody else with what may or may not have happened in Falkirk and other places, but am trying to pass comment here only upon what I know.

I believe that having a solid link between organised labour and our party is one of the great strengths we have. At its best, it means that we have to at least consider ordinary peoples’ daily lives, rather than simply what sounds good on telly.

If you were to ask most party members which legislation they would be proudest of over the past century, my guess is that after the foundation of the NHS, the list would include equal pay, anti – discrimination laws, John Wheatleys’ housing act, the wages councils, their successor the minimum wage, the dock labour scheme, the expansion of education, including the open university and health and safety at work.

It is a long list, and by no means exhaustive. What is striking is that in these cases and many others pressure for reform came not from some arid Fabian pamphlet, but from the trades unions affiliated to the Labour party. Hell, even when we had less than 100 Labour MPs back before the great war, the Liberal government passed the national insurance act, in part to head off a rising tide of militancy.

So I have watched the growing fuss over Falkirk with impotent rage. In simplest terms, those shouting loudest for my general secretary’s scalp have their own agenda. It is clear and simple to Msrs Hodges, Murphy et al – the union link must die. It is the major block to a “realignment” of the “progressive” parties in the UK, which, shorn of any link to ordinary people, could then unite and deny the Conservatives any power for a generation.

Of course, the fact that their preferred progressive partners, the Lib Dems, are in government with the Tories, and presiding over the biggest slump in living standards since 1929 may mean that this is utter tripe, but no matter. Never mind that the other parties of the centre left – the Greens, Plaid, SNP and Respect have gained votes from us by outflanking us to the left, and are looking to replace us, rather than do deals.

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How does Ed deliver his vision for union link reform? Step one, call Clegg

10/07/2013, 11:27:03 AM

by Atul Hatwal

Nick Clegg? Yes, Nick Clegg. Yesterday Ed Miliband gave a landmark speech about Labour’s relationship with the union movement, but it is Nick Clegg who will determine whether this boldest of gambles pays off for Labour’s leader.

To understand why a call to Clegg is so important, we need to be clear on the purpose of yesterday’s speech.

For all the talk of democracy and the new politics, this was only ever about dealing with the fall-out from Falkirk.  David Cameron’s recent barrage at PMQs defined the immediacy of Ed Miliband’s task: to demonstrate Labour is not in the pockets of the unions and can govern in the interests of the whole country.

Yesterday’s address was a visionary response that has the potential to transform what has been an unmitigated disaster, into defining moment for Ed Miliband.

But now comes’ the hard work. Turning aspiration into reality will be difficult and the path to success is both narrow and parlous.

Based on the details we have about the proposals, we know the arrangements for the political levy will remain the same.

Trade unionists will still contribute to their union’s political fund, unless they expressly opt out. Just as they do now.

What will change is how the political fund is distributed by the unions.

Under Ed Miliband’s plan, trade unionists will now have to “opt-in” to pay a portion of their political levy to the Labour party as an affiliation fee.

At the moment, the union leadership decide the number of members it will affiliate (for example, the GMB affiliates 400,000 of its 600,000 members) and the fees are paid in bulk, by the union, to the party.

The likelihood is that no matter how successful Labour is at encouraging union members to contribute to the party, there will be a major shortfall in affiliation fees.

Unions have estimated a potential 90% drop in affiliations. This isn’t even a particularly pessimistic assessment. Let’s not forget, the majority of trade unionists didn’t even vote Labour at the last election, let alone want to fund the party.

As the level of affiliations fall, so the portion of the union’s political fund that can be used for discretionary donations increases. The overall total in the political fund remains the same; it’s the split between affiliation fees and donations that will change.

In a scenario, where affiliation fees drop significantly, union leaders could end up with greater powers of patronage from the increased sums available for donation.

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Miliband’s moment of truth

10/07/2013, 07:00:28 AM

by Rob Marchant

The last week or so has undoubtedly set the biggest challenge of Miliband’s leadership, in the aftermath of the Falkirk selection fiasco. It is one to which he has risen.

We can dress it up how we like, but it was difficult to interpret Len McCluskey’s defiant denials – flying in the face of all kinds of inconvenient facts – as anything other an open challenge to his authority as leader.

As ever, it’s not so much what people say, it’s the subtext.

When the leader of Britain’s largest union is moved to tell us that Ed Miliband is leader of the Labour Party, you feel like saying “oh, thanks, Len, just as long as you’re sure. We’ll keep him on, then.” The damaging implication of the statement, of course, is that it might ever have been in question.

Much of the left blogosphere opted to play it down, with the best of intentions; but there is nothing that looks more obvious than a “move along, nothing to see” approach when your house is clearly on fire, and the rest of the world saw it.

Miliband, thankfully, if belatedly, also noticed his house was on fire.

He gave a dreadful, hesitant interview on Friday, where he talked about being “very clear” so often, as John Rentoul observed, that it sounded like what it was, playing for time.

But worse than that were the interventions from Harriet Harman and Owen Smith; which left you shouting “noooooo” at BBC News, because they left such a clear hostage to fortune in implying that “Falkirk was a one-off”.

