Labour's long relationship with the trade unions was under threat last night after its biggest single donor decided to review links with the party in disgust at the Government's "privatisation" policies.
In an unprecedented move, the public service union Unison voted to take a fundamental look at whether it gets value for money from its annual donation of more than £2m, which forms a significant slice of Labour's income. Despite strong opposition from the Unison leadership, the union's annual conference in Brighton said it needed to reassess the relationship because of the Government's "attack" on the wages and conditions of state employees.
The move follows a warning of nationally coordinated strikes by Unison, Britain's biggest union, and a decision by the Fire Brigades Union to "free up" its political fund so that the money can be used to back parliamentary candidates who support the union's aims.
The RMT rail union – a prime mover in the establishment of the Labour Party in 1900 – will debate a similar motion next week. At its biennial conference next month, the Transport and General Workers' Union, another of the party's largest affiliates, will be urged to look at alternative ways of using its political fund.
In response to the mounting concern in the union movement, Tony Blair yesterday told the Cabinet to go out and explain Government policies on attracting private money into public services.
His spokesman said he had told ministers that it was "important to have constant explanation of what this was about as people will try to misinterpret and misrepresent it".
Proposing the motion in the Unison debate, Glen Kelly, a Socialist Party member from Bromley, said that, by making the donation, the union was "feeding the hand that bites us". He said that while the last Conservative government introduced the Private Finance Initiative (PFI) at one hospital, Labour had done it at 38.
Geoff Martin, Unison's left-wing London convenor, and a Labour Party member, said the motion passed by his union's conference meant there had to be "root and branch" review of the donations.
"The leadership... opposed the motion quite strongly, but the decision by the conference means that people are asking some serious questions about the nature of the union's relationship with the party. We are not going to be taken for granted any more."
He said that while the motion – passed by 478,000 votes to 386,000 – was proposed by the Socialist Party, many of the speakers in favour were Labour Party members.
Embarrassed Unison leaders were anxious to play down the significance of the decision. Dave Prentis, general secretary of the union, who argued against the proposition, said the union was happy to conduct the review and report back to next year's conference.
"The vote does not change in any way whatsoever our arrangements with either the Labour Party or our general political campaigning work," he said. Mr Prentis pointed out that a move earlier in the conference to withhold funds to Labour if the Government was not prepared to stop the use of the PFI was "roundly defeated". He said that other motions instructed Unison to use the links with Labour Party to pursue union policies.
The resolution passed yesterday stated: "Conference notes that, increasingly Unison members are asking why we hand over millions of pounds of members money to fund a party which is attacking our jobs, wages and conditions."
On Wednesday more than 2,000 delegates at the conference backed nationally coordinated strikes and rallies to halt the "privatisation juggernaut" as the Queen's Speech unveiled plans for legislation which will increase private sector involvement in public services.
A senior Labour source said: "I'm sure that when Unison weighs up the benefits, they will stick with Labour."
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