How the Miliband reforms may give even more power to the unions
It has taken 24 hours to work it out, and I warn you: It’s complicated. It’s head-scratching stuff.
But if you are wondering why Len McCluskey seems so relaxed about Miliband’s reforms of the link between Labour and the unions, here is the answer. The change could shift millions of pounds of money away from the party and into the hands of the union barons.
That is so at odds with the TV headlines – suggesting a dilution of union power – that it might seem unbelievable. After all, the changes have been cast as an historic break with the union stranglehold: even by persistent critics such as Dan Hodges.
The Labour leader was praised by his predecessor Tony Blair as he used a Fleet Street speech to offer an “historic” overhaul of his party’s relationship with the trade unions which provide the majority of its private funding.
Blair responded fast, saying the “bold” plan – ending the automatic affiliation fee paid by 3m union members to Labour – was something that he had never dared to attempt. But had he read the small print?
Miliband, by changing to an “opt in” system, hopes to increase party membership and get the contact details of Labour-supporting union members for the first time.
But the reason union leaders seem relaxed (with the exeption of the GMB’s Paul Kenny) is because they have noticed that the total amount of money paid by 3m members to their unions’ “political funds” would not change.
Although less money may go directly to Labour it will instead be available for union leaders to distribute on an ad hoc basis – for example on anti-coalition campaigns. Or, as donations to….Labour. For example just before a general election.
Len McCluskey, general secretary of Unite, said he welcomed the change.
“He seemed to be saying to me that he wanted to see tens of thousands, maybe hundreds of thousands of ordinary trade unionists playing an active role within the Labour party,” he said. “Now, that’s something I very much welcome.”
A Tory source said “no wonder McCluskey is smiling” given Unite would maintain major influence. “All these reforms have done is increase his power base and one of his allies is now in charge of this so-called independent inquiry.”
Here is the explanation in more detail:
Miliband’s high-profile reforms are less risky than they may appear at first sight because the total amount of “political” money being paid by three million union members will not be reduced.
Currently members pay money into their union’s political fund, with a small proportion of this – typically £3 a year – earmarked for Labour as an affiliation fee. The money is paid unless they actively “opt out” and is worth a total £8m a year for the party.
Under the reforms members would for the first time have to “opt in” to pay the affiliation fee, meaning Labour could lose millions of pounds it currently receives directly.
Yet the overall political fund would maintain an “opt-out” system, meaning unions would still receive the same amounts of money – while passing less of it on to Labour.
That means the unions will have extra millions which can be used by unions for policy campaigning and – crucially – for big donations to Labour, for example at election time.
That will make it even more important for Labour MPs to keep the union general secretaries on side; the opposite of what you might have believed.
The reforms which the union leaders fear – to dilute their power over conference votes and leadership elections – were only vaguely hinted at by Miliband.
At present the unions have a half of votes at annual conference and a third of those for leadership contests. Miliband said merely that this would be considered in the Ray Collins review.
It is political genius. Labour gets the positive headlines overnight and into today. By the time anyone reads the gruelling explanation for why the reform does not hurt the unions at all - I’m impressed that you made it so far – Miliband will have achieved what he set out to do: Bury the Falkirk scandal and get back on the front foot.
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