Miliband urges £5,000 donors' cap
Labour leader Ed Miliband has called for a £5,000 cap on donations to political parties, including those from trade unions.
He told the BBC this would remove the influence of "big money" on politics.
But Mr Miliband also said he wanted to keep the system under which union members are asked whether they want to keep paying £3 a year to Labour - around three million currently do so.
The Conservatives called Mr Miliband's proposal "virtually meaningless".
The three largest political parties began talks last week on the way parties are funded, in an effort to resolve an ongoing row over the subject.'Much tougher'
Labour argues that large businesses are providing too much of the Tories' funding, while the Conservatives say Labour is itself too reliant on lump sums given by affiliated unions, such as Unite and Unison, particularly in the run-up to general elections.
Speaking on the BBC's Andrew Marr Show, Mr Miliband suggested a cap of £5,000 on individual donations to parties.
At face value, Ed Miliband's comments appeared to be groundbreaking. Was he really proposing severing the major artery of his party's funding?
Not quite. Yes, he proposed a £5,000 cap on donations. But the affiliation fees many trade union members pay to the Labour Party would continue.
Nonetheless, Labour point to last year's report on party funding by Sir Christopher Kelly, which suggested union donations were worth on average £2.5m to the party every year between 2000 and 2010. Add the private donations they would give up with this idea, and they say their "biggest single source of discretionary income" would be shut down.
But a source in Downing Street told me Mr Miliband's idea was "nakedly partisan, and nothing about making genuine progress".
In short, any one measure suggested to shake up party funding is likely to have a greater impact on one party than another - and all the parties at Westminster have to wrestle with trying to come up with a package of measures that overall doesn't advantage one of them over the others.
And that isn't easy.
This is half the £10,000 proposed by Sir Christopher Kelly, chairman of the independent Committee on Standards in Public Life, which carried out its own inquiry into party funding last year. The Conservatives want a cap of £50,000 on individual gifts.
Mr Miliband said: "We've got to change the way we fund politics and take big money out of politics...
"When people don't vote for the mainstream parties, it's because they don't believe that politics can change their lives."
He added: "We've got to have much tougher limits on spending...
"[When] I talk about a £5,000 donations limit it's got to apply to trade unions."
This would be "painful" as it would cost Labour "some millions of pounds", he said.
But Mr Miliband added that he would keep the system where members of unions affiliated to Labour are asked whether they would like to "opt out" of giving the party a levy of £3 a year, rather than changing to an "opt-in".
Mr Miliband said: "It's not just that working people founded the Labour Party, but they keep us rooted in those communities now."
He added that about 40% of Labour's income was from its members, 40% from unions and the rest from individual donors.
CURRENT FUNDING RULES
- No limit on size of donations
- But name of anyone who gives £7,500 or more is published
A Conservative Party spokesman said Mr Miliband's proposals on party funding reform would be "virtually meaningless".
He added that Labour received £10m from its affiliation fees, which would not be covered by the change.
Conservative housing minister Grant Shapps told BBC One's Sunday Politics that, in years other than when a general election was held, Mr Miliband's party would lose only 1% of funding.
He added: "We are very, very keen to reform party funding. It's the unions that have been blocking it and, of course, funding the Labour leader."
And Liberal Democrat deputy leader Simon Hughes said: "We're pleased that Labour has finally recognised that big money should be taken out of politics and that this includes trade unions.
"But questions remain over how committed Labour is to real reform. Why does Ed Miliband still disagree with the Kelly proposals that people should have the freedom to opt in to donating to the Labour Party, rather than the complex system of opting out?"
But a spokesman for the Unite union said: "Unite supports Ed Miliband's efforts to restore faith in politics, and is pleased that the vital link between Labour and millions of working people is valued and will be retained.
"The affiliation to the party is the most transparent money in politics. Now, more than ever, it is something to be proud of."