Is the job-creating private sector giving up on Labour?

Tim Montgomerie

The extent to which the Labour Party has become dominated by the trade union movement was underlined yesterday by the latest figures for giving to political parties (FT (£) report). 88% of the money received by Labour in the first quarter of Ed Miliband's leadership came from the trade unions. Not one private donation was made to central party funds and just £39,286 was given to constituency Labour parties from private individuals.

Tory Deputy Chairman Michael Fallon commented:

“Ed Miliband was elected by the unions, now almost every pound his party receives in donations comes from the unions. So much for a fresh start. With private donations to the Party shrivelled, the Labour party now looks like a wholly owned subsidiary of the trade unions. Unions who oppose any public service modernisation and deny the deficit. Labour under Ed Miliband are abandoning the centre ground of British politics.”

The Sunday Times (£) recently reported that a number of key Labour donors had closed their chequebooks in protest at the party's economic strategy: "Hugh Osmond, the financier who floated Pizza Express and founded Punch Taverns, criticised Balls’s economic strategy: “Either he’s too stupid to understand that they spent all the money that they possibly could when they were in power — so there’s none left — or he’s not that stupid, in which case he’s deliberately pursuing flawed policies that he knows are going to cause maximum trouble and discontent.”"

Even the Labour-supporting New Statesman is noticing. On the NS blog yesterday, George Easton described Labour's dependence on the unions - and they are largely public sector unions - as "unhealthy".

Parties obsess about achieving diversity of gender and ethnicity but I was very struck at last year's Labour conference that business people were almost completely absent. Nearly every person I met came from a union, a public sector organisation or the media world. It's time, perhaps, for another prawn cocktail offensive to the City and industry from Labour, but is Ed Balls the man to lead such an offensive? Today's Sun reveals that he was Ed Miliband's THIRD choice to be Shadow Chancellor.