Elections Bill

Lord Butler of Brockwell Excerpts

2nd reading
Wednesday 23rd February 2022 Lords Chamber

[Lord Butler of Brockwell (CB)]

My Lords, it is a great privilege and a pleasure to follow the noble Lord, Lord Moore, and to be the first to congratulate him on his delightful maiden speech. The noble Lord acknowledged that it has been a long time coming, albeit with good reason. I think the whole House will agree that it has been worth waiting for and that it amply fulfilled the expectations of those who have previously spoken.

As with John Morley always being remembered for his Life of Gladstone, when we are all forgotten, the noble Lord will be remembered for his biography of Margaret Thatcher. Like many others, I gave him such help as I could in that endeavour, in the belief that I was contributing to the objective and definitive history of that time. My trust was never abused and was amply rewarded by the outcome. It is our good fortune that the stimulus and enjoyment which the noble Lord gives us each week through his columns in the Spectator and the Telegraph will be extended to his contributions in this House. I hope we will receive them on a similarly regular basis.

I want to make three short points about the Bill. First, I regret that it has not been subject to pre-legislative scrutiny or, even better, a Speaker’s committee in the other place. It is desirable that legislation on this subject should be submitted to the views and contributions of all parties and, if possible, introduced with all-party agreement. If that does not happen in the Commons, it invites partisan disagreement in this House, and it is clear from the speeches that have already been made that that has not happened. For that reason, it will encounter more difficulties in this House than it otherwise would have done, which is regrettable.

Secondly, we live in a time in which the means of distorting information available to voters have grown hugely in their reach and influence. It is necessary for legislation to protect voters, as far as possible, against the intervention of those with the means and resources to subvert the democratic process, whether that subversion comes from state actors or other interest groups. In this context, the Bill is inadequate. As has been stated, it does not address the concerns expressed by the Intelligence and Security Committee or, more recently, the Committee on Standards in Public Life and the Foreign Affairs Select Committee in another place, about the dangers of secretive campaign finance coming from foreign sources. In passing, I cannot help referring to the paradox that, in my time in government, we used to worry about subversive finance from Russia to the Labour Party; now we worry about subvention from Russia to the Conservative Party.

Seriously, however, I ask the Minister to tell us what the Government are doing about these reports, particularly in current circumstances. I say with all due respect to him that it is not sufficient to say that the Government always consider the advice they get from wise committees and then do nothing about it. These committees are indeed wise. As those of us who serve on Select Committees and other committees find, they take a great deal of evidence and receive contributions from experts, and they need to be taken seriously. There is not likely to be another opportunity for legislation on election issues during this Parliament, and so these matters need to be dealt with in the Bill. The committees that have made recommendations need and deserve a serious response from the Government before the Bill is considered. I mention particularly the threat through unincorporated associations identified by the Committee on Standards in Public Life, and I ask the Minister in his response to deal with that.

Finally, the Electoral Commission is the instrument through which we seek to ensure a level playing field. Like others, I remain to be persuaded that it is necessary for the Executive to interfere with the independence of the commission through a strategy and policy statement, especially one prepared by the Government, with their own majority in the House of Commons and their own electoral interests. I hope that the House will look very carefully at that provision in the Bill.

Elections Bill

Lord Butler of Brockwell Excerpts

Lords Hansard - Part 1 & Committee stage
Thursday 10th March 2022 Lords Chamber

[Lord Beith (LD)]

My Lords, I want to make a Committee point, if I may. Even though I agree with the general statements that have been made about the deep undesirability of Clauses 14 and 15, and the danger they represent to the reputation of this country as a guardian of democracy, my noble friend made quite clear that we would want to see those clauses removed but also indicated his support for the noble Baroness’s amendments, which would ameliorate those clauses slightly if the Bill were to retain them. I am very keen that the Bill does not retain them.

The amelioration has its limits and, in that context, I want to remind the Committee of the report of the Constitution Committee on the Bill in this respect. Paragraph 39 says:

“We are concerned about the desirability of introducing a Government-initiated strategy and policy statement for the Electoral Commission. The proposal will open up to risk the independence of the Commission … it would be dangerous if the perception were to emerge that the Commission is beholden to the Government for its operation and delivery.”


