Legislation was supposed to bring transparency into lobbying but has been dubbed the 'gagging law' by charities

Labour has announced that it will repeal the Lobbying Act if it wins power, in an attempt to make elections and lobbying of government more transparent.

The act has been dubbed the "gagging law" by charities for restrictions it places on their ability to campaign in election periods. The shadow leader of the Commons, Angela Eagle, said on Thursday that if Labour won the next election it would protect freedom of speech for charities in elections, as well as regulate the lobbying industry and get rid of big money from politics.

It is relatively rare for Labour to say it will repeal a specific piece of government legislation, partly because shadow ministers know there will be a huge demand for legislative time if Labour is elected.

The legislation was supposed to bring transparency into lobbying but it has faced intense criticism from charities who say that the restrictions it places on how much they can spend on campaigns during election periods amount to a gagging clause.

The bill received royal assent in February, and in June the Electoral Commission is due to issue clarifying guidance on how the act's provisions will work in practice.

Despite concessions during the passage of the act, the alliance of charities that opposed the bill said the law "will restrict the ability of many charities and campaigning groups to fulfil their core function on behalf of their supporters because campaigning ahead of elections will be restricted on a scale never before experienced".

The alliance added: "The law is badly drafted and is ambiguous in its meaning."

Eagle said she would consult with charities to see what restrictions on campaigning were still needed. She said a Labour government would bring in a universal register of professional lobbyists that covered all lobbyists and not just the 1% covered by the current legislation, and there would be sanctions for firms that did not comply. She said that at present only firms that lobbied for a variety of clients were required to register.

"The lobbying laws had been cooked up in a shabby deal between David Cameron and Nick Clegg. It lets vested interests off the hook, and it gags charities and grassroots campaigners who want to hold the government to account," Eagle said.

"In the next parliament, we will introduce a universal register of all professional lobbyists backed by a code of conduct and sanctions. We will do what Cameron and Clegg didn't and consult with charities and campaigners about how to ensure transparency in our elections while protecting freedom of speech."

She said the government's reforms "have achieved the feat of uniting both lobbyists and campaigners for lobbying transparency against them.

Eagle said groups as disparate as the Taxpayers Alliance, the Royal British Legion, 38 Degrees and Friends of the Earth had opposed the laws, while the Alliance for Lobbying Transparency said the reforms were a box-ticking exercise.

It is generally accepted that the new legislation excludes all in-house lobbyists working inside banks, energy firms, payday lenders, alcohol and tobacco companies, as well as corporate lobbyists in business lobby groups like the CBI.

Lobbyists in those agencies that have direct contact with ministers will be required to list merely their clients. There will be no record of dealings with special advisers, civil servants or regulators; no information on what they are seeking to influence or what deals are being done; nor how much money is being spent to sway government.

Senior lobbying groups including the Association of Professional Political Consultants recently issued a statement claiming the law remained unclear. They said the law needed clarifying by the Cabinet Office "so that potential registrants are able to comply with the law. Our members want clarity on the exact nature of activity that will trigger the requirement to register and about the cost of registration".