GMB chief warns Ed Miliband: Labour could lose 90% of its union funding if it pushes through reforms

Paul Kenny estimates only 10 per cent of his union's members would decide to 'opt in' to giving £3 a year to Labour

Ed Miliband wants to scrap the present system under which union members have to “opt out” if they do not want the fee automatically handed to the party (Reuters)

Ed Miliband was given a stark warning today that his plan to reform Labour’s relationship with the trade unions could cost the party 90 per cent of the funding it gets from the unions.

Paul Kenny, general secretary of the GMB union, predicted that only 10 per cent of its members would decide to “opt in” to giving £3 a year to Labour. Mr Miliband wants to scrap the present system under which union members have to “opt out” if they do not want the fee automatically handed to the party.

Mr Kenny, who backed Mr Miliband for the Labour leadership three years ago, suggested the union's annual donation to the party could fall from about £1.5m a year to less than £200,000. He said the GMB would almost certainly ballot its 600,000 members this autumn. He said: "The consequences of this are very far-reaching".

The leader of the country’s third biggest union, who also chairs Trade Union Labour Organisation for the 15 unions affiliated to Labour, told the BBC: “We have been campaigning for our members to join Labour for a very long time and I have to say we have not been knocked down in the rush.” He added: “I think we will be lucky if 10 per cent of our current affiliation levels say yes they want to be members of the Labour Party, because... campaigning for issues with the Labour Party and being members of the Labour Party are two entirely different things."

Mr Kenny criticised the language used by some Labour figures about the unions recently as "very disappointing and insulting".

Tory officials have played down the threat to Labour’s £8.2m annual income from affiliation fees, arguing that unions could merely replace lower fees with one-off donations. But unions say such gifts would be harder to justify if only a small proportion of their members “opt in” to backing Labour financially.

Lord Whitty, Labour’s former general secretary, who turned down the chance to review the party-union relationship, issued a statement saying the Miliband proposals were workable. "I felt that delivering this change would be difficult,” he said. “But that was true when we were modernising the Labour party under Neil Kinnock and John Smith too. It was done then and I'm sure that it can be done again.” The Labour review will now be led by Lord Collins, another ex-Labour general secretary.