Labour
Back to the Workers' Banner
By George Parker and Andrew Taylor. FT 19/7/08
Jul 20, 2008 - 6:06:15 AM

The event at Wembley stadium raised more than £350,000 but times are still hard. After a series of party funding scandals, big donors from business have largely vanished, reluctant to stand in the spotlight. In any case, why support a party that looks as though it is sliding out of power?

With private donations shrivelled to one-tenth of their level of a year ago, the unions are now paying 90 per cent of Labour's bills. Teetering on the brink of bankruptcy and facing a general election within two years, Labour is being offered a lifeline by its most reliable - and often most controversial - source of funding: the trade unions. But is the lifeline about to turn into a noose around the party's neck?

Next week the union barons will demand payback. Gathered at Warwick University, they will try to persuade Gordon Brown to fight the next election on a more leftwing platform, with workers' rights a main -element. Tony Woodley, the joint head of Unite, has no qualms. "We have to speak for our 2m members," he told a union summer event attended by MPs. "There is no point backing a Labour party that does not support Labour policies."

The unions had an initial shopping list of 130 policies, including the abolition of laws stopping secondary picketing - the practice that dogged Britain in the 1970s and 1980s when, for example, workers in other industries came out in support of striking coal miners, causing wide disruption. This is politically explosive for the prime minister, who on Friday travels to Warwick for talks with union leaders, MPs and other Labour officials to map out the next election manifesto.

For some in Britain, Labour's umbilical tie to the trade unions is a reminder of the dark days of the 1970s, when the last Labour government collapsed under a wave of strikes in the "winter of discontent". Mr Blair made a virtue of taking on "the brothers", a brave act given that the party evolved from the trade union movement in the 19th century. One of Mr Blair's first acts as Labour leader in 1994 was to axe the party's totemic Clause 4, which committed it to wholesale nationalisation. He appointed Lord Levy, a music ind-ustry impresario, to tap wealthy business donors to show that Labour now represented boardroom interests as much as those of the shop floor.

But that drive ended with allegations that Mr Blair's allies illegally traded seats in the House of Lords for party donations. Although no charges were ever brought, business leaders started to shy away from Labour. Then came Mr Brown, who has spent a year in Downing Street stumbling from one self-inflicted crisis to another, his reputation further battered by economic downturn.

Next week's policy talks take place against that gloomy backdrop and come the day after a sensitive parliamentary by-election in Labour's working-class Glasgow heartland. If Labour loses, or suffers a big fall in its vote, Mr Brown will be under even greater union pressure to support policies aimed at the party's core supporters.

Mr Brown and cabinet colleagues know the dangers of appearing to trade Britain's liberalised labour markets for trade union gold. Mr Brown fired a pre-emptive shot on his way to this month's Group of Eight industrial nations' summit in Japan, telling journalists there would be "no return to the 1970s, 80s or even 90s when it comes to union rights". Restoring secondary picketing was not on the agenda.

John Hutton, the Blairite business secretary, infuriated unions when he said in May that the government had "successfully completed" its mission to update workplace law. Most of the reforms introduced under Margaret (now Baroness) Thatcher in the 1980s remain intact.

Tensions have been building and they will come to a head at Warwick. Brendan Barber, the head of the Trades Union Congress and normally a loyalist, has warned that Labour "has not been clear about what it wants to be - and where it now wants to go". Paul Kenny, the head of the GMB union, says he is "concerned and dismayed" about the government's direction.

They want Mr Brown to come up with "voter-friendly" policies of the kind agreed the last time the party's national policy forum met in Warwick in 2004. They included initiatives intended to appeal to families and a rule that bank holidays should be treated separately from annual leave. "After the last Warwick agreement we were able to knock on doors at the 2005 election and tell voters they would get eight days' extra holiday if they voted Labour," says one union official.

But union leaders recognise they will not help Labour win the next election by appearing to hold a gun to the prime minister's head and demanding a roll-back of Thatcherite labour laws. Out of the 130 union demands, the proposals on secondary or "supportive" strike action are by far the most controversial and look certain to be rejected. Other proposals on employment law are more modest, even if business will be wary of anything that smacks of new regulation.

Union demands include simplifying strike ballots, allowing members to vote by e-mail, extending apprenticeships and raising the minimum wage for younger workers, as well as policies to allow staff to take time off with sick children, extending the rights of low-paid workers to sick pay and setting a maximum legal workplace temperature.

Britain's flexible labour market has produced one of Europe's best employment records. Using the standardised unemployment rates of the Organisation for Economic Co-operation and Development, Britain has 5.2 per cent out of work, compared with 5.5 per cent in the US and 7.4 per cent in both Germany and France. But John Monks, the leading trade unionist who now heads the European Trade Union Confederation, says that while the UK may have more restrictive rules on strikes and collective bargaining than most European countries, it is far from the red-blooded deregulated labour market of popular belief.

"There has been quite an extension of individual rights in the fields of equality and parental leave," he says. Mr Blair's gov-ernment introduced a nat-ional minimum wage and imp-roved maternity leave. Britain has adopted European Union rules on temporary workers' rights (albeit watered down) and consultation with unions on big redundancy programmes. On health and safety issues, Mr Monks says, the UK is "top of most league tables". Other union demands at Warwick next week include free meals for primary school children and more social housing.

Although the unions may be realistic about what can be extracted from Mr Brown in terms of labour law, they remain a potential danger to a prime minister who is demanding tough pay restraint at a time of rising fuel and food prices. Hundreds of thousands of local government workers stopped work this week in protest and Mr Brown was taunted by Nick Clegg, the leader of the Liberal Democrats, that another winter of discontent could be looming, with potentially fatal consequences for the weakened prime minister.

But there are some who believe that on strikes - as in their policy demands - British trade unions and their members are today more realistic than in the past. "If employees are faced with a choice of having a bigger wage increase and potentially losing their jobs, they will opt for a smaller pay rise," says Bronwyn Curtis, the chairman of the Society of Business Economists. "Although we are hearing a lot about pay strikes spreading, I don't really think that is going to come through."

Rising living costs and high mortgage repayments have made striking an option of last resort. Brian Strutton, a GMB national official, admits many of his members "cannot afford to lose pay to go on strike", whatever they think of the government's 2.45 per cent pay offer to local government employees.

Union leaders, in spite of their anger over Mr Brown's calls for pay restraint, still believe a Labour government is best for their members. They know that to rock the boat would ensure what many already believe is inevitable: that David Cameron's remodelled Conservative party will win the next election. Motions calling on unions to withdraw financial support for Labour were either defeated at recent annual conferences or were not even put to a vote.

"If we withdraw funds or try to use them as a lever to win support for specific policies, we will only ensure that Cameron wins the next election. That's the reality. We know that," says the general secretary of one of the biggest unions.

Source: Ocnus.net 2008