Miliband's balancing act: Labour and the unions

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Following a row about Unite's role in the selection of Labour parliamentary candidates, Ed Miliband announced a special conference to re-examine Labour's relationship with the unions. Ian Taylor looks at the tensions between Labour and the unions but also the forces that push them together.

A Labour party special conference in March will review how unions fund the party and, by extension, the link between the two. At least, that is what Labour leader Ed Miliband pledged last July to the delight of New Labour acolytes and Blairite former ministers.

Miliband announced the review in the wake of allegations of malpractice by members of Unite in the selection of a parliamentary candidate in Falkirk. It was a decision Miliband appeared to be bounced into at the time. But there seemed little ambiguity when the Labour leader declared himself "incredibly angry".

Labour called in the police, set up an inquiry, suspended two members - candidate Karie Murphy and Falkirk party chairman Stevie Deans - and established a review of union funding under former party general secretary Lord Collins.

Tony Blair hailed it as "a real act of leadership". Former cabinet minister John Reid claimed, "Ed Miliband didn't go looking for this fight. It came to him. [But it] is a determining struggle about the direction of the Labour party."

In fact, Miliband has previously touted changes to party funding and to the link with the unions. The Observer reported in June 2011: "Ed Miliband is to loosen the grip of trade union leaders over Labour policy-making. Miliband signalled the move after he refused to back a planned strike by up to 750,000 teachers, lecturers and civil servants. He said it was time for Labour to move on from 'late-night deals thrashed out in locked meeting rooms by a handful of people'."

In April 2012, Miliband argued for a cap on donations "to take big money out of politics", saying, "It is only fair that a cap should also cover donations from trade unions."

In the event, the police found no evidence of wrongdoing in Falkirk and Labour's (unpublished) inquiry found no case to answer following a withdrawal of evidence. The suspensions were lifted.

However, the damage had been done. Deans was also Unite convenor at Grangemouth where the union was locked in a dispute with the petrochemical plant's owner Ineos. The company seized Deans' computer and suspended him. When the workforce voted to strike, the company locked them out, demanded cuts in pay, pensions and holidays plus a no-strike agreement, and threatened to shut the plant if the union didn't agree. Tragically, Unite did agree.

The union did not need to give in without a fight, though no doubt Labour leaders were on to leader Len McCluskey imploring him to do just that. But Miliband prepared the way for the employer's attack at Grangemouth through Falkirk.

However, Miliband himself was under pressure. Within weeks of his election in 2010, The Times reported, "Former ministers from the Blairite camp are pushing explicitly for Labour's link with the unions to be broken."

Furore
Labour had deferred the Falkirk selection process in February, but the furore broke in May only after Blair's former right-hand man Peter Mandelson claimed "a cabal" of union members on Labour's national executive was manipulating election procedures. Mandelson made clear his desire to break the link between Labour and the unions as a collective force, when he suggested the attack on Unite in Falkirk was "not because we are trying to exclude individual trade unionists from influence in the party".

Falkirk is a safe Labour seat, left vacant by disgraced MP Eric Joyce after he admitted assault in a House of Commons bar. It is alleged that Murphy, a senior figure in Unite who worked in the office of then Labour vice-chair and party election co-ordinator Tom Watson, was being pushed for the nomination.

Details remain contested and the sole source of information in the public domain appear to be emails leaked to The Sunday Times following Ineos' seizure of Deans' computer. But Unite had been open about its campaign to recruit union members to Labour and its offer to pay their first year's affiliation fees.

The strategy rattled the right in the party, organised around the New Labour pressure group Progress - founded by former Mandelson advisor Derek Draper and financed by Lord Sainsbury, a New Labour donor who withdrew party funding when Miliband became leader.

It was at a Progress conference that Mandelson made his allegations, even suggesting union-backed MPs might be loyal not "to the party [but] a section of it" - an absurd idea in light of Labour's history. The Guardian report of the conference quoted a "frontbench source" as suggesting Unite was so active in candidate selection that: "If Ed Miliband wins the next election he will be in coalition with Unite."

