Political Party Finance and the Electoral Commission

My Lords, at the core of any western liberal democracy is trust. The citizen must trust the institutions that make up their democracy and the people within those institutions. They must trust also that the oversight arrangements will work and, if someone or something breaches that trust, that there will be a mechanism to put things right. Within our democracy, and in common with other western liberal democracies, there will always be questions about political party finance. Political party finance in the UK is regulated by the Electoral Commission, which I will come back to shortly. Trust in the ruling party in Scotland is at a very long-term low. There is the First Minister who could not see a huge and shiny motor home outside her mother-in-law’s house; the refrain in rural Perthshire is, “She should’ve gone to Specsavers”. This is the same First Minister who believes that full co-operation with the police is hours in their custody repeating “no comment”. Another First Minister is vigorously trying to stop a Scottish Parliament inquiry into something so damaging for our democracy—with no apology for the obvious and serious conflict he has—as such an inquiry would inevitably seek to look into his actions and inactions as well. Be it a Cabinet or a board of directors, members have joint responsibility for what has gone on. Indeed, a director is personally liable for their negligence. The SNP leader claims the SNP national executive committee to be different. Members of the NEC, he feels, have no responsibility or liability for their actions and inactions over the decade of immoral mess. The judge in the case made it clear that the embezzlement was not particularly sophisticated, which only underlines how deep the NEC’s failure was, individually and collectively. The senior members of the NEC have then reached for the Pontius Pilate kit to wash away the blame. That is very wrong. The leader, former leader and long-term treasurer over the decade all owed a particular duty to their party and each year would have made the usual clear representations to their auditors. They remain the most active at trying to prevent more scrutiny that would examine their actions and inactions. This presents that horrible conflict. They do this to their great shame. The seriousness of the situation means a lot of questions must be answered. The nation has rightful questions over the short money, the policy development grants, the money raised for the ring-fenced funds that have disappeared, and simply the money of the members of the SNP. To the extent that funds have been improperly used, restitution must be made. The Electoral Commission is the regulator of political finance and I expect it to play a public and leading role in the process, but a parliamentary investigation also is more than warranted. I ask the Minister: do the Government intend to be fully supportive of any Westminster or other parliamentary inquiry to look at this very serious matter? The other recent situation that has been so damaging to our trust has been the saga of the £5 million and Nigel Farage. Mr Farage announced in March 2021 that he was “stepping back from front-line politics”. Christopher Harborne, who had been a major supporter of Reform UK Party Ltd, gave Mr Farage £5 million in early 2024. Subsequently, in mid-2024, Mr Farage stepped back into “front-line politics” in time to be elected as the MP for Clacton-on-Sea. He says that there was no need for him to report the £5 million gift to anyone. The trouble with this account of affairs is that Reform Party UK Ltd is a company, and during the relevant period there were three directors: Richard Tice, Mehrtash Azami and Nigel Farage. Nigel Farage therefore never stepped back from politics. He is a very strong personality and he sat on the small central board of his party at all the relevant times. I imagine his lawyers are fighting very hard to get him off on a technicality, but morally at least he is in the wrong. The vital thing where any regulator is concerned is to ensure that they have the correct powers, the correct duties and the correct level of resources. The Electoral Commission is rather a new body, born in 2001 following the Political Parties, Elections and Referendums Act, or PPERA. It came to life in what was already a very large and very complicated field and canon of electoral law. In the intervening years since 2001, there have been several Acts of Parliament which have amended PPERA and several carefully thought-through reports pointing to a direction of simplifying and strengthening matters. I will briefly mention one or two of the key ones. The Law Commission produced a 230-page report on electoral law in 2020. Although this was not so much about political funding, it picked up strongly on the theme of needing to simplify things. There were 106 recommendations. Recommendation 1 was: “The current laws governing elections should be rationalised into a single, consistent legislative framework governing all elections”. As we settle down to a 27th Representation of the People Bill later this year, I for one will recall this simple wisdom. The Committee on Standards in Public Life, chaired by our own noble Lord, Lord Evans of Weardale, published Regulating Election Finance in 2021. This report, with its 47 recommendations, said at recommendation 1: “The government should bring forward a bill to simplify and consolidate electoral law”. That is the second respectable institution making the same powerful and obviously correct point. Last year, in July, the Government produced a policy paper, Restoring Trust in our Democracy. The sponsoring Minister was Angela Rayner. This, essentially, was the trailing document for the Representation of the People Bill announced in the latest King’s Speech. There is, however, no mention of a consolidation Bill. I ask the Minister to comment on that. In March this year, we had the welcome Rycroft