Loopholes Must Be Shut to Stop Foreign Money Influencing UK Politics: Watchdog

Undated file photo of the UK's Houses of Parliament in London. (Stefan Rousseau/PA)

The UK must close loopholes in its political donations rules in order to block foreign influence in British politics, an election watchdog has said.

John Pullinger, the chairman of the Electoral Commission, the UK’s independent elections agency, said there are not enough safeguards in place for the British public to have confidence that “unlawful” foreign money is not influencing UK politics.

In an article for The Telegraph, Pullinger wrote: “For over two decades, there have been laws in place to restrict who can donate to political parties.”

“But, does existing electoral law do enough to safeguard from unlawful foreign money, or to protect public confidence in the political finance regime? To put it bluntly, no.”

Currently, anyone on a UK electoral register and any company registered in the UK can legally make donations to political parties.

However, the companies do not need to prove enough money is made in the UK to cover the amount of the donations they make. This is a loophole allowing a UK-based company to use foreign money to make political donations in the UK.

Pullinger said the Electoral Commission has put forward two proposals to shut the loophole, both focusing on the recipient of unlawful money.

Firstly, the law should stipulate that parties cannot accept money from companies that have not generated enough in the UK to fund the amount of their donation or loan, so as to “ensure the money did not originally come from outside the country.”

Secondly, the UK government should require political parties to take steps to ensure that they know where the money has come from, a duty companies, financial institutions, and public sector bodies already have to fulfil under anti-money laundering laws.

Pullinger said over £240 million ($302 million) has been donated to political parties in the UK since 2019, and “proper transparency” is needed to prevent foreign political influence.

He said now is a “timely moment to kick-start action and strengthen financial checks,” as the recent spotlight on Russian-linked individuals and their wealth has sparked renewed interest and concern about foreign influence and money entering UK politics.

The Chinese Communist Party (CCP)’s influence operations in the UK have also attracted media attention this year.

In January, Britain’s MI5 security agency warned that Christine Ching Kui Lee, an alleged CCP agent who had been active in the UK Parliament, had “acted covertly” with the United Front Work Department of the CCP to interfere in UK politics.

PA Media contributed to this report.