Nigel Farage has admitted the £72 million donated to his party over the weekend may not be legal under upcoming legislation to clamp down on foreign political donors.
Reform UK has come under fire after two £36 million gifts from crypto-billionaires were made public on Saturday, prompting the government to vow to “seriously address” spending limits on political donations.
Questions have been raised over the legality of the donations, given the two benefactors - Ben Delo and Christopher Harborne - could be covered by a cap on overseas donors put in place by the Representation of the People Bill.
The legislation will be backdated to March 25 and also apply to donations made in the first year that someone moves back to the UK, raising concerns over the location of the two donors.
Mr Delo had been based in Hong Kong but stated in April he would move back to the UK to bypass limits on foreign donors, while Mr Harborne was resident in Thailand before reportedly registering to vote in Hampshire in June.
Mr Farage told the BBC on Monday that while he believed the two donations were “compliant” with the law as it stands, suggested they would not be acceptable as a result of a law change.
He went on to say that if the donations were deemed impermissible retrospectively, Reform UK would advocate a cap on trade union funding to political parties, which would serve as a major blow to Labour.
"Both these donations are 100 per cent compliant with the law today, of that there is no question whatsoever," Mr Farage said.
He was subsequently asked whether Mr Delo and Mr Harborne were resident in the UK on 25 March, as this status would affect their donations.
Mr Farage replied: "I’m not going to go into their particular details. All I’m going to say is, with the law of the land as it stands, they are both compliant.
"Now, there is talk, and Angela Rayner was talking about this yesterday, there is talk of them retrospectively declaring donations illegally. Well, that simply cannot be.
"If the government was allowed to do this, you know what would happen? There would be a response the other way. We or the Conservatives would say 'if you're going to stop legitimate donors like this, we would say to the trade unions, you can't give money’.”
Reform UK deputy leader Richard Tice also drew parallels with Labour’s backing from trade unions, who he argued "make demands about employment rights regulations, public sector pay and they get those demands satisfied".
The donations prompted Labour peer Lord David Blunkett to urge the government to impose a cap on political donations - including from trade unions - as he branded Reform UK’s donations a “complete distortion of democracy”.
“Obviously, we've been talking about overseas donations. I think there should be a cap on donations internally as well for domestic reasons,” he told Times Radio.
“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.”
But Labour ministers and union leaders have pushed back on suggestions that trade unions should be included in legislation to cap political donations from wealthy individuals.
Angela Rayner on Monday told the TUC congress that Mr Farage’s. donations from “sugar daddies” were “proof” Reform UK is not on the side of working people.
“How dare they try to compare money from a couple of crypto billionaires to union members' subs? The most highly regulated political funding we can have,” she said.
“It couldn't be more different from a couple of offshore billionaires trying to buy our democracy.”
Sharon Graham, general secretary of Unite, 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”.
He warned the government not to “allow our political system to be captured by corporate interests”, adding: “Let no one tell you there is any similarity between care workers chipping in a few quid a year through their union and a party bought and paid for by billionaires.
“So, we need a proper conversation about how we clean up our politics that doesn’t push workers to the margins, but does stop the super-rich corrupting our politics.”
Proposals regarding a cap on all political contributions are anticipated to feature prominently in the House of Lords, which considers the government’s Representation of the People Bill on Monday.
The Bill already incorporates limits restricting overseas electors to £100,000 annually, though attempts by MPs to introduce an overall cap failed after ministers promised to direct officials to explore how such a measure would function.
The Liberal Democrats are set to demand a cap, having called for "emergency legislation" and arguing that the contributions revealed "a dangerous flaw in our democratic system".
A Downing Street spokesperson said the government has “been clear that the Bill going through parliament isn't the limit of our ambition for electoral reform”, adding: “It strengthens safeguards against foreign influence and we will continue bringing forward further reforms to strengthen public confidence in our democracy.”
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