Risk of repeat of riots if UK unable to tackle hostile foreign state interference from Russia, China & Iran, ministers warned

Cryptocurrency donations will be banned in the UK from today in a bid to tackle hostile foreign state interference from Russia, China and Iran.

And there's a risk of more riots on UK streets if they don't properly defend democracy, ministers were warned by an official review.

Housing and Local Government Secretary, Steve Reed confirmed that he would take forward a number of the recommendations of a stark review to our electoral system, commissioned in the wake of the Nathan Gill scandal.

The former Reform leader in Wales was jailed for ten years for taking bribes from Russia - prompting the PM to order an urgent review into threats to our democracy.

The Prime Minister told MPs the Rycroft review set out the "stark threats posed by illicit finance".

He said: "We will act decisively to protect our democracy.

"That will include a moratorium on all political donations made through cryptocurrencies."

The move will only impact the Reform party, who are the only mainstream political party who accept donations in this way.

He Reed told MPs during a statement in parliament this lunchtime: "This moratorium will remain in place until the Electoral Commission and this Parliament are satisfied there is sufficient regulation in place to ensure full confidence and transparency in donations being made in this way subject to parliamentary approval."

Former permanent secretary, Sir Philip Rycroft has today recommended a string of suggestions for how to beef up our systems and better protect it from malign interference.

But he concluded that he did not think the 2024 election saw foreign interference.

The report said: "This country faces a persistent problem of foreign interests seeking to exert influence on, and to interfere in, our politics.

"Too much of this is malign and seeks to sow distrust and exacerbate divisions in UK society, with the ultimate aim of undermining confidence in our democracy."

The government says it will temporarily pause all donations made through cryptocurrency, after the review said it could be used to funnel donations with no way to work out where or who they came from.

Political parties will have 30 days to return any donations after today - or risk criminal proceedings.

Other recommendations included a cap on foreign donations of up to £300,000, a specialist police unit to look into matters of electoral law, and for all political parties to have a code of conduct to prevent rogue donors.

And donations from big corporations should be capped at their pre-tax profits in the UK to prevent "game-changing" donations, the report also suggested.

Sir Philip said it was impossible to know how much foreign money has "leached" into British politics, and insisted that any action must be seen to be robust by the public.

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If trust in democracy is damaged by external actors, he warned there could be a repeat of the riots seen in summer 2022.

Sir Philip said: "The consequences of that could be extremely serious indeed.

If people lose trust in the political process they will seek to resolve their problems outside the political process and that would be extraordinarily damaging to us as a country and you see some signs of that already.

"So what happened around the Stockport riots and so on.

"So sustaining confidence in our democratic processes, people have faith in our political process to resolve the issues that we face is absolutely fundamental.

"And where you have hostile foreign states seeking to undermine that trust, it stands to reason that's got to be a priority for our regulatory authorities, Ofcom included."

The report warned: "Loss of confidence could in turn lead to a rapid downward spiral in the integrity of our democracy as people seek other means to settle political differences.

The former permanent secretary urged regulator Ofcom to take robust action to crackdown on interference content - including AI, deep fakes and bots - as part of their remit under the Online Safety Act.

So far, Ofcom have not taken steps to do this, he noted in the report, calling on them to wake up to the threats posed.

He says: "Hostile foreign state interference is a priority offence under the Act and enforcement of the regulations should be a priority for Ofcom too, but Ofcom have not yet taken any enforcement action."

Sir Philip also warned that there was a direct link between UK politics and state actors - including Iran.

Some studies have revealed that the number of comments around Scottish independence dropped by around a quarter online during Iran's internet blackout earlier this year.

The Chair of the Joint Committee on the National Security Strategy, Matt Western MP, said: “I welcome the publication today of Philip Rycroft’s review into foreign interference in UK politics.

"With public trust in politics worryingly low, we cannot allow the perception of foreign money distorting our politics to continue. The review published today is an important step in getting ahead of the problem before dirty money damages our democracy.

"The Committee’s recent report on political finance called for the Government to ban cryptocurrency political donations until secure rules can be developed, tighten rules around corporate donations and toughen up penalties for wrongdoing.

"I therefore welcome some of Philip’s suggestions and look forward to considering his review in detail.”