Political Donations

Tom Hayes Excerpts

Monday 31st March 2025 Westminster Hall

[Tom Hayes (Bournemouth East) (Lab)]

I want to start by taking stock of where we are as a country. We are in a particular moment in British history. The Conservative Government that this Labour Government replaced did a number on this country in two ways. First, as we have heard from other hon. Members, our electoral and political system has been diminished—for instance, the Electoral Commission has fewer teeth. Secondly, vast swathes of our country feel hopeless. When I knocked on doors over the past two years, I began to feel that the opposition was not in fact the Conservative party but hopelessness. Whether it is the fabric of our society being torn apart or our public services being underfunded, people have been cast adrift, and they are increasingly unconfident about the ability of democracy to fix our problems. That is why fixing these problems is so important for this Government.

We are also in a particular moment in world history. That moment is one of democratic backsliding, and of the rise of authoritarianism, populism and misinformation. If we as a leading western democracy do not fix our rules around political donations and our electoral and political system, we will not be able to contribute to the survival of democracy in this moment, when democracy faces such a significant challenge. We have to get it right for our own people, but we have to get it right, too, for the democracies of the world.

It is important, therefore, that the Government were elected on a manifesto commitment to protect democracy by strengthening the rules on donations, and that the Prime Minister has said that he wishes to protect democracy from the threat of interference. The Government are right that we need to move further and faster to protect our elections and our national security against foreign interference. That means shoring up and shielding the integrity of our democracy and our institutions, which have been made vulnerable to foreign actors by some of the changes made by the previous Government, which we have heard about.

We also need to reflect on the fact that this world moment involves a particular intersection between the concentration of wealth that can sway elections in the hands of a small number of people who happen to be tech billionaires, and the fact that these wealthy men are foreigners to our country. If they were to get engaged in our politics under the current system, they could sway our elections through donations, as well as through their use of technology and communication channels. That is particularly important, because there are challenges around the use of the online space to spread misinformation, the role of artificial intelligence and the role of hacks, as well as questions about donations to political parties, candidates and agendas.

We know the names of some of these tech billionaires: Jeff Bezos, Mark Zuckerberg, Larry Ellison, Bill Gates or Sergey Brin. There is also, as we all know, Elon Musk. I talk about Elon Musk here for illustrative purposes, rather than just to single him out as an individual; any of the individuals I have just mentioned could use their tech wealth to be involved in the political activities of this country. But as I saw when I went to Queen’s Park Infant Academy and spoke to some of the younger people there, they are concerned about foreign donations into our country’s political system.

One young person said to me, “What do you make of Elon Musk?” I did not quite know what to say, so I flipped the question back and said to that child, “Well, what do you make?” Her answer was absolutely pitch perfect. She said, “Why is a South African-born person, who lives in the United States, has funded a presidential election there, and is now part of the US Government, threatening to get involved in UK politics. I can’t even have a say in UK politics.” I think she makes an interesting point, and I thank her for making it.

Elon Musk cannot legally make a donation personally to a British political party, but he could go through UK subsidiaries of his companies, and we ought to be worried about that. He has suggested that he could donate significant sums of money to a political party in the UK. My concern is not about who he chooses to give that money to—I would not want his money coming to the Labour party. My concern is about his ability to give that money under present rules and the influence that that could buy. We have to be concerned about that.

There is a second point: we have a prevalence of wealth among tech billionaires, who may be getting involved in the political system of our country, and these are individuals who also have control over platforms, such as X and Starlink in the case of Elon Musk. That gives him significant control over access to information, and also over the integrity of information on those channels. For instance, with Ukraine, he has made on-again, off-again threats to end Starlink’s support for Ukraine. With X, we know that he has removed content moderation, and as a consequence we have seen that site become a den—a haven—for misinformation and populist rhetoric. We need to think not just about donations and who donates, but about what power those people have to influence agendas through their control over tech and social media channels.

This is dangerous not just within a democracy, but on the world stage. Elon Musk might be talking about funding one political party in the UK, but he could fund parties around the world if their electoral laws allow. It is not just about his view of one particular party in this country, it is about his view of particular agendas—here I will mention his endorsement of Alternative für Deutschland in Germany.

How do we go about toughening up the rules? I believe there are three things that we can do. First, we should close the loopholes, and ensure that when companies make their profits in the UK for two years, they are able to make donations, but at no other time. We should also introduce a requirement for political parties to know their donor and identify the true source of donor funds. Secondly, we need to have a tough deterrent for those who break the rules. Frankly, if Elon Musk were to become actively involved in financing UK political parties and then to breach election law, the maximum fine that the Electoral Commission could levy is £20,000. I do not think that a man who is worth £263 billion is going to be very concerned about £20,000.

Thirdly, we need to look at closing the loophole in our donations system that allows donations from shell companies that have never even made a profit in the UK. Often, they have chosen to be in shell companies because they do not want to contribute tax towards our welfare system, to fund the schools and the hospitals that many of our voters depend on and whose improvement they say is their main priority.

