Political donors could face tougher residency rules

Reform UK has come under scrutiny after receiving £72 million in donations from two British crypto‑billionaires, Ben Delo and Christopher Harborne, both of whom have recently lived abroad. The government is moving to tighten residency rules for political donors, proposing a £100,000 annual cap on contributions from British voters residing overseas and a minimum twelve‑month residency period before the cap applies to those who return to the UK. While Reform leader Nigel Farage maintains that the donations are “100 % compliant with the law today,” he could not confirm whether they would meet the forthcoming requirements. The proposed changes are being debated in the House of Lords as part of the Representation of the People Bill, with MPs having already approved amendments supporting the stricter regime.

The core of the reform is to ensure that anyone seeking to influence British politics has a genuine, ongoing connection to the country, mirroring existing tax residency criteria that deem a person resident after 183 days in a tax year. Communities Minister Baroness Taylor of Stevenage emphasized that the new rules would align donor residency with broader government policy, and Business Secretary Jonathan Reynolds stressed that the measures are not aimed at any single party or donor. Liberal Democrat spokesperson Lisa Smart criticised the government for “playing whack‑a‑mole,” arguing that Labour’s own residency standards are insufficient and calling for a universal donation cap to prevent “Trump’s America becoming Farage’s Britain.” The government’s earlier proposals in March and July to cap foreign donations did not mention the enhanced residency test, leading to speculation that the Delo and Harborne contributions have prompted the latest push.

Farage warned that retroactively declaring such donations illegal could trigger a tit‑for‑tat response, with parties like the Conservatives potentially targeting trade‑union funding, which he described as “the cleanest money in politics.” Trade unions, which have supplied Labour with nearly £43 million since 2020, issued a joint statement after the Trades Union Congress, urging the government to protect democracy from “super‑rich” influence and pledging cooperation on political‑funding reform. Unite, the second‑largest union, suggested a cap of £500,000 to £1 million on individual donations, though larger unions remain cautious about caps that might affect Labour’s financing. The government has also established a taskforce to tackle “mega‑donors,” signaling a broader effort to reshape the UK’s political‑funding landscape.

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