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Falkirk fallout: Miliband's war with the unions comes to a head as Labour's ruling votes to rip up its system for voting on selection and policy

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The Labour Party’s 113-year relationship with the trade union movement is set to undergo “historic reforms” that will “bridge the gap between Westminster and the rest of Britain”, Ed Miliband claimed today.

The Labour leader was speaking after the party’s ruling body, the National Executive Committee, overwhelmingly voted to rip up the current internal democracy rules,  involving MPs, the unions, and ordinary members, which controls how the leader is elected.

How policy is decided on will also be affected.

The new “one member, one vote” system, which still needs to pass a final hurdle at a special conference on 1 March, will weaken the group influence of affiliated unions on the party they founded in 1900. Further changes, to be phased in over the next five years, are likely to affect the direct financial support Labour receives from trade unions.

The political catalyst that sparked the reform package drawn up by Lord Collins, a former Labour general secretary, was the alleged vote-rigging scandal that erupted in a central Scotland constituency last year.

A report into voting irregularities in Falkirk during the selection of a prospective parliamentary candidate claimed officials from the powerful Unite union had been involved in recruiting members without their knowledge. Other irregularities claimed people were pressurised into completing direct debit forms, and that there was evidence of signatures being forged on application forms.

The initial fall-out from the internal investigation last summer led to Mr Milband branding the alleged behaviour in Falkirk as “the death throes of the old politics” and a “politics of the machine” that was rightly hated.

One of Labour’s potential candidates for the seat, Karie Murphy, and a Unite official, Stevie Deans, who was also the constituency’s chair, were suspended from the Labour Party. A police investigation was also ordered.

Although Mr Milband later dropped further inquiries in Falkirk after key witnesses were said to have retracted their formal statements of complaint, the Labour leader refused to publish the report.

Today the 20-page report was leaked to the Guardian newspaper.

The report’s executive summary describes membership “abuse” involving “deliberate attempts” to frustrate investigators, “evidence” of members recruited without their knowledge, irregular pressure to complete direct debit payments, and forged signatures.

The report states: “There can be no doubt that members were recruited in an attempt to manipulate party processes.”

However the authoritative evidence said to have been uncovered by party investigators, which led Mr Miliband to effectively order a root-and-branch revamp of the Labour-unions relationship, is largely absent.

The published document backs previous reports in the Independent which, according to party sources, suggested the executive summary was “flawed” and may have been drawn up by inexperienced interns.

Ms Murphy, now reinstated as a Labour member, said the allegations of voting irregularities levelled against her had “not been proved in the evidence [in the report]".

Labour has not commented on the contents of the leaked report.

A party statement said the Scottish constituency’s candidate – the former MSP, Karen Whitefield – had been chosen, and the focus now was on getting her elected as Falkirk’s next MP.

Mr Miliband also chose to focus on the reform package that has come out of the Falkirk row, rather than the on-going speculation that he over-reacted and has ended up risking Labour’s ability to fund future election campaigns due to reduced union-related income.

As a result of the planned reforms, trade union members will no longer have an automatic vote in Labour leadership contests. Instead they will need to pay a £3 affiliation fee.

Although the influence of MPs has been reduced by the scrapping of the old “electoral college” system, they will still chose the final short-list of leadership candidates who go forward to the one-member-one-vote run off. 

Speaking after the NEC vote, which followed similar backing earlier this week from MPs and the Shadow Cabinet, Mr Miliband said: “For too long politics has been out of touch with working people and people from all walks of life. These changes will help bridge the gap between Westminster and the rest of Britain.

“They are about opening up the Labour Party so that more people can have more say on the issues which matter to them most, like the cost-of-living crisis.”

The Labour leader acknowledged his reforms would not go down well in all sections of his party. This was a scarcely coded apology to the union members who had effectively secured him the leadership over his brother David.

However he added “We must have the courage to change our party and change our politics if we are to change our country once again.”