review, which was aimed particularly at the difficult issue of foreign money. The Government’ response to this review was given in the House of Commons Chamber orally the day the review was published. It was most positive on the review and announced that there would be a ban on cryptocurrency and a donations cap of £100,000 for overseas voters. Can the Minister clarify exactly how these proposals will be brought forward? It is easy to see how the trust of the electorate can be in question when the legal environment is so complex and so unclear, and when institutions such as the Law Commission and the Committee on Standards in Public Life recommend major and logical change. Before I close, I must set out at least some of the major areas where change would help, apart from a simple consolidation Bill. The first would be to decriminalise offences that are essentially administrative in nature. This would allow fines and enforcement notices to replace the full force of the criminal law. Regulators would no longer need to bother hard-pressed police to pursue wrongdoers, creating a much speedier and proportionate regime, as in most of the rest of regulated life. Secondly, maximum fines are too low. The maximum fine for a breach of political finance law is £20,000 today, and that was set in 2009. For the special regime set up for the Scottish referendum, it was £500,000, which I suggest is a more proportionate number. Thirdly, the Electoral Commission is today limited as to how it can give and receive information with other agencies and organisations. Most other regulators have statutory regimes that allow for this to happen, and the Electoral Commission needs to be put in a similar place. These things and others, I suspect, will be part of our work as a Chamber on the 27th Representation of the People Bill. In closing, I return to the importance of trust in all of our institutions and in the people who work within them. As I survey the scene, I feel that the position is most unsatisfactory, and we owe it to ourselves and our citizens to be better here. The Electoral Commission must have greater legal clarity on its duties and powers. It must have sufficient resource to be able, as an independent body, to give confidence to us all in this difficult area of political finance. We will have an interesting debate and I look forward to every speech. In the meantime, I beg to move.

My Lords, it is a pleasure to follow the noble Earl, Lord Kinnoull, and to thank him for initiating this short debate. I agree entirely with his opening remarks in relation to what has happened in Scotland. Even my guide dog would have been able to see the motor home, never mind the multiple very clever coffee makers. It is appropriate that we should be debating this before the latest Representation of the People Bill reaches us, because on the previous occasion, the 26th Bill, it was my pleasure to join with the noble Earl’s predecessor, the much-missed Lord Judge, in trying to get right what we were debating at that time—both the powers and independence of the Electoral Commission and where we were going. Much has changed in those very few years. I say to my noble friend on the Front Bench, whose fault it is not, that we did not really need the Rycroft review, important and informative as it is, to tell us that there was a major problem with bitcoin. It is remarkable that the Bill as drafted, and not yet amended on Report in the Commons, missed this out. Sadly, that is an indication of our time, where reviews rather than action, missing the point, being somewhat behind the door, and looking at the past rather than the future have been too prevalent. We have got to get real in this area. It is time to understand the absolute reality and check what is taking place now, to equip our laws and our Electoral Commission for the future. If we do not, the basic tenets of our democracy will be undermined. It is a sadness to me that one of the great donors to Reform UK—£5 million direct to the leader and £12 million to the party—turns out to have been born in Sheffield. This is not something I can be proud of. Mind you, the particular location was not in Sheffield at the time he was born, so maybe I can avoid that one. We have a situation where it is suggested, including by Rycroft, that it might be possible that people who are registered to vote—this underlines the importance of those who pay taxes—should be enabled to donate. I ask my noble friend the Minister whether we should always have a cooling-off period when people change their location or seek to renew their electoral rights, so that we cannot have somebody changing their domain and their ability to donate very large sums at a whim. In other words, we have to be much more sure-footed. In my short contribution, I think it is important that we move quickly on developing still further, and reinforcing, citizenship and democracy in our schools and colleges. As the new Representation of the People Bill indicates, we will be asked to approve that 16 and 17 year-olds can vote in general elections. It is beholden on us to make sure that they understand how our constitution works—in fact, it is beholden on all of us to take a good cool look at how our constitution works. We are not a presidency. We elect a Parliament, and Parliament then selects and puts forward a Prime Minister Only in circumstances with complicated PR would a situation arise where there would have to be a general election, because the parties that had colluded in deciding who should be the Prime Minister would have to have changed. Therefore, the suggestion at the moment that a change in Prime Minister should automatically result in a general election is a misunderstanding of how our democracy actually works. Today, it is beholden on us to send a message to the House of Commons to get on with bringing forward the Bill, to complete Report and allow us to scrutinise it, and, above all, to look to the future, not the past.

