Good afternoon. Will Members please ensure that all electronic devices are switched to silent or switched off? We will now continue line-by-line scrutiny. The selection list for today’s sitting is available in the room and on the parliamentary website, and shows the clauses, schedules and amendments that have been grouped for debate. I remind Members who have put their name to the lead amendment in a group that they will be called first. In the case of a stand part debate, the Minister will be called first. Other Members are then free to indicate, by standing in their place, that they wish to speak.

At the end of a debate, I shall call the Member who moved the lead amendment, new clause or new schedule again, and they will need to indicate whether they wish to withdraw it or press it to a decision. If a Member wishes to press other provisions in any group to a vote, including new clauses and new schedules, they need to let me know. The order of decisions follows the order in which the amendments appear in the amendment paper. I hope that is helpful.

Clause 60

Donations by companies and LLPs etc

Amendment proposed (this day): 34, in clause 60, page 72, line 36, at end insert—

“(c) the person has nominated a director or partner who is to be personally responsible for ensuring the donation is made in accordance with the requirements of this Part.”—(Lisa Smart.)

This amendment provides that for donors from corporate bodies to be permissible they must nominate a director or partner who is responsible for compliance with the legal requirements relating to donations.

Question again proposed, That the amendment be made.

I remind the Committee that with this we are discussing the following:

Amendment 35, in clause 60, page 73, line 8, at end insert—

“( ) After section 54D (inserted by section 58 of this Act) insert—

‘54ZE Criminal liability of nominated director or partner to follow requirements

(1) A director or partner nominated by virtue of section 54(3ZA)(c) commits an offence if without reasonable excuse they cause or permit a breach of any requirement imposed under this Part.

(2) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding 3 years or to a fine, or to both;

(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding 3 years or to a fine not exceeding £500,000, or to both.’”

This amendment provides that the director or partner who has been nominated to be responsible for ensuring compliance with the legal requirements relating to donations commits an offence if they cause or permit a breach of those requirements without reasonable excuse.

Amendment 36, in clause 60, page 77, line 14, after “party” insert

“, any other party, regulated donee (within the meaning of Schedule 7) or candidate (see Schedule 2A to the Representation of the People Act 1983)”.

This amendment would ensure that the amount a company or limited liability partnership can donate to a party must take into account any donations it has already made to other parties, regulated donees (which includes members of parties, members associations and holders of elective offices) or electoral candidates.

Amendment 37, in clause 60, page 77, line 28, after “party” insert

“, any other party, regulated donee (within the meaning of Schedule 7) or candidate (see Schedule 2A to the Representation of the People Act 1983)”.

This amendment would ensure that the amount a company or limited liability partnership can donate to a party must take into account any donations it has already made to other parties, regulated donees (which includes members of parties, members associations and holders of elective offices) or electoral candidates.

Clause stand part.

New clause 13—Permissible donors not to include property development and construction undertakings—

“(1) Notwithstanding the provisions of PPERA 2000 and any other enactment, a person is not a permissible donor to a registered party, recognised third party, regulated donee or permitted participant if they meet the conditions in subsections (2).

(2) The conditions in this subsection are that the person is a property development or construction undertaking as defined under subsections (3) and (4).

(3) For the purposes of subsection (2), a person is a ‘property development or construction undertaking’ if they are a body corporate, partnership, limited liability partnership, or unincorporated association, of such an undertaking which carries out, whether wholly or substantially, activities consisting of—

(a) the acquisition, disposal, or development of land for commercial or residential purposes,

(b) property speculation,

(c) the construction, renovation, or substantial alteration of buildings or infrastructure, or

(d) the provision of construction services as a principal contractor,

and whose principal business activities fall within such Standard Industrial Classification (SIC) codes as may be prescribed by regulations made by the Secretary of State.

(4) Further to subsection (3), a ‘property development or construction undertaking’ includes—

(a) any person who is acting on behalf of a property development or construction undertaking,

(b) any person who is funded either directly or indirectly by a property development or construction undertaking, and

(c) any subsidiaries or holding companies of a property development or construction undertaking.

