The GMB union has issued a stark warning to the Labour Party, arguing that proposed caps on political donations would endanger the party's financial stability. In a strongly worded letter to Labour leader Keir Starmer, the union's general secretary, Gary Smith, described the planned £5,000 limit on individual donations as a direct threat to the party's ability to campaign effectively.
Union's Objections to Donation Cap
Smith wrote that the cap would disproportionately affect Labour, which relies heavily on union donations, while leaving the Conservatives' wealthy donors relatively unscathed. He pointed out that the Tories received over £10 million from just a handful of donors in the last quarter alone, a sum that would be illegal under the proposed rules. The GMB represents around 400,000 workers, many in the public sector and manufacturing.
The union's intervention comes as Labour prepares to debate internal reforms at its annual conference next month. Starmer has championed the donation cap as part of a wider package to clean up politics, but the GMB argues it is a 'blunt instrument' that would hamper Labour's electoral chances.
Impact on Labour's Funding Model
According to the GMB, union donations accounted for nearly 40% of Labour's central income in 2025. The proposed cap would force the party to rely more on membership fees and small donations, which the union says are insufficient to compete with the Conservatives' fundraising machine. Smith warned that the cap could lead to a 'two-tier' political system where only the wealthy can fund parties.
The GMB's stance has put it at odds with other unions, including Unite, which have expressed conditional support for the cap. However, the GMB insists that any reform must be accompanied by a broader overhaul of political funding, including a ban on foreign donations and tighter regulation of dark money groups.
Political Reactions
Conservative Party chairman Richard Fuller seized on the split, accusing Labour of being 'in hock' to union barons. He said: 'Starmer's weakness is exposed again – he cannot control his own party, let alone the country.' Labour insiders, however, remain confident that the cap will pass, citing polling that shows strong public support for limiting donations.
Shadow Cabinet Office minister Lucy Powell defended the policy, stating: 'We are determined to restore trust in politics. The days of cash-for-access must end.' She added that the party is consulting widely and will consider all feedback.
Next Steps
The Labour conference will vote on the donation cap proposal on 25 September. If passed, it will form part of the party's manifesto for the next general election. The GMB has not ruled out industrial action or withdrawing funding if the cap is implemented without safeguards.
Political analysts note that the row highlights the delicate balance Starmer must strike between reforming the party and keeping its union allies onside. With Labour trailing in the polls, the outcome of the conference could have significant implications for the party's future.
