Author: Pravar Petkar, Head of Strengthening Democracy Desk
Who do politicians work for? Modern democracy relies on decision-makers being accountable to the people they govern. Yet political parties seem increasingly in thrall to those with deep pockets, ranging from well-heeled private donors to the titanic influence of Elon Musk on Donald Trump’s re-election campaign. The risk to British democracy has been laid bare by rumours that Musk was planning a $100 million donation to Reform UK. In this climate, the UK must urgently introduce a monetary cap on donations to political parties and needs more extensive public education for citizens on political party funding.
The holes in the current framework
The UK’s regulatory framework for donations to political parties is relatively relaxed. There is no formal cap on how much any donor can donate to a political party. Donations under £500 need not be reported, whilst those over £11,180 must be by law, a threshold increased from £7,500 in early 2024. The transparency of one’s financial transactions is the only real limit in play. Transparency is also having to do more work than ever before: the outgoing Conservative Government increased the general election campaign expenditure limit for each party from £30,000 to £54,010 per constituency, alongside other limits relating to candidates’ expenses. If parties and candidates can spend more, fundraising efforts – and larger and larger donations – will only increase. As Tom Brake has recently pointed out, this situation is exacerbated by donations made by unincorporated associations. These bodies range from golf clubs to dining societies and need not report their finances in the way charities or companies do.
In comparison to the UK’s European neighbours, state funding for political parties is minimal, producing a reliance on private donations. Following the 2024 General Election, just under £7 million was distributed to opposition parties in the House of Commons in ‘short money’ to support parliamentary business, travel costs and the Leader of the Opposition’s office. An additional £1.9 million was disbursed in policy development grants across all political parties in the 2023-24 financial year. In Germany, by contrast, the cap on state funding of political parties in 2024 was €219 million, with private donations a much smaller financial source.
Despite this, the UK is better-off than some other major democracies around the world. For the last 15 years, since the famous Citizens United decision, corporations in the USA have been able to spend unlimited amounts on elections, since any restrictions are considered by the US Supreme Court to violate free speech rights. Meanwhile, India’s Supreme Court declared in February 2024 that it was unconstitutional for political parties to receive donations through anonymous promissory notes termed ‘Electoral Bonds’. Whilst this protects voters’ rights to information in form, it may also increase the number of unreported cash donations to parties, thus making Indian democracy more opaque.
Why Musk’s donations are a new kind of threat
In this landscape, Musk’s donations – as well as those of any other social media giants – raise a new kind of threat for democracy. All political parties need some form of funding, whether from private donors or the state, to finance their campaigns and provide a space for those with similar political views to assemble and exchange ideas. Yet major private donors can also leverage their financial hold over parties to secure their desired political outcomes, or simply turn a profit.
Musk poses not only this threat, but one that strikes at the heart of any democracy Increasingly, social media platforms such as X not only aspire to be the public sphere, but are it. Research by Ofcom in 2023 shows that 47% of UK adults use social media for news, rising to 71% of 16–24-year-olds. Those like Musk and Mark Zuckerberg who own and control social media platforms have almost unrestricted power to control what ideas can be exchanged in these public spaces, with no accountability to their users or to government. When this power is turned towards the interests of one political party, democracy is eroded from within, because electoral politics is no longer a level playing field. Musk’s role in government following Trump’s re-election should raise alarm bells here, as should his recent appearance at an Alternative für Deutschland (AfD) rally ahead of the German federal elections in February. Because of this, policymakers cannot treat the owners of social media companies as they would any other private donor: more extensive restrictions and transparency requirements are needed because such donations open up multiple paths to influencing elections.
A cap on donations is needed
Discussion about a cap on donations to political parties has intensified in recent weeks in the UK. In an Opinium poll carried out for pressure group Unlock Democracy, two-thirds of the 2,000-odd respondents across parties supported some limits on donations. The Leader of the Liberal Democrats, Sir Ed Davey, raised a question in Parliament on the matter on 8 January 2025, reiterating a position from his party’s 2024 spring conference. Most recently, Liberal Democrat MP Manuela Perteghella introduced a Bill into the House of Commons on 12 February 2025 to impose a fair cap on donations and outlaw foreign donations. Since Musk might use a British subsidiary of X to make a donation, a cap is the most straightforward option for tackling the challenge he poses: it will ensure that nobody – Musk or otherwise – could donate $100m to one party in one go.
Where that cap is set is another matter entirely. Recent commentary for The Constitution Society argues that there is no ‘silver bullet’ for reforming party funding: any cap on donations would “significantly reduce party income and expenditure”, to the detriment of parties’ ability to engage the electorate and hold governments to account. Although political parties today are often viewed as tribal fronts, rather like rival football teams, a political world made up solely of independent politicians would lack the infrastructure to regularly bring elected politicians at all levels and the public together to campaign around shared values, principles and policies. Despite this, there is no good democratic rationale for donations on the scale of that rumoured to be considered by Musk to Reform UK. An immediate cap around the £50,000 mark would head off this threat. Yet this should not be the end of the story: a wider public debate is required on whether a lower cap should be set. Unlock Democracy, for example, proposes £5,000 per year per donor, but a cap at this level will inevitably result in greater monetary contribution from members of the public to keep parties afloat, whether through direct donations or state funding.
More extensive state funding would limit the influence of private donors and could be justified on the grounds that political parties are a public good, as they facilitate free assembly. Moreover, state funding can ensure electoral competition by supporting a wide range of political parties. This creates a more level playing field, by evening out the impact of large private donations to larger and well-established parties. However, individuals should retain the freedom to choose which party they fund, or whether to fund any of them at all; citizens are otherwise coerced into giving their money to the state to fund political parties whose views they may find distasteful.
More extensive public education on donations is required
To ensure both that individuals retain freedom over whom and what to fund, and that political parties can continue to operate, another solution is needed. Citizens must be enabled to form their own judgements on whether to donate, and to which parties. This will require public education campaigns about how political parties are funded. Although the Electoral Commission publishes quarterly reports of donations made on its website, it is less clear that members of the public know about this, or are even encouraged to explore the data available. A combination of formal education and public awareness campaigns on how parties are funded, and where individuals can access information about funding, can equip citizens with the knowledge to hold parties to account. This citizen accountability can complement the legal limits that may be introduced in the Political Party Donation Limits Bill. This will enhance current efforts to ensure transparency and provides a firm basis for voters to realise their right to information that is fundamental to freedom of speech across the world.
The Government must patch up this leaky boat during this Parliament
Although Musk may have rowed back from his intentions to donate $100m to Reform UK, the UK’s political party funding framework is not shipshape enough for the present day. With over four years until the next General Election, there is ample time to develop a robust set of regulations and policy measures, beyond the much-needed immediate cap on donations. Yet reliance upon the law is not enough: ensuring the capability of voters to hold political parties to account must be at the heart of these changes.
