Open Editor's Digest for free
Roula Khalaf, Editor of the FT, selects her favorite stories for this weekly newsletter.
Sir Keir Starmer's adviser on ethical standards has asked the government to “protect the integrity of elections” by limiting donations from companies to profits made in the UK, after fears that Elon Musk could disrupt British politics with a large donation to Reform UK.
Doug Chalmers, chairman of the government's Committee on Standards in Public Life, told the Financial Times that the law should also be changed so that political donations made by businesses do not exceed their after-tax income in the two years before the donation.
“At stake here is the fundamental principle that only those who have the right to vote and run a business in the UK should be able to fund our political parties and therefore influence the outcome of UK elections,” Chalmers said. “It is an important area that must be addressed to protect the integrity of UK elections.”
Chalmers was speaking after UK Reform leader Nigel Farage said he had met US billionaire Elon Musk. he was thinking of making a big donation in a large group of people.
The revelations have sparked widespread concern across Westminster that Musk's financial intervention could have a significant and lasting impact on British politics, giving Reform UK the tools to transform itself into a political leader. reliable vehicle power.
It also drew attention to a long long hole in electoral law it means that foreigners can donate to UK political parties through British businesses they own although they are not allowed to donate directly.
The Electoral Commission, the UK's electoral body, also said on Wednesday it is in discussions with the government about changing the law to ensure that only profits made in the UK can be given to political parties.
Vijay Rangarajan, the chief executive of the Election Commission, said that “the system needs to be strengthened . . . to protect the electoral process from foreign interference”.
But the proposals put forward by Chalmers and Rangarajan are likely to do little to reduce the contributions of Musk, whose companies have made almost 90mn profits in the UK over the past two years.
According to their latest accounts, the UK's largest telecommunications company, Twitter UK, made a pre-tax profit of £14.5mn in 2021 and 2022 combined, while Starlink Internet Services UK Ltd made a pre-tax profit of -£226,000 in 2022 and 2023.
Tesla Motors Ltd, the UK subsidiary of the electric car company Musk founded and where he is the largest shareholder with 13 percent, makes £74mn in profits before tax in 2022 and 2023.
Musk's AI company xAI was incorporated in the UK last week, giving him a new car with which to make a contribution to the Reformation. Has not published any accounts.
The Committee on Standards in Public Life has required political donations by companies to be limited to profits made in the UK since 1998.
Chalmers said he was “encouraged that the government has said publicly that it is looking at the site”.
Labor promised in its general election manifesto that it would “protect democracy by strengthening the rules around donations to political parties”, underscoring concerns about foreign interference.
Government officials have told the FT they are looking to change the law to reduce corporate contributions to UK-made profits, but say no legislation will be introduced next year.
Several countries have stricter laws to prevent people from influencing elections. In France, companies are not allowed to donate to parties or candidates, while individuals are allowed to donate a maximum of 7,500 euros per year.
In Finland, no single donor can give more than 30,000 euros per year, according to Transparency International.