Commons Chamber

Wednesday 25th March 2026

(began 2 hours, 13 minutes ago)

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None Portrait Oral questions: Northern Ireland
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None Portrait Q3. What steps he is taking to mark the anniversary of the Good Friday Agreement. (908468)
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>> Number three, Mr. Speaker. >> Secretary of State. >> Thank you very much indeed, Mr.
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None Portrait Q5. What assessment he has made of the potential impact of the Spring Forecast 2026 on Northern Ireland. (908470)
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>> No, no, no. >> Douglas McAllister question number five, please. >> Mr. Speaker. >> Northern Ireland will directly benefit from the Spring Forecast
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None Portrait Mr Speaker
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Thank you.
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None Portrait Ministerial statement: Report from the Independent Review into Countering Foreign Financial Influence and Interference in UK Politics
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12:43
Steve Reed Portrait Rt Hon Steve Reed MP, The Secretary of State for Housing, Communities and Local Government (Streatham and Croydon North, Labour )
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Mr. Speaker. >> Mr. Speaker. >> Thank you, Mr. Speaker. The responsibility to protect our democracy is a duty which every democracy is a duty which every single member of this House shares. As a government. We are clear eyed about the evolving threats we must contend with from those who wish to disrupt our democracy for their own gain and their own twisted purposes. We already have a strong toolkit to detect, disrupt and deter interference, and we are strengthening this through our Representation of the People Bill and counter Political Interference and Espionage Action plan.

But as threats evolve, so too must our protections. For this reason, I announced in December an independent review led by the former permanent secretary, Philip Rycroft, into foreign financial interference in UK politics. I would like to place on record my thanks to Mr. Rycroft for his thorough, diligent and swift work in rigorously assessing our political finance framework and identifying where further safeguards are needed. The full report from his review has today been laid before this House, and the findings are stark.

Mr. Rycroft concludes that this country faces a persistent problem of foreign interests seeking to exert influence on and to interfere in our politics, and that the threat has become arguably more acute. While he welcomes the measures in our bill, the report is clear that we need to go further, and I agree. We welcome both Mr. Rycroft's assessment and his wide ranging recommendations, which cover the regulation of corporate and overseas donations, the need to close loopholes used by some non-party campaign groups, the approach to combating online threats, the importance of ensuring enforcement agencies have the information and powers they need, and the organisation of Whitehall to ensure we are best placed to tackle these threats.

In advance of the Commons Report stage of the Representation of the People Bill, we will provide a comprehensive line by line response to all of the report's recommendations. I am clear that wherever necessary, we will be amending the Bill to ensure our defences against foreign interference are robust and given the gravity of the threats we face and their level of seriousness. I also want to reassure the House that we will take immediate action on the most serious loopholes set out in the report that allow illicit foreign money into our democracy.

Madam Deputy Speaker, British citizens living overseas have the right to participate in UK parliamentary elections, and this gives them the right to donate to parties or candidates they support. However, the report raises two fundamental concerns about such donations from overseas. Firstly, the report is clear that, quote, inevitably tracing the source of funds offered by individuals living abroad is more complex than for domestic donations. The report also raises concerns about the democratic fairness of allowing people who have chosen to live abroad to have their wealth taxed abroad, but who nonetheless have the opportunity to make potentially game changing donations into British politics.

I will therefore take immediate steps to implement the report's recommendation on donations from overseas electors. We will introduce an amendment to the Representation of the People Bill to place an annual cap on the total political donation, donations. An overseas elector can make. That cap will be set at £100,000 a year. In light of the gravity of the issues raised in the report, I am not prepared to allow any window of opportunity in which malign actors based overseas can funnel dark money into our politics.

This cap will therefore apply retrospectively, so it includes all donations from overseas electors received from today, and all regulated transactions entered into from today. Once the provisions are enforced, any donations by an overseas elector to any political party or regulated entity that exceed the cap for that overseas elector will be an unlawful donation, subject to parliamentary approval of the amendment. I will table the recipient of any unlawful donation will have 30 days to return that donation once the legislation comes into force, after which enforcement action can be taken and criminal penalties will apply.

This cap will apply to relevant donations from today in all elections in the UK. This includes for parties at the upcoming English local elections. Scottish Parliament elections and Senate elections in Scotland and Wales. Donations to candidates rather than parties are devolved are devolved matters, but my intention is to seek a legislative consent motion for our amendment to ensure there are no gaps in our safeguards, and I will speak to my counterparts in the Scottish and Welsh governments to emphasise my commitment to work together to protect our electoral system right across the United Kingdom.

The second recommendation I will take immediate action on relates to donations made in cryptocurrencies. Following extensive consultation, Mr. Rycroft sets out clearly the deep reservations many people have about such donations. His conclusions are clear and I quote there is a risk. Crypto assets are used as a vehicle to channel foreign money into the political system in the UK, and we should pause the use of crypto assets for political donations for the time being. Madam Deputy Speaker, I accept Mr.

