If party reform goes through as advertised, it is a major triumph. But it ain’t over till it’s over

It has been a rollercoaster couple of weeks for Labour. It started with Miliband’s ideas on how to change competition in banking, and ran through Balls’ announcement on fiscal probity, of which the only story newspapers wanted to print was about the retention of the 50p tax rate. Indeed, the economic story that they tell is one which could yet be Labour’s undoing.

But let us give credit where it is undoubtedly due. The settlement announced at the weekend was, for the long-term future of the party, an undeniable success. It did not go as far as some of us might have wanted. But given where we are in the electoral cycle and the importance of not facing a general election broke, it was surely about as good as anyone could have hoped for.

If you can secure the fulsome praise of Andrew Rawnsley and John Rentoul – no Miliband cheerleaders they – for reforms which they describe as “bold” and “brave” respectively, you must know that you have done something out of the ordinary.

In summary: move to individual affiliation for union members – tick. Primary in London – tick. End of electoral college in leadership elections – tick. Most importantly, it leaves the door open for further reform. If the London primary is a success, then the argument for using them to select parliamentary candidates could become unstoppable. We didn’t get changes on conference voting, but then no-one expected we would.

Now, let’s assume the best of all worlds, and that this all goes through on the nod. Not a particularly safe assumption, but let’s assume it does.

Is there still a caveat? Of course there is. This is Labour Uncut, and we know how to sit amongst the most churlish of churls, if there is an uncomfortable truth to be told. And to do so, we have to get down into a nerdiness of procedural detail that even respected political journalists might baulk at.

And it is this. What happens if there is a leadership election next year?

There is a five-year transition period, and the detail in that period is somewhat absent. The general assumption is that some bulk donations will continue until the system is fully in place. And those donations will mean that there is still leverage for unions. Here’s how.
Dan Hodges, formerly of this parish, makes this point over at the Telegraph, about what would happen if there were to be a leadership election tomorrow:

“If Ed fell under a bus tomorrow then we’d have to look at arrangements for transferring existing union members over” one source said.

In practice…some transitional deal with the unions would have to be struck. The idea that they would say to their members “we’re going to keep paying your affiliation fees to Labour, but you can’t have a vote for Labour leader” isn’t logical or politically sustainable.”

Now, this refers to something that happens before the system has a chance to get off the ground, i.e. tomorrow.

But what about after a year, by when, we presume at least, there will already be some affiliated members signed up, but perhaps not that many yet? When is the new system irrevocably in place, such that no such compromise is necessary – after six months? A year? Three years? And it is obvious that the most likely time for a leadership election will either be next summer, or not at all.

In fact, the important point here is about understanding the practicalities of the “deal” which has been struck. In business, a deal is usually followed up by a contract. It’s a bilateral lock-in: if you want to undo it, you call a lawyer.

In politics, at the party rather than the government level, things are often a little more blurry. They may depend on trust; “my word is my bond”. And they sometimes unravel.

Now, the deal seems simple: on one side, the party makes conference rule changes in March which allow only “opted-in” union members to vote. On the other, unions agree to keep up their affiliation payments at a reasonable level, so as not to bankrupt the party. But on this side, it is difficult to imagine that the major union donors will all be signing a legal agreement guaranteeing future payments. After all, they have never done so in the past. It will most likely be done on the basis of “goodwill”.

It is interesting that, although most commentators have made judgements about the success of the reforms, it is still markedly unclear what the financial arrangements will be in the interim.

So, in that sense, any “deal” is one-sided: it cannot be watertight. If it is not watertight, it is open to pressure and ultimately renegotiation.

To extend Dan’s argument, in the event of a 2015 leadership election, the question is, would the three big union leaders simply say, ok, we’ll keep writing you a fat cheque every year, but only, say, 10,000 of our new opted-in members can have a say in the leadership election? Because of some gentleman’s agreement we made with someone who is no longer running the party?

Well, although that sounds theoretically possible, it doesn’t exactly sound safe, either. What seems extremely likely is that pressure would be brought to bear to put in place something in the “exceptional circumstances” the party would find itself in. In other words, existing union members could well to be able to vote, as in 2010.

Furthermore, if Miliband were no longer leader, how much weight would an “understanding” have with union leaders?

One can suddenly understand the thinking of Len McCluskey: on the one hand, you may get a Labour government, via which you can hopefully advance some of your agenda. On the other, Labour may lose, but then you get a shout in selecting the next leader. Oh, and by the way, the union saves millions in the process. Yes, you can imagine him saying, I’ll have that.

Bottom line is this: if Miliband wins, there may be a tricky interim period to navigate, but the stage is set for a much better-governed party than ever before. He will go down in history as a true moderniser, and an audacious one.

If he loses, this could get messy.

This post first published at Labour Uncut and was selected for Progress’ What We’re Reading