The government is set to ban foreign companies from giving donations to political parties under new legislation.
As part of the government’s Representation of the People bill, only foreign companies with British owners or that make enough revenue in the UK will be allowed to donate.
Companies would also only be allowed to give up the equivalent of two years of their UK revenue.
The legislation will also ban shell companies from giving large sums of money to parties or candidates.
The measures would prevent oversees tycoons such as Elon Musk from indirectly giving huge donations to UK political parties.
In 2024, Nigel Farage claimed Musk was considering making a donation to Reform UK, with later reports claiming this could be in the region of £100 million.
This would have been legal if Musk had made the donation through one of his companies’ UK subsidiaries, the Financial Times reports.
Under the legislation being introduced in the House of Commons today (February 12), companies will have to demonstrate that they are headquartered in the UK, majority owned or controlled by UK electors or citizens and have generated sufficient revenue to cover the donation.
Donations from shell companies or those whose parent companies are based overseas will be capped at £500 to parties or £50 for candidates.
However, the bill does not include plans to introduce a cap on political donations.
The bill will also deliver on Labour’s manifesto pledge to allow 16 and 17-year-old the right to vote in general elections.
Local government secretary Steve Reed said the bill would “usher in a new era for our democracy – one that protects against foreign interference and empowers young people.”
“With growing threats from abroad, now is the time to make changes to make our elections secure and get young people engaged in them,” he added.