Political Donations

Jim Shannon Excerpts

Monday 31st March 2025 Westminster Hall

[Markus Campbell-Savours (Penrith and Solway) (Lab)]

I thank my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) for leading the debate.

The Labour manifesto pledged to

“protect democracy by strengthening the rules around donations to political parties.”

I am pleased that these important proposals are being developed. Both today’s debate and the 2021 recommendations of the Committee on Standards in Public Life focus on foreign money entering the UK via companies and unincorporated associations, but I urge the Government, when they develop their proposals, to go further than that.

In 2009, Lord Campbell-Savours of Allerdale, who also happens to be my father, was involved in the tortuous debates in the other place before the passing of the Political Parties and Elections Act 2009. He and other Members worked to secure an amendment to the Government’s proposals. That amendment meant that individuals giving or loaning more than £7,500 to a political party must be resident or ordinarily resident and domiciled in the UK for the tax year in which the relevant donation or loan is made.

The Bill and the amendment were later given Royal Assent, but that clause, as with many other provisions of primary legislation, was subject to the development of commencement regulations. At the time, the Minister of State envisaged that secondary legislation would be completed not long after the summer of 2010. A general election interrupted that process. However, primary legislation is still in place, ready to be enacted—a quick win, one might say.

As has been said, the Conservatives enormously expanded the number of foreign residents eligible to donate to political parties in our country by removing the 15-year limit on British citizens overseas being able to vote and donate to a political party. Now, up to 3.5 million overseas residents can influence elections.

I am going to take on the baton handed to me by my father and his colleagues in the other place, some of whom are no longer with us, and urge the Ministry of Housing, Communities and Local Government and the Electoral Commission to take on the task of drafting the secondary legislation required to ensure that overseas residents who do not pay tax in this country are no longer allowed to influence the outcomes of elections with their money.

[Jim Shannon (Strangford) (DUP)]

The hon. Member may not be aware that nearly $20,000 was donated from the United States to Sinn Féin’s 2017 Assembly election campaign—representing nearly one third of Sinn Féin’s spending in that election. Those who have been so exercised by political donations here have often done nothing to close the loophole that allows huge amounts of foreign money to influence politics in Northern Ireland. Nowhere else in the world would it happen that someone would be paying the bills of a foreign political party, yet that is what seems to happen with Sinn Féin. Does he agree that this loophole must be closed very quickly?

[Markus Campbell-Savours]

The hon. Member is quite right: I was unaware of that.

Under the rules set out the amendment, and made into law, these people would still be able to vote, and could even stand for election—arguably, that would be legitimate participation—but they could not spend money to disproportionately influence the outcome of elections in a country where they do not pay tax. Who runs this place should be a matter decided by those who live and pay their way here; it is they who live with the consequences of those electoral outcomes.

--- Later in debate ---

[Phil Brickell (Bolton West) (Lab)]

It is a pleasure to serve under your chairship, Mrs Harris. I thank my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) for leading this important debate. I rise to speak on behalf of the 177 people in Bolton West who signed the petition.

Before I came to this place I dedicated more than a decade of my career to tackling bribery and corruption in all its forms across the UK, India, the UAE and the US, so I have a professional imperative to speak out on cleaning up our politics, as well as a moral one. That is why I have been campaigning on the issue week in, week out since I was elected to this place in July of last year. I was pleased to attend the launch of Transparency International’s “Checks and Balances” report in the autumn of last year, along with the anti-corruption champion, Baroness Margaret Hodge.

Having pored over the petition data in granular detail, I know that this is one of the rare issues that cuts across north and south, blue and red, and urban and rural. We all want our politics to be clean and fair so that it can deliver the very best outcomes for our constituents. For me, that is the heart of the issue that we are discussing. Our democracy relies heavily on donations to provide funding for parties and candidates to engage with the electorate.