My Lords, I join the noble Lord, Lord Blunkett, in thanking the noble Earl and congratulating him on introducing this debate. It is a timely and incredibly important subject. I speak as a veteran, at various stages in a long and chequered career, of engaging in cross-party talks on party funding. The concern I have about where we are today is that the long-established convention on these matters of changing the rules on party funding—that they are pursued only after cross-party talks, with agreement being sought—seems to be being abandoned. The noble Earl made a powerful case for a much more comprehensive and simple approach to these matters, so it is a matter of regret and concern that the Government have chosen to pick a couple of cherries out of the Rycroft report and introduce them, at a relatively late stage, into a Bill already going through its legislative process. That is a breach of the approach which has been followed pretty rigorously. I recall that, in the period after the 2005 election, when Sir Hayden Phillips—sadly, now the late Sir Hayden Phillips—was asked to undertake one of these reviews, Jack Straw and I, accompanied by the noble Lord, Lord Tyrie, had comprehensive discussions, which sadly did not reach agreement. They did not reach agreement because the Labour Party had a concern that a cap on donations of £50,000 could not be applied to donations by trade unions. At that point, the whole deal that was being fashioned—which would have gone some way to re-establish trust and support in the system—fell down. There is another concern here, which is the introduction of a retrospective element into what is apparently being proposed. There is a cap to be introduced retrospectively on donations from legitimate electors—people who are entitled to vote but who happen not to be living in this country. I query the whole principle of saying that some voters are more equal than others. If there is a concern about the right of people living overseas—the noble Lord, Lord Blunkett, slightly raised this point—to have full rights in our Parliament and our democratic processes then that should be dealt with differently, but to say that for one particular aspect of participation in our parliamentary democracy they should be disadvantaged in this way seems plainly wrong. These matters should be treated very carefully indeed. There was a very good reason, first set out by Sir Winston Churchill in the late 1940s, why parties should treat these matters very carefully. If a Government are seen to be using their position to advantage themselves and disadvantage their competitors, that can trigger a tit-for-tat approach, because no party has a lifetime hold on power. At various stages during the 2005 Parliament, and during discussions that took place subsequently in the coalition Government, the approach that Jack Straw and I took was that which the then Labour Party was strongly committed to. All of this was approached by seeking consensus wherever possible. I strongly urge the Minister to take this message back to his colleagues in the other place, because this is a dangerous path.

My Lords, in following the noble Lord, Lord Maude, with whom I worked in the coalition many years ago, I am thinking of the 2022 Act, through which the Conservative Government were certainly trying to advantage themselves and disadvantage their competitors. That is one of the reasons why we have this Bill before us today, and this is a debate to which we will return. Last Thursday we debated the problem of rebuilding public trust in our democratic institutions, so it is highly appropriate that today, we move on to discuss the Electoral Commission as the guarantor of the integrity of our campaigns. To play its role effectively, the Electoral Commission needs to have sufficient powers and to be seen as independent of government. In last Thursday’s debate, the noble Lord, Lord Hannan, argued that political debate is “a free and open encounter ”—[Official Report, 25/6/26; col. 820.] in which truth will always emerge victorious, regardless of the channels of influence available to, for example, Elon Musk, as opposed to the ordinary citizen. In his speech, the noble Lord, Lord Frost, denounced “the absurd and dangerous Rycroft review … which was written … to justify unnecessary and authoritarian solutions. ”.—[Official Report, 25/6/26; col. 808.] The noble Baroness, Lady Fox of Buckley, decried “self-righteous campaigns against foreign actors ”—[Official Report, 25/6/26; col. 816.] as an effort by the establishment to distract the public from what she sees as the real reasons for public discontent. Both the noble Lord, Lord Frost, and the noble Baroness, Lady Fox, regard the BBC as a greater threat to democracy. All three dismissed the impact of money on politics. Yet all of us who have been involved in democratic elections know from painful experience how important financial resources are. Money on its own does not win elections if candidates are poor and messages weak, as Reform has been discovering. But effective campaigns carry costs. When one side is richly funded and the other is skint, campaigns are not an open and fair contest. American democracy is providing us with a test case in the importance of money in politics. The Supreme Court’s ruling against congressional limits on political donations opened the sluice gates for donors to try to buy candidates. The sums of money now involved in congressional elections are eye-watering. A presidential campaign costs more