Political donations: can Elon Musk become a major backer of Farage’s Reform UK?

Nigel Farage has announced that he is in discussions with Elon Musk regarding a possible donation from the tech billionaire to support his populist party, Reform UK.

Gaps in UK election laws indicate that such a contribution could potentially be of any amount and may be allowed if set up in the right way.

Tom Gillie, a barrister who specializes in UK electoral law, stated, “The current laws were not written with a situation like this involving Musk in mind — I doubt anyone even imagined this would occur.”

How Can Musk Make Donations?

UK election regulations forbid overseas individuals from contributing directly to British political parties. Therefore, as a citizen of the United States, Canada, and South Africa, Musk would not be permitted to make a direct donation to Reform.

Importantly, the regulations permit businesses to contribute to political parties, provided that those parties are officially registered and established in the UK, and that the companies operate within Britain.

Musk oversees companies that meet these criteria, such as the UK division of social media platform X and his AI venture, xAI, which was established in the UK earlier this year.

Gillie mentioned that the organization providing the donation would need to reveal where the funds originally came from, but it would still be allowed.

Gavin Millar KC, an expert in election law, stated, "This is a clear illustration of how our existing legislation is inadequate; it’s completely nonsensical. Parliament needs to revise this law."

Millar pointed out that there isn't much legal precedent regarding this issue. The Electoral Commission may investigate the true source of the funds and consider whether the company is being guided by a donor who is not allowed to contribute.

"He claimed that it’s not accurate to describe the company as a donor in this situation."

Are There Limits On Musk's Donations?

In the UK, there are no restrictions on how much a person or a business can contribute to a political party. However, there are regulations on how much a party is allowed to spend during an election campaign.

In a general election, every political party is allowed to spend £54,010 for each constituency they compete in. So, if a party decided to run for all 632 seats across the UK (not counting Northern Ireland), their total spending limit would be £34.1 million.

Candidates are permitted to increase their spending in the last few months leading up to an election.

Political parties will face spending caps during the regulated timeframe before local elections, which are determined by the number of voters in each ward. These spending restrictions will come into effect on March 25 of next year, in preparation for the council elections scheduled for May 1 in over 30 local areas.

The upcoming local elections are vital for Farage, who is aiming for Reform UK to make significant gains throughout various regions and secure hundreds of positions, including at least one mayor's office.

There are no restrictions on spending during times that aren't designated as official election periods. This raises the concern of whether Reform UK will have sufficient time to utilize the significant donations they expect to get during those off-seasons.

How Will Musk's Wealth Influence UK Politics?

In contrast to American politics, British politics has typically been more affordable. The most significant contributor in recent times was health technology entrepreneur Frank Hester, who donated £20 million to the Conservative Party between 2023 and the general election in 2024.

Musk, the richest person on the planet, donated nearly ten times that figure—around $250 million—to Donald Trump’s winning campaign for the US presidency this year.

A significant contribution from abroad could be crucial for Reform UK, as the party has faced challenges in evolving from merely a protest group into a legitimate contender for political influence.

In recent years, Labour and the Conservatives have invested between £30 million and £60 million each year outside of election periods, whereas Reform has spent around £1 million.

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Farage aims to create a strong grassroots campaign over the coming years in areas where the party already has some backing. This includes places like Leicester, Nottingham, Lincolnshire, and Essex in England, as well as across Wales.

The party seeks to encourage locals in those regions to run for office in local and national elections, take on roles as regional leaders, hand out flyers, and collect information for the party.

"We can't rely solely on aerial campaigns anymore... we've pretty much hit our limit there," Richard Tice, the party's deputy leader, mentioned in an interview with the Financial Times last week. "The more funds we gather, the quicker and more effective our efforts will be. Quality efforts come at a cost."

The ruling Labour party stated in its official document that it aims to "safeguard democracy by reinforcing regulations regarding contributions to political parties," specifically mentioning worries about foreign influence.

On Wednesday, Downing Street announced that efforts are underway to strengthen the current measures that protect the integrity of elections in the UK.

However, a representative for Prime Minister Sir Keir Starmer stated that he would definitely not refer to foreign nationals contributing to UK political parties through British companies as a "loophole." This indicates that Labour does not plan to alter the regulations that permit these actions.

Vijay Rangarajan, the head of the Electoral Commission, stated, “We need to improve the system, and we've been urging legal reforms since 2013 to safeguard our electoral process from outside interference.”

The proposed changes involve restricting company donations to only those funds that are generated within the UK. He mentioned that this matter is currently under discussion with the government.