Shabana Mahmood drawn into storm over £700,000 in hidden Labour Together donations

A UK home secretary has been dragged into a widening controversy over £700,000 in concealed donations to Labour Together, the think-tank linked to Prime Minister Keir Starmer’s senior adviser Morgan McSweeney. Leaked emails indicate that Shabana Mahmood, then a deputy leader in the party and now Home Secretary, discussed why the political funding watchdog was not informed about large sums flowing to Labour Together, as required by law. The discussions also involved Steve Reed, a Labour MP who now oversees electoral law, and centered on concerns that disclosure could expose a Jewish donor amid heightened tensions over anti-Semitism within the party.

The donations, raised from wealthy backers, were reported to the Electoral Commission only from December 2017 onward. McSweeney stopped reporting the donations to the regulator for several years, a lapse that culminated in a formal sanction after Labour Together was later found to have breached electoral law on more than 20 counts and was fined £14,250. The episode has resurfaced as a highly anticipated book about Sir Keir Starmer’s rise to leadership draws on private correspondence and internal legal advice.

In February 2021, Gerald Shamash, a longtime Labour Party solicitor, wrote private notes describing conversations with Mahmood and Reed regarding McSweeney’s interactions with the Electoral Commission in early 2018. Shamash recalled that directors and board members wanted to be as transparent as possible but we[re] mindful of the party’s climate and the anti-Semitism debate at the time. The notes also indicate an intention to protect Trevor Chinn, a venture capitalist who had been an early donor to Labour Together. Labour Together’s own spokesman said the think-tank proactively raised concerns about its reporting and fully cooperated with investigators. The Electoral Commission, for its part, said it thoroughly investigated the concerns and concluded that the breaches occurred without reasonable excuse; offences were identified and sanctioned accordingly.

The Conservative Party quickly seized on the disclosures, demanding the Electoral Commission open a new inquiry and refer the matter to police. Shadow Home Secretary Chris Philp asserted that Mahmood must be transparent about what she knew and when, given the Home Office’s responsibility for law enforcement and the broader implications for public trust in political funding. He also used the episode to criticise the government over immigration policy and other domestic priorities, arguing that regulatory failures divert attention from pressing issues.

The leak’s timing adds fuel to a broader narrative about the Labour leadership’s history with transparency and donor relationships. The revelations come as Downing Street faces questions about how money guiding political campaigning is reported and monitored, particularly when figures connected to the leadership are implicated.

Analysts note that the affair intersects several strands of risk for Labour: the party’s handling of anti-Semitism allegations, the management of large donor gifts, and the balance between openness and donor protection in internally funded policy centers. The Electoral Commission’s determination that the failures were not excusable is likely to inform any future regulatory scrutiny and could influence how parties structure reporting going forward. While some supporters view Labour Together’s fundraising as a legitimate part of policy advocacy, opponents argue that opacity around funding undermines public confidence in electoral processes.

As the book detailing Sir Keir’s rise to No. 10 prepares for release, the leaked correspondence offers a rare glimpse into internal debates over how party infrastructure, donor influence, and compliance with reporting requirements intersect in a competitive political environment. The episode underscores ongoing tensions between party leadership, regulatory bodies, and lawmakers as they navigate the evolving landscape of political finance in the United Kingdom.