Funding changes pile more pressure on Labour

By Chris Rogers December 2, 2015 4:07 pm

Labour’s having a difficult time of it. The very public split over Syrian airstrikes is but the latest in a series of troubles that have plagued the Party since its calamitous election defeat in May. The election of Jeremy Corbyn, welcomed by many within the rank and file, has been poorly received by the public according to numerous opinion polls since September. And many within the Parliamentary Party have struggled – or simply not bothered – to hide their exasperation with the new leadership.

But, say what you want about Mr Corbyn (and many have), he is widely credited with substantially increasing the Party’s base. Thousands of new members and supporters – along with more than a few mischievous Tories – flocked to Labour during the leadership campaign. Not only did this bolster party finances that were in a parlous state, they offered Labour the prospect of a grass roots mobilisation that would undoubtedly aid the Party in local, regional and ultimately national elections.

But, largely overlooked amidst the talk of military action, steps by the Chancellor now threaten even that legacy.

As the Financial Times has noted, George Osborne has announced a sharp cut in the amount of public money (‘short money’) received by opposition parties. The cost of this change to Labour is expected to be in excess of £1 million a year. And the problem is compounded by the expectation that changes to  trade union rules – requiring members to opt into paying into political funds (which go to Labour) – will result in further cuts to Party funding.

Critics inevitably accused Mr Osborne of playing politics and abusing his position to support the Tories’ electoral ambitions in 2020. It’s of course an astute move by a Chancellor who has repeatedly shown a knack for nobbling his opponents and stacking the deck in his and his party’s favour. Although, it’s a decision the government can defend in the context of wider efforts to lower public spending.

Regardless of whether the motivation was to hurt Labour or protect the public purse, the effects will be profound. The loss in funding will likely mean redundancies within the Party, which will reduce its ability to coordinate and direct the efforts of the supporters brought onboard during the leadership contest. And the Party will be left with few options to replace the funds, given ‘affiliated supporter’ fees to vote in the leadership contest were one-off payments.

At a time when Labour appears to already be in turmoil, its job has been made a lot harder.

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