National Security Bill

Consideration of Lords message
Monday 26th June 2023 Commons Chamber

Consideration of Lords message

After Clause 14

Foreign interference in elections: duties on political parties

20:04

[The Minister for Security (Tom Tugendhat)]

I beg to move, That this House disagrees with Lords amendment 22B.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to discuss Lords amendment 122B, Government motion to disagree, and Government amendment (a) in lieu of Lords amendment 122B.

[Tom Tugendhat]

It is a pleasure to bring the National Security Bill back to this House. I must once again highlight the importance of the Bill’s achieving Royal Assent in a timely manner. Our police and intelligence services need the tools and powers that it contains; the longer they go without, the greater the risk to national security.

[Maria Eagle (Garston and Halewood) (Lab)]

Why doesn’t the Minister just accept the Lords amendments, then, so that we can move straight to getting the Bill on the statute book?

[Tom Tugendhat]

The right hon. Lady will be delighted to hear the rest of my speech, in which I answer her wonderful questions.

As this House will be aware, the Intelligence and Security Committee memorandum of understanding can already be revised by agreement, which is one of the points that the right hon. Lady is raising. We do not believe that primary legislation is an appropriate mechanism for making amendments to the MOU. However, we recognise the strength of feeling on the issue, and in a spirit of compromise we have tabled amendment (a) in lieu of Lords amendment 122B. The Government’s amendment will achieve a similar result and will create a duty on the Prime Minister and the Intelligence and Security Committee to progress a review of the MOU within six months of the provision’s coming into force.

[Mr Kevan Jones (North Durham) (Lab)]

That is fine, but the ISC has been raising this issue for the past two years. It takes two to tango. Unfortunately, the only reason we have this Lords amendment is a sense of frustration—certainly among members of the ISC, but also among a lot of Members of this House.

[Tom Tugendhat]

I assure the right hon. Gentleman that I have heard him. I hope that the amendment will now satisfy the ISC with respect to its concerns. I am sure that hon. Members across the House will support Government amendment (a) in lieu.

I turn to Lords amendment 22B, which would require political parties to make an annual return to the Electoral Commission, setting out the details of donations from foreign powers. It would also create a duty on political parties to write an annual policy statement to ensure the identification of donations from foreign powers. I understand the intention behind the amendment, and I share the strength of feeling behind it.

The Government are very much alive to the risk that foreign interference presents. I am pleased that we have already taken action to address it, and I am pleased with the support that we have received on both sides of the House for our reforms to Companies House, which will deliver more reliably accurate information on the companies register, providing greater powers for Companies House to query and challenge the information it receives. The Government are also legislating, via the Economic Crime and Corporate Transparency Bill, to enhance data sharing between Companies House and public authorities, including the Electoral Commission. This will help the enforcement of the rules on donations by providing greater confidence in the accuracy of the data held at Companies House.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The Minister is one of the House’s experts on the malign influence of foreign money in this country and the creation of Londongrad, so he knows all too well that money from foreign powers is coming into the bank accounts of UK citizens and then moving almost immediately—sometimes even overnight—into the coffers of political parties in this country. That creates a risk to the integrity of our political system. He must surely accept that the drafting of the Bill does not yet provide sufficient safeguards against that risk.

[Tom Tugendhat]

The right hon. Gentleman flatters me, which is always a way to succeed in this place, but he will forgive me if I carry on, because I will address some of those points. He will see that I have considered them, and that there are some areas in which there may be some conversation.

Our reforms build on the updates to electoral law in the Elections Act 2022, which have closed loopholes on foreign third-party campaign spending. They also include other measures to ensure that our democracy will remain secure. The National Security Bill will give our agencies more tools to tackle foreign interference. The new offence of foreign interference includes manipulating whether or how any person participates in political processes. The Bill also provides for substantially higher maximum penalties where a foreign power is involved in the commission of existing electoral offences of the nature that the right hon. Gentleman describes. That includes those relating to making political donations, including via third parties.

In addition, the Bill’s foreign influence registration scheme, which the right hon. Gentleman and I both championed on the Foreign Affairs Committee, will increase the transparency of foreign political influence activities. The enhanced tier of FIRS, as we are calling it, allows us to list foreign powers that act against the safety and interests of the United Kingdom. A designation would require a person acting within the United Kingdom at the direction of a specified power or entity to register with the scheme.

Although I understand the aims of Lords amendment 22B, I do not follow its approach. The legal framework in this area is exceptionally clear: any person accepting a donation from a foreign power, whether made directly or indirectly, is already breaking the law. As such, the result of this amendment would be for political parties to submit a blank return to the Electoral Commission once a year. As I am sure colleagues would agree, this would do little to improve transparency or enhance our electoral security.