than the GDP of several members of the UN. That brings with it corruption, and foreign interference. The Republican Party and the think tanks which drive its agenda have been captured by ultra-wealthy individuals and companies which resist progressive taxation and government regulation and often deny climate change and the impact of their products on human health. Growing inequality between the extremely wealthy and the ordinary citizen exacerbates this distortion of democratic debate. Wealthy British expatriates who avoid paying tax but nevertheless want similarly to reshape British politics aim to change the balance of public debate in this country. The flow of private money from ultra-wealthy sources in America is now a greater threat to free and open debate in Britain than money flowing from Russia, China or—until the recent elections—Hungary. That money flows into third-party campaigns and partisan think tanks as well as political parties, and we will need to look at that. So far as I understood last week’s speech from the noble Lord, Lord Frost, he sees the ultra-wealthy as better able to understand and support the real wishes of ordinary voters than government, or what he calls the “British political class”. I am not sure whether that makes him an anarchist or an illiberal democrat, which is to say, an authoritarian in the style of Viktor Orbán or Donald Trump. I believe in liberal democracy and in creating, so far as possible, a level playing field for all contending opinion in public debate and, in particular, in political campaigns. For that, we need a trusted Electoral Commission with sufficient powers to punish those who break the rules. I hope that the Conservative Front Bench will admit the error it made in government in attempting to limit the independence of the commission and enormously increase campaign spending limits. Wealth piles up on one side of politics—which is not, whatever the noble Lord, Lord Frost, believes, the side of the poor or the left behind. Money is a vital aspect of political campaigning, but massive flows of money pollute politics and endanger democratic debate, and we must use the forthcoming scrutiny of the Representation of the People Bill to regulate that flow more tightly.

My Lords, I have learned much from the debate so far, and we will learn a lot from the speeches still to come. It is a particular pleasure to speak after the noble Earl, Lord Kinnoull. I am conscious that I am somewhat outside my comfort zone in speaking today, and so I will speak principally as a voter. I vote assiduously in local elections; I used to vote assiduously in European parliamentary elections, but alas no more, and I would vote assiduously in general elections were I allowed to do so. I hope the Minister will tell us what plans the Government have to enable Peers to vote in general elections in future. The need to tighten up the present arrangements for political party financing is clear, as the noble Earl, Lord Kinnoull, has said. In 2020, when Boris Johnson was Prime Minister, the Law Commission reported: “The current laws governing elections should be rationalised into a single, consistent legislative framework”. In April 2026, under the present Prime Minister, the Rycroft review recommended that there should be an annual cap on donations from British donors living abroad, a moratorium on donations in crypto assets, and that political parties’ ability to monitor donations and deal with the threat of foreign financial interference should be strengthened. That is all very sensible, and I am glad that some of the Rycroft report’s recommendations will be included in amendments to the Representation of the People Bill. Can the Minister update us on the progress of that important Bill and on proposals to strengthen the Electoral Commission, whose role in monitoring and enforcing the present system is crucial? It strikes me that, as the noble Lord, Lord Blunkett, has said, this is all becoming quite urgent. The noble Earl, Lord Kinnoull, has rightly spoken of the importance of trust in our political system and in our political parties. The Electoral Commission’s annual public opinion tracker shows that 14% of the British public thinks that political party financing is transparent. Without transparency there is no trust, and without trust we will see the rise of parties on the extremes and a dangerous lack of public confidence in our democracy, so we need reforms soon. There are alternative ways of funding political parties. France, Germany and Spain all permit public funding under certain conditions, and to do so here would not be especially innovative. There is already Short money and the policy development grants scheme, and there is free TV airtime for party-political broadcasts. None the less, I know the outcry that further public funding of political parties might cause. One can imagine the response of the Daily Mail if it were proposed by the Labour Party, and of the Daily Mirror if it were proposed by the Conservative Party. But if the choice is between the continuation of the present system, with all its failings, on the one hand, and public funding effectively monitored by the Electoral Commission on the other, I would not, as a taxpayer, self-evidently choose the former. I therefore hope that all three political parties, in responding to this debate, will make clear their absolute commitment to reformed and properly monitored political party funding arrangements that will still arguments for extended public funding.

My Lords, I welcome this debate into this important matter, but more to help put the record straight than to add further fuel to the misconception about how mainstream political parties raise funds. The noble Earl, Lord Kinnoull, raised some extremely important points, but the situations he illustrated were criminal acts in my view. The law is clear; it is the enforcement that is the problem. With the exception of my noble friend Lord Leigh of Hurley, I think I have been involved in party fundraising for probably longer than anyone in this House. I see it as my duty to encourage people to support my party. Indeed, when asked by people from other persuasions if they should donate to their cause, I always encourage that too. I do not have an interest to register. I have stopped raising money for the Conservative Party for the time being—I am afraid I found I had run out of friends and people were crossing the road to avoid me. In all my time as a treasurer, as chairman and as vice-chairman for finance for the last 15 or so years, I was never—not once—asked to influence something in exchange for a donation. All our donors wanted, and sadly seldom got, were basic conservative principles put to work in government. I see some union Barons opposite; they probably feel the same way about their own contributions. It is a totally incorrect idea that there is a nefarious influence, either from home or abroad. In fact, everyone involved in funding whom I dealt with in the Conservative Party was absolutely petrified that they might break the rules in some way. What these debates and sentiments end up doing is building further on the myth that giving to a political party is somehow a bad act. We in this House should actually be making it easier to donate, with less friction, and, frankly, it should be more applauded. Noble Lords worry about the potential for Elon Musk to make huge donations, but that is illegal for him as a foreign citizen from a foreign entity. In fact, it would be worse for us if mainstream parties cannot raise enough money to take their messages out to the electorates and are superseded by fringe parties instead. The proposals for enhancing the powers of the Electoral Commission have some merit, though. The reducing of certain classes of offence, as has been mentioned, to a civil matter is eminently sensible. The fear of good people acting as election agents or some village tombola raising a few hundred pounds should not be a matter for the police where genuine mistakes are made. This is a good move for our politics. I applaud the current leadership of the Electoral Commission for its very sensible approach to proportionality, which we should always bear in mind. What I would recommend is probably a bit contentious on my own side, but it is quite simple: we should impose a cap—I have said this consistently—on donations from any individual. It could be £100,000, £50,000 or £75,000—whatever it is can be discussed. We should, at the same time, raise the threshold of reporting to a higher level, maybe £20,000, under which only a record should be kept, and remove small fundraising events entirely from the onerous rules which reduced the level of local activity in politics. No one person should be able to buy a political party, but many people should be encouraged to engage at a sensible level and not be hounded for it. Unless we do these things, we will further denigrate our system at a huge cost to our security and future. I also think to some extent this should relate to the unions. I am very careful, and I do not like the political manoeuvring that tries to limit the power of unions to donate, because the Conservative Party has a foundation, which is also an aggregation of donations, which is a very important part of our funding. We should be aware of where influence is directed, and to suggest that the unions do not have direct policy-making power is absurd. Indeed, they have been championed in terms of how they have selected the new leader of the Labour Party and, potentially, the new Prime Minister. In any debate we should be very open about that because what we want is transparency. If we have transparency, we will have faith in politics. At the end of the day, we are missing a key point here. The real issue is to confront the fact that we now have, in this Parliament, MPs elected not on national issues but on narrow sectarian issues based on communities abroad. We have serious issues of voter fraud, family voting, intimidation of candidates and people’s trust in our elections is declining fast. We are so worried that a rich American might give some money to Restore that we are totally missing the point about where we should be directing our attention. The people trying to influence our politics from abroad are not donating to the Conservatives, Labour or the Liberal Democrats. They are running their operations from abroad in order to influence voting intentions here. We are entirely missing the point if we think that it is about donations to parties. We should use this debate not to spend our time limiting and controlling but to find ways to enlarge the support bases of our mainstream parties, showing the country that donating to a political party is a good thing, and using our powers here to encourage people to step forward and become a more meaningful part of our democracy. The alternative is state funding of political parties, which we can neither afford and I do not think we should support.

My Lords, Labour’s 2024 manifesto promised to “protect democracy by strengthening the rules around donations to political parties”— an aim shared, I am sure, by all of us from whichever party or none. Trust in politics, Parliament, our system of government and lawmaking is crucial for the maintenance of democracy. Sadly, such trust has declined and we need action to restore it. Money is one element. Donations to political parties have a whiff of buying influence or access, whether the money comes from companies or wealthy individuals. I say “wealthy” because it is big money that concerns people, not the purchase of £20 of raffle tickets, which, yes, we still do. The Government have taken action and, unlike the noble Lord, Lord Maude, I am delighted that the Rycroft review recommended a cap on donation from non-residents. It has been mentioned by other noble Lords. Most in the House will know that I have raised this issue ever since the previous Government extended from 15 years to life the period in which those who have left our shores but still have a UK passport can remain on the electoral roll. I welcome the cap, though I still cannot understand how someone who pays no tax here and does not use our services or contribute to our economy or to civil society should be able to fund a political party. They have no skin in the game, so why are they influencing our politics by financing a party’s ability to campaign and win? We have already heard from the noble Earl, Lord Kinnoull, and my noble friend Lord Blunkett about the enormous amounts of money paid to Reform by people who no longer live here. I think some of them are based in Thailand and elsewhere. That money from people who do not live here—they may have a British passport—is not good for politics or our democracy. Further than that, how can we check on the bona fides of overseas donors in a sort of “know your donor” requirement? Where did they get the money from that they are going to contribute? Is it their own or has it come from a non-permitted donor? Is the donor even alive or in prison? Are they working for another Government? It may be that they are, quite legitimately, but does it not feel a bit odd that they are then funding our political parties? How will the Electoral Commission, or any individual party, police these donations and undertake due diligence, either on the person or on the source of their money? Furthermore, how effective in terms of democracy is a cap of £100,000 a year per person? Over a five-year Parliament, a couple could give £500,000 each. That is £1 million per Parliament from an expat couple, who may not have lived here for decades and may have no intention of returning. I hope that, when the Bill arrives here, I and others in the House can persuade my Government to reduce this cap to £10,000 a year, or else make donations possible only for those who are registered for tax in the United Kingdom. My second ask of the Government is to support my Private Member’s Bill, which will have its Second Reading tomorrow. This would require any person or organisation lobbying a Minister or Permanent Secretary to be on the register of lobbyists and report such meetings. It is not a lot to ask, and it is what virtually all our equivalent democracies do. I am an old lobbyist, so I have no problem with the practice. In fact, I think when I was lobbying on behalf of Alcohol Concern, the noble Lord, Lord Frost, was arguing exactly the other case on behalf of the Scotch Whisky Association. It is quite right that we both did that, but surely that should be out in the open, because many lobbying approaches are from people with money behind them. Good government means listening to everyone affected by policies or legislation, but it should not be in secret. We should be able to see who has the ear of government. I finish by thanking the noble Earl, Lord Kinnoull, for his introduction, particularly his opening bits about Scotland. It is bad for the whole of the United Kingdom what has happened in one part of it.

My Lords, it is very good that we are having this discussion today; I want to raise two issues. The first is the role of the Electoral Commission and the second is the composition of the electoral register. On the first, I cannot entirely agree with the general approval of the direction of travel of the Electoral Commission in recent years. I worry that we are creating another quango, as we have previously in other areas, that in day-to-day practice is relatively unaccountable. We have touched on the reporting arrangements that were originally brought in for the Electoral Commission when it was created. There is not real accountability to the Speaker’s Committee; it is a financial scrutiny loop, really. Of course, the Speaker’s Committee has a government majority on it. That is why the Government that I was briefly a part of changed this in 2022, so that there was at least some attempt to pay due regard to broader strategic priorities in this area. It seems that we are now going to change this back. The problem is that somebody has to decide how the Electoral Commission acts. If it is not proper accountability from outsiders, then it is the permanent bureaucracy that runs it. The permanent bureaucracy is not, in my view, neutral, and has a very strong worldview in these areas. We saw that on the Electoral Commission during the Brexit period when the commission went after people without properly understanding its own rules, putting individuals through the wringer. We saw it—I say this at the risk of distressing the noble Lord, Lord Wallace—in the highly contentious and political recommendations in some areas of the Rycroft review. We see it in some of the actions of the Electoral Commission even today. I do not think it should be a semi-political actor and I do not think its head should be a political figure, but that is what is beginning to happen. I happen to agree with the comments by the head of the commission a few months back: “As a matter of principle, we do not think that capacity constraints are a legitimate reason for delaying long planned elections”, but I do not think it is his job to be rebuking the elected Government in these highly political areas. There are real risks here. The only thing that would be worse than government direction of the commission would be the commission becoming a player itself. It should be an umpire, not a player. The head of an electoral regulator carries automatic media authority. When he pronounces on contested questions, he lends the weight of officialdom to one side of a live political argument. Public confidence depends on visible restraint by the Electoral Commission. I worry that the powers that we are about to give it will push it in the opposite direction. On my second point, on the electoral register, we all believe and often say that you must be a British citizen to be able to donate to a political party—Ministers often say this. Actually, it is not true. The condition is that you have to be on the electoral register. As we know, the electoral register includes many qualifying Commonwealth citizens, and indeed Irish citizens, resident here, so the right to bankroll a British political party in fact goes rather further. The real problem is not the donation issue itself, but the absurdity in the first place of having large numbers of non-British citizens on our electoral register. I must say that, when I have written and spoken on this subject, I find that people are incredulous—they literally cannot believe that you do not have to be a British citizen to be on the UK electoral register. The scale is not marginal; it almost certainly runs to the millions. The Electoral Commission itself holds no record of it, but we can estimate it. In the 2021 census, there were 1 million adults here holding only a Commonwealth passport. That figure has plausibly doubled, at least, since then. The Electoral Commission’s own report in 2023 found that 66% of eligible Commonwealth citizens in Great Britain were registered to vote. This is not even properly policed. Zimbabwe withdrew from the Commonwealth in 2003 yet, more than 20 years on, its nationals can still register to vote because Parliament never amended the relevant schedule to the nationality Act. This is not a new problem. The noble and learned Lord, Lord Goldsmith, recommended in 2008 that the rules should be changed to establish a clear connection between citizenship and the right to vote and donate. That has never been taken up. This is the real scandal. If we are really worried about foreign influence in our politics, we need to stop foreign citizens voting. If people want to vote in our country, they need to commit to our country and become citizens. This anomaly has lasted too long and it should be ended.

