Ministers to crack down on political donations as Farage faces calls for second inquiry | Party funding

Ministers will launch a crackdown on major political donations on Monday as Nigel Farage faces a possible second investigation into gifts he received from a convicted fraudster before he became an MP.

The government will announce a series of measures to make political financing more transparent, including restrictions on donations from foreign-based philanthropists.

But he is under pressure to go further after it was revealed the Reform UK leader received benefits from crypto entrepreneur George Cottrell ahead of the general election.

These benefits could also become the subject of a new investigation by parliamentary standards commissioner Daniel Greenberg, who is considering a £5 million donation to Farage from crypto billionaire Christopher Harborne.

Announcing the new rules, communities secretary Steve Reed said: “British democracy is not for sale. These tough new rules will stop dodgy funding, stop foreign money influencing our elections and keep our democracy strong.”

The Prime Minister’s principal secretary, Darren Jones, said: “We are cracking down on those who try to buy and sell our democracy and put the British people first.”

The changes will impose a £100,000 donation limit on anyone moving to the UK from abroad for one year after doing so. Officials say this would prevent donors from circumventing restrictions on foreign-sourced donations by simply registering to vote in this country.

The government will also introduce new checks to assess whether companies making political donations are legitimate by measuring their profits as well as their revenues. This is designed to prevent donors registering businesses in the UK to qualify under British electoral law but funneling their profits abroad.

Finally, the ministers plan to introduce a disclosure obligation for political candidates for the first time, and this provision will also apply to the period immediately before becoming a candidate. Candidates will have to declare donations over £2,230, but personal gifts will remain exempt.

MPs are currently required to declare donations of over £500, including in the year before becoming an MP, but unsuccessful candidates do not have to follow the same rules.

The package, which will be introduced as a change to the representation of the people’s bill later this month, comes at a time when Farage’s finances are under intense scrutiny.

Sunday Times revealed It emerged this weekend that the Reform leader had accepted a series of previously undisclosed benefits from Cottrell, who spent time in a US prison for wire fraud before becoming an MP.

These benefits included donating multiple staff to manage the social media team, security and the use of a mansion near Buckingham Palace.

When he became MP, Farage recorded a £9,253 donation from Cottrell for a trip to Belgium in April 2024, and later added a £15,276 donation for a US domestic flight Cottrell secured in December 2024. However, he did not disclose other benefits that the crypto businessman has previously provided.

In 2016, Cottrell was charged with 21 crimes for his alleged role in a “money” laundering scheme. He pleaded guilty to wire fraud and served time in prison in Arizona, but is now seeking a pardon from Donald Trump.

Reform acknowledged on Sunday that the gifts had been received but said they were personal gifts to Farage unconnected to his political activities and therefore did not need to be disclosed.

Asked by the BBC’s Laura Kuenssberg whether Cottrell would pay staff to run Farage’s social media presence in 2024, Jenrick said: “Yes, absolutely.”

But he added: “If it is in a purely personal capacity, you are allowed to accept a gift, support, whatever you want to call it, from a personal friend before you become an MP.

“When you’re a news anchor and you’re still in the woods [in the TV programme I’m a Celebrity … Get Me Out of Here!]“You are creating social media content that has nothing to do with his duties as an MP because he was not an MP.”

Jenrick admitted Farage had stayed at Cottrell’s home “a number of times” and accepted private security paid for by him. “The reform was completely clear on this,” he said.

Health Minister James Murray said: “There are quite a few questions that arise around this issue. [Farage’s] finance. It seems to have a somewhat flexible relationship with transparency, and I put that mildly.

Reform’s claims that the gifts were entirely personally given were rejected on Sunday after the Times revealed that Cottrell had distributed business cards bearing the Reform party branding and Farage’s email address.

Liberal Democrats have now called on Greenberg to investigate the donations alongside the separate investigation he is already conducting into a £5m donation by Harborne, first revealed by the Guardian.

Greenberg is set to publish his findings on the Harborne donation within the next two weeks, in a move that could lead to a by-election in Farage’s seat of Clacton.

Alistair Graham, the former chairman of the Independent Committee on Standards in Public Life, said on Sunday he believed Greenberg should investigate the two allegations side by side. HE he told the Financial Times They raised “serious doubts about Nigel Farage’s integrity as a senior politician”.

Meanwhile, Labor MPs are pushing the government to go further with its new rules, including a full cap on all political donations.

Walthamstow MP Stella Creasy has promised to introduce an amendment to the public bill’s representation to cap donations at £100,000; the government says this will harm the political process.

Creasy told the Guardian: “Every week, more evidence emerges of the need to take action to prevent the notion that there is a price tag on any politician in the UK, such as the allegations regarding Cottrell. This diminishes public confidence in all of us.”

“Limiting donations from a single person to £100,000 in a calendar year will put an end to the idea that any one millionaire’s voice is more important than anyone else’s and will protect those who want to support causes they care about across the board. Every party is after big donations; if we want to defend democracy, we must step in now before it is too late.”