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Keir Starmer’s Government has promised to urgently “take all necessary steps” to prevent “malign actors” from evading laws which seek to prevent foreign billionaires from bankrolling UK political parties.
UK election law currently forbids any political party from accepting foreign donations.
However, a loophole in the law could allow individuals based abroad to route their donations through a UK-based company.
Billionaire X Owner Elon Musk recently set up a new UK-based company, amid reports that he is considering donating up to $100 million to Nigel Farage’s Reform party.
Asked by former Labour minister Lord Blunkett to close this loophole and “see off… malign state actors or multi-billionaires who seek to interfere in our democracy”, Government frontbencher Baroness Taylor told the House of Lords that she “shares the sense of urgency” required to tackle the problem.
Taylor insisted that “foreign money has no place in our elections” and said the Government was now urgently “considering changes which will help further protect our system from such risks.”
“By law it’s the responsibility of political parties to take all reasonable steps to verify their donors and we will take necessary steps to ensure those requirements are tightened and stuck to”, she said.
Taylor said the Government was specifically looking at the issue of parties using “proxy donors” to evade laws designed to prevent overseas funding of UK elections.
“There are strict rules already in place to make sure that foreign money is prohibited from entering through proxy donors, providing a safeguard against impermissible donations by the back door”, she said.
“We’re looking at ways to make that even stronger.”
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The Labour party promised to reform the law on political donations in its general election manifesto last year.
However, the plans were not included in Keir Starmer’s first King’s Speech, leading to the assumption that any reforms would be unlikely to come until later in the Parliamentary session.
However, Baroness’ Taylor’s acceptance of the “urgency” of reforming the system suggests that changes to donations rules could come earlier than previously expected.
Other peers pressed the Government to go further, with Lib Dem peer Chris Rennard arguing that the only way to prevent undue influence on political parties would be to ban company donations and have a “sensible cap” on all other donations.
Taylor responded that a cap on donations “is not a current priority for the Government” but that “strengthening the rules around donations is”.
The Government was also quizzed on changes allowing voting for people who’ve been out of the UK for more than 15 years.
Baroness Taylor assured the House “this will be looked at.”
Lib Dem peer Lord Wallace also noted that the Intelligence and Security Committee’s Russia report in the last Parliament “hinted at the very considerable extent of Russian money flowing into British politics” both to political parties and into the Brexit campaign.
“Will the Government consider whether the redacted parts of that report should now be published to inform the public fully?” he asked.
Speaking for the Government, Baroness Taylor replied: “I’m happy to look at that, my Lords, but we are very aware that this is a real issue. We continue to be concerned about it, and we will continue to take whatever steps we can to avoid foreign interference in our elections.”