Donation cap 'would include unions'

Labour leader Ed Miliband has offered to include unions in a proposed cap on party donations

Labour leader Ed Miliband has offered to include trade unions in a £5,000 cap on donations as he threw down a gauntlet on party funding reform.

He said the change would rule out "some millions of pounds" every year of the cash from the movement which is by far the party's biggest source of income.

The application of a cap to trade unions has been one of the sticking points in previous negotiations over reform - restarted in recent weeks at the height of the cash-for-access controversy.

Mr Miliband said the change would be "painful" for Labour but challenged the other main party leaders to offer compromises in a bid to find a way forward.

He made clear however that he was not prepared to sever the flow of cash from individual trade union members through an annual political levy.

There could be greater transparency over where that money went he said, though he indicated that he did not favour changing the system so that members had to opt in to donating rather than opt out.

"All political leaders are going to have to make difficult decisions on this. When I talk about a £5,000 donation cap it has got to apply to donations from the trade unions," he told BBC1's Andrew Marr Show.

"The large donations from trade unions would no longer happen under this system. It does need to be a comprehensive reform - I am not making a unilateral act."

He went on: "Let's take the big money out of politics. I hope Nick Clegg and David Cameron will come forward with their own proposals that say: 'We're willing to take a bit of pain too; we are willing to make changes which will make things harder for our political party but it's in the interests of our democracy'."

"Let's make a concerted effort now to really grasp that nettle. I don't know how quickly we can get that reform. It's taken a long time to get to this stage, let's try and get the reforms moving."