A couple of weeks ago Ed Miliband gave what was branded a watershed speech, in which he sought use the Falkirk selection hoo-hah to kick-start a whole new approach to party-union relations, and ultimately to redevelop Labour as a mass membership party.

Why such an approach needed to be kick-started by events in a single parliamentary selection contest, rather than as part of the year long Refounding Labour process, which was all about redefining how Labour is run, need not detain us here.  I’m happy to take Ed at face value, and to accept Ed’s explicit invitation to current members to give him ideas on how precisely he should go from principle to practice.  I do so in the context of Ashcroft’s new polling of Unite members, which suggest that 12% of members would join the party if they were offered that ‘opt-in’ choice today.

So I’ve written to him.  Here is what I said.

Dear Ed

Introduction

Thank you for the opportunity to have my say on a “better way of doing politics”, which is to be found here on the Labour party website, though I would note that it is not as easy to find on the site as it might be. Much of what I have to say to you actually builds on an earlier lengthy submission to the Refounding Labour process (see Section 5 in particular). My submission was ignored at the time, but it would seem that in the last week you have sought to push the party towards a position where my practical recommendations on steps to bring the party closer to ordinary people, and within them union members, might receive a better hearing.  I am grateful for your having done that, and I hope my recommendations now enable you to build the case for the necessary rule changes over the next two Labour conferences.

My submission here focuses solely on your proposals around the financial relationship between the party, the affiliated unions and their members.  While I have views on your proposals for primaries, I will set these out in a different submission.

The risk

Many commentators have noted that your proposals for an ‘opt-in’ system to replace the current ‘opt-out’ one (other than in Unison) is a high risk strategy, in that while it could recreate a genuine mass membership party, it could also lead to a large percentage of union members choosing not to opt in, leading to millions of pounds lost revenue for the party.  Then, goes the argument, the party might be forced to go cap in hand to businesses (notwithstanding your proposals for a funding cap, about which there has been significant scepticism).

In addition, as Mark Ferguson at Labourlist has rightly pointed out, if all the party does is switch from an opt-out to an opt-in system, then we are indeed likely to lose millions.  Today, Ashcroft publishes a snapshot poll of Unite members which appears to back this up – as it stands, and in the absence of any further ‘offer’ from Labour, only 12% of Unite members want to opt in.

The reasons

There are two reasons for this current low potential take-up of the opt-in option.

First, there is the unpalatable but nonetheless true fact that a significant percentage of union members actively dislike the Labour party, and see no connection between their union membership and support for the party.  There is  strong argument that such a dislocation has been caused, at least in part, by the unions’ strategy of depoliticisation over the last 30 years, during which time the emphasis in everyday union activity has drifted from the role of representation to service provision (though of course unions have always “provided for” their members to a certain extent.  While I hope the current process of drawing union members back within the political sphere will repoliticise workers in favour of Labour’s electoral position in the longer term, there is clearly a risk to the party’s finances in the meantime.

Second, even amongst those affiliate union members who are Labour supporters and voters, there is Olson’s ”collective action” problem i.e. the danger that, even people who support, or at least feel a bond to, the Labour party, will feel that the costs, both in terms of money and “hassle” of joining the Labour party outweigh the ’private member’ benefits of joining.

Towards the solution

Of course, Olson only considered two “solutions” to the collective action problem as applied, say, to membership of a a political party.  First, there was compulsory membership – what we effectively have at the moment with the opt-out process, and therefore redundant as a possible solution here.

The second solution comes, according to Olson, when there is a substantial enough ‘byproduct’ , available only to members, alongside the public good that the existence of the political party brings to everyone, regardless of their membership. Olson’s formulation has been refined over the years, notably in the context of trade unions by Alison L Wood, who argues that we should

incorporate sociological factors into the traditional utility-maximising model, in…..a “social custom” theory of large union membership”.

Wood’s argument (and algebraic model) is essentially that the local reputational benefits of adhering to ‘social custom’ of union membership are often as important or more important than outcomes like improved wages, terms and conditions.

If we accept this “refined Olson” theory as a reasonable model, the question then arises of how we best promote Labour party membership as a, necessarily, new, social custom for union members, such that over time the new form of ‘opt-in’ membership becomes accepted, even automatic practice.   That is, what ‘byproduct’ of the common good brought to everyone by the Labour party is available only to members, and how can we best sell this member-only benefit, such that union members choose both to join and stay in the party?

To start to answer this key question, it is useful to look back, to the late 1970s/early 1980s, the last time the Labour party seriously tried to address the twin issues of a) the loss of the ‘traditional’ support base and membership; b)  the seemingly irrevocable shift in control over the party from representatives of the working class to a professionalised, middle-class political elite.   It is useful to do this, I contend, because while the analysis of the problem was often acute. the supposed solutions were not successful in the longer term, though arguably they were in the short term.  This time around, under your  reflective leadership, it is possible to get both problem analysis and solution correct.

