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Labour Should Refuse Large Private Donations

by Duncan Davis
September 29, 2020

A Labour Party funded by ordinary people whether as members or through trade unions is a democratic necessity. 1268 words / 5 min read

It’s hard to know what to do as a socialist member of the Labour Party in 2020. Many are leaving the party in disgust at the direction it has taken: back to the days of “opposition” that proposes no alternative; politicians as a professional elite who know what’s best; and a membership who should knock on doors, deliver leaflets and know their place. There have been calls for us to “stay and fight”, but there’s not been much fight so far.

Under the leadership of Jeremy Corbyn, Labour’s membership grew from around 200,000 to more than 500,000. Since Keir Starmer’s election, the official figures remain as high as ever, although this seems to go against the reports of large numbers of people resigning from the Party. We don’t know yet if that’s because those numbers are more than made up for by new members won over by Sir Keir, or if the resignations aren’t yet counted due to grace periods. The recent news of Starmer courting former big private (property developer) donors to the party suggests that either membership income has fallen and the aim is to make up the shortfall, or the leadership wants the option to not rely on membership dues and union funding. If this move is successful, it could mean the influence of the membership and unions is further diminished, enabling the leadership to move the party as far to the right as they wish.

Along with the increase in membership and the social democratic policies, Corbyn’s leadership saw an exodus of wealthy donors, but the loss of this money was more than made up for by the membership dues of those hundreds of thousands of new members. The Labour Party as an organisation was financially much better off relying on members and unions, than when it had the backing of big donors. These members weren’t merely a source of passive income: they campaigned hard in unprecedented numbers during elections, and demanded changes to the party’s policy programme and rulebook. But even with a socialist leadership that had fought for decades for empowering the membership through democratising the party, members couldn’t get everything we wanted. Policy motions were won on issues such as a Green New Deal and free movement of people, but these didn’t reach the 2019 manifesto without being watered down. Open Selection was defeated in favour of a barely improved trigger ballot system, stitched up by the NEC with the backing of unions at Corbyn’s request.

Both the membership and the unions look like they will lose a great deal of power within the Labour Party’s internal coalition. The strategy of the leadership is clearly to become acceptable to the mainstream media and sections of capital in order to get into government. At the most generous, this reaching out and trimming of sails is felt to be the precondition of using the power of the state to improve people’s lives. However, the means by which office is gained affect not only how it is used but the ends to which it is put to, wanting to stay in office and having got therethanks to big donors and schmoozing with media bosses, the Labour leadership will think twice before upsetting them. The reliance on media bosses and big donors creates a hard limit on enacting policies that will empower the working class. Big donors are not fools, they know what they want from donating to the Party and expect to get it. When it relies on the wealthy, a Labour government means war and privatisation with a smiley face. A Labour Party, like the Tories, reliant on big donors, leaving the vast majority of us unrepresented, cuts off possibilities of a democratic alternative. A Labour Party funded by unions and members is a pre-condition of a functioning democracy.

The reliance on media bosses and big donors creates a hard limit on enacting policies that will empower the working class. Big donors are not fools, they know what they want from donating to the Party and expect to get it.

Party democracy was turned off as we entered the first lockdown. We can’t safely meet physically, which has been convenient for the new leadership who’ve been able to lead in their own way without much resistance. Indeed, it has often been noted that a lack of internal democracy favours Labour’s integration into the purposes of capital. Now that some democracy is allowed again (online CLP meetings that can vote on motions) and we may have some kind of democratic conference next year, we should think about how we can put the brakes on elite capture of the Labour Party.

We could organise around policies - maybe ones in Starmer’s leadership election pledges that have quickly been dropped - but the leadership can just ignore conference policies. We could push for greater party democracy, but without a left majority on the NEC, reforms like Open Selection or improved NEC composition, are unlikely to make their way to a conference vote. If instead we focus on a rule change that wrecks the leadership’s big donor strategy, we could force them to move back to positions favourable to a mass membership and trade unions.

If instead of organising around policies, we focus on a rule change that wrecks the leadership’s big donor strategy, we could force them to move back to positions favourable to a mass membership and trade unions.

Simply put, the rule would be to ban large donations (from individuals or companies) to the Labour Party. Of course, we would want democratic organisations of the labour movement (unions and co-operatives) to be able to make large donations - these are just the pooled small donations of workers. Individuals should be able to make small donations too, but what exactly counts as a “small” or “large” donation is up for debate. Should it be £1000 per year (as in the draft rule change below), some multiple (maybe 50, or 100) of the minimum wage, or something else? Such questions would need to be ironed out, but the basic principle would fit with the common sense of most of the membership - not just the socialist left. A proposal like this would also stand a good chance of winning trade union support because it would extend their influence at a time when the direction of the Party is to see it diminished.. These are the poles of support needed to get a motion past the NEC and passed at conference. Let’s campaign against the corrupting influence of wealthy donors.

Amend Chapter 1, Clause III of the Rulebook “The Party’s financial scheme” to add:

“5.The Party and each of its accounting units shall accept no more than £1000 per annum in donations from any individual or organisation (except for trade unions and cooperative societies; for which the allowed amount is unlimited) and must return any amounts received in excess of this. If returning excess donations is not possible, they should be donated to charities under rules set by the NEC.

6.Members of the Party acting in any capacity relating to the Party (including candidate for public office, candidate for internal Party elections, or holder of public office) shall accept no more than £1000 per annum in donations from any individual or organisation (except for trade unions and cooperative societies; for which the allowed amount is unlimited) and must return any amounts received in excess of this. If returning excess donations is not possible, they should be donated to charities under rules set by the NEC.”

Follow The Labour Campaign for Clean Money on twitter to get involved.