Labour will end the use of \u201cdodgy front companies\u201d that hide the source of dark money for political donations as part of its sweeping elections bill, which will give votes to 16-year-olds and pave the way for \u201copt-out\u201d voter registration.<\/p>\n
Gifts and hospitality for politicians sponsored by foreign states or companies will also be severely curbed, the Guardian understands.<\/p>\n
The government also intends to put new restrictions on cryptocurrency donations and the size of foreign donations, a key concern of Labour MPs about money that may be funnelled to Reform UK.<\/p>\n
Elon Musk, the billionaire X owner, was once reported to have been interested in a multimillion pound donation to Nigel Farage\u2019s party, though later said he had failed to be impressed by the Reform UK leader.<\/p>\n
The communities secretary Steve Reed told the Guardian the bill introduced to the Commons on Thursday would be \u201cthe biggest reset to our democratic system since the second world war\u201d, adding potentially millions to the electoral roll and introducing tough new laws to stop foreign donations being hidden in shell companies.<\/p>\n
Pilots will begin for mass voter registration, giving voters the chance to register automatically when they interact with other government services, such as getting married or changing their address.<\/p>\n
But pro-democracy campaigners have said the bill should introduce full automatic voter registration using national insurance numbers \u2013 and have criticised that it does not restore full independence to the electoral commission.<\/p>\n
Tom Brake, the chief executive of Unlock Democracy, said the reforms passed \u201cthe Musk test\u201d but said the government could go further \u2013 including a donations cap, saying there was \u201coutsized influence of a handful of domestic mega-donors \u2026 An annual cap on donations from individuals and companies would begin to address public concern that politics can be bought.\u201d<\/p>\n
Reed said the political financing bill would help safeguard democracy under threat from malign foreign influences. \u201cUnder the current rules, it\u2019s too easy to game the system using dodgy front companies to make political donations,\u201d he told the Guardian.<\/p>\n
\u201cNew firms registered today \u2013 owned by anyone, funded from anywhere, and without even a single day of trade \u2013 are allowed to finance our political parties. That can\u2019t be right. So we are closing this loophole by making firms go through stringent tests to prove their connection to the UK before their donation is allowed.\u201d<\/p>\n
Firms must prove they are headquartered in the UK, majority owned or controlled by UK electors or citizens and have generated sufficient revenue to cover the donation.<\/p>\n
The bill will also stop foreign companies offering high-value gifts to MPs, who will not be able to accept them unless they are below \u00a32,230. There have been multiple instances of politicians accepting luxury gifts or hospitality worth significant amounts from foreign states or businesses.<\/p>\n
\u201cThe flow of foreign cash into British politics ends here,\u201d a departmental source said. \u201cPoliticians won\u2019t be able to take gifts above a very low threshold. This will protect our democracy from interference and make it more transparent than ever.\u201d<\/p>\n