Ed Miliband’s party reforms are purely presentational

Ed Miliband’s proposal to cap party donations at £500 – thereby restraining the huge one-off union payments that sustain Labour – certainly looks radical enough. But, as any fule kno, surface appearances can be deceptive. As Jim Pickard explains in an insightful post over at the FT, the result would be a system that affects the other parties far more than it does Labour and their union support. The trick is crystallised by this passage from the original Independent report:

“One reform option would be to treat Labour’s income from union members who pay the political levy as individual donations. This helps to fund the party’s day-to-day spending. But a ceiling would stop Labour from appealing for big one-off union donations – notably at election times.”

So, no big donations around election time. But still thousands upon thousands of £500 donations from union members who have to opt out of – rather than opt in to – the political levy. Whereas for the Tories – who rely on a considerably smaller base of donors, each giving many £thousands – the effect would be to decimate their income, be it an election or whenever.

Not that Miliband’s proposal will actually come into force. The other parties will resist it, just as Labour would resist any move to make the unions’ political levy more avoidable. Which leaves us exactly where we were: an unedifying stasis over party funding, where the only likely escape route is to siphon off public funds towards all political parties.

Miliband, and Labour, must know this – meaning that their little offering today is presentational rather than substantial; a ruse for distancing themselves from the unions in public.