Foreign Interference in UK Politics

My Lords, I thank the Minister for the opportunity to ask questions on this Statement and thank Philip Rycroft for his thorough review. We on these Benches have consistently supported measures to tackle foreign interference in our democracy and recognise the value of Philip Rycroft’s review. However, an independent review is not a substitute for ministerial engagement with political parties where recommendations affect the rules by which political parties compete with one another. The Government have traditionally sought broad political agreement before legislating. The threats posed by hostile states are real and growing, so protecting the integrity of our democratic system is fundamental to maintaining public confidence in our elections. Every political party represented in this House has a shared interest in ensuring that foreign interference, illicit finance and attempts to undermine our democratic processes are robustly addressed. However, we remain concerned about both the process the Government have adopted and aspects of the proposals now being taken forward. As my noble friend Lady Finn said during last week’s debate, there is a simple constitutional principle at stake. The rules governing political finance are not ordinary legislation; they are the rules by which political parties compete with one another. Governments are therefore the trustees of those rules, not their proprietors. The reason why that convention exists is straightforward: Governments should not use their parliamentary majority unilaterally to legislate on the finances of their political opponents. Once that principle is abandoned, it becomes easier for future Governments of any political persuasion to do the same and risks importing the kind of hyper-partisan approach to electoral law that has proved so damaging elsewhere. For many years, Governments of all political persuasions have recognised that changes in this area should, where possible, be developed through consultation and broad cross-party agreements, rather than imposed unilaterally by the Government of the day. That is why the Government’s approach is so disappointing. Rather than waiting for Philip Rycroft’s review to conclude, Ministers introduced the Representation of the People Bill before publishing their response. They have now chosen to cherry-pick two recommendations from that review and insert them into the Bill through significant government amendments during the stages in the other place without first engaging in proper cross-party talks. Simply informing political parties of changes after they have already been drafted is not consultation. Why did the Government not publish a consultation paper, formal or informal, or convene proper cross-party discussions before deciding to legislate? Constitutional conventions exist precisely because changes to the rules of democratic competition should not come as a surprise to those expected to operate within them. An independent review is valuable, but it is not a suitable political consensus on the rules governing political competition. However, the Government have immediately accepted two recommendations from the Rycroft review—a moratorium on cryptocurrency and a £100,000 annual cap on donations from overseas electors—before publishing their full response to the review or consulting political parties on how these proposals should operate. More troubling still, these measures are intended to have a retrospective effect from March this year. Political parties are therefore expected to comply with legal requirements whose detailed legislative provisions have not yet been debated by Parliament or, indeed, published in draft. That is full-on retrospective legislation and is constitutionally very difficult to justify. More fundamentally, why was the Representation of the People Bill introduced before the Rycroft review had reported? Given that there was no imminent general election, why did Ministers not pause the Bill for a matter of weeks to bring forward a coherent package of reforms? Alternatively, if the Government wished to proceed urgently with electoral reforms, why were the political finance provisions not introduced in separate legislation, as previous Governments have done? Can the Minister also outline the consultation that has taken place with the Electoral Commission, parliamentary authorities and political parties on these proposals? What additional resources will be provided to ensure that any new regulatory responsibilities can be implemented effectively? Finally, legislation is only one part of the answer. Effective enforcement is equally important. Can the Minister therefore tell the House what additional resource will be provided to the Electoral Commission, and to any other enforcement bodies, to ensure that these reforms can be properly implemented and enforced? Good policy requires more than good intentions; it requires proper consultation, careful scrutiny and, in this area above all, broad political consensus. We will continue to support proportionate measures that genuinely strengthen our democracy against foreign interference, but we urge the Government to return to the long-established constitutional principle that the rules governing political competition should be made with political parties, not simply imposed upon them. Protecting our democracy should unite Parliament and not become another area for partisan legislation.

