National Security Bill

Liam Byrne Excerpts

Consideration of Lords message
Monday 26th June 2023 Commons Chamber

[Tom Tugendhat]

I assure the right hon. Gentleman that I have heard him. I hope that the amendment will now satisfy the ISC with respect to its concerns. I am sure that hon. Members across the House will support Government amendment (a) in lieu.

I turn to Lords amendment 22B, which would require political parties to make an annual return to the Electoral Commission, setting out the details of donations from foreign powers. It would also create a duty on political parties to write an annual policy statement to ensure the identification of donations from foreign powers. I understand the intention behind the amendment, and I share the strength of feeling behind it.

The Government are very much alive to the risk that foreign interference presents. I am pleased that we have already taken action to address it, and I am pleased with the support that we have received on both sides of the House for our reforms to Companies House, which will deliver more reliably accurate information on the companies register, providing greater powers for Companies House to query and challenge the information it receives. The Government are also legislating, via the Economic Crime and Corporate Transparency Bill, to enhance data sharing between Companies House and public authorities, including the Electoral Commission. This will help the enforcement of the rules on donations by providing greater confidence in the accuracy of the data held at Companies House.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The Minister is one of the House’s experts on the malign influence of foreign money in this country and the creation of Londongrad, so he knows all too well that money from foreign powers is coming into the bank accounts of UK citizens and then moving almost immediately—sometimes even overnight—into the coffers of political parties in this country. That creates a risk to the integrity of our political system. He must surely accept that the drafting of the Bill does not yet provide sufficient safeguards against that risk.

[Tom Tugendhat]

The right hon. Gentleman flatters me, which is always a way to succeed in this place, but he will forgive me if I carry on, because I will address some of those points. He will see that I have considered them, and that there are some areas in which there may be some conversation.

Our reforms build on the updates to electoral law in the Elections Act 2022, which have closed loopholes on foreign third-party campaign spending. They also include other measures to ensure that our democracy will remain secure. The National Security Bill will give our agencies more tools to tackle foreign interference. The new offence of foreign interference includes manipulating whether or how any person participates in political processes. The Bill also provides for substantially higher maximum penalties where a foreign power is involved in the commission of existing electoral offences of the nature that the right hon. Gentleman describes. That includes those relating to making political donations, including via third parties.

In addition, the Bill’s foreign influence registration scheme, which the right hon. Gentleman and I both championed on the Foreign Affairs Committee, will increase the transparency of foreign political influence activities. The enhanced tier of FIRS, as we are calling it, allows us to list foreign powers that act against the safety and interests of the United Kingdom. A designation would require a person acting within the United Kingdom at the direction of a specified power or entity to register with the scheme.

Although I understand the aims of Lords amendment 22B, I do not follow its approach. The legal framework in this area is exceptionally clear: any person accepting a donation from a foreign power, whether made directly or indirectly, is already breaking the law. As such, the result of this amendment would be for political parties to submit a blank return to the Electoral Commission once a year. As I am sure colleagues would agree, this would do little to improve transparency or enhance our electoral security.

Secondly, as the Government have set out previously, Lords amendment 22B does nothing to enhance the ability of political parties to investigate donations of the nature that the right hon. Gentleman describes. Political parties do not have the financial investigative capabilities of the banks or security services. They rightly cannot access people’s personal financial records and do not have the means to trace layers of financial transactions. They cannot themselves undertake sophisticated forensic accounting. There is little to be gained by increasing pressure on political parties to identify impermissible donations without improving their ability to do so.

Thirdly, political parties are not global corporations. There are more than 380 registered political parties, many of which are predominantly made up of volunteers. Lords amendment 22B could be disproportionately burdensome for smaller political parties, disincentivising them from accepting donations and, in turn, harming grassroots democracy.

Finally, the requirement to publish an annual policy statement lacks utility. In previous debates on this matter, hon. and right hon. Members highlighted concerns that parties do not have to evaluate a donation and its perceived risk. This is not true. I reiterate that political parties are already required by law to take all reasonable steps to verify the identity of a donor and whether they are permissible. Failure to ensure that permissibility requirements are met is an offence under existing law. As such, parties are already required to have systems in place to mitigate the acceptance of such funds.

As to the political point: just because you can, does not mean you should. Political judgment should always apply to donations.

[Liam Byrne]

I thank the Minister for giving way once again. He is being characteristically generous.

