Labour faces £1m funding crisis after GMB cuts party cash by 90%

Membership has dropped from 193,961 in 2010 to 187,537  last year

Labour faces a financial crisis in the run-up to the general election after the third biggest trade union announced that it will cut the money it gives to the party by 90 per cent.

The move by the GMB union highlights the backlash against Ed Miliband’s plans to reform the relationship between Labour and its union founders. He wants the three million  union members who pay the political levy to actively “opt in” rather than have to opt out if they do not wish to support the party, as at present.

The GMB will cut the affiliation funds it gives Labour from £1.2m to £150,000 a year. It also threatened “further reductions in spending on Labour Party campaigns and initiatives” and expressed “considerable regret” about the impact of Mr Miliband’s proposals on the union-party link.

The GMB estimates about 50,000 of its 650,000 members would affiliate to Labour, with a GMB source saying the idea that many more might choose to join the party was “fantasy land... dream on”. The move is worrying for Labour because officials expected the reforms to take effect after the 2015 election. If, as expected, other unions follow suit, the party could be forced to run a slimline election campaign in which it spends less than the Conservatives.

Labour could be forced to plead with the unions for a last-minute injection of money on the eve of the election, when several have traditionally topped up their affiliation fees with one-off donations totalling millions. That would provoke Conservative claims of trading “cash for policies” in the Labour manifesto.

Ronnie Draper, general secretary of the Bakers, Food and Allied Workers Union , said he would not be surprised if other unions copied the GMB’s reaction to Mr Miliband’s “gamble.” He said: “This is the biggest own goal we [Labour] have ever done.”

Ian Lavery, who chairs the trade union group of Labour MPs and has described the reform as the “biggest political gamble” in the party’s history, said: “People are not queuing up to join Labour – quite the opposite. They are waiting to see what the party will bring to the table in its manifesto.”

Some Labour MPs accused the GMB leadership of “jumping the gun” before consulting its members on whether they want to back Labour. Others saw it as a negotiating tactic as the reforms are hammered out.

The snub is significant because Paul Kenny, the GMB general secretary, backed Mr Miliband for the Labour leadership in 2010. When the two men  meet tomorrow, Mr Miliband will tell Mr Kenny his union’s decision “makes the case” for the reforms rather than undermines it. A modern, transparent relationship between Labour and the unions means that individual members, not union bosses, should decide on financial backing for the party, he will argue.

The GMB will cut donations to Labour from £1.2m to £150,000 (Getty) The GMB will cut donations to Labour from £1.2m to £150,000 (Getty)  

Aides insist Mr Miliband will not back down. He will address the TUC’s annual conference next week and an interim report on the reforms will be discussed at Labour’s conference later this month.

Labour officials insisted they are not worried about a pre-election cash crisis. They are confident of raising more funds by attracting new members.

Labour claims its membership has risen since 2010 to about 190,000. However, accounts filed to the Electoral Commission show that it dropped from 193,961 in 2010 to 187,537 last year.

According to Labour, the party had an income of £16.8m in the 12 months to June, of which £4.8m (29 per cent) came from membership and small donations, £4.2m (25 per cent) from fundraising and commercial activities, £4.1m (25 per cent) from union donations and affiliation fees and £3.6m (22 per cent) from grants, including public money for opposition parties.

Start your day with The Independent, sign up for daily news emails
Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Sport
Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
football
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
News
i100
Travel
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Sport
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Life and Style
tech
Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Helpdesk Analyst

£25000 per annum: Ashdown Group: An established media firm based in Surrey is ...

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Head of Finance - Financial Director - London - £70,000

£70000 per annum: Ashdown Group: Head of Finance - Financial Controller - Fina...

Recruitment Genius: Business Development Executive - Nationwide - OTE £65,000

£30000 - £65000 per annum: Recruitment Genius: This small technology business ...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum