Ministers are considering whether to bring in caps on political donations amid reports that Elon Musk is mulling donating $100 million to Nigel Farage’s Reform through the UK branch of X.
The Tesla billionaire, who donated tens of millions of pounds to Donald Trump’s campaign, is said to be looking at funnelling the far-right politician cash in a bid to make him the next prime minister of the United Kingdom.
Ministers are now looking at tightening the rules around money in UK politics, with the Institute for Public Policy Research set to recommend that they limit individual and corporate donations to political parties to £100,000 a year.
In its manifesto, Labour committed to “protect democracy by strengthening the rules around donations to political parties”.
At the core of this pledge is an aim to tighten protections around foreign interference in UK democracy.
Analysis by Transparency International over the weekend suggested that loopholes in the existing law were allowing “dark money” to infiltrate British politics, with almost £1 in every £10 donated to parties and politicians coming from unknown or dubious sources.
Cash from companies that have never turned a profit, from unincorporated associations that do not have to declare their funders, and banned donations from overseas donors via intermediaries are all entering the system, according to the research.
In December 2023, Wajid Khan, a Labour frontbencher, told the House of Lords: “We think that opening the electoral register as widely as the government are doing today goes far beyond what our current donation rules were set up to do.
“It will allow those with tenuous links to the UK, who have spent most of their lives in states that may even be openly hostile to our aims, the right to massively influence our system.”
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