Galvanised by the prospect of foreign donors – including a certain US-based tech billionaire – potentially contributing to UK political parties, over the last two weeks more than a dozen parliamentarians have echoed calls by independent experts to urgently tighten up the UK’s election finance laws. This would go a long way towards safeguarding our democracy, protecting elections from foreign interference and rebuilding trust in politics.
As we and other civil society organisations noted in a briefing published ahead of the 2024 General Election, the UK went into that election with seriously weak defences against foreign interference and dodgy money entering our politics.
Despite a manifesto commitment from Labour to “protect democracy” by “strengthening the rules around donations to political parties”, our electoral finance laws remain riddled with the same loopholes, and the enforcement regime is not robust enough.
While the Government’s recent promise to consider changes to the electoral finance system is very welcome, there is no time to lose to bring in major reforms.
In particular, we urge the government to introduce an Elections Bill at the earliest opportunity which would:
- Require political parties to identify the true source of funds as part of a risk-based approach to donations.
- Introduce new rules on corporate donations that at the very least ensure they cannot donate more than net profits generated in the UK in the previous two years, and prohibit corporate donations from public contractors.
- Require unincorporated associations at a bare minimum to conduct permissibility checks on money they receive that is intended as a donation.
- Strengthen the civil and criminal enforcement regime for electoral finance.
It’s been heartening to see lots of parliamentary interest in ambitious reform. Here is an overview of recent interventions and government responses which hint at current thinking.
Parliamentary calls for action on foreign donors
7 January:
Joe Powell MP: “Do the Government recognise the risks of potential foreign funding in our political system and a general lack of transparency and accountability around money in politics? When might we expect some action on this?”
Response from Angela Rayner, Secretary of State for Housing, Communities and Local Government:
“Yes. We were looking at this in opposition, around how we can make sure that elections are transparent and that funding and donations are transparent within our system. We continue to look at that, making sure that we have the systems in place that people have confidence in… I certainly would want to do that as soon as possible – certainly before the next general election – so that people are very clear and have confidence in our electoral system and its transparency, so that people can exercise their right to vote. I get frustrated that people feel disconnected from politics and politicians. I want people to be engaged with that process and to have confidence in our political system. That is what we will be hoping to achieve.”
8 January:
Ed Davey MP: “Moving on, while Nigel Farage may miss out on his big allowance from Elon Musk, the spectre of the richest man in the world trying to buy a British political party should give us all pause for thought. After years of the Conservatives taking millions of pounds of Russian money, will the Prime Minister now work with us to bring in long overdue reforms to party funding, so that power in this country lies with the voters, not wealthy overseas oligarchs?”
Response from Prime Minister Keir Starmer:
“I think we all had a smile on Sunday when Nigel Farage said how cool it was to have the support of Musk, only for Musk to say he should be removed just a few hours later – that is the rough and tough of politics. Of course, we are looking at the question of funding more generally.”
15 January:
Lord Blunkett: “To ask His Majesty’s Government what steps they are taking to prevent political parties, and activities to promote political parties, from receiving funding from outside of the United Kingdom, and whether they plan to grant additional powers to the Electoral Commission in this regard.
I very much welcome the Answer from my noble friend but does she agree that true patriots and those who believe in the sovereignty of our democratic system in the UK will want to see off those – whether they are malign state actors or multibillionaires – who seek to interfere in our democracy? Is it not now that we must act to safeguard our future?”
Response from Baroness Taylor of Stevenage, Parliamentary Under-Secretary for Housing, Communities and Local Government:
“My Lords, the Government committed in their manifesto to “protect democracy by strengthening the rules around donations to political parties”. Foreign money has no place in our elections and the rules already provide clear safeguards against foreign interference. We are considering changes which will help further protect our system from such risks and are engaging with the Electoral Commission as we do so. We welcome the views of and evidence from stakeholders. Details of our proposals will be brought forward in due course.”
Peers who spoke in support: Lord Rennard (Liberal Democrat), Baroness Scott (Conservative), Lord Dodds (DUP), Baroness Hayter (Labour), Lord Hayward (Conservative), Lord Wallace (Liberal Democrat)
16 January:
Joe Powell MP: “In recent weeks we have seen the unedifying spectacle of opposition parties trying to curry favour with one particular foreign billionaire. However, this issue is much bigger than Elon Musk. Transparency International UK estimates that £1 in every £10 in our system – £150 million since 2021 – comes from questionable or unknown sources. When will these proposals come forward, so that we can debate them in the House and tackle this threat to our democracy?”
Alaistair Carmichael: “Surely, even in these febrile times, it should not be difficult to build a consensus around the proposition that foreign money should not be in British politics. Can we not get the parties together now to make the strongest possible package of reforms, rather than reacting when it is too late?”
Response from Jeremy Wright, representative of the Speaker’s Committee on the Electoral Commission:
“When establishing the political finance regime, Parliament’s explicit intention was to ban foreign donations. However, limitations of the current law mean that it is possible for money from foreign sources to enter the UK electoral system through donations from UK companies. For that reason, the Electoral Commission has called for the laws around company donations to be strengthened, to ensure that parties cannot accept money from companies that have not made enough in the UK to fund their donation or loan, to impose a duty to carry out enhanced “know your donor” checks, and to improve transparency over donations made through unincorporated associations.”
20 January:
Phil Brickell MP: “Transparency International recently reported that since 2010, £38.6 million of donations into UK politics have come from unincorporated associations, which are not required to report their source of income. With that in mind, will the Minister close political donation loopholes to protect our democracy from foreign influence by banning unincorporated associations and shell companies that have never turned a profit from donating to political parties?”
Response from Rushanara Ali, Parliamentary Under-Secretary for Housing, Communities and Local Government:
“Effective regulation of political finance is crucial for maintaining trust in our electoral system and our democracy. The UK already has a strong framework that makes clear that only those with a legitimate interest in UK elections can make political donations, but the Government committed in our manifesto to strengthening the rules on donations to political parties in order to protect our democracy from foreign interference. We will bring forward proposals in due course.”
22 January:
Lord Dubs: “My Lords, the Minister will not be aware, but I wanted to donate to the Democratic campaign on the internet. I could not do so, not because I am living in this country but because I do not have an American passport. I think we have to tighten up our arrangements a bit. Foreign money is undermining our democracy, whether it is donations to particular parties or, more insidiously, to pressure group. There are reports in the papers that an environmental pressure group is going to be funded from the States in order to undermine our attitude to climate change. We need to act quickly.”
Response from Lord Khan of Burnley, Parliamentary Under-Secretary for Housing, Communities and Local Government:
“My Lords, as set out on 15 January by my noble friend Lady Taylor of Stevenage, the Government committed in our manifesto to protect democracy by strengthening the rules around donations to political parties. Foreign money has no place in our elections and the rules already provide clear safeguards against foreign interference. We are considering changes that will help further protect our system from such risks. Details of these proposals will be brought forward in due course.”
Peers who spoke in support: Lord Fowler (Crossbench), Lord Wallace (Liberal Democrat), Baroness Hayter (Labour), Baroness Scott (Conservative), Lord Rogan (DUP), Lord Rennard (Liberal Democrat)
