Contribution
My Lords, I declare an interest: I have been advising the charity Spotlight on Corruption on these issues. This is a good Bill, in my view, and the Government deserve credit for it, but as ever the question is whether it goes far enough. The noble Lord, Lord Macintosh, in an excellent maiden speech, said that money cannot buy you power but the question in my mind is whether there is a risk that, actually, currently it can. A central objective of the Bill, therefore, must be protecting the integrity of our electoral system against wealthy individuals, whether here or abroad, donating vast sums to a political party and giving it a game-changing advantage during elections. It is a particular problem in the case of illicit foreign money. Electoral success should not be significantly determined by financial power, since that diminishes our democracy and enables a handful of individuals to subvert political discourse and policy-making.
In the case of money from abroad, the Government have proposed a cap on donations from overseas donors because they recognise, in their words,
“the inherent complexity in tracing the true source of political donations made by overseas electors due to the very nature of their overseas residence”.
Yet they are doing nothing to mitigate the risks of money from impermissible donors abroad—that is, people abroad who are not electors but who make ostensibly legitimate donations via permissible donors in the United Kingdom; in other words, they are dealing with only one part of the foreign money problem, and not the main one at that. Although it is currently an offence to make a donation on behalf of an unlawful donor, such as a foreign national overseas, for the offence to apply, the money needs to be given to the donor with an agreement it will be donated. Crucially, without evidence of that agreement, it is not possible to prove that the donor was just a conduit and in breach of the law. There rarely is such evidence.
The Government will no doubt point to the commencement of Section 54A of the 2000 Act, which has never been commenced, as dealing with this problem. This will require donors to declare whether they have received money from another individual in connection with their donation, and parties will be prohibited from accepting any donation without such a declaration. But its wording is vague and too easy to circumvent in 2026. It prohibits money given to the UK donor
“with a view to, or otherwise in connection with, the making of the donation”.
However, the UK donor might have received the money from a person abroad who was not on the electoral roll and who purported to give it for a different purpose in circumstances where it was obvious to each of them, but no one else, that it was intended as a political donation.
The clearest way to address this loophole, as well as to mitigate the influence of wealthy donors based in the UK, is a wider donation cap than the one currently proposed only for overseas electors. This point has been made by several noble Lords, including the noble Lords, Lord Evans, Lord Rennard and Lord Wills. This proposal was the subject of at least eight amendments in the other place, none of which was accepted. The Government instead propose a cross-government task and finish group which would work at pace to look at this issue, but it is unclear how it could finish anything if it reports after this Bill has been enacted. Would it not be sensible to insert a wide enabling power in the Bill so that there is no need for more primary legislation to create a wider donation cap, if that is what the group recommends?
Finally, I would, in addition or alternatively, impose a tighter cap on campaign spending. After the 80% increase in the spending limit in 2023, both main parties increased their campaign spending by tens of millions. Set at the right level, spending limits promote fairness by preventing wealthier parties massively outspending others. I am encouraged by the Government’s letter of 29 August to the Electoral Commission, seeking its views on limiting the spend on campaigning, but why has the commission been given a July 2027 deadline? Surely it does not take that long to consider what lower level of spending is appropriate.
To conclude, election Bills do not come round often. The Government are addressing some issues in their Bill but not going far enough. They need to take this rare opportunity to finish the job, with a wider donation cap and spending limits, since these two measures combined would create a more level playing field and prevent the abuses currently taking place.