Campaigners have welcomed the bill, but say that there also needs to be a cap on donations to political parties
In a huge shake-up of political donation rules, the government’s election bill will ban foreign companies from giving money to political parties.
Under the rules, only foreign companies with British owners or that make enough revenue in the UK will be allowed to donate.
The legislation means that overseas billionaires like Elon Musk would be prevented from giving substantial donations to UK political parties.
Under new laws, companies would only be allowed to give up to the equivalent of two years of their UK revenue.
In addition, shell companies will be prevented from funnelling large sums of money to parties and candidates.
The laws will also require those with “significant control” of a company to be based and registered to vote in the UK.
Shell companies or those whose parent companies are based overseas will only be able to donate £500 to parties or £50 for candidates.
The bill, which is officially called the Representation of the People bill, will be introduced to Parliament today.
Campaigners have welcomed the bill but note that it does not include plans to introduce a cap on political donations. In December, crypto investor Christopher Harborne donated £9 million to Reform UK, reportedly the largest single donation ever made to a UK political party.
Tom Brake, chief executive of Unlock Democracy, said: “Passing the ‘Musk test’ is a welcome step – foreign billionaires, no matter their corporate holdings in the UK, have no business interfering in our politics.”
However, Brake added that “the government’s proposals do not tackle the outsized influence of a handful of domestic mega-donors. An annual cap on donations from individuals and companies would begin to address public concern that politics can be bought”.
Rose Zussman, Senior Policy Manager at Transparency International UK, said the changes “are welcomed but not sufficient to deal with risks of corruption, foreign interference and undue influence in British politics”.
She added: “The problem isn’t just about where the money comes from, but how much can be given and what may be expected in return.”
The bill will also lower the voting age to 16 by the time of the next election.
Olivia Barber is a reporter at Left Foot Forward
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