John Harris

Journalist & Author

Ed Miliband’s bold donations cap is a glimmer of hope for Labour | John Harris

Some will try to frame Miliband’s proposals on union contributions as a betrayal, but diluting power is all to the good

The current condition of the Labour party does not exactly suggest sunlit uplands and boundless confidence. No sooner had the budget opened up a pleasing poll lead over the Tories, than the resurrection of George Galloway sparked some very unsettling questions: most pointedly, how exactly does any party with a half-decent grassroots operation get ambushed by a 36% swing? Now, we hear, nerves are so jangled by the prospect of similar byelection upsets that plans have been drawn up to somehow prevent Labour MPs running to be mayors and police commissioners this October, lest hard-lefties and anti-war activists once again hoover up the votes of the disaffected.

From around the country, there comes grim news of old Brownites and Blairites fixing candidate selections using standard-issue Tammany Hall methods. Labour blogs and the party’s corner of the Twittersphere frequently suggest a rum mixture of nastiness and delusion: the habitual shooting down of any halfway promising ideas, mean-spirited delight in internecine strife and the kind of whispers that suggest things are not right. Some of these can be unexpected: a couple of weeks ago, a Labour insider told me that in the wake of his deification during the phone-hacking scandal, the latest person to fancy their chances as the next Labour leader is Tom Watson.

Here, though, is one very under-reported aspect of Labour’s present. Ed Miliband, we are usually told, is the party’s uncertain predicament incarnate. But his grasp of the leader’s job grows surer by the month, his sense of where both policy and the practice of politics have to go in such turbulent times is sound. And his move on party funding is one of his best strokes yet: brave, unapologetic about the most fundamental aspects of Labour’s identity and wrapped up in a keen sense of how to go on exposing the Tories’ association with privilege and wealth. It may just point the way to a future in which Labour politics starts to slip free of some of its serial limitations and failures.

In the midst of Miliband’s turn on the Andrew Marr Show, there it all was, in bold colours: much more stringent and longer-term spending limits (”If you can’t spend it, you don’t have to raise it” is the Labour line), a strong defence of working people funding Labour via the annual £3 political levy and that head-turning proposal for donations to be capped at £5,000, which will include discretionary contributions from the unions. Reasonable questions are being asked about the prospect of affiliation fees being raised to make up some of the difference, but to say that the plan may create a big financial hole for Labour is an understatement. In 2010, donations in advance of Miliband’s figure from both the unions and wealthy individuals accounted for £9.2m of Labour funds – “a real chunk of change” as an aide said.

Talks between the three main parties about the future of funding are ongoing. Their basis is the report issued last November by the committee on standards in public life, and fronted by its chairman, Sir Christopher Kelly, whose proposals included three headline suggestions: an annual donations cap of £10,000 (an idea first floated by the Power Inquiry of 2004-2006); a change whereby trade union members would have to actively opt in to funding the Labour party; and another idea pinched from the Power Inquiry, whereby each parliament, £3 per vote should be given to parties from public funds. The parties reacted with varying degrees of unease: all three had a neuralgic response to the idea of increased state funding, Labour bemoaned opting-in, and the Tories were panicked by what a low donation cap would do to their funding base. With no little chutzpah, they claimed that Kelly’s £10,000 limit would “hugely inhibit the ability of political parties to engage with the electorate”, and insisted on a £50,000 ceiling.

That, strangely enough, is the price of membership of the Conservatives’ specially branded Leader’s Group, which involves “dinners, post-PMQ lunches, drinks receptions” and more, and provides the party with mountains of cash. Last year, a study by the Bureau of Investigative Journalism discovered that in the year up to June 2011, 50 City donors had given more than £50,000, that three of the biggest name hedge fund bosses had together donated £636,300, and that one David Rowland – the boss of an outfit called Blackfish Capital Management – had contributed a cool £1.1m.

Miliband wants rid of all this, and not just from the Tory side. No party leader much likes soliciting money, but he seems to find it painful beyond words: a reflection, perhaps, of the fact that whereas many of his New Labour predecessors were Cavaliers, often ecstatic to be feted by the rich, Miliband is a self-evident Roundhead, devoid of the taste for opulence and easy living that made the likes of Tony Blair and Peter Mandelson such capable fundraisers. When he tries, the results can be borderline catastrophic: witness last month’s ride in a Rolls-Royce to Hull City FC, where he shared the company of the club’s Labour-donating chairman, having allegedly cried off an anti-cuts rally on grounds of ill health. The resulting pictures, equal parts Get Carter and The Thick of It, were not exactly pretty.

As infuriating as the habitual conflation of millionaires’ donations with union funding can be, you will not even begin to cleanse politics of any of this, without some change in approach to the unions. Besides, though it is a leftwing habit to assume that even modifying the union link is tantamount to revisionist betrayal, Miliband’s move on union donations may actually boost the best elements of Labour politics.

Even some of those on Labour’s left are beginning to understand that as long as the bond between the unions and the Labour party remains, diluting their influence need not be such a bad thing, for either side. What follows will doubtless prompt howls of hostility, but what the hell: the big unions wield truly clunking fists, often seeming much more interested in short-term factional advantage than the development of ideas. On such issues as electoral reform and climate change, their influence has been conservative rather than progressive – and all too often, they are at the centre of the kind of machine politics that sits increasingly awkwardly with rising public expectations of transparency. At the same time, the unions would often do well to be less mindful of tight relationships with Labour politicians, not least in an age of direct action and spontaneous protest.

Right now, most of the noise about party funding is mechanistic, focusing on party accounts, numerous loopholes, and funding gaps that may or may not be bridged by public money. Exactly what will happen in the mincing-machine of three-party talks is anyone’s guess. But in the next months, bear in mind this glimpse of a reimagined Labour future, offered by a leader who is proving to be cleverer than some people would like to think.

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