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For the third time in the last 10 years, the issue of Party funding is centre stage. In the wake of the scandal that has erupted around the question of “cash for peerages”, there is a demand that politics rids itself of those seeking undue influence through financial donations. The Government has acted, setting up the Hayden Philips Commission to seek a consensus between political parties on the future of party funding.
Of course it was not going to be long before our opponents began to focus upon the relationship of the trade unions with the Labour Party. Despite the recognition of the relationship by the Neill Commission (1998) and the Electoral Commission (2004), there are those who persist in believing that the union – party link is improper.
The relationship between the party and the unions is far more than financial – it is based on shared values and beliefs. Let us not forget that it was the trade unions that established the Labour Party in 1900 to seek the better representation of working people in Parliament. Only through the funding of trade unions was the infant Labour party able to take on the established wealth and power of the Conservative and Liberal Parties.
Those who believe that the trade unions are funding the Labour Party to obtain influence would do well to remember that the Labour Party spent less than 25 years in Government during the 20th Century. If the link were merely a financial relationship in the cynical pursuit of power, the trade unions would have deserted the Party long ago.
A hundred years on, Labour remains unique in British politics as a party that is made up of both individuals and organisations. Individual party members belong to Constituency Labour Parties (CLPs), while the affiliated organisations include trade unions, socialist societies and political parties such as the Co-operative Party. The structures of the Labour party reflect this constitution - the National Executive Committee, the National Policy Forum, and Party Conference have separate affiliate and constituency sections to ensure that all are represented in our movement.
One of the criticisms that has been levelled at the trade unions is that they are unrepresentative – that they are controlled by union ‘barons’ who exercise power without accountability. This is nonsense. The trade unions are intrinsically democratic organisations – their conferences decide the policy of the union, and the trade union delegations to Labour Party Conference make decisions based on the policies of their union. This is the very collective essence of trade unionism – it delivers one message but behind that message are the voices of thousands of members, and that is what makes our movement strong.
The comparison between Labour and our Tory opponents must be made. The Conservative Party is funded by the wealthiest in our society – despite having less than 200 seats they currently receive three times as many individual donations as Labour, and twice as many corporate donations. Even at the constituency level they are formidable fundraisers – there are 271 Conservative Associations raising a collective £17 million a year. Despite our best efforts, the 27 richest Labour associations are raising just over £1 million a year. If you wish to understand the fundamental inequality of power between the richest and poorest in our society, it is writ large in party funding.
In response to the current debate, the Tories have made proposals that shatter the mask of reasonableness that David Cameron is so careful to present, proposing a £50,000 donation cap per individual or organisation. Such a proposal would effectively mean an end to the process of affiliation, removing millions of trade unionists from the Labour Party. Never before have the Tories made such a direct attempt to break the relationship between the trade unions and the labour party. We must resist this highly cynical and partisan assault on our party.
We should also contrast the differences between the democratic affiliation of trade unions to the Labour Party, and the undemocratic nature of the Conservative Party – and nowhere is it easier to see this in the debate about Party Funding. One reason that the Tories have been able to make such proposals is that their party is undemocratic to its core. Who approved these proposals? Does the rest of the Tory party agree with them?
On the other hand, the Labour Party is embarked upon a democratic process which will invite all affiliates, constituency parties, and socialist societies to have their input into a party process that will deliver a united position on the future of our party’s funding.
Perhaps Hayden Philips should consider a new proposal – to make any additional funding only available to democratic parties. It would be very interesting to hear how the Conservative Party considers itself to be democratic in any shape or form.
The financial regimes of the parties are very different – the blunt tool of a symmetrical donation cap will simply advantage the Tories as they will receive many more donations than us. Suggestions that the trade unions can act as the conduit for many individual donations are simply inoperable – the time and resources required to gain individual consent for each and every donation would be massively debilitating, worse than anything introduced by the Thatcher Governments.
So what is the way forward for our party? How can we defend our movement whilst ensuring that rich individuals do not wield undue influence on our political process? Perhaps the best way forward is a voluntary solution.
Let us prove to the British people that, as a party, we are capable of acting in an adult manner and are not so weak that we require legislation to force us to manage our internal affairs properly. One possible solution might be for the Party to set its own donation caps for individuals, determine our own methods of affiliation, and invite the Electoral Commission to police our regime effectively. Combined with a proposal to reduce spending limits, we can then talk properly with the Hayden Philips Commission about an increase in state funding to replace the loans and donations from rich individuals that have so damaged us.
TULO has produced a pamphlet on Party Funding, covering these issues in greater detail. You can download a copy by clicking here or call 0207 783 1530 to have a copy sent to you.
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