Mr Miliband loses financially but gains politically

The claim that “Red Ed” – who won the leadership thanks to union votes – is in the pocket of organised labour

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When Ed Miliband announced plans to reform Labour’s relationship with the trade unions – giving individual members a choice, for the first time, about whether to contribute to the party – estimates suggested that it would leave a £9m funding gap. And with the GMB’s decision yesterday to cut its affiliated members from 420,000 to 50,000, the first shoe dropped. From January, Labour will receive just £150,000 each year in such fees, rather than £1.2m. The union also plans to reduce its spending on party “campaigns and initiatives”.

Such a hefty shortfall will hardly go unnoticed. But what Mr Miliband loses financially, he may gain with voters. After all, the GMB’s move must surely nix, once and for all, the claim that “Red Ed” – who won the leadership thanks to union votes – is in the pocket of organised labour.

In the aftermath of the Falkirk scandal, which saw Unite accused of manipulating Labour’s selection procedures, relations between the party leader and his erstwhile backers have sunk to an all-time low. To their chagrin, Mr Miliband has proposed reforms to modernise Labour’s trade union links and open up “the politics of the machine”.

There is much choppy water ahead. Where the GMB leads, others will likely follow. And the tone is also increasingly rancorous. Yesterday, the GMB accused Mr Miliband of a “lack of understanding” and next week’s Trades Union Congress conference includes a motion demanding that he reject austerity (which runs counter to his professed position).

But the Labour leader’s decision to take on the unions was always a risky strategy. He was nonetheless right to do so. Not just to prove he is his own man; also because if Labour can rid itself of the taint of big money, it will force the hands of the others. We can only hope.

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