Key facts
- The UK government will not implement a universal domestic cap on political donations in the forthcoming elections bill.
- The government's focus for the bill is on curbing foreign interference and banning cryptocurrency donations.
- There is no current limit on individual donations from within the UK.
- A proposed £500,000 cap could significantly reduce funding for parties like Reform UK and Labour.
- Trade unions are major backers of the Labour party, and their inclusion or exclusion from a cap presents a political dilemma.
- An amendment proposes exempting union affiliation fees from donation caps.
The UK government has decided against including a universal domestic cap on political donations in the upcoming elections bill, despite pressure from within the Labour party and previous indications of support from Prime Minister Andy Burnham. Officials stated the priority for the bill is to address foreign interference and ban cryptocurrency donations, with no ruling out revisiting domestic caps in the future.
Currently, there is no limit on individual donations from within the UK, though amounts over £11,180 must be reported. Burnham had previously expressed support for a cap, suggesting a figure around £500,000 to prevent undue influence. However, incorporating such a measure into the Representation of the People Bill could delay other key provisions, such as granting 16-year-olds the right to vote.
Analysis suggests that a £500,000 cap would disproportionately affect Reform UK, potentially curbing over half its reported private donations. For Labour, a similar cap without an exemption for trade unions could significantly reduce its funding. Exempting unions, however, could be seen as a carve-out that bolsters Nigel Farage's narrative of an establishment campaign against his party.
Labour MP Stella Creasy has proposed an amendment that would exempt union affiliation fees from donation caps, while other donations would be capped. This approach, analyzed by POLITICO, would lessen the financial impact on Labour compared to a blanket cap. A £100,000 cap, as proposed in other amendments, would also significantly reduce income for major parties, with Reform UK facing substantial losses due to its reliance on large individual donors.