National Security Bill

Debate between Baroness Hayter of Kentish Town and Lord West of Spithead

Report stage
Wednesday 1st March 2023 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, one of the reasons for supporting the amendment, to which I have added my name, as the noble Lord, Lord Carlile, said, is the Government’s recent change which allows long-term expats to continue to be on the UK electoral register and therefore to be permitted donors to UK political parties. This means that someone living —for the sake of this argument—for 40 years in, say, Russia, to take the example just given, can be on the electoral roll here. A British subject, living for 40 years in Russia, can now be on the electoral roll here, with no checks or questions asked, and that person can then donate money to a British political party—no names, no pack drill, and importantly, of course, no checks whatever on the source of the money they are able to donate to a British political party.

PPERA—the Political Parties, Elections and Referendums Act, as most of us know—requires parties to check only that the donors are “permissible”; no checks are needed on the source of their funds. They are not even required to carry out enhanced due diligence on donors operating in high-risk countries which are listed in the money laundering and terrorist financing regulations 2022. There are no obligations on political parties to do the due diligence that we would expect of anyone else handling money from any of the countries on that list.

Incidentally, that is very, very different from those of us—well, all of us in this House—who are PEPs under the AML rules. Indeed, at this moment in the Moses Room the financial services Bill is being discussed, which is trying to reduce the extraordinary number of hoops that we and our children all have to go through in our banking activities because of our presence here. However, Russian-based UK citizens, who long ago gave up paying taxes of any sort here, can donate money, without any question as to its provenance, to a UK political party, surely influencing our democracy way beyond some of the other minor activities that this Bill seeks to make transparent—an issue we will return to later.

Amendment 51, tabled by the noble Lord, Lord Carlile, would capture any possibility that the money could come from a foreign power. As the amendment states, it would include donations made through an intermediary. We on this side would certainly like to know the source of donations made from outside the UK to a political party, whether in government or opposition, or to a party with no elected Members.

The noble Lord, Lord Sharpe, has been very helpful on this Bill. To our surprise, in Committee, he claimed that our existing electoral law has

“a stringent regime of controls on political donations to ensure that only those with a legitimate interest in UK elections”—[Official Report, 21/12/22; col. 1166.]

can donate. I question that in respect of someone who has been out of the country for that long, does not use any of our services and does not pay our taxes. Even more, do we check the legitimate interests of those long gone who can put in money from another source?

I trust that the Government have now looked again at what was a rather complacent reply and that they share our interest in revealing full details, including instigating proper checks. I hope that they will therefore accept Amendment 51. As the Minister knows, it has the full support of the Electoral Commission. I hope that he would welcome a duty on political parties to check the true source of donations and assess the risk of accepting money from overseas, particularly from those on the list of the AML regulations. Rather along the lines of “know your customer” which the banks have to do, there should also be a “know your donor”. This should be a culture in all our political parties. It would mean assessing the risk that donors might pose, especially those from overseas countries. There would be an enhanced due diligence on new donors and proper recording of such checks.

I received a letter from the Minister today which I think has not yet been shared with the House. It says that it is in the national interest to have greater openness about the influence on British politics by foreign powers. We agree. Amendment 51 would ensure that all overseas donations were openly made and disclosed.

[Lord West of Spithead (Lab)]

My Lords, I support Amendment 51, which would help increase the transparency and accountability of our political system. The ISC’s Russia report of 2020 recognised that the UK had clearly welcomed Russian money, including in the political sphere.

The Government have previously assured the House that the protections within the electoral financing laws are “sufficient”. However, as other noble Lords suggested in Committee, there are clear differences between the requirement on companies to undertake due diligence when receiving foreign money and that on political parties, which have no such duties. This would help close the gap.

I note that the amendment requires a political party to publish a policy statement within three months of the passing of the Bill. The Secretary of State also has three months to produce the accompanying guidance. It may be advisable for the Secretary of State to publish the guidance before political parties are required to produce their policy statements. I simply raise that as a practical point. It does not affect my support for the amendment.

As regards the government amendments, it is not clear why they seek to exclude parliamentary proceedings from the definition of political processes, thereby moving them outwith the scope of any new foreign interference offence. I appreciate that the Government have said that it is to clarify that the Bill does not intend to interfere with parliamentary privilege, but I do not see that the answer is to remove the concept entirely.

To commit the foreign interference offence, one needs to conduct “prohibited conduct” which has an “interference effect”. “Prohibited conduct” includes a variety of unacceptable behaviours—from a criminal offence to threatening to damage someone’s reputation or causing financial loss. Surely, it is critical to prevent any foreign interference in parliamentary proceedings which involves a person conducting such unacceptable behaviour. Perhaps the Minister could explain how including parliamentary proceedings in the foreign interference offence would undermine parliamentary privilege, given the need for the prohibited conduct of the offence to apply. Even if the amendment is warranted, could the Minister explain why the Government have not replaced it with wording similar to that in Clause 70, as amended. This refers to interference with

“a Member of either House of Parliament, the Northern Ireland Assembly, the Scottish Parliament”

rather than “parliamentary proceedings”, which would ensure that no gap was created.