The weakness of the noble Baroness’s amendment, which I know is well intentioned, is that the statutory status of the statement remains and she creates a rather interesting situation, which I had not seen in legislative form before, in which the commission can carry out what the Government suggest if it already agrees with them, which would be a new kind of statutory position. The fact is that there would still be a statement that had some degree of statutory authority behind it.

Governments and governing parties can always criticise what the Electoral Commission says and does and have shown little hesitation about doing so over the years. There has never been a limit on the ability of the Conservative Party to say what it disagrees with in the Electoral Commission’s work. But to create a statutory process, even with the consultation involved, and produce from that a statement which explicitly or implicitly appears to bind the Electoral Commission is highly dangerous. I see that statement as addressing priorities of the commission. Is the commission spending too much time on political finance and donations? Is it spending too much time trying to register groups of people in this country? Should it spend more time trying to find more overseas voters? Such issues are not things on which we want to see the Electoral Commission steered by a statement that has any authority from statute. Let parties both in government and outside it continue to express their views and, indeed, their criticisms, but do not build into our statutory system that kind of statement.

[Lord Butler of Brockwell (CB)]

My Lords, I put my name to the amendment in the name of the noble Lord, Lord Wallace of Saltaire, which my noble and learned friend Lord Judge will move this afternoon. As I may not be able—depending on the progress of business—to speak then, it may be for the convenience of the Committee if I make a very short intervention now.

I spent last night reading the illustrative example of a strategy and policy document issued by the Government in September. This document is no doubt designed to reassure but we are left with the question of how much further this clause gives an opportunity to a Government to go in regulating the activities of the commission. That is the subject that should worry us.

Elections Bill

Lord Butler of Brockwell Excerpts

Lords Hansard - Part 2 & Committee stage
Thursday 10th March 2022 Lords Chamber

In considering the policy and strategy statement to be written by the Secretary of State, telling the Electoral Commission what it may and may not do, will the Minister tell the Committee which political parties and which organisations have supported this principle and which have opposed it? As far as I can tell, support comes from only one party. All the independent organisations concerned with the health of our democracy have opposed there being such a statement.

[Lord Butler of Brockwell (CB)]

My Lords, since the Minister will no doubt address the question that the noble Lord, Lord Collins, raised, perhaps I may just add a supplementary. In addition to asking what problem Clauses 14 and 15 address, why is a strategy and policy statement thought the necessary solution to it?

[Lord Kerslake (CB)]

My Lords, may I add a further supplementary question? In the Written Ministerial Statement, the Minister in the other place, Chloe Smith, said:

“In recent years, some across the House have lost confidence in the work of the Commission”.—[Official Report, Commons, 17/6/21; col. 11WS.]


Perhaps the Minister can tell us whether that is the view of some across the House of Commons or of the Government? Is this change about an issue of confidence or is it something different?

--- Later in debate ---

[Lord Butler of Brockwell (CB)]

My Lords, I am very grateful to the noble Lord for giving way. His complaints against the Electoral Commission may be justified, but can he explain how a strategy and policy statement from the Government would put the matter right?

[Lord Hayward (Con)]

The noble Lord intervenes at a highly apposite time. I said at the start of my contribution that I was conflicted. All I wanted to do was set the record straight in relation to the Electoral Commission as I and others have experienced it. A number of noble Lords have said that these clauses do not solve the problems that might arise from any behaviour of the Electoral Commission. That is why I am conflicted. I do not believe these clauses solve the problem. I believe there are problems with the Electoral Commission and that Mr Pullinger and his new organisation will tackle them, but I do not believe that these clauses solve the problem.

The noble and learned Lord, Lord Judge, regularly reminds us of Henry VIII clauses. I regard this as a Henry II clause: “Who will rid me of this troublesome priest?”—or, in this case, this troublesome regulatory body. I am sorry, but I cannot read those clauses without thinking that in some malevolent hands they will be misinterpreted by some Government or another.

