Unions spurn Labour plea for cash

ON THE DAY it elected a new leader committed to reducing the trade unions' influence, the Labour Party faced a financial crisis last night after union leaders rejected a long-term plan to increase their contributions to the party by a third.

Representatives of 30 unions affiliated to the party said they would agree to a 6.25 per cent increase at the annual conference in October, to help Labour cope with its seven-figure overdraft.

But they turned down plans by Larry Whitty, the party general secretary, for further increases to be implemented automatically.

The party was told bluntly by union leaders that, instead of relying on them, it must find new ways of raising money. They added that union finances are in too parlous a state to allow them to agree automatic increases.

Mr Whitty suggested a 10p increase to pounds 1.70 this year in affiliation fees for each of the 4.5 million union members paying the political levy.

This would be followed by staged increases to pounds 2.15 in four years' time. He said Labour needed funds to fight next year's local elections and the 1994 European elections.

Even if the fee is increased this year, there is no guarantee that there will be a proportional increase in total contributions because of declining union membership. At a private meeting at the headquarters of the Transport and General Workers' Union in London, Mr Whitty acknowledged that there had already been an increase in financial contributions from other sources and this would need to be encouraged.

While commercial fund-raising has improved, so that union contributions make up only 55 per cent of the general fund, against 75 per cent in 1986, declining union membership has seen the real value of affiliation fees drop 30 per cent since 1987.

Mr Whitty also laid out plans to cut about 60-70 Labour Party jobs out of 200.

The unions' refusal to guarantee long-term aid comes against a background of warnings by Larry Whitty that the party's financial position is 'bleak'.

In a paper circulated recently he warned that the party made a loss of pounds 800,000 in 1991, with a shortfall in this year's income of pounds 500,000.

The party's overdraft stands at pounds 2.5m. In order to repay it, pounds 400,000 has to be found this year and pounds 680,000 in 1993, with further instalments due to be paid in 1994 and 1995.

Before yesterday's decision, Mr Whitty was warning that total income was likely to be 25

per cent or pounds 2m lower in real terms over the next few years.

Start your day with The Independent, sign up for daily news emails
Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
News
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
news
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
  • Get to the point
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: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Recruitment Consultant / Account Manager - Surrey / SW London

£40000 per annum + realistic targets: Ashdown Group: A thriving recruitment co...

Ashdown Group: Part-time Payroll Officer - Yorkshire - Professional Services

£25000 per annum: Ashdown Group: A successful professional services firm is lo...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before