Who funds Labour? Keir Starmer’s party took more from private donors and companies than trade unions last year

Photo: Kim Mogg
Consultancies, renewable firms and construction companies are among the donors filling Labour’s coffers

The Labour Party took in more donations from private companies and individuals than trade unions last year, new analysis by NationalWorld has revealed.

These include large donations from a renewables firm and several peers with significant business interests, while a number of major consulting firms have provided the party with staff, either indirectly or through secondments.

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Keir Starmer has emphasised his willingness to work with big business and has been encouraged by Labour grandee Lord Peter Mandelson to seek more private donations to counter union influence.

Figures in the trade union movement say they are relaxed about the increase in private donations, highlighting that the party has always sought funding from wealthy individuals and has to be able to compete with the Conservatives.

Shift toward business

Based on Electoral Commission and register of members’ financial interests data on donations to the Labour Party, individual MPs and member organisations, our analysis shows the increasing importance of private donations to Starmer’s Labour. This includes cash donations as well as staff costs and visits.

Donations from companies and individuals totalled more than £7.6 million in 2022, including a single donation of £2 million from Lord David Sainsbury - making him the party’s largest individual benefactor. Lord Sainsbury’s daughter, prominent philanthropist Francesca Perrin, was another of Labour’s biggest donors, giving £750,000 last year.

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Renewables firm Ecotricity Group is one of the party’s main corporate backers, providing more than £700,000 to Labour’s coffers last year. Drax Power, which has been criticised over the practice of burning wood-pellet based biomass at its East Yorkshire facility, gave the party £12,000. NationalWorld has previously reported how Labour’s ‘Green Growth’ plan could spark a rift with major union backer GMB.

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Last year, City A.M. reported that former minister Lord Mandelson urged Labour to seek more private donations and said Starmer “cannot allow himself or the party” to be reliant on “hard-left trade unions” that “are going to try and use their financial muscle to get policy positions they want from Labour”.

Lord Mandelson, who now runs lobbying firm Global Counsel and the Policy Network think-tank - which has donated almost £100,000 to the internal Labour group Progressive Britain since 2020 - is understood to be a key adviser to Starmer, with one union figure describing him as “running the show”.

In January, Politico reported that Starmer appeared alongside Lord Mandelson at a business roundtable event, where he said he wanted to “extract as much as I can from you, have a really grown-up conversation, and also for you to see that it is possible to mould, have your fingerprints on what we’re doing”.

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NationalWorld has previously reported that lobbying firms and public affairs consultancies are increasingly looking toward Labour as the likelihood they will lead the next government increases.

Consultant lobbyists Weber Shandwick and the Lowick Group both provided members of staff for shadow cabinet members last year, while two of the so-called ‘big four’ professional services firms have also funded staff members for the party.

Ernst & Young gave Labour almost £90,000 toward staff costs in 2022, while PricewaterhouseCoopers provided just over £30,000 for staff.

The last time Ernst & Young made similar contributions to a political party was in the run up to the 2010 election, when they gave the Conservatives - then in opposition and considered likely to enter government - more than £60,000 toward staff costs. PricewaterhouseCoopers also regularly donates to the Liberal Democrats and last donated to the Conservatives in 2015.

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Arden Strategies, a communications and corporate strategy consultancy run by former Labour cabinet member Jim Murphy, provided the party with £15,000 toward staff costs. Arden has recently established a “Labour Directorate,” which it says will help its corporate clients “understand Labour,” and provide “insight, strategy and thought leadership” on the party.

Its website states: “Arden helps business understand Labour and Labour to understand business. Our Labour Directorate brings together a wealth of experience of former Labour politicians, Special Advisors in ten different departments and senior parliamentary staffers with real-life knowledge, insight and understanding of Labour.”

The party has also received funding from firms and individuals in the construction sector, including DCD London, the Canary Wharf Group and Scottish businessman Lord Haughey, chair of City Facilities Management.

Lord Haughey is one of Scotland’s most high-profile businessmen and recently attracted controversy when he blamed a decision to delay much-publicised plans to build 11,000 affordable homes in-part on the Scottish government’s rent-freeze legislation.

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Trade union contributions down

In 2020, trade unions donated around £6.8 million, compared with just £2.3 million from companies and individuals. The party received more from individuals and companies in 2021, at just over £3 million, but still saw significantly more of its funding come from trade unions, at £6.9 million.

However, last year the party took more in donations from individuals and companies than in the previous two years combined, and over £2 million more than from trade unions, which provided £5.3 million.

Union sources say this drop in funding reflects a change in priorities among the leadership of two of the party’s main union backers in recent years, toward on-the-ground organising and disputes over Westminster politics, but not a significant change in the movement’s overall commitment to the party.

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One source in an affiliated union told NationalWorld they were relaxed about the increased contribution of individuals and companies compared to trade unions, but predicted that donations from unions would increase significantly in the run up to an election.

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GMB, Unite and Unison were the largest union donors to the party last year, providing a combined £3.6 million. The party received around £1.7 million from its other trade union affiliates, including Usdaw, Aslef, the Communication Workers Union (CWU) and the Fire Brigades Union.

Labour MP Sam Tarry, who lost his shadow cabinet role after attending a picket line with striking rail workers last year, said: "Trade union funding of the Labour Party is the cleanest money in politics, and is fully transparent unlike the Tory Party which is bankrolled by big business and the super rich. Union donations to Labour are used to fund campaigning for employment rights and decent pay for workers both inside and outside Parliament."

A spokesperson for Usdaw said: “Our view is that trade Unions and the Labour Party have a strong relationship, continuing to work together to deliver for our members and people across the country.

“We welcome the Labour Party receiving funding from a broad range of donors. Political donations are a healthy part of our democracy, so long as they are lawful and transparent.”

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