My Lords, I will resist the temptation to ask the Minister to remind us what consultation the previous Conservative Government carried out with either his party or mine over, for example, changing the electoral system for elections of mayors or expense limits for general elections. Instead, to go to the heart of the matter, these Benches very much share the concerns set out in the Rycroft review about the risk of foreign money influencing, or even corrupting, our politics. We therefore broadly welcome the Government’s commitment to implementing the report. However, I have some concerns about the intended speed of implementation, some of the loopholes that will remain, and one particular issue that is not mentioned in the Government’s response, which I suspect the Minister can successfully predict. I turn first to the intended pace of implementation. On recommendation 4, regarding non-party campaigners and related issues, the Government have said they will “commit to consultation and further work”. They are not even committing to action on that one. On recommendation 14, on internet advertising, the Government have promised “proposals in due course”. On recommendation 16, on think tanks and associated issues, the Government’s commitment is that they will “consider opportunities for further work”. I fear that you can almost hear the wheels of Whitehall grinding to a halt as you consider that phrase. I hope the Minister can set out clear timelines for the Government’s intended progress on those recommendations, which are, after all, on substantive major issues such as the role of online advertising. On loopholes, I have raised before the question of the Government’s apparent inconsistent approach to politics and the media. They appear to be sticking to a significant control test for companies that permits greater foreign ownership of a company that donates to our politics than is permitted for a company that owns one of our newspapers. It remains unclear to me why the Government think that a lower level of protection against foreign interference in our politics than in our media is appropriate. I hope the Minister might be able to clarify that. The Government are proposing—in a broad sense, this is a welcome step in the right direction—introducing a new threshold of £2,230, above which pre-campaign donations to individual candidates would need to be declared. That sounds a reasonable threshold, until one remembers that British-wide political parties will typically stand 633 candidates across the country, or, if not contesting the Speaker’s seat, 632 candidates. Therefore, 632 lots of some £2,000 gets you to nearly £1.5 million-worth of donations that could be made legally, legitimately and in secret, unless the Government also propose to go a little further and introduce aggregation requirements around those donations to individual candidates. I hope the Minister can tell us what is intended on that front. Indeed, the Government Statement is rather silent on whether similar protection will be extended to, for example, elections for the Mayor of Greater Manchester or the Mayor of London. Those, among other elected posts at other levels of election, have important power, and, although we have not yet had a track record of having to worry about foreign money in such elections, it would seem to me prudent to extend such protections. Finally, I turn to the consolidation of election law and the dangers, costs and complexity that arise from the messy and fragile state of election law, In the past, I have used the parallel of a teenager with a messy bedroom—the Government never quite decide that now is the time to start cleaning up that bedroom The Rycroft review said: “I urge Government to consider” action in this area. Because that was a boxed-out urging of the Government to consider, rather than a formal recommendation, the Government’s response so far has been silent on that particular part of the Rycroft review. I hope the Minister, having been urged by Rycroft to consider this issue, can tell us what consideration the Government have come to. To push on one specific example, consolidation does not have to a be a big project, put off for ever only to be done in one big bang. It is possible to pick off little individual issues. For example, it is possible to look at redundant legislation on the statute book, the repeal of which would have no or only minimal knock-on consequences. It is a bit like picking up the dirty crisp packet from the middle of the floor—we are not going to tidy the whole bedroom but can at least pick up some of the easy bits. I have one specific question. The Parliamentary Elections Act 1695 seems to me to be the perfect crisp packet—an easy thing that could be picked off and repealed under the Representation of the People Bill. I hope the Minister can tell us that that is going to be added to the Government’s plans.

My Lords, I will come to that question at the end, if I may. The Secretary of State commissioned Philip Rycroft to conduct an independent review of risks posed by foreign financial influence in UK politics. In March, we welcomed Mr Rycroft’s comprehensive assessment and announced immediate plans to accept two recommendations responding to urgent risks. A week ago, in your Lordships’ House, I said that the Government would publish their response very soon, and I am delighted to say I was right. They have now published their full response and, as noble Lords know, the Government have accepted all of Mr Rycroft’s recommendations. I will come to the specific points that the noble Lord, Lord Pack, made in a moment. I welcome the support—I would not say it is qualified support—from all the Benches opposite for Rycroft and our acceptance of the recommendations. In response to Mr Rycroft’s recommendations, we will strengthen our political finance rules through amendments to the Representation of the People Bill. I should note, because this is an important point that the noble Baroness made, that the Minister will be writing to political parties to set out these measures in much more detail, and that letter will be publicly available on GOV.UK. I will come to the question of discussions and engagement in a moment. We will introduce an annual £100,000 cap on donations and regulated transactions from overseas electors. It is materially more complex to trace the true source of political donations made by voters living overseas, and this creates a clear avenue for the channelling of illicit funds. There is a simple principle at stake here, which I think we all share: we want the people who make donations to political parties to have a genuine stake in the life of the UK. That is the principle we are seeking to achieve. A cap recognises legitimate participation while ending the risk of unlimited overseas money entering our politics. The noble Baroness referred to those risks, and the Government are very alive to them. Recognising that risk continues when British citizens return to the UK, and therefore we are introducing a minimum residency period. The risk is very clear. An overseas elector returning to the UK must be here for a full calendar year before that cap is lifted, to prevent circumvention of the regime. Once the measures come into force, that minimum residency period will apply retrospectively, from the date of our original announcement on 25 March. I note the comments that the noble Baroness, Lady O’Neill, made about retrospection, but the Government’s view is that there are clear risks and we should address them in the way that we have. We will apply the same cap and the minimum residency period to anyone who moves to the UK after the date of the Statement and was not previously an overseas elector, to ensure these individuals cannot circumvent the rules before commencement. That is the risk. A modified cap will apply retrospectively and an annual cap of £100,000 per recipient will apply to donations they make between today and the date of the commencement of the measures, including any regulated transactions they enter into from today. On commencement, the cap and the minimum residency period will apply in the same way as for those who were formerly overseas electors. As we previously announced, we will introduce a moratorium on all political donations of any amount made via cryptocurrency. The arrangements around crypto are simply too opaque. Building on previous announcements, and in response to the review, we will go further to strengthen our political finance safeguards. We will amend the corporate donation test, so that it is based on post-tax profits rather than revenue, measured over five years to prevent double counting. We will introduce a new donor declaration to be made by anyone donating above a specified threshold. We will engage with the Electoral Commission and political parties as we develop the declaration, including an appropriate threshold. We are introducing a raft of transparency measures. We will also strengthen rules and transparency on donations to candidates. Candidates will have to declare that donations to fund campaigning—as the noble Lord, Lord Pack, said—made prior to formally becoming a candidate are from permissible sources. Donations in that period above £2,230 will need to be cleared. The noble Lord, Lord Pack, asked me about aggregation. We have no plans to legislate on aggregation at the moment. We recognise how vital it is for the health of our democracy that we have a regulator that is fearlessly independent and, to the noble Baroness’s point, properly resourced to do the job that we are asking it to do. That is why, to ensure its independence, we are also repealing the Government’s powers to designate a strategy and policy statement for the Electoral Commission. Beyond political finance, we will take steps in the Representation of the People Bill and more broadly to implement these important reforms. If I do not manage to cover everything in the time I have left, I will come back to noble Lords. On consultation, I do not have anything to add. The noble Lord, Lord Pack, gave a very adequate response on the history, so I shall not go over that again. I do, however, accept the noble Baroness’s point that we are trustees, not proprietors, of the political finance system. I take that very seriously. I take very seriously the risks of tit for tat—I said this in the debate last week—and the risk that future Governments might get into a prisoner’s dilemma. I do not, however, accept that these reforms are partisan, hyper-partisan or otherwise. I agree with the noble Baroness that that is not a scenario we want to see. The Parliamentary Parties Panel of the Electoral Commission has continued discussions between parties. I assure the noble Baroness that I will, as this legislation proceeds—I will be taking it through your Lordships’ House—engage in a lot of detail with anyone who is keen enough to talk to me. The noble Lord, Lord Hayward, has already had the pleasure of my company on these matters; I bow to his superior knowledge. I can see him waiting to rise to his feet. On the resources of the Electoral Commission, I take the point that the noble Baroness made. On a point from the noble Lord, Lord Pack, I take very seriously the question of online adverts and, indeed, misinformation online generally. I see the noble Lord, Lord Clement-Jones, nodding. I do not think any of us feel we have cracked it, to be blunt, and this is an area that we will have to continue to think about in relation to political representation, online advertising and so on. We will all be here on this subject for some years to come. On foreign ownership of the media, I hope the noble Lord, Lord Pack, will forgive me if I do not get drawn into that, but I take the point he made. I have already discussed our plans on aggregation. On consolidation, I think I did answer this last week, but I am very happy to repeat my answer, which is that the Government want to fulfil the commitments they made in their manifesto. I was going to say “as a first step”, but I had better not say that because it might get me into a whole lot of trouble. That is our priority, and noble Lords can understand why. I understand the arguments, and the noble Lord, Lord Hayward, made the same arguments to me yesterday about consolidation. On the 1695 Act, I will have to come back to the noble Lord. I commend the Statement, despite that absence in my knowledge, to your Lordships.

