Representation of the People Bill (Sixth sitting)

Debate between Lloyd Hatton and Paul Holmes

Committee stage
Tuesday 14th April 2026 Public Bill Committees

[Lloyd Hatton]

Before I speak to clause 58, let me say in response to the hon. Members for Hamble Valley and for Hazel Grove that this game-changing legislation and the Rycroft review have both come in the first Session of a new Government. There is a clear understanding—the Minister has made it known here and in the Chamber—that the threats that we face, whether through foreign interference or foreign money trying to influence our democratic process, are severe, and we have made a robust response to them, through this legislation and by commissioning the Rycroft review last year.

I want to make two points on clause 58. First, a key part of the changes introduced by the Bill is the “know your donor” principle, which will require political parties to take more responsibility for exactly who is funding them. Existing rules do not specifically require recipients to consider the risk that a donor is potentially facilitating an illegal donation. I welcome the fact that that will change as a result of this clause, which will bring about a complete overhaul of the system and I believe will improve the integrity of our democracy, help strengthen national security and help restore trust in political parties across the country.

[Paul Holmes]

The hon. Gentleman is absolutely right that the clause is important. We do need to have a greater say. He says he supports the clause, and I agree with him, because he is very sensible. But given some of the headlines we have had across the House in recent weeks about the origins of donations and the facilitation of bad donations, why does he not agree with us that foreign influence registration should be part of the risk assessment? Does he share my concern that the Government have rejected that?

[Lloyd Hatton]

I do not believe that the Government are rejecting that carte blanche. As I was about to say—it is almost as if the hon. Gentleman has my notes before him—the Rycroft review commissioned by this Government notes that the “know your donor” provisions are similar to the anti-money laundering checks that are required by thousands of organisations, large and small, in the private sector, the third sector and elsewhere. Those are about ensuring that financial transactions, such as a donation, are indeed legitimate. As we digest the Rycroft review, I hope and expect that the Minister will give careful consideration to what it sets out and look at the idea that “know your donor” checks should more closely mirror the due diligence checks we see elsewhere, particularly in relation to anti-money laundering regulations.

In making my second point, which I think is worthy of further consideration, I think it will be helpful to provide a case study. As Members on both sides of the Committee will recall, earlier this year the hon. Member for Great Yarmouth (Rupert Lowe), a former Reform UK MP—I notified him that I would be mentioning him—launched a new political party, Restore Britain. Before that, however, he set up a “political movement”, and he may or may not—we do not know—have received substantial contributions from impermissible sources before Restore Britain was registered officially as a political party. The fact is that we simply do not have a clear understanding, and the current legal landscape means that there are no checks on the funds that a party may hold prior to formal registration.

I should make it very clear that the Bill goes far in strengthening controls on the sources of donations to political parties, and goes a great way to shoring up our democracy against foreign interference. However, I would really welcome the Minister’s thoughts and ideas on how we can ensure that a political party does not seek to sidestep controls on donations and loans by accepting substantial contributions from a potentially impermissible source simply because it has not yet set itself up officially as a political party.

I know that this is something that Rycroft seeks to understand at a top level in his review, so I do not expect it to be dealt with in Committee—I think that would be wrong, because we had the review only just before the Easter recess—but I would welcome the Minister’s thoughts, as the Bill proceeds, on how we close down the potential problem whereby political movements, political projects or whatever we want to call them seek to gain donations outside the controls and checks that would apply if they were a registered political party.

Representation of the People Bill (Seventh sitting)

Debate between Lloyd Hatton and Paul Holmes

Committee stage
Tuesday 14th April 2026 Public Bill Committees

[Lloyd Hatton (South Dorset) (Lab)]

I will keep my remarks brief. As we start the afternoon sitting, it is worth putting on the record that clause 60 goes a significant distance towards finally tightening up the rules around corporate donations, which many campaigners, including in civil society, would argue have been left unaddressed for far too long. What clause 60 seeks to do is effective.

That said, and I will not repeat in too much detail the points made by the hon. Member for North Herefordshire, it is worth reflecting on the recommendations in Philip Rycroft’s review around revenue versus profits, and how we can tighten things up. So I am keen to understand how, as the Bill progresses, we can potentially take his recommendations into account.

It is worth remembering some of the big case studies that have been a cause for concern. We therefore know that, in some cases, corporate donations can carry a significant risk of nefarious interference in the democratic process. There was much media coverage and speculation about the idea that Elon Musk, the California-based billionaire, could legitimately make a donation to a UK political party via a UK subsidiary of Tesla.

When we look at some of the research conducted by CenTax or Transparency International, we see that around £1 in every £10 that comes via a company as a donation could be because the individual in question could not donate directly themselves. According to that same research, around a quarter of money donated by companies is completely untraceable. So these measures are really welcome.

[Paul Holmes]

I do not disagree with what the hon. Gentleman is saying; I think he is well intentioned, and his speech is well researched. However, as set out in the House of Commons Library note, the Electoral Commission itself has warned that the provisions in the clause

“would not reduce the risk of foreign money entering British politics through companies”.

What does he say to that? Does he think the Government should do more?

[Lloyd Hatton]

I think there is a difference between corporate and non-corporate donations. However, what would be really interesting is to see how the Bill progresses in taking forward the Rycroft review. That is a really important point, but I will not go over it again, because it has already been well articulated by the hon. Member for North Herefordshire.

To conclude, the Bill takes serious steps forward in addressing some of the foul play we have seen time and again with corporate donations in the past, and there is a huge body of evidence behind that. However, I would welcome any early advice or opinion the Minister can give us on how we can work on the recommendations set out by Philip Rycroft.

--- Later in debate ---

[Paul Holmes]

I thank the Minister for her remarks. Once again, I would like to say on the record that the Government are making great strides in this area and are trying to strengthen the legislation and the regulatory regime around donations. We agree with her that the amendments—particularly amendment 88—for the reduction to £500 on the reporting threshold for donations from unincorporated associations is simply too low. There could be a debate on whether it should be lowered from what the Government are proposing; I think actually unifying the regulations between companies and unincorporated associations is a sensible thing to do. It removes ambiguity and creates a more uniform system. The burden placed at £500 would create an unnecessary reporting regime.

[Lloyd Hatton]

It has already been outlined by the hon. Member for North Herefordshire, but I am interested to know whether the official Opposition spokesperson agrees that the previous Government’s decision in the Elections Act 2022 to inexplicably increase the threshold for UAs was wrong, and that the intention of this Bill, which is to reduce it, is the right way forward?

[Paul Holmes]

I have already said that I think the Government are being sensible in creating a unified or level playing field between companies and unincorporated associations. I was not an expert on the previous Act when it was passed, but in my view it is sensible for the Government to be taking this action, now that its consequences are clear, because the Act obviously did not work. If Members across the House look at some of my previous remarks on some of the proposals brought forward by the last Government, I am not ashamed to say that sometimes—I only say sometimes—we got it wrong. That is the nature of democracy.

The changes that the Government are making are sensible and my contention is that some of the amendments—especially amendments 88 and 90—use a sledgehammer to crack a nut. They create an overburden compared with the Government’s good intentions and what they want to get out of the proposals.

We would not support amendment 88 and we certainly would not support amendment 90, but we do welcome the strides that the Government, and the Minister, are trying to take in tightening up the regime.