Andrew Tyrie's recent Guardian article (In hock to the unions, 6 July), attacking trade union funding of the Labour Party together with its rebuttal in the Guardian letters page makes depressing reading.  The Hayden Phillips Review is an attempt to find consensus on the issue of party funding reform, yet the two main parties could not be farther apart when it comes to trade unions.  If this gap is not somehow bridged, the prospects for meaningful reform are bleak.

Andrew Tyrie's attempt to portray the union-Labour link as somehow sinister is simply absurd.  If Labour occasionally dances to the trade union movement's tune, it is because of the two's historic links.  The public understands this, and the dialogue between unions and Labour is vastly more open and transparent than the relationship between political parties and private donors.

However, while the union-Labour link is defensible, that is not to say it is not open to criticism.  We have two main concerns.  Firstly, while individual union members have a legal right to opt-out of the political levy which goes to Labour Party, very few unions even inform them of this right. Secondly, all too often the leadership of trade unions use their affiliation funds as personal bargaining chips.  Far from a way of linking the workers with the party, trade union funding is in the hands of a few oligarchs to do with as they wish.

This is not always in the Labour Party's interests, as it discovered when the leadership of the RMT decided to unaffiliate 75% of its members from Labour without bothering to consult their own members.  I suspect most trade union members would welcome greater say over how their money is spent.

While giving individual trade union members more say would almost certainly reduce the amount of money Labour get from unions, it would pass the "democracy test" and the impact would be greatly reduced if spending were capped as Jack Straw has suggested. It would force Labour to court individual trade unionists rather than their National Secretaries.  It should be noted that UNISON allows its members to opt out easily, yet the union remains one of Labour's biggest donors.

If trade union donations should be regarded as coming ultimately from individuals and not a corporate sponsor, as Labour asserts, then the case for creating a direct link trade union members and the party becomes unarguable.  Labour would be better off grappling with this issue now than leaving it for the Conservatives to deal with when they next get into power.

Peter Facey is the Director of the New Politics Network, which is currently organising an online consultation on party funding.