Labour faces accusations of attempting to 'punish' the Reform party with a new law that could compel it to return £72 million in donations. Angela Rayner, Labour's Communities Secretary, stated on Sunday that the proposed rules to regulate overseas political funding would be backdated.
Under the Representation of the People Bill, slated for debate in the House of Lords, a 'minimum residency period' will be introduced. This provision aims to prevent returning Britons from breaching annual donation limits for a calendar year after their relocation back to the UK. Rayner confirmed that the rules would apply to 'overseas donators' and those who have 'recently returned to the UK,' affecting all donations received since March 25, the date a government review of foreign influence on politics was published.
When asked if the legislation could impact two recent £36 million donations to Reform from cryptocurrency billionaires residing abroad, Rayner replied, "It will be backdated." She elaborated that any donors who do not comply with the new regulations would have 60 days to return the funds. "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," Rayner added.
Reform UK has expressed confidence that the donations are legal and will not need to be returned. The party stated it is "100 per cent confident both are legal and won't ever have to be handed back." Sources suggest that the donors in question, Ben Delo and Christopher Harborne, who had previously lived abroad, both returned to Britain before the March cut-off date.
Senior figures within Reform have reacted strongly to Rayner's comments. Zia Yusuf, the party's Home Affairs spokesman, criticized the move as an attempt to "weaponise Parliament" to "confiscate donations," calling it an unprecedented move in modern British political history. Robert Jenrick, Reform's Treasury spokesman, accused Labour of behaving like "gangsters" in a "shoddy stitch-up."
Labour may also consider imposing a cap on individual donations. While a £500,000 limit was previously considered, Prime Minister Andy Burnham is reportedly reconsidering this following lobbying from trade unions that support his party. Rayner indicated that a group is examining this issue. Labour MP Stella Creasy, who has supported an amendment for a donations cap, stated that the government acknowledges the problem of UK mega-donors, arguing that such large contributions can distort electoral outcomes.
Leaders from trade unions have also suggested a cap on individual donations. Paul Nowak of the Trades Union Congress commented on the impact of large donations on democracy, while Sharon Graham of Unite specifically called for a cap on individual donors. Reform deputy leader Richard Tice countered that this could lead to a "two-tier system" favouring union donations over those from individuals.