Lord Wallace of Saltaire (LD)

My Lords, in the light of the mega donations we have heard about to Reform in the past week, I start by emphasising the difference between liberal democracy and popular democracy—or illiberal democracy, as Viktor Orbán and others call it. Liberal or constitutional democracy recognises that democratic processes are open to abuse and require rules and regulations to ensure that all citizens, regardless of background or income, are able to play a positive part. Transparency in campaigning and finance is vital to maintain public trust. Safeguards against foreign interference, the buying of votes or dominance of the media by the wealthy are justified to ensure acceptance of the outcome and to prevent corruption. Popular democracy dismisses all this. Populist leaders claim that they understand what the people really want and that regulations are there only to protect the establishment. If they spend money from doubtful sources in huge amounts, that is justified by the need to counter the weight of the mainstream media and the power of the established elite. If others question their arguments, they dismiss reasoned argument as fake news. None of us should take our democracy for granted. In the 2024 election, less than 60% of our citizens turned out, and some 6 million to 8 million citizens were missing from the electoral register. Public disillusion with Westminster politics and with democracy itself is dangerously high in this country. Liberal Democrats argue that everything we put in this Bill must be geared to rebuilding public trust in our democratic institutions and encouraging every citizen to play an active part. Paragraph 84 of the Bill’s Explanatory Notes declares: “The Government wants as many people as possible to engage in the United Kingdom’s democracy”. Liberal Democrats share that objective and aim to amend the Bill to go further in pursuing it. Thankfully, Hungary’s experiment with illiberal democracy, with the massive corruption that went with it, has now been defeated, but we are watching democracy in the USA being undermined by gerrymandering, challenges to voting lists and attacks on the impartiality of election administrators, as well as by enormous flows of money. I hope that most of us in this House share a deep concern about current developments in the US and a commitment to sustain our liberal democracy against the threats it now faces. In a previous debate, the noble Lord, Lord Hannan, argued that the right to spend money in political campaigning was a part of free speech, repeating the argument the US Supreme Court made in overthrowing congressional limits on campaign funding. The noble Lord, Lord Frost, who will be speaking in this debate, dismissed the Rycroft report as “absurd”, which is to say, “fake news”. Money in politics is vital to political campaigning, but large donations—millions of pounds or dollars—distort and corrupt the democratic process. Commentary on this year’s US congressional elections frequently starts by telling us which candidate has raised the most money, as a key factor in whether they win or lose. We will support extending spending limits of campaigns and imposing clear conditions and limits on donations to prevent our democracy sinking into a similar funding race. I find it striking that populists who campaign to defend British sovereignty get so much of their money from sunny places abroad: Gibraltar for the Brexit campaign, and Thailand, Hong Kong, Montenegro and beyond for the Reform Party. It is gross hypocrisy to claim to represent the sovereign voice of the British people when they depend on shady money from sunny places. Some of the changes in this Bill aim to reverse the damage inflicted in the highly partisan 2022 Elections Act. The noble Baroness, Lady O’Neill of Bexley, has repeated the argument that there was an established convention dating from 1948 that changes in election regulations must be subject to consensus among the parties involved. I was the Liberal Democrat leader in 2022, and I remember no consultation from the Conservatives whatsoever. If there were such an established convention—I asked to see any evidence of this but was told they could find none—the Conservatives decisively broke it during the passage of that Act. I hope we all now behave better than that. The Conservative Party must own and admit the damage done to our country’s democratic institutions and to public trust under Boris Johnson as Prime Minister. It must own and admit its own shortcomings in allowing Russian money and influence to penetrate deeply into the party. I have just read an article by Dominic Grieve, then chair of the Intelligence and Security Committee, on Boris Johnson’s determination to limit the investigation of major donations to the Brexit campaign, as well as to delay publication of the ISC’s Russia report until after the 2019 election and to redact much of the damaging detail. Some of those involved in promoting the Conservative Friends of Russia and cultivating Russian donors now sit in this House. Rycroft distinguished between money that flowed directly to political parties and efforts to shape “the wider influencing environment”, including “attempts to create division and distrust among the wider public”. Direct donations may seem easy to regulate, but I recommend chapter six of George Cottrell’s recent book, How to Launder Money, which lists a variety of ways to donate to a politician or party without being caught: from high speaking fees and book deals to paying travel expenses and funding associated foundations and think tanks. As a fundraiser for the leave campaign and now for Reform, he is an expert in this. Oddly, he does not include paying extraordinarily high fees for TV work in the way that the loss-making GB News subsidises Nigel Farage. The wider influencing environment is a grey area in political regulation: non-party campaigners are hard to define; political movements that are not parties are not covered; and social media has become a powerful form of influence. Money from abroad is hard to trace. It is not only Russia and China that seek to influence UK campaigning; the Hungarian Government, under Viktor Orbán, reportedly provided almost all the funding for the Roger Scruton Legacy Foundation to support James Orr’s promotion of Christian nationalism. The Times last week reported that Daniel Pipes’ Middle East Forum, a strongly anti-Muslim American organisation, was funding both Tommy Robinson’s movement and Daniel Thomas’s Patriotic Platform that organised the demonstrations in Dover and Portsmouth. The significant surge of American money into British politics, now also from the Trump Administration itself, threatens to upset the balance of our domestic debate. The Bill may not be able to close all these loopholes, but we must try. This unregulated flow of money to the fringes of party politics is not entirely new. I recall many years ago a former treasurer of the Conservative Party telling me that when potential donors wanted to remain anonymous, he would suggest they donate to a friendly think tank instead. But it has become a more contentious issue as social media and private polling have opened up more space for unobserved funding to tip the balance of the political debate. The Rycroft Report’s recommendation on think tanks is clear, and we strongly support it: “The Government, working with the Charity Commission as appropriate, should ensure it has the capability to monitor the think tank landscape … to make transparent the engagement of foreign-funded think tanks in the policy process”. I look forward to the speech from the noble Lord, Lord Young of Acton, on this. Others on these Benches will examine the proposals on regulation of social media, on intimidation and abuse of candidates, on moves towards automatic voter registration and other aspects of the Bill. They will also address the deficiencies of our antiquated voting system, now that we have five to six parties competing in national and local elections. Noble Lords may not be aware of the magnificent Liberal Democrat victory in a recent Cornish by-election, in which the victor won just under 19% of the vote. Liberal Democrats welcome the extension of voting to 16 year-olds, as a contribution to building participation and trust in our democratic institutions within the younger generation. But it will need to be supported by an expansion of civic education in our schools, well beyond the very limited space provided within our current curriculum. I have talked to a number of secondary schools, and I am shocked by how little they are taught about democracy or our political institutions. We will look to the Minister and others for assurances that changes are now under way. Effective regulation, I hope we all agree, is a vital part of constitutional democracy. We on these Benches will bring forward amendments to adjust Britain’s structure of regulation to the growing domestic and foreign challenges we face.