Backlash over bid to change the rules after £72m gift to Reform from billionaire businessmen
Andy Burnham and Angela Rayner are seeking to change rules on political party funding (Image: Getty)
Labour will try to change political donation laws after Reform received a bumper £72million from two businessmen in as many days.
Left-wing MPs are pushing for a £100,000 cap that will apply to expats donating to UK parties but not to trade unions, which have given tens of millions of pounds to Labour over the past decade, or UK-based donors.
The planned changes would be retrospective, Local Government Secretary Angela Rayner confirmed, sparking fury from rivals.
In July, Ms Rayner herself received around £30,000 in donations, with similar sums paid earlier this year. Her donors would be unaffected by the cap she is backing.
The Ashton-under-Lyne MP previously made headlines after quitting as Deputy Prime Minister under Sir Keir Starmer amid a scandal around her underpayment of stamp duty on a £800,000 seafront property in Brighton.
Andy Burnham reappointed her back to the job when he became Prime Minister earlier this year.
Speaking to Sky News on Monday, Ms Rayner said the law would “be backdated” and will apply to “overseas donors” and those who have “recently returned to the UK”.
She added: “Look, we’re saying that if you don’t pay taxes, if you don’t live here, you can’t buy your way into our democracy.”
Asked on the BBC‘s Sunday With Laura Kuenssberg if Nigel Farage might need to hand back the money given to him by cryptocurrency billionaires Ben Delo and Christopher Harborne, Ms Rayner said she did not know their “individual circumstances”.
But she added: “With the retrospective action, anyone that’s received donations that don’t comply with what was in the Rycroft review, what legislation is currently going through Parliament, would have 60 days to return that money.”
Reform UK said it was “100% confident” that both are legal and “won’t ever have to be handed back”.
Senior Reform figures slammed Labour over the plans, with Westminster insiders pointing out that Labour pocketed £4million from Quadrature Capital in 2024, which has funds based in the Cayman Islands.
Treasury spokesman Robert Jenrick wrote: “They’re behaving like gangsters. We have to stop their shoddy stitch-up.”
Labour is also said to be plotting a cap on donations from any individual, but not trade unions. Mr Burnham previously backed a cap of £500,000, but is believed to have stopped backing it after lobbying by trade union barons.
Home affairs spokesman Zia Yusuf said the pledge to backdate the terms of the Bill would “weaponise Parliament” to “confiscate donations”.
He dubbed it “literally changing the rules after the fact to hurt and punish a political opponent”, adding: “There is no precedent for this in modern British political history. How can anybody operate on these terms?”
Labour has come under renewed political fire over plans to tighten Britain’s political donation rules, with opponents accusing the government of trying to rewrite the rules after Reform UK received an unprecedented £72 million from two cryptocurrency billionaires.
The dispute has rapidly become one of the most contentious political funding rows of the year. Labour says its proposals are designed to protect British democracy from foreign interference and prevent people with insufficient connections to the UK from exercising disproportionate financial influence. Reform UK, however, argues that the government is changing the rules retrospectively because it dislikes the source and scale of the party’s recent fundraising.
The language surrounding the row has become increasingly heated. Conservative Treasury spokesman Robert Jenrick accused Labour of “behaving like gangsters” and described the proposals as a “shoddy stitch-up”. Reform figures have similarly claimed that Parliament is being used to target a political rival.
Those are political accusations, rather than established findings. The government insists the reforms are part of a broader effort to strengthen electoral safeguards, following an independent review into foreign financial interference.
The £72 million donation that changed the argument
The immediate trigger was a remarkable sequence of donations to Reform UK.
In September, cryptocurrency investor Ben Delo announced a £36 million donation to Nigel Farage’s party. Just a day later, fellow crypto investor Christopher Harborne announced another £36 million contribution.
Together, the two donations amounted to £72 million in less than 48 hours.
Reuters reported that the combined sum exceeded the amount spent by either Labour or the Conservatives during the previous general election campaign, according to Electoral Commission data. Harborne said he expected nothing in return for his contribution and described his motivation as supporting a party he believed was ready for government.
The scale of the money immediately intensified the debate about whether Britain’s existing political-finance system can adequately regulate extremely wealthy individual donors.
Under the rules in force before the new proposals, there was no general upper limit on the amount an individual, trade union or corporation could donate to a British political party, provided the donor was legally permissible. The House of Commons Library confirmed in April that there was no general maximum donation limit under existing law.
That distinction is crucial.
The controversy is not simply about whether Reform was allowed to accept money under the rules that existed when the donations were made. The government is attempting to change those rules and, in certain circumstances, apply the changes retrospectively.
What Labour actually wants to change
The government has proposed an annual £100,000 cap on political donations and regulated transactions from overseas electors.
It has also announced a moratorium on cryptocurrency donations.
According to the government’s own announcement, the measures are intended to take effect retrospectively from 25 March 2026. Political parties and other regulated recipients would have a period to return donations that become unlawful under the new rules.
The government’s justification is that Britain needs stronger protection against foreign interference.
Its wider political-finance programme includes enhanced “Know Your Donor” requirements, tougher rules governing company donations, additional controls on unincorporated associations and stronger forfeiture provisions for impermissible donations.
The government argues that the purpose is not to suppress legitimate political fundraising but to ensure that donations come from people and organisations with a genuine connection to Britain.
