Leaked document shows Unite is facing a financial crisis

Report has hints of Labour union funding cut.

At the most recent meeting of Unite’s Executive Committee the union’s bosses were presented with the stark news that a vital source of funding worth £11 million last year is set to dry up, potentially leaving Unite in the red.

The revelation casts doubt on leader Len McCluskey’s claim that Unite is cutting the money it gives to Labour because of changes to the relationship between the party and the trades unions driven through by Ed Miliband.

It raises questions as to whether McCluskey is actually tightening the purse strings in anticipation of Unite’s budget being reduced.

Immediately after Labour’s Special Conference last month at which ties with the trades unions were loosened, Unite announced a cut of £1.5 million to its party funding, nearly halving the amount it pays into party coffers.

But the minutes of the Executive Committee, seen by The Sunday Post, reveal that Unite’s Finance and Operations Director, Ed Sabisky told the trade union’s top brass that, while its finances are currently satisfactory, they are “in the calm between two financial storms”.

The first was a problem with Unite’s pension valuation but the coming storm is Government legislation limiting legal fees and compensation and making it harder to bring employment tribunals.

Unite banked more than £11 million from successful court cases on behalf of their members last year. Sabisky’s report warns that without the legal income Unite would be “in deficit” and urges “further savings”.

A Unite spokesman said: “Unite does not comment on leaked documents.”

However a source close to the Coalition Government said: “Our legal reforms are designed to get rid of the compensation culture.

“If they limit Unite’s pernicious and undemocratic influence on our politics, then that would be a welcome side-effect.”

The Tories claim other parts of the leaked minutes show Unite still exerting excessive influence on Labour policy-making, despite Miliband’s reforms.

Unite’s Political Director, Jennie Formby, described the special Labour conference as “a distraction that nobody wanted”.

She revealed Unite has been “very involved” in Labour’s policy commissions as the party draws up its Manifesto for next year’s General Election.

And she reported that, before Labour MP Ian Lavery presented a backbench bill calling on the Government to scrap the bedroom tax, Unite: “worked hard both with Ian and with the Labour Party to get them to impose a three-line whip on this.”

A three-line whip would have forced all Labour MPs to vote in support of the bill.

Conservative Party Chairman, Grant Shapps, said: “Len McCluskey is still calling the shots on Labour’s candidates, policies, and their whole future as a party.

“This leaked Unite document makes clear that Ed Miliband is a puppet on Len McCluskey’s string shoved around by the trade union bosses who pay Labour’s bills.”

Worryingly for Labour the leaked minutes show the Unite General Secretary has been handed more discretion over how much money the union gives to Labour in the run up to the General Election.

In Westminster just last week, McCluskey warned he could see Unite cutting ties with Labour if it loses next year’s election.

He called on Ed Miliband to make a bold offer to the electorate rather than a “pale shade of austerity” and expressed support for nationalising the railways and energy companies.

Grant Shapps added: “Len McCluskey is threatening to cut off the cash if he doesn’t get his extreme shopping list of policies. It’s the same old Labour.”

The minutes also confirm what McCluskey has said about Unite’s role in the Scottish independence referendum.

He previously praised the SNP for “charging up Labour’s left wing” but said Unite could not support either the Yes or No camps because its membership was split between the two positions.

The Executive Committee report explains Unite in Scotland’s position “is certainly not a passive one.

“Rather, the approach is to ensure our members are able to make a positive choice by providing as much information and opportunity for debate as possible about the consequences of either choice.”