However, recent scandals across all major parties involving donations being linked to criminal, unknown or potentially malign foreign sources have led to some of the lowest levels of public trust that we have ever seen. Only 12% of people trust political parties, and there is a corrosive view that politicians are all in it for themselves. The issue has become so severe that I argue that the very integrity of our political system is under serious threat. Our constituents will not cast their votes if they do not believe that their vote makes a difference. Without voting, of course, they lose their stake in our politics. Who can blame them? For far too long, successive Governments have failed to act on political finance reform, leaving our system vulnerable to exploitation by those who seek to subvert our much-cherished democracy.

I recently had the pleasure of meeting the Electoral Commission, which has warned that significant loopholes in our political finance laws allow money of unknown origin, and potentially foreign influence, to infiltrate British politics. Independent scrutiny bodies, including the Intelligence and Security Committee of Parliament and the Committee on Standards in Public Life, have repeatedly warned about the risks posed by opaque political donations. That is why we desperately need what I hope will be a forthcoming elections Bill. I urge the Minister, in her response, to provide a clear timeline for that piece of legislation. We desperately need to close loopholes, empower regulators and protect our democratic institutions from foreign influence.

[Jim Shannon]

Continuing that line of thought, Northern Ireland will need to be part of such a new legislative ruling. Does the hon. Gentleman agree that we must all be subject to the same rules in this great United Kingdom of Great Britain and Northern Ireland?

[Phil Brickell]

I agree that we need to move across the entirety of the United Kingdom to clean up our politics. Time waits for no person, so we must act now. With that in mind, I would like to propose five key reforms, which I gently ask the Minister to consider.

First, and most importantly, the campaigning organisation Spotlight on Corruption has called for “know your donor” checks, which would legally require political parties to conduct thorough checks on the source of donations. If a donor’s origins cannot be verified, that donation should be rejected outright. As a former compliance professional for more than a decade myself, I know that such checks can be proportionate and risk based, avoiding excessive administrative burdens. This approach would align with anti-money laundering practices already established in the private sector and mirror existing requirements in the charity sector. If charities must conduct due diligence on their donors, why should political parties be exempt?

Secondly, has the Minister considered reducing the donation reporting thresholds to bring more donations into light? Coupled with the “know your donor” checks, I think that would improve scrutiny and put off lower-value donations from dubious sources.

Thirdly, there is a glaring loophole around shell companies. Under current rules, companies that have never turned a profit in the UK can still donate to political parties. That is an obvious weakness for potential foreign influence, and I am yet to hear a convincing argument as to why it is permitted. The solution is simple: the Government should mandate that a UK-registered company can only donate from the UK profits that it makes. That seems like a principle we can all get behind, and it would go a long way to protecting our much-cherished democracy.

Fourthly, as we have already heard, we must address the role of unincorporated associations, which provide a potential trapdoor for dark money entering our politics. Currently, candidates are not required to verify the ultimate source of donations received through these associations, effectively creating opaque slush funds. Forcing unincorporated associations to conduct better checks on the sources of the original donations would very quickly put an end to that risk.

Fifthly, despite the current political financing laws being riddled with loopholes, they are not even enforced properly. The Tories neutered the Electoral Commission and stripped it of its independence in the Elections Act 2022. What better way to return politics to service than by equipping the commission to hold all parties, including my own, to account? We could start by increasing its capacity for deterrence, by putting up its fining powers. In this era of plutocrat donors, the current paltry fines that the Electoral Commission can impose are hardly going to put wrongdoers off. As I understand it, enhancements to the regime in that respect would not even require primary legislation.

This is an existential issue for our politics. It is not about one person, one party, one donor or even one jurisdiction. Transparency International UK has found that between 2001 and 2024, nearly £115 million in political donations came from unknown or questionable sources, with £1 in every £10 donated to political parties having an unclear origin. Reflect on that for a moment. It is simply unacceptable. The early signs are positive, and I thank the Minister for her engagement with myself and colleagues on this matter already. It demonstrates that the Government understand why today’s debate is crucial. Failing to act sends a dangerous message that British democracy is for sale; we cannot and must not allow that to happen.