National Security Bill

Baroness Winterton of Doncaster Excerpts

Consideration of Lords message
Monday 26th June 2023 Commons Chamber

[The Minister for Security (Tom Tugendhat)]

I beg to move, That this House disagrees with Lords amendment 22B.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to discuss Lords amendment 122B, Government motion to disagree, and Government amendment (a) in lieu of Lords amendment 122B.

[Tom Tugendhat]

It is a pleasure to bring the National Security Bill back to this House. I must once again highlight the importance of the Bill’s achieving Royal Assent in a timely manner. Our police and intelligence services need the tools and powers that it contains; the longer they go without, the greater the risk to national security.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Before I call the next speaker, let me say that I am conscious that the debate has to finish at four minutes past 9. I know that the Minister will want five minutes at the end, and we also have to hear from the Scottish National party, so I ask people to take that into account.

I call the Chair of the Intelligence and Security Committee, Sir Julian Lewis.

[Sir Julian Lewis (New Forest East) (Con)]

Thank you, Madam Deputy Speaker.

Lords amendment 22B, accepted by the upper House last Wednesday, 21 June, requires a UK-registered political party to publish a policy statement ensuring the identification of foreign donations and providing the Electoral Commission with an annual statement showing the foreign donations received. This is the second time that the other place has amended the Bill to include such a clause. On behalf of the ISC, I spoke in favour of the previous version of the amendment when the Bill was last in the Commons, and, as Lord West stated on Wednesday, the ISC’s position remains the same: we firmly support the introduction of this provision. It is deeply concerning that the Government continue to oppose it.

In 2020, the ISC’s long-delayed Russia report highlighted the risk of foreign state-linked financial interference in UK politics. There is clearly a threat that needs to be tackled. The Committee on Standards in Public Life, in a major 2021 report on regulating electoral finance, concluded that

“the current rules are insufficient to guard against foreign interference in UK elections.”

That committee also observed that, since 2018, the Electoral Commission has supported the introduction into electoral finance regulation of risk management principles that are used for anti-money laundering checks conducted by companies. This amendment falls into that same category.

Members from both sides of both Houses have previously spoken strongly in support of the Lords amendment and, together with the evidence provided by the ISC, the Committee on Standards in Public Life and the Electoral Commission, have clearly set out why it is needed and why the current safeguards in our law are insufficient. By refusing to accept the need to update the law, the Government are rejecting the non-partisan conclusions of both Parliament and the Electoral Commission. They are inexplicably rejecting the opportunity significantly to improve the transparency and accountability of our political system by requiring political parties to take modest but important steps to identify and disclose donations received from foreign sources and states.

The Government claim to oppose this Lords amendment on the basis that the existing protections within electoral law are sufficient; that the amendment would not work in practice; and that it would place an undue burden on grassroots political organisations. Almost everyone else disagrees. The Government rely on the fact that existing electoral financing law requires political parties to check that a donor is “permissible”. Yet that misses the central point: the lack of any requirement for a political party to check the source of the funding.

There is currently no rule that political parties must conduct adequate due diligence on donors—not even donors operating in high-risk countries. Citizens domiciled abroad and companies based in the UK can donate to a political party with no questions asked about the source of the money. That applies even to companies that are making no operating profit. Why should a UK charity, or a UK company, have to undertake enhanced due diligence, under money laundering and terrorist financing law, where a donor is linked to a high-risk country, whereas a political party is exempt from that duty? Political parties surely require the highest level of protection.

--- Later in debate ---

Each piece of new legislation devolving intelligence and security matters away from the bodies already overseen by the ISC must come with a commensurate expansion to the ISC’s memorandum of understanding. The Government’s last-minute amendment falls short of that and will not resolve the underlying recurrent problem.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

As the observant among you will know, I am not the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C McDonald), who is indisposed. I am sure that we all send him our best wishes for a speedy recovery.

I am very pleased to be in front of the Minister again. For those who were not paying close attention to the Home Affairs Committee last week, his delivery, rather than the content of what he was saying, was so soporific as to put my children to sleep in the Committee Room. So, for all parents who missed CBBC’s Bedtimes Stories, I recommend the Minister’s speech from this evening.

I rise to support these Lords amendments. I wish also to agree with the right hon. Member for New Forest East (Sir Julian Lewis) and what he has proposed this evening. I am disappointed to hear that he will not vote on this issue, but I understand his reasons for so doing.