My Lords, before we move on to Back-Bench questions, I remind the House that the next 20 minutes are reserved for questions from Back-Benchers only. I know that the whole House would appreciate these rules being adhered to in order to ensure that as many noble Lords as possible get a suitable opportunity to ask questions to the Minister—that means questions, not speeches or statements.

My Lords, the noble Lord, Lord Lemos, referred to me. In opening, I echo what the noble Lord, Lord Pack, said. I am pleased to see the noble Lord, Lord Kennedy, in his seat, since I notified him that I intended to quote him. On 15 July 2022, he said: “I hope that, when we get a new Prime Minister— how perceptive— “they will look at the whole issue of our electoral law, which desperately needs some revamping ”.—[Official Report, 15/7/22; col. 1709.] I now move on to the question of implementing changes in this particular field. The noble Baroness, Lady O’Neill, has already made comments about this. I know that the Minister is an old Alleynian—a product of Dulwich College. There is another product of Dulwich College who may have a certain influence on the changes that are necessary in this field. It is because of the events that we are witnessing and the investigations that are being undertaken by the Ethics and Integrity Commission that I ask the Government: please, can we not force through amendments to the Bill now, when we may be in the position in the imminent future of having yet more changes necessary to the legislation?

I am indeed a product of Dulwich College, which only goes to show that it is not the school’s fault. I am sorry to say that I am older than Nigel Farage, and I am tempted to make jokes about bins and recycling—but I will not, because the Chief Whip will tell me off. On the substantive point, we understand that there is a lot going on. These are not matters for me; they are matters for the Parliamentary Commissioner for Standards and the Electoral Commission. We hear what the noble Lord says about the need not to keep double-dipping on this, so we will watch the situation carefully, but I should not comment on individual cases, as I know he understands.

My Lords, I welcome the Government’s acceptance of the recommendations of the Rycroft report. The Statement says: “We will also strengthen our response to the wider influencing environment”. Recommendation 16 specifically talks about think tanks. The other night, in a committee room upstairs, I listened to a number of experts on foreign interference talking about foreign Governments funnelling money through think tanks in Britain to influence our political debates, including not only the Russian Government but the last Hungarian Government. I therefore urge the Government to consider including those forms of indirect political influence to shape the political debate—the noble Baroness, Lady Hayter, may add that PR firms are also engaged in this—as part of what we need to control, and to insist on transparency, at the very least, in where the money is coming from. I suggest that we should have a Defending Democracy Taskforce that reports to Parliament about what it is defending and what the threats are, so as to inform and alert us all to where we are. I was the leader on our Benches for the 2022 Bill. I have been trying to recall the consultations that the then Conservative Government had with other parties. I must have forgotten that they took place. I was unaware that there was any form of constitutional convention. I will welcome the paper from the Conservative Benches about the constitutional convention: when it was shaped and how the Conservative Government previously used it in consultation with other papers. Perhaps, at that point, we may be able to discuss this new constitutional convention further.

I do not have anything to add on the noble Lord’s final point, other than that it sounds a bit like the Schleswig-Holstein question to me. On the question about think tanks and so on, I have already said how the principle behind the Bill is that we are seeking to prevent foreign interference in our democracy. As we go through the process with the Bill in Committee and on Report, we will discuss the issues that the noble Lord raises. At the moment we are focused on political parties, as I have said, but we recognise the wider landscape he draws, and we will cleave to the principle I have set out.

I welcome the Government’s commitment to give the Electoral Commission more investigatory powers, including the power to require information from third parties, as the Rycroft review recommended. The devil will be in the detail on that. Other regulators have extensive powers to require information from third parties, to search premises, to require third parties to attend for interviews, and so on, which are enforceable by criminal penalties. What powers are envisaged to be given to the Electoral Commission to require information from third parties and how will they be enforced?

The noble Lord raises a very important point in relation to information sharing. To address the asymmetry identified in the Rycroft review of the information-sharing provisions in the Bill, we will amend the Bill to establish a broad reciprocal statutory gateway for information sharing. Importantly, we will also extend the commission’s power to require disclosure of information outside of a formal investigation, enabling a more proportionate and effective approach to enforcement. On criminal liabilities, one of the things that we want to achieve in the Bill is for these matters to be dealt with, as far as possible, by the Electoral Commission, as there are other pressures in relation to police time, and so on. We are decriminalising some minor offences in the Bill, as I think the noble Lord knows, but we do not want to reduce the liability in relation to serious matters.

