Blair accused over donations 'loophole'

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By Melissa Kite, Deputy Political Editor
(Filed: 11/09/2005)

Labour has been accused of altering by stealth the rules over political donations, which would let it solicit gifts behind closed doors.

Under proposals in the Company Law Reform Bill, a copy of which has been seen by The Sunday Telegraph, trade unions would no longer be regarded as "political" organisations. This would enable companies to donate more freely to unions, which supply much of the money that finances the Labour Party.

The legislation would create a loophole in the tight regime effected by the Political Parties, Elections and Referendums Act of 2000. It would let companies fund unions without shareholder approval.

David Willetts, the shadow trade and industry secretary, said: "This looks like a cosy deal that Labour are trying to smuggle through to help them raise money without the normal controls.

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