After the donor cap and crypto ban, what if we all chipped in to fund our political parties?

Last week, a stable door was shut with a bang and a flourish. The government announced a cap of £100,000 a year on donations to political parties from British citizens living abroad and a moratorium on donations made in cryptocurrencies.

Unusually, both measures came into effect on the day they were announced by the housing secretary, Steve Reed, who was fighting the flood of dangerous cash on the beaches: “Foreign interference and dirty money are menacing the integrity of our elections… we will stop hostile foreign states and others who want to weaken and exploit the UK by stoking division and hatred. It is our patriotic duty to safeguard the British people’s right to freely choose their own government.”

Both the crypto ban and the cap were in line with recommendations made by a review commissioned by the government. Both, of course, will apply to all parties and all donors, but – for now – only really affect one party and one man: Reform UK and Christopher Harborne.

Reform is the only mainstream UK party to acknowledge that it has accepted donations in bitcoin. On the political fringes, two other parties have said they are open to crypto donations. One of them, the nationalist and neo-Nazi Homeland party, has a public crypto wallet that shows it has received £27 so far.

Harborne operates in a different financial universe. The £12m he donated to Reform in 2025 from his home in Thailand – where he has been based for about 25 years – has the potential to transform the British political landscape.

In five weeks’ time, the national elections in Scotland and Wales, and the locals in England, are likely to install Reform as the official opposition in Cardiff, as rulers of the roost in a host of English town halls and possibly as attendants at the political funeral of Keir Starmer.

Small wonder that Reform is “throwing the kitchen sink at May” and spending as much as £1.5m – even £2m – a month, its opponents believe.

The horse that has bolted is the Harborne money – and it is making a difference. Reform posted a campaigning leaflet to every household in Wales last November, and Plaid Cymru, keen to mimic the exercise if it could, asked for a quote for a similar mailshot. The estimate was about £400,000. Plaid’s budget for the entire Senedd election campaign is in the region of between £250,000 and £300,000, The Observer has been told.

In total, if you take an average of the last four years (to include high-spending general election years and quieter ones), political funding in the UK is in the region of a £77m-a-year business; with about £100m spent in 2024 and half that amount in 2022.

Total political funding in 2025 came in at £65m, and breaking that figure down points to the significance of the measures that were announced last week – and to the questions they deliberately dodge.

Of that £65m, £48m was from private individuals and companies. Harborne accounted, neatly, for a quarter of that – an enormous foreign body in a system that never envisaged someone operating on that scale.

But nearly all the rest of that year’s political funding – £15m – came from the public purse. It is a figure that, it is easy to suspect, may surprise people. Perhaps they heard Nick Clegg, when he was deputy prime minister in 2011, reject proposals from the committee on standards in public life to cap donations at £10,000 and top up party finances from public funds? “It would not be right,” Clegg said, “to ask our hard-pressed taxpayers to pay more to political parties at a time when they are having to deal with so many cuts and savings elsewhere.”

We do pay; the question that has never really been asked is: how much do we want to pay? Today, taxpayers (or the 47 million registered voters in Britain) would each have to chip in about £1.75 a year – yes, a year – to completely fund political parties at their current level.

Hard-pressed or not, they may think that a price worth paying to avoid the cash-for-access and influence-peddling scandals that have dogged Conservative governments, or the questions about why Labour has accepted £8m in donations from the Unite union since it last filed a full set of accounts in 2020 – and those while it confronted a barrage of corruption allegations.

An increase in the state funding of politics would make the UK less of an outlier on the European scene but raise some enormously tricky issues. What happens to political parties if they become more like public utilities – perhaps seen as agents of the state rather than agents of the people? Will people be willing to pay for parties whose views they despise? Who decides which parties qualify for funding, and how do we prevent the rules preserving the current system in aspic, killing entrepreneurial politics?

They are difficult questions, and unattractive in some ways. But if you survey the state of British politics, you may conclude that they are less unattractive than the convenient alternative of pretending that interference and dirty money come only from abroad.

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