Trade unions now contribute three-quarters of Labour Party funding, but does this really spell doom and gloom for business?
The statistic makes for scary reading for those in the business community concerned about undue influence in government. Trade unions now give the Labour Party nearly 75p out of every £1 it receives in donations.
Figures from the Electoral Commission show that the Labour Party received £3.4m in donations between April and June, and that £2.5m came from trade unions.
Yet despite having what looks like a financial stranglehold on Labour, the union movement is heading for an all-time membership low. The latest figures show the percentage of the working population who are union members stands at just 29%.
The Trade Union Membership 2005 report, published by the Department of Trade and Industry, shows that fewer than one in five (17.2%) employees in the private sector were union members in autumn 2005. It seems Labour is now at the mercy of a favoured few.
But is this scaremongering? Is the government allowing the unions to "undermine democracy" as the Conservatives claim?
Tory party chairman Francis Maude said that, in return for funding, unions were getting "pet policies and bungs" with taxpayers' money. "This sort of cronyism undermines our entire democratic process," he said.
At a cursory glance, it does look like the message to business is: be afraid, be very afraid. In July 2004, Labour upped the ante on union involvement to help make sure it won the 2005 general election. The Warwick Agreement made between the party and the unions set out a list of 67 promises and 24 additional commitments. One such promise resulted in the £10m fund to modernise the trade unions.
Not long after, the government backtracked in the face of industrial unrest over public sector pensions and allowed current civil servants to retire at 60. The Institute of Economic Affairs estimates this could add £11bn a year to public expenses.
But of greater concern is what the unions are after now, according to David Yeandle, deputy director of employment policy at the manufacturers' group, EEF.
"There is no doubt