Secondly, as the Government have set out previously, Lords amendment 22B does nothing to enhance the ability of political parties to investigate donations of the nature that the right hon. Gentleman describes. Political parties do not have the financial investigative capabilities of the banks or security services. They rightly cannot access people’s personal financial records and do not have the means to trace layers of financial transactions. They cannot themselves undertake sophisticated forensic accounting. There is little to be gained by increasing pressure on political parties to identify impermissible donations without improving their ability to do so.

Thirdly, political parties are not global corporations. There are more than 380 registered political parties, many of which are predominantly made up of volunteers. Lords amendment 22B could be disproportionately burdensome for smaller political parties, disincentivising them from accepting donations and, in turn, harming grassroots democracy.

Finally, the requirement to publish an annual policy statement lacks utility. In previous debates on this matter, hon. and right hon. Members highlighted concerns that parties do not have to evaluate a donation and its perceived risk. This is not true. I reiterate that political parties are already required by law to take all reasonable steps to verify the identity of a donor and whether they are permissible. Failure to ensure that permissibility requirements are met is an offence under existing law. As such, parties are already required to have systems in place to mitigate the acceptance of such funds.

As to the political point: just because you can, does not mean you should. Political judgment should always apply to donations.

[Liam Byrne]

I thank the Minister for giving way once again. He is being characteristically generous.

We may as well test the argument he is rehearsing against facts that are now known. Mr Mohamed Amersi, for example, has given something like £775,000 to political causes in this country. The Financial Times has reported that a considerable fraction of Mr Amersi’s profits are made from trade in Russia. How does this Bill safeguard against profits made in a country such as Russia finding their way into this country’s political system and infecting it?

[Tom Tugendhat]

The right hon. Gentleman, as he will understand, raises an individual about whom I will not comment. The Government will not take a position of that nature on an individual based on such comments. I will not address him specifically.

What I will say is that there have been reports of foreign donations getting into political parties—that is true. What is also true is that political parties have a responsibility to check the sources of their donations, and all British citizens have the right to donate. If a specific accusation has not been reported to the Electoral Commission and investigated, and if a person has not been found guilty, the right hon. Gentleman will understand that I cannot make any further comment.

[Holly Lynch (Halifax) (Lab)]

I thank the Minister for his opening contribution as these two additions to the National Security Bill return to the Commons once again.

The Minister has made the case for Government amendment (a) in lieu of Lords amendment 122B. I have a great deal of respect for him, as he knows, but this amendment in lieu, tabled in the name of the Home Secretary, essentially says that this House and the other House have a point, that the Government want to give themselves maximum wiggle room to be able to avoid doing anything about addressing the point by tabling an amendment in lieu that is much wishier and much washier than the clarity of our Lords amendment.

Lords amendment 122B, tabled by my noble Friend Lord Coaker, would have introduced a duty to update the Intelligence and Security Committee’s memorandum of understanding, rather than a requirement to consider whether the MOU needs updating. What does that actually mean? Is there a proposed framework or a timetable for deliberations? The Lords amendment was not tabled for fun; it was tabled because the Intelligence and Security Committee performs a vital function, but its ability to perform that function is being eroded.

The Lords amendment followed a recommendation made by the ISC in its 2021-22 annual report, which looked back to the Committee’s origins, when the then Security Minister told Parliament that it was

“the intention of the Government that the ISC should have oversight of substantively all of central Government’s intelligence and security activities to be realised now and in the future.”––[Official Report, Justice and Security Public Bill Committee, 31 March 2013; c. 98.]

20:15

[Maria Eagle]

Does my hon. Friend agree that intelligence and security activities are now undertaken by a wider assortment of policy Departments, including those that generally do not carry out national security-related activities? Those teams are not listed in the ISC’s memorandum of understanding, and therefore there is a scrutiny gap that cannot be fixed unless the memorandum of understanding is changed.

[Holly Lynch]

I am grateful to my right hon. Friend for making that important point. The annual report lists a number of policy Departments. Although the Select Committees do incredibly important work, they are not able to see the same information because their members do not have the same clearance as members of the ISC. It is quite right that such information and such scrutiny fall to the ISC, which alone can do that important work.

We have previously discussed that one of the starkest revelations from that annual report is that the ISC has not been able to secure a meeting with a Prime Minister since December 2014, nearly nine years ago. I welcomed the Chair of the ISC’s intervention when we debated the merit of the previous amendment, saying that the right hon. Member for South West Norfolk (Elizabeth Truss) had pledged to meet the ISC. However, given her exceptionally short tenure in office, we will never know if that meeting would have taken place—her name is No. 4 on the list of five Prime Ministers who have been in office since 2014.

Such a meeting is just one of the considerations for an updated MOU, but knowing how often this issue has come up, both in this House and in the other place, I wonder whether the current Prime Minister now has a date in the diary to meet the ISC. If we are to take Government amendment (a) at its word, arranging that meeting is the very least the Government could do to be able to point to some progress. Alas, it appears that they cannot point to that progress.

