National Security Bill

Consideration of Commons amendments
Tuesday 4th July 2023 Lords Chamber

Commons Reason and Amendment

15:56

Motion A

Moved by

[Lord Sharpe of Epsom]

That this House do not insist on its Amendment 22B, to which the Commons have disagreed for their Reason 22C.

22C: Because the law already makes sufficient provision in relation to donations to political parties.

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, with the leave of the House I will also speak to Motion B and ask that this House do not insist on its Amendment 122B and do agree with Commons Amendment 122C in lieu.

I thank the noble Lord, Lord Carlile, for meeting once again with me and speaking with the Security Minister. During the previous debate on the Bill in this place, I talked about the importance of the Bill finishing, and continued engagement is the way to achieve that. I thank him and all in this House again for their valued scrutiny of this Bill.

I will start with the amendment tabled by the noble Lord, Lord Carlile. I understand the intention behind it. The Government are very much alive to the risk presented by foreign interference, as evidenced by the various ways we are seeking to tackle it through this Bill. However, as I said during previous debates on this matter:

“Political parties are already required by law to take all reasonable steps to verify the identity of a donor and whether they are permissible”.—[Official Report, 21/6/23; col. 227.]


The introduction of an independent review to consider the matter is not an approach the Government would support. The scope of the review the noble Lord proposes implicitly suggests that the duty should be on political parties to prevent foreign interference, not the relevant enforcement bodies with the appropriate tools and knowledge. The Government submit that this is not the way to approach concerns about the risk of foreign donations entering our political system, although we agree that work is needed in this area.

As such, I offer an alternative to today’s amendment in lieu. If noble Lords agree with the Government that the amendment before the House is not the right approach, the Government will commit to consult on enhancing information sharing between relevant agencies or public bodies to help identify and mitigate the risks of foreign interference in political donations that are regulated by electoral law. The relevant public bodies in scope of the consultation would include Companies House and the Electoral Commission, among others. This consultation would take place within a year of the Bill coming into force. It would seek views on how relevant agencies and bodies can obtain and share information relating to the provenance of a donation, which might not be available to the recipient of a donation. We consider that greater information sharing may well help in the prevention and identification of breaches of the law in relation to impermissible donations from foreign powers.

The Government also commit to tabling a report in the House at the end of this consultation which will set out conclusions and next steps. I want to be clear that the Government’s intention is not for any changes made as a result of this consultation to become a tool to be wielded against political parties where they could not have reasonably known the provenance of a donation. As I have noted before, political parties do not have the investigative capabilities of banks to trace layers of financial transactions. Rather, this consultation would look at ways in which information sharing between the relevant agencies and public bodies that do have those capabilities could support parties in mitigating the risk of foreign donations.

The rules on political donations are clear: donations from foreign powers, whether made directly or indirectly, are illegal. This consultation will allow us to consider how best to strengthen the information-sharing and enforcement system that supports those existing rules. This goes a considerable way towards addressing the noble Lord’s concerns, and in a way that will deliver real benefit. I am committing the Government to undertake this work in good faith, and I ask the noble Lord, Lord Carlile, to withdraw his amendment on this matter, in favour of our suggested approach.

16:00

Before moving on, I impress upon your Lordships the importance of agreement on this issue. The Government have agreed that there is more work to be done here, but we should not let a debate about the exact terms of that work stand in the way of the Bill. The National Security Bill is a foundational piece of legislation and, if this amendment is approved today, there is a real risk of significant delays to implementation due to late Royal Assent.

I turn to the amendment tabled in lieu by the Government, relating to the ISC memorandum of understanding. The Government carefully considered the arguments for such a review and, although there is provision for review within the Justice and Security Act, the strength of feeling in both this House and the other place means that the Government were willing to respond to this issue with their own amendment. The difference between the Government amendment and the amendment in lieu tabled by the noble Lord, Lord Coaker, ahead of the last debate is relatively minor. It removes the requirement for the review of the MoU to be completed within six months of the measure coming into force, to give more adequate time to conduct that review alongside the work to implement the Bill. While we have built in more flexibility in the end date of the review, I hope that noble Lords will recognise that this amendment delivers the effect sought in the amendment of the noble Lord, Lord Coaker.

