Democracy Minister Rushanara Ali is planning a “series of new measures” to protect against foreign political interference.
Tech billionaire Elon Musk, now adviser to US President Donald Trump, caused some concern in the UK when it was reported he could donate as much as £78m ($100m) to Reform UK through a UK branch of his social media company X.
A public petition to remove loopholes that allow wealthy foreign individuals to donate to UK political parties was signed by more than 142,000 people, sparking a debate by MPs.
Earlier, the head of the elections watchdog called on the government to plug legal loopholes on foreign donations to UK political parties as a matter of urgency.
Leadig the Westminster Hall debate, Labour MP Irene Campbell said: “Elon Musk proposed to donate a large sum to Reform UK and while he could not make a personal donation there are ways he could possibly get around the rules.”
The debate heard from multiple MPs raising concerns around foreign interference in UK politics, with several raising fears about a potential donation from Mr Musk or alleged links between Farage and other foreign actors.
Responding to the concerns, including possible interference by Russia, China and Iran, Ali told MPs she believed action must be taken to enhance safeguards against foreign donations, including those funneled through UK companies.
She said: “While it is clear that foreign donations to political parties and other campaigners are illegal, the government recognises the continued risk posed by actors who seek to interfere in our democratic process.
“The current rules no longer match the sophistication and perseverance of those who wish to undermine our laws – this threat must be addressed by stronger safeguards.
“We are considering a series of new measures which would achieve this such as enhanced checks by recipients of donations and tighter controls on donors, including more restrictions around company donations.”
However, Ali said she would not look at restricting the size of donations, nor blocking funds from foreign nationals with “legitimate ties to the UK”, in order to allow political parties to continue to raise funds.
Reform UK saw its first group of MPs elected last year and, amid talk of becoming the party of government at the next general election, its leader Farage confirmed a potential donation from Mr Musk in late December.
Farage talked about the possibility of this being done through a UK arm of a Musk company, having previously set out how such donations needed to be “proportional” to the size of that company in the UK.
However, the festive mood between the pair had substantially chilled by the new year, with no donation transpiring and, instead, a call from the tech tycoon for Farage to be replaced as party leader.
Mr Musk’s choice to take over the reins of the party was Rupert Lowe, then a newly minted Reform UK MP, but – following a spat where he accused Farage of having a Messiah complex and amidst accusations of bullying – he has now been kicked out of the party for good.
However, the drama reaffirmed a weakness in UK law to those worried about a potential multi-million donation from an overseas actor with no links to the UK, and sparked the petition.
On Sunday, Electoral Commission chief executive Vijay Rangarajan told the BBC’s Westminster Hour the government needed to act, ideally this year, to limit company donations.
Asked about speculation that Mr Musk could make a donation to Reform UK, Mr Rangarajan said: “We think that companies should only be able to donate something like the last couple of years’ worth of profits that they’ve made in the UK.
“We think unincorporated associations need to become much more transparent, and we think the parties themselves need to do a bit more in terms of looking at the donors that do come, have a kind of ‘know-your-donor’ set of regulations.”
Asked how urgently the government should act he added: “In the next year or so.”
