National Security Bill

Lord West of Spithead Excerpts

Consideration of Commons amendments
Wednesday 21st June 2023 Lords Chamber

[Lord West of Spithead (Lab)]

My Lords, I support Motion A1 from the noble Lord, Lord Carlile, and Motion C2. On Motion A1, I spoke in favour of the previous version of this amendment on Report on behalf of the Intelligence and Security Committee. Our position in the committee remains very much the same: we firmly support the introduction of this clause. Indeed, I cannot really understand why the Government continue to oppose the amendment. It is eminently sensible and the previous version received widespread support across this House. Indeed, as the noble Lord, Lord Carlile, said, it was notable that, apart from the Government Front Bench, not a single Peer across the House spoke against it.

The ISC’s Russia report in 2020 recognised that the UK, including political parties, had welcomed money from Russian elites, and the Government acknowledged that. They have, for example, as part of the Bill increased the sentences for electoral offences involving foreign powers. There is no doubt that protecting our democratic institutions should be the very top priority for the Government and parliamentarians, but the Government have adopted a rather dismissive and worryingly complacent approach to this risk. They claim that they oppose this 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 grass-roots political organisations. These claims are patently not true.

Current protections within the electoral financing law are demonstrably inadequate. As the noble Lord, Lord Evans, the chairman of the Committee for Standards in Public Life, who is in his place, noted on Report, his committee undertook a major report into the regulation of electoral finance in 2021 and provided a series of recommendations to close several loopholes in this space, all of which were rejected by the Government. The report stated that

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

One of the many problems the committee identified was the ability of a foreign corporation to create a UK subsidiary with the sole function of receiving and channelling money to a UK political party. Further, as extraordinary as it may seem, unlike charities or companies, political parties do not have to examine the source of funds they receive. This means 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. These factors clearly increase the threat of political parties being unduly influenced by a foreign power.

The report also noted that, since 2018, the Electoral Commission has supported the introduction to electoral finance of risk management principles that are used in anti-money laundering checks conducted by companies. As the noble Baroness, Lady Hayter, suggested on Report, this amendment would introduce such principles and ensure that political parties identify foreign money and potential proceeds of crime, establishing a culture of “know your donor” within parties similar to the “know your customer” approach in the financial sector.

Contrary to the Government’s suggestion, this amendment would not place a significant administrative burden on smaller political organisations, and nor would it be too difficult for political parties to implement in practice. As the shadow Security Minister noted in the other place, the Electoral Commission has stated:

“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”.—[Official Report, Commons, 3/5/23; col. 129.]


Guidance would prevent this amendment, which increases transparency and accountability, becoming a disproportionate burden. The fact that due diligence measures are used in the charity sector and not just by commercial enterprises demonstrates that it would be entirely possible for similar measures to be adopted by political parties.

I find it extraordinary that the political parties currently do not have to check the source of their funding in the same way as charities and businesses—it is extraordinary—and it is inexplicable that our Government or any political party could consider it appropriate to oppose such a sensible and proportionate amendment. It is entirely necessary and it would go a long way to strengthening our democratic institutions, providing greater protection from foreign influence. I am sure that the Government agree that we must protect our democratic institutions from harmful interference and I am sure that, having heard all these arguments, they will change their view—or I hope they will

Moving on to Motion C1, on behalf of the Intelligence and Security Committee—I have been given its approval to speak on this—I am grateful to my noble friend Lord Coaker for introducing this amendment and we fully support it. It is interesting to note that, when a similar amendment was debated in the House, many Peers spoke in favour but only one, on the Government Front Bench, spoke in opposition. It seems to be a trend with these various amendments. Strangely, the same was true in the other place, where many MPs spoke in support and only the Minister opposed the amendment. The Security Minister himself acknowledged the need for the amendment when he stated that an update to the ISC’s memorandum of understanding needed to be made.

Parliament is united in its support for independent oversight of the intelligence agencies; it is only the Government who are seeking to undermine the ability for oversight, for purposes unknown. National security is too important to play party politics with. Members from across both Houses have repeatedly explained the need for this amendment throughout the passage of the Bill, but to no avail.

I intend to do so again to demonstrate the absurdity of the Government’s opposition to it. The ISC’s memorandum of understanding, which sits underneath the Justice and Security Act 2013, outlines its remit and the organisations that it oversees. Its remit encompasses the expenditure, administration, policy and operation of the agencies and four other organisations that form part of the UK intelligence community. As the ISC has made very clear in its most recent annual reports, intelligence and security activities are increasingly undertaken by a wider assortment of policy departments, as the noble Lord, Lord Coaker, mentioned, including those that generally do not carry out national security-related activity, such as BEIS—now the Department for Business and Trade—DCMS and the Department for Transport.

Those teams are not currently listed in the ISC’s MoU. This is solely because, when the MoU was drafted in 2013, they were not responsible for intelligence and security matters. Had they been, Parliament would have included them in the ISC’s remit. Parliament was clear on the remit it wished the ISC to have and the work it wished it to do on its behalf and that of the British public.

Effective oversight of intelligence and security matters can be undertaken only by the ISC. Only it has the security infrastructure to scrutinise effectively those aspects where classified material, such as intelligence, underpins decisions on national security. This is not rocket science—perhaps sometimes it is, but that is a different issue. Intelligence and security matters deal primarily with highly classified information. Parliament established the ISC, supported by security infrastructure such as the appropriate computer systems, storage facilities and vetted staff, to provide independent oversight of classified matters precisely because Select Committees cannot effectively undertake that role. They definitely cannot do it and it is wrong for the Government to pretend that they can.

The sole purpose of the ISC, and the reason Parliament set it up, is for it to hold the Executive to account on behalf of Parliament and the public. Independent oversight in this space is particularly important given the gravity of national security decisions and the significant intrusive powers that the agencies have at the Government’s disposal. The inability for Select Committees to provide effective oversight of intelligence and security matters has already been acknowledged by the Minister on Report.

The ISC’s MoU, which sets out which government bodies it can oversee, is woefully out of date. There is now intelligence and security activity undertaken by government that is outside the ISC’s independent oversight, which means that it is outside Parliament’s democratic oversight. I am sure noble Lords agree that that is unacceptable. In effect, it means that secret activity is being carried out in our name that no one is scrutinising. The ISC’s MoU needs to be updated so that Parliament can ensure that the Government are acting appropriately in the intelligence and security space at all times.

I find it appalling that the Government continue to oppose this amendment. It is hardly controversial. There is no reason to oppose it unless one wants there to be less independent oversight, less transparency and less accountability in relation to classified intelligence and security. Is that really what the Government want? Would they rather keep any problems behind closed doors? If so, we should be very afraid. This is a matter of grave concern. I therefore support this amendment.

[Lord Wallace of Saltaire (LD)]

My Lords, the Commons reason given for disagreeing to Lords Amendment 22 is:

“Because the law already makes sufficient provision in relation to donations to political parties”.


Yet we have heard that the Committee on Standards in Public Life and the Electoral Commission have made it quite clear that they do not believe the current law makes sufficient provision for that. I remind the noble Lord that the Committee on Standards in Public Life and the Electoral Commission, like the Intelligence and Security Committee, are part of the structure of constitutional safeguards in our politics. They are there to remind the Government how the rules need to be kept. A wise Government should accept that advice. When they do not accept it, Parliament should insist that they do.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I thank all noble Lords who have taken part in this relatively short debate. It was remiss of me earlier not to praise our security services, as the noble Lord, Lord Coaker, did, so I will correct that omission now. I also thank in particular the noble Lords, Lord Coaker and Lord Carlile, for the spirit in which they discussed and spoke to their Motions.

There is obviously a fundamental disagreement on the burden that this Bill would place on political parties, and indeed on whether the laws stand up to “intellectual analysis”; I believe that was the phrase used. I think I have made a strong case already that all of the matters under discussion are already illegal. However, there are one or two points that perhaps deserve clarification, so I will go into those briefly.

On overseas electors, as raised by the noble Baroness, Lady Hayter, it is a long-standing principle first introduced by the Committee on Standards in Public Life in 1998 that if you are eligible to vote for a party in an election then you are also eligible to donate to that party.

On unincorporated associations being used to funnel donations to political parties, there are a number of existing rules that make sure that ineligible foreign money is prohibited from entering through proxy donors. Permissible donors cannot give donations on behalf of impermissible donors. It is right that unincorporated associations that carry on business mainly in the UK and have their main office here can donate to political campaigns. I have already said this, but I will say it again: unincorporated associations that are making political contributions are already subject to additional controls compared with other types of donors. If they make political contributions or donations over £25,000 within a year, they must notify the Electoral Commission and provide it with information about how they are funded.

On the questions raised about the Committee on Standards in Public Life, the Government responded to the committee’s report Regulating Election Finance in September 2021. The Elections Act 2022 contains measures that closely link to the recommendations made in that report—for example, the new requirement on political parties to declare their assets and liabilities over £500 on registration, and a restriction of third-party campaigning to UK-based or otherwise eligible campaigners. However, as the Government’s response stated, the recommendations in the report deserve full consideration. As noble Lords will be very well aware, electoral law is complex, and more work is required to consider the implications and practicalities of all the committee’s recommendations.

The noble Baroness, Lady Hayter, also referred to a report in the newspapers today. I obviously cannot comment on the details of the individual case, but the Government absolutely recognise the risk posed by those who wish to evade the rules on donations. I think this story demonstrates just seriously the Government take that risk.

I am not sure there is very much point in me saying anything else. I say to the noble Lords, Lord Balfe and Lord Anderson, that we are not Ukraine. Self-evidently, there are very robust laws already in place.

If I was ungracious to the noble Lord, Lord Wallace, in a previous debate, I would like to apologise for that.

The noble Lord, Lord Purvis, raised a number of party-political matters. Obviously, I am here to speak on behalf of the Government so I will not address those, but I suggest that he writes to the party.

I now move on to Motion C1 from the noble Lord, Lord Coaker. I join him in praising the work of the ISC, on which the noble Lord, Lord West, sits. Of course, we agree with much of what has been said. However, 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.

The ISC has a broad remit over security and intelligence policy, as set out in the Justice and Security Act and the accompanying memorandum of understanding between the ISC and the Government. Those documents also set limitations where, for example, there would be a conflict with current operations or where it would be duplicative of the work of other jurisdictions. We believe that those guiding principles are working effectively and would seek to maintain them but, as I just said, the Government would welcome the ISC proposing changes it would like the PM to consider. It also shows the respect the Government have for the work of the ISC that the Security Minister has made the commitments that he has.

I say to the noble Lord, Lord Coaker, that I do not believe I was glib in my remarks about the Prime Minister earlier. Obviously, I am unable to comment on the PM’s diary, but I have said this before and made the commitment at this Dispatch Box: I will make sure that No. 10 is well aware of the discussions that we have had in the Chamber today.

With that, I am afraid that I do not think there is much point in me saying too much else. I beg to move.

[Lord West of Spithead (Lab)]

We in the ISC have tried to get movement on the MoUs being changed. There is no doubt—all ISC members feel this way—that we are being thwarted in getting this to happen and we do not really understand why. The Minister makes it sound as though this is a nice process that is happening. It is not, I am afraid. It is not happening, which is extremely worrying.

[Lord Sharpe of Epsom (Con)]

Obviously, I will make sure that those concerns are reflected to my right honourable friend the Security Minister, who will see the committee fairly soon. As I have just said to the noble Lord, Lord Coaker, clearly I will make sure that this debate is widely understood in the appropriate places.