How will we know Labour is really cleaning up party funding? When Reform and the Tories fight like hell to stop it | Polly Toynbee

3 hours ago 1

Good. Yet again the government has done a good thing. But yet again it is not enough, and too weak a political klaxon to signal what Labour stands for. Overcaution and opportunity missed is so often the story, as the government fails to imprint the best of itself on the public mind. But there is still time to act, with hopeful signs behind the scenes that it is considering stronger reforms to how politics is funded. Bring it on, fast – and this time with panache.

Crypto donations to political parties have been banned, instantly leaving no time for shovelling more truckloads of dubious cash from mysterious sources into British politics. Donations from Britons abroad have been capped at £100,000 – still high for those paying to influence tax-and-spend decisions without paying UK tax. Many good recommendations from the report by Philip Rycroft will be debated and included in the current representation of the people bill, after his severe warnings about the influence of Russia, Iran, China or indeed US billionaires inside Trumpworld: all of them enemies. He offers an example of this kind of malevolent interference, noting the sharp drop in aggressive commentary on Scottish independence during Iran’s internet blackout. Who knew Iranian ayatollahs were so interested in the SNP? Enemies relish a broken-up, enfeebled UK.

Steve Reed, whose departmental remit includes the constitution, said on Wednesday as he announced the immediate action, “I am not prepared to allow any window of opportunity in which malign actors based overseas can funnel dark money into our politics.” Starmer promised in prime minister’s questions to “act decisively to protect our democracy”. Many in politics are said to be delighted that Labour’s actions will prevent donations such as the £12m given to Reform last year by the Thailand-based crypto billionaire Christopher Harborne. The jailing of the Reform politician Nathan Gill for taking Russian-linked bribes shone another light in a murky place. Naturally, Richard Tice, Reform’s deputy leader, told GB News that the party would reverse these new rules if it came to power. (Enforcing broadcasting law must be Labour’s next democratic act: with a new Ofcom chair being selected, make that someone with the guts to force GB News to obey basic broadcasting law. See Alan Rusbridger’s deep investigation of how Ofcom let GB News become Reform News.)

Democracy campaigners welcomed Wednesday’s action, but all call for a real clean-up of political funding. Labour’s manifesto said it would “protect democracy by strengthening the rules around donations to political parties” and surely more than this was implied. A record sum of £94.5m was spent on the last election, reports the Electoral Commission. Money talks, and is increasingly being spent on tidal waves of social media influencing and super-sophisticated data systems pinpointing canvassers towards the right voters.

Everyone can see how rewards follow donations, accelerating understandable public cynicism about all politics and politicians. Transparency International research found in 2024 that £48.2m came from donors alleged or proven to have bought privileged access, potential influence and/or honours, and 66% of private political donations in 2023 came from just 19 individuals. How could people not be suspicious when, for example, the Good Law Project reports that the Conservatives have received £15m from the Phoenix Partnership, owned by businessman Frank Hester – a company that has secured more than £400m in public contracts since 2016. (He’s the man who said Diane Abbott made him “want to hate all black women” and that she “should be shot”.)

So far the present bill tightening up on foreign donations will only scrape away the most egregious threats from foreigners. But it wouldn’t stop Elon Musk’s rumoured $100m gift to Reform if it came from his UK-generated profits. What’s needed is a ceiling on donations, such as other countries impose. France caps individual donations to political parties at €7,500 per year. Canada, Belgium, Portugal and South Korea impose similar limits. Some ban corporate donations altogether and it’s high time we did too.

This clean-up would not be easy. Labour would have to make sacrifices in its own funding, abolishing trade union donations except by individual union members. As in other countries, the state would have to contribute towards political funding: parties are an essential element in democracy. To protect their main funding sources, the Tories and Reform would fight a dirty campaign against this, stirring up public objections to the Treasury contributing what would be a tiny sum to pay for hated politicians. That’s how Tory funders swung the referendum on the alternative vote in 2011, using pictures of a baby in intensive care to suggest money would be better spent on healthcare than changing the voting system.

Helena Kennedy’s longstanding proposal to democratise the funding of parties is a good one: in a 2006 report for the Joseph Rowntree Charitable Trust, she and others recommended letting voters tick a box at elections to allocate their share of public money to the party of their choice.

Labour stands to gain far more than it would lose by standing up as the champion of clean politics, embarrassing defenders of a system growing more corrupt at every election.