Why Labour blocked party funding reform

Previously unpublished documents (previously held back by Jack Straw despite Freedom of Information requests, under the fact that the information contained within them was given in confidence) have shown the real reason why Labour blocked Political party funding reform in October 2007.

The newly published papers reveal the true extent of the union funding of the Labour Party and why it is impossible for it to reform party funding to be more reliant on smaller individual donations rather than large scale individual (Ashcroft, etc) or union funding:

• Many union members would not pay a political levy to the Labour Party if given a choice.
• Some trade unions affiliate more individuals to the Labour Party than they have union members paying a political levy (only money from the political levy can be used for political purposes).
• From 2001 to 2006, the unions gave the Labour Party £45 million in cash.
• Trade unions pay £1 million a year to the Labour Party at a local and regional level, tying in local Labour Party branches through binding “Constituency Development Plans”.

The chair of the meeting Sir Hayden Phillips apparently drew up detailed option papers showing how the political levy could be reformed to give union members real choice, however they were blocked by the Labour party negotiators. One of his options is below.

“The trade union would be able to collect donations from its members, and would be required to pass the donation to the political party of the individual’s choice. Where members decided to donate to the political party the union had affiliated to, these payments would form the collective affiliation fee. The union would therefore be affiliating based on 100% of its members who contributed towards the affiliation fee. The union would continue to collect a political levy from members to fund other political activities. Trade unions would annually ask each member whether they wanted to make a donation and if so, how much and to which political party” 

Shockingly figures revealed by the Labour party at the meeting also showed that in 2001 Union funds represented 81% of all cash donations to the party averaging 66% of all donations between 2001 and 2006.

	Total donations in cash to Labour Party	Donations from trade union (including affiliation fees) to Labour Party	Percentage of cash donations from trade unions
2001	£12 million	£9.7 million	81%
2002	£11.3 million	£6.7 million	59%
2003	£14.7 million	£8 million	54%
2004	£15 million	£10.7 million	71%
2005	£20.6 million	£11.8 million	57%
2006	£11.7 million	£8.5 million	73%

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