Unions cut pounds 400,000 from donations to Labour

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The Independent Online
LABOUR'S biggest benefactors are to cut nearly pounds 400,000 from their donations at a time when the party is experiencing severe financial problems.

The public service union Unison, the Transport and General and the GMB general union, which together contribute more than one-quarter of the party's funds, have decided to make massive cuts.

The decline in the big unions' subvention to the party is a barometer of the dwindling number of trade unionists, but there is also considerable disquiet among senior union activists about the political direction of the Government under Tony Blair's stewardship.

The Amalgamated Engineering and Electrical Union (AEEU), which withheld pounds 250,000 from the Labour Party's election fund last year, is biding its time before deciding how much to give the party in affiliation fees. Sources at the union say they first want to see the contents of the "Fairness at Work" White Paper in April, which will include proposals on a union recognition law.

One AEEU official also said they were keen to find out how many of its members would be selected for impending Euro-elections before making a final decision. The pounds 250,000 withheld by the engineering union was in protest at the Labour leadership's alleged practice of "parachuting in" middle-class parliamentary candidates at the expense of its own locally selected members.

There is little doubt that reaction to the White Paper will be the main factor in determining union contributions to the party. Mr Blair's zeal in transforming Labour into the business-friendly party of government may have to be tempered by considerations about party finances.

The impending drop in union affiliation fees is accompanied by concerns about the level of Labour's individual membership. Senior party sources insist that while membership has stopped growing, it is not declining. Party officials claim that it is simply "churning" with the number of leavers being matched by the number of joiners. Unions register scepticism about such claims, arguing that the true figures will show a sharp drop, largely because of disillusionment with new Labour.

The most recent figures from Labour show that it has incurred debts of pounds 3.5m on top of the pounds 4.75m overdraft built up in the two years to the general election.