The Observer view: Farage and the price of Britain’s rules

British politics has been corrupted, and the rules and laws that are meant to stop it are not working. To guard against conflicts of interest, MPs and parties are required to take account of the “appearance test” as well as breaches of the law: do their actions make it appear that they might be using public office for private gain? If that is the case – even if those involved think it is unfair – they should choose another course.

Unequivocally, Nigel Farage’s recent actions fail the appearance test. Last week he was forced to admit he had taken £5m as a gift from Reform UK’s billionaire donor, Christopher Harborne. Farage claims he did not have to declare the money because he was not an MP when he received it but the rules are clear; the millions should have been made public when they were given in 2024.

Nothing remotely similar has happened in living memory. It would take a backbench MP 50 years to earn what Farage was handed overnight, and earnings are taxable while the gift was not. So make that 75 years. The circumstances in which a personal gift of that size would not appear suspicious are unimaginable.

For the past year, Farage and Harborne have been setting ugly precedents. Between them, they have exposed the weaknesses of a system of party political funding that was designed to control the flow of thousands of pounds into British politics and has found itself unprepared to handle the millions Harborne has given from his base in Thailand. Farage and Harborne have allowed their personal probity to appear questionable as well.

Even before then, Farage had laid himself open to allegations of profiteering. A public champion of lighter crypto regulation, he bought shares at a discount in a bitcoin trading company and made a promotional video aimed at driving up their price. If the company succeeds as its owners hope, Farage could make millions from an initial investment of around £275,000. By both purchasing and boosting the shares in plain sight, Farage effectively brought to an end a long-running assumption in British public life that transparency alone should be sufficient to prevent elected officials from behaving in ways the public might regard as questionable.

In very short order, Britain has entered a new era in the relationship between money and politics with only outdated rules to protect its troubled democracy. Farage has been referred to the parliamentary commissioner for standards. In theory, depending on the commissioner’s recommendations, parliament could choose to suspend Farage and potentially trigger a byelection in his Clacton constituency. In practice, sanctions of that severity are vanishingly rare. A comprehensive rewriting of the rules is now urgent.

It should include a recognition by all the major political parties that the vested interests that have closed their minds to radical reform of political funding have become harmful to trust in democracy. Labour has been so frightened at the prospect of losing trade union money, and the Conservatives so wary of abandoning the advantage that funding by big business can give them, that neither has listened closely when serious reformers have suggested caps on donations. The excuse that the public is against more state funding of politics (when it is not against it in most other European countries) has never truly been challenged.

A review of the foundations of political funding is complicated and delicate, and will inevitably take time. But there is something that can and should be accomplished more quickly: Farage should be required to repay Harborne’s gift, and any others he has secretly received, or forfeit his right to remain as an MP. To demand that of Farage is simply to adopt a precautionary principle. What, if any, conditions were attached to the money? What, if anything, has been done because of it? We can never know, and so there is only one way to be as sure as possible that something of that kind never happens again.

In the absence of a clear signal of that kind, the risk is that the political culture Donald Trump has created in the US is imported to the UK: the realisation that it is not just possible to be on the make in politics, it is normalised and acceptable. Farage behaves as if the rules – probity, integrity, accountability – do not apply to him. But, it turns out, that is because there are no real rules.

Photograph by Leon Neal/Getty Images