In the City
Dough nations
TALK of a $100m donation to Reform UK from Elon Musk may have faded after the world’s richest man dismissed its leader Nigel Farage as not the far-enough-right man to oust prime minister Keir Starmer. But the threat focused Labour and Tory minds on the long overdue need to change rules on corporate political donations.
Legislation to prevent UK companies being conduits for otherwise banned foreign donations was first urged in 1998 by the independent committee on standards in public life and since 2013 has been backed by the Electoral Commission.
At present foreign donors, although banned from personally making direct political donations, can do so if the money flows from a company which is incorporated and “carries on business in the UK”. A definition sufficiently vague to be easily gamed.
The Conservatives in particular have benefited from this loophole, which enabled donations from those not even living here. Eye 1638 reminded readers of donations linked to recently sanctioned Ukrainian oligarch Dmitry Firtash.
Questions were raised with the Electoral Commission (and by Private Eye, issue 1250) in 2008-09 about £4m-5m in donations made since 2003 by Bearwood Corporate Services, a relatively small, often loss-making Belize-owned company controlled by Tory party deputy chairman Lord (Michael) Ashcroft. The commission concluded in 2010 that Bearwood was a permitted donor as it was carrying on business here.
Musk cannot make direct political donations because he is a foreign national (US/Canada/ South Africa). But he does plenty of business here via Tesla and X, so it would not be difficult for a UK company to be a legitimate vehicle for donations.
Tesla Motors had 2023 revenues of £2.47bn, net profits of £23.6m and accumulated/retained profits of £170m. Twitter UK had revenues for 2022 (Musk took over that November) of £205m, net profits of £5.6m and accumulated profits of just under £29m. So plenty of potential donation firepower.