Labour peer urges cap on all political donations after Reform row

A Labour peer has urged the government to impose a cap on political donations – including from trade unions – amid concerns over Reform UK’s £72 million donation from crypto-billionaires.

The government has promised to “seriously address” limits on political donations after two crypto-billionaires disclosed donations of £36 million each to Reform UK over the weekend.

The donations amount to three quarters of the money spent at the last general election by all parties combined, prompting calls from MPs and campaigners to limit political funding.

Labour peer and former home secretary Lord David Blunkett urged the government to bring in a cap on political donations from wealthy individuals, as he branded Reform UK’s donations a “complete distortion of democracy”.

He also backed a cap on domestic donations, which could impact Labour’s own historic funding from trade unions.

“Obviously, we've been talking about overseas donations,” he told Times Radio. “I think there should be a cap on donations internally as well for domestic reasons.

“And I think we should reach an agreement that respects that both business, trade unions, and wealthy individuals, as well as the poor devils who sustain the Labour Party over the many years I've been in it, which is giving £20 here and £50 there.”

Union leaders have pushed back on suggestions that trade unions should be included in legislation to cap political donations from wealthy individuals.

Sharon Graham, general secretary of Unite, has suggested donations from trade unions should be exempt from any cap, saying were “not the same as two crypto millionaires waking up and giving £72 million”.

General secretary of the Trades Union Congress (TUC) Paul Nowak also insisted that trade union money is the “cleanest, most transparent money in British politics”.

Proposals for a cap are likely to feature heavily in the House of Lords, which will debate the government’s Representation of the People Bill on Monday.

The Bill already contains measures limiting donations from overseas electors to £100,000 a year, but attempts by MPs to impose a general cap failed after the government promised to task officials with investigating how a measure would work.

On Sunday, Ms Rayner suggested a cap was still on the table, telling the BBC she wanted to stop people “being able to overpower and buy their way into democracy”.

Reform has said it will use the money to fund its preparations for office, and that the men want “nothing” in return.

But campaigners have said the £72 million gifts demonstrate the need for a cap on political donations, and Spotlight on Corruption said the situation “creates risks that the game will be rigged in favour of those with the most cash”.

However, questions remain over whether Reform will be able to keep all of the £72 million after Ms Rayner appeared to suggest they could be covered by the cap on overseas donors, which will be backdated to March 25.

The rules, which limit donations from overseas electors to £100,000 per year, were proposed in a review by former civil servant Philip Rycroft aimed at countering foreign influence in UK politics.

They also apply to donations made in the first year that someone moves back to the UK.

Mr Delo has been based in Hong Kong but said in April he would return to the UK to avoid restrictions on overseas donors, and Mr Harborne is based in Thailand.

Robert Jenrick, the party’s economic spokesman, said on Sunday the donations were “entirely in line with the law as it is, and as far as we know, the law as it’s going to be in the future”.