Labour gears up for fight over funding
Labour MPs unhappy with reports of funding review
Wednesday, 13, Dec 2006 12:00
Labour party figures have today reacted angrily to reports that a government-commissioned review of party funding will cut their links with trade unions.
Reports suggest Hayden Phillips will recommend a cap on individual donations to political parties of £50,000, phased in over four years, when he publishes his final proposals.
This would mean the millions of pounds donated to the Labour party each year from trade unions would be no longer legal. Instead, individual union members would each have to give their permission for their £3 levy to be given as a donation.
Today Jeremy Beecham, the former head of the Local Government Association (LGA) and a member of Labour's national executive committee (NEC), said the reports were "outrageous" and amounted to state interference in how political parties work.
Labour leadership candidate John McDonnell also condemned the plans, telling BBC Two's Daily Politics that the Hayden Phillips review was being used for "political purposes" by people who wanted to break the union link with Labour.
The party's trade union MPs were reportedly told in a meeting on Monday night that Tony Blair would back the £50,000 cap, despite its threat to the party's traditional structure, and Mr McDonnell said the news prompted "absolute fury".
An emergency meeting of the NEC is being held tomorrow, with the question of party funding top of the agenda.
Hayden Phillips began his review at Mr Blair's request in the wake of the cash for honours row, where the main parties were accused of offering wealthy businessmen peerages in return for loans. All those involved deny wrongdoing.
In their submissions, the Conservatives called for a cap on individual donations to political parties, but Labour rejected this and instead called for caps on campaign spending throughout the year, rather than simply in a run-up to an election as now.
These proposals reflect the traditional funding arrangements of both parties – the Tories have long relied on donations from numerous wealthy individuals, while Labour gets much of its funding from the trade unions.
During his monthly press conference yesterday, Mr Blair refused to comment on the party funding review, but his support for a £50,000 cap would not be unexpected given his efforts to cut the power of the trade unions during his time as Labour leader.
Housing minister Yvette Cooper told the Daily Politics today that Hayden Phillips must recognise the "historical tradition" of Labour and its affiliated organisations, and said there was likely to be "strong hostility" to any attempt to change that.
However, former Conservative chancellor Ken Clarke said: "I actually think the vast majority of members of the Labour party would quite like to see the party to stop being dependent on these millions from the trade unions, what is left of the trade union movement, that keeps trying to use that as political leverage which they do not want."