There isn’t room here for a full literature review around how Labour analysed and reacted in the late 1970s/early 1980s to the changing nature of its membership base/membership in the context of the decline of heavy industry etc. (though I’ll happily provide you with one if you want to explore further).  Instead, I’ll focus on the contemporary analysis of Paul Whiteley, the doyen (still going strong) of empirical studies of party membership, not least as his analysis tends to reflect (as well as promote) the consensus of period, namely that the Labour party was in a state of terminal decline.

Here is Whiteley in The Decline of Labour’s Local Labour Party Membership and Electoral Base, 1945-79 (in The Politics of the Labour Party (1982), Ed. Kavanagh D), using both Olson’s collective action theory and Hirschmann’s (1970) contemporaneous ‘Exit, Voice, Loyalty’ model to get the nub of the problem facing (then as now) the Labour party:

We might crudely summarise the situation in Labour party grass-roots parties in response to the failures of Labour in office as follows: ‘nearly everyone voices, but whilst the middle class remains loyal, the working class exits’. Clearly the Olson paradox tends to make instrumental members  more likely to leave than expressive members, regardless of performance, simply because because they are pursuing collective goals.  But when this inherent vulnerability to defection is coupled with a wide-ranging failure of performance it becomes critical. Other factors related to the class mix within local parties may also be influential in producing a working class defection.  Hindess shows that for middle-class activists the language of politics and the attitude towards issues are very different from those of the working class…[M]iddle class activists tend to discuss politics in terms of general principles, whereas working class activists see things in terms of specific events which affect the life of the individual (p.122-3, my hyperlink).

It is this kind of analysis, crudely normative though it now appears, which provided at least some of the rationale for the rise of the New Urban Left in the early 1980s, as activists strove to provide ‘instrumental’ reasons for party membership by opening local parties out to identity politics, and to a wider range of people than the (supposedly) fast disappearing traditional working class.  In some ways, this was a successful development, as people who would never previously have conceived of Labour party involvement were drawn in by the promise, and often real delivery, of political respect and clout.

But it came at a cost that we still feel today, as party-union links at a local level withered away, and at a wider level there was a failure to reconceptualise the labour movement for the post-industrial landscape, leading to major de-unionisation across vaster swathes of the service economy, which in turn allowed the Right to portray unions as relics of a past age. In short, the response of the 1980s to the perceived membership crisis was successful in the short term because it focused on the local and the instrumental, but a disaster in the longer term because it allowed the growing division between grassroots Labour parties and local unions set-up to grow to the point where they no longer saw each other as part of the same labour movement institution.  Given this, it is no surprise that Labour clubs all over the country, where they still exist, are now often nothing more than pubs with snooker tables and tattier chairs than you’d get away with elsewhere.

This time around, of course, we’re not trying to retain union-based membership, but to create it anew.   But the basic tenet of what we should have learned from the 1980s still applies – keeping it local and instrumental, rather than abstract and expressive, will help us recruit the working class members from affiliated unions.   Conversely, failure to provide a tangible local offer, through which newly recruited members can develop a real ‘social custom’ of long term membership will lead inexorably to the kind of member and financial haemorrhage Ashcroft’s poll is currently predicting.

So how does Labour go about creating this ‘local, instrumental offer’ to union members?

To answer that, let’s take a short diversion into ‘localism’ (aka ‘decentralisation’) research literature.  Localism has become, in recent years, the policy item no self-respecting party can afford to be without, and it can come as a surprise to people that it’s not very new – decision-making at the lowest possible got written into the US constitution well before the right to carry a gun.  But for all its popularity and longevity, there’s actually relatively little research about whether it actually delivers on its core promise of the virtuous circle of local engagement-local accountability-effective delivery- increased local engagement, and whether the benefits accrued through localism actually outweigh those potentially or actually foregone (standardisation, economy of scale etc..).

Nevertheless, recent research does give us at least some insight into which aspects of ‘localisation’ lead to improved perceptions of accountability (and thus, by extension, to public engagement).   Escobar-Lemmon and Ross (2013) , researching into active departmental decentralisation in Columbia, find that, perhaps counter-intuitively, administrative and fiscal decentralisation have a greater positive impact on perceptions of accountability than political decentralisation (though the choice of proxy indicator for political decentralisation does look rather forced).

