Reform UK prepares legal fight against Labour's overseas donation cap

LONDON — Nigel Farage’s Reform UK is spoiling for a legal fight against Labour’s attempt to prevent record-shattering donations from reshaping British politics.

The insurgent right-wing party plans to carry on spending the £72 million donated over the weekend by two crypto-billionaires — even as an incoming law threatens to make them impermissible.

Labour MPs are bracing for Reform to launch an “Establishment is out to get us” court drama that plays into the narrative Farage has been shaping of a plucky outsider being scuppered by the machine.

It’s a clash that two senior figures in Reform, both granted anonymity to discuss plans in the making, signaled to POLITICO they are well up for having.

Farage has been dogged for months by allegations of undeclared donations, and more recently lost two top aides who were caught in an undercover cash sting. A skirmish over the record-breaking £72 million in gifts would be another opportunity to reclaim Reform’s underdog positioning.

“These are legal donations, the proposed law doesn’t affect them, and we will carry on spending our legal donations,” one of the senior Reform figures told POLITICO.

“Also you should remember, we have a great record against the government in court,” the official added, a reference to Reform successfully seeing off Labour plans to delay local elections in order to reshape local government.

A person advising Reform believes the party could take the challenge against applying the legislation retrospectively all the way to the European Court of Human Rights, the Politics at Sam and Anne’s podcast reported.

Another person close to Reform, who believes an “almighty fight” is coming in the courts, acknowledged the “optics” of that might look off, given that Farage wants to pull the U.K. out of the international court.

But it is Article 7 of the European Convention on Human Rights that Conservative former Attorney General Michael Ellis has suggested could be used to appeal against the retrospective nature of the proposed law change, which the government argues is necessary to prevent malign actors getting around the change before it’s enacted.

The government plans to backdate its law change to March 25 this year — when an independent review proposed the overseas cap because of the extra complexities of tracing the source of funds being sent from abroad. The law would mean that anyone who registers in the U.K. after that date will be subject to the cap until at least 2028.

Cap cut

Farage’s carefully-crafted comments have been taken as a suggestion that the two donations of £36 million each by Christopher Harborne and Ben Delo may not be acceptable under the government’s pending legislation to impose a £100,000 cap on overseas donations.

The party leader has only gone as far as saying the donations are “100% compliant with the law today,” but Reform is refusing to set out when both men registered in the U.K.

Privately, however, Reform is more bullish — and the party has been setting out how it’s already spending the money on an expansion of its staff and in a new online television channel, as the Times reported Tuesday.

Without a legal challenge, it’s hard to see how Delo and Harborne’s donations won’t have to be paid back. Delo only said in April he would move back from Hong Kong so he could continue donating in full to Reform and the Thai-based Harborne reportedly only registered on the U.K. electoral roll in June. Both Delo and Harborne have said they’re not acting for personal gain.

While Reform’s legal position on when the two became eligible to donate under the legislation is unclear, so too is just how far reaching Labour’s residency changes could be.

Ministers have signaled they could amend the new legislation to include enhanced residency checks for donors. That could even be coupled with a requirement to pay tax in the U.K., but “complex” work on whether to take this forward is still underway, according to one government official.

While Labour is united in trying to stop “dodgy money” being used to influence elections, some are concerned about being seen to be try hobble Reform.

One Labour MP, granted anonymity to discuss concerns about party strategy, told POLITICO: “I can’t quite decide the value in us highlighting the sleaze vs. letting them have a big ‘the establishment is out to get us’ court case.”

Another working on the parliamentary push to get the government to adopt a universal cap on domestic donations as well as overseas electors said the current strategy means “it looks like Reform is being picked on.”

“And that’s the story — how we are going to stop massive donations from crypto guys, whereas actually it’s chip paper,” this person added. “Crypto is a big problem at the moment but it’s the principle that matters: Lots of money shouldn’t buy you influence.”

‘Do we find it icky?’

The other political pitfall in the strategy is it exposes how Labour, as well as the other mainstream parties, have long accepted multi-million pound donations from wealthy backers. Then there’s hesitancy from the Labour-supporting unions who worry their deep donations could also be caught by a cap.

Unite General Secretary Sharon Graham told POLITICO they should not be left “cowering in the corner” on how to curb donations out of fear of reprisals from Farage’s party.

“Reform will do what they do. We shouldn’t be concerned about that,” she said.

“The question really before us is: Do we find it icky … that you’ve got two billionaires who can basically say, here is £72 million in 48 hours? And everyone and his mother knows that, essentially, that is because they want the crypto leniency.”