We need to strengthen democracy by strengthening our rules around donations. We need to be conscious of the threat to democracy in the UK and around the world from the concentration of wealth in tech billionaires, who often have narrow agendas. We need to be especially conscious of the capacity of those billionaires not just to fund our politics but to distort it through the communication channels that they have.

--- Later in debate ---

[Rushanara Ali]

I want to sum up some of the contributions made by colleagues. I am particularly grateful to my hon. Friend the Member for North Ayrshire and Arran, who of course opened the debate, for the points in her speech; to the Chair of the Petitions Committee, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for his contribution; and to my hon. Friend the Member for Penrith and Solway (Markus Campbell-Savours). I thank the hon. Member for Tewkesbury (Cameron Thomas) for his contribution, as well as other hon. Members—I hope I am not missing colleagues out—including my hon. Friend the Member for Bolton West (Phil Brickell).

There were some excellent contributions about some of the outstanding issues that we need to address, as a Parliament and a Government, by my hon. Friends the Members for Clapham and Brixton Hill (Bell Ribeiro-Addy), for Stroud (Dr Opher), for Bournemouth East (Tom Hayes) and for Glasgow North East (Maureen Burke), and, of course, by the Front-Bench spokespeople, the hon. Members for Stratford-on-Avon (Manuela Perteghella) and for Ruislip, Northwood and Pinner (David Simmonds).

Various questions were raised in the debate. In relation to the issues surrounding donations, we recognise that further work needs to be done. The Government are concerned about the growing threat of foreign interference and are focused on ensuring that we have systemic resilience and institutional strength. Of course, any suspected breaches of the rules, now or in the future, will remain a matter for the Electoral Commission or the police.

A number of colleagues mentioned donations from overseas electors. As has been mentioned, the franchise change for British citizens living overseas came into effect on 16 January 2024, removing the 15-year limit on overseas citizens’ voting rights. Overseas voters have the right to participate in UK parliamentary elections, and that includes the right to donate to the parties or candidates they support, but foreign money is not permitted, and it is a criminal offence to facilitate an impermissible donation. Political parties can accept donations only from registered electors, and overseas electors are subject to the same counter-fraud measures as domestic electors, including having their identities confirmed as part of the registration process. Colleagues asked questions relating to the 15-year rule; we have no plans to reintroduce it.

A further question was raised about increasing the maximum fine that the Electoral Commission can impose for breaches of the political finance framework. As I stated earlier, robust enforcement of political finance rules by the Electoral Commission is crucial for maintaining public trust in our electoral system. As I said, that is why, as part of delivering on our commitment to strengthen the rules around political donations, we will look at any changes that are necessary to ensure that enforcement provides a clear deterrent against breaking the law, while remaining proportionate.

The strategy and policy statement was raised. We recognise the vital role that the Electoral Commission plays in the UK’s democratic system, promoting public confidence in the democratic process and ensuring its integrity, and this Government are committed to strengthening our democracy and upholding the integrity of elections. The current strategy and policy statement does not reflect the Government’s priorities, and we will not keep it in its current form. Alongside our broader electoral reforms to strengthen democracy, we will be reflecting on what actions are necessary in relation to the statement in the coming months.

Hon. Members raised the issue of safeguards against political donors being given favourable treatment in relation to Government contracts—for instance, PPE contracts. The Procurement Act 2023 strengthens existing obligations in respect of conflicts of interest. Contracting authorities must take all reasonable steps to identify, mitigate and keep under review conflicts and potential conflicts of interest. Where a conflict of interest puts a supplier at an unfair advantage, and if steps to mitigate it cannot avoid that advantage, the supplier must be excluded from that procurement.

Hon. Members raised the issue of foreign nationals being allowed to donate in UK elections. Electoral law ensures that only those with legitimate ties to the UK can donate. That includes people of varying nationalities who are established in the UK and are legitimately entitled to vote in certain elections, such as resident Commonwealth citizens. We do not propose to renege on that principle; instead, we are focusing our efforts on the real risk of foreign interference coming from external actors with no such legitimate links.

Reference was made to lobbying. The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 ensures that there is transparency around meetings between Ministers and external groups. When it comes to foreign influence, additional controls are being implemented through the foreign influence registration scheme that will require those being directed by a foreign power to carry out, or arrange for others to carry out, political influence activities to register with the scheme.

I look forward to continuing discussions with colleagues, and I am happy to follow up in writing if there are outstanding issues that I have not been able to address.

[Tom Hayes]

The Labour party was elected on a manifesto that committed to giving 16 and 17-year-olds the vote; the Minister referred to this earlier. Can she confirm that we will give 16 and 17-year-olds the vote, and perhaps set out a rough timetable for when that might happen?

[Rushanara Ali]

We have already set out our plans in Parliament, and before the summer recess we will set out a strategy in relation to what we intend to do, including the legislation.