Ann Black published her report of last week’s NEC over the weekend. The account shows how wide the NEC consensus was against the Hayden-Phillips proposals and how members were alarmed at the apparent double dealing from No. 10.
Party Funding: Facts and Rumours
Mike Griffiths and Hazel Blears summarised the story so far. In the wake of the loans affair, Sir Hayden Phillips was charged with reviewing party funding. A working group chaired by Jack Straw oversaw the drafting of Labour’s submission, agreed by the NEC and by conference. On 16 November Hayden Phillips published an interim report posing specific questions, including whether there should be a limit on donations. The Labour party responded in line with conference policy. On 4 December Hayden Phillips issued more detailed proposals.
Some were regarded as acceptable, including increased transparency, better enforcement, national and local spending limits, and state funding for purposes such as training candidates and improving feedback from Partnership in Power.
Others were alarming. All donations, from individuals and from organisations, would be capped. Trade unions would no longer operate a collective system of affiliated membership through their political funds. Instead affiliation would become “individualised”: the party would have to write to over 3 million union members, every year, explaining how their contribution had been spent and reminding them that they could choose to stop paying.
As Hayden Phillips said, in a masterpiece of understatement, “the proposals will be especially demanding for the trade unions. They will need to introduce new systems and new accounting arrangements”. And for the party, the average affiliation payment of £3 a year would be entirely consumed by paperwork. A Thatcherite dream come true.
What really fuelled the anger was Hayden Phillips’ claim that these plans enjoyed consensus across the parties, leading to a widespread belief that Number 10 insiders were conducting parallel negotiations on their own agenda. Tony Blair was unable to attend the NEC, but John Prescott assured us that the leader had never had any extra meetings nor departed from the conference mandate.
Other ministers made it clear that they would not introduce laws opposed by the entire parliamentary party.
Back from the Brink
Mike Griffiths’ statement, printed below and agreed unanimously, dealt with most concerns. Dennis Skinner argued that union money was clean, given because of shared values and not to buy influence. Others said it was ridiculous to impose the same donation cap on Amicus/TGWU with 1.75 million members as on unions with a few thousand, and there were only 17 unions affiliated to Labour, against hundreds of Tory-supporting companies. And I pointed out that general secretaries no longer wield block votes in electing party leaders but must ballot their levy-payers, giving them a democratic voice.
There will now be more discussions, but Hayden Phillips intends to conclude by the end of January. The NEC were still worried that he did not fully understand the party’s federal structure, and rejected any outside attempt to rewrite our rulebook. Members hoped he would not wish to appear as a Tory patsy and would listen again to our proposal for voluntary systems of donations appropriate to each party’s traditions and statutorily enforced. All agreed that the party must speak with one voice.
However, dangers remain. Party negotiators are keen for speedy curbs on local expenditure, with Tory millions already pouring into key marginals. They would also prefer cross-party consensus, because without it we risk ending up on the wrong side of the argument and bogged down in the Lords.
My view is that there are even worse options than the status quo, and conceding too much would make spending limits irrelevant because we would have no income. Tony Blair once paid tribute to those who stuck with the party during the years of opposition, when business didn’t want to know, and our high-value donors were backing the SDP. Without the unions there would have been no Labour victory in 1997, and it is sheer arrogance to think that we may never need that solidarity again. Some members still suspected Blairites of using Hayden Phillips to pursue their original project of breaking the union link.
That may have seemed a viable alternative when individual membership was 400,000 and rising, and the world was at our feet. Now it looks like political suicide. The survival of our party, and of a healthy democracy, are at stake.