Closer to home, we are at least starting to get some recognition that ‘proper’ local accountability requires not just the occasional election, but greater day to day, administrative involvement, withacademics now even highlighting the emerging thinking in the Labour party about the ‘relational state’ (Cooke and Muir, 2012), whereby the type and quality of everyday contact with public servants is as important as the formal public service ‘transaction’, as a coherent means to achieve this.

But while this kind of thinking about public service delivery is welcome (though not easy to implement until the labour movement regains its focus on quality), it has not yet transferred across into thinking about the way the party itself might work.  Within the party, ordinary members are still expected to be the relatively passive recipients of often frankly patronising messaging from those in leadership positions, especially MPs, and the chance for members, especially working class members, to achieve the local ‘instrumental’ goals with which they may have joined the party (see above) is extremely limited.

If we are to recruit and retain more union members than the Ashcroft polling is suggesting we will, this has to change.  The offer to working class union members needs to be one which offers the genuine prospect of productive, instrumental involvement in the Labour party, in a way which allows them first to express pride in what they and the party have achieved locally, and second to develop the social bond with other members so that the ‘loyalty’ aspect of the Exit, Voice, Loyalty model kicks in (when times get hard, electorally, economically or both). This requires a radical decentralisation of the way the finances of the party are organised and controlled –remember from above that is fiscal and administrative decentralisation which potentially has the greatest impact on perceptions of accountability.

Recommendations My principal practical recommendations are therefore as follows:

1) All membership payments from both existing and new members should be paid directly into local party accounts, with Constituency Labour Parties becoming an entirely autonomous accounting unit,

2) All or almost all Short Money (currently £6.5m per year), or its equivalent when Labour is in government. should be paid into a single pot then distributed to local parties on a pro-rata basis according to membership numbers.

3) Sitting MPs and MEPs should be required, or strongly encouraged if coercion is not legally possible, to put their MP salary (possibly excluding a living wage amount) into the same pot for distribution on the same basis.

4) All other donations coming into the party (including from unions), where they are not specifically ring-fenced by the donor (e.g as with Progress now) should be paid into the same central pot for distribution on the same basis.  This is, our course, in keeping with the proposal for a donation cap that you have already made.

5) MP, PPCs and MEPs should be asked to submit a yearly (or rolling three year) budgeted business plan, setting out what the outcomes they seek to achieve and the resources needed to achieve it.  This should be submitted alongside/in collaboration with local Campaign Forum budgets and business plans.  It will be for the CLP, acting effectively now as a board to a resourced local voluntary organisation/development trust, to approve business plans and allocate finances.

6) Similarly, Regional offices and the NEC should submit plans to CLPs in the event that they feel they need resources over and above any topslice, setting out in particular how their activities will assist local CLPs in their function.

7) MPs, MEPs and PPCs should be encouraged to unionise themselves, either as a collective bargaining unit within an existing union or as a newly esatablished independent union, so that they can make representation to their employers on their terms and conditions as they see fit, and just like any other union member.

8) In terms of timetable, this process should be ready to roll after the 2014 conference (the last of its centrally funded type) when the necessary Labour rule book changes have been made, such that when union members get their first opt-in/opt-out letter, they get an invitation in the same envelope to review a draft of business plans and attend local meetings aimed at setting those local ‘instrumentl ‘ priorities.

Of course, such a radical reversal of the financial and power flows within will create early teething problems, especially in regards to the competence of some CLPs to move from being little more than campaign fodder to running small-to-medium voluntary organisations.   Early, top sliced central support may be warranted in some cases to ensure the transition.  But the benefits, in terms of involving members from the start in meaningful, relational action, so that the ‘social bond’ required for long term party loyalty and genuine mass membership are fostered, are clear.

It would of course be naïve to think that this can be achieved without a struggle, and without real leadership from yourself.  More than anything, this route (and it is the only viable route) to mass membership requires a massive culture change, away from the fetishisation of the MP, and towards a position in which the MP/PPC is seen as the capable functionary of the local party.  Clearly, the vested interests of those MPs who like their almost god-like status – and you know that there are many – will ensure that there is an effective campaign against the grassroots taking back financial and administrative power, fought principally on the basis that such a move away from the cosy professionalization of the party is just too risky.

Leading that change will therefore take real guts from yourself, because – unlike with the current party-union squabbles – some of those closest to you may really want to stab you in the back.  I have great hopes that you will be up to that task, because it will be the smoothest and most effective way to achieve the committed mass membership party you want.

But even if you are not up to it – or  rather if the institutional forces you come up against are just too strong – you will almost certainly see the process coming towards you anyway, as unions start to disaffiliate nationally but reaffiliate, albeit messily, at local levels.  There is, of course, no guarantee that the Labour party will survive that process.  Better for all of us that you seize the day now, rather than have to go with the flow later on.

I wish you all the best at this time of important change for the party.

Paul