How the Tory political funding plan screws Labour

By an extraordinary coincidence I found myself sharing a bottle of wine on a train out of St. Pancras last night with the man who is playing a key role on the subject that I had decided to write about this morning – the Tory threat to Labour’s funding.

This is Tony Dubbins, a leading Labour movement figure for several decades and now chair of the body that links the trade unions with the party. A key issue that he is fighting is the Tory proposal that donations to political parties from either individuals or corporate entities such be restricted to a maximum of £50,000 each year.

On the face of it that sounds quite reasonable and resonates well in the current climate following the “loans for peerages” scandal. For at first sight it appears that the Tories would be the big losers. In fact that’s not the case for the £50,000 cap would apply to trade unions as well.

The challenge Dubbins has got is that as a result a huge series of amalgamations in recent years there are only seventeen unions left affiliated to the party – so the most Labour could get from its traditional source would be 17 times the maximum donation.

It’s been worked out that such a restriction would cost Labour about £8m a year while the Tories would only see a short-fall of just over £3m. No wonder the Shadow Chancellor, George Osborne, is so enthusiastic about the plan. For from a fundraising perspective a rich individual donor could get round the £50,000 by making several donations in the name of his wife and family as well.

Although Labour, of course, originally evolved from the trade union movement and its links are very deep the unions are viewed very differently nowadays. The Osborne proposal sounds as though the Tories are making a sacrifice and the case about Labour’s traditional links is quite hard to put.

In the current climate I do not think it is feasible for Labour to force through a proposal that would restrict Tory funding but allow it to keep its own income stream.

Naturally we talked a lot about the Labour leadership and it would be wrong for me to write about what was a private conversation. All I can say is that my first action on getting home last night was to put as much as the bookmakers would allow me on Jon Cruddas for the Deputy’s job. You can still get 8/1. Take it.

Mike Smithson