Trade unions, MPs and donors have urged the government to look again at party funding rules, after Reform UK insisted £72m in donations from two crypto billionaires was within the law.
Andy Burnham, a previous backer of caps on domestic donations, has so far declined to insert any curbs in the elections bill that would apply to UK-based donors.
Labour MPs have voiced anger on internal WhatsApp groups that the government did not act last week when the elections bill was in the Commons to restrict domestic donations after two donors – Christopher Harborne and Ben Delo – gave Reform UK a total of £72m over the weekend.
The bill returns to the House of Lords next week where peers told the Guardian they would ask the government to look again at the issue.
The communities secretary, Angela Rayner, suggested on Sunday that the donations could be caught in a new bill which would apply retrospectively on donors from outside the UK.
The two donors who gave Reform £36m each have both previously been based outside the UK. Harborne is a citizen of the UK and Thailand, while Delo recently moved back to Britain from Hong Kong. It is unclear when Delo returned to live in the UK and whether Harborne remains a resident of Thailand. Reform said both donations were within the rules.
Senior government sources indicated the government was prepared to look again at the issue of domestic donations once it receives advice from a newly commissioned taskforce and from the Electoral Commission.
One No 10 source said they did not want to delay the elections bill – which gives votes to 16-year-olds and puts new curbs on foreign donors – but said the bill was “not the right vehicle but this is not the end of the story”.
Several Labour MPs said they had been assured by ministers that further legislation could still come before the general election. Trade unions are also understood to be wavering on the issue and a possible donations cap is expected to be part of discussions at the TUC congress next week, where Rayner and Burnham will speak.
Unions have been central to the decision not to impose a domestic donations cap after several, especially GMB, argued it would be a slippery slope towards future rightwing governments curbing union donations.
On Sunday the Unite trade union said it was in favour of a cap – and the largest trade union, Unison, said it would fight attempts by billionaires to influence politics.
“For individual donors there must be a cap,” said Sharon Graham, the Unite general secretary. “I think at some point it gets beyond what people think as normal.”
Andrea Egan, Unison’s general secretary, said: “As his support dwindles in this country, Farage is turning to crypto billionaires in an attempt to undermine our democracy. The trade union movement will oppose him every step of the way.”
Stella Creasy, the Labour MP whose amendment on donations caps attracted support in the Commons, is liaising with peers about how they can raise the issue when the bill returns to the House of Lords this week.
The Labour peer Michael Wills said: “The government has already committed to urgently reviewing the questions of caps on donations. Now the bill is in the Lords, it offers an unmissable opportunity to say when that review will complete its work, and what its remit will be.”
Creasy said the Reform donations had “concentrated people’s minds about what is now happening in our politics and what it will do to the voices of working people if it’s not stopped – we have the chance with the Lords to amend this bill with a cap”.
Her amendment proposed an annual cap of £100,000 on most domestic donations. It was not put to a vote after the government said it would ask a taskforce to look at the proposal.
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The former shadow chancellor John McDonnell said it was time for the government to move faster and for unions to get onboard. “It’s clear now to the trade unions meeting in congress this week that action is needed to protect our democracy and there’s a growing expectation the government will respond with urgency,” he said.
Two influential big party donors also called for a cap on Sunday. The billionaire businessman and Phones 4U founder, John Caudwell, who previously donated to the Conservative party in 2019, told BBC Radio 4’s Broadcasting House: “There should be a definite change in law. We should not have very wealthy people making undue influence.”
Dale Vince, the Ecotricity founder who has given donations to the Labour party, said it was “urgent” the government dealt with donations rules. “Ridiculous sums of money don’t level the playing field – they distort it.
“Our current system of funding is anti-democratic – those with big money have more say than the simple vote we all have. A cap on donations would be a step in the right direction – the end game should be publicly funded politics.”
The TUC general secretary, Paul Nowak, suggested he was sympathetic to further action. Speaking before the opening of the TUC congress, he said: “No one wants the UK to become a country for hire in the way Reform is clearly a party for hire. Without a doubt, we are going to need to restrict the ability of billionaires like Delo to buy and sell our politics. But we’ll have to do that in a way that doesn’t cut across workers having their voice heard politically.”
Reform has said it is confident that its two donors will not be caught in a retrospective cap on donations from Britons living abroad. “We are 100% confident both are legal and won’t ever have to be handed back,” a spokesperson said, suggesting both men would meet the criteria on residency even within the rules of the new bill.
As part of the new legislation, donations to political parties from Britons living abroad or those who have returned to the country within the past 12 months will be capped at £100,000 a year, with the rules backdated to March.
Rayner – the minister responsible for the bill – said it was not targeted at individual donors or parties. “We didn’t know that donors were going to be putting that money in, and this isn’t about individual donors to a political party. This is an issue that has been raised about protecting our democracy from foreign interference, and the government is taking action on that,” she told the BBC’s Sunday with Laura Kuenssberg programme.
Reform’s economy spokesperson, Robert Jenrick, said the two donors were well aware of the law. He said: “It’s a breakthrough moment, really, for the party. It means that we will be battle ready if Andy Burnham calls an election, and we can compete now finally on a fair, even playing field with the two old parties.”
