GMB warns Labour MPs that political donation cap could jeopardize party funding

On Friday, the GMB union cautioned Labour MPs against supporting a cap on political donations, claiming it could threaten the party's funding. The union's letter, sent to over 80 affiliated MPs, argues that amendments to the representation of the people bill, proposing caps of £100,000 or £1 million, could have serious unintended consequences for trade unions.

Concerns Over Proposed Donation Caps

The GMB union highlighted that trade unions are already heavily regulated regarding political expenditures, facing requirements that no other membership organizations encounter. The union stated, “We believe this amendment risks having significant unintended consequences.” This warning comes as Labour whips reportedly contacted MPs to dissuade them from backing the cap.

According to sources, this intervention has led some MPs to reconsider their support for the proposed donation limits. The amendments are set for debate next week, coinciding with a broader discussion on limiting the influence of significant financial contributions in politics.

Political Landscape and Funding Issues

The ongoing debate over political donations gained urgency following revelations about funding sources for Reform UK, including donations from cryptocurrency billionaire Christopher Harborne and convicted fraudster George Cottrell. Transparency International reported that the share of political donations exceeding £1 million has surged from 1% in 2015 to 35% in 2024, intensifying scrutiny on party funding.

Labour MPs had anticipated that the controversies surrounding Reform UK would facilitate a push for stricter regulations on political donations. Prominent Labour figure Andy Burnham expressed support for a donation cap during his campaign, suggesting a limit of around £500,000. However, ministers are currently only proposing a £100,000 cap for donations from British citizens living abroad, which has drawn criticism from within the party.

Specific Proposals and Reactions

Stella Creasy, MP for Walthamstow, has introduced an amendment aiming to cap individual donations at £100,000, while Alex Sobel has proposed a £1 million limit. If selected for discussion, these amendments will be debated on Tuesday as the Commons considers the representation of the people bill. Creasy has articulated concerns that large donations, whether from overseas or domestic sources, risk compromising the integrity of political outcomes.

She stated, “The apparent view of Harborne that where there’s a will, there’s a way correctly describes the current situation – but that’s a bad situation.” The outcome of the upcoming debate will be closely watched by both party members and the public as the implications for political funding remain critical.