Finally, I will address the amendment tabled by the noble Lord, Lord West, which looks to remove subsection (2) of the Government’s amendment in lieu. This would remove the six-month time limit from the amendment, and the Government do not support this approach. The six-month limit is an important part of showing that the Government take seriously the fact that consideration of whether the MoU needs amending should commence in a timely manner. Removing the time limit would suggest that the Government could delay consideration beyond six months, which I do not think this House would support. So I encourage the noble Lord not to move his amendment, and I beg to move.

[Lord Carlile of Berriew (CB)]

My Lords, I now have the opportunity to speak to Amendment 22D. I thank the Minister and the others involved in the discussions we have had. I give particular thanks for the involvement of the Security Minister, whom he mentioned, in the creation of what the Minister offered today.

In my reamendment, I offered an independent review, which is quite a physical way—to use a metaphor—of examining the law in this area. We have been offered a much more neurological review, to use another metaphor, because it involves going to every place where knowledge is held within government of the possibilities by which foreign powers may contribute to political parties.

I am particularly grateful to the Minister because the Government are offering something that not only places a clear moral obligation on political parties by which their honesty will be judged, but which goes further. It means that there will be standards by which their honesty will be judged, which has potential implications for political parties that they had better pay regard to. Compared with the no-action approach when we last discussed this matter, what was decided today is a generous response by the Government.

I will close with another metaphor. The right reverend Prelate, who read Psalm 24 in Prayers this afternoon, spoke of a “pure heart” and “clean hands”. I doubt very much whether these measures will purify the hearts of political parties, but it will certainly make their hands much cleaner. I therefore announce my intention not to move Motion A1.

[Lord West of Spithead (Lab)]

My Lords, I will speak to Motion B1, an amendment to government Motion B. I am very pleased that the Government have finally proposed an alternative amendment, recognising that only the ISC can undertake effective scrutiny of intelligence and security work undertaken by the Government.

The ISC supports the government Motion on the basis that my Motion is also accepted. It removes the requirement for consideration of whether the ISC’s MoU needs to be updated to commence within six months. We are concerned that such a time restriction may have unintended consequences; it might inadvertently affect the ability of the ISC to oversee security or intelligence activity related to the Bill. For example, if the Government commence new security or intelligence activity as part of the Bill outside the ISC’s remit—beyond the six-month period—the Government could attempt to argue that they will not consider any commensurate update to the ISC’s MoU as considerations are required to start within six months of the Bill coming into force.

Because of the Government’s long-standing refusal to update the ISC’s MoU, and their continued arguments to justify their refusal to accept independent oversight of the committee, the committee is of the view that it will be much safer for us to remove this time limitation to avoid any possible confusion in the future. Although that sounds like a lawyer’s argument, this is a lawyer’s issue; it is something we have to be quite careful about.

While the government Motion will not remedy the significant gap in ISC oversight that already exists in relation to intelligence and security matters, it at least seeks to stop the oversight gap becoming even bigger. I hope that this reflects a turning point and the beginning of a shift in the Government’s position, including their acceptance of the need for robust, independent and democratic oversight of secret intelligence matters.

However, the House should not forget the wider problem, and we should continue to insist on a remedy. With my ISC colleagues in the other place, I have already explained repeatedly why the ISC’s MoU needs to be updated more broadly. I will not repeat those arguments now, other than to say that currently there is insufficient parliamentary oversight of the Government’s intelligence and security activities.

Intelligence and security matters are too important for there not to be comprehensive parliamentary oversight. There can be no activity by the Executive which escapes democratic oversight. The Motion is the first indication from the Government that they have begun to grasp this fundamental principle and the importance attached to it by those in this House. Despite the Motion’s significant limitations, I support it being added to the Bill, with my own Motion, to ensure that there are no unintended consequences which may negatively affect the ability of the ISC to oversee the entirety of this regime. I encourage the Government to use this as a foundation for constructive engagement on the rest of the ISC’s MoU, which, as I have explained, urgently needs updating.

[Lord Leigh of Hurley (Con)]

My Lords, I will speak to this closing part of the Bill. I declare my interest as the senior treasurer of the Conservative Party. It is not on the register of interests, because the registrar does not accept it as a declarable interest; I do not know why, but I bring it to your Lordships’ attention now.

