UK to ban political party donations from foreign-owned companies

Overseas tycoons such as Elon Musk would be barred from indirectly giving substantial donations to UK political parties under new legislation to block companies making gifts if they do not have British owners or make sufficient revenue in the country.

Reform UK leader Nigel Farage said in late 2024 that tech billionaire Musk was giving “serious thought” to donating to the populist party.

Subsequent media reports claimed he could provide up to £100mn, which would have been legal if done through one of his companies’ UK subsidiaries.

The representation of the people bill, to be introduced in the House of Commons on Thursday, will require companies 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.

The legislation will also deliver on a Labour manifesto pledge to extend voting rights to 1.7mn people aged 16 and 17 for UK-wide elections.

The proposed changes to electoral law form part of the government’s efforts to limit the ability of individuals and entities based overseas to influence UK politics.

One official said the new law would block figures such as Musk from giving more than £500 to a political party, £50 to a candidate or £2,230 in in-kind donations annually.

While political parties must carry out strict checks on individuals who make donations, they do not need to perform any checks on the individuals behind companies that make donations to them or their candidates.

At present, the only stipulation is that a company is registered and incorporated in the UK and carrying on business at the time of making the donation, allowing donors to mask their identity.

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 said.

The legislation would not have blocked a £9mn donation to Reform in August by crypto investor Christopher Harborne, the biggest single donation to a UK political party by a living donor.

Harborne has lived in Thailand for more than 20 years but he is a British citizen.

Sir James Cleverly, Conservative shadow local government secretary, criticised the change in the voting age, saying his party was “clear that people become adults at 18 and that is when citizenship rights — such as voting — should be gained”.

Officials said they were aware that people based overseas could still try to funnel money into Britain by finding ways around the new legislation.

But they said a review by former senior civil servant Philip Rycroft into foreign financial interference in UK politics, which is now under way, would seek to close any possible “loopholes”.

The Rycroft review was commissioned after former Welsh Reform UK leader Nathan Gill was jailed for accepting bribes to advance Russian interests.

The review — which is set to report in March — will also look at rules around cryptocurrencies, which Reform has said it will accept as a form of political donation.