I am also interested to know whether the Government have spoken to the ISC about Government amendment (a). Given that the amendment seeks to assure us that the Government intend to do due diligence on engaging with the ISC, have they engaged the ISC about the amendment? Hopefully the Minister might be able to shed some light.

[Jim Shannon (Strangford) (DUP)]

I commend the shadow Minister for her thoughts. I suppose the rationale for opposing Lords amendment 122B is the Justice and Security Act 2013. Does she have any idea why the Government are reluctant to concede to a review as the legislation evolves? That seems to be a simple way of doing it.

[Holly Lynch]

It would be unwise to speculate at the Dispatch Box, but I am grateful to the hon. Gentleman for making that point. In the absence of clarity, he is right to put that question to the Government. Why have we not seen progress on this? It would seem to be sensible and proportionate to expect that engagement happens between the Government and the Prime Minister and the Intelligence and Security Committee, and happens on a regular basis.

Lords amendment 22B, tabled by Lord Carlile—once again, let me thank him for his services to this legislation—has continued to enjoy broad support, both across the Benches inside Parliament and outside. We know, from examples that have been exposed and from the most recent annual threat assessment by the director general of MI5, Ken McCallum, that it deals with one of the ways hostile state actors and their proxies are seeking to gain influence within our democracy. When we debated the merit of the previous amendment on this matter, I shared the examples of those linked to so-called Chinese secret police stations who had been involved in organising Conservative fundraising dinners. I also cited the Good Law Project’s research, which claims that the Conservatives have accepted at least £243,000 from Russian-associated donors, some of whom were linked to sanctioned businesses and organisations, since the start of Russia’s invasion of Ukraine.

There is a comprehensive case for these proportionate changes. The Electoral Commission has said:

“Enhanced due diligence and risk assessment processes would help campaigners identify foreign money, identify potential proceeds of crime, and establish a culture of ‘know your donor’ within parties—similar to the ‘know your customer’ approach, encouraged through Anti-Money Laundering regulations for the financial sector.”

I hope the Minister is persuaded by its argument that:

“These requirements could be introduced in a way that recognises the need for proportionality, with different requirements depending on the size of a regulated entity’s financial infrastructure, or the size of a donation, to prevent the checks becoming a disproportionate burden on smaller parties and campaigners.”

Similarly, Spotlight on Corruption has argued:

“The rules that are supposed to prohibit foreign donations are riddled with loopholes which enable foreign money to be channelled to political parties and MPs through lawful donors.”

That point has just been made by my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne). Furthermore, the Committee on Standards of Public Life, in its 2021 “Regulating Election Finance” report, recommended that laws should be updated and that

“parties and non-party campaigners should have appropriate procedures in place to determine the true source of donations. Parties and campaigners should develop a risk-based policy for managing donations, proportionate to the levels of risk to which they are exposed”.

We know that the risk is there, and Lords amendment 22B is a rational and proportionate response to that risk. The Minister has said that the Lords amendment is unnecessary and that donations are covered by other provisions, but I ask him once again, can he truly assure us that dirty money, with a price attached, is not finding its way into our system and our democracy?

[Liam Byrne]

My hon. Friend is making a brilliant speech. Does she agree that the scale of this potential risk is now unprecedented, not least because in 2019 we saw the most expensive election year in British political history? More than £100 million flowed into British political parties then. Does that not underline the obligation on all of us to make sure that every penny of that money is clean?

[Holly Lynch]

I am grateful to my right hon. Friend for that, as he is absolutely right. I think we can all come together to recognise the responsibility that falls to all of us to clean up our democracy as much as we can. The world has changed, even since we started work on this legislation well over 12 months ago. The role of hostile state actors and their conduct in the world, and the interference that we are having to take every measure to protect ourselves from, means that these proposals are needed more than ever, so he is absolutely right to make that point.

If the Minister and the Government reject these proposals, the electorate will draw their own conclusions as to why. I will be listening carefully to the other contributions and to the Minister’s closing remarks. I am pleased that the Government have recognised the need to have a look at the updated MOU for the ISC—I just wish there was some substance to their amendment.

Once again, in case we do not see the Bill back again in the Commons, may I take the opportunity to thank all those who have worked so hard on it, and the law enforcement officers and security services who work so hard, every day, to keep us safe?

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Before I call the next speaker, let me say that I am conscious that the debate has to finish at four minutes past 9. I know that the Minister will want five minutes at the end, and we also have to hear from the Scottish National party, so I ask people to take that into account.

I call the Chair of the Intelligence and Security Committee, Sir Julian Lewis.

[Sir Julian Lewis (New Forest East) (Con)]

Thank you, Madam Deputy Speaker.

