Reliance on political ‘mega-donors’ risks giving them ‘undue influence’, watchdog warns

Heavy reliance on large political donations from a small number of sources risks allowing donors to “exert undue influence”, the Government’s ethics watchdog has warned.

The Ethics and Integrity Commission (EIC) said perceptions around so-called “mega-donors” could be “damaging for trust in politics”.

The watchdog said cross-party talks will be needed to ensure any reforms have “democratic legitimacy”.

In a letter to Prime Minister Andy Burnham, the EIC said: “Political parties play a vital role in our democracy and need significant sums of money to function, yet the reliance on large donations from a limited number of sources creates the risk that donors may exert undue influence, or may be perceived to do so, which is damaging for trust in politics.

“A universal donation cap is likely to affect the major parties in different ways.

“The EIC recommends that the cross-government ‘task and finish’ team announced in September engage with all major political parties so that decisions are not seen to be enacted in a partisan manner.

“This will also ensure reforms have democratic legitimacy and are more likely to endure.”

The longstanding debate around an annual donations cap was reignited after a record £72 million was given to Reform UK from its crypto-billionaire backers.

Ministers are considering whether to strengthen proposed laws to force political donors to demonstrate an “ongoing” presence in the country amid reports Ben Delo and Christopher Harborne have already returned to the UK.

The Government has already moved to introduce a £100,000 cap on the amount of money that can be given to parties by British citizens overseas, which would also apply for the first 12 months after any expats return to the country.

Downing Street has denied targeting Reform with the proposals.

The party has started using the funding to expand its staff, including doubling its policy team from 10 to 20 and 400 new field agents, with a new online channel also expected to be broadcast over YouTube, The Times reported.

It comes after prominent Labour donor Dale Vince backed a report advocating a ban on private funding for UK political parties last week.

He said British democracy is "increasingly up for sale to the highest bidder" and must be made "squeaky clean".