Miliband has got to restore trust or pay the price at the election: Devastating verdict of top Labour figure By David Blunkett Decisive: Ed Miliband has decided to turn the potential disaster of Falkirk, and the question of Unite's activities in the Scottish seat, into an opportunity In politics, there are moments when you have to act decisively, and Ed Miliband's moment came this week. Twenty years ago, John Smith, the then Labour leader, fought against vested interests to move party elections on to a "one member, one vote" basis. A year later, Tony Blair had what is now known as the "Clause IV" moment when he secured the removal of the party's historic commitment to nationalisation. Miliband's challenge is no less pivotal. Wisely, he has decided to turn the potential disaster of Falkirk, and the question of Unite's activities in the Scottish seat, into an opportunity. An internal party investigation into the matter was handed to the police, and a significant frontbench figure resigned. Sometimes, as Alastair Campbell admitted, an individual becomes the story, and with it the problem. So it was with Tom Watson, Labour's election co-ordinator and a former flatmate of Unite leader Len McCluskey. It does not take a genius to realise that Watson's closeness to both McCluskey and the Falkirk candidate promoted by the union - Karie Murphy, who happened to be Watson's own office manager - amounted to a toxic mix. Whatever the nature of the private discussions which took place between Ed and Tom, the decision that he should step down from his role in the selection of candidates was not only inevitable but essential. However, wider issues are at stake. Without radical change, the Conservatives will be gifted the chance to paint Labour, again, in hock to its union backers - in the same way that Labour's opponents are dependent on the financial institutions which were responsible for the devastating global economic meltdown. This is all the more reason for Ed Miliband needs to reclaim the moral high ground by introducing changes which would eliminate any suggestion of vested interests. Closeness: It does not take a genius to realise that Tom Watson's closeness to both Len McCluskey (pictured) and the Falkirk candidate promoted by the union amounted to a toxic mix I am not talking here about some ineradicable breach of the historic link between the unions and the party. After all, even our opponents accept that engaging those men and women who work by hand or brain in the political process is crucial to the health of our democracy. David Blunkett: 'Ed Miliband needs to reclaim the moral high ground by introducing changes which would eliminate any suggestion of vested interests' The electorate want it both ways: no major donors from financial and industrial interests, or from the unions. So we need to start a genuine debate about the funding of political parties, which can pave the way for a new, open and transparent system that will remove from the public mind the sense of behind-the-scenes "jiggery-pokery." The only alternative is some form of public funding - the discussion about which has just collapsed. But how the funding is collected, and therefore how we can reassure the electorate that they are genuinely "involved," will necessitate the engagement of a wider swathe of the population in the political process. These are big challenges. The last few days have demonstrated that Ed Miliband is prepared to grasp this opportunity and ensure that Labour will go into the Election with the trust of the British people restored. If he doesn't, we will pay the price at the ballot box.