My Lords, I have just returned from the Organization for Security and Co-operation in Europe Parliamentary Assembly, where I spent the last five days on behalf of the House. One of the issues that came up was that what is happening here is not unique to us. A number of countries across Europe—not least Armenia, Hungary recently, and Moldova—are suffering the same issue of money coming in, possibly from Moscow and elsewhere. A considerable amount of time and effort is being spent by people on thinking of ways to tighten up the rules and make things more effective. Enforcement has been touched upon. I may have mentioned this last week when it came up, but things have changed since then. Suppose that Count Binface was the recipient of several hundred thousand pounds from some foreign donation and was to win that by-election in Clacton. Many might like to see him win, but that is another matter for another time and another place. What would be the ability to enforce against him? He would be the successful Member of Parliament. Does the Representation of the People Bill, as drafted, have the teeth to remove that Member of Parliament? The Recall of MPs Act 2015 does not properly cover this. Can the Minister give some advice or think carefully about how we are going to deal with this problem? Maybe he could write to me or meet me for a discussion.

I already have a date to meet the noble Lord, Lord Shamash, so we can certainly pick this up then. These potential breaches and allegations are matters for the Electoral Commission. It is our job to empower it to deal with them. I am sure that we will debate the issues he raises at some length in Committee when the Bill comes before the House.

My Lords, the noble Lord, Lord Pack, is too nice to have gone through everything that the Tories did without involving us, but one of the things they did was to bring in the requirement for ID for people casting a vote. However, those people living abroad, although they extended the vote to them, do not have to produce their ID; they vote by post. I am sorry to bring this to my noble friend again but, more importantly, although I approve what Rycroft did in bringing in a cap, it is £100,000 per year per person. A couple living abroad who may not have lived here for 40 years can do £1 million between them over a Parliament. My noble friend cannot say that he agrees with me, but can he at least say that he is sympathetic, hears what I say and that it will be taken into account in future discussions?

My noble friend Lady Hayter will have to read my body language, I am afraid. I will not be drawn. Her arithmetic is correct. If those patterns emerge, I go back to the principle that we want to stop foreign interference in our politics. If we see these rules being manipulated, as she suggests might be the case, we will respond to that. On voter ID, as she knows, the Bill does contain some provisions to make it easier for people. We will come back to those in Committee, I am sure.

On procedure, I suspect that on the Opposition Front Bench the lady doth protest too much, judging by what I hear about the precedents. It is rather a good thing that there is a vehicle, in the Representation of the People Bill, ready for the addition of the amendments that the Government are making, picking up from the Rycroft report. I thought that the report was very good and that the Government’s answers were generally good. My concern is over penalties. There is a risk, given the very large amounts of money that are flying about and the penalties being exiguous, of them simply being seen as a cost of business. I am rather sorry that on the recommendation that sentencing should be reviewed, the response is: “Significant changes to criminal thresholds and sentencing length require a longer process of analysis and consultation than is possible to deliver in the timeframes of the RoPB”. I am not sure why that should be so. Is the Minister sure that it is not possible to tighten up penalties in this Bill?

I am starting to feel the need to defend the noble Baroness, Lady O’Neill, but will not fall into that temptation. On enforcement, one point that I should perhaps have made and will make now is that we are increasing the fining powers of the Electoral Commission. I know that is not quite the point that the noble Lord is making but it is precisely for the point that he makes. The current cap on fines from the Electoral Commission is £20,000, which could be seen as the cost of business for people and businesses richer than I am. We are raising that to £500,000. On the point about criminal sanctions, we are in active discussions with the Ministry of Justice. As the noble Lord rightly acknowledged, we want to do what we can and not go at the pace of the slowest recommendation. We will come back to that point because the recommendation from Philip Rycroft gives us a very clear direction of travel.

My Lords, I welcome this very important review and that the Government are accepting all the recommendations. I am most concerned about the area pertaining to recommendation 13, on what is happening online in the social media space. The recommendation is that combating “hostile state online interference” requires “clear lead accountability at ministerial and senior official level … with resources commensurate to the challenge”. Since this review was undertaken, an important report came out in the last month from the Social Market Foundation. It found that around by-elections and elections online, we are seeing 26 times more misinformation and disinformation on social media. That review looked specifically at what was happening on Facebook. In that context, I urge the Government to press the National Crime Agency to undertake a full investigation into who is funding British content creators who are posting daily toxic content that is deliberately anti-democratic, divisive and highly damaging to our politics.