Lords amendment 22B, accepted by the upper House last Wednesday, 21 June, requires a UK-registered political party to publish a policy statement ensuring the identification of foreign donations and providing the Electoral Commission with an annual statement showing the foreign donations received. This is the second time that the other place has amended the Bill to include such a clause. On behalf of the ISC, I spoke in favour of the previous version of the amendment when the Bill was last in the Commons, and, as Lord West stated on Wednesday, the ISC’s position remains the same: we firmly support the introduction of this provision. It is deeply concerning that the Government continue to oppose it.

In 2020, the ISC’s long-delayed Russia report highlighted the risk of foreign state-linked financial interference in UK politics. There is clearly a threat that needs to be tackled. The Committee on Standards in Public Life, in a major 2021 report on regulating electoral finance, concluded that

“the current rules are insufficient to guard against foreign interference in UK elections.”

That committee also observed that, since 2018, the Electoral Commission has supported the introduction into electoral finance regulation of risk management principles that are used for anti-money laundering checks conducted by companies. This amendment falls into that same category.

Members from both sides of both Houses have previously spoken strongly in support of the Lords amendment and, together with the evidence provided by the ISC, the Committee on Standards in Public Life and the Electoral Commission, have clearly set out why it is needed and why the current safeguards in our law are insufficient. By refusing to accept the need to update the law, the Government are rejecting the non-partisan conclusions of both Parliament and the Electoral Commission. They are inexplicably rejecting the opportunity significantly to improve the transparency and accountability of our political system by requiring political parties to take modest but important steps to identify and disclose donations received from foreign sources and states.

The Government claim to oppose this Lords amendment on the basis that the existing protections within electoral law are sufficient; that the amendment would not work in practice; and that it would place an undue burden on grassroots political organisations. Almost everyone else disagrees. The Government rely on the fact that existing electoral financing law requires political parties to check that a donor is “permissible”. Yet that misses the central point: the lack of any requirement for a political party to check the source of the funding.

There is currently no rule that political parties must conduct adequate due diligence on donors—not even donors operating in high-risk countries. Citizens domiciled abroad and companies based in the UK can donate to a political party with no questions asked about the source of the money. That applies even to companies that are making no operating profit. Why should a UK charity, or a UK company, have to undertake enhanced due diligence, under money laundering and terrorist financing law, where a donor is linked to a high-risk country, whereas a political party is exempt from that duty? Political parties surely require the highest level of protection.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

On that point, the hon. Gentleman is clear that even small and medium-sized registered charities, whether they are in Scotland, England, Wales or Northern Ireland, have to do as he says. I am absolutely perplexed as to why the Government cannot agree with him and his Committee on why that should not be extended to political parties.

[Sir Julian Lewis]

I hope he, like us, will persevere and maybe one day that mystery will be solved. In fact, the amendment does not even represent the highest level of protection. It is a very modest measure that would not place undue burdens on political parties. The Electoral Commission says that such rules could be introduced in a way that recognises the need for proportionality, as we have heard, with different requirements depending on the size of an entity’s financial infrastructure and/or the size of the donation. Guidelines would prevent this amendment, which increases transparency and accountability, from becoming disproportionately onerous.

The fact that due diligence measures are used in the charity sector, and not just by commercial entities, demonstrates that it should be entirely possible for similar steps to be taken by political parties. We know that there is both a threat and a vulnerability. We know that current safeguards are inadequate. This is a modest, sensible and proportionate amendment: the Minister should seize the opportunity by accepting it or proposing his own alternative.

20:30

Amendment 122B, also passed by the upper House last week, relates to repeated refusal by the Government to update the ISC’s memorandum of understanding in order to ensure that we retain the power to scrutinise effectively all intelligence and security activity taking place across Government. The Minister for Security, my right hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), accepted the need for action when the Bill was last in this House, acknowledging that an update to the ISC’s memorandum of understanding “needs to be made”. Why is such a process overdue? The reason is simple and has been explained, time and again, ever since the national security and investment legislation came before this House, as the right hon. Member for North Durham (Mr Jones) pointed out, over two years ago.

As a result of the so-called “fusion doctrine”, intelligence and security-related activities are increasingly undertaken by units within a wider assortment of policy departments, including several that have not generally carried out such sensitive work previously. These new bodies, such as the Investment Security Unit and the Counter Disinformation Unit, are not currently listed in the ISC’s MOU and therefore fall outside the ISC’s remit. Yet, there is no way in which the classified aspects of their work can be scrutinised systematically or effectively by departmental Select Committees.

Effective oversight of intelligence and security matters can be undertaken only by the ISC, and that is precisely why Parliament established it. Intelligence and security activity by parts of Government falling outside the ISC’s independent oversight means that such activity escapes Parliament’s democratic oversight. That is why our memorandum of understanding with the Prime Minister must be promptly updated.

During the passage of the Justice and Security Act 2013, as we have heard, the Government gave the clearest possible undertaking to Parliament that the ISC should have oversight of all of central Government’s intelligence and security activities, both now and in the future. It was clear that the ISC’s MOU was designed to be a living document that could be updated easily to reflect any changes to the security and intelligence activities being undertaken by the Government. Yet, the Government have consistently refused to abide by that authoritative commitment made to this House by our late and much-missed colleague, James Brokenshire, the then Security Minister.

That failure is genuinely troubling. Statements by Ministers are critically important—Parliament, courts and the public rely on them. I am sure I speak on behalf of this House when I say that we expect the Government to meet the commitments that they make in Parliament. Their obstinate refusal to do that in the case of the MOU, which began under the premiership of Boris Johnson but which so far seems to have outlasted him, shows at best an apathetic approach to public accountability and, at worst, an intention to obstruct non-partisan oversight of intelligence and security matters.

At Lords’ Report stage, in opposing a very similar amendment, the Government’s position was that it was not necessary as the Prime Minister was already considering the changes to the ISC’s remit that the ISC had itself proposed. It was stated that the PM would respond in due course and that it was not appropriate to mandate him to update the MOU in a specific timeframe “so soon” after a change had been proposed.

However, when that argument did not prevail, the line changed. Last Wednesday, their Lordships were told:

“His Majesty’s Government consider the current MoU to be sufficient to allow the ISC to discharge its statutory oversight duties of the agencies and the wider intelligence community. The MoU is subject to continuous review and His Majesty’s Government welcome the ISC proposing changes that it would like the PM to consider.”—[Official Report, House of Lords, 21 June 2023; Vol. 831, c. 245.]

In his opening remarks, the Minister in the Lords threw in for good measure the extraordinary assertion that the “true driver” of this amendment was to compel the Prime Minister to attend a session of the Intelligence and Security Committee. The attribution of an ulterior motive of this sort is as discourteous as it is inaccurate. The Minister also told the Upper House that my right hon. Friend, the present Security Minister, had met me to find

“an agreeable resolution to the issue.”—[Official Report, House of Lords, 21 June 2023; Vol. 831, c. 226.]

That was also incorrect. Although we had a typically amicable conversation, he will recall that he simply reiterated the Government’s rigid opposition to the amendment, and no solutions were proposed to resolve the issue.

This morning, ISC members and staff discovered that, sadly without consulting or even notifying us, the Government were, after all, tabling their own version of the Lords amendment, despite having resisted any such thing in all previous debates and discussions with us. This is strange and inconsistent behaviour, and I intend to abstain in the absence of a satisfactory explanation.

Perhaps the Government hope that their amendment might supersede the existing provision in the Justice and Security Act 2013, which explicitly states that our MOU

“may be altered…with the agreement of the Prime Minister and the ISC”.

We believe that this was always intended to be a simple and straightforward process. Unfortunately, all our efforts from 2021 onwards to secure the necessary changes have relentlessly been blocked.

The issue ought not to be controversial, and the Committee has been baffled and exasperated by the Government’s negative attitude. We do not know precisely who in Government are seeking to erode proper parliamentary oversight, nor what it is they are trying to hide, but behaviour of this sort only fuels conspiracy theories, and that is in no-one’s interest. I ask my right hon. Friend explicitly to confirm that the Government support the existence and work of a fully independent ISC that can effectively scrutinise their work—as originally intended—in relation to all the intelligence and security matters undertaken across Government.

Each piece of new legislation devolving intelligence and security matters away from the bodies already overseen by the ISC must come with a commensurate expansion to the ISC’s memorandum of understanding. The Government’s last-minute amendment falls short of that and will not resolve the underlying recurrent problem.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

20:37

[Alison Thewliss (Glasgow Central) (SNP)]

As the observant among you will know, I am not the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C McDonald), who is indisposed. I am sure that we all send him our best wishes for a speedy recovery.

I am very pleased to be in front of the Minister again. For those who were not paying close attention to the Home Affairs Committee last week, his delivery, rather than the content of what he was saying, was so soporific as to put my children to sleep in the Committee Room. So, for all parents who missed CBBC’s Bedtimes Stories, I recommend the Minister’s speech from this evening.

I rise to support these Lords amendments. I wish also to agree with the right hon. Member for New Forest East (Sir Julian Lewis) and what he has proposed this evening. I am disappointed to hear that he will not vote on this issue, but I understand his reasons for so doing.

In reading the Lords debates from last week, it really does seem quite odd to me that the Intelligence and Security Committee has to come to this House and beg for things that it should have by right and by prior agreement. The Committee should not have to come to the Chamber to lay amendments to try to get the information that it ought to have. In recognition of the widening landscape across different Departments and the need for accountability, it seems very sensible that the Committee should have access to the information that it seeks.

I also find the Government’s amendment a bit curious:

“The Prime Minister and the Intelligence and Security Committee of Parliament must consider whether the memorandum of understanding…should be altered (or replaced)”.

