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.

Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Have you tried new the Independent Digital Edition apps?
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Head of Marketing and Communications - London - up to £80,000

£70000 - £80000 per annum: Ashdown Group: Group Head of Marketing and Communic...

Nursery Nurse

Negotiable: Randstad Education Manchester: Level 3 Nursery Nurse required for ...

Nursery Nurse

Negotiable: Randstad Education Manchester: L3 Nursery Nurses urgently required...

SEN Teaching Assistant

Negotiable: Randstad Education Manchester: We have a number of schools based S...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments