‘Election finance laws are on the agenda – now is the moment for ambition’

Today, the Electoral Commission revealed the price tag of General Election 2024: £95 million. Also today, the UK Government introduced their new Strategy for Modern and Secure Elections, which seeks to tackle dangerous loopholes in political party funding.

So, election finance laws are back on the agenda. As the printer paper cools down, anti-corruption organisations will be scrutinising the detail of the strategy and responding accordingly. New controls on company donations will be interesting to follow, as will new donor-due-diligence requirements for political parties.

As this debate continues over the summer, there are various reasons why we desperately need changes to election finance laws, but here are four to consider: national security, rebuilding trust in politics, a warning from the United States, and timing.

National security

First – British democracy faces real threats from hostile foreign actors seeking to influence our politics through dark money. Foreign adversaries are actively targeting democratic institutions worldwide, and the UK is no exception.

In an era of heightened geopolitical tension, our weak political donation rules create dangerous vulnerabilities. When almost £1 in every £10 of political donations comes from unknown sources, we’re essentially operating blind to potential foreign manipulation. Foreign influence doesn’t just come through traditional espionage – the use of shell companies, unincorporated associations, and anonymous cryptocurrency donations all present huge security risks.

The government’s new strategy recognises this and we can be cautiously optimistic that we are taking positive steps to close these loopholes.

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Rebuilding trust in politics

Second – as the Prime Minister says in the first sentence of his Ministerial Code: “Restoring trust in politics is the great test of our era.” Labour’s manifesto promised to restore public service to Westminster, uphold democracy, and strengthen rules around donations to political parties.

When mega-donations dominate public policy decisions, ordinary voters feel voiceless and trust in the entire system collapses, contributing to the 2024 GE having the second lowest voter turnout since 1918, with only 59.9%. In 2021, 1 in 4 voters believed donors to political parties had the most influence over public policy decisions made by the Government. Barely 1 in 20 believed it was ordinary voters.

Voters can see that wealthy interests have outsized influence while their own voices go unheard – and they’re absolutely right to question this. Currently, 81% of UK millionaires believe extreme wealth buys political influence. Unfortunately, the government strategy does not seem to take issue with our overreliance on a few big spenders.

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A warning from the United States

Third – the United States serves as a warning to the dangers of oligarchic democracy. With unlimited corporate spending, super PACs and billionaire oligarchs like Elon Musk essentially buying government roles, American democracy has become a playground for the ultra-wealthy at the expense of democratic integrity.

Despite our close alliance, the British public has always been horrified by this system where money talks louder than voters. We must not let Britain follow this path. If we don’t act now, we risk opening a Pandora’s box on political donations, with parties chasing major donors, rather than listening to the concerns of the British public. Stronger rules are our insurance policy against that future.

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Timing

Fourth – timing. The moment for change is now. Not only are our political parties in a permanent campaign and already planning for the future, but as we get closer to an election, another Bill on this topic is also unlikely.

New threats, from crypto-based donations to AI-driven disinformation, are already here. The UK is urgently looking to ramp up its traditional defence capabilities in the coming years – the Elections Bill provides an opportunity to match this ambition for the defence of our cornerstone values: our elections and democratic processes.

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‘Now is the decisive moment for action to protect our democracy’

For the major changes that we need, the UK Anti-Corruption Coalition wrote an open letter to Democracy Minister Rushanara Ali MP on 3rd July advocating for comprehensive reforms addressing current loopholes in political finance laws. The Bill represents an important opportunity to strengthen democracy in the UK, restore trust in our politics, and secure the integrity of UK elections in an increasingly volatile world.

Our elections are left dangerously exposed to foreign interference and the influence of mega-donations raises serious questions about the power of money in British politics at a time when public trust in democratic institutions is already at an all-time low. Now is the decisive moment for action to protect our democracy.

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