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

Measures to be announced to make funding more transparent amid new revelations about Reform UK leader

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

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

But it is under pressure to go further after the revelation that the Reform UK leader received a number of benefits from the crypto entrepreneur George Cottrell before the general election.

Those benefits could also become the subject of a new investigation by Daniel Greenberg, the parliamentary standards commissioner, who is already looking into a £5m donation to Farage from the crypto billionaire Christopher Harborne.

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

Darren Jones, the prime minister’s chief secretary, said: “We’re cracking down on those trying to buy – and sell – our democracy and putting the British people first.”

The changes will apply a £100,000 donations cap to anyone who moves to the UK from abroad for a year after they have done so. Officials say this will stop donors from circumventing restrictions on foreign-based donations simply by registering to vote in this country.

The government will also bring in new checks to assess whether companies making political donations are legitimate by measuring their profit as well as their revenues. This is designed to stop donors registering businesses in the UK in order to qualify under British elections law but funnelling the profits abroad.

Finally, ministers are also planning to bring in disclosure requirements for political candidates for the first time, which will also apply to the period immediately before they became a candidate. Candidates will have to declare any donation above £2,230, though personal gifts will continue to be exempt.

While MPs currently have to declare donations above £500, including for a year before they became an MP, unsuccessful candidates are not required to follow the same rules.

The package, which will be introduced as amendments to the representation of the people bill later this month, comes amid heightened scrutiny of Farage’s finances.

The Sunday Times revealed this weekend that the Reform leader had accepted a number of previously undisclosed benefits from Cottrell, who spent time in a US jail for wire fraud, in the period before he became an MP.

Those benefits included the donation of multiple members of staff to run his social media team, security and the use of a mansion near Buckingham Palace.

When he became an MP, Farage registered a £9,253 donation from Cottrell to pay for a trip to Belgium in April 2024, and later added a £15,276 donation for a US domestic flight that Cottrell provided in December 2024. He did not declare the other previous benefits provided by the crypto businessman, however.

In 2016 Cottrell was charged with 21 offences for his alleged role in a “dark money” laundering scheme. He pleaded guilty to wire fraud and spent time in prison in Arizona, though he 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 with his political activities and so did not need to be disclosed.

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

But he added: “You’re allowed to accept a gift, support, whatever you want to call it, from a personal friend before you’re a member of parliament, if it’s in a purely personal capacity.

“When you’re a news presenter and you’ve just been on the jungle [in the TV programme I’m a Celebrity … Get Me Out of Here!], you do create social media content that’s nothing to do with his job as a member of parliament, because he wasn’t a member of parliament.”

Jenrick acknowledged that Farage stayed in Cottrell’s house “a couple of times” and accepted private security paid for by him. “Reform have been completely open about this,” he said.

James Murray, the health secretary, said: “Quite a lot of questions come up in relation to [Farage’s] finances. He seems to have a bit of a flexible relationship with transparency, and I put it mildly.”

Reform’s claims that the gifts were made in a purely personal capacity were challenged on Sunday after the Times revealed Cottrell had given out business cards carrying Reform party branding and Farage’s email address.

The Liberal Democrats have now written to Greenberg urging him to investigate the donations alongside the separate inquiry he is already pursuing into the £5m one made by Harborne, which was first revealed by the Guardian .

Greenberg is preparing to publish his findings on the Harborne donation in the next two weeks, in a move that could eventually prompt a byelection in Farage’s Clacton seat.

Alistair Graham, the former chair of the independent Committee on Standards in Public Life, said on Sunday he believed Greenberg should investigate the two sets of allegations alongside each other. He told the Financial Times they raised “serious doubts about the integrity of Nigel Farage as a senior politician”.

Meanwhile, Labour MPs are pushing the government to go even further with its new rules, including introducing an outright cap on all political donations.

Stella Creasy, the MP for Walthamstow, has promised to bring an amendment to the representation of the people bill to cap donations at £100,000, something the government says would damage the political process.

Creasy told the Guardian: “Every week brings more evidence – like the allegations regarding Cottrell – of the need to act to prevent the very notion any UK politician has a price tag. It is decimating public confidence in all of us.

“Capping donations at £100,000 from any single individual in a calendar year would put a stop to the idea any millionaire’s voice matters more than someone else’s and protect those who want to support causes they care about on all sides. Every party is chasing big donations – if we want to defend democracy, we need to step in now before it’s too late.”