Elon Musk potentially donating millions to Reform UK is a symptom of a broken system which allows big money to dominate our politics
Today
Left Foot Forward
When it comes to political donations, Musk is not the problem
Left Foot Forward
When it comes to political donations, Musk is not the problem
Elon Musk is not the problem. At least, to be more precise, when it comes to political donations, Musk is not the problem. The problem is the framework of law that would allow any foreign citizen living abroad to make a multi-million pound donation, via a UK company, to a UK political party.
This is worth spelling out up front because – as I found during a recent media appearance – concern at the prospect of Musk’s donation is too easily politicised. This is not about Musk, the man. The politics and politicians he promotes, whatever one’s own views, have no less right to seek funding. At issue is the extent to which big money has been allowed to dominate our politics.
Let’s be clear – Musk would not be taking advantage of a loophole. The rules as they stand would allow him freely to donate as much money as he wants through the UK arm of one of his companies, most likely X. This would even be true for a company that – unlike X – registers no profits and pays no tax in the UK.
Transparency International (TI) recently revealed that from 2001 to 2024, £115 million in political donations came from dubious or unknown sources, including companies that have never recorded profits. £48.2 million was linked to donors accused of seeking influence or honours, and £42 million from individuals suspected of corruption, fraud, or money laundering.
Existing regulation and legislation are clearly not fit for purpose, a situation compounded by recent policy changes. The previous government’s decisions to raise spending limits and the threshold for registering donations – while blocking an amendment to the National Security Bill that would have mandated anti-money laundering checks on political donations – has hampered transparency and tilted power further in favour of those with the deepest pockets.
Unincorporated Associations (UAs) are especially problematic. These groups, the sources of whose funding can be shrouded in secrecy, funneled over £38 million into the system in just over two decades, according to TI. Little wonder the Committee on Standards in Public Life described UAs as a “route for foreign money to influence UK elections.”
Countries across the democratic world are having to grapple with the dual risk of foreign manipulation and, as Radek Sikorski, Foreign Minister of Poland and someone intimately familiar with fighting Russian interference, told The News Agents podcast, “the oligarchisation” of politics. We should listen when he says “big money in politics is not good for democracy.”
It should not have taken the political threat posed by Elon Musk’s possible donation to push the government to strengthen donation rules, but better late than never. Nonetheless a narrow focus on tackling foreign interference would be a mistake if it leaves big money donations from wealthy UK donors untouched.
A single £4 million donation from Musk – with speculation it could go even higher – would be an undeniable game-changer in British politics. But the same would be true – at least on the financial level – of a UK citizen doing the same. Filings to the end of Q3 show Reform UK has taken a little under £4.5 million in donations this year – already a sixteen-fold increase on where they were in 2023. £100k+ donors make up around 85% of their income. It strains credulity to believe that Musk – or any of these big donors – would not want anything in return for their investment.
This problem of political capture, either by wealthy mega donors or malign overseas interests, is the cost of unlimited donations. Capping donations, Unlock Democracy recommends at £5,000 annually, whilst insufficient on its own to eliminate the risk entirely, is now unavoidable.
It’s pleasing that the new anti-corruption champion, Baroness Margaret Hodge, has expressed support for a donations cap, as well as greater transparency in respect of political donations. “For example”, Baroness Hodge recently told peers, “for all donations over £200, we should know the identity of the donor.”
We agree. Lowering registration thresholds for donations is another key plank of what must be a comprehensive package of reform. Mandatory anti-money laundering checks on all political donations would also enhance scrutiny of their true origins and weed out dark money.
In line with the principle of no foreign interference in UK elections, the government should legislate to ban foreign organisations or individuals from funding non-party campaigners or buying campaign advertising in the UK. Private donations should also be restricted to UK citizens living in the UK.
If the government won’t adopt our strict cap of £5,000 for genuine UK company donations, corporate donations should be limited to businesses with a demonstrable record of trading in the UK, capped at the company’s net profits after tax from the previous two years. And, perhaps most complicated of all, the rules around Unincorporated Associations need a major revamp to ensure illicit and inappropriate funding cannot seep into our politics.
At this time of year, I am reminded of Latin lessons as a boy. Ex umbra in solem: from the shadow into the light. Christmas celebrations, Christian or secular, are perfused by light. It’s too late now to wish for wholesale political finance reform for Christmas, but the government’s proposals, when they come, could do worse than channel the Christmas spirit. Let in the light.