Rycroft's assessment that the anonymity inherent in cryptocurrency transactions transactions could make it easier to mask the origin of donations and to evade robust checks on the true source of funds. The clear route this creates for illicit channelling of money into our politics is unacceptable and undermines public confidence in our electoral system. In light of this, I can confirm the government will take immediate steps to implement the recommendation made in the report, and we will introduce an amendment to the Representation of the People Bill to place a moratorium on all political donations made through cryptocurrency.

I want to be crystal clear that, as the report recommends, I mean crypto in any amount, including donations of a value that would ordinarily fall below the threshold for control on donations, there are specific risks posed by cryptocurrency donations, such as the risk of rapid multiple small donations being made just below our current thresholds. This moratorium will remain in place until the Electoral Commission and this Parliament are satisfied there is sufficient regulation in place to ensure full confidence and transparency in donations being made in this way, subject to parliamentary approval.

This moratorium will be applied retrospectively to any crypto donations received from today by any political parties and regulated entities once the provisions are in force. If a political party or regulated entity has received a donation in the interim, they will have 30 days to return it, after which enforcement action can be taken and criminal penalties will apply. This will again apply to all elections in the United Kingdom, and as I have set out, we will work with devolved governments to secure legislative consent where that is required.

Madam Deputy Speaker, I would like again to express my thanks to Philip Rycroft for his comprehensive, thoughtful and well reasoned report. It is and always will be an absolute priority for this government to protect our democratic and electoral processes. The swift and decisive action being taken by this government sends a clear message. We will do everything necessary to protect, to protect the UK's democracy. I commend this statement to the House.
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James Cleverly Portrait Rt Hon Sir James Cleverly MP (Braintree, Conservative)
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Thank you, Madam Deputy Speaker, and I thank the. Secretary of State and I thank the. Secretary of State for advance. >> Sight of this statement. >> And I echo his thanks to Mr.

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And I echo his thanks to Mr. Rycroft on the work he's done on what is a very important report. We began the work in this area through the Defending Democracy Task Force, and I'm glad to see the Minister, the security Minister, in his place to highlight the important link between the work of this report and the work that he does. And there should be no party political divide when it comes to protecting the integrity of our democracy.

And of course, there is a great deal within this report that my party instinctively agrees with. But the process falls far short of what this House should expect. The Rycroft Review, 50 pages, was published just 20 minutes before Prime Minister's Questions, and only five minutes before one of his Ministers was hosting a meeting that I was invited to on local government reorganisation, making it very difficult for me to properly read the detail of the report and.

Made it very difficult for me to read the detail of an incredibly important report, a report with which I said we instinctively have much that we agree. This is not just poor procedure. It means that it is harder for the opposition to properly scrutinise the actions of the government, particularly in light of the fact that many of the proposals in the report are being initiated immediately. Sadly, this does follow a pattern of behaviour from this government. This bill has already been through Second Reading and is at bill committee, and yet today this is the first time we are seeing important elements of a report that goes to the heart of that legislation.

Foreign interference is growing, and it does demand a coherent response, a cross-party response. And yet this government chooses to legislate first and then make announcements later. They brought forward the Representation of the People Bill. Before this review had been reported, they asked the House to scrutinise legislation which was full of holes, which the Secretary of State is now announcing at the despatch box. This is not good process and it is not about process. For process steak. It is about ensuring that unforeseen outcomes, bad outcomes, are avoided whilst protecting what needs to be protected.

Because now we are told that major changes, fundamental changes on donations, on enforcement, on on transparency. We rushed into a bill mid-way through its process late in the bill's passage, without proper consultation, without proper scrutiny, without proper type. Madam Deputy Speaker, This is not the way of making sure that cross party policy is successfully implemented, and it is absolutely right that the Secretary of State and the government want to send a clear message that they take this seriously.

And we echo we echo that desire, but this is not the way to do it. Announcing government action by press release, then filling in the details later actually undermines the important work at the heart of this report. Russia's aggression, Iran's hostile activity on British soil, cyber attacks on our institution, Chinese state based activity against us here in UK makes it incredibly important that we fight this fight together. And having these things bumped on the House in the way that this report has been does not help.

And he knows he knows that I very much we are very much on the same side of this. So I have a number of questions which I will rattle through. Now why did he not wait for the Ryecroft report before introducing this bill to the House. Which of the review's recommendations will require primary legislation and what time will be made for for that primary legislation? Will he commit to a full consultation with the political parties and regulators before making any substantive amendments to bill going through the House from initial reading, the proposal on company donations will have a significant effect on legitimate domestic donations.

Why is the government proposing to treat domestic philanthropy as if it was something distasteful? And will the Secretary of State confirm that these changes will not be brought forward without proper consultation and consideration on the effects of legitimate domestic funding for foreign interference is not the only threat to the integrity of our elections. We have seen evidence of breaches of electoral law. So what steps will the Secretary of State take to ensure the current legislation is enforced? Will he tighten the rules on foreign donations? He said about he said about devolved.