In reading the Lords debates from last week, it really does seem quite odd to me that the Intelligence and Security Committee has to come to this House and beg for things that it should have by right and by prior agreement. The Committee should not have to come to the Chamber to lay amendments to try to get the information that it ought to have. In recognition of the widening landscape across different Departments and the need for accountability, it seems very sensible that the Committee should have access to the information that it seeks.

I also find the Government’s amendment a bit curious:

“The Prime Minister and the Intelligence and Security Committee of Parliament must consider whether the memorandum of understanding…should be altered (or replaced)”.

Well, the ISC has already considered that; it has done that work. It is for the Government to take that ball and to do something with it, rather than to table amendments for further consideration perhaps six months down the road. That does not seem to me something that the ISC should be waiting any longer for; it should have that information as soon as it requires it.

Let me move on to amendment 22B on political donations. Reading the Lords debate last week it seemed that there was very wide agreement on the need for this measure, with Lord Carlile, Lord Evans, Baroness Manningham-Buller and Lord West all agreeing that it was necessary, along with the Electoral Commission, the Committee on Standards in Public Life, the ISC itself and Spotlight on Corruption. The question is not the eligibility or permissibility of donors, but rather the source of those donations in the first place.

As others have said, charities and companies have to have “know your donor” and “know your customer”-type checks; “know your donor” checks for political parties ought already to happen automatically. Parties already carry out various checks, so there is no reason why that should pose an additional burden upon them. I note that a June article in Politico outlined the scale of the problem and the loopholes in the rules. The article mentioned that an unincorporated association has a threshold of £25,000 a year, after which it is subject to an additional Electoral Commission requirement: it has to report any gifts of £7,500 in a 12-month period, but only if the donations that make up that figure are of £500 or more.

Someone could have £24,999.99 and not have to report anything, but if they go over by one penny, suddenly they have to report it—and if they are a bit fly, they will know exactly what they are going to do in those circumstances. Furthermore, if someone gives £499.99, again it does not hit the threshold and it does not count. According to the Politico article, only one single group hit that £7,500 threshold, despite millions of pounds going through unincorporated associations. Some £14 million has gone through them in the past five years, and only one donation hit that threshold. That is indicative to me of a loophole, and if the Government will not do something about that just now, we have to ask why.

The Scottish Unionist Association Trust has been noted for some of the dark money funnelled through it; indeed, according to openDemocracy, it took a donation from another unincorporated association. We have layers upon layers of unincorporated associations and money sloshing through them. There needs to be a wee bit more curiosity about where that money is coming from, and a lot more accountability in accounting for that. Certainly, in the election campaigns I have been part of, none of the donations we have received have hit the £25,000 threshold. That is a lot of money for certain political parties in this country.

I note that Spotlight on Corruption has also provided a helpful briefing on those loopholes for this debate, pointing out how difficult things become in terms of the accountability and integrity of the whole system. I urge the Minister to explain why he thinks that that is not worth tackling, because it seems to me that that loophole opens up certain political parties in this country to serious risk and that we should certainly know where that money is coming from and whether it is accountable.

I would like to thank the Lords for the amendments they made to this Bill. As a person who does not really believe in the House of Lords, it should not be the case that they are improving legislation in this place, but they have done so, and the Government should take account of that, rather than continuing to undermine the good and sensible amendments made in the other place.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We still have three more speakers, so I would urge brevity.

[Sir John Hayes (South Holland and The Deepings) (Con)]

Brevity is my middle name, Madam Deputy Speaker, as I shall illustrate in this short, pithy but powerful address.

I have only three points to make. The first is that, as members of the ISC know and as the Security Minister knows, the threats to this country are dynamic. They change rapidly and the means of countering them must change accordingly. It is critically important therefore that we understand, as the shadow Minister said, that there are foreign powers—many of them state powers, though not exclusively so—who are determined to effect things in this House through contacts with political parties, with the institution itself and with politicians. Being aware of that, we need to counter it using all the necessary methods, including legislation.

The second point is that, in order to exercise the power to protect us, those missions to do so must act in a way that is secret.

Their work cannot be transparent. They need to protect their sources, their methods and, most of all, information. To legitimise that kind of power, which is by its nature extreme, it must be accountable and it must be scrutinised. A body that does so must, by definition, have a very particular kind of constitution, in that it has to have a means and method of doing so that is itself secret.