The link between Labour and the trade unions is both essential and non-negotiable. Thanks to our relationship with the unions, the party is kept in touch with the concerns and views of the millions of working people and their families whom it seeks to represent.

The unions are also a vital component of Labour’s election-winning machine. This is not simply a question of cash. Thanks to the work of millions of individual trade unionists, officers and staff, the unions have played a critical role in helping Labour win the last two general elections. And, as we argued in Progress last September, the behaviour of the unions during Labour’ s first term helped to reassure the public that the party really had changed; that a New Labour government of the 21st century would look very different to one of the 1970s.

From the outset of Labour’ s second term, however, relations between government and the union movement have been far less easy. Some unions have deep concerns about the government s plans to use the private sector to deliver public services. Unions representing the low-paid (and, in some cases, the not so low-paid) see more money going into the public services and want to ensure that their members see some of it in their pay packets; other unions find something grating about what they view as New Labour’s continuing love-in with big business. We’ve seen a rash of strikes by local government workers, tube drivers and train drivers, for instance. At the same time, some unions have decided to cut sharply their donations to the Labour Party.

The unions have every right to express their views: through industrial action, where they deem it necessary, or, where they are affiliated to the party, through votes in Labour s internal policy-making process. And, indeed, some unions recognise that quiet, patient negotiation through Partnership in Power does bring results: the issue of the two-tier workforce in the public sector being a prime example of this.

Unions are also, of course, entitled to reduce the funds which they give to Labour. However, it is time for the party to make clear just how counter-productive this strategy is. The unions need to make a distinction between Labour government and Labour Party. Admittedly, it is a subtle distinction. But the party is broader than the government and has certain distinct functions: recruiting members; fighting elections; supporting members through training and education and, critically, ensuring that a policy-making process exists which allows individual members and the party s affiliates including the trade unions to play a role in the shaping of government policy.

Those unions cutting funding are allowing certain consequences to develop, neither of which we believe they intend. First, by sapping Labour s ability to fight and win elections, they open up the possibility of Labour s elected representatives at all levels of government losing their seats. A return to Conservative government at Westminster may seem far-fetched but do the unions really want to see scores of Labour MPs replaced by Tories at the next general election? Moreover, while a general election is three years away, the party has a series of crucial elections to fight and win in the meantime. It is essential that Labour-led administrations are returned in Cardiff and Edinburgh next May. It is critical that, after the disastrous 1999 elections, Labour s presence in the European parliament is strengthened in 2004. This is to say nothing of the need to ensure that Labour councillors up and down the country are returned to power in the annual round of local government elections.

Second, Labour s general secretary, David Triesman, has been arguing since his appointment that Partnership in Power needs to be strengthened. Members must feel themselves to be authors , not just passive recipients, of policy; the process needs to become more of a discussion and less of a monologue. None of this is possible while a cash-strapped party is engaged in budgetary navel-gazing. And surely, given that many party members share the concerns of the unions, it is in the interest of the unions to allow those voices to be heard? Those who complain of the influence of unelected spin doctors and advisers on government, yet weaken those who can best check this influence the party in the country are being plain inconsistent.

Those unions which have cut their funds to the Labour Party need to think again. The punishment they are inflicting is not simply disproportionate. It is way off target.