Keir Starmer Urged to Back Law Blocking Foreign Billionaires Like Elon Musk From Bankrolling UK Political Parties

Keir Starmer’s Government is being urged to back a new bill aimed at limiting the size of political donations and closing loopholes that allow foreign billionaires like Elon Musk to bankroll British politics.

Liberal Democrat MP Manuela Perteghellas’s Political Donations Bill, launched in Parliament on Wednesday (12th February) would establish the first-ever cap on how much individuals and companies can give to political parties in the UK, while also restricting the ability of foreign nationals to donate through UK-registered companies.

The MP, who was first elected last July to represent Stratford-on-Avon, said the reforms are needed to tackle the perception that wealthy donors have excessive influence over British politics and to prevent “dark money” from hostile states from undermining democracy.

It follows reports that billionaire Trump backer and far-right X owner Elon Musk is preparing to donate up to £80m to Nigel Farage’s Reform UK party. 

“Our politics has been exposed. It’s far too easy for those who don’t have our country’s national interest at heart, or who have made money through illicit means, to funnel dark money into British politics,” Perteghellas told Byline Times.

“We want to close loopholes that allow foreign nationals to donate via UK-registered companies. The British public needs to ensure that political donations come from UK-based sources.” 

The bill proposes establishing an independent review committee to determine an appropriate cap on political donations for UK parties. 

That committee would also assess the impact of donation limits on political parties’ ability to function while ensuring legitimate political participation isn’t undermined.

A key target of the legislation is the practice of foreign nationals making political donations through UK-registered companies – a loophole that has drawn increasing scrutiny amid the Musk rumours. 

While Perteghellas insisted the bill wasn’t specifically targeted at the Trump acolyte, she acknowledged that under current rules, “if Musk wants to [make large donations], we cannot stop him.”

She told Byline Times that “hostile states” are frequently seeking to undermine democracies. “We have seen it in cyber attacks and disinformation campaigns, yet our political finance laws remain riddled with loopholes that allow foreign and dark money to shape British politics. We want to close those loopholes as soon as possible.”

Perteghellas believes the House of Commons is “united in thinking something has to be done.” However, the Conservative manifesto made no mention of reforming donations. 

Labour’s manifesto committed to “protect[ing] democracy by strengthening the rules around donations to political parties.” There are reportedly plans underway to launch an Elections Bill in the next King’s Speech, which could close some of the loopholes on foreign funding. 

There is growing concern about the influence of large donors in British politics. The Committee on Standards in Public Life, Electoral Commission and groups like Transparency International have long recommended reforms to political funding, though successive Governments have failed to implement changes. Critics fear any changes will now come too late. 

“Every voter and every voice should be equally heard in our political system,” Perteghellas said. “This bill aims to improve transparency and fairness…and establish a genuine level playing field in our democracy.”

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The legislation would affect all major political parties. When asked whether parties would still have sufficient resources to campaign effectively under a donations cap, she suggested it might force a broader rethink of political financing.

“Perhaps we don’t need to spend that much money on elections,” she said. “Maybe we need to change the way we do politics.”

As a Private Member’s Bill, the legislation will not become law without Government support. Perteghellas said she hopes her bill will “put pressure on the Labour Government to do something about it.” 

Current UK law allows individuals on the UK electoral roll – including Brits who have lived abroad for decades – and UK-registered companies to make unlimited donations to political parties. Foreign companies and individuals cannot donate directly, but can do so through UK-registered subsidiaries or companies. 

The Political Donations Bill is set to include:

• Introducing a cap on individual and corporate donations
• Establishing an independent review committee to set appropriate limits
• Closing loopholes allowing foreign donations through UK companies
• Increasing transparency in political funding

Unless it is objected to in the House today (Wednesday), the bill’s second reading should take place later this month. 

The Political Donations Bill (Ten Minute Rule Motion)

Lib Dem MP Manuela Perteghella: “That leave be given to bring in a Bill to make provision about a cap on political donations; to make provision for a review to recommend the level at which such a cap should be set and to consider the impact of such a cap; to make provision about political donations made by foreign nationals through companies; and for connected purposes.”

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