Unions warn against Tory funding plans

The Conservatives’ plans to change party funding would have major financial implications for Labour and could undermine its entire structure, unions have warned.

In evidence to a parliamentary inquiry into party funding, the 17 trade unions affiliated to the Labour party warn plans for a £50,000 cap on donations would benefit the Conservatives but remove a significant source of Labour funding.

Between 2001 and 2005, trade union donations and affiliation fees came to £42 million, or 64 per cent of the party’s total funding. By contrast, they say the Tories have more individual donors giving smaller amounts, who would be eligible under the new cap.

In a letter to the constitutional affairs committee, the Tulo group says when unions give money to the Labour party, they are doing it on behalf of their members, through affiliation fees, and as donations approved in a ballot.

To limit these to £50,000 as the Conservatives have proposed, even when, as in the case of Unison, membership stands at 1.3 million people, would be “absurd”, the unions warn.

Party funding became a major issue earlier this year after it was revealed that a number of wealthy backers to both the Conservative and the Labour parties were being given, or at least offered, peerages for their support.

A police inquiry has been launched into these claims, while several parliamentary committees and the Electoral Commission are looking into the issue of how parties’ undue reliance on certain wealthy individuals can be addressed.

Today, the committee on standards in public life will take evidence from the chief executive of the commission, Sam Younger, as part of a wider review of party funding, voter turnout and ballot fraud.

In its evidence to the constitutional committee, the Tulo group insists that unions play a unique part in the Labour party and should not just be regarded as donors when looking at party funding.

They play an important role in policy formation, holding 50 per cent of the vote at conference, taking 12 seats on the national executive committee (NEC) and 30 of 183 on the national policy forum, while they are also one college in elections for party leader.

In addition, the unions argue that they play a key role in political engagement – 2.5 million workers are affiliated to the party through their unions, and the Tulo group says this should be seen as a model for future change, not something to be penalised.

“Trade unions neither caused nor contributed to the current funding crisis and it is intolerable that they should be caught in the crossfire,” the letter to the committee says.

Last weekend, Labour published its proposals for party funding, in which it made clear that its funding links with the unions should remain.

“Our link is one that is based on values, not simply finances, and we therefore totally
reject any assertion by our political opponents that the affiliated link is one of
the problems in party funding,” it said.

However, Conservative party chairman Francis Maude hit back, saying Labour was “not serious about restoring trust in politics”.