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Labour holes

Today’s FT report on twin trends within Labour’s fundraising. First, that donations by private individuals have collapsed. And second, that Labour’s reliance on Trade Union funding is now greater than ever – the barons now provide 72 per cent of Miliband’s money.

The two are related – in fact, they drive each other. Accepting Union cash means adopting more left-wing, anti-business rhetoric and policies. Adopting such rhetoric and policies drives away well off individuals who might otherwise have considered donating to Labour. The loss of such donors leaves the Opposition with nowhere to go for their funding other than the Unions, who demand yet more left-wing policies…repeat ad nauseam.

Ironically, Miliband’s own much-heralded reforms to the Trade Union link have exacerbated the problem. The FT notes:

“What few observers noticed two years ago was that members would pay as much money into union political funds as before. Instead of flowing directly to Labour, the money would be available for union leaders to distribute on an ad hoc basis: for example as donations to Labour.”

Ad hoc donations can be made conditional – whereas the old system of affiliation fees was handed over automatically, money from the political funds is only dispensed at the personal discretion of McCluskey et al. Effectively, the new system is an opportunity to attach far more ideological and policy strings to their money than ever before.

This seems as good a moment as any to smugly lay claim to being one of the “few observers” who predicted in 2013 that precisely this would happen.

It’s hard to see how Labour can break the cycle (if indeed they want to, given how many of their MPs and candidates are bound tightly in with the unions).

This also has some bearing on the possibility of a second General Election this year. The Conservatives probably have enough money to fight two elections, but Labour are still on their uppers after failing to clear their debts, alienating many of their donors and the departure from politics of the Co-Operative Bank. If there was a second campaign, they could probably find the money to fund it – but only by going begging to the Unions again, who would presumably insist on even more extreme and unelectable policy positions in return. It’s quite a bind.

49 comments for: The vicious circle of Labour fundraising and policy-making

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