Gunter was associated with the right wing of the Labour Party and was a member of the Labour Party's National Executive Committee from 1955 to 1966 and was president of his union, TSSA, 1956–64. When George Isaacs announced his decision not to stand for re-election in the strongly Labour constituency of Southwark in South London, Gunter secured the nomination in time for the 1959 general election. He was returned to the Commons as a TSSA-sponsored Member of Parliament, with a majority of 12,340. Following Labour's heavy defeat in the 1959 election, its then leader, Hugh Gaitskell, sought to revise and moderate Labour's constitution – the so-called Clause IV dispute. The trade union leaders overwhelmingly disliked this shift and Gunter was one of the opponents. In 1963 Gaitskell died suddenly, the Clause IV conflict still unresolved. Harold Wilson was elected the new leader of the Labour Party, and Gunter continued to be a Labour shadow cabinet member.
Labour narrowly won the 1964 general election and Harold Wilson made Gunter Minister of Labour. The dilemma Gunter faced was this: as a union leader he believed that trade unions should be able to negotiate responsible pay rates for their members through "free collective bargaining"; on the other hand, the wildcat strikes in some parts of British industry were often seen as damaging to the economy, and "wage restraint" was the alternative. Soon after Labour's landslide victory at the 1966 general election, the seamen's strike was a particularly important factor in the conflict. On that issue, Gunter took the same tough line as Wilson. Looking back, he described his stint as Minister of Labour as a "bed of nails". He sought to complete his work by bringing in a new bill drawn from the findings of the Donovan Commission report on trade union power, but Wilson reshuffled him to the post of Minister for Power in April 1968. Gunter was rumoured to have been the source of leaks to the media which put the cabinet in a negative light. In any event he resigned from government on 1 July, stating that he could no longer work in a Wilson government. Meanwhile, Gunter's successor in labour affairs, Barbara Castle, saw her proposals to reduce trade union powers in her 1969 white paper, 'In Place of Strife' fail in the teeth of concerted Trade Union opposition.
Gunter was re-elected in his Southwark constituency at the 1970 general election that saw the Labour government replaced by a Conservative one led by Edward Heath. He was by now a senior opposition backbencher and resigned from Parliament in 1972 and was succeeded by Harry Lamborn. Gunter died in 1977 and was buried at St. Mary's Old Church, St. Mary's on the Isles of Scilly. For many years he had a house on the Isles of Scilly, located in Launceston Close, Old Town, and called Y Bwythen Bach. His name lives on in a block of sheltered flats for the elderly built by Southwark Council in Walworth.
