Cap private political donations to restore trust in British democracy, think tank says

A cap on private political donations would rebuild trust in British politics, a new report has argued.

Published by think tank the Institute for Public Policy Research (IPPR), the major report makes the case for a “radical overhaul” of the UK’s democracy through a new model of “democratic citizenship”, in response to a crisis of pride in the country and growing disillusion with the current political system.

It has proposed several reforms that it believes will rebuild trust in the UK’s political institutions and boost national unity.

Among them is the cap on donations, which the IPPR says will challenge the threat of big money in politics and reassure ordinary voters that their views also carry weight.

It suggests a £100,000 cap, to be lowered gradually to £10,000, alongside an outright ban on non-UK taxpayers donating to political parties. The IPPR says this would curb the influence of the super-wealthy over the nation’s politics.

It comes as Nigel Farage faces criticism over his decision to trigger a by-election in Clacton before the completion of a parliamentary probe into his undeclared donations. The investigation has now been paused after his resignation – but will resume if he is re-elected.

Mr Farage is being investigated by the Parliamentary Standards Commissioner over whether he should have registered a £5m gift from cryptocurrency tycoon Christopher Harborne, which happened before he was an MP.

He said it was needed to fund the security he required as a result of multiple threats against him.

The Reform leader is also facing questions over support provided by convicted criminal George Cottrell after a Sunday Times investigation.

New MPs are required to register any gifts worth more than £300 they received in the previous 12 months, except where the gift “could not be reasonably thought by others” to relate to their political activities. Mr Farage maintains he has done nothing wrong.

The IPPR’s cap suggestion also follows this week’s government announcement of measures to crack down on foreign political donations and funding funnelled through dubious companies.

The new rules will impose a £100,000 donations limit on donors coming to the UK from overseas, for a year after they arrive.

The government had already announced a £100,000 annual cap on donations from overseas backdated to 25 March and this will now also apply for the first year of someone’s time in the UK.

There is currently no limit on the amount of money that UK-based donors can give to parties and politicians.

The IPPR’s report found that over the 12 years from 2013, public pride in Britain’s history, democracy, economy and influence in the world all declined by at least 20 percentage points, with pride in its sporting achievements and in arts and literature falling by an average of 12 points.

Even though interest in politics has risen over that same period, overall levels of voting have declined, especially among young people.

New analysis by the think tank has found that the growing divide between voting rates by age group – which barely existed 60 years ago – means that at the last election only 56 per cent of 18-24 year olds voted, compared with 81 per cent of those aged 61 and above.

There was a 20 percentage point gulf in voting between those with the least educational qualifications (60 per cent turnout in 2024) and those with university education (80 per cent in 2024).

As such, also included in the proposed reforms are compulsory voting for all eligible UK residents, with a £10 fine for failure to cast a vote, and an option to vote for “none of the above”.

The paper says taking part in elections is “the most minimal responsibility of a democratic citizen”.

Since a similar system was introduced in Australia in 1924, turnout has fallen below 90 per cent only once, the IPPR says.

It also calls for a more proportional voting system and what it calls a universal “Democratic Citizens Service” for all 16 and 17-year-olds.

This would be organised within the school system, extending beyond volunteering to include political participation and democratic decision-making.

The IPPR says these overhauls are required to “counter the radical right’s efforts to redefine national belonging in exclusionary, racial terms”.

It argues that the citizenship debate has focussed too narrowly on issues of migration and who is entitled to welfare benefits. Instead, it says, the fundamental question is what it means to belong to the nation.

In his foreword to the report, Jon Cruddas, who was Labour’s policy coordinator for three years, says: “IPPR makes a big argument, commensurate with the challenges of our times: that to resist the forces of ethno-nationalism and reanimate the left, progressives must articulate a radical framework of democratic citizenship that enables every person to contribute, live securely and flourish.”

Lead author and IPPR senior research fellow Dr Nick Garland added:“The fundamental building block of collective progress is citizenship. Without a new, shared ideal of democratic citizenship, our politics is reduced to a zero-sum game of haggling between rival groups and voters’ narrow financial self interest.

“Mainstream politicians have ceded too much ground to the radical right, which wants only to talk about who can be a citizen, and not the rights and duties we all share in as citizens. The failure to offer a more robust idea of citizenship is one of the factors behind declining democratic participation and political trust.

“To change that, progressives must be much bolder about changing how our democracy works, and making a big argument about the way we can live together.”