He said about devolved franchise changes in Wales and Scotland. What will he do to make sure that the forthcoming elections are protected? And finally, finally, Madam Deputy Speaker, finally, does the Secretary of State now accept a very short pause to enabled to enable good faith interventions from my party and others would make this legislation stronger and send

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the signal that we are united as a democracy in this endeavour. Thank you.

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Thank you. Stake. Can I thank him, first of all

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Can I thank him, first of all for his support, for the purpose and intent of this, of this legislation and indeed for his and legislation and indeed for his and his party's engagement with Philip Rycroft. On his review, he lists the reasons why this is important the reasons why this is important to all of or to all of us. And I agree with him and certainly are put on the record. I want to see proper engagement with the opposition and proper scrutiny, the opportunity for proper scrutiny by the opposition, because that will strengthen the legislation.

It's important it has cross-party support, given the nature of the issue that we that we are talking about, we had to act quickly to bring forward the provisions because we could not allow a window of opportunity to open, which would allow malign and hostile actors to evade the intent that we're all that we're, that we're all that we're all seeking. Beyond that, the the proposals will proceed in the usual way through the parliamentary processes, and members on all sides will have the opportunity to comment and be engaged.

It was necessary to act at speed because of the gravity of the threats, which Philip Rycroft review outlines very, very, very, very clearly. None of us want to allow foreign interference to continue. All of us believe it is the right of the British people and the British people alone to freely choose their own government. We will engage with governments across the United Kingdom and parties across this Parliament to ensure that is the outcome.
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Florence Eshalomi Portrait Florence Eshalomi MP (Vauxhall and Camberwell Green, Labour )
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Select Committee Chair Florence Eshalomi. >> Thank you, Madam Deputy Speaker. Maya, start by the Secretary of State and the Shadow Secretary of State's comments, paying tribute to State's comments, paying tribute to Sir Philip Rycroft for his tireless work and to the Joint Committee on the National Security Strategy for their work on cryptocurrency. Madam Deputy Speaker, We have to be honest in that there is a lot of mistrust in our politics and democracy as it stands, and I'm proud to stand here as someone who is supported by two trade unions and local members.

In terms of how I was funded for my campaign. And we also have to be honest to say that if we are going to defend this country from foreign threats in one breath, then allowing fundamentally opaque payment methods in our democracy is not on. And it is right that the government will put this memorandum on cryptocurrency in place. So I welcome the Secretary of State's pledge on this and the cap for overseas electors, following the extension of their enfranchisement in the Elections Act 2022.

But as it stated in Rycroft Review, we know that one of the problems is the fact that no less than five departments cover responsibility to protect our democracy. Secretary of State and Madam Speaker, if we want to get this right, we need to continue with that leadership at the heart of government. So will the Secretary of State accept recommendation 17 of this review and allocate a permanent Secretary with lead responsibility for sustaining our democracy and coordinating the response at the heart of government? And will the Secretary of State also commit that any amendments to the representation of peoples Bill as a result of the recommendations be brought forward? Whilst the Bill is still going through the Commons before Report stage, so that us as a party, as a Parliament, can have adequate time to scrutinise these proposals.
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Lisa Smart Portrait Lisa Smart MP (Hazel Grove, Liberal Democrat)
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Called the Liberal Democrat >> Called the Liberal Democrat spokesperson. Lisa Smart. Thank you very much indeed, Madam Deputy Speaker, and I thank the Secretary of State for advanced sight of his of State for advanced sight of his statement, and I was grateful to meet Philip Rycroft as part of this important and urgent work. The important and urgent work. The threat we face, though, is not new. Back in 2020, the Intelligence and Security Committee said Russian influence in the UK is the new normal and the government then was not doing enough.

Since then we've seen reforms. Former leader in Wales being convicted for accepting pro-Russian bribes. We said before that the Representation of the People Bill is not nearly ambitious enough, and so I very much look forward to working as part of the bill committee to incorporate these recommendations. Could the Secretary of State say a little more and clarify whether the government intends to accept just the two recommendations he's focussed on in his statement, or if the government plans to accept all of them on overseas donations? A cap is welcome.

But does he accept that if this reform is made without wider changes, a malign actor could get around it by simply donating via a UK company? We strongly support the moratorium on all political donations made through cryptocurrency, but, Madam Deputy Speaker, much more is needed to really seize this opportunity to clean up our politics. We should ban anyone who has served a foreign administration from donating to UK political parties to think tanks or campaign groups. The significant opportunity remains for those who have been political appointees in hostile governments to funnel donations into the UK.

We should also ban politicians from receiving payment for participating in the propaganda of foreign adversaries on broadcasters like Russia Today and Iran's press TV. And could he address why calls from the Liberal Democrats for Donald Trump's administration and their explicit policy of interference in our democracy to be included in this review were ignored? Will he order a standalone probe.
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