The reality is those organised around Progress expected their man, David Miliband, to win the leadership and carry the New Labour project forward. Ed Miliband's defeat of his brother owed everything to the major affiliated unions which balked at more of the same.

Mandelson is a hypocrite not just because he and Blair owed their safe seats as MPs to union support or because he sees no problem with wealthy individuals paying large sums to Labour, but also because New Labour routinely imposed candidates on constituencies over the heads of local members.

Unite general secretary Len McCluskey justifiably hit back at the allegations, writing of Mandelson in The Guardian in May: "He appears rattled that Blairite true believers are not winning every Labour nomination...This is a row about politics not procedure."

The storm broke in July when Tom Watson resigned, complaining of "unattributed shadow cabinet meetings around the mess in Falkirk". A day later The Guardian reported Miliband would act: "Amid calls from senior party figures for him to use a bitter row with the Unite general secretary to break the formal link." The paper quoted a "former cabinet minister" saying: "There should no longer be a formal union affiliation. Of course, if unions want to donate to the party they can."

McCluskey accused the party leadership of a "stitch up". But within days The Times could report: "[Miliband's] hopes of provoking a defining clash were set back when Len McCluskey welcomed changes that curb his influence."

Initial reports on Miliband's intentions, clearly the product of briefings by Miliband's office, suggested wholesale changes to the Labour-union link. Labour insiders suggested Miliband's entourage had been panicked.

The messages subsequently became more emollient. Collins assured union leaders the aim was "to mend, not end the link" between Labour and unions, with a key proposal being that union members should opt into Labour affiliation rather than be automatically signed up by unions.

Forerunner
McCluskey pledged to ensure Labour would be "well funded" for the election, arguing (in October): "Affiliation fees would come down. But that doesn't stop unions making donations. The Labour party is still our party, remember."

By December, the Guardian could report: "Labour is trying to avert a showdown by proposing that changes to the way union members become affiliated to the party are delayed for five years - or are applied only to new recruits."

So does any of this matter? Most certainly it does. Trade unions represent millions of workers. Add in the millions in non-union workplaces and the non-working dependents of trade union members and the retired and we could argue the unions represent the interests of a majority.

Millions of trade unionists pay into the political fund. Why shouldn't they or their representatives have a say in Labour policy and who gets to be a Labour politician? After all, the unions set up Labour and unions work on the basis of collective, not individual, action.

The forerunner of Labour, the Labour Representation Committee was established in 1900 by leaders of 67 unions - they were smaller and more numerous then - representing 575,000 members, more than one quarter of the total at the time. The LRC manifesto noted: "[Capital] is represented on both sides of the House [of Commons]."

A political levy soon followed, though it was not long (1909) before the House of Lords put a bar on the use of funds for political purposes (this was subsequently overturned). The 29 LRC MPs elected in 1906 established the Parliamentary Labour Party and a 1907 conference established the relationship between members inside and outside Parliament.

Party conferences could pass "resolutions instructing the Parliamentary Party as to their action in the House of Commons". But it was resolved: "The time and method of giving effect to those instructions be left to the Party in the House, in conjunction with the National Executive." In essence, that arrangement has remained.

So the Labour Party was set up to represent organised labour in parliament, to address political issues the union leaders could not.

The relationship between the two is important. Trade union leaders mediate between their members and employers. They pay a price if a union loses recognition or members leave or lose their jobs in large numbers. But they also experience a strike as an interruption to the normal course of negotiation. Inevitably, they mingle with employers, with politicians and political commentators, and earn salaries comparable with these groups rather than with their members' wages. They are at one remove from the daily experience of work, from the class struggle.

Labour Party leaders are at a further remove from that struggle. Their position does not depend on its outcome. At the same time, they look to appeal beyond the ranks of trade unionists, to convince political commentators of their credentials and to win the confidence of big business and the City. After all, they seek to run the state.