I was an electoral observer in 2018 in a country I know well because I completed the whole of my university career there—Zimbabwe. I met the Zimbabwe Electoral Commission and challenged it on the way it operated that election. I would like to be in a position to suggest that it use and operate our law. Could I honestly do that with these two clauses as they stand?

I come back to the position on which I opened. I am conflicted. I would like to see what the noble Lord, Lord Scriven, identified: the clear operation of an electoral commission that produces independent, fair, free elections. That I could commend to the Zimbabwe Electoral Commission. I hope that, when it comes back, this legislation will be something that I could recommend. As it stands, with these clauses, I could not.

Elections Bill

Lord Butler of Brockwell Excerpts

Lords Hansard - Part 2 & Committee stage
Monday 28th March 2022 Lords Chamber

[Lord Butler of Brockwell (CB)]

My Lords, I put my name to the amendment that has just been introduced by the noble Lord, Lord Rooker, because this is an important subject. The disinterested recommendations of the Committee on Standards in Public Life need to be taken seriously, and this is probably the last opportunity to do so before the general election. By the way, I apologise to the noble Baroness, Lady Hayman, for missing the first few sentences of her speech.

The amendments in this group seem to have three common themes. The first and most important is integrity. Political parties need finance to support their operations, but money should be given to meet their expenses because the donor believes in our electoral system and in the principles of a particular party, not because he or she has an ulterior motive of self-interest. The second theme is transparency. The integrity of a donation can be judged only if its source is known. If its source is unknown—and, more especially, if it is disguised—it is very likely that the motive for the donation is an ulterior one. The third theme is to ensure that the money is clean and does not derive from activities contrary to the public interest or even criminal—what is often called dirty money. Those themes are interwoven. Dirty money can be detected only if there is transparency so that the source of the donation is known, and dirty money will almost always have an ulterior motive.

Some of the previous amendments spoken to in this group have been concerned with transparency, and in general I support them. Amendment 212G, to which I have put my name, is principally concerned with the third theme, the detection and prevention of dirty money discrediting our electoral politics. The amendment, which is very long—I did not draft it myself; I owe it to the organisation Spotlight on Corruption—can be best summed up by its opening words: it would impose a duty on political parties to

“develop and publish a reasonable and proportionate risk-based policy for identifying the true source of donations”

above £7,500.

The point that I want to emphasise is that this amendment should be pushing at an open door. All political parties want and need financial support for their activities, but all political parties are discredited if it turns out that in one way or another the money is tainted. The amendment might be described as helping political parties to protect themselves—not least to prevent the embarrassment that comes later, on a scale that very often entirely undoes the benefit of the donations that they have received.

All parties have fallen on their faces over this issue. A great deal of reference has been made to the Conservative Party but I remember, as will many noble Lords, the fuss in the early days of the 1997 Labour Government about a donation of £1 million that the party had received from Bernie Ecclestone. He had a vested interest in the use of tobacco advertising on Formula 1 cars, while the Government were thinking of banning such advertisements. Mr Ecclestone had given the Labour Party one substantial donation and was offering a further one.

Prime Minister Blair asked Sir Patrick Neill, then chairman of the Committee on Standards in Public Life, whether the party could accept the further donation. Sir Patrick Neill advised that, not only should the party decline the further donation, but that it should give back the earlier one. To his credit, I believe Mr Blair accepted that. Nevertheless, there was a great fuss and Tony Blair was severely embarrassed. Some may remember that he had to give a television interview in which he defended himself by saying that most people thought that he was a “pretty straight guy”. I think most people did think that. I am sure he wished he had not been put in that position.

I can see no conceivable reason why political parties should be opposed to having a protective machinery of the sort proposed in Amendment 212G. It implements, as the noble Lord, Lord Rooker, has said, three specific recommendations in the July 2021 report by the Committee on Standards in Public Life. It reduces the risk of damage to the reputations of all political parties. Above all, it helps to protect our country’s electoral system and safeguard the integrity of our political life.