But despite the poor start, yesterday confounded expectations: it was a political coup de grâce. Tory politicians and commentators were taken by surprise, and overreached in their criticisms, leaving them looking as if they had chewed on the sourest of grapes. And if you can manage to secure broad support from Tony Blair to Len McCluskey on the same day, you’ve clearly done something right.

Symbolism is something gets undervalued in life in general, probably rightly. But in politics, sometimes it’s not only desirable but essential. Clause four was all symbolism, and none the less important for that.

But this was different. The symbolism was not to make a break with the unions, something not even the most rightward-leaning party figures have any real intention of doing.

Indeed, many commentators failed to grasp that this struggle was not about right-left politics at all. The symbolism of yesterday was to make a break with the political equivalent of an abusive relationship, where power and accountability are uneven and twisted. And, as in that case, both partners need to take a step back and put it on a more healthy footing if it is to survive.

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Well done Ed, this is right for the party. Just one thing: make sure you’ve squared off the creditors

09/07/2013, 09:00:01 AM

by Atul Hatwal

This morning Ed Miliband will make a brave and genuinely bold move. Backing a change to the terms of union affiliation, so that individual trade unionists “opt in” to pay towards the party, will revolutionise the party’s relationship with union members.

It will potentially give Labour a direct link to millions of trade unionists and enable the party to focus the funding spotlight on the Tories’ dodgy big money donors.

Others’ have written about the merits of this move, suffice to say it is radical and offers the opportunity to comprehensively modernise Labour’s relations with the unions.

There’s just one thing. And it’s likely that the team at Brewers Green will have already addressed this, but just in case, before Ed Miliband gets up to speak, it’s important that the Labour party has made sure its creditors are comfortable with the changes being proposed.

Why? Because the party has long term loan financing arrangements that are secured against a stable, minimum level of future income.

A few years ago, the party did what many businesses and individuals do: it refinanced its debts. As part of this process, agreements were signed that committed the Labour party to a more manageable  schedule of repayment and debt servicing .

The creditors consented to signing these less stringent agreements because Labour promised to maintain a minimum level of income, out of which a proportion would be dedicated to debt payment and servicing.

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Ed Miliband needs a big win today and Len McLuskey should give it to him

09/07/2013, 06:30:56 AM

by Kevin Meagher

Today, Ed Miliband will set out a series of bold reforms to Labour’s relationship with its affiliated trade unions, in a bid to draw a line under the disastrous fallout from the botched Falkirk selection process.

He will propose an end to affiliation fees from the unions, switching to a system where individual trade unionists “opt in” to pay towards the party. Miliband will argue that trade unionists need to make “a more active individual choice on whether they affiliate to the Labour party”.

Fee income under the current system is said to be worth around £8 million a year to the party. The risk is that many fewer trade unionists choose to opt-in, with some estimates predicting the change could cost the party as much as £5 million in income

Miliband is also set to announce the greater use of primaries to select parliamentary candidates, especially where a local party’s membership is small. The party will also use a primary selection to choose Labour’s candidate for the London mayoralty in 2016.

There will be a new code of conduct for those seeking selection, with stricter spending limits, both on individual candidates and the trade unions and other affiliates backing them.

Miliband will say that Falkirk represented “the death throes of the old politics” and that he wants to build “a better Labour party – and build a better politics for Britain.”

Party reform is a familiar expedient for Labour leaders in opposition. Neil Kinnock’s is best remembered for driving through vital policy and organisational changes which brought Labour back from the brink. Later, John Smith took the gamble of driving through one member, one vote and curbing the union block vote.

And of course Tony Blair scrapped Clause Four of the party’s constitution back in 1995 – with its ambiguous commitment to public ownership – in a bid to “say what we mean and mean what we say.”

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John Mills, tax and dishonesty

07/06/2013, 08:41:55 AM

by Dan McCurry

On the issue of taxation abuse, we need to move on from the oversimplified distinction between legal avoidance and illegal evasion.

At the moment some avoidance has shocked people, while other avoidance, such as my tax free savings, is not an abuse. In order to sort out the difference between good and bad avoidance, I suggest people concern themselves with whether the avoidance was dishonest or not.

In the case of George Osborne’s complaint about a Labour donation, we need to ask, was John Mills dishonest in his method of avoiding tax in this donation? If he was, then Labour is in trouble, if he wasn’t then we are not. Mr Mills chose not to sell the £1.5m of shares and give the cash to Labour, as that would have been taxed as a capital gain. By giving Labour the shares, then Labour will be taxed on the dividends, but only liable to the capital gains if they are sold.

I have some of my savings in an ISA as a tax efficient method of building a pension. I can invest £11,250 per year in my ISA and this will be exempt from taxation both on the dividends and on the capital gains. The same applies to a donation I might give to charity that can be given with “Gift Aid” so that the tax paid amount is passed on to the charity. Is that dishonest? No.

This is quite different from the case of Jimmy Carr who passed his money to an Isle of Man, company who then provided him with same amount back but called it a loan. A loan isn’t taxable, so he avoided tax. Now, any sensible person would describe that as completely dishonest, but because tax law is based on a set of rules, he wasn’t prosecuted.

