Close The Loophole Letting Elon Musk Donate To Reform, Says Labour MP
Elon Musk, Wisconsin (Credit: Associated Press / Alamy Stock Photo)
3 min read
Elon Musk could give money to political candidates to bypass government’s clampdown on donating to UK parties, a Labour MP has warned.
It is currently illegal for political parties and campaigners to receive foreign donations directly.
However, parties can accept donations from individuals on the UK electoral register, UK-registered companies, trade unions, unincorporated associations and limited liability partnerships. The amount parties can accept from these sources is not limited.
Amid speculation that Musk could donate $100m to Reform UK through the UK branch of his social media company X before the next general election, the Labour government is considering restricting donations from UK businesses.
However, according to Labour MP Joe Powell, Musk could exploit a loophole in these plans.
"The whole system needs to be looked at," he said in an interview with The House.
The Electoral Commission requires candidates to adhere to spending limits during the long and short election campaigns, when they are officially recognised as the party’s runners for Parliament.
However, with candidates increasingly being selected by parties before the long election campaign begins — many months in some cases — donors can funnel money through them and onwards to their parties without it being declared. If a candidate is not elected, the money they receive will go untracked.
“I was a candidate for almost two years, and I was not even regulated for most of that period,” Powell said.
“All parties are doing this now. Very few people are selected six weeks before an election — it’s just not reality.”
Powell said "for sure" Musk could use this loophole to donate to Reform UK.
“This idea of a short campaign, long campaign, especially with digital spend, is really hard to enforce. I personally think that the whole system needs to be looked at. I just don’t think practically it’s delivering.
“Essentially, you’re asking people to play by the rules and hoping that they will do the right thing. I’m not sure that’s sustainable,” he said.
According to data from anti-corruption group Transparency International, four donors gave more than or equal to £5m to political parties in 2023. Twenty-five donors donated more than £500k in 2023, totalling £60.7m from private sources. Between 2019 and 2023, donations over £500k totalled £203.8m from private sources.
Last week, Parliament debated an online petition with 140,000 signatures calling to “remove loopholes that allow wealthy foreign individuals to make donations into UK political parties” and “cap all donations to a reasonable amount”.
Speaking in the debate, Phil Brickell, Labour MP for Bolton West, said that unincorporated associations “provide a potential trapdoor for dark money entering our politics”.
“Currently, candidates are not required to verify the ultimate source of donations received through these associations, effectively creating opaque slush funds. Forcing unincorporated associations to conduct better checks on the sources of the original donations would very quickly put an end to that risk,” he added.
Responding in the debate, democracy minister Rushanara Ali said the government is “considering a series of new measures” such as “enhanced checks by recipients of donations and tighter controls on donors, including more restrictions around company donations.”
However, Ali said the government is not looking to restrict the size of individual donations, nor to block funds from foreign nationals with “legitimate ties to the UK”.