(5) The Electoral Commission may issue guidance for the purposes of determining whether an undertaking is a property development or construction undertaking.”

This new clause would mean that a property developer or construction undertaking would not be a permissible donor to a registered party, recognised third party, regulated donee or permitted participant.

New clause 32—Restrictions on permitted donors: public contracts—

“(1) Section 54 of the Political Parties, Elections and Referendums Act 2000 (permissible donors) is amended as follows.

(2) After subsection (2) insert—

‘(2A) An individual who would otherwise fall within subsection (2)(a) is not a permissible donor if that individual—

(a) has significant control of a company which has been awarded a public contract within the previous ten years, or

(b) has significant control of a company which is a parent undertaking or subsidiary undertaking of a company falling within paragraph (a).

(2B) A company which would otherwise fall within subsection (2)(b) is not a permissible donor if that company—

(a) has been awarded a public contract within the previous ten years, or

(b) is a parent undertaking or subsidiary undertaking of a company falling within paragraph (a).’

(3) After subsection (8) insert—

‘(9) In this section—

“public contract” has the meaning given by section 3 (public contracts) of the Procurement Act 2023;

“significant control” has the meaning given by section 790C (key terms) of the Companies Act 2006;

“parent undertaking” and “subsidiary undertaking” have the meanings given by section 1162 (parent and subsidiary undertakings) of the Companies Act 2006.’”

New clause 52—Permissible donors not to include oil and gas companies—

“(1) Section 54 of PPERA 2000 (permissible donors) is amended as follows.

(2) In subsection (2)(b) after ‘Kingdom’ insert ‘, subject to the exemption in subsection (2A).’

(3) After subsection (2) insert—

‘(2A) A company is not a permissible donor if it is an oil and gas company.’

(4) After subsection (8) insert—

‘(9) For the purposes of this section, “an oil and gas company” means any company which derives over 50% of its annual revenue from the extraction, acquisition, transportation, processing, supply or disposal of petroleum or natural gas, or a combination of the two.’”

This new clause provides that an oil and gas company would not be a permissible donor for the purposes of the Political Parties, Elections and Referendums Act 2000.

It is a pleasure to serve under your chairmanship, Sir Desmond. This is the first time we have met in this Committee, but I know you like good order, so I will be brief.

Hear, hear!

That is the only time the Liberal Democrats have ever cheered me on, so I am glad we are in agreement.

The Minister gave a comprehensive outline of the proposals in clause 60. I will briefly talk to amendment 34, which was tabled by the hon. Member for Warwick and Leamington (Matt Western) but moved by the hon. Member for Hazel Grove. The Conservatives think the amendment is well intentioned, but one of my big concerns—I think the Minister outlined this, but perhaps she will return to it in winding up—is the burden that would be placed on businesses, which already have quite extensive regulatory burdens placed on them by Government. I think all parties in this Committee have intimated that everybody wants more transparency and wants to talk more about donations to ensure that we really tighten up the regulatory regime on political party donations. However, although I am not averse to being radical, I think amendment 34 is probably a bit over-burdensome and we do not support it, but we are content to support clause 60.

It is a pleasure to speak under your chairship, Sir Desmond. In clause 60, we are considering company donations in UK politics, and I ask the Minister to consider outright banning them, as happens, for example, in France and Canada. There is no real reason for companies to be permitted to make donations, particularly when we are concerned, as in this Bill, with ensuring that company donations are not a mechanism for channelling funds from outside the country into British politics. Why not make the situation clear and allow only individuals, whose connection to the country can be clearly tested, to donate? Company donations have been nearly half the size of individual donations in UK politics in recent years. These are really significant sums.

The hon. Member is speaking about company donations. I am not saying I agree with this, but does she feel that the same logic should apply to trade union donations? If she feels that companies cannot donate, does she still feel that trade unions can?

I consider companies and trade unions to be completely different entities. One is a profit-making organisation, and the other is a membership association designed to represent the interests of its members. The two are not parallel, and I am completely fine with trade unions making donations.

Company donations have a huge influence on our politics. There is also a tax advantage for companies; there is effectively a taxpayer subsidy to them, and the advantage can be up to about 40% for companies making donations from company funds, compared with individual funds. I would therefore like to hear why the Minister thinks it is important to retain the ability for companies to make donations and does not want to follow the example of France and Canada in stopping such donations. Individuals can still make donations.

On a couple of specific points, the hon. Member for Hazel Grove referenced the fact that there is a clear problem in the Bill as currently drafted. A loophole permits companies to give donations up to the limit multiple times, both to a party and potentially to every single one of its candidates. Surely the limit should be set so that it reflects the total value of donations to all recipients. That has been argued for by the Electoral Commission and in Philip Rycroft’s recommendation 4, and it is also covered by amendments 36 and 37 in the name of the hon. Member for Warwick and Leamington.

It is also clear that the test should be post-tax profit, not revenue. It is far too easy for companies to inflate their revenues by engaging in what is sometimes called transfer pricing in other sectors, effectively enabling them to completely bypass the intended restrictions. Surely it is in the spirit of the Bill, and should therefore be put into the letter of it, that the test should be post-tax profit, not revenue. If we are going to permit company donations, we should be really clear that they are derived from profit made in-country, because using the revenue test provides a huge loophole. Again, that is called for in Philip Rycroft’s recommendation 2, and by the Electoral Commission and many others, so I very much hope the Minister will respond positively.

Amendments 34 and 35, in the name of the hon. Member for Warwick and Leamington, would make the donor criminally liable. The Minister responded by saying that the onus should all be on the recipient of those donations, but that is not how the law operates in other areas when it is broken: the commissioners of the offence, as well as the recipient of the funding, are guilty. So I ask the Minister to think again. If we are talking about large companies making huge donations, they arguably have greater capacity, and certainly just as much responsibility, as the recipient to check that they are operating within the law. I refer the Minister to my comments on a previous clause about establishing a donor register, which would enable us to deal with these issues and involve the Electoral Commission in ensuring that these checks are in place.

I will briefly touch on new clause 13, in the name of the hon. Member for North East Hertfordshire (Chris Hinchliff), new clause 32, in the name of the hon. Member for Poole (Neil Duncan-Jordan), and new clause 52, in the name of the hon. Member for Leeds East (Richard Burgon). They all recognise the widespread concern in UK politics, and among all of us to some extent, about how company donations risk twisting, and in some cases have twisted, our politics. Each of those Members has tabled a new clause seeking to ban donations from particular categories of company donor. The first seeks to exclude property development and construction undertakings, the second seeks to exclude those who have had public contracts at any time in the last 10 years, and the third seeks to exclude any companies involved in oil and gas extraction.

I have huge sympathy for the arguments and for the broad thrust of those new clauses. I am not necessarily convinced that, in their current form, they are ready to be incorporated in the Bill, but they highlight a key concern. For example, there has been widespread concern about cases where large donations by a property developer were associated with planning decisions under a previous Government that went in favour of that property developer. There have also been serious concerns about the revolving door between the Government and the legislature, and profit-making companies. I would really like to hear the Minister’s response to those three new clauses tabled by Labour Members, which highlight concerns about the influence of particular groups of companies on our politics.

However, the issues I really hope the Minister will respond to are, first, stopping all company donations, because people who want to make donations can still make them as individuals; secondly, adopting the post-tax profits test, rather than the revenue test; and, finally, ensuring that the donations limit applies to the total value of donations, not just single donations.

I will keep my remarks brief. As we start the afternoon sitting, it is worth putting on the record that clause 60 goes a significant distance towards finally tightening up the rules around corporate donations, which many campaigners, including in civil society, would argue have been left unaddressed for far too long. What clause 60 seeks to do is effective.

