Housing Secretary Steve Reed denied the cap was designed to target Reform UK’s donors, after announcing the move last month.

“The reason we are capping donations from British nationals who are living and paying their taxes overseas is that we cannot track where their funding has come from in the same way as if they’re in the UK,” Reed told the BBC.

“So you could have situation where the Russians, Chinese, Iranians, hostile states, could be funnelling their money through those individuals to influence UK elections.”

The Telegraph interview comes as Reform UK leader Nigel Farage faces questions about a £5m gift Harborne had given him before he became an MP.

Harborne, who until now had kept a low profile, said he wanted to speak out to explain his motivation and his relationship with Farage.

Farage said he had been given the £5m gift to pay for personal protection “so that I would be safe and secure for the rest of my life”.

But Labour and the Conservatives have accused Farage of breaking parliamentary rules by not declaring the £5m gift in the register of interests for MPs – and the Tories have referred the Reform leader to Parliamentary Standards Commissioner.

The Conservatives have also raised concerns with the Electoral Commission, which said it was considering the information.

Farage’s team say there was no requirement to declare the money because it was a “personal unconditional gift that was given before he was elected”.

Last year, Harborne donated £9m to Reform UK – the biggest single donation to a UK political party by a living person.

The cryptocurrency investor and aviation entrepreneur gave £12m in total to Reform UK in 2025.

Harborne has previously given large sums to the Conservatives under Boris Johnson’s leadership, as well as Reform’s predecessor the Brexit Party in 2019 and 2020.

In March, the government announced changes to “protect UK democracy from scourge of foreign actors and financial influence”, including an annual £100,000 cap on donations from British citizens living abroad.

At the time, Reform UK’s home affairs spokesman Zia Yusuf accused Labour of “choking off legal funding for its main rival”.

Harborne echoed that view in his interview with the Telegraph, telling the newspaper: “I think I’m the reason for that legislation.”

He added: “I don’t believe the government has a right to stop me, and they won’t. There is always a way, we just don’t know what it’s going to be yet.”