My Lords, I declare an interest as I have been advising the charity Spotlight on Corruption on these issues. I am grateful to the noble Earl, Lord Kinnoull, for initiating this debate, since what is more important than the integrity of our electoral system? Political party finance goes to the heart of this. For many years, there has been no restriction on how much a party can receive from donors, meaning that some parties have had a game-changing advantage during elections. Electoral success should not be significantly determined by financial power, since that diminishes our democracy and risks a handful of wealthy individuals subverting political discourse and policy-making. Now that we have more parties—some at the extremes of right and left—competing for power and receiving large donations, the need to instil a greater degree of fairness in how much each party can receive and spend has never been so important. To their credit, the Government are addressing some of the issues in their Representation of the People Bill, such as the commencement of Section 54A of the Political Parties, Elections and Referendums Act 2000, which will require donors to declare whether they have received money from another individual in connection with their donation. Parties will be prohibited from accepting any donation without such a declaration. However, the wording of Section 54A, enacted—unbelievably—17 years ago but never commenced, 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 noble Baroness, Lady Hayter, touched on that point. One answer is to expressly prohibit foreign money unless earned by an elector here or abroad, since it would be much easier to establish whether money has come from abroad and test the legitimacy of that than to try to prove beyond reasonable doubt that the donor knowingly or recklessly made an unlawful declaration under Section 54A. The Government have said they will impose a £100,000 limit on donations from an elector abroad, but this does not deal with non-electors abroad. It also seems inconsistent to treat electors in the UK and abroad differently. As an alternative to a donation cap, is it time for a tighter cap on campaign spending? After the 80% increase in the spending limit in 2023, both Labour and the Conservatives increased their campaign spending by tens of millions. Set at the right level, spending limits promote fairness by preventing wealthier parties massively outspending others, and thereby reduce the risk of electoral success being influenced by financial power. The amount of the spending limit should be independently agreed with the Electoral Commission, the Ethics and Integrity Commission and the Speaker’s Committee. Fair spending limits are arguably the best way of putting political parties on a more equal footing. As Professor Keith Ewing put it, not having fair spending limits is like “inviting two people to participate in the race, with one participant turning up with a bicycle, and the other with a sports car”. The Government should also facilitate criminal enforcement, which is virtually non-existent. Despite receiving referrals from the Electoral Commission, there have been no prosecutions by the Met, no doubt because of the complexities of electoral law, lack of resources and other priorities, but there is no point having rules if they are not enforced. The Electoral Commission has the expertise in electoral law, and one option is to give it more resources to investigate offences; for example, by having greater powers to demand information from financial institutions and others, with the police retaining responsibility to refer cases to the CPS. Alternatively, as recommended by the Joint Committee on the National Security Strategy in its recent third report, we could create a new national political finance enforcement unit, staffed by secondees from across existing agencies. To conclude, election Bills do not come around 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 by tightening restrictions on political donations and spending, and by giving more powers to the Electoral Commission to investigate breaches.

My Lords, I start by thanking the noble Earl, Lord Kinnoull, for introducing this debate on such an important subject for our country. I declare my interest as a former chief executive of the Conservative Party and indeed a donor to the party for over 25 years, although not on the scale of Mr Harborne.

Shame.

A great shame. I come to this debate from a slightly different angle, perhaps, from other noble Lords. I have always believed that assisting the work of a political party that shares one’s views and values is a form of public service. As a party, the Conservative Party has always been deeply committed to the principles of the Electoral Commission and we adhered very carefully to the rules and always carried out detailed due diligence on large donors. I agree with the idea of a cap on overseas donors and with the idea of increased fines for misconduct; however, I am concerned about some proposals in the Bill which would be unfair to companies wanting to support any of our parties. I want to address another concern, which is the matter of electoral fraud, as I am concerned that some items in the Bill could have the unintended consequence of making this easier. Most political parties believe that companies should be able to donate to a political party. At the same time, we are all aware of the potential for foreign money to enter our politics, which of course can come through individuals as well as corporates. The question is: what is the test we ought to apply in practice to judge eligibility to donate? The Bill stipulates three tests—perhaps I am getting slightly ahead of myself, as it is not yet before us, but I am addressing an item that will be in the Bill. The three tests are UK-generated revenues, UK headquarters and majority UK control. I strongly agree with the last two: we need companies to be in the UK and majority controlled by UK shareholders. However, the idea that the revenue should be generated in the UK could create some unfairness for those who make some or all of their revenues outside the UK. The revenue source condition will not stop a determined shell company, but it will penalise genuine UK-owned businesses. In addition, the information on the geographic source of revenue is simply not discoverable for private companies, in effect, making it impossible to apply this new test to any company. I ask the Government to look again at this revenue source requirement. I now turn to voter fraud, which is another serious issue that should concern us all. The Bill may unwittingly open a door to fraud by allowing non-photo ID to be used as verification. It also provides for the acceptance, without proper checks, of digital ID and introduces the idea of vouching. For those who have not read about vouching, this means that voter A can tell polling station staff that voter B is eligible and has the necessary ID. These proposals amount to a significant loosening of our voter verification rules at a time when there are rising concerns at the growing number of election frauds that have been alleged over several years. If we are worried about interference in our politics, and we should be, we ought to be alive to the real risks posed by voter fraud in certain areas. In this context, it is not clear why any dilution in the stricter requirement introduced by the last Government should be introduced. This fraud risk is reinforced by the proposal for automatic registration, which will provide further opportunities for wrongful voting, as we know the electoral roll is only 84% accurate. However, I commend the Government on one important change, which is that candidates for UK general and local elections will now have to prove their identity. It seems extraordinary, does it not, that until now we have allowed people to stand for Parliament without having them prove their identity? The whole system needs to be as rigorous as possible to reinforce public confidence in our electoral system and in democracy itself. It is all about trust, as mentioned by the noble Earl, Lord Kinnoull, right at the beginning of this debate. A final concern I want to raise, and I will be very brief, is about votes for 16 year-olds. This change is manifestly inconsistent with almost all rules defining adulthood, including by this Government, and the eligibility rules of the overwhelming majority of OECD countries. In implementing the social media ban up to 16, the Government recognised the vulnerability of young people to malign influences, yet the Bill places an expectation of competency for them to vote as soon as they turn 16, which is a dangerous precedent and should be resisted when the Bill comes before us.

The noble Earl, Lord Kinnoull, introduced the debate with his usual courtesy and wisdom, but he reminded us that, as a highlander, for all the courtesy, he carries a claymore. I cannot follow him in that—I am a boring lowlander. I want to support the plea from the noble Lord, Lord Blunkett, for urgency with the Representation of the People Bill. It is worrying that it has been three months since the Rycroft report came out. I thought Rycroft was quite right when he presented it saying that he did not want to press a panic button, but he did want to ring an alarm bell. I think that it is alarming. The particular angle I want to explore, one that has not been touched on so far in this debate, is hostile state actors using agents of opportunity, gullible, greedy or malevolent, in this country. We need to look closely at the financial links that have been well documented between RN in France and Moscow and the links that are well documented between the AfD in Germany and Moscow—the Fidesz link with Budapest is of course notorious. There were reports of close involvement, interference, by Russia in the Romanian and Moldova elections. I cannot stand that up, but the reporting seemed convincing. Last weekend, I heard a senior Ukrainian say that with the war going rather better, even though the Americans have reduced their support, the worst thing for Ukraine, the thing it feared most now, was an election going wrong in a major European state. I think he was talking about France, but he might have been talking about Italy or Germany, or he could have been talking about us. What will happen if the Russians reach the same analysis, if they believe that undermining our trust in our democracy will assist in getting a party in power in a western European capital that is less willing to support Ukraine? You do not need a crystal ball; they have done it before and they know how to do it. The Representation of the People Bill has been sitting in the Commons, and we do not know when Report will be. I think that the message we should send, the message from the noble Lord, Lord Blunkett, is that we want to see it soon and to see it amended and strengthened along the lines that Rycroft recommended.