That said, and I will not repeat in too much detail the points made by the hon. Member for North Herefordshire, it is worth reflecting on the recommendations in Philip Rycroft’s review around revenue versus profits, and how we can tighten things up. So I am keen to understand how, as the Bill progresses, we can potentially take his recommendations into account.

It is worth remembering some of the big case studies that have been a cause for concern. We therefore know that, in some cases, corporate donations can carry a significant risk of nefarious interference in the democratic process. There was much media coverage and speculation about the idea that Elon Musk, the California-based billionaire, could legitimately make a donation to a UK political party via a UK subsidiary of Tesla.

When we look at some of the research conducted by CenTax or Transparency International, we see that around £1 in every £10 that comes via a company as a donation could be because the individual in question could not donate directly themselves. According to that same research, around a quarter of money donated by companies is completely untraceable. So these measures are really welcome.

I do not disagree with what the hon. Gentleman is saying; I think he is well intentioned, and his speech is well researched. However, as set out in the House of Commons Library note, the Electoral Commission itself has warned that the provisions in the clause

“would not reduce the risk of foreign money entering British politics through companies”.

What does he say to that? Does he think the Government should do more?

I think there is a difference between corporate and non-corporate donations. However, what would be really interesting is to see how the Bill progresses in taking forward the Rycroft review. That is a really important point, but I will not go over it again, because it has already been well articulated by the hon. Member for North Herefordshire.

To conclude, the Bill takes serious steps forward in addressing some of the foul play we have seen time and again with corporate donations in the past, and there is a huge body of evidence behind that. However, I would welcome any early advice or opinion the Minister can give us on how we can work on the recommendations set out by Philip Rycroft.

It is a pleasure to serve under your chairmanship, Sir Desmond. I will be guided by you, but I do not intend to speak to new clauses 13, 32 and 52 at this stage. However, to respond to a number of points made during the debate, particularly by the hon. Member for North Herefordshire—

Just for clarity, if you wish to speak to those new clauses, your only opportunity to do so is now.

In the interests of time, I will continue.

On the other remarks made by the hon. Member for North Herefordshire, I hear her point about profit and revenue, and it is highlighted in the Rycroft review. As I said many times this morning, we will carefully consider the Rycroft review and respond to it appropriately.

The hon. Members for North Herefordshire and for Hazel Grove both highlighted the Government’s view that the responsibility rests with the donor. The Government strongly believe that. The onus is on the person or organisation receiving the donation to consider its origins very carefully. They can and should decline donations if they cannot satisfy themselves that those have come through the proper and legitimate channels.

Let me turn to the issue of why we should not ban donations from companies altogether. Political parties and other campaigners will remain able to raise sufficient funds because they need to communicate their views to the electorate about protecting our democracy better against those who seek to covertly undermine it. The hon. Member for North Herefordshire referenced the Canadian model. I have had the pleasure of meeting the Leader of the House from Canada. While it is tempting to suggest that there should be a ban on corporate donations, I remind the hon. Lady that 60% of their political campaigning is funded by the taxpayer—and it is a brave politician who would enter that particular plea to the British electorate at this time.

I thank the Minister for her engagement with my point. In UK politics, about 22% of donations into politics over the past few years have been from companies. We are not talking about requiring the Government to step in and put 60% of the funding into politics; we are talking about the risks associated with a specific form of donation.

Under the measures the Government is putting forward in clause 60, we are putting in place requirements to ensure that persons of significant control are clearly allowable donors. However, it is possible for a company to restructure so that it just goes underneath that and does not meet the 25% threshold. So that could still be a channel for illicit or foreign funding to come into British politics. Would it not be simpler to require any persons who have significant control in a company and who wish to make political donations to make them as individuals?

This is a very long intervention.

I do apologise, Sir Desmond. I think I have made my point.

The hon. Member has made her point. The Government believe that there is a place for company donations from UK companies. We just feel that we should be much stricter about the arrangements by which they do these things. We have set that out in the legislation, which is what we are discussing this afternoon.

