Lord Peter Mandelson has called on Labour to “redouble” its efforts to bring in private donations amid claims the party is struggling to fill its coffers.
The party grandee, and New Labour architect, told City A.M. that Sir Keir Starmer “cannot allow himself or the party” to become beholden to “hard-left trade unions” that “are going to try and use their financial muscle to get policy positions they want from Labour”.
Labour’s largest Union backer Unite has threatened to completely withdraw its funding in the wake of Starmer’s efforts to moderate the party after Jeremy Corbyn’s premiership.
Other left-wing unions have done similarly and Labour has been on a campaign to attract millions of pounds of donations from private donors.
One senior party source said that “the donation drive just isn’t getting in the big numbers that were hoped”.
Labour’s recently released financial accounts showed the party recorded a £4.8m deficit last year, after a 91,000 drop in members and millions paid out in legal fees.
The accounts did show a £4.3m annual increase in donations in 2020-21, however the party’s largest contributors were still mostly trade unions.
Mandelson said Starmer cannot allow the party to become the “plaything” of hard-left unions and that those who “want to see a centre-left Labour government must reach into their own pockets”.
“The party has to redouble its efforts to raise funds from the public as a whole and from any donors who are prepared to back Labour’s campaign,” he said.
The former cabinet minister added that he was not calling for a total Labour “dissociation” with the unions.
Labour has increased its private donation efforts since Starmer became leader in 2020, with the party increasing the number of members in its Rose Network – a club for people who have donated thousands of pounds to the party.
Shadow cabinet ministers often attend Rose Network gatherings, which happen at regular intervals.
The party raised more than £5m in total donations in the first quarter of 2022-23, with some notable big New Labour names back in the fold.
This includes Lord Michael Levy who donated £12,500 and Francesca Perrin, daughter of Lord David Sainsbury, who gave £250,000.
Levy acted as Sir Tony Blair’s chief fundraiser during his premiership and was at the centre of the 2006 cash for honours scandal.
A source close to Starmer said the £4.3m increase in donations last year showed “the confidence in the direction of the party under Keir Starmer’s leadership”.