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.

Voices
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
News
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
News
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
A polar bear’s diet is rich in seal blubber and half of its own body weight is composed of fat
i100
News
London is the most expensive city in Europe for cultural activities such as ballet
arts
Travel
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
Arts and Entertainment
Jeremy Clarkson has rejected criticisms of his language, according to BBC director of television Danny Cohen
tv
Extras
indybest
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Arts and Entertainment
tv
Sport
Is this how Mario Balotelli will cruise into Liverpool?
football
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
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

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Service Desk Analyst- (Desktop Support, Help desk)

£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape