Elections Bill

Debate between Lord Rennard and Lord Butler of Brockwell

Lords Hansard - Part 2 & Committee stage
Monday 28th March 2022 Lords Chamber

[Lord Butler of Brockwell (CB)]

My Lords, I put my name to the amendment that has just been introduced by the noble Lord, Lord Rooker, because this is an important subject. The disinterested recommendations of the Committee on Standards in Public Life need to be taken seriously, and this is probably the last opportunity to do so before the general election. By the way, I apologise to the noble Baroness, Lady Hayman, for missing the first few sentences of her speech.

The amendments in this group seem to have three common themes. The first and most important is integrity. Political parties need finance to support their operations, but money should be given to meet their expenses because the donor believes in our electoral system and in the principles of a particular party, not because he or she has an ulterior motive of self-interest. The second theme is transparency. The integrity of a donation can be judged only if its source is known. If its source is unknown—and, more especially, if it is disguised—it is very likely that the motive for the donation is an ulterior one. The third theme is to ensure that the money is clean and does not derive from activities contrary to the public interest or even criminal—what is often called dirty money. Those themes are interwoven. Dirty money can be detected only if there is transparency so that the source of the donation is known, and dirty money will almost always have an ulterior motive.

Some of the previous amendments spoken to in this group have been concerned with transparency, and in general I support them. Amendment 212G, to which I have put my name, is principally concerned with the third theme, the detection and prevention of dirty money discrediting our electoral politics. The amendment, which is very long—I did not draft it myself; I owe it to the organisation Spotlight on Corruption—can be best summed up by its opening words: it would impose a duty on political parties to

“develop and publish a reasonable and proportionate risk-based policy for identifying the true source of donations”

above £7,500.

The point that I want to emphasise is that this amendment should be pushing at an open door. All political parties want and need financial support for their activities, but all political parties are discredited if it turns out that in one way or another the money is tainted. The amendment might be described as helping political parties to protect themselves—not least to prevent the embarrassment that comes later, on a scale that very often entirely undoes the benefit of the donations that they have received.

All parties have fallen on their faces over this issue. A great deal of reference has been made to the Conservative Party but I remember, as will many noble Lords, the fuss in the early days of the 1997 Labour Government about a donation of £1 million that the party had received from Bernie Ecclestone. He had a vested interest in the use of tobacco advertising on Formula 1 cars, while the Government were thinking of banning such advertisements. Mr Ecclestone had given the Labour Party one substantial donation and was offering a further one.

Prime Minister Blair asked Sir Patrick Neill, then chairman of the Committee on Standards in Public Life, whether the party could accept the further donation. Sir Patrick Neill advised that, not only should the party decline the further donation, but that it should give back the earlier one. To his credit, I believe Mr Blair accepted that. Nevertheless, there was a great fuss and Tony Blair was severely embarrassed. Some may remember that he had to give a television interview in which he defended himself by saying that most people thought that he was a “pretty straight guy”. I think most people did think that. I am sure he wished he had not been put in that position.

I can see no conceivable reason why political parties should be opposed to having a protective machinery of the sort proposed in Amendment 212G. It implements, as the noble Lord, Lord Rooker, has said, three specific recommendations in the July 2021 report by the Committee on Standards in Public Life. It reduces the risk of damage to the reputations of all political parties. Above all, it helps to protect our country’s electoral system and safeguard the integrity of our political life.

[Lord Rennard (LD)]

My Lords, Amendment 212E, in my name, seeks to draw attention to a principle Parliament has previously agreed and that should now be brought into force. The Political Parties and Elections Act 2009 was discussed, and agreed, in much more consensual debates than is the case with the current Elections Bill. Parliament then agreed that donations and loans from an individual that are worth over £7,500—either individually or in aggregate over a calendar year—would have to be accompanied by a new declaration confirming that the donor is resident and domiciled in the UK for income tax purposes.

The Electoral Commission explained that donors would have to make the new declarations, and that those it regulates would have to ensure that they receive a declaration in respect of each relevant donation and add up donations they receive below £7,500 to check whether a declaration is needed. But this provision was not subsequently introduced. The consequences of this failure, and the real reasons for it, soon became clear. All the main parties have received donations from people who are not domiciled here and do not pay taxes here. The scale of the funding involved seriously distorts our democracy. After the 2015 general election, the Guardian reported:

“The Conservatives have raised more than £18m from wealthy donors who were domiciled abroad for tax purposes, research shows. Labour have also benefited from non-dom donors and accepted gifts of at least £8.55m. The family that controls the Lib Dem’s biggest corporate donor is also domiciled abroad”.


The provisions of the 2009 legislation should probably have been brought in before the 2010 general election, because the relative sums raised indicate why Governments since 2010 have not seen it as being in their interest to introduce these provisions. Ministers since then have tried to maintain that that the 2009 legislation approved by Parliament is unworkable, which is very convenient. But this is not the case as the Electoral Commission produced proposals nine years ago to make it workable. It is time that we insisted that all the parties—and simultaneously—are unable to take donations from those who are abroad simply to avoid paying taxes here. Only when no party can accept donations from people who may be tax exiles can all parties be expected to adhere to this principle. This amendment would bring that 2009 legislation into effect. We should not have a political system which might be described as “the best that money can buy”.