Turning briefly to the points raised by my hon. Friend the Member for South Dorset, I remind all Members that these measures are not designed to prevent a specific individual or company from donating. Those who follow and meet the three tests and successfully meet the “know your donor” and section 54A requirements should be able to enrich our democracy by donating as they do. I therefore commend clause 60 to the Committee—

I apologise, but I have not heard the Minister respond to the point that I and the hon. Member for Hazel Grove made about donations being counted cumulatively, which is also one of the Rycroft recommendations.

We will consider those points. The Rycroft recommendations are being considered very carefully. We will respond to them in due course and we will come back to Parliament with our recommendations as they come forward. I hope that gives the hon. Lady the assurance she is seeking.

We have had a good discussion of the amendments that I spoke to on behalf of the Chair of the JCNSS, the hon. Member for Warwick and Leamington. I do not feel a desire in the room to move to a Division, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 60 ordered to stand part of the Bill.

Clause 61

Forfeiture of certain donations to registered parties etc

Question proposed, That the clause stand part of the Bill.

This clause strengthens the electoral regime by restoring a clear, objective test for forfeiture: if an individual donor was not actually on an electoral register at the time of the donation, the donation is impermissible and liable to forfeiture. It responds directly to long-standing concerns from the Electoral Commission that the current framework is open to inconsistency. In particular, the 2010 Supreme Court ruling, which allowed courts to consider whether a donor was eligible, rather than actually registered, when assessing impermissible donations and their forfeiture, introduced uncertainty and risked discouraging thorough permissibility checks by campaigners.

The clause removes the ambiguity in electoral law, ensuring that permissibility of an individual is determined on actual electoral registration. It reinstates a simple and objective test that supports consistent enforcement and reinforces the integrity of the electoral regime. Campaigners already must take reasonable steps to verify donor permissibility. The clause simply removes the scope for subjective interpretation of permissibility and strengthens deterrence by ensuring that impermissible donations cannot be retained by campaigners due to ambiguity in the law. By reinforcing the principle that only permissible donors may fund UK politics, the clause provides a clear deterrent for impermissible donations and supports compliance by political parties and campaigners.

I welcome the Minister’s comments on the clause. It is important that when we have been discussing the nature of this legislation, particularly regarding donations, we have outlined a clear stance that if people want to participate in our political process and make donations, they should have a physical stake in it. Any removal of the ambiguity around campaigners having to look to see whether it is permissible is welcome. It is a reasonable expectation from the Government that there has to be some level of participatory engagement in the political process. We have no problem with the clause; indeed we support it.

Question put and agreed to.

Clause 61 accordingly ordered to stand part of the Bill.

Clause 62

Unincorporated associations making political contributions

I beg to move amendment 88, in clause 62, page 83, line 17, leave out “£11,180” and insert “£500”.

This amendment, together with Amendments 89 to 94, would bring the reporting threshold for donations from Unincorporated Associations in line with the permissibility threshold for donations to political parties.

With this it will be convenient to discuss the following:

Amendment 89, in clause 62, page 83, line 26, leave out “£2,230” and insert “£500”.

See explanatory statement for Amendment 88.

Government amendment 79.

Clause stand part.

Amendment 90, in schedule 9, page 165, line 23, leave out “£11,180” and insert “£500”.

See explanatory statement for Amendment 88.

Amendment 91, in schedule 9, page 165, line 25, at end insert—

“1A For sub-paragraph (1) substitute—

(1) Where in any calendar year an unincorporated association falling within section 54(2)(h) makes a political contribution of more than £500, not having previously made any political contributions in that year, the association must notify the Commission accordingly within the period of 30 days beginning with the date on which the contribution was made.”

See explanatory statement for Amendment 88.

Amendment 92, in schedule 9, page 165, line 26, leave out sub-paragraph (2).

See explanatory statement for Amendment 88.

Government amendments 80 to 84.

