Elections Bill

Lord Grocott Excerpts

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

[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”.

[Lord Grocott (Lab)]

My Lords, I agree with much of what has been said so far, although I think an obvious connection—an obvious debate that we still need to have—between this question of donations from overseas and the massive extension of the electorate living overseas has been missing. The two issues are related and they raise matters of very similar principle. This extension of the franchise would be a massive change: it is an increase in the potential electorate of around 2.5 million people over a couple of years.

Of course, it will be argued that, in practice, most of those who could register as electors would not. In 2019, when the rule was that only people who had been domiciled abroad for 15 years could vote, I think about 204,000 people actually voted, which represents a turnout of about 17%, but there is absolutely no guarantee that that low turnout will persist. I say this particularly to the noble Lord, Lord Wallace, who argued about the importance of connecting different aspects of the Bill, which I agree with. If we move to a system of automatic voter registration—which I am personally in favour of, but I do not expect it to come about as a result of this Bill—you have a potential additional electorate of 2.5 million people.

Once you concede the argument that it is okay for people with virtually no practical connection with this country who have lived abroad for 40, 50 or 60 years to get on the register by “attestation”—that is the word—if there is no way in which you can establish as a matter of fact that they once lived or voted in a particular constituency, albeit 50 years ago, they can get on the register by means of someone else who does qualify attesting on their behalf that they are in fact the person who lived there and they are entitled to vote. It is much easier to get on the electoral register from abroad in many respects than it is at home, particularly when we have voter ID established in the way being proposed.

But, to me, the principle at stake is about individual constituencies. To remind the House, at the last election the figures for the proportion of overseas electors in some constituencies were small. The figures are small at the moment. For example, in London and Westminster it was 2.43%, in Hammersmith it was 2.12%, and in Islington it was 2.36%. They are relatively low figures, but, of course, if you increase the electorate by potentially 2 million, even if the turnout is low, you could end up with 5,000 or 6,000 people in individual constituencies who have no connection with the area worth speaking of at all being able to vote. This could result in particular decisions being made, as they can be at elections, of crucial importance to the people living there. The most dramatic example would be a proposed hospital closure, involving very strong views on either side of the debate. The 5,000 or 6,000 people who have never lived in the constituency and who will never have to cope with the circumstance of the hospital closing could be the determining factor in the election. I am opposed to that; I just think it is wrong. It damages our democracy if there is no residence, no contact and, in truth, no responsibility for the decisions that are made.

I think what is true of voting is also true of money: if you have a situation where people who are on the register are also permitted donors, there can be a totally distorting effect—I am not going to go into the various figures that have already been given—possibly on the outcome of the election itself. If huge sums of money come from a potentially very large number of overseas electors—or even someone who is not particularly interested in voting but thinks “Well, as soon as I become someone on the electoral register, I’ll be able to donate with impunity and I’ve only got get someone to attest that I once lived in a particular area and away we go”—you have a situation where it is now money that might determine the outcome of an election. This is money from people with nothing but a slender and tenuous connection with the country, in this case, in which they are not going to be living with the consequences of their money having a significant effect on the outcome of a general election.

--- Later in debate ---

[Lord Wallace of Saltaire (LD)]

My Lords, before the noble Lord sits down, I remind him of the third link in this, which is that campaigning for overseas voters is going to be very expensive and the advantage will go to the party that has the most money, in terms of contacting them and soliciting their vote. So, in terms of a level playing field, the addition of another 2.5 million overseas voters tips the balance even further in favour of the richest party.

[Lord Grocott (Lab)]

I absolutely agree with that.

[Baroness Bennett of Manor Castle (GP)]

My Lords, this has been a hugely interesting and terribly important debate. I am now going to take what you might describe as the traditional Green role of going much further than anyone has gone before in seeking to deliver what the noble Baroness, Lady Hayman, called for in introducing this group: free and fair elections. That is what I think we are all aiming for. Before I do that, I think perhaps I should—given the direction the debate in group one today took—declare in retrospect my position as vice-president of the LGA, and apologise for not doing that earlier.

Given the hour, I am going to restrict myself to commenting on Amendments 212A and 212B, which appear in my name. They do bear some relationship to Amendment 212DA in the name of the noble Lord, Lord Stunell, which goes in a similar direction but in a more limited way. Like many noble Lords, I am drawing particularly on the 13th report of the Committee on Standards in Public Life entitled Political Party Finance: Ending the Big Donor Culture—which is what my amendment seeks to do.

Amendment 212A amends the Political Parties, Elections and Referendums Act to set a donation cap of £500 from any individual donor or corporation to each party or candidate, either with a single donation or cumulatively by multiple donations through a calendar year. Clause 1(2) specifically excludes trade unions from that cap, which I think deserves some explanation. One of the Green Party’s policies for a sustainable society states:

“Donations from democratic membership organisations (such as trade unions) provide a useful method for ordinary people to pool resources in order to exert influence”.


It could be argued that there may be other organisations similar to that—I think of the RSPB, perhaps, as an example—that might choose, as a group, to give a larger donation. But the practical reality is that most of those are charities, and our charity law means that is not practically going to be an issue.

I would like to acknowledge that there is potential flaw in the way this amendment is written—and it certainly needs some more work—in that it does allow a donor to give £500 to potentially every single candidate, which would obviously come to a very large sum of money, which is not the intention of the amendment. This was done because the donation rules apply separately to parties and to individual candidates—but this is something I will work on in terms of this amendment.

