Labour is considering capping political donations by individuals and private companies amid reports Elon Musk will hand a $100m donation to Nigel Farage’s Reform UK.
The Tesla tycoon is said to be plotting the £79m donation, which would be by far the largest in British electoral history, via the British arm of his social media firm X.
According to The Sunday Times, leading businessmen and Conservative Party officials believe Musk could hand over the cash as a “f*** you Starmer payment” in his ongoing feud with the prime minister.
It would give Mr Farage’s insurgent Reform a significant financial advantage over Labour and the Conservatives and be enough to fund a near-endless barrage of attack ads against the government.
But the government is considering recommendations in an upcoming report by the Institute for Public Policy Research (IPPR) think tank that would cap individual and corporate political donations at £100,000 a year.
The Guardian reported that officials have asked for more details on the proposals, though work is at an early stage and any changes would unlikely be made until late in the parliament.
Labour’s manifesto vowed to “protect democracy by strengthening the rules around donations to political parties”, with a key part being to crack down on foreign interference in Britain’s electoral process. A government source played down suggestions the government was considering a cap on donations but said it would set out further details later in the parliament.
The potential donation cap comes as Mr Musk and Mr Farage grow increasingly close, with the Reform leader describing the billionaire Trump ally as “my new friend” last week.
Mr Musk has been highly critical of Sir Keir’s government since it was elected in July, using his social media platform to compare Britain to a “Stalinist state” and attacking the government over free speech.
Labour grandee Lord Mandelson has urged Sir Keir to recruit Mr Farage as a bridge between Donald Trump’s incoming administration and the UK.
The Labour peer, who is the favourite to be named as the next British ambassador to the US, also warned that his party needs to end its feud with Mr Musk.
Speaking to The Times podcast, Lord Mandelson said: “[Musk] is a sort of technological, industrial, commercial phenomenon. And it would be unwise, in my view, for Britain to ignore him. You cannot pursue these feuds. You can’t afford to do it. We should try and kick it into touch as soon as possible.
“If I were the government here, I’d be asking the embassy in Washington DC to find out who his other British friends are. Who are they all? And they’ve got to be used, I think, as a bridge to Musk. And so that’s what I would do.
“You know, swallow your pride, find out who his friends are and try and get into those networks. You cannot just continue this feud indefinitely. You’ve got to get over it. You’ve got to, he’s got to be reintroduced to the British government.
“And one good way of doing that might be through some of his British friends, even if they are not, as I say, you know, bright red supporters of the Labour government.”
A Ministry of Housing, Communities and Local Governmentspokesperson said: “As set out in the manifesto, we are working to strengthen the rules around donations to political parties to ensure we maintain trust in our electoral system. We will set out more details on this in due course.”
