Elections Bill

Baroness Bennett of Manor Castle Excerpts

Report stage
Monday 25th April 2022 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Wallace. They have already very clearly outlined Amendment 63, to which I attached my name, so in the interests of time, I will comment just on Amendments 66 and 68 in my name. These are advances, derivations or different approaches that arose from the debate we had on these issues in Committee. As the noble Lord, Lord Wallace, just said, I would not necessarily suggest that these are the complete answer—although Amendment 68 certainly takes us in the direction that he referred to of reviewing our current situation—but they are an attempt to raise the issues and continue the debate from Committee.

I begin by noting—I owe this to the Forbes website—that a superyacht costs on average about $275 million. I cannot personally attest to that, but we can take it as a ballpark figure to start with; of course, there are probably quite a few going second hand at the moment, which might make them a bit cheaper. This is a demonstration of the fact that, in our current economic system, with the corruption and extractivism, we have people in the world who have access to massive sums of money. Amendment 63 and most of the debate around this have focused very much on foreign influence. Indeed, the noble Lord, Lord Wallace, talked about bringing influence over our democratic politics. But what my Amendments 66 and 68 do is ask: why should any individual, wherever they reside, have that kind of influence over our democratic politics?

If we look at what a typical political party—one of the two largest parties, or perhaps particularly the party that draws the most funds, as the noble Lord, Lord Wallace, said—spends on a general election, it is about 10% of the cost of a superyacht. It is not quite small change down the back of the sofa for the oligarchs, but it is not a really large amount of money. I asked in Committee what would happen if one of our existing political parties or a new political party drew all its funding from one source—one highly questionable source or any source at all. For example, we have just had the French election, and the far-right candidate, Marine Le Pen, who got more than 40% of the vote, got a very large loan from a Hungarian bank linked to President Putin. If noble Lords want to see how this plays out in Australian politics, they might like to look at the role of Clive Palmer in the election going on now, since I raised that issue in Committee.

This amendment developed from the Committee work. Of course, we do not have exact parallels to the two examples I have just cited in the UK, although I note, looking back over the past decade or so, that in the run-up to the 2010 election, Lord Ashcroft donated about 20% of the money that the Conservative Party spent in preparing for and running that election campaign. In 2021, the Conservative mayoral candidate, Shaun Bailey, received about 40% of his funding from the same source. I am not in any way casting aspersions on those cases; I am merely asking what happens to our politics when one person is hugely influential and a party is dependent on that one person.

Amendment 66 is an attempt to say that there should be a limit on how much one person can influence a political party. I came up with the figure of 5%, which I think is a reasonable estimate. This was debated at some length with the noble Earl, Lord Howe, who is not in his place today. He said that he would go away and think about whether one person should be able to donate 100% of the cost of an election campaign for a party or major character. I give notice to the Minister that I raise that question again. The noble Earl said he would go away and reflect on what the maximum percentage should be; maybe the Government do not think my 5% figure is right, but do they really believe that 100% of the funding for a political party’s campaign for a general election should be able to come from one source? Maybe they think it should be 50% or 25%. I give the Minister fair warning that if I do not get an answer to that, I will be bouncing back up again. I am sure that, if they engage with Amendment 66, the Government are likely to say that this might be drafted differently. I have attempted to address some of the main issues. I will not push this to a vote. I do not believe that I have necessarily found all the answers here, but there is a really important question that needs to be asked about whether we should limit anyone’s, not just foreign residents’, percentage of influence over our parties.

Some will say that we have rules about declaring donations and, providing they are followed—your Lordships’ House did its best earlier to keep an independent Electoral Commission overseeing that—voters can use that information to influence their choice. However, even if it is all open and transparent, voters have many reasons to make the choices that they do. Elections do need to be funded, which is why I have put down Amendment 68, which would require a 12-month consultation on public funding of political parties. This very much draws on the amendment the noble Lord, Lord Sikka, tabled in Committee and on which, unfortunately, due to the hour, we did not have time to have a full debate. None the less, the noble Lord put forward—as he has again in an amended form here—a proposal for how to do this and get state funding of political parties. We could have lots of debates about the nature of that and the way it should be done, so rather than do that, I have put down this amendment for a review.

I will stop there, but I remind the Minister that I will be asking him if he thinks that 100% of the funding for a campaign should be able to come from one source.

[Lord Grocott (Lab)]

My Lords, I strongly support my noble friend’s amendment, although I do not think it goes to the source of the problem. The source of the problem is the massive increase in the electorate contained within this Bill. We know from the impact assessment and I know from written replies I have had from the Minister that it increases the electoral roll of people living abroad—many of whom have lived abroad for decades—from around 1 million to 3.3 million, an increase of 2.3 million names. I remind the House that these will overwhelmingly be people who have lived abroad for more than 15 years—for many, 50 or 60 years —and who have no reasonable expectation of ever returning to this country. The Bill makes it easier for this registration to persist as, once on the register, names now remain for three years as opposed to one year previously, and you can get on the electoral roll by the process of attestation—in other words, providing you can get someone to attest that you lived at 22 Station Road 60 years ago, even though 22 Station Road has been demolished and you have not been back since, and that you are a bona fide former resident of the United Kingdom.

To me, that is wrong in principle, but I shall also apply it at a constituency level—the noble Lord, Lord Wallace, raised this and I can give him some of the answer. Under the present system, with the 15-year rule on residence that is allowed, in London and Westminster, 2.43% of voters at the last election were overseas voters. Let us assume that that increases by three, once these 2.3 million are added to the register. You could then have constituencies in the United Kingdom with 6,000 or 7,000 voters in an electorate of 73,000 who have no obvious connection whatsoever with the constituency in which they are voting. That, it seems to me, is wrong.

Whatever your view is, the absolute basis of our electoral system—which I cherish; I have to be controversial here by saying I am a powerful supporter of first past the post and single-member constituencies—is that representation, for a general election, is based on where you live. That is a very good basis for registration and voting, it seems to me. But, no, we are going to add 2.3 million people to the register who never lived in the country—not in recent memory.

In order to do this, the Government are spending some £15 million. I wish that they would show the same anxiety and commitment on making sure that people resident within the United Kingdom and not on the register at present were added instead of spending £15 million on getting people to vote in individual constituencies—possible decisively, affecting the result—who simply do not live in the area.

I am very sorry that this Bill has extended the period of residence from 15 years to life. I hope that the Minister can improve on his answer when I raised this before; he asked what on earth is the basis for objecting to supporting a 15-year rule, which says that—I quote him loosely—if you have been abroad for 15 years, you can vote in an election, but if you have been abroad for 15 years and a day, you cannot vote in an election. That really is a thin argument; he really can do better than that. That applies to any boundary—why do we say people can vote at 18 but not at 17 and 364 days? We can all find numerous examples of how people draw boundaries.

The problem of overseas voting—and here I find myself agreeing with the Green Party, which I do not on every occasion—is that with the possibility of this initial problem, which is that you can vote however long you have been away from the country, you can also now provide funds for parties. It means, as has already been said, that, in theory, a party could be almost entirely financed by people living abroad with no intention of returning to the United Kingdom or of living with the consequences of their vote. That is the other crucial element in our democracy: you live to see the consequences of your vote. People who voted Conservative—I hope a lot of them vote Labour at the next election—bear some responsibility for what is happening in the country at the moment. It is not the same responsibility as the Minister, of course, but they have some responsibility. Of course, if you live abroad, vote from abroad, remain abroad and intend to remain abroad, then you do not live with the consequences of your vote.

I very much regret that, somehow or other, this massive extension of the franchise is in this Bill, without any compensating extension of the franchise for people in this country who are not on the electoral roll. I have seen no sensible, adequate defence of it so far. I am sure that the Minister will do his best, which he is bound to do, but we have made a step in our democracy that violates the principle of representation by place of residence and adds the problem of enabling parties to be massively financed by people living and working permanently abroad.

--- Later in debate ---

[Lord True (Con)]

My Lords, I was thinking that others would wish to intervene, but that does not appear to be the case.

These are important amendments, but I shall not encourage anyone to think that the Government will accept them. The context is a shared concern about dirty money, a phrase that the noble Lord, Lord Butler of Brockwell, used. I do not think any Government have been stronger in response to the Russian invasion, or in bearing down on oligarchs, than this Government. However, following our robust debate in Committee, I am pleased that we are again returning to this important issue of political donations. I do listen to contributions of noble Lords and these debates will certainly serve as a key reference point for the Government as they keep rules on political donations under review, to ensure that they continue to provide an effective safeguard that protects the integrity of our political system. In that context, the Bill bears down very heavily on foreign donations and makes them much harder.

Turing to the specific amendments tabled by the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Rennard, Amendment 63 would remove the rights of overseas electors to make political donations. Amendment 69B would place a £7,500 limit on any donation or series of donations from overseas electors. I fear that many will not be surprised when I reiterate that the Government cannot support these amendments, as we intend to uphold the long-standing principle, first introduced by the Committee on Standards in Public Life itself in 1998, that if you are eligible to vote for a party, you are also eligible to donate to that party. These amendments would overturn that principle by removing the right of overseas electors to donate. Overseas electors are British citizens who have the right to vote and, despite what the noble Lord, Lord Grocott, said, the Labour Party has acknowledged that for many years. They are reasonable participants in our democracy. Furthermore, due to the interaction of Amendment 69B and the existing legislation, there would be no provision for either the return of donations exceeding the £7,500 threshold or the reporting of such donations to the Electoral Commission. This leaves a significant gap, which means that the amendment would simply not have the intended impact.

The Government do not support the proposal of the noble Lord, Lord Sikka, to which I listened carefully. It was fair for him to set out his case because he wishes to establish an independent committee to report on the creation of a foundation for democracy. The concept here, however, which is where agreement falls away, is that he submits that this body should be responsible for collecting all donations made to registered political parties and mandatorily allocating them based on membership and vote share at certain elections. The Government can find no justification for this amendment and believe it would place unreasonable restrictions on an individual’s freedom to donate to the political party of their choosing. It would go against the fundamental principle of allowing members of the public to get involved in our democracy by giving their support, be it at the ballot box, via a cup of coffee or via donations, to any party or parties that they choose.

Moreover, this proposal would risk disproportionately penalising smaller parties, which may not have such high levels of membership and vote share as the larger parties, but form an integral part of our democracy. Indeed, it is not clear to me how any new parties would emerge under the noble Lord’s system, as they would not be able to fundraise for themselves and would therefore struggle to get their message out to the public to encourage members to join and voters to support them in the future. The Government are therefore simply not convinced that there is a demand or evidence to support the noble Lord’s radical idea; nor do we think it necessary to establish an independent committee to come to this conclusion. Should other parliamentarians share the noble Lord’s view, the existing framework of parliamentary committees obviously provides an ideal place to consider the proposal further, so I urge the noble Lord not to press his amendment.

Next, I turn to Amendments 66 and 68, spoken to by the noble Baroness, Lady Bennett, and the noble Lord, Lord Sikka, which address a similar theme. Amendment 66 would seek to cap donations that any one individual or organisation can make to a political party to 5% of that party’s maximum campaign expenditure limit at the preceding election. This cap would apply to all donors, whether individuals or organisations, such as trade unions for example. What effect would it have on a large trade union donation?

Amendment 68 would require the Government to publish a report on proposals to establish state funding of political parties and limitations on private donations. In essence, the noble Baroness and the noble Lord are seeking the Government’s views on these two fundamental principles. I will underline our position.

First, fundraising is a legitimate part of the democratic process. Consequently, there is no cap on political donations to parties, candidates and other types of campaigner but, instead, strict limits on what they can spend on regulated campaign activity during elections. These maintain a level playing field in elections. In particular, the noble Baroness’s amendment has the potential to create a very uneven and complicated playing field. Under the proposal, each political party will have different amounts it can fundraise, given that spending limits are calculated according to the number of constituencies it contests. New political parties in particular, again, would be affected and this change could encourage quite unnatural growth, whereby new parties are incentivised to contest seats they have no intention of winning to give them a more competitive funding limit in the next cycle. I will not be drawn on what percentage of a party’s overall donation might be permitted because the Government simply do not accept that there should be such a percentage figure.

Secondly, there is absolutely no public support for expanding the level of public funding already available to political parties. The Government are not going to go down that road.

Finally, I wish to address Amendment 69, retabled by the noble Lord, Lord Rooker. This would introduce requirements, as he said, for registered parties to carry out risk assessments and due-diligence checks on donations. Only those with a legitimate interest in UK elections can make political donations and there are strict rules requiring companies making donations to be both incorporated and carrying out business in the UK. Parties must check that companies meet these criteria. It is also an offence to circumvent the rules through proxy donors—for example, an impermissible donor seeking to make a donation through a company that is itself a permissible donor. Political parties must already report all donations over a certain value to the Electoral Commission, which are then published online for public scrutiny.

The Government have heard the concerns that donors may seek to evade the rules and, in principle, the point of strengthening the system to provide greater levels of assurance on the sources of donations to ensure they are permissible and legitimate is important. Indeed, the Government recently published, ahead of introducing necessary legislation, the Corporate Transparency and Register Reform White Paper.

Reforms to Companies House will deliver more reliably accurate information on the companies register by introducing mandatory identity verification for people who manage or control companies and other UK-registered entities, providing greater powers for Companies House to query and challenge the information it receives, and introducing more effective investigation and enforcement powers for Companies House. This, in combination with a new power for the Companies House registrar proactively to pass on relevant information to law enforcement and other public and regulatory bodies, including the Electoral Commission, will indirectly support the enforcement of the rules on donations by providing greater confidence in the accuracy of the data held at Companies House, including when seeking information on UK-registered companies and other UK-registered entities that have made political donations.

The Government have not dismissed the fact that this is a significant area, which is why we are instituting these reforms to corporate transparency, but for the reasons I have outlined to the House on various amendments, I urge that noble Lords consider not pressing their amendments.

[Baroness Bennett of Manor Castle (GP)]

Before the Minister sits down, may I confirm what he said? I wrote down his words: “The Government do not accept that there should be a percentage limit.” On the percentage of contribution from one person or organisation to a political party’s campaign, would the Minister confirm that the Government believe it appropriate for 100% of the funding for a political party’s campaign to come from one source or organisation?