In its manifesto, Labour promised to tighten the rules around political donations. Officials are now examining a slate of ideas including donation caps and further restrictions on foreign cash.
Change will take time, as the plans are still at an early stage and ministers are not due to bring forward proposals until at least 2026. But speculation that Elon Musk could donate $100m to Nigel Farage’s party, Reform UK, will trigger a fresh clamour for stricter rules.
What are the current rules on political donations?
The Political Parties, Elections and Referendums Act 2000 stipulates that all donations and loans to political parties worth more than £500 must come from “permissible sources”.
The key requirement for donors to be permissible, according to the Electoral Commission, is that they must be registered in the UK – either by being a voter on the electoral register or a UK company, trade union or LLP. They can also be unincorporated associations in the UK.
How could Musk make a donation to Reform?
Two potential avenues have been floated: either through the UK arm of the social media company X or by securing UK citizenship, which his father Errol has said he is eligible for because his grandmother was British.
What has Labour said in the past?
Labour has been critical of a reform ushered in by the Conservatives in 2022, which extended the franchise to overseas voters who have been away from the UK for more than 15 years. The change, which came after a protracted legal battle by the second world war veteran Harry Shindler, allowed Britons living abroad for more than 15 years to vote and donate to political parties.
In opposition, Labour warned that this would “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”.
Labour has also previously called on the election watchdog to look into instances where the Tories appeared to have received donations from shell companies and firms that had ceased to exist.
How much can donors give?
There are no limits, but campaigners have argued for them to be introduced for decades.
What are some of the biggest political donations?
Labour received millions during the last parliament from Gary Lubner, the former Autoglass boss; Dale Vince, the founder of gas and electricity supplier Ecotricity; David Sainsbury, the former chair of Sainsbury’s supermarkets; and his daughter, Fran Perrin.
The Conservatives benefited from a series of big donations from the controversial businessman Frank Hester, who gave the party £20m between the start of 2023 and the 2024 general election. Mohamed Mansour, who served as a minister under former Egyptian president Hosni Mubarak, gave the party £5m.
One of the heftiest donations in recent history was £8m from Sainsbury to the Liberal Democrats in the run-up to the 2019 election.
How does the UK compare to the US?
Political funding in the US dwarfs that in the UK. Independent fundraising and campaigning groups called super political action committees (Super Pacs) can raise unlimited amounts of cash for presidential candidates – as long as they do not coordinate with candidates’ campaigns and disclose their donors. Musk’s Super Pac reportedly spent about $200m to help elect Donald Trump this year.
There are concerns that the UK political donations system, which campaigners say is already not fit for purpose, is unprepared for the prospect of involvement from US billionaires such as Musk.