Well, the ISC has already considered that; it has done that work. It is for the Government to take that ball and to do something with it, rather than to table amendments for further consideration perhaps six months down the road. That does not seem to me something that the ISC should be waiting any longer for; it should have that information as soon as it requires it.

Let me move on to amendment 22B on political donations. Reading the Lords debate last week it seemed that there was very wide agreement on the need for this measure, with Lord Carlile, Lord Evans, Baroness Manningham-Buller and Lord West all agreeing that it was necessary, along with the Electoral Commission, the Committee on Standards in Public Life, the ISC itself and Spotlight on Corruption. The question is not the eligibility or permissibility of donors, but rather the source of those donations in the first place.

As others have said, charities and companies have to have “know your donor” and “know your customer”-type checks; “know your donor” checks for political parties ought already to happen automatically. Parties already carry out various checks, so there is no reason why that should pose an additional burden upon them. I note that a June article in Politico outlined the scale of the problem and the loopholes in the rules. The article mentioned that an unincorporated association has a threshold of £25,000 a year, after which it is subject to an additional Electoral Commission requirement: it has to report any gifts of £7,500 in a 12-month period, but only if the donations that make up that figure are of £500 or more.

Someone could have £24,999.99 and not have to report anything, but if they go over by one penny, suddenly they have to report it—and if they are a bit fly, they will know exactly what they are going to do in those circumstances. Furthermore, if someone gives £499.99, again it does not hit the threshold and it does not count. According to the Politico article, only one single group hit that £7,500 threshold, despite millions of pounds going through unincorporated associations. Some £14 million has gone through them in the past five years, and only one donation hit that threshold. That is indicative to me of a loophole, and if the Government will not do something about that just now, we have to ask why.

The Scottish Unionist Association Trust has been noted for some of the dark money funnelled through it; indeed, according to openDemocracy, it took a donation from another unincorporated association. We have layers upon layers of unincorporated associations and money sloshing through them. There needs to be a wee bit more curiosity about where that money is coming from, and a lot more accountability in accounting for that. Certainly, in the election campaigns I have been part of, none of the donations we have received have hit the £25,000 threshold. That is a lot of money for certain political parties in this country.

I note that Spotlight on Corruption has also provided a helpful briefing on those loopholes for this debate, pointing out how difficult things become in terms of the accountability and integrity of the whole system. I urge the Minister to explain why he thinks that that is not worth tackling, because it seems to me that that loophole opens up certain political parties in this country to serious risk and that we should certainly know where that money is coming from and whether it is accountable.

I would like to thank the Lords for the amendments they made to this Bill. As a person who does not really believe in the House of Lords, it should not be the case that they are improving legislation in this place, but they have done so, and the Government should take account of that, rather than continuing to undermine the good and sensible amendments made in the other place.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We still have three more speakers, so I would urge brevity.

[Sir John Hayes (South Holland and The Deepings) (Con)]

Brevity is my middle name, Madam Deputy Speaker, as I shall illustrate in this short, pithy but powerful address.

I have only three points to make. The first is that, as members of the ISC know and as the Security Minister knows, the threats to this country are dynamic. They change rapidly and the means of countering them must change accordingly. It is critically important therefore that we understand, as the shadow Minister said, that there are foreign powers—many of them state powers, though not exclusively so—who are determined to effect things in this House through contacts with political parties, with the institution itself and with politicians. Being aware of that, we need to counter it using all the necessary methods, including legislation.

The second point is that, in order to exercise the power to protect us, those missions to do so must act in a way that is secret.

Their work cannot be transparent. They need to protect their sources, their methods and, most of all, information. To legitimise that kind of power, which is by its nature extreme, it must be accountable and it must be scrutinised. A body that does so must, by definition, have a very particular kind of constitution, in that it has to have a means and method of doing so that is itself secret.

20:45

That is why the Intelligence and Security Committee was born, why it deals with matters that would otherwise not be considered because they would not be available beyond its confines, and why those appointed to it are Privy Counsellors and security cleared. We hold our security services to account and, in so doing, empower them to do what is necessary to protect us all. That is not a permissive function. It is not something to be spread around the Committees of this House, nor is it something that we can deal with in such detail on the Floor of the House. To reinforce the role of the Intelligence and Security Committee through its memorandum, responding to the very dynamism that I described at the beginning of my speech, is essential. It is essential to empower the Government to do what is right.

St Matthew’s Gospel says:

“Blessed are the merciful, for they shall be shown mercy.”

I am grateful for the Government’s small mercy in respect of their amendment in lieu, which is a recognition of much of what has been said. I, like others, preferred the West version, but then I am a great friend of Lord West, so perhaps I am a little prejudiced in that respect. It would have been simpler to deal with it in that way, but I understand that the Security Minister has responded. We now need him to be as good as the amendment he has put forward by dealing with this matter promptly. The amendment says it will happen within six months, so let us deal with it well within six months—that might mean within six weeks; within six days would perhaps be asking a little too much. None the less, let us deal with it promptly and so have a pertinent and sensible amendment of the MOU to give the ISC the powers it needs.