With that proviso, this is an amendment that could truly revolutionise our elections. Indeed, it could go a long way to making the United Kingdom a democracy. Currently, very large donations are a major factor, perhaps a deciding factor, in our elections and other votes. The dictionary definition of an oligarchy is “a small group of people having control of a country or organisation”. I might add “party”. There is a strong case for saying that that fits the UK better than the definition of a democracy. Perhaps that has always been the case, but certainly now, since we have a situation where technology allows huge online spending to reach voters in a targeted way—far more than anyone using up their shoe leather to knock on doors and deliver leaflets possibly could.

I am not really expecting the Government to say, “Yes, we want to transform our elections and make them wonderfully democratic and set a £500 maximum donation limit in a year”. But I have a real question which I would very much appreciate an answer to from the Minister. I note that, responding to the Committee on Standards in Public Life report in 2011, the then coalition Government said:

“The amount any one individual, organisation or institution can give in political donations should be limited.”


So I ask the Minister: do the Government accept that there should be a limit, whatever that limit is, on how much one organisation or individual can give? Should it really be the case, as it is now, that there is no limit?

I note that a political party’s spending is capped at £30,000 for each constituency that it contests in a general election. So if a party stood a candidate in each of 650 UK constituencies, its maximum spend would total £19.5 million. Indeed, I am indebted to the Library for some very rapid research this afternoon. The figures have not yet been fully published, but it would appear that the Conservatives spent not very far off £16.5 million in the 2019 election and about the same in 2017, according to the published figures.

That might seem to be a kind of limit. One donor could fund an entire general election campaign. But, of course, that spending covers only the regulated period and only the regulated spending, which is far from everything that political parties spend. Funding outside election periods would, so far as I can see, be utterly unlimited.

If you think I am talking in terms of theoretical possibilities here, you might want to look across the channel to the United States of America whose political direction, for many ills, we very often follow. A useful report produced last year by Issue One, a non-partisan group that seeks to reduce the influence of money in politics, totalled some of the contributions from what it called “megadonors”—multiple Wall Street billionaires and investors, a Facebook cofounder, a shipping magnate and an heir to a family fortune dating back more than a century. If you look at those figures, you see that at the top of the list is Michael Bloomberg, the former mayor of New York City, who spent $1.3 billion, which is about £1 billion. Of that, $1 billion went towards his own failed campaign for president in 2020.

This is a pattern that we are increasingly seeing around the world, where money can buy you the politics you want—or at least you can make a very effort at it. It seems that the natural conclusion is to buy yourself, or the party created or reshaped in your own image, office. In my native land, the United Australia Party has said that in the forthcoming federal election it plans to spend more than it did in 2019, when the figure topped 80 million Australian dollars, which is about £45 million. It was previously known as Clive Palmer’s United Australia Party and the Palmer United Party, and it was formed and overwhelmingly funded by the mining magnate Clive Palmer.

I would be very interested in anyone’s answer to the question of why people should be able to buy the politics they want and why people can make serious efforts to buy control of the whole country. That is what is happening and we have nothing in our law to stop it. A lot of our discussion in this group has focused on foreign money in politics and we have heard many powerful accounts of why that should be so. For example, the wife of President Putin’s former deputy Finance Minister, a British citizen acting legally, has donated almost £2 million to the Conservative Party since 2012, making her the largest female donor in history, but if we focus on foreign donors, that only partially addresses this issue.

Why should anybody, whatever their residence, status or citizenship history, be able to buy our politics? If they are a businessperson or an inheritor of family wealth, surely they are likely to influence politics in the direction of maintaining that wealth. Why should they be able to do that? I am sure there is many a nurse tonight, struggling hard to do his best for his patients in the NHS, who would love to influence our politics to improve its resourcing. A farmer might have very strong thoughts about the direction of UK trade policy and its impact on food, health and environmental standards. A family carer, struggling along on an allowance of £87 a week, might have strong views on the adequacy of that. Why should their voice be any less than anyone else’s?

I was discussing this amendment with a Member of your Lordships’ House who I will not identify, because it was a private conversation. They exclaimed in a tone that I think could best be described as horror, “But we couldn’t run an election on that!”—noble Lords might guess that they were not from the Green Party. I invite your Lordships’ House to consider a different kind of election, one based on passion, ideas, commitment and genuine engagement with the public, rather than a continual bombardment of slogans—which would probably consist of three words—endlessly, from every media source, as a replacement for actual politics and policies.

I understand that there are some ways of reaching voters that quite reasonably cost money, such as leaflet or video production, so I agree that Amendment 212A implies state funding for political parties. We collectively get the politics that we fund. If we all paid for politics, it would be our politics—what a refreshing idea. I think we will get to those points in the ninth group, with the very interesting amendment from the noble Lord, Lord Sikka, so I will leave my comments on that till then.

Amendment 212B is rather more technical. There will be people in your Lordships’ House who know a great deal more about this than I do, and I would be very interested in any comments. This amendment would revive Section 68 of PPERA, requiring declaration of multiple small donations by an individual which total £5,000 or more in any year. The figure of £5,000 is what was used in Section 68 of PPERA originally. I have tabled this amendment because, when I had some experts look at the donation rules for Amendment 212A, we realised that Section 68 of PPERA had been repealed, but neither our team, nor the House of Lords Library, could find any justification recorded for the repeal. It does not seem to have been discussed in any parliamentary debates.

It ought to be revived because of the online nature of many political donations now. It is possible and easy to make many small donations that could total a very large figure. This perhaps sounds theoretical, but a person could donate £1 billion by making 1 billion donations of £1. None of those donations would have to be declared to the Electoral Commission and none of the verification that is done with larger donations would have to be made. That is obviously wrong. Questions have been asked about recent election donations. I will not go into those, but I have identified a clear risk here. Indeed, both of my amendments identify very clear risks that have to be addressed.