National Security Strategy, Political Finance and Foreign Influence

Matt Western Excerpts

Thursday 19th March 2026 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

I am pleased to present the Joint Committee on the National Security Strategy’s third report of this Parliament, on political finance and foreign influence, and I am grateful to the Backbench Business Committee for granting time for this.

Let me outline why this issue matters. First, the UK’s political finance system was designed for a more innocent age when state threats were lower and the “good chaps” theory of politics resonated more strongly, both at home and abroad. The scale of loopholes facilitating the flow of foreign money into UK politics is now recognised, and Transparency International UK estimates that it runs to tens of millions of pounds. Furthermore, US intelligence has estimated that Russia spent over $300 million to influence politicians in 24 countries between 2014 and 2022. Here, we have seen a British politician jailed for taking Russian bribes, alongside MI5 interference alerts about Christine Lee, who made around half a million pounds in political donations. This is all deeply concerning. The Government deserve credit for addressing the basic failures through the new Representation of the People Bill, alongside other work, but our Committee established that they need to go further.

We have not yet seen a collapse in the integrity of our democratic processes, but we worry that a moment of reckoning may be coming. Indications suggest that foreign state threats are growing, and the possibility of an acute crisis can no longer be ruled out. Efforts to influence UK political positions on critical issues will likely increase between now and the next general election. Democracies around the world are under threat, and as democratic norms erode, so will corporate behaviour. That will only be made easier by new technologies that enable firms to evade due diligence checks.

There is also deepening uncertainty about the trajectory of the current United States Administration, who have ambitions to shape the political direction of their allies. Wealthy individuals are a concern too: Elon Musk, for example, has reportedly considered a £75 million donation to a UK political party. As our political landscape becomes more fragmented, the likelihood of tight and unpredictable electoral races is growing. Adversaries could try to create the impression of having influenced a few races, even if they do not actually change outcomes, simply to make the losers doubt the legitimacy of the process.

Our political finance system is not designed to withstand a major effort by foreign actors to circumvent the rules, and what happens if political actors in the UK decide that they are not going to respect the rules and constitutional precedents? Presently, I have little confidence that the system would hold. Safeguards and deterrence are completely inadequate. Responsibilities and capabilities are fragmented. Too much problematic activity is apparently allowed or impossible to prove. Thresholds for criminal investigations are too high. Prison sentences are too low. The police are under-resourced, the Electoral Commission lacks the basic powers to do its job, and the general enforcement toolkit is slow, timid and retrospective.

That all feeds the public perception that our politics is open to external influence—a belief that is corrosive. Already, Electoral Commission data shows that public trust is worryingly low. All of this matters right now because the Government have brought forward the Representation of the People Bill. There is much to like, and I commend the Government for their willingness to grapple with a politically sensitive topic. The Committee also welcomes the forthcoming Rycroft review on foreign interference.

Our Committee concluded on six recommendations for change. First is the need for a new enforcement lead. Presently, responsibilities for foreign financial influence risks are split across MI5, Counter Terrorism Policing, the National Crime Agency, the Metropolitan Police Service, local police forces and the Electoral Commission. That hardly inspires confidence that risks are being investigated proactively, with the right expertise in the right place at the right time. The Government should use the police service reforms to create a new centralised political finance enforcement unit, staffed with expert secondees.

Second is the need to fix basic loopholes. For example, the Bill proposes a cap on donations linked to UK-generated cash but then allows companies to donate their entire limit hundreds of times over to individual candidates and campaigners. We heard anecdotally that the rationale was to limit reporting burdens for business, which is a little bizarre. It is not hard to record making a donation—it is a matter of public record. That needs fixing.

Third is the need for tougher declarations and penalties. For example, the Government have committed to commencing section 54A of the Political Parties, Elections and Referendums Act 2000, which requires donors to declare money they have received in connection with a donation. But why does that only apply above £11,180, and why is it such a bizarre figure? Why are the penalties so low, and why is the threshold for a police investigation still so high? We therefore suggest introducing the measures through the Representation of the People Bill instead, which would allow the Government to lower the declaration limit to £500, widen the scope and increase maximum penalties to three years in prison.

Fourthly, the Electoral Commission needs new powers to do its job. It must be able to require information from financial institutions about the source of a suspicious donation. Currently, the commission faces a Catch-22 situation: it cannot get that information without a major formal investigation, and it will not have grounds to launch an investigation without that kind of information. The Government need to fix that conundrum, so that the Electoral Commission has access to data.

Fifthly, we must address crypto donations. We heard arguments for and against, but found no democratic imperative to allow crypto donations right now. The risks are way too high and the benefits too low, and the resource burden of trying to implement safeguards is disproportionate. We therefore call for a ban—a moratorium—until proper rules are in place, and the Electoral Commission should develop adequate safeguards ahead of the next general election.

Sixthly, we need to be mindful of resourcing. The Government should ensure that the new national policing unit is properly staffed, and that the Electoral Commission has specialists and the appropriate tools for complex investigations—because they are complex.

Finally, we must ensure that any changes are proportionate. Our report is very targeted and seeks to strike the right balance. It is important to note that we did not look at other contentious areas—for example, second jobs, think-tanks, media outlets and online campaign outfits, which also deserve scrutiny. I have tabled amendments aligned to these recommendations. I trust that this report is helpful to the Bill Committee and to the wider House.

[Mr Alex Barros-Curtis (Cardiff West) (Lab)]

I thank my hon. Friend for that excellent statement. I fully welcome the report and its recommendations, which I will read very carefully. I share his concerns about cryptocurrencies. The first recommendation is about the need for a single centralised unit. Does he agree that the Government might consider the new National Police Service, announced as part of the policing reforms, a suitable vehicle to deal with the issues of electoral crime?

[Matt Western]

The Committee very much hopes that a new service will be able to accommodate that recommendation. We hope that there can be a centralised service, using whichever is the most appropriate vehicle; whether that be within the National Crime Agency or separately within the police service is for others to decide. The most crucial thing is that we do not have a disparate mix of agencies working in the same arena. The critical thing that we uncovered was how the Electoral Commission—which much of the investigation was about and where so much of the concern originates—often cannot access data and information from other agencies for GDPR reasons, and therefore it is frustrated in its work and many opportunities to prosecute or bring cases are not enabled.