One of the biggest questions facing Ed Miliband as he bids to become Britain’s next prime minister is whether he is prepared to shift the Labour party to the centre ground of politics, appealing to a broad swath of the electorate. The alternative is for the Labour leader to remain firmly wedded to the left, relying on his party’s core vote to get him past the winning post.

On economic policy, Mr Miliband has shown his hand. He is an interventionist committed to raising the top rate of tax and sorting out what he sees as broken markets and predatory corporate behaviour. But another issue will also define where he stands on the political spectrum: his approach to the trade unions, Labour’s traditional paymasters.

For the past six months Mr Miliband has grappled with a set of reforms that his spin-doctors say will put some distance between the party and the unions. These are changes he never envisaged making when he became Labour leader in 2010. Mr Miliband relied heavily on union support to beat his brother David to the top job. But the embarrassing allegations last summer that the Unite union sought to manipulate the selection of a Labour candidate in the Scottish constituency of Falkirk forced him to respond.

Mr Miliband’s reform programme, delivered to the party’s ruling National Executive Committee on Tuesday, has two aims. One is to signal to voters that Labour is reducing its financial dependence on the unions. The second is to indicate a watering down of the unions’ influence over the election of future party leaders. The package is unlikely to deliver either.

Take the issue of party finances. At present, individual union members who do not opt out pay about £8 a year into their union’s political fund. Of this, £3 automatically goes to Labour, irrespective of the member’s party preference. The party receives a total of £8m a year from this source.

Under Mr Miliband’s proposal, union members must now choose whether to give their £3 to Labour. If they do not, the money will stay in the overall political fund. This will not reduce union influence. Labour is likely to receive less automatic cash from members, making it even more reliant than it already is on direct block donations directed by the likes of Len McCluskey of Unite.

Then there is the leadership voting system. At present the Labour leader is elected by three colleges. A third of votes go to MPs, a third to party members and a third to union members. This has always looked undemocratic. One concern is that union bosses can greatly assist their chosen leadership candidate by handing their full membership list to his or her campaign team – as Mr Miliband reportedly discovered to his delight in 2010.

Mr Miliband is now proposing that the colleges be replaced by a system of one member, one vote. This is important. It brings Labour closer to being an individual membership party in which union bosses would have less sway. But again, we should be under no illusion about the scope of this change. The union block vote at conferences will remain for at least another five years. The unions will retain huge sway over Labour’s ruling NEC. Above all, the new union “affiliate members” of Labour could quickly dwarf the existing grassroots party members. This would give the union bosses huge new power to influence the Labour party’s grass roots.

It was perhaps unrealistic to expect Mr Miliband to make a decisive break with the unions a year before an election. In the search for paymasters, Labour can no more shrug off the big public sector unions than the Conservatives can the company bosses. But this is no Clause Four moment for the Labour party. Ed Miliband should be careful of presenting it as such to the British people.


Letter in response to this editorial:

Disapproval has clouded judgment / From Ben Bradshaw MP

Get alerts on UK political party funding when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.

Follow the topics in this article