I wish to speak because, as this debate concludes, it would be unfortunate if the reader of this debate and previous debates was left with the conclusion that political parties are in any way seeking to obtain donations from foreign parties or do not take considerable steps to ensure that foreign parties or intermediaries do not make donations to political parties. In the previous debate, the noble Lord, Lord West, commented that

“it is perfectly possible for companies to make significant donations to political parties despite clearly not making operating profits and therefore with limited explanations of how they can afford such donations and where the money comes from”.—[Official Report, 21/6/23; col. 237.]

However, many companies can of course raise substantial sums of money and not make operating profits— I have personal experience of that. That is not the issue; the issue is that regulated donees have to be UK-registered companies incorporated in the UK which carry on business in the UK. I know from my experience that considerable lengths are taken to ensure that those companies are companies that carry on business, by any definition, in the UK. That is a requirement of the Political Parties, Elections and Referendums Act 2000.

The companies must also be registered with Companies House. Later this afternoon, we will finalise our debates on the Economic Crime and Corporate Transparency Bill, in which I have had a large involvement. From that, it is clear that Companies House will have substantially greater access to information on companies’ accounts digitally to assess who the persons of significant control are.

Accepting or funnelling unlawful donations is already illegal. Every donation over £7,500 is declared and you can take my word for it that any donation that one might think is, shall we say, unusual leads to lots of inquiries from the press, which is perfectly reasonable, and others such as political opponents. The Electoral Commission has 233 staff. It has resources this year of £25.5 million. It is responsible for looking after political parties, not much more than that.

It is not particularly obvious to me what more political parties could do. They are not banks; they are not HMRC. It would be inappropriate to create a very false impression. Donors do not control parties. They do not influence or determine policy. They typically give modest sums of money because they believe in supporting a party and wish it to succeed. We do not wish to slip into state funding, which would be a very dangerous route. In fact, donors to all political parties should be thanked and recognised for their contribution to civil society.

[Lord Carlile of Berriew (CB)]

I slightly despair listening to the noble Lord. Can we just ask for a little humility from treasurers of all political parties? I am afraid there is plenty of evidence that the garden is not as perfect as the noble Lord, Lord Leigh, is saying.

[Lord Leigh of Hurley (Con)]

I beg to disagree and am happy to offer humility. I note that recently the Labour Party returned a donation from a Mr Ian Rosenblatt which it decided was inappropriate. All credit to it. It happens regularly. This is not a political issue; this a cross-political matter. As I say, every donation is listed, so there is 100% transparency. I welcome my noble friend the Minister’s proposals, which I think are extremely sensible and helpful to this argument.

[Lord Wallace of Saltaire (LD)]

We on these Benches very much welcome the concessions that the Government have made. I disagree with the rather overoptimistic interpretation of where we are from the noble Lord, Lord Leigh. In the last exchanges, the Minister said that the National Security Bill was about national security and not about donations to political parties, but donations to political parties from foreign powers are a matter of national security.

Indeed, in the last Commons debate on this, a number of rather distinguished Conservatives intervened to say how strongly they supported the amendment as put forward by the noble Lord, Lord Carlile, on the last occasion. I recall Sir Jeremy Wright saying that he found it “very difficult to disagree” with anything in the amendment. He is currently on the ISC and was previously a member of the Committee on Standards in Public Life when it was writing its report on public finance.

I have just read a paper on political finance that the Institute for Government has just published. That stresses how rapidly the context is moving and how the law needs to adjust to cope with that. It particularly stresses the extension of overseas voting rights to British citizens who have been resident abroad for a very long time, many of them dual nationals. Checking on where the ultimate source is for those things is going to be extremely difficult and probably impossible, but political parties should be on their guard against undue influence and the suggestions the Government are now making perhaps will help political parties to take further moves in that direction

I was also struck by the speech that David Davis made in the Commons last week about a donor to the Conservative Party who had given £750,000—not a modest donor, even by the terms of the noble Lord, Lord Leigh—who had spoken openly about buying influence and “access capitalism” as part of what he expected. This was a dual national whose fortune appears to have come largely from contracts within a number of post-Soviet states.