We may as well test the argument he is rehearsing against facts that are now known. Mr Mohamed Amersi, for example, has given something like £775,000 to political causes in this country. The Financial Times has reported that a considerable fraction of Mr Amersi’s profits are made from trade in Russia. How does this Bill safeguard against profits made in a country such as Russia finding their way into this country’s political system and infecting it?

[Tom Tugendhat]

The right hon. Gentleman, as he will understand, raises an individual about whom I will not comment. The Government will not take a position of that nature on an individual based on such comments. I will not address him specifically.

What I will say is that there have been reports of foreign donations getting into political parties—that is true. What is also true is that political parties have a responsibility to check the sources of their donations, and all British citizens have the right to donate. If a specific accusation has not been reported to the Electoral Commission and investigated, and if a person has not been found guilty, the right hon. Gentleman will understand that I cannot make any further comment.

--- Later in debate ---

[Holly Lynch]

It would be unwise to speculate at the Dispatch Box, but I am grateful to the hon. Gentleman for making that point. In the absence of clarity, he is right to put that question to the Government. Why have we not seen progress on this? It would seem to be sensible and proportionate to expect that engagement happens between the Government and the Prime Minister and the Intelligence and Security Committee, and happens on a regular basis.

Lords amendment 22B, tabled by Lord Carlile—once again, let me thank him for his services to this legislation—has continued to enjoy broad support, both across the Benches inside Parliament and outside. We know, from examples that have been exposed and from the most recent annual threat assessment by the director general of MI5, Ken McCallum, that it deals with one of the ways hostile state actors and their proxies are seeking to gain influence within our democracy. When we debated the merit of the previous amendment on this matter, I shared the examples of those linked to so-called Chinese secret police stations who had been involved in organising Conservative fundraising dinners. I also cited the Good Law Project’s research, which claims that the Conservatives have accepted at least £243,000 from Russian-associated donors, some of whom were linked to sanctioned businesses and organisations, since the start of Russia’s invasion of Ukraine.

There is a comprehensive case for these proportionate changes. The Electoral Commission has said:

“Enhanced due diligence and risk assessment processes would help campaigners identify foreign money, identify potential proceeds of crime, and establish a culture of ‘know your donor’ within parties—similar to the ‘know your customer’ approach, encouraged through Anti-Money Laundering regulations for the financial sector.”

I hope the Minister is persuaded by its argument that:

“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, to prevent the checks becoming a disproportionate burden on smaller parties and campaigners.”

Similarly, Spotlight on Corruption has argued:

“The rules that are supposed to prohibit foreign donations are riddled with loopholes which enable foreign money to be channelled to political parties and MPs through lawful donors.”

That point has just been made by my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne). Furthermore, the Committee on Standards of Public Life, in its 2021 “Regulating Election Finance” report, recommended that laws should be updated and that

“parties and non-party campaigners should have appropriate procedures in place to determine the true source of donations. Parties and campaigners should develop a risk-based policy for managing donations, proportionate to the levels of risk to which they are exposed”.

We know that the risk is there, and Lords amendment 22B is a rational and proportionate response to that risk. The Minister has said that the Lords amendment is unnecessary and that donations are covered by other provisions, but I ask him once again, can he truly assure us that dirty money, with a price attached, is not finding its way into our system and our democracy?

[Liam Byrne]

My hon. Friend is making a brilliant speech. Does she agree that the scale of this potential risk is now unprecedented, not least because in 2019 we saw the most expensive election year in British political history? More than £100 million flowed into British political parties then. Does that not underline the obligation on all of us to make sure that every penny of that money is clean?

[Holly Lynch]

I am grateful to my right hon. Friend for that, as he is absolutely right. I think we can all come together to recognise the responsibility that falls to all of us to clean up our democracy as much as we can. The world has changed, even since we started work on this legislation well over 12 months ago. The role of hostile state actors and their conduct in the world, and the interference that we are having to take every measure to protect ourselves from, means that these proposals are needed more than ever, so he is absolutely right to make that point.

If the Minister and the Government reject these proposals, the electorate will draw their own conclusions as to why. I will be listening carefully to the other contributions and to the Minister’s closing remarks. I am pleased that the Government have recognised the need to have a look at the updated MOU for the ISC—I just wish there was some substance to their amendment.

Once again, in case we do not see the Bill back again in the Commons, may I take the opportunity to thank all those who have worked so hard on it, and the law enforcement officers and security services who work so hard, every day, to keep us safe?