Union pressed to cut Labour cash

The leadership of the public service union Unison is facing rank and file pressure to divert millions from its political funds to a new fund set up to back non-Labour candidates, in a test case on future union-Labour links.

The union's executive is battling to block the change, arguing Labour's rules may prevent a union affiliated to the party simultaneously giving cash to a rival party.

A report to the Unison executive also claims there would be "a political and moral imperative" to hold a membership ballot before making any change.

A new political fund linked to non-Labour candidates could divert millions from the already depleted coffers of Millbank.

Leftwing union branches, opposed to Labour's approach to the public services, have already submitted resolutions demanding the union establish a new fund to which members could contribute to back candidates opposed to Labour. The motion from the Bromley branch is due to be debated at the union's conference in June.

The Unison leadership was forced into reconsidering its financial links with Labour after its annual conference unexpectedly voted for a motion demanding the review and condemning New Labour for attacking the wages, conditions and jobs of Unison members.

The move is part of a wider campaign to free the union from the link with Labour. Unison - as the largest public sector union - is seen as the test case that could transform the union-party link.

Although the leadership is critical of Tony Blair, the report to the executive is designed to stress the pitfalls of losening ties with Labour. Glen Kelly, Bromley branch secretary, described the report as "completely biased".

Unison is facing three options: disaffiliating from Labour, the establishment of an additional fund to help non-Labour candidates, or maintenance of the status quo.

The report to the union's executive, prepared by a working party, warns that any decision to disaffiliate from Labour "could lead to haemorrhage of members to other unions, as well as raising major questions about Labour's role as a trade union party."

The report claims that if an additional fund was established and cash given to other parties, "such a payment could be in breach of contract between the party and the union, and could have difficulties for the union's continued relationship with the party".

Unison currently has two political funds, one deployed to fund general political campaigns, such as the anti-debt campaign Jubilee 2000, and the other specifically linked to the Labour party.