One of the UK‘s largest trade unions has urged Labour MPs to reject plans to cap political donations, warning the move could significantly reduce union funding for the party.
The GMB union has written to more than 80 Labour MPs affiliated with the union, calling on them to vote against proposed amendments to the Representation of the People Bill that would limit political donations to either £100,000 or £1 million.
The amendments are due to be debated next week as part of wider efforts to reduce the influence of large financial donors in British politics, following growing scrutiny of Reform UK’s funding and donations received by senior party figures.
The proposals are expected to trigger a clash between ministers and Labour backbenchers. Alongside the donation cap, MPs will also consider a proposal to ban cryptocurrency donations.
According to reports, Labour whips have been contacting MPs, urging them to consider the GMB’s concerns, with some MPs reportedly withdrawing their support for a donation cap.
In its letter, the GMB said: “We believe this amendment risks having significant unintended consequences.”
The union argued that trade unions already face strict legal controls over political spending.
“Trade unions are already subject to a level of statutory regulation over political expenditure that no other membership organisations face,” the letter said.
It added: “Affiliation arrangements are also fundamentally different from political donations and should not be treated as though they are the same.”
Other Labour-affiliated unions are understood to share similar concerns.
The debate comes amid renewed focus on political funding in the UK. Research by Transparency International found that donations from individuals and companies giving £1 million or more increased from just 1% of all political donations in 2015 to 35% in 2024.
Pressure for reform has intensified following reports about donations linked to Reform UK, including contributions associated with cryptocurrency billionaire Christopher Harborne and convicted fraudster George Cottrell.
The Times reported that police are investigating £500,000 in donations made to Reform UK by Cottrell’s mother, Fiona, while parliamentary authorities are also examining gifts linked to both Harborne and Cottrell.
Earlier this week, The Guardian reported that several financial transactions involving Reform UK leader Nigel Farage and deputy leader Richard Tice had been flagged as potentially suspicious to the National Crime Agency.
Some Labour MPs had hoped the controversy would increase support for tighter political funding rules, particularly with Andy Burnham expected to become Prime Minister.
During his Makerfield campaign, Burnham expressed support for a donation cap, saying it “would guard against the perception of any one party being unduly influenced or swayed by one person or organisation”.
In an email to campaign group WakeUpGB, Burnham added: “As to the level, I think that would have to be subject to wider review of political funding but my gut feeling would suggest somewhere in the region of £500k.”
While the Government has proposed a £100,000 cap on donations from British citizens living overseas, it has not suggested applying the same limit to UK-based donors, a decision that has drawn criticism from some Labour MPs.
Labour MP Stella Creasy has proposed a £100,000 donation cap, while fellow Labour MP Alex Sobel has tabled an amendment setting the limit at £1 million.
If selected by the Speaker, both amendments will be debated in the House of Commons next week.
Creasy wrote: “Whether a million-pound individual donation from a private benefactor comes from overseas or from a UK-based billionaire, the public understand the risk remains broadly the same.”
She added: “This Tuesday, MPs can show they have both a will and a way to protect our politics from the perception as well as the reality of impropriety.”