[Lord Rennard (LD)]

My Lords, Amendment 212E, in my name, seeks to draw attention to a principle Parliament has previously agreed and that should now be brought into force. The Political Parties and Elections Act 2009 was discussed, and agreed, in much more consensual debates than is the case with the current Elections Bill. Parliament then agreed that donations and loans from an individual that are worth over £7,500—either individually or in aggregate over a calendar year—would have to be accompanied by a new declaration confirming that the donor is resident and domiciled in the UK for income tax purposes.

The Electoral Commission explained that donors would have to make the new declarations, and that those it regulates would have to ensure that they receive a declaration in respect of each relevant donation and add up donations they receive below £7,500 to check whether a declaration is needed. But this provision was not subsequently introduced. The consequences of this failure, and the real reasons for it, soon became clear. All the main parties have received donations from people who are not domiciled here and do not pay taxes here. The scale of the funding involved seriously distorts our democracy. After the 2015 general election, the Guardian reported:

“The Conservatives have raised more than £18m from wealthy donors who were domiciled abroad for tax purposes, research shows. Labour have also benefited from non-dom donors and accepted gifts of at least £8.55m. The family that controls the Lib Dem’s biggest corporate donor is also domiciled abroad”.


The provisions of the 2009 legislation should probably have been brought in before the 2010 general election, because the relative sums raised indicate why Governments since 2010 have not seen it as being in their interest to introduce these provisions. Ministers since then have tried to maintain that that the 2009 legislation approved by Parliament is unworkable, which is very convenient. But this is not the case as the Electoral Commission produced proposals nine years ago to make it workable. It is time that we insisted that all the parties—and simultaneously—are unable to take donations from those who are abroad simply to avoid paying taxes here. Only when no party can accept donations from people who may be tax exiles can all parties be expected to adhere to this principle. This amendment would bring that 2009 legislation into effect. We should not have a political system which might be described as “the best that money can buy”.

Elections Bill

Lord Butler of Brockwell Excerpts

Report stage
Monday 25th April 2022 Lords Chamber

Those are just three examples but the point is simple. There ought to be a requirement. The Committee on Standards in Public Life is where I rest my case, in a way; it has been absolutely clear about this. There is a strong case for requiring parties to make these checks. Businesses have to do it, and rightly so. The checks, as I have shown, are not onerous, with a £7,500 limit. I would not argue if the limit were £10,000, but I would not go beyond that. The fact is that it is not onerous on the parties. There is plenty of evidence that requires us to see that these checks take place, so that tainted, dirty money does not come into British politics. The Minister will have to have a much better answer than the noble Earl, Lord Howe, had; otherwise, I might push this.

[Lord Butler of Brockwell (CB)]

My Lords, I have added my name to the amendment of the noble Lord, Lord Rooker, and I really need to add very little to what he has said. It is very difficult to see why there should be opposition to a requirement that political parties should have

“a reasonable and proportionate risk-based policy for identifying the true source of donations.”

The Government’s answer to this, which the noble Earl, Lord Howe, gave in Committee, is that there has to be a balance. It is clear, however, that where the balance is now is not satisfactory, because, as the noble Lord, Lord Rooker, said, there have been a series of donations to all political parties that have been not to the credit of the parties, not good for their reputations and not good for the reputation for cleanliness of our politics.

As I understand the position, the Government have not ruled out acting on the recommendations of the Electoral Commission and the Committee on Standards in Public Life, but regard this as a complicated matter—perhaps it is—and need more time to work on it. If the noble Lord, Lord Rooker, seeks to test the opinion of the House, I will support him. I would be gratefully comforted, however, if not only the Minister but the spokespeople for the other political parties said tonight that they duly take this issue seriously and regard donations from foreign sources and people who want to influence our politics in an unhealthy way as a growing danger to our politics. If the spokespeople for the parties and the Government will say that they take this seriously, and the Government do not rule out acting on the recommendations of the Electoral Commission and the Committee on Standards in Public Life in due course, I will be very comforted.

[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.