Amendment 93, in schedule 9, page 170, line 26, leave out “£2,230” and insert “£500”.

See explanatory statement for Amendment 88.

Amendment 94, in schedule 9, page 170, line 26, at end insert—

“(aa) omit sub-paragraph (5)”.

See explanatory statement for Amendment 88.

Government amendments 85 to 87.

Schedule 9.

The clause contains the welcome measure of preventing donations from impermissible donors being made through the mechanism of unincorporated associations and reducing the level at which they have to register with the Electoral Commission and report gifts. That is very positive. The current situation really cannot continue, so I am pleased that, through these measures, the Government will try to manage and block malicious interference and ensure democratic safety.

Although unincorporated associations are used legitimately by some, they can be an opaque vehicle for funds of unknown origin, so there is potential for them to be used to introduce foreign interference in our political system. Interesting Transparency International research published last year found that, of the £40.4 million in donations made by unincorporated associations since 2010, a huge £38.6 million was unaccounted for. More than 95% of donations from unincorporated associations came from those that have not reported the source of their income, so it is clearly time for change Despite those concerning statistics, the previous Government increased reporting thresholds for unincorporated associations in the Elections Act 2022, so I am very glad that this Government are reversing that decision through the Bill.

Under normal regulations, donations to political parties must come from a permissible source if they are over £500, but if the donations are made by an unincorporated association, even with the lower threshold, the reporting requirements are not triggered until donations reach over £11,180 in a calendar year. Even with the new rules, it is possible for an unincorporated association that does not meet the threshold and is therefore not required to register to make donations without any checks. That is clearly an undesirable and unnecessary loophole, so I support the amendments that have been tabled by the hon. Member for Rochester and Strood (Lauren Edwards), which aim to close this loophole, and I urge the Minister to consider reducing the permissibility threshold for unincorporated associations to £500, equal to the permissibility threshold for other sources of donation.

I will speak now to clause 62 and Government amendments 79 to 87, which were tabled in my name. I will come to the other amendments later.

The clause introduces measures that have long been called for by the Electoral Commission, the National Crime Agency and the Committee on Standards in Public Life, which is now known as the Ethics and Integrity Commission, to tighten the rules around unincorporated associations. Under the current framework, unincorporated associations are permitted to make political contributions provided their main office and activities are based in the UK, but there are no restrictions on the sources of the funds behind those contributions. Existing rules therefore do not provide sufficient transparency or assurance about who is ultimately funding the political contributions made through such bodies.

The clause introduces a strengthened framework to ensure that political contributions from unincorporated associations come from permissible sources and are subject to stricter and more consistent transparency requirements. The clause lowers the thresholds at which UAs must register with the Electoral Commission and report the gifts they receive, ensuring that significant contributors provide the same level of transparency as other regulated campaigners. It also extends transparency rules so that contributions to candidates count towards the registration threshold, and it requires UAs to appoint a responsible person, improving clarity about who stands behind such associations.

Finally, clause 62 introduces new controls to ensure that funds used for political contributions come from permissible sources. UAs will be required to verify political gifts they rely on, and they will be prohibited from using unverifiable or impermissible funds for political activity. I commend clause 62 to the Committee.

I thank the Minister for her remarks. Once again, I would like to say on the record that the Government are making great strides in this area and are trying to strengthen the legislation and the regulatory regime around donations. We agree with her that the amendments—particularly amendment 88—for the reduction to £500 on the reporting threshold for donations from unincorporated associations is simply too low. There could be a debate on whether it should be lowered from what the Government are proposing; I think actually unifying the regulations between companies and unincorporated associations is a sensible thing to do. It removes ambiguity and creates a more uniform system. The burden placed at £500 would create an unnecessary reporting regime.

It has already been outlined by the hon. Member for North Herefordshire, but I am interested to know whether the official Opposition spokesperson agrees that the previous Government’s decision in the Elections Act 2022 to inexplicably increase the threshold for UAs was wrong, and that the intention of this Bill, which is to reduce it, is the right way forward?

