Some might think that we need more than a committee, given the depths to which standards have fallen. The inquiry is on the funding of political parties (again) – the committee picking over the wreckage of an earlier inquiry conducted by retired civil servant Sir Hayden Phillips in 2006.
Undertaken with the encouragement of Nick Clegg, one of whose many ambitions is to remove big money from British politics, Sir Christopher Kelly’s Committee received evidence from a wide range of sources. It appears to be examining a wide range of issues, such as the need for caps on donations to political parties, as well as more state funding for the parties. It’s déjà vu all over again.
Due to publish its findings in October, the inquiry has provided the Tories with another stick to beat Labour and another opportunity to attack the link between the political and industrial wings of the labour movement. The Tories continue opportunistically to propose a £50,000 cap on donations to political parties, to apply equally to bankers, companies and trade unions. This carries grave dangers for Labour, at a stroke undermining the principle of affiliated membership by unions.
First impressions suggest that a contribution cap would be good for Labour – stopping rich people giving to the Tories. But while the Tories may be many things, they are not daft. So, counter-intuitive though it may seem, if a funding cap of this kind had been in place since 2006 when proposed by Sir Hayden Phillips, Labour’s donation income would have fallen from just over two-thirds that of the Tories to just over a quarter. The fact is that there are many more rich Tories than rich socialists.
This would have caused a massive imbalance between the parties and would have given the Tories an even greater funding advantage: £50,000 a year (double the average annual wage) is £100,000 per couple, and £500,000 per couple over the lifetime of a parliament. The Tories could cash in more by asking their big donors to give annually rather than occasionally, as is often the case at present. So much for clean politics and fair elections.
This is not the only threat facing Labour. For some time now, the Tories have been scratching around looking at trade union political funds, currently raising about £20 million annually, a not insignificant £100 million over the lifetime of a parliamentary session. Pressing the case for tighter regulation, the Tories wheeled out Andrew Tyrie to give evidence to the Kelly Committee, he having previously prepared the Tory position paper on the subject.
Tyrie, chair of the House Commons Treasury Committee, is apparently an expert on unions and much else besides. Despite legislation operating in this field since 1913, Tyrie claimed there is “no regulation”, we have “appalling abuse where there is not really a genuine opt-out, let alone an opt-in” and that “the vast majority” of trade union members do not get “a genuine choice’ on whether or not to pay the political levy.
These are reheated claims made periodically by Tory spokesmen and business representatives. But none has been able to stand up their allegations. Not Robert Carr in 1965 and not James McFarlane in 1983. Indeed, in 1997, the Kelly’s predecessor committee (the Neil Committee) had “no evidence” that the law relating to trade union political funds is not “working satisfactorily” and made no proposals to change it.
I have no idea what the Kelly Committee will recommend. We will all know soon enough. My view is that the reformers are snookered, which may help to explain the lack of public support from some on the Labour side for funding reforms that were once actively sponsored by the New Labour cabal in Downing Street. We should not forget that it was Tony Blair’s office that commissioned Sir Hayden Phillips to look into donation caps and state funding.
Big picture funding reform is snookered because of the financial crisis, which ironically may help save the Labour Party constitution. It is conceivable that the Tories could propose measures that would require Labour to rip up its rulebook and drive the unions to the margins of political life. But it is inconceivable that this could be done without a massive injection of state cash or that the Treasury would sanction this in the present climate.
This is not to say that legislation will not be introduced to respond to some of the points made by Tyrie, or to address a key issue raised in Trade Union and Labour Party Liaison Organisation oral evidence session before the Kelly Committee. This is the question whether trade unions affiliate to Labour directly as organisations, or indirectly on behalf of millions of levy-payers. It would suit both the Tories and the New Labour rump to use the law to individualise what is and should remain a collective relationship.
There will inevitably be very serious problems ahead for affiliated unions (on both the political and industrial fronts), although my sense is that party funding reform will not yet be the anvil on which the chains that bind the labour movement are broken. While this will no doubt disappoint the legatees of New Labour, denied the opportunity to swill at the public trough, it ought to provide fresh opportunities for affiliated unions.
With an unexpectedly secure base, this is not the time for affiliates to be making irrecoverable constitutional concessions that will weaken Labour democracy, or the trade union voice in party affairs. Now is the time to reflect on why, after 13 years of Labour government, collective bargaining coverage in Britain is the lowest in the European Union and why core labour rights fall a long way short of international standards.
And now is the time confidently to re-assert democratic socialist values, to turn the Labour Party in the direction of the people it seems so ashamed to represent.
