Tough new rules to crackdown on foreign money in UK elections

• New safeguards to stop foreign money influencing UK elections, including a timebound cap on donations on those who move to the UK from overseas.
• Tougher checks on company donations will ensure only legitimate UK-linked businesses can contribute, with donations assessed against profits rather than revenue.
• Candidates will be required to prove campaign funding comes from legitimate sources, strengthening transparency and closing loopholes in political finance rules.

Foreign money influencing UK elections will be stamped out under a major package of reforms to strengthen political finance rules and protect British democracy.

The government will confirm today it will introduce a new timebound cap on large political donations from people who have recently moved to the UK, in effect creating a minimum amount of time someone must permanently be based in the country before they can donate over the cap to a political party or candidate. 

Other new measures include stronger tests on company donations, new and tough transparency requirements for candidates, and the closing of loopholes that could be exploited by those seeking to interfere in UK elections.

The measures, announced as part of the government’s response to the independent Rycroft Review, will strengthen safeguards against foreign financial influence and reinforce the UK’s position as a world leader in defending democratic integrity.

Together, the reforms will ensure political donations are transparent, legitimate and firmly rooted in the UK, helping to safeguard elections for years to come.

Secretary of State Steve Reed said:

British democracy is not for sale. These tough new rules will shut down dodgy funding, stop foreign money influencing our elections and keep our democracy strong.

By holding overseas donors to tougher standards and requiring candidates to prove where their funding comes from, we are taking world-leading action to protect the integrity of our elections and tackle the threats we face from abroad.

Minister for Democracy, Samantha Dixon MP, said:

The overwhelming majority of people who take part in our democratic process do so honestly and transparently, but our rules must keep pace with new and emerging threats.

These reforms will close loopholes that can be exploited by those seeking to influence UK politics through foreign money, while strengthening transparency around campaign funding and company donations.

This means political decisions are made only in the interests of voters in the United Kingdom.

Chief Secretary to the Prime Minister Darren Jones said: 

For too long, foreign money, foreign bot farms and foreign powers have exploited the system, trying to warp our elections and sow division in our country for their own ends.

We’re cracking down on those trying to buy – and sell – our democracy and putting the British people first. If you want to donate to our politics, you need to have legitimate and longstanding roots in our country.

As part of the government’s response to the independent Rycroft Review today [Monday 6 July], new safeguards will be introduced to toughen the previously-announced cap on political donations of more than £100,000 from overseas donations. 

Individuals returning to the UK will now be subject to the cap for at least a full calendar year to prevent the rules being dodged – not just those who are registered to vote overseas. 

Companies will also face tougher checks, with political donations assessed against post-tax profits over the previous five years rather than revenue alone.

This means only legitimate UK-linked businesses will be able to donate in a way that is transparent, accountable and reflective of their real financial position. Anyone could set up a business with high revenue without needing to demonstrate how they operate and make money, or whether they’re paying tax in the UK. Having a profit-based system will make donations clearer and more accountable.

Views of key groups, including the Electoral Commission and Committee on Standards in Public Life, have been listened to and accepted the Rycroft recommendation, which stated corporate donation income tests should be amended to one based on post-tax profits, rather than revenue.

This will strengthen the rules already set out in the Representation of the People Bill, which outlines that companies making donations will be required to show a genuine connection to the UK or Ireland by demonstrating that they are headquartered in the UK, majority owned or controlled by UK electors or citizens and have generated sufficient revenue to cover the donation.

For the first time, candidates will also be required to prove that any campaign funding received before they become a candidate has come from legitimate sources.

Candidates will also be required to declare donations above £2,230 received prior to officially becoming a candidate, improving transparency even further. At present, donations received before the regulated election period are not covered by the same requirements, meaning funding from illegitimate sources could go undeclared and later be used to support a campaign.

This builds on the measures announced in March as part of the government’s initial response to the Rycroft Review, including the hard cap on political donations from overseas electors and a ban on crypto donations. The changes being made today will accept the rest of Philip Rycroft’s recommendations in full. 

The major reforms will be taken forward through as amendments to the Representation of the People Bill, which returns to the Commons for Report stage next week [w/c 13 July]. 

The government has been clear that we will act decisively to defend the UK’s democratic system from malign influence and the measures will safeguard the integrity, transparency and resilience of elections and political finance for years to come.