Political Party Finance and the Electoral Commission

Lord Wallace of Saltaire Excerpts

Thursday 2nd July 2026 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, in following the noble Lord, Lord Maude, with whom I worked in the coalition many years ago, I am thinking of the 2022 Act, through which the Conservative Government were certainly trying to advantage themselves and disadvantage their competitors. That is one of the reasons why we have this Bill before us today, and this is a debate to which we will return.

Last Thursday we debated the problem of rebuilding public trust in our democratic institutions, so it is highly appropriate that today, we move on to discuss the Electoral Commission as the guarantor of the integrity of our campaigns. To play its role effectively, the Electoral Commission needs to have sufficient powers and to be seen as independent of government. In last Thursday’s debate, the noble Lord, Lord Hannan, argued that political debate is

“a free and open encounter”—[Official Report, 25/6/26; col. 820.]

in which truth will always emerge victorious, regardless of the channels of influence available to, for example, Elon Musk, as opposed to the ordinary citizen. In his speech, the noble Lord, Lord Frost, denounced

“the absurd and dangerous Rycroft review … which was written … to justify unnecessary and authoritarian solutions.”.—[Official Report, 25/6/26; col. 808.]

The noble Baroness, Lady Fox of Buckley, decried

“self-righteous campaigns against foreign actors”—[Official Report, 25/6/26; col. 816.]

as an effort by the establishment to distract the public from what she sees as the real reasons for public discontent.

Both the noble Lord, Lord Frost, and the noble Baroness, Lady Fox, regard the BBC as a greater threat to democracy. All three dismissed the impact of money on politics. Yet all of us who have been involved in democratic elections know from painful experience how important financial resources are. Money on its own does not win elections if candidates are poor and messages weak, as Reform has been discovering. But effective campaigns carry costs. When one side is richly funded and the other is skint, campaigns are not an open and fair contest.

American democracy is providing us with a test case in the importance of money in politics. The Supreme Court’s ruling against congressional limits on political donations opened the sluice gates for donors to try to buy candidates. The sums of money now involved in congressional elections are eye-watering. A presidential campaign costs more than the GDP of several members of the UN. That brings with it corruption, and foreign interference. The Republican Party and the think tanks which drive its agenda have been captured by ultra-wealthy individuals and companies which resist progressive taxation and government regulation and often deny climate change and the impact of their products on human health.

Growing inequality between the extremely wealthy and the ordinary citizen exacerbates this distortion of democratic debate. Wealthy British expatriates who avoid paying tax but nevertheless want similarly to reshape British politics aim to change the balance of public debate in this country. The flow of private money from ultra-wealthy sources in America is now a greater threat to free and open debate in Britain than money flowing from Russia, China or—until the recent elections—Hungary. That money flows into third-party campaigns and partisan think tanks as well as political parties, and we will need to look at that.

So far as I understood last week’s speech from the noble Lord, Lord Frost, he sees the ultra-wealthy as better able to understand and support the real wishes of ordinary voters than government, or what he calls the “British political class”. I am not sure whether that makes him an anarchist or an illiberal democrat, which is to say, an authoritarian in the style of Viktor Orbán or Donald Trump. I believe in liberal democracy and in creating, so far as possible, a level playing field for all contending opinion in public debate and, in particular, in political campaigns. For that, we need a trusted Electoral Commission with sufficient powers to punish those who break the rules.

I hope that the Conservative Front Bench will admit the error it made in government in attempting to limit the independence of the commission and enormously increase campaign spending limits. Wealth piles up on one side of politics—which is not, whatever the noble Lord, Lord Frost, believes, the side of the poor or the left behind. Money is a vital aspect of political campaigning, but massive flows of money pollute politics and endanger democratic debate, and we must use the forthcoming scrutiny of the Representation of the People Bill to regulate that flow more tightly.