Finally, I said at the outset that the threats to us are profound and dynamic. It is in recognition of that fact that members of the ISC go about their work. We should thank those in the intelligence and security services for all they do. They are remarkable people who do a remarkable job. All we seek is the power to help them do that job by holding them to account.

[Mr Kevan Jones]

In a democracy, the ability of Parliament or others to scrutinise the activities of our security services is not a “nice to have” but a vital part of the confidence that our citizens have in them. We have the Investigatory Powers Commissioner and the Investigatory Powers Tribunal, and then we have the ISC, which is the parliamentary arm that ensures that there is full accountability.

The Justice and Security Act 2013 extended the powers of our security services and, in return, increased the powers of the ISC. The important thing is that it has to be independent. I have been on the Committee the longest—six years now—and what has happened over the past three years has been an attack on the Committee’s independence and our ability to scrutinise. It started with Boris Johnson’s attempt to rig the Committee by giving the Conservative party a majority on it and the chairmanship of it. That failed. We also had the delay of the Russia report for no apparent reason other than to avoid his own embarrassment.

The Minister asks, “Why have we got this amendment to the legislation?”. The reason is a sense of frustration. Our Committee has been trying for the last two or three years to get the MOU changed, as my right hon. Friend the Member for Garston and Halewood (Maria Eagle) said, because the remit for considering departmental policy has grown, but at every turn we have been refused. It is not about a lack of willingness on the part of our Committee.

There are other aspects in which the Committee’s work has been frustrated. I mentioned the unnecessary delay of the Russia report, but it is still happening. We have just done a major report on China. It has gone to the Prime Minister and been through security clearance. He had 10 days to publish it; a month later, we are still waiting for a date for it. The report we completed on international partnerships was sent to the Prime Minister on 6 September last year, and we are still waiting for it to be published, so the Government have form when it comes to trying to frustrate the work of the Committee.

We on the Committee get frustrated, but the important thing is that Parliament is being frustrated. For some reason, the arrogance that was around when Boris Johnson was there seems to have continued. The Minister can say all those nice warm words—as he does in his nice, flannelly sort of way—but frankly it does not wash with us. The Prime Minister or whoever in Government is trying to stop this needs to recognise that it is not about whether the Committee gets access; it is about proper scrutiny, as laid down in an Act of Parliament. This is serious for our democracy.

I want to add a few final points about the passage of the Bill, during which I think we have had four Ministers. The Committee approached the Bill in a constructive way and worked with the security services to come up with amendments. However, that was not helped by the Minister’s Department, which frankly did everything it could to stop the positive amendments that we had agreed and that were put forward by the security services. They valued that, but were amused, frankly, that the Home Office was so incompetent, or for some reason did not want to give the Committee any credit for coming up with anything.

All I say to the Minister is that I can agree to this proposal, but frankly it means nothing unless there is a change of attitude among the higher echelons of this Government. The point that needs to be remembered is that democracy is important and our constituents need to have that confidence. Our security services, who work day in, day out in very challenging situations on our behalf, need the security and support of knowing that there is independent oversight and that the public can be satisfied with it. Unfortunately, the way that the Government are carrying on in this area is damaging that oversight.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

I want to make a few brief comments about both the amendments before us. Let me start with Lords amendment 22B and the Government motion to disagree with it. I find it very difficult to disagree with this amendment. I was a member of the Committee on Standards in Public Life when the 2021 report that has been referred to was produced, and I am a member of the Intelligence and Security Committee now. Both those Committees, as the House has heard this evening, take the view that further measures are required to protect our democracy from the influx of inappropriate foreign money, and I think both would say that the amendment is the bare minimum of what needs to happen.

Lords amendment 22B does two things. It says, first, that a political party should be able to identify donations from a foreign power and, secondly, that it should be transparent with the Electoral Commission about such donations. It is worth stressing that the donations we are talking about are those from a foreign power—not necessarily from an individual, but from a state, perhaps funnelled through an individual. It is surely important to recognise the significance of such donations—potentially, at least—on our democratic process. It seems to me that there are two scenarios here. Either there are hardly any such donations in British politics, in which case the work involved to identify and deal with them appropriately is hardly likely to be onerous, even for smaller parties; or there are substantial numbers of such donations, in which case the case for greater transparency is overwhelming.

Let me turn to Lords amendment 122B and Government amendment (a) in lieu. It is worth being honest: there is very little difference between the Government amendment in lieu and the amendment from the other place, but both, as others have said, are operating on the margins of the real issue. The real issue is that there needs to be the capacity for the Intelligence and Security Committee’s remit, and the memorandum of understanding that relates to it, to adapt as the processes and structures of Government adapt. If that is not the case, all the consequences flow that have been described so well by my Committee colleagues, which I do not need and have not got time to repeat.

