LABOUR must go further in tackling big money distorting politics, campaigners demanded today after the government announced a cap on foreign donations to political parties.

Communities Secretary Steve Reed also pledged to ban crypto-currency donations altogether as he unveiled the ministerial response to a review by civil servant Philip Rycroft into the scandal.

But Duncan Hames, of Transparency International UK, said more needed to be done to protect democracy.

He said the review “didn’t extend to the most fundamental question — whether to cap how much any single donor can give.

“Unlimited donations are driving an arms race for funds and invites Parliament to debate this during the Bill’s passage,” Mr Hames said, adding that MPs should act.

“A meaningful annual cap on donations is the most robust safeguard against both foreign interference and the outsized influence of big money in our politics.”

Donations by electors living abroad will now be capped at £100,000 per year and a moratorium on crypto cash funding will come into effect immediately.

“Any donations by an overseas elector to any political party or regulated entity that exceed the cap for that overseas elector will be an unlawful donation,” Mr Reed told MPs.

He pointed out that such funds often came from people who chose to live abroad for tax reasons.

The Rycroft report had raised “concerns about the democratic fairness of allowing people who have chosen to live abroad to have their wealth taxed abroad, but who nonetheless have the opportunity to make potentially game-changing donations into British politics,” he added.

Reform will be particularly hard hit by the new rules, since they have been funded to the tune of millions by millionaires based abroad and by crypto bosses.