The Electoral Commission could recommend cutting political spending limits under a Government-commissioned review, as Reform UK faces renewed scrutiny over a £72million funding boost.
Vijay Rangarajan, the watchdog’s chief executive, said the review would assess whether existing rules governing party spending remain “fit for purpose”.
The inquiry follows two record £36million donations made to Reform earlier this month by cryptocurrency billionaires Ben Delo and Christopher Harborne.
The donations have intensified debate over political funding in Britain. Mr Rangarajan said voters must be confident that elections are fought on a “level playing field”.
The review will examine party spending limits, donation reporting rules and the money political organisations can spend between formally designated election periods.
The Government launched the review in July. Last month, Labour ministers Angela Rayner and Louise Haigh wrote to Mr Rangarajan, arguing that current spending limits are “too high” and should be reduced.
The Electoral Commission could recommend lower political spending limits following a Government review launched after Reform UK received £72million in donations
Under the current rules, parties fielding candidates in Britain cannot spend more than £34million during the year before a general election.
With the proposed changes potentially limiting the impact of Reform’s large donations, party leader Nigel Farage accused the Government of trying to undermine his party. He said: “Once again our dishonest Government is trying to change the rules to stop Reform. They are the most anti-democratic British Government ever.”
The Electoral Commission is required to remain politically impartial and is expected to publish recommendations from the review in July next year.
Speaking to the Sunday Times, Mr Rangarajan said: “Trust in elections depends on people believing that the rules are fair and transparent, and how much parties and campaigners can spend is a significant part of that picture.
“Funding is essential to democratic participation and political debate, but the framework must give voters confidence that our elections are being contested on a level playing field.”
He added: “Our review will look across the campaign spending framework as a whole, including spending limits, the interaction between party and candidate spending, and the reporting requirements that support public confidence in the system.
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“Campaigning has changed significantly in recent years, and a significant amount is spent between election periods, so it is right that we examine whether the current arrangements remain fit for purpose.”
Mr Farage has also criticised plans by the Government to impose a retrospective £100,000 limit on donations from overseas-based contributors.
Mr Delo has been based in Hong Kong, while Mr Harborne has lived in Thailand, although both are reported to have returned to the UK.
Reform maintains that the donations comply with current regulations as well as proposed restrictions on funds from donors living abroad. Those planned rules would also cover the first 12 months after expatriates return to Britain.
The party has accused Labour of hypocrisy over the substantial sums it receives from trade unions.
In a letter sent to Mr Rangarajan on 29 August, before Reform received its £72million windfall, Cabinet ministers Ms Rayner and Ms Haigh wrote: “We have to limit the way financial power can end up dominating political power, to get to a politics that works for all people in all places.
“We believe spending limits on parties and candidates are too high, and ought to be reduced.”
It comes as new research suggests Reform could lose half its projected seats if Restore Britain, led by Great Yarmouth MP Rupert Lowe, stood candidates in every constituency at the next general election.
Polling this month forecast that Reform would end up with 108 MPs after a general election, but an analysis found this could fall to 59 if Restore contested every seat.
The research, commissioned and funded by consultancy Public First, found Labour would be within touching distance of a House of Commons majority with 316 MPs if there was a widespread Restore presence at the ballot box.
Mr Lowe was initially elected to Parliament as a Reform MP at the 2024 general election but left the party last year amid a furious row with Mr Farage and other senior Reform figures.
He went on to found Restore and has since seen his outfit secure a significant portion of the vote at the Makerfield by-election in June, as well as August’s contest for Greater Manchester mayor.