Political Finance Rules

Iqbal Mohamed Excerpts

Thursday 6th March 2025 Commons Chamber

[Iqbal Mohamed (Dewsbury and Batley) (Ind)]

I thank the hon. Member for South Dorset (Lloyd Hatton) for securing this important debate. The lack of transparency in the funding of our political parties is well documented, although I suspect not so well known among members of the public, who tend to associate the corrupting influence of money in politics with other countries, usually very far away. The reality is that it is taking place on our doorstep.

According to research done by Transparency International, almost �1 in every �10 reported by political parties and their members since 2001 has come from unknown or questionable sources. Some �42 million comes from donors alleged or proved to have been involved in other corruption, fraud or money laundering, and �38.6 million comes from unincorporated associations that have not reported the source of their income, despite Parliament introducing new transparency rules in 2010. The rest of its findings highlight millions from donors alleged or proved to be intermediaries for foreign funds and/or a hidden source, and millions from companies that have not made sufficient profits to support the political contributions they have made.

Other research has confirmed that successive Governments have invested trillions in the defence industry. Our new Government are also proposing to increase defence spending to 2.5% and then to 3%. The defence industry is reportedly responsible for approximately 40% of all corruption worldwide, and much of the money that we and other countries spend in defence is funnelled back through opaque channels into political parties and members. The industrial military complex needs to be investigated and dismantled.

The fact is that our political finance rules are too weak on hidden money, making the system vulnerable to subordination from rich individuals and secretive vested interests. My constituents and people from our country are concerned by the malign influence on Government policy of parties, Governments and Opposition Members and other Members accepting millions from state and industry lobbies, corporations and mega-rich donors.

[Tom Hayes (Bournemouth East) (Lab)]

The hon. Member is making a case. Does he agree that foreign money has no role in our democracy, and that one of the strongest ways in which we can clean up our politics and indeed strengthen our democracy is to make sure that the Electoral Commission has real teeth and has higher fining powers? Does he also agree that where we have concerns about foreign money coming into our country, we should have particular concerns about money coming from people such as Elon Musk?

[Iqbal Mohamed]

I completely agree with the hon. Member. The action that the Electoral Commission should be permitted to take should not just be limited to bigger, greater fines for donors. There should be consequences for those accepting donations and potentially being influenced.

My constituents and the people of this country see and feel in their daily lives the deep impacts of pro-rich, pro-war, anti-poor and anti-consumer decisions and policies. The solution lies in reforms: to tighten spending rules; to shine a light on the source of financial contributions; to lower spending limits to reduce campaign costs and reliance on large donations; to introduce donation caps of �10,000 a year for individuals and organisations, as recommended by the Committee on Standards in Public Life; to remove the corrupting influence of big money in politics; and to close loopholes to ensure that overseas trips for parliamentarians are funded only by trusted sources.

The UK used to lead the way on funding transparency. The UK was a founding member of the Open Government Partnership, and placed third in the 2014 OECD open data index, but in recent years the UK has slipped. The most recent OECD rankings saw the UK fall to 24th place, with stories about dodgy dealings, personal protective equipment procurement and Ministers� disappearing WhatsApp messages all contributing to the decline in the trust that the public place in their politicians.

As has been mentioned, it should be a cause for grave concern that of the �85 million of private donations in 2023 alone, two thirds came from 19 donors giving more than �1 million each, the highest ever share of mega donations. If we do not want our politics to go the way of American politics, with British equivalents to the likes of Elon Musk and his fellow tech billionaires blatantly using money to buy influence and remake politics in their own interests, we need tighter regulation of political finance than we currently have, and full transparency for the public.