Union leader warns of drop in Labour funding

Labour Party leader Ed Miliband, pictured in Manchester, on October 3, 2012. One of Britain's biggest trade unions warned Wednesday that only a fraction of its members would opt to join Labour under changes announced by Milliband, leading to a huge drop in funding. (AFP/File)

One of Britain's biggest trade unions warned Wednesday that only a fraction of its members would opt to join the Labour party under changes announced by its leader Ed Milliband, leading to a huge drop in funding.

GMB General Secretary Paul Kenny said the union's funding could fall by as much as 90 percent as a result of plans announced Tuesday to reform trade union ties.

Miliband vowed to end automatic affiliation of union members to his centre-left party for ??3 a year in a move that could cost Labour millions of pounds a year.

Kenny said the move was "very bold" but warned that it had "far reaching consequences".

The GMB leader believes that while 400,000 of the union's 620,000 members are affiliated to Labour, few of those would choose to become party members if balloted.

"I think we will be lucky if 10 percent of our current affiliation levels say 'yes' they want to be members of the Labour Party," he told BBC radio.

"Campaigning for issues with the Labour Party" and "being members of the Labour Party are two entirely different things", he said.

The GMB is the third largest union contributor to the Labour Party, donating some ??2 million a year, with its members paying the political levy unless they opt out, under current rules.

"We've been trying to encourage our members to join the Labour Party for a very long time, in our magazine at meetings, our conferences, and I have to say we have not been knocked down in a rush," added Kenny.

Labour currently nets a reported ??8 million a year from almost three million union workers -- the majority of the party's funds.

Miliband's proposals come after Unite, Britain's biggest union, was accused of trying to fix the result of a candidate selection for the Falkirk by-election by signing up its members to the local party without their knowledge.

Unite denies it has broken any Labour Party rules.

"In the 21st century it just doesn't make sense for anyone to be affiliated to a political party unless they have chosen to do so," Miliband said in a speech Tuesday to party activists in London.

He admitted the proposed change had "massive financial implications" for a party which has struggled to attract private donations since losing the last election.

But Miliband said he wants to create "a modern relationship with individual working people" and believes the move could increase party membership.

He hopes to push the changes through by the next election in 2015.

Unite leader Len McCluskey, who has been embroiled in a war of words with the Labour leadership in recent weeks, welcomed the move, calling it "brave and bold".

Former Labour Prime Minister Tony Blair hailed the proposal as "real leadership".