There are three main groups in the Labour party: the constituency parties, the elected members of parliament (the parliamentary party) and the affiliates (the unions, Co-operative society and other groups).

The unions, taking advantage of Labour's poor financial situation, are agitating to dictate policy. The GMB has decided to cut funding to MPs who support Labour party policies that the union disaproves off. Instead they intend to "to put more cash into encouraging its members to take more control over constituency parties so the union has more influence over party policies".

This is a direct threat to the primacy of the constituency parties who select and support MPs/parliamentary candidates and do the donkey work at elections. Here's the reason why this would be a bad thing.

Firstly, the unions only represent a narrow section of the population. Union membership has been declining over time - see the graph linked to at the bottom of this piece. According to the ONS, union membership was 28.4% of employees as at December 2006. Given that the workforce is some 29.5 million, union membership is around 8.3 million. Worse only 25% of those aged between 25 and 34 are union members and only 21.4% of employees in the south east are union members. In addition union membership is concentrated in certain areas - public sector workers, factories, cleaners. Whole industries such as the IT industry are non-unionised and therefore not represented by the union movement.

Constituency party members on the other hand come from all walks of life, all professions, all demographics and Labour has a constituency party in every single part of Great Britain. Constituency members are therefore better placed to reflect and represent the population at large. As soon as John Smith wrested control of the Labour party away from the unions and gave it to the constituency members, party policy began to be attractive to voters and Labour won three consecutive general elections.

44 million people are eligible to vote in the UK. We cannot just concentrate on the needs of 8.3 million union members. If we ignore the 35.7 non-union voters (some of whom are retired) then we doom ourselves to defeat. This is not to say that we ignore the needs of unions entirely - we should take the approach taken in 1997 where we had some policies for every group, including unions. But we cannot formulate policy soley with reference to the unions.

However Labour does have a funding problem. How to solve this? The only rational answer is to expand the membership of the constituencies. I would expect any future leader of the Labour party to come up with a strategy to do this, including a Labour version of the donation model pioneered by Barack Obama, which he has used to great success.

Potential leaders putting forward the tired old formula of "let's get closer to the unions, we need their money" or "let's focus on getting big donations from millionaires" will get short shrift. Potential leaders who can formulate an effective strategy to increase the party's membership base and introduce online fund-raising will get the nod. I know this seems like a huge ask, given where the Labour party is at the moment, but we might as well make these demands from those who would lead us - it's the only way to ensure we get elected to government

P.S. I was trying to insert a graph of union membership over time but it failed to load properly. Click here to view it in a new window.