Lord Sikka (Lab)

My Lords, this Bill does not end the power of the rich to hijack democracy. Corporations and the super-rich do not donate; they invest and get a return for themselves and their class. Numerous laws are bent to advance their interests. The result is that 1% own more wealth than the bottom 70% of the population combined. Private equity bosses are taxed at lower rates than wage earners. No one is prosecuted for the Post Office, Grenfell or other scandals. Frauds at HBOS remain uninvestigated. Government contracts are showered on donors with little transparency. The Autonomy Institute reported that, for every £1 of donations since 2000, public contracts worth £1,294 have been given to the same set of companies. No party really wants to end the political auction that people see every day. The £100,000 cap on donations by an overseas voter does not dismantle the political bazaars. It can be bypassed through donations by connected persons. There is no way of knowing whether the money came from Musk or Mafia. Thailand-based Christopher Harborne has handed £61 million to Reform since 2019. He was named in the Panama Papers. Ben Delo has handed £44 million to Reform and has a criminal conviction in the US. He was sentenced to 30 months on probation and fined $10 million. Will the Government ensure that individuals with criminal convictions cannot fund political parties? The Government have promised to implement the Rycroft review proposals on corporate donations, but they will not curb regulatory games. I will give just one example. Some years ago, £5,137,785 was donated to the Conservative Party by Lord Ashcroft, its one-time Treasurer and a Treasurer with a non-dom status. The money originated from Stargate Holdings, a company controlled by Lord Ashcroft and registered in Belize. Complex transactions were used to conceal the origins of the money. The money passed through a series of UK companies—Astraporta UK Ltd and Bearwood Holdings Ltd—and was then paid to the Conservative Party by Bearwood Corporate Services Ltd; none had sufficient profits to cover donations. The small companies used in this chain did not have to publish full sets of accounts, thereby making it difficult for anyone to carry out what we now call “know your donor” checks. The Rycroft review has now recommended that corporate donations should be based on post-tax profits. This is also highly problematic, as there is no statutory definition of profit. Profits for accounting, tax and management purposes are not identical. Accounting rules are malleable, and scandals show that profit can be manufactured through intra-group transactions. That happened at Carillion and is happening at water companies. Companies can have profits but be cash poor. Does that mean they will borrow money to make political donations? That is what this legislation will result in. Currently, the Government are consulting on deregulation of corporate reporting, which will make it impossible for anyone to carry out the “know your donor” checks. I hope that someone in the Government will connect the dots. Finally, there are two ways of cleaning up UK politics, which has to be the ultimate aim of the Bill in front of us. We need a ban on political donations, with parties funded by modest membership fees and possible state money to help them—they are already getting some Short money—or all donations must go to a central fund administered by the Electoral Commission. The money would then be divided in accordance with the share of votes secured by a party. This way, corporations and the super-rich could not directly fund a political party and buy political influence, and we would finally be free of the iron grip of corporations and the super-rich on our politics.