Political Donations

Alex Sobel Excerpts

Monday 31st March 2025 Westminster Hall

[Irene Campbell]

I fully agree with the statement the hon. Member has just made.

The Electoral Commission, the independent regulator for the rules, has said that, at present, donations can be made using funding from otherwise impermissible sources, including from overseas. There are variable monetary penalties from the Electoral Commission for breaking the rules, which are outlined in the Political Parties, Elections and Referendums Act. These can be between £250 and £20,000, depending on the severity of the breach, which is another area that the petition seeks to address.

There are many electoral reform recommendations from independent bodies that address some of the concerns in this petition. In relation to fines for breaking the rules, the 2021 report by the Committee on Standards in Public Life recommended reviewing the maximum fines that can be issued for breaking electoral rules, saying that the maximum fine the Electoral Commission may impose

“should be increased to 4% of a campaign’s total spend or £500,000, whichever is higher”.

The Electoral Commission supports that, saying in 2020:

“The Scottish Parliament recently raised the maximum fine to £500,000 for Scottish referendums, and we believe this would be a reasonable benchmark for the maximum fine in relation to other parts of the UK’s political finance regulations”.

Additionally, the Committee on Standards in Public Life recommends that political parties introduce caps on donations. It said:

“A cap of £10,000 should be placed on donations to a political party or regulated donee from any individual or organisation in any year.”

Similarly, Australia’s new electoral reform Act imposed caps on political donations and electoral expenditure, after recent elections where a multimillionaire donated 117 million Australian dollars to a political party.

Both bodies have also addressed the loopholes that allow possible donations from foreign parties. In particular, the Electoral Commission said last year that parties and campaigners should

“only accept donations from companies that have made enough money in the UK to fund…their donation.”

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

A 2020 report from Parliament’s Intelligence and Security Committee found:

“Several members of the Russian elite who are closely linked to Putin are identified as being involved with charitable and/or political organisations in the UK, having donated to political parties”.

It is really important that we close these loopholes so that we are not at risk of Russian interference.

[Irene Campbell]

I agree with my hon. Friend. To further close loopholes that allow foreign interference, the Committee on Standards in Public Life added that the Government

“should legislate to ban foreign organisations or individuals from buying campaign advertising in the UK.”

As public office holders, we are all beholden to the seven principles of public life, known as the Nolan principles: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. To dedicate ourselves to these principles, we must ensure that there is no question about the transparency and lawfulness of the donations that we receive. Any rules regarding electoral donations must reflect and represent those principles, which we hold dear.

The Labour manifesto promised to

“protect democracy by strengthening the rules around donations”.

In December, the Prime Minister’s spokesman confirmed that the Government are committed to

“strengthening the rules around donations to political parties.”

Regarding the commitment to reviewing the rules on political donations, he said there will be a

“relevant update in due course.”

In her response to the debate in March, the Minister agreed that foreign money has no place in the UK electoral system, and that the current rules do not provide strong safeguards. She also made clear the crucial role that the Electoral Commission has, and the possibility that its roles and responsibilities may change.

There is much evidence and many policy interventions to be considered before the Government’s approach to electoral reform is published. However, now is the time for robust legislation that works. I look forward to hearing the Minister’s response, and the contributions of hon. Members from both sides of the House.

--- Later in debate ---

[Emily Darlington (Milton Keynes Central) (Lab)]

It is a pleasure to serve under your chairwomanship, Mrs Harris. In the interests of transparency, I would like to declare that I have received no donations from business, but I have received donations from UK citizens, including via the trade union GMB, of which I am a member, and through fundraising dinners and quizzes in my constituency, which anyone is welcome to attend.

I would like to thank Mr Stone for starting this petition and having such great success in raising the issue with the public right across the country. We cannot be complacent in protecting our democratic rights, and we must take heed of what has happened elsewhere. When the US relaxed funding laws, it changed the course of election costs. In 1990, the average cost of a successful campaign to the House of Representatives was $981,000, while a successful Senate race cost an average of $9.3 million. In 2022, after the relaxation of the political donations legislation, the average cost of a successful campaign for the House of Representatives was $3 million, while the average cost of a successful Senate campaign was $28.5 million. We cannot afford to let that happen within the UK.

Standing for Parliament is an honour and a privilege, but not only for those who can afford it or have rich friends; it is for those who come from all walks of life. One of the big loopholes that I perceive within our campaign finance rules—I hope that the Minister will consider it in fulfilling the campaign pledge in our manifesto to clean up political donations—is the rules for political party spending and the long and the short campaign. Although we have rules for the short campaign that are adhered to in the final few weeks, we do not have a consistent set of rules for the 55 months when political parties of any sort are campaigning.

The rise of online spend is much more difficult to track and understand. As the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) mentioned, there are ways of supporting political parties that are not always about straight donations, but that can be done through algorithms and other online activity. I will not mention any particular Member, but I will mention the behaviour of two parties when it comes to donations received. We have people with backgrounds very much linked to tax havens, such as the billionaire property developer Nick Candy, who is one of the main fundraisers for the Reform party. He is also a link between the Reform party and Trump and Elon Musk. He was very clear when he told The New York Times,

“We are going to have fund-raisers all over the world, in every part of the world where there are British nationals”—

not necessarily British taxpayers. He went on:

“We will have fund-raisers in the US, in Monaco, and we will have huge fund-raisers in the UAE, where we have an expat community there who are unhappy with the amount of regulation and tax in the UK.”

To be clear, he is the UK treasurer for the Reform party. We need to close the loophole, as my hon. Friend the Member for Penrith and Solway (Markus Campbell-Savours) said earlier. If someone is not a UK taxpayer, they should not be funding a political party in order to create outcomes around regulation and tax. There are other examples I could point to, and I am sure many will.

[Alex Sobel]

I am sure my hon. Friend knows of the Carlton Club, which is a private and unincorporated association with close links to the Conservative party. It has received over £200,000 in donations from companies run by wealthy Swiss, German and Russian nationals. Over the same period, since 2020, the Carlton Club has donated £312,000 to the Conservative party. Do we not need to remove the ability to use unincorporated associations to wash money that would otherwise not be able to be donated?

[Emily Darlington]

That is a very good foray into my last point. My hon. Friend is absolutely right to mention unincorporated companies or LLCs that are not transparent about where their money comes from. I have to ask why businesses are the ones giving money in the first place. I always think: what is the reward? I understand it better when it comes from a trade union that represents millions of workers. The trade union pulls together donations. Its members are asked whether they want to donate. Under the current legislation, they are asked whether they are happy to pay their dues and make political donations. Those individuals work and pay tax here in this country. But when there is a lack of transparency and the public cannot see how much money the company is making and then donating—the Carlton Club may fit into that; I have never been there, but I hear it is pretty lavish—that is the final loophole that I ask the Minister to consider.

I end my comments there because I know that many colleagues want to speak. I ask the Minister to consider my points and take action.