Political Finance Rules

Paul Kohler Excerpts

Thursday 6th March 2025 Commons Chamber

[Mr Paul Kohler (Wimbledon) (LD)]

I congratulate the hon. Member for South Dorset (Lloyd Hatton) on securing this debate, and I thank the Backbench Business Committee for granting it.

As the Prime Minister declared last year, and as we see so graphically on the world stage now, the �fight for trust� will be

�the battle that defines our political era.���[Official Report, 17 July 2024; Vol. 752, c. 56.]

It is clear that if we MPs are to achieve the changes that people need most in their lives, we need a functioning democracy. If those we represent do not trust politicians to act in their best interest, we will not be an effective institution. Currently, it is simply not the case that they trust us. Both in the UK and across the globe, faith in politics and politicians is at an all-time low. In the UK, 76% of people have little to no trust in Members of this House�up from 54% a decade ago. I note with no great relish that this may not be surprising after years of a Conservative Government who were more concerned with their internal politics than the concerns of people around the country, but it should be a deep concern for us all. Rebuilding trust in politics is the goal, regardless of our political colour or persuasion. I am sure that all Members of the House can support that, but it will not happen overnight.

Research from the Electoral Commission shows that only 15% of people agree that there is transparency around the money spent and received by parties and campaigners�down from over a third in 2011. We should be clear that political donations are not inherently wrong and are part of a vibrant democratic system. Individuals should be able to take part in the democratic process through political donations, which can help people to further the goals and ideals that they believe in. Banning any donations would entrench power, leaving new or smaller parties unable to campaign against incumbents. It would work against many of our democratic principles, but it is clear that although political donations are a good thing, we must have adequate transparency as to the source of the money. That is currently not the case.

The legal framework for the political finance system is now over 25 years old, and though it was explicitly intended to ban foreign donations to UK political parties, there are clearly many loopholes. There is no doubt that foreign nations have an interest in altering our politics. Dictators such as Putin and Xi Jinping have made it perfectly clear that they do not believe in democracy and are willing to undermine our institutions, but our current system has built-in loopholes that allow foreign interests to channel money to our politics to shape it in their interest. At present, UK-registered companies are permitted to make donations using money raised overseas and, as has been said previously, unincorporated associations can legitimately make donations using funding from otherwise impermissible donors.

It is not just foreign donations that should cause concern; the sheer amount of money coming from a small number of extremely wealthy donors is also worrying. Of the �85 million received in private donations in 2023 alone, two thirds came from just 19 donors. Money helps direct the political winds, and having that amount of money come from such a small number of powerful individuals risks bringing our democratic system into disrepute.

We must introduce a cap on donations. No matter how noble the intention, no individual should be able to donate excessively, as large donations can at the very least give the impression that undue influence is being exercised over our democracy. This would not only be a positive step in cleaning up politics; it would be popular too. A recent YouGov poll found that more than two thirds of the British public support a limit on political donations. Personally, I also have concerns about the capacity of union barons to exercise what might appear to be undue influence via the vast amount of money accumulated through the political levy, which they can donate or withhold as they see fit. However, I acknowledge that the issue is complex.

We are at a crucial juncture, and it is in everyone�s interests that the Government get a proper handle on this issue. We cannot enter the next general election with so many questions left unanswered.

[Madam Deputy Speaker (Caroline Nokes)]

I call Stella Creasy, with a four-minute time limit.