There is a problem there, and it requires investigation, and I welcome the Government’s acceptance that there is a problem and that it needs further investigation, and we look forward to reading the text of the amendment that the Government will move in the Commons and to the further work that they will do then—we hope in co-operation with other parties—to last beyond the next election. This is an area where we need to have electoral rules that are agreed by all the participants.

16:15

[Lord Purvis of Tweed (LD)]

To follow my noble friend to conclude from these Benches on this part of the Bill, I wish to commend the Minister for listening and taking back to the department a very strong view from this House that more needed to be done in this area. I also commend the noble Lord, Lord Carlile, for his persistence on this area. I respectfully disagree with the noble Lord, Lord Leigh of Hurley. Of course, we all know that there is a distinction between the small donors—those who give small sums of money either as a member or as a supporter of a political party: in my case, in my former constituency, there were all too small numbers of small donors, regrettably, but there were those who would bake a cake for a raffle—and individuals who give really quite enormous sums to political parties. On the one hand, I understand the argument that there should not be a distinction between the two groups, if someone is of wealth and means and they believe in the same thing as someone without wealth and means. However, as my noble friend indicated, with regret I share more the view of the noble Lord, Lord Carlile, in this regard.

We would not be where we are in pursuing and being persistent with this issue if we did not know that the Electoral Commission was in effect asking us to do it. I have met the Electoral Commission frequently, and I do not think that it is relevant to highlight its resources when it has been very clear to us in saying that it does not have the powers to carry out what, ultimately, I believe it should be able to carry out—to ask political parties for due diligence as to the source of large donations. I hope that the government review will take us on that journey and provide an evidence base, on which I believe there will be a degree of consensus.

I thank the Government for their response and look forward to the review taking place, especially as it will start with the competent authorities that will have the information available to them. The Government are taking through the economic crime Bill, reforming and updating the mechanisms through unexplained wealth orders. It strikes me that that is a very good opportunity to look at some of the processes around UWOs, which are designed to be streamlined and not burdensome on authorities, to see whether they can be the model by which we would look at the requirements on political parties. On this issue, I have previously talked about the jarring position that, if a politically exposed person who is open to unexplained wealth order mechanisms, instead of giving to a political party used that money to buy a property, the relevant competent authorities would have to go through a process of due diligence for that property. However, as my noble friend said, on the concern about buying influence rather than buying a property, there is no mechanism that is open. I hope that that loophole will be closed. The Government have been clear in their guidance on the duties on the public and competent authorities to access data for unexplained wealth orders, so we should be in a better position.

Finally, as I said in the previous debate, this is likely to be the most expensive year coming up in British politics. I hope that we will have cleaner hands, but they will not be empty. Therefore, it is how we ensure that with the source of that money going into British politics, especially in the lead-up to election campaigns, the transparency is not just around the donor but around where that money is from for substantial donations. I hope very much that we have started the process of rectifying this deficiency in the British system, and I thank the Minister for starting it.

[Lord Coaker (Lab)]

My Lords, I begin by saying how much we support the amendments of the noble Lord, Lord Carlile. I am glad that the Government have listened and come to an amicable agreement with the noble Lord which takes us forward. I thank the Minister for the way he has done that and for the concession that the Government have made on the updating of the memorandum of understanding, although clearly issues remain between the ISC and the Government, hence Motion B1 tabled by my noble friend Lord West, which we support. Aside from the Motion itself, it will allow continuing discussions, and indeed perhaps negotiations, around how the memorandum of understanding can be revised or replaced, including by negotiation, hence its importance.

I think it is really significant that still, even at this late stage of the Bill, my noble friend Lord West, speaking on behalf of the Intelligence and Security Committee, which gives parliamentary oversight of the activities of the security services, is not happy with where we have arrived at. I think it is incumbent on the Government to reach an agreement with the ISC. Clearly, as we have heard from my noble friend Lord West this afternoon, we are not in a situation where that has occurred. There are all sorts of issues that remain between the Government and the ISC, as has been evidenced by various things that have happened today, and the Government need to respond to those.

