The Missing Part Of Keir Starmer’s Plan To Clamp Down On Foreign Election Meddling

The Government has pledged to act on the findings of a landmark report designed to tackle foreign interference in UK elections.

On Monday, ministers pledged to implement the recommendations of the recent Rycroft review into the risks of meddling and corruption in Britain’s party funding system.

The decision is a big step forward, but it misses one vital element.

Ministers have rejected calls from backbenchers, including Stella Creasy MP, to go further and introduce an overall cap on political donations for UK voters, triggering disappointment among democracy campaigners.

In the House of Commons, Minister Samantha Dixon confirmed that a previously-announced annual £100,000 cap on donations from overseas voters would be extended for a year after they return to the UK.

It follows the announcement of the £100,000 overseas-donations cap in March, after which Reform funder Christopher Harborne, a Thailand-based billionaire crypto tycoon, announced plans to return to the UK.

Labour’s moves would bar him (and others reportedly returning, such as fellow crypto-billionaire Ben Delo) from donating for 12 months after coming back to the UK, to avoid donors simply ‘popping back’ to the UK to avoid the cap.

But Dixon rebuffed repeated calls from backbenchers to introduce an overall donations cap, arguing: “The Government’s view is that there is a place for legitimate donations in political financing in the UK.”

The planned new residency requirement for returning overseas voters will apply retrospectively from 25 March – the date of the original announcement – again to capture those who may have rushed back to Britain after the Government said rules would be tightened.

A temporary ban on all political donations made via cryptocurrency, of any amount, will also continue until the safeguards are deemed robust enough to deal with the risk of money laundering or hiding the true source of funds.

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What’s Changing

One move welcomed by anti-corruption campaigners is that the law on companies donating to political parties will be tightened so that eligibility is based on a firm’s post-tax profits, rather than revenue.

No company will be able to donate more than it has made in post-tax profits over a period of five years. This would likely catch out some of the troubled firms that Byline Times recently reported as having donated nearly £500,000 to Reform in recent years. There is no suggestion they broke electoral law.

Minister Dixon also confirmed to MPs that a known loophole around so-called unincorporated associations being subject to weaker transparency rules on giving to parties would be dealt with in amendments to the Government’s Representation of the People Bill, which will again be before MPs on 14th July.

Donors giving large sums will also have to sign a declaration stating they are legally able to do so, for those giving above a threshold to be developed with the Electoral Commission. This is seen as a key way any wrongdoing, later proven, can be prosecuted.

Due diligence checks on party purseholders – “Know Your Donor” rules – are also being strengthened, adding donors’ location (e.g. if they’re abroad) as a risk factor parties must take into account when accepting large sums.

Candidates for office will also have to declare that any substantial donations (over £2,230) come from permissible sources, covering their campaigning activity in the year before they formally became a candidate.

There will be new information-sharing abilities between the Electoral Commission and anti-corruption agencies – including national security bodies – to aid investigations into potential wrongdoing.

The Electoral Commission will also be able to demand information from parties, and potentially donors, outside of a formal investigation.

Rycroft’s call for tougher criminal sanctions and sentences for foreign interference and illegal donations was backed in principle by ministers – but the Government says further work with law enforcement, political parties and others is needed before they will propose legislation here.

The Permanent Secretary of the Home Office has been appointed as the civil service’s champion for “sustaining our democracy”, coordinating Whitehall’s efforts on the issue – a gap spotted by Phillip Rycroft in his review.

Amendments will be tabled to the Representation of the People Bill ahead of its third reading in the Commons next week.

Communities secretary Steve Reed wrote in the Government’s response: “The threat we face is real, persistent and evolving. But so too is our response…

“The National Security Act 2023 has transformed our ability to confront hostile state activity head-on, while the Counter Political Interference and Espionage Plan will ensure a coordinated and relentless effort across the whole of government to protect our political system.”

He added: “The government is going further still. Through the Representation of the People Bill, we are strengthening transparency in political finance, tightening the rules on donations, closing loopholes and making it harder than ever for those who would seek to exploit our system. We are not standing still – we are taking decisive action to meet the challenges of today.”

He suggested further legislation may be on its way, likely under Andy Burnham as PM, adding: “Where we can legislate now, we will. Where further work is required, we will move at pace to deliver it.”

It comes as Labour called for the elections watchdog, the Electoral Commission, to investigate the “previously secret donations” made to Nigel Farage by convicted criminal George Cottrell. The party’s chair, Anna Turley, has written to the EC’s Chief Executive, Vijay Rangarajan, calling for an investigation to be opened following reports over the weekend.

On Tuesday, Farage dramatically announced his intention to resign his seat and trigger a by-election over the looming Standards Committee investigations he faces in Parliament. No major party plans to run against him, with several branding it a “stunt” and a “media circus.”

Labour is asking the Electoral Commission to assess whether the donations should have been declared. It is also asking it to assess wh