By Jane West
Ed Miliband’s decision to call a Special Conference in Spring 2014 to change the relationship between the unions and the Labour Party has been dubbed his ‘Clause IV moment’, in reference to Tony Blair’s Easter 1995 Special Conference that changed the Party’s Aims and Values.
The parallels are unmissable, but they should not disguise the fact that whereas Tony Blair’s change was largely symbolic – the elimination of a pledge to public ownership that Labour had never had any intention of carrying out – what Ed Miliband proposes is far more profound, irreversibly changing the character of the Labour Party.
The two fundamental proposals of Miliband are to reduce the ‘block vote’ of the unions substantially below its current 50 per cent to ensure the unions no longer have any effective veto over the direction of the Party; and to end the Labour Party’s dependence on the trade unions for funding – which also delivers a union say.
Delivering the first is straightforward. A constitutional amendment will emerge from the Collins review that reduces the union share of the vote in the conference and electoral colleges for leader and so on.
The only issue will be whether the unions will agree to it. At present the GMB and CWU are the only unions to clearly and unequivocally say they will not. Others have indicated tentative agreement if all other proposals are acceptable (UNITE) and some, such as UNISON, have yet to express an official view.
Organisations of the left in the Party membership – CLPD, Labour Representation Committee, the two Labour Briefings, etc – have come out against the proposals. But given the weakness of the left in the CLPs and the support of major unions, Miliband looks set fair to sail through the conference. This time he will secure the change he sought in 2011 – in the Refounding Labour consultation process – but which at that point the unions blocked.
The second – breaking Labour’s reliance on union funding – is more difficult to achieve.
Although usually heavily reliant on union funding as a stable source of income, in periods where Labour looks likely to win an approaching General Election donations from business – hoping to influence its political course – tend to increase. This was the case for Tony Blair in the run-up to 1997, and is happening again now.
According to Patrick Wintour writing in the Guardian, in the last quarter, trade union funding fell to 20 per cent of Labour funding while business funding climbed steeply. For example, in the first quarter of 2013, John Mills, of the home shopping firm JML, donated £1,647,500 – more than all trade unions put together (£1,343,975).
As this is likely to continue – and even increase – through to 2015, Miliband can safely rely on other sources of funds to see him through the next couple of years.
However, business does not fund Labour out of political preference but expediency. When Labour’s support declines or it looks possible for the Tories to win, this financial support from business slumps back to a trickle.
This happened to Blair. Despite Blair and Mandelson’s assiduous courting of business and the City, by the 2000s company presence at the Labour conference was disappearing, its funding declined and the Blairites were forced back into reliance on the unions.
Unless Miliband is pursuing a suicidal financial course for Labour, he has to have a reliable alternative to union funding if he is to rule it out for the future.
Billy Hayes, general secretary of the CWU, spelled out the issue clearly: ‘It seems to be generally agreed that the new mechanism [opt in rather than opt out – Ed] will reduce levy affiliation by around 80 to 90 per cent from current levels. On top of this, general donations will be substantially reduced, as the impact of reducing the role of unions will increase internal resistance to donations. Inevitably, there will be the argument that if we only affiliate 10 to 20 per cent of levy payers why should we donate more than 10 to 20 per cent of the remaining levy on top of this?
Taken together these reductions will cost several million pounds each year. The obvious question is then how do the enthusiasts for opting-in propose to fill this gap?’
Billy Hayes goes on: ‘There is only one way this proposal will work – through a massive increase in state funding of political parties. Labour in government could secure Lib-Dem support for this, and perhaps the Tories also, if there is a large enough cap on individual donations.’
Billy Hayes is right. It is inevitable that – as a consequence of these changes – if Labour wins in 2015 there will be a rapid introduction of state funding of political parties.
This is a historic change in the character of the party political system in Britain. It will end decisively the relationship between Labour and the unions.
Rather than a party that at bottom is the political representation of organised labour – even if organised labour has rarely demanded very much of it – Labour will become just another continental style modern not very ‘social-democratic’ party of the right-wing variety.
How long the unions will remain formally affiliated to such a party, even at a reduced level, is questionable.
So why is Ed Miliband so determined on this course, when he was elected on union votes, the unions are applying very little pressure on policy, and the mass of the population do not care one way or another about the role of the unions in the Labour Party?
Indeed, for people being hit by cuts and contracting real incomes, it is going to seem incomprehensible that Labour spends the next six months on some arcane internal matter rather than setting out its alternative for government. This is not going to win Labour votes, in fact it will probably lose it some.
Indeed there is an argument that this is the very reason for this attack now: Miliband would prefer a hung Parliament so in a Labour-Lib coalition unpopular policies could be blamed on the Lib-Dems. That elements of the Labour frontbench might prefer this outcome may well be true. The Blairites in particular have always hankered after a rapprochement with the Lib-Dems and would be quite comfortable in coalition with them. But the attack on the union-link will only have a marginal impact on the result of the next election, so this cannot be the explanation.
Others believe it is simply grandstanding for a right-wing and anti-union media. The media is certainly anti-union obsessed and blows up any story of union influence on Labour to the levels of a national scandal. But as countless polls show that Labour’s voter base is deeply uninterested in the issue, this media campaign in fact has little impact. The changes Miliband proposes are too profound for this to be just to appease the media.
Or perhaps he believes his own rhetoric that the Labour Party can be ‘refounded’ with a much wider individual membership partly derived from a new relationship with the union membership, unmediated through their leaderships. But no one thinks this is realistic, and Ed Miliband is not a fool.
The only logical and correct explanation is that the Labour leadership anticipates leading a government after 2015 that will pursue policies that are so deeply unpopular with the unions that it will turn the Labour Party into a battleground, with the union block vote deployed in a fight to try to make the government change course. Eliminating that possibility now is an important insurance policy against future trouble.
What is coming is a ‘New Labour Mark II’ government. However, this time it will be worse.
After 1997 Blair’s ‘New Labour’ government sucked up to big business and the City, privatised and ‘marketised’ public services , carried out odious attacks on the vulnerable such as lone parents and the disabled, introduced higher education fees and embarked on disastrous and immoral wars. But over the period of Blair’s premiership the welfare state grew, led by a sharp increase in spending on health and education, the minimum wage was introduced, real incomes grew by 18 per cent between 1997 and 2006 and there was a significant decrease in poverty.
Miliband will embark on similar backward attacks – as the March PPB on immigration indicates. But unlike Blair, this will not be mitigated by expansion in spending on the welfare state, inroads on poverty or overall steady improvement in living standards.
Austerity will continue, new cuts will be introduced, wages will continue to be held down, and living standards will not recover to their previous levels of growth.
New Labour Mark II will be more unpleasant and more unpopular overall than the Blairite original. That’s why the union influence has to go.