Musk’s $100m to Farage will break our democracy

Keir Starmer needs to fix Britain’s broken electoral laws now - if he doesn’t, we will all suffer the consequences

We can’t say we weren’t warned. We have known for years how British election law is broken and ripe for abuse.

Journalists and experts - in this newsletter and elsewhere - have shown time and again how easy it is to pump dark money into our politics.

Successive governments have done nothing.

Now the question for Keir Starmer is whether he can turn a crisis into an opportunity. Because if reports that Elon Musk intends to donate $100million to Nigel Farage are accurate, then we are on the cusp of a real crisis for British democracy.

Musk’s donation to Farage’s Reform will be “a “f*** you Starmer payment” with a view to transforming British politics,” according to today’s Sunday Times.

“It would also open the door to near-limitless anti-government advertisements from Reform.”

The craziest thing about this story is that it is all perfectly legal.

Musk is a South African-born billionaire who lives in the US. Our election laws are explicitly supposed to prevent foreign donations like this - but anyone, from anywhere, can get around the rules if they donate through a UK registered company. (A wheeze Robert Jenrick knows well.)

If Musk’s donation does materialise it will likely be made via the British branch of X/Twitter, the Sunday Times reports.

Trump’s right-hand man can pump as much Reform content as he wants onto this social media platform. Britain’s election laws, written for the analogue age, have barely changed since the digital revolution.

Even if Farage and Musk break election law, why would they care? The maximum fine the Electoral Commission can impose is just £20,000. That’s not even small change to the world’s richest man.

I’d admit I am incredibly frustrated writing this. I wrote an entire book five years ago that showed time and again how poor our election laws are. I and countless other journalists, MPs, lawyers and experts have been pointing to these obvious problems again and again. None of them are news.

With grim irony, the Musk donation story came out on the same day as new analysis from our friends at Transparency International highlighted how loopholes in the law are allowing “dark money” to infiltrate UK politics. Almost £1 in every £10 donated to parties and politicians comes from unknown or dubious sources.

“Cash from companies that have never turned a profit, from unincorporated associations that do not have to declare their funders, and banned donations from overseas donors via intermediaries are all entering the system,” the Observer reports.

Keir Starmer came into office promising to “end the chaos of sleaze” but has done almost nothing to reform the broken systems that are supposed to protect our democracy. His King’s Speech had no mention of reform of electoral law or the lobbying act.

A Labour MP once told me that even though the system was broken, every party thought they knew how to make it work for them. When I reported a long piece on Labour and lobbyists recently, a well-placed source told me that Labour donors had put pressure to block a proposed cap on political donations.

Privately, many people in and around the Labour party express their frustration at Starmer’s failure to understand how important these issues are. “He just doesn’t seem to get it,” is a common refrain.

I have frequently argued that it is Labour’s self-interest to take the money out of British politics. That’s still true. But now, with the advent of Musk, doing nothing poses an existential risk to our democracy.

We all saw how Musk pushed US election law to the limits and beyond in the run-up to Trump’s election last month, using his vast fortune to try and tip the scale in key battleground states. His deep coffers also provide a formidable warchest ready to squash any potential Republican opposition to Trump’s excesses in office. It is hubristic to imagine all this couldn’t happen here.

But there is good news. There is action - pretty straightforward action - that the government could take to stop all this happening here.

First, and most crucial, Starmer needs to reverse his position and cap political donations. Currently anyone can give an unlimited amount to politics. This makes a mockery of democracy. The cross-party Committee on Standards in Public Life has recommended a cap of £10,000 per individual donor.

British politics used to run on far less money than it does now, it can do so again. Small donations could also be match-funded to create a much broader, more diverse pool of donors that are unlikely to capture policy platforms. So no more VIP Covid lanes for donors…

This is easily done and has little prospect of being successfully challenged. Unlike the US, we have no history of pro-dark money Citizens’ United-style legal judgments overriding legislation.

At the same time we need stricter reporting requirements for donations, including lowering thresholds for disclosure - which the Conservatives massively increased in the run-up to the general election. This would do a lot to mitigate the risk of dark money.

As Musk shows, we need to tighten rules to prevent indirect foreign influence that would protect the integrity of UK elections​.

How? Well, I would stop companies from being allowed to donate to politics altogether. Companies were only made permissible donors because, in the era before donations had to be publicly declared, big firms gave a lot (particularly to the Tories). But now with open records, almost no large companies donate and the loophole has become a route for all manner of dodginess, not least donations from overseas.

Finally, the Electoral Commission needs to be strengthened. Boris Johnson stripped the elections watchdog of its independence. This needs to be returned. The commission should be given greater investigatory powers and the ability to levy increased fines.

Starmer famously doesn’t want to spend money. All of these changes could be made almost for free. (Only the Electoral Commission recommendation would need any cash, and even then it would be small beer.)

The alternative is doing nothing, and watching British democracy’s complete capture by Musk, his fellow travellers, and who knows who else in the future. That’s no choice at all.

That’s why here at Democracy for Sale we are going to keep revealing how dark money and vested interests are infiltrating British politics. We will keep digging, and investigating, and talking about how this broken system can be fixed. Before it really is too late.

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