Political Party Finance and the Electoral Commission

Lord Pack Excerpts

Thursday 2nd July 2026 Lords Chamber

[Lord Pack (LD)]

My Lords, I join other noble Lords in thanking the noble Earl, Lord Kinnoull, for such a helpful and timely debate. As we have heard from the contributions today, it is useful to debate this topic in advance of legislation coming to this House, but with a step back from the necessary microfocus we quickly get into when the legislation is in front of us. As someone who has also long called for consolidation of election law, I have been particularly heartened by the number of contributions, including the one before me, highlighting this issue and raising its importance.

When I asked an Oral Question in this place a while ago about the topic, it was perhaps understandable but a little disappointing that the Government’s position seemed to be that, because consolidation will take a long time to carry off, they were not going to prioritise it. One can therefore unfortunately characterise the Government’s position as: “Because it’s going to take a long time, we’re going to put off starting it”. The alternative interpretation is that, because it is going to take a long time to do, maybe that is all the more reason to start it sooner rather than later.

I very much agree with the comments by the noble Lord, Lord Carter, about the long delay in implementing the provision about the original source of money. It is welcome to say something nicer about the Government’s position in this case. It is welcome that the Government have definitely moved on that—it happened to be the topic of my first Oral Question in this House, and I acknowledge that the Government have moved on that issue. But underlying all this is a basic tension in a free and democratic society between, on the one hand, the basic principle of one person, one vote—an essential equality between us all—and, on the other, the fact that we all should be free to spend or give our money as we wish in a free and democratic society. That means that, inevitably, those with more money have an ability to chip away a little bit at the fundamental equality that there should be in a democracy.

Not all these issues are going to be easy to resolve or address, but it might be useful to focus on one area which has not had attention so far in the debate: donations that are made direct to candidates at election time and declared on their candidate expense returns. This is an issue on which I did some research with Chris Butler that was published in Political Quarterly a couple of years ago. I am sure all noble Lords are deeply familiar with that, but I will expand on it for those who are newer to the topic. If, for example, at general election time, someone makes a donation directly to a candidate, which is then declared on their election expense return perfectly legally and properly, the problem is that that money then essentially disappears from the system. Those donations direct to candidates do not appear in the Electoral Commission’s published register of donations.

Moreover, when Chris and I asked the Electoral Commission for copies of some of the expense returns that it had kept so that we could do our research, it decided—I am sure on good legal advice—that it could share those forms only with the names of the donors redacted for data protection reasons. We have a system where donations are declared on bits of paper but, when you ask to see those bits of paper, the name of the donor is redacted. That is, I think it is fair to say, an unsatisfactory situation. It is unsatisfactory not just in principle: our estimate was that around £3.5 million was donated at the 2019 general election in this way, so it is not merely an obscure, fun or trivial point but a route by which millions of pounds are flowing into our political system. Indeed, about one in four donations received by successful candidates who were elected were direct to them; the money was not recycled from a political party and then passed on to them. As I said, who those donations were from were, in effect, kept secret.

In some cases, where people are successful and are elected, there is the MPs’ register of interest, which people are meant to fill in and declare appropriate sums on. But that does not wholly solve the problem, because that applies only to donations of a higher threshold and only to people who are successful. The names were redacted on the forms that the Electoral Commission was willing to provide so one has to step cautiously in trying to compare those forms with the MPs’ register of interests, but Chris Butler and I found that about one in 10 of the donations appear to be of a significant enough sum to an MP that they should be on the MPs’ register of interests, and that there was no matching entry on the register of the right size. There may be some explanations in one or two cases, but there is a question about how the system does not appear to be properly joined up, and a non-trivial amount of donations that people who end up being MPs receive and should be declaring do not appear to be being properly recorded.

There are many other circumstances in which donations direct to candidates and direct to politicians are reasonable, legit and above board, and the system works well. I say that not only because, when I twice ran to be president of my own political party, I received donations directly, which are all properly recorded and can be looked up on the Electoral Commission website. I hope that the example I have given highlights how much of an issue there is around the donations of money directly to individuals.

I will briefly give one other example. It is true that the Representation of the People Bill, as it stands, introduces a cap on foreign donations, but that cap is a per candidate or per person cap. Therefore, very simply, under the current proposals any political party contesting all the seats in the country—most of the parties that contest across the board do not stand in Northern Ireland, so there are 632 seats, including the one held by the Speaker—would be able to donate 632 times the cap. As such, the figures that the noble Baroness, Lady Hayter, gave earlier are unduly modest on the amount of money that could legitimately be given within the spirit of what is currently proposed.

I very much hope that we will hear from the Minister some intentions and thoughts around tightening up some of the proposals, particularly for donations made directly to politicians and candidates. Of course, if the Electoral Commission is right—I grant that it will have taken specialist advice on this—that it is not allowed to release the names of those donors, that may be a suitable ground for an additional amendment to the Representation of the People Bill when it comes our way.

I will end on what may seem like a slightly less important point, but it concerns a fundamental, underpinning issue: the consolidation of election law. It is easy to always think that tidying up stuff and making it neater is never quite the priority. I confess that I have never put demanding the consolidation of election law as the headline story on the front of a Lib Dem Focus leaflet—and were I to find a colleague who was planning to do so, I would reach for the phone to tell the printers, “Don’t print this yet!”

None the less, the long-term commitment to keeping things neat, tidy, clear and comprehensible brings significant benefits. The Rycroft review rightly highlights the potential benefit in helping protect our democracy against foreign interference. Returning officers would absolutely talk about the benefits of it making their lives easier and, particularly in an environment of stretched budgets, making it more possible to run elections successfully in a more cost-effective manner. A bit like the frustrated parent who is trying to tell their teenage child to remember to tidy their bedroom now and again, I hope that, in that spirit, we will hear from the Minister on the topic of consolidation.