I have already said that I think the Government are being sensible in creating a unified or level playing field between companies and unincorporated associations. I was not an expert on the previous Act when it was passed, but in my view it is sensible for the Government to be taking this action, now that its consequences are clear, because the Act obviously did not work. If Members across the House look at some of my previous remarks on some of the proposals brought forward by the last Government, I am not ashamed to say that sometimes—I only say sometimes—we got it wrong. That is the nature of democracy.

The changes that the Government are making are sensible and my contention is that some of the amendments—especially amendments 88 and 90—use a sledgehammer to crack a nut. They create an overburden compared with the Government’s good intentions and what they want to get out of the proposals.

We would not support amendment 88 and we certainly would not support amendment 90, but we do welcome the strides that the Government, and the Minister, are trying to take in tightening up the regime.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 79, in clause 62, page 83, line 28, at end insert—

“(h) create offences of—

(i) giving an unincorporated association false information about a gift that may be used to make a political contribution, and

(ii) withholding information about such a gift with intent to deceive.”—(Samantha Dixon.)

This amendment is consequential on amendment 85.

Clause 62, as amended, accordingly ordered to stand part of the Bill.

Schedule 9

UNINCORPORATED ASSOCIATIONS MAKING POLITICAL CONTRIBUTIONS

Amendments made: 80, in schedule 9, page 168, line 2, at end insert

“, unless it already has one (see sub-paragraph (6A))”.

This amendment, and amendment 81, amends the new provisions on responsible persons for unincorporated associations to make it clear that an association is not required to appoint a responsible person when it already has one in place, but that the Commission must be notified that the responsible person is willing to continue to act.

Amendment 81, in schedule 9, page 168, line 30, at end insert—

“(6A) Where an unincorporated association would be required by sub-paragraph (2) to appoint an individual to be the responsible person in relation to the association but an appointment of such a person is already in force, the notice under sub-paragraph (3) must inform the Commission that the responsible person is willing to remain as the responsible person in relation to the association (and sub-paragraph (4)(a) is to be read accordingly).”

See the explanatory statement for amendment 80.

Amendment 82, in schedule 9, page 170, line 7, after “within” insert

“any of paragraphs (a) to (g) of”.

This amendment prevents unincorporated associations from being permissible donors in relation to other unincorporated associations: it is intended as an anti-avoidance measure to prevent gifts being channelled through chains of unincorporated associations.

Amendment 83, in schedule 9, page 170, line 20, leave out from “within” to end of line 22 and insert

“any of paragraphs (a) to (g) of section 54(2),”.

This amendment makes similar anti-avoidance provision to that in amendment 82.

Amendment 84, in schedule 9, page 170, line 24, at end insert—

“(4) Section 162 (meaning of exempt trust donation) applies for the purposes of this paragraph as if, in subsection (2)(a), for ‘27th July 1999’ there were substituted ‘7th April 2026’.”

This amendment modifies the meaning of “exempt trust donation” for unincorporated associations by providing that a trust set up before 7th April 2026 (i.e. the date of tabling this amendment) is a permissible donor to an unincorporated association.

Amendment 85, in schedule 9, page 173, line 11, at end insert—

“(c) after sub-paragraph (3) insert—

‘(3A) A person commits an offence if—

(a) they knowingly give an unincorporated association any information relating to—

(i) the amount of any gift to the association, or

(ii) the person or body making such a gift,

which is false in a material particular, or

(b) with intent to deceive, they withhold from an unincorporated association any material information relating to a matter within paragraph (a)(i) or (ii),

in circumstances where they believe that the unincorporated association may use the gift for the purposes of making a political contribution.’”

This amendment creates a new criminal offence where a person knowingly provides an unincorporated association with false information, or withholds information with intent to deceive, about a gift that they believe the association may use for the purposes of making a political contribution.

Amendment 86, in schedule 9, page 173, line 15, at end insert—

“(b) in sub-paragraph (2)(b)(iii), at the end insert ‘or 3A’.”