That argument has been strengthened by the Rycroft Review, an independent investigation into foreign financial interference commissioned by the government.
But the retrospective element is where the political battle has become particularly intense.
Why the retrospective element is controversial
Critics argue that political parties should be able to rely on the law as it exists when they receive money.
If a donation was lawful when accepted, they ask, should Parliament subsequently be able to create a new restriction and require the money to be returned?
Labour’s answer is that the extraordinary risks surrounding foreign financial influence justify stronger measures and that the retrospective provision is specifically designed to prevent people from exploiting a gap between the announcement of new restrictions and their formal passage through Parliament.
The government’s parliamentary correspondence makes clear that the £100,000 cap would apply retrospectively to donations from overseas electors received on or after 25 March 2026. Donations exceeding the limit would have to be returned within 60 days of the legislation coming into force.
That does not automatically mean that Reform’s £72 million will be confiscated.
Whether particular donations are affected depends on the legal status and circumstances of the donors, including their residency and electoral status, as well as the final legislation.
Reform has maintained that the donations comply with existing law and has expressed confidence that the money will not have to be returned. Reuters reported that the party said it had complied with electoral rules.
Angela Rayner faces questions
Angela Rayner has become one of the most visible Labour figures defending the proposed changes.
She has argued that people who do not live in Britain or pay taxes in Britain should not be able to use enormous sums of money to influence the country’s democratic system.
Rayner has also confirmed that the government intends the new rules to have retrospective effect.
That has given opponents an opportunity to argue that Labour is changing the rules because Reform has suddenly become exceptionally well funded.
The government rejects that interpretation.
The policy predates the £72 million donations. The £100,000 cap had already been announced in March, and the government subsequently commissioned and acted upon recommendations from the Rycroft Review.
That chronology matters because it complicates the claim that the entire reform programme was invented specifically to deal with Reform’s September fundraising.
At the same time, the extraordinary size of the Reform donations has undoubtedly accelerated the political argument over the legislation.
Labour’s own funding creates another line of attack
The controversy has also exposed a potential political difficulty for Labour.
Critics have questioned why restrictions should focus particularly heavily on overseas individual donors while Britain’s major political parties continue to receive substantial sums from other sources, including trade unions.
The issue has become especially sensitive because Labour has historically received significant union support.
The Guardian reported that Labour had received almost £43 million from trade unions since 2020. The same report noted growing internal debate over whether political donations should be subject to broader limits.
That does not mean Labour’s union funding is unlawful. Trade unions are permissible political donors under Britain’s existing electoral framework, subject to the applicable rules.
But the difference has become central to the political argument.
Critics say that if the objective is to reduce the influence of very large donors, the government should consider a comprehensive cap applying across the political system rather than rules focused on particular categories of donors.
Supporters of Labour’s approach respond that the immediate problem identified by the government is foreign financial interference, which presents a distinct risk.
Labour is facing pressure from inside its own movement
The donation controversy is not simply a Labour-versus-Reform dispute.
Trade unions, MPs and political donors from different backgrounds have been calling for changes to the system.
The Guardian reported that Labour MPs and unions were pushing for stronger restrictions following Reform’s £72 million fundraising surge, while the government was also asking the Electoral Commission and a taskforce to examine the wider rules.
At the same time, Labour has continued fundraising from wealthy supporters.
A Downing Street reception for Labour donors was held in September amid the growing debate over a donations cap. The event highlighted the awkward reality facing the governing party: while Labour is arguing for stronger controls on political money, it still needs substantial funding to operate, campaign and compete electorally.
That tension is not unique to Labour. Britain’s major parties have historically relied on combinations of individual donors, organisations and trade-union support.
The crypto question
Another major element is cryptocurrency.
The government has announced a complete moratorium on political donations made directly through cryptocurrency until Parliament and the Electoral Commission are satisfied that sufficient regulation exists.
The government says the concern is transparency and traceability.
A parliamentary answer in September confirmed that a moratorium on political donations made through crypto assets had applied since 25 March 2026 and that donations made directly in crypto would be banned under the new legislation. It also acknowledged a more complicated question surrounding money converted from crypto assets into ordinary currency before being donated.
That distinction could become important in future disputes.
A donor who acquired wealth through cryptocurrency is not necessarily making a “crypto donation”. A donation made in ordinary pounds can have a very different legal classification from a direct transfer of digital assets.
The government has said it will provide further detail on how converted crypto wealth will be treated.
A political-finance battle far bigger than one donation
The argument therefore goes beyond Nigel Farage and Reform UK.
At its heart is a question about how Britain should regulate political money in an era when a small number of extremely wealthy individuals can provide sums capable of transforming a party’s finances almost overnight.
Reform says the government’s approach risks creating a dangerous precedent: politicians could change the rules after donations have been accepted and force parties to return money that was lawful at the time.
Labour says the opposite danger is greater: without stronger safeguards, wealthy people with limited connections to Britain could acquire excessive influence over British politics.
Both sides therefore present the dispute as a question of democratic integrity, but they disagree sharply about where the principal threat lies.
The phrase “behaving like gangsters” captures the temperature of the political argument, but it does not establish what the legislation will ultimately do.
What is clear is that the government intends to tighten political-finance rules, including a £100,000 annual cap for donations and regulated transactions involving overseas electors and a ban