I will add just a couple of other points. One is that the Government gave a commitment during the passage of the Justice and Security Act 2013 and the Minister gave assurances to Parliament that the memorandum of understanding was a live document that would be regularly reviewed and updated. Are the Government of today completely ignoring that commitment that was made to Parliament? If so, we are in a really difficult situation, because it means that parliamentary oversight is undermined by the fact that Ministers making pledges to Parliament can just be ignored in the future by the Government. I say—we often say, all of us say—that we will not press an amendment, on the basis that the Minister, speaking from the Dispatch Box, makes commitments that are read into the record. That is an important part of parliamentary scrutiny. Ministers are asked to do that and Members of Parliament in the other place and noble Lords withdraw amendments. But here we have an example of where the Intelligence and Security Committee is saying that pledges and commitments were made to Parliament that the memorandum of understanding would be regularly updated and the Government have not done that or are still not in agreement with the ISC. I think that is a really important point.

For the avoidance of doubt, I remind your Lordships again that I do not seek to compel the Prime Minister to go to the Intelligence and Security Committee. I shall just say what I believe, and your Lordships will have to make up their own minds. Given that the Intelligence and Security Committee is the oversight body for this Parliament, I would have thought that if the ISC were regularly asking the Prime Minister to attend, the Prime Minister would go—not because he is compelled to go but because it is an important part of that parliamentary oversight and the Prime Minister of our country negotiating and liaising personally with the Intelligence and Security Committee is of real importance. So I say to noble Lords, as others have heard me say before, that all of us would be surprised by the fact that no Prime Minister has been since 2014; nearly 10 years. It has been nine years, in case I am quoted as not being accurate, since a Prime Minister has been. So I gently say that, while I do not seek to compel the Prime Minister, I politely ask the noble Lord, Lord Sharpe, whether the Home Office has suggested to the Prime Minister that, in his diary, he might consider going to see the Intelligence and Security Committee when he can.

My noble friend Lord West’s amendment raises several important issues, but the most significant is that we need to send a message through supporting it that the ISC is still not at one with the Government. That is a serious issue and needs somehow to be resolved. I believe that supporting my noble friend’s amendment will continue to put pressure on the Government to ensure that they come to an arrangement with the ISC in the end, such is its importance. If my noble friend chooses to test the opinion of the House, we will be happy to support his Motion B1.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Carlile, very much for his words and his engagement on a number of matters throughout the Bill, and for not pressing his Motion. I also thank other noble Lords who have participated in this very short debate, including my noble friend Lord Leigh of Hurley, who brought a very useful perspective on the current state of play with regard to political party donations. I gently remind the noble Lord, Lord Wallace, that donations from foreign powers are already illegal and suggest that the word “consult” means that all political parties will be consulted.

On Motion B, the noble Lord, Lord Coaker, said that he does not seek to compel the Prime Minister to come to the ISC. That is certainly not the tone of the remarks he has made in a number of debates in this House. It seems to me that he does seek to compel the Prime Minister to attend the ISC. He will know that I have answered before the question as to whether the Home Office and No. 10 Downing Street have had discussions on this subject. I will not answer it again. I have nothing else to say on Motion B, as I have already spoken to it. I ask this House not to insist on its Amendment 122B and to agree with the House of Commons in its Amendment 122C.

Motion A1 not moved.

Motion A agreed.

Motion B

[Lord Sharpe of Epsom]

Moved by

That this House do not insist on its Amendment 122B and do agree with the Commons in their Amendment 122C in lieu.

122C: Page 62, line 13, at end insert the following new Clause— “Intelligence and Security Committee: memorandum of understanding (1) The Prime Minister and the Intelligence and Security Committee of Parliament must consider whether the memorandum of understanding under section 2 of the Justice and Security Act 2013 should be altered (or replaced) to reflect any changes arising out of this Act.
(2) Consideration under subsection (1) must begin before the end of the period of six months beginning with the day on which this section comes into force.”

Motion B1 (as an amendment to Motion B)

[Lord West of Spithead]

Moved by

At end insert “, and do propose Amendment 122D as an amendment to Amendment 122C—

122D: Leave out subsection (2).”

[Lord West of Spithead (Lab)]

My Lords, my noble friend Lord Coaker has put it far better than I have. I am afraid that there has been a breakdown in trust between the ISC and the Government, although the Minister on the Front Bench has been very helpful in this area. This is such an important issue, and we cannot get our minds around what has gone wrong. Therefore, I would like to test the opinion of the House.

16:28

Division 2

Ayes: 201

Noes: 210

16:38

Motion B agreed.