My last point relates to a deficiency in both Lords amendment 122B and the Government’s amendment in lieu. Both say that the consideration or the review—depending on which version we choose—of the memorandum of understanding must begin within six months of the passage of the Bill. The problem with that, it seems to me, is that it is far from inconceivable that the Government may make a machinery of government change or a process change beyond that six-month point. It does not seem sensible to artificially limit the capacity for having that review or consideration of the memorandum beyond that point. For that reason, I am afraid, I do not think that either the Lords amendment that we have received or the Government’s amendment in lieu are sensible responses to the challenge we face. In my view, both are flawed.

[Tom Tugendhat]

I thank all Members of the House for their comments this evening—there have been some important contributions. I pay particular tribute to the hon. Member for Halifax (Holly Lynch), who has been not only a powerful critic, but a very able debater and participant in improving the Bill and getting it into a position where I think it is ready to be enacted. As she and the House are very well aware, this is a Bill that is somewhat overdue. It updates the powers that our fantastic intelligence services require in order to keep this whole nation safe. We have, sadly, seen various different efforts by nations and—as my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) put it—some non-state actors to use our freedoms against us. It is very welcome that the House has worked so helpfully in bringing the Bill together to make sure that we are as protected as possible.

I now turn to some of the areas in which criticism has been raised, and I understand that criticism. As a former Committee Chair myself, I start by praising the Intelligence and Security Committee. My right hon. Friend the Member for New Forest East (Sir Julian Lewis) has regularly been in my office of late, and indeed in the past. We have worked extremely closely on many other areas, so I am delighted that he has raised his challenges. I will seek to answer them, because he understands as well as I do that parliamentary scrutiny is not just essential for the country, but for good government. The areas that he challenges us on are incredibly important.

It is also very good to see the hon. Member for Bristol North West (Darren Jones) in his place. There are other Committees that have responsibility for some of the areas we are discussing today, and as Chair of the Business and Trade Committee, he is charged with overseeing some of the areas that require some understanding of the nature of business in our society today. That, I am afraid, does include some classified information, so the Government are committed to finding ways in which we can make sure that not only the Intelligence and Security Committee, but relevant departmental Committees, can have appropriate oversight. I repeat what I have said separately to him and to my right hon. Friend the Member for New Forest East: this issue is extremely important to me, and I know that the whole Government share my view.

I will now turn to the question of foreign donations, and the reason why I do not think that Lords amendment 22B quite works. As the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) has put it in the past, I do not resile from saying that the nature of foreign donations to this country is certainly not something to be taken lightly. When it is found, it is a crime, and a crime that must be punished. We should be very clear that interfering in our democracy is completely unacceptable, and I am very pleased that working with others in this House, we have made some progress in different areas through the defending democracy taskforce. I thank all Members of this House for that, and I particularly thank Mr Speaker for his assistance in making sure that we are in a better position today and will, I hope, be in an even better position in a few months’ time as various elements come forward.

May I say that there are differences between charities or businesses and political parties? One of those important differences is that charities and businesses, quite correctly, do not have to make public their donations. They do not have the obligation that political parties have to state exactly who is funding them. Political parties do have that obligation, and that is one reason why there is a difference. Transparency is provided not only by the political parties checking who is permissible and therefore who is actually giving the money, but by their making that donation public so that the media, who scrutinise us all, scrutinise those who donate and seek to influence or promote ideas by supporting any of us. I think that is an important difference that we should recognise.

May I, however, add that there is clearly a question on scrutiny? I say again that this amendment does not address that question, because any lawful political party should give a nil return, according to the amendment. I do not think that quite answers the questions that right hon. and hon. Members are asking, but I do understand the question of scrutiny that has been raised across this House, and I can assure Members that I am listening.

Question put, That this House disagrees with Lords amendment 22B.

21:00

Division 271

Ayes: 289

Noes: 199

Lords amendment 22B disagreed to.

21:12

One hour having elapsed since the commencement of proceedings on the Lords amendments, the proceedings were interrupted (Programme Order, 3 May).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).

Lords amendment 122B disagreed to.

Government amendment (a) made in lieu of Lords amendment 122B.—(Tom Tugendhat.)

Motion made, and Question put forthwith (Standing Order No. 83H(2)), That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing with their amendment 22B;

That Tom Tugendhat, Fay Jones, David Johnston, Simon Jupp, Holly Lynch, Gerald Jones and Alison Thewliss be members of the Committee;

That Tom Tugendhat be the Chair of the Committee;

That three be the quorum of the Committee.

That the Committee do withdraw immediately.—(Steve Double.)

Question agreed to.

Committee to withdraw immediately; reasons to be reported and communicated to the Lords.