Tension between the two sets of leaders is inevitable, regardless of the individuals or their politics.

At the same time, there are pressures to maintain the Labour - trade union link regardless of the desires of Mandelson or anyone else. Consider what breaking it would mean for Labour's leaders: a huge blow to the party's finances and a sharp reduction in its capacity to fight elections, meaning less prospect of forming a government and the denial of parliamentary aspirations for large numbers of would-be MPs.

Labour politicians would also lose a crucial ability to influence union activity - undoubtedly in evidence at Grangemouth. This is manifest in every appeal to temper workplace demands or action so as not to jeopardise an election and will be in increasing evidence in the run up to the next election.

More important, from the point of view of the British ruling class, a Labour government which lacked a relationship with the union leaders would lose its ability to hold back workers. There could be nothing like the Social Contract between union leaders and Labour during the Callaghan government of the late 1970s, which held wage rises below inflation.

Traumatic
But it would be equally traumatic for the union leaders. They would be left with workplace negotiation backed by struggle or nothing - with a failure to defend their members likely to call into question the existence of the union, its headquarters, structure and so on. So long as Labour is connected to the unions it provides an alternative avenue.

So how may events unfold? The union leaders insist there must be no reduction in the collective voice of unions in the party. Unions currently hold 50 percent of votes at Labour Party conference and Collins appears to think this "block vote" should reflect the numbers choosing to affiliate to Labour.

That looks unacceptable to the union leaders and would cost Labour money if substantially fewer choose to affiliate. The GMB announced in September it would cut the funds it gave Labour over the next year from 1.2 million pounds to 150,000 pounds, suggesting only about 50,000 members would choose to affiliate under Miliband's proposals. At the same time, GMB general secretary Paul Kenny insisted, "The removal or sale of our collective voice is not on the agenda."

The Unite executive decided in December to give partial backing to the Review, but noted the union "cannot support any proposal that would lead to the collective voice of Unite being expressed solely though individual Unite members scattered across the constituency parties, nor can it accept any diminution of the trade union vote at either regional or national conference nor of our delegation to conference, on the national executive or national policy forum".

The union also insisted it would not allow the combined union vote at Labour conference to fall below 50 percent. This would seem to limit Collins' and Miliband's room for manoeuvre.

The Collins Review proposals - which have yet to be finalised - will be discussed at a Labour Party conference in London on 1 March.

FOLLOW THE MONEY

Labour needs the unions' money. The party derived just under 8 million pounds from union affiliation fees in 2012 two-thirds of the 12 million pounds total in donations.

The Electoral Commission shows Labour received more than 1.5 million pounds from Unite in the six months to September 2013 and 3.16 million pounds over 12 months.

Shop workers' union Usdaw paid 1.03 million pounds to the party in the first nine months of 2013. Unison provided more than 1.2 million pounds in funds to Labour in the 12 months to September. The GMB furnished 1.1 million pounds over the same period and the CWU 509,000 pounds.

A handful of wealthy individuals gave substantial sums to the Tory party over the same period - typically 250,000 pounds to 500,000 pounds a time.

Without the unions, Labour would struggle to match the Tories for funds: the party received 12 million pounds in 2012 against the Tories' 13.8 million pounds in handouts from the rich.

However, it's not just about affiliation fees. What is key is the election fighting fund, which is largely dependent on the unions.

More than half the 218 million pounds Labour received in all donations over the past 10 years came from the unions.

IN THRALL TO WHOM?

Labour leaders are forever accused in the Tory press of being "in thrall to union paymasters". For example, the Telegraph reported last April that 23 out of 42 parliamentary candidates selected by Labour "have links to the unions" - some were selected with "direct backing from unions" while others "are union members".

This is hardly remarkable when Labour Party rules state members must "if applicable, be a member of a trade union". Yet Peter Mandelson is seldom reported as in thrall to Lord Sainsbury or David Cameron as in thrall to the City or the CBI.