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Labour MP seeks to block Elon Musk "gaming the system" over controversial rumoured $100 million donation to Reform UK
18 December 2024, 12:28 | Updated: 18 December 2024, 15:45
Reports suggest that US billionaire Elon Musk is considering a large donation up to $100 million (£79 million) to Nigel Farage's Reform UK.
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Elon Musk's controversial rumoured donation to Reform UK has been branded "an attempt to subvert our politics" by a Labour MP.
Joe Powell, the MP for Kensington and Bayswater, has expressed concerns over the possibility saying it is "not in the spirit or possibly the practice of our electoral law" and accused Reform UK of "trying to find a way for foreign money to enter politics".
Mr Powell told LBC "it is illegal for a foreign citizen, someone who is not on the electoral register in the UK, to donate money directly", arguing that Elon Musk should not be able to donate to a UK political party but he conceded that "there are ways you can work the system".
"I am absolutely concerned by that. Reform stood at the election saying they were going to stand up for people not listened to, and yet they are now running around the United States trying to secure funding from a foreign billionaire".
Read more: Elon Musk giving 'serious thought' to Reform UK donation, Nigel Farage says after Mar-A-Lago meeting
Nigel Farage visited US billionaire Elon Musk alongside Reform UK's treasurer Nick Candy at Mar-a-Lago, Donald Trump's Florida home. In an article for the Daily Telegraph following the visit, Farage admitted "the issue of money was discussed, and there will be ongoing negotiations on that score".
Joe Powell who is chair of the cross-party Anti-Corruption group and says there is "urgent tidying up to do".
Working alongside Phil Brickell MP and Lloyd Hatton MP, the group are urging the government to urgently curb foreign donations.
Transparency International UK recently reported that £1 in every £10 declared as donations to political parties since 2000 came from 'unknown or questionable sources', whilst ten companies have made £10.9 million worth of political donations since 2001.
Caller thinks Elon Musk donating to Nigel Farage is 'fantastic'
The last published accounts for Twitter UK were for year ending Dec 2022 - just after Musk's takeover completed - showed a profit before tax of £8.5 million.
Calling for the government to adopt his recommendations, it would include a UK subsidiary of an international company being prevented from donating more than the profits they make in the UK, or a percentage of those profits.
For example, Elon Musk would be prevented from donating more than the profits of the UK divisions of his companies X, Tesla or SpaceX.
The law on permissible donations would be tightened to ensure political parties, candidates and campaigners cannot accept money from companies that have not made enough money in the UK to fund the amount of their donation or loan. This would reflect a 1998 recommendation by the Committee on Standards in Public Life that foreign companies should not be able to use subsidiaries based in the UK.
One government minister has told LBC that the party are "very sympathetic and open" to the suggestions, conceding that electoral finance laws are "outdated".
Joe Powell MP says that the laws are "outdated and have left political parties vulnerable to dirty money derived from corruption".
He is also calling for the Electoral Commission to be given more powers to crack down on 'unincorporated associations', which he describes as "opaque structures where you don't have to declare where the money is coming from".
Currently, people who give money to unincorporated associations are not required to be permissible donors, and there is little to no transparency around who donates to unincorporated associations.
It's 'not in the spirit of the rules' for Reform to accept a donation from Elon Musk
Since 2010 unincorporated associations have given £40.4 million in political contributions. In a recent report Transparency International UK cites the example of The Carlton Club, an unincorporated association that since 2020 has donated over £300,000 to the Conservative Party.
In that same period it has also received over £200,000 worth of donations from companies run by wealthy Swiss, German and Russian nationals who would not be permitted to make contributions directly to political parties.
Other calls to reform campaign finance include calls to give the Electoral Commission more fining powers beyond the current £20,000 limit. UK Governance Project, an independent cross-party commission, chaired by Dominic Grieve KC recommended that the Electoral Commission be able to impose a fine of at least £500,000 or 4% of a campaign’s spend, whichever is the greatest.
A Ministry of Housing Community and Local Government spokesman said: “We are committed to protecting our democracy from the threat of foreign interference by strengthening the rules around donations to political parties. We will set out more details on this in due course.”
