Labour MPs to rebel on political funding reforms, demanding tougher measures

Exclusive: Call for ministers to tighten bill amid Nigel Farage funding controversies

Labour MPs are to rebel next week over the government’s reforms to political funding, pushing ministers to introduce tougher measures including a ban on cryptocurrency donations and much lower spending limits.

MPs on the all-party, anti-corruption group are canvassing support for four amendments to the representation of the people bill that would significantly tighten the government’s plans.

They include a permanent ban on donations made in digital currencies, instead of the government’s current moratorium , a proposal that is finding widespread support among Labour MPs after the controversies over Nigel Farage’s funding .

Liam Byrne, the Labour chair of the business select committee who is calling for a cryptocurrency donation ban, said: “With each passing day, we learn new revelations about the extraordinary lengths to which Reform UK politicians will seemingly go in order to avoid proper oversight of their finances.

“Amendments to the representation of the people bill which my colleagues and I have tabled are vital safeguards against the wider threat that’s seen £200m come flooding in to build a whole media political complex behind populists in Britain.

“We simply cannot afford to let our crumbling defences be undermined any further. I would urge any parliamentarian who genuinely cares about the integrity of UK democracy to back these amendments.” Byrne’s amendment had at least 20 signatures to it by midday on Thursday.

Anneliese Dodds, the former Labour cabinet minister, has tabled an amendment calling for campaign spending limits to be reduced by nearly a third from £34m to £24.4m.

She said: “We now have an arms race in funding political campaigns. The public want to see limits set at a more reasonable level.”

Other amendments include one from Yuan Yang, an ally of the incoming prime minister, who is calling for limits on how much money a party can have when it is first set up. Her amendment comes after it emerged Rupert Lowe’s far-right party Restore Britain started with £2.5m in the bank without having to declare where it came from.

Another amendment from Mark Sewards would introduce a check on donations to assess whether there is a risk that they are part of an attempt by a foreign country to undermine British democracy.

The moves to toughen the bill come amid a mounting controversy over the funding to Farage’s Reform UK party, including millions of pounds from two cryptocurrency entrepreneurs – Christopher Harborne and George Cottrell.

The Guardian has revealed over the last 48 hours that several of the transactions from both men were flagged by bankers to the National Crime Agency. In some cases there were concerns over the true source of the money.

Farage has responded by denying any wrongdoing and triggering a byelection in his seat of Clacton-on-Sea in an attempt to prove that voters are on his side. He will not face any organised opposition as all Reform’s main competitors refused to field candidates in the race, promising to stand at a later date should a parliamentary investigation prompt another byelection.

As the questions over Farage’s finances have mounted, ministers have promised to toughen their own elections bill when it returns to the Commons on 14 July. The government’s amendments include one imposing a £100,000 cap on donations from expats for a year after they return to the UK.

Many Labour MPs believe ministers have not gone far enough, however, and are campaigning for changes on a number of issues.

One proposal being put forward by the Labour MP Stella Creasy is for a £100,000 cap on all individual donations, although this is understood to have less support among her colleagues than those by Byrne, Dodds, Yang and Sewards.

A spokesperson for the Ministry of Housing, Communities and Local Government said: “[We] will keep looking for ways to strengthen the bill as it works its way through parliament.”