By Chris Mason
Ed Miliband wants to change Labour's relationship with the unions
How exactly do the trade unions fund the Labour Party - and will Ed Miliband's proposed changes work?
Rewind to 1984, and the then Prime Minister Margaret Thatcher introduced the Trade Union Act.
It sets out that unions must ballot their members every ten years if they want a political fund, that is money to spend on campaigns.
Unite, the country's biggest union with 1.4 million members, held its own ballot on retaining a political fund earlier this year.
It was the first time it had had to do it, since Unite came together as an amalgamation of its predecessors, Amicus and the Transport and General Workers Union.
The turnout was pitiful, at 18.6%, but 87.4% of Unite members that took part in the vote, opted to retain the fund.
'Core' rate
In its campaign to ensure the political fund was retained, Unite sent a leaflet to its members.
The document emphasised "this is not a ballot on affiliation to the Labour Party. It is about whether we can spend any money on political purposes at all."
It added: "A full-time Unite member paying at the "core" rate pays 66p per month into the Political Fund. Every member has the right to opt-out of this payment to the Political Fund. It is a tiny amount of money from each member, around 2p per day, but it all adds up to a considerable sum which the Unite can use to support the membership in campaigning."
In many unions, ordinary members automatically contribute to the political fund, unless they opt out.
The reforms suggested on Tuesday by Ed Miliband will not change that.
Unite's political fund was around £7m last year and just over £3m of that went to Labour in affiliation fees.
In return, the unions who make a contribution get a say in policy-making and choosing the Labour leader, a say that proved crucial in securing Mr Miliband the Labour leadership over his brother David three years ago.
'Mend not end'
But now Ed Miliband says he doesn't want union members to pay money to Labour through those fees unless they've deliberately chosen to do so.
So how many will do that?
Nobody knows.
Paul Kenny, the General Secretary of the GMB, the UK's third largest union, predicts just 10% of its members would want to.
Currently, the GMB estimates that around 95% of its members contribute to its political fund and from that some money is passed on to Labour.
Mr Kenny has warned that Ed Miliband's union reforms are "as close as you can get" to ending the union link.
Mr Miliband has repeatedly stressed he wanted to "mend not end" the link.
Paul Kenny believes there will be such a fall in union money for the Labour Party that this will in effect amount to a breaking of the link between his union and the Labour Party.
Though interestingly, the big public sector union Unison already asks its 1.3 million members not just whether they want to contribute to its political fund, but also to Labour, and around half contribute to the Labour pot.
It is also worth remembering that if fewer of their members want their subs to go to Labour, this reform would actually increase the amount union bosses have to spend on campaigns of their own choice.
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Change 'could end rather than mend' Labour-union links
Paul Kenny said Ed Miliband's speech had "far reaching consequences"
Plans to change the way union members donate to Labour could "end rather than mend" relations, says the leader of the UK's third largest union, the GMB.
Paul Kenny told the BBC that Labour leader Ed Miliband's "bold move" was "as close as you can get" to ending the link between Labour and the unions.
He predicted a fall in Labour funding.
Mr Miliband wants union members to have to actively opt in to join Labour, rather than being automatically affiliated as part of union membership.
Mr Kenny said the move could see a 90% drop in the number of GMB members affiliating to the party.
The union says its affiliation fees paid to Labour could drop from around £2m a year to less than £1m as a result of the changes.
Mr Kenny, its general secretary, said the union would decide whether to ballot its members on whether they still want to give money to Labour in September - meaning the funding cut could happen as early as next year.
Under the current system members are given the chance to vote on a union's political fund every 10 years.
But Mr Miliband said on Tuesday he would end the automatic "affiliation" fee paid to Labour by three million union members and people should not pay Labour any fees "unless they have deliberately chosen to do so".
The changes would have "massive financial implications" for the party, he acknowledged, but could raise its membership from the current 200,000 to a "far higher number".
The announcement came after Unite, one of the party's biggest donors, was accused of signing up its members to Labour in Falkirk - some without their knowledge - in an effort to get its preferred candidate selected to fight the next election.
"This is an absolute watershed moment - the changes they are about to do will fundamentally change the party's relationship with trade unions and their members," Mr Kenny said.
'Insulting'
He told BBC Radio 4's Today programme that collective affiliation and individual membership were two "entirely different things".
The union would be "lucky" if 10% of the 400,000 members who are currently affiliated to Labour on a collective basis would choose to sign up as individual members, he said.
"We have been trying to encourage our members to join Labour for a very long time - through magazines, meetings and our conference. I have to say we have not been knocked down in a rush.
"The jump will be from currently affiliating the union to argue for people on political policies with the Labour Party to individual membership of the party. Lots of people agree with the first but I am not sure that many people agree with the second.
"If they wanted to, they could join the Labour Party like that now."
Mr Kenny criticised the language he said had been used by some Labour politicians in recent weeks describing it as "disappointing and insulting" and said he would not be surprised if some members wanted to disaffiliate from Labour entirely.
Gerry Morrissey, the general secretary of media and entertainment union Bectu, which is also affiliated to Labour said he believed Mr Miliband's proposals were "totally unnecessary", as members could choose to opt out of the 3p a week payment on their membership forms.
If the proposal went through, he said, "then the Labour Party will lose money".
"I don't know what percentage of ours would opt in but if you looked at normal ballot procedures etc, I wouldn't be expecting much more than 20-25% of people to be opting in," he told BBC Radio 4's World at One. His party has donated more than £50,000 to Labour since the general election.
Members of both Unite and the GMB recently voted to maintain their political funds.
Unite general secretary Len McCluskey has said the union's political levy - worth £8m a year to Labour - would "stay as it is" and he is happy to discuss the proposals with Labour as the current relationship between the party and the unions is not satisfactory.
Mr Miliband's initiative has been welcomed by senior figures in the party, including Tony Blair, who said he wished he had done it when he was party leader.
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