Wednesday, April 05, 2006

The Union Modernisation Fund

Guido Fawkes highlights an ongoing concern for anyone worried about how the Labour party seems to be taking maximum electoral advantage from its time in government by every means other than actually running the country well. The Union Modernisation Fund offers £10 million over 3 years to the Unions for the purpose of "modernising". This, fairly vague, term appears to mean buying computers and websites. It is set out clearly on the DTI's documentation for the project that it cannot be used for funding political projects. This is an important distinction because otherwise the money is the Labour party using the Unions as a vehicle to fund itself from tax revenues.

The problem here is that the Unions have a budget restriction that forces them to make choices between, for example, spending more on computers or spending more on political funding for the Labour party. Reducing this pressure by, for example, paying for Amicus to communicate with its branches increases its ability to spread largesse elsewhere. The segregation of Labour funding in a political fund does not change the fact that this political fund's size is limited by the need to prioritise within the budget limitation that is the willingness of union members to sacrifice consumption for union representation. Clearly a Labour government policy is contributing to the same budget that funds the Labour party politically. Clearly Frances Maude is right that is "very, very direct sleaze. That is buying influence and buying taxpayers' money".

The argument that unions which don't fund Labour are also receiving money therefore the scheme is okay is utterly irrelevant. All that means is that Labour has no objection to spreading taxpayer money around so that it funds other unions as a byproduct of enabling those unions who do fund the party to continue to do so. Al Fayed also gave substantial money to his son, does that mean his payments to the Hamilton's were above board?

The Metropolitan Police investigation into this scandal marks another low for this government. With the investigation into the cash for peerages row that makes two policy probes into the Labour party directly that I know of at the moment. Really puts the problems at the end of the Major government into perspective doesn't it?

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