Russia has been attempting to meddle with western democracy for years, but successive governments led by Boris Johnson and others have insisted that the UK’s electoral system can withstand its influence.
That argument was recently blown apart by the conviction of former Reform politician Nathan Gill, jailed for 10 years for accepting bribes to advance Russian arguments.
And now Steve Reed, the cabinet minister responsible for elections, has admitted there are worries that the UK’s “firewall” against foreign interference may not be strong enough as he ordered an independent review.
The decision is clearly partly motivated by the chance to score political points against Reform UK over its links to the Russian bribe case. And yet there is no doubting the reality of the threat, even if it has until recently been ignored.
There has been a sense of denial about the risk of political funds from unclear sources – known as “dark money” – among the two main parties, fuelled partly by self-interest as fundraising chiefs are reluctant to curb future sources of revenue.
But there appears to be a dawning realisation now for Labour that the issue is urgent, with Nigel Farage’s party openly seeking money from offshore sources such as Monaco-based donors, welcoming cryptocurrency donations and making efforts to woo high-net worth individuals with policies friendly to non-doms.
Reed’s acknowledgement that the UK system is vulnerable comes as absolutely no surprise to the myriad experts who have been warning for so long that Britain’s political financing system has more holes than a sieve.
There are numerous potential sources of dark money. It is very difficult to know the origin of smaller donations flowing into unincorporated associations. Any UK company carrying out business can donate money without any concern about how they are financed. And it is hard to check “crowdsourced” donations that may include large sums being broken down into many smaller contributions.
UK nationals living abroad for years are still able to make donations despite it being harder to verify the source of their funds. And in the last year, the government has stood by while political parties – namely Reform UK – said they would take contributions in cryptocurrency, which is particularly hard to trace.
Some of these loopholes are set to be dealt with in the government’s forthcoming elections bill, but all of them could easily be closed if there were the political will to lower the threshold for declaring donations or impose a cap on overall sums to limit excessive influence by single parties.
However, another major, overarching problem is the fact the Electoral Commission was weakened by the Conservatives. There is also a huge onus on parties, with sparse resources, to self-police and conduct their own due diligence, with new requirements to carry out “know-your customer” checks.
The Electoral Commission is largely independent, but it remains under the direction of the government of the day, which sets its strategic direction. Its powers were severely curtailed in 2022, and it no longer has the ability to propose its own criminal investigations.
Strengthening the powers of the watchdog, reversing Johnson’s efforts to curb its oversight, would be a major step towards countering efforts by Russia, China or other foreign powers to meddle with British democracy.
Keir Starmer’s government does now appear willing to take action.
The test will now be how far it is willing to go to eradicate money of unclear origin from political donations to parties and politicians as well as tackling the prevalence of gifts and hospitality aimed at influencing individual lawmakers.
Some within the main parties will be squeamish about limiting their own money-raising powers before an election, but the chance is there to protect the system from future malign influence.
“It’s clear there are a range of actors seeking to buy influence in our democracy, including foreign governments, and for relatively small amounts of money,” Rose Zussman of Transparency International points out.
“Without limits on how much any individual or organisation can donate, and in the context of increasingly high spending on election campaigns, political parties are becoming ever more reliant on a small pool of wealthy donors.”
Tom Brake of Unlock Democracy, an advocacy group, adds: “So long as foreign billionaires can still funnel vast sums into our politics via UK-based companies, we will remain vulnerable.”
In parliament, Reed made the bold claim that he wanted to get “dirty money out of British politics” for good. If the government seizes the opportunity for serious and lasting reform, going much further and deeper than simply banning cryptocurrency donations, it would be a huge legacy in terms of safeguarding British democracy.