Criminal law is a different set of law and can take precedence if policy makers wish it to. If the authorities wished to prosecute him for fraud, they could have done so, but if they had, then they would probably have to prosecute everyone else who has done similar, and that is a prospect that can be frightening to the people who run this country.

Fraud is when someone commits a dishonest act which makes a gain for himself, or a loss to another.

The other problem that exists with tax is that countries tend to have bilateral treaties with each other.

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The latest party funding figures tell us we can’t go on like this

23/08/2012, 07:00:00 AM

by Peter Watt

I’m on holiday at the moment and have both limited internet access and limited interest in all things political.  Normal levels of political obsession will no doubt return once the holiday is over.  One thing has caught my attention though this week and I felt the need to write about it.  It’s an old favourite of mine, something I feel passionately about – party funding and the trade unions.

The Electoral Commission has published its latest quarterly report on the donations to political parties.  The first thing to note is that overall levels of donations to all political parties were down almost £1 million when compared to the first three months of the year.  The Tories were down £250,000 receiving £3.8 million whilst Labour was down £450,000 receiving just under £3 million.

So it’s clear that Labour, already receiving less than the Tories, appears to be feeling the squeeze even more. The detail of the figures goes on to show that that even more of party’s income is now derived from a single source: the trade unions.  Of all of the donations received by Labour in this reporting period more than £2 million, or about 70%, came from the Trade Unions.  And of this £2 million, Unite gave over £840,000 almost double that of the next biggest, USDAW, at £429,000.

Our opponents have once again tried to make mischief and claim that this means that 70% of our income comes from the trade unions.  This is simply not true.  As I have blogged on Labour Uncut several times before, the Labour party does not in fact receive the majority of its income from the trade unions.

In an average, non-general election year income comes roughly from the following sources:

  • £8  million in affiliation fees from trade unions;
  • £7 million from the tax payer in short money;
  • £5 million from individual membership subscriptions.

This gives a “definite” income of about £20 million per year.  In addition the Labour Party gets:

  • £2 – 5 million in donations from individuals, companies and trade unions;
  • £5 million or so from other things like commercial income, legacies and dinners.

So while the attacks of our opponents are an exaggeration, we should not pretend that they do not have a point.  Labour’s financial position remains precarious and we need to face up to it.

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Ed’s funding proposals: Nearly but not quite

16/04/2012, 07:00:55 AM

by Peter Watt

Yesterday morning Ed Miliband used his slot on the Andrew Marr show to outline some eye-catching new proposals on funding political parties.  It sounded good and it almost was, but it could end up being a disaster.

First let’s expose some myths.

The Labour party does not receive the majority of its income from the trade unions.  In an average, non-general election year, income comes roughly from the following sources:

  • £8  million in affiliation fees from trade unions;
  • £7 million from the tax payer in Short money and so on;
  • £5 million from individual membership subscriptions.

This gives a “definite” income of about £20 million per year.  In addition the Labour party gets:

  • £2 – 5 million in donations from individuals, companies and trade unions; and
  • £5 million from other things like commercial income, legacies and dinners.

This gives a potential income of £27 – £30 million per year.  Clearly in the run up to an election you would expect an increase in donations.  So Ed’s cap of £5000 per year will hurt. Under his proposal this will impact between £2 and £5 million per year and more in the year before an election.

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Time to learn from the union link in funding politics

29/03/2012, 07:18:41 PM

by Ian Stewart

Every time there is a donor scandal in British politics, Whether its Ecclestone or an oligarch’s yacht, the same old arguments for state funding rise, Lazarus-like from their tomb. No doubt since Sunday, Lib Dems have been muttering to their dwindling band of friends that all this will go away if we had a system like Germany.

It is a tempting argument, well made by Mary Ann Sieghart earlier this week in the Independent. Many inside progressive politics are no doubt swayed by its siren call. Yet like so many centrist arguments favoured by political nerds, this one has some gapng holes:

Hole 1:  Germany has had state funding since the 1950s, yet corruption and bribery still happen. The massive “Lockheed scandal” of the 1970s forced politicians and Luftwaffe Generals to resign over the purchase of the starfighter warplane. Germany now apparently requires companies to state what they have spent on buying political influence, so that they can levy a “bribes tax” (hmm… thinking about this one…)

Hole 2:  The old Soviet Bloc had state funding for its token “Opposition” parties in the GDR, Poland et al. Anyone see any good that came of that? No? Lets move on…

Hole 3: Politicians are about as popular as leprosy. Do we want more of our taxes spent on them?

Hole 4: The state is not always neutral. State funding of political parties could take away some of our independence and ability to propose radical new policies.

Hole 5: Why should a Labour supporter help fund the LibDems/Tories/UKIP/BNP/Respect… or indeed anybody else? Why should a Scottish Labour supporter fund the SNP? That’s what Brian Souter is for.

Hole 6: For Labour, it further weakens the trades union link, and Progress are in favour of it.

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