Miliband moves on party funding: offers £5k cap including union donations (but what about members’ opt-in?)

by Stephen Tall on April 15, 2012

Three weeks after the latest funding furore to hit politics — when Tory co-treasurer Peter Cruddas touted influence on government policy for £250k a pop — Ed Miliband has seized the initiative, proposing to limit all donations from individuals, organisations and unions to a maximum of £5,000.

Here’s the BBC report:

Labour leader Ed Miliband has offered to limit donations to his party from trade unions to £5,000, as leaders discuss how to change the system. He told the BBC this would remove the influence of “big money” on politics. The issue has been the subject of an ongoing row between Labour and the Conservatives. Labour argues that large businesses are providing too much of the Tories’ funding, while the Conservatives say Labour is itself too reliant on lump sums given by affiliated unions, such as Unite and Unison.

Credit where it’s due, this is a positive step by the Labour leader, both in principle and tactically. There’s a sticking point, though:

But Mr Miliband would keep the system where members of unions affiliated to Labour are asked whether they would like to “opt out” of giving the party a levy of £3 a year, rather than changing to an “opt in”.

As Mr Miliband puts it in his own press release:

The 3 million levy payers – nurses, teaching assistants, engineers, shopworkers – would continue to be linked to the Labour Party through the £3 or so they pay each year through their unions. There is the world of difference between a wealthy individual giving millions, and millions of trade union levy payers paying a small sum of money to affiliate to the Labour Party.

Hmmm, well up to a point. Of course in terms of scale and influence he’s right. But there is a fundamental principle which Labour likes to brush aside: that individuals should willingly opt-in to a political donation. Ed Miliband is hoping that the boldness of his £5k-cap offer will enable him to maintain the controversial opt-out political levy, the aggregate value of which is worth £millions to Labour.

Those who justify the current opt-out policy often make the claim that union members know their donations fund Labour and are content for their levy to be gifted to the party. Perhaps they are. There is of course an easy way to prove that’s the case: move to an opt-in system so that Labour knows the political levy is willingly gifted by everyone whose money they take.

Ed Miliband’s move is a welcome one. But until Labour shifts on the opt-in principle as well the suspicion will linger that self-interest is more at play here than a genuine commitment to reform party funding.

* Stephen Tall is Co-Editor of Liberal Democrat Voice, and also writes at his own site, The Collected Stephen Tall.