This amendment inserts a missed consequential amendment so that paragraph 7(2)(b)(iii) of Schedule 19A to the Political Parties, Elections and Referendums Act 2000 refers to the new paragraph 3A inserted into that Schedule by paragraph 9 of Schedule 9.

Amendment 87, in schedule 9, page 174, line 9, at end insert—

This amendment sets out the penalty for the new offence inserted by amendment 85.

Schedule 9, as amended, agreed to.

Clause 63

Electronic material promoted by third parties

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following:

Clause 64 stand part.

New clause 10—Guidance on the law relating to digital communication offences in relation to elections—

“(1) The Secretary of State must, within six months of the passing of this Act, publish and lay before both Houses of Parliament guidance on certain digital communication offences, including digital manipulation and artificially generated content in relation to candidates and elected officials.

(2) Any guidance issued under section (1) must include guidance on the following—

(a) the operation of section 106 (false statements as to candidates) of the RPA 1983 in relation to digital communications;

(b) the operation of section 114A (undue influence) of the RPA 1983 in relation to digital communications;

(c) the interaction between the operations of sections 106 and 114A of the RPA 1983 and the duty of providers under the Online Safety Act 2023, including in relation to priority offences during election periods.

(3) Within 12 months of the publication of guidance under subsection (1) and annually thereafter, the Secretary of State must publish and lay before Parliament either—

(a) a statement that no updates to the guidance are required, or

(b) an updated version of the guidance.

(4) Before issuing—

(a) any guidance under subsection (1) or subsection (3) (b), or

(b) a statement under subsection (3)(a),

the Secretary of State must consult OFCOM and such other persons as they think necessary.

(5) For the purposes of this section “priority offences” means an offence listed in Schedule 7 (priority offences) of the Online Safety Act 2023.”

This new clause would require the Government to publish guidance on the operation of certain offences relating to digital communications as they relate to candidates and elected officials.

New clause 18—Information to be included with electronic material: generative artificial intelligence—

“(1) Section 41 of the Elections Act 2022 (requirement to include information with electronic material) is amended as follows.

(2) After subsection (3)(b) insert—

“(c) where the electronic material consists of or includes image, audio or video content that has been generated or materially altered by means of generative artificial intelligence, a statement that such artificial intelligence has been used.”

(2A) In this section, "generative artificial intelligence" means a machine-based system that can, for a given set of human-defined prompts or objectives, generate new image, audio or video content.”

This new clause amends the digital imprint rules in the Elections Act 2022 to require that any political campaigning material which contains images, audio, or video generated or materially altered by AI must include a statement that such artificial intelligence has been used.

New clause 24—Repository of digital political advertising—

“(1) The Elections Act 2022 is amended as set out in subsection (2).

(2) After section 61 insert—

“Part 6A Repository of digital political advertising

61A. Establishing a repository of digital political advertising

(1) The Secretary of State must, by regulations, make provision to require the Electoral Commission to establish a repository of paid-for digital political advertising.

(2) Any regulations made under subsection (1) must—

(a) provide for the repository of political advertising to be publicly accessible;

(b) specify that a provider of a Category 1 service within the meaning of the Online Safety Act 2023 must ensure that prescribed information relating to such advertising is submitted to the repository as soon as reasonably practicable, and, in any event, within 72 hours;

(c) set out the types of information to be prescribed; and

(d) provide for material in the repository to be transferred to the National Archives for preservation after a certain period.

(3) Before making any regulations that make provision for the matters under subsection 2(c), the Secretary of State must consult—

(a) the Electoral Commission;

(b) the Information Commissioner’s Office; and

(c) OFCOM.

(4) Any regulations made under subsection (1) must be laid before and agreed by both Houses of Parliament.””

This new clause requires the Secretary of State to bring forward regulations to require the Electoral Commission to establish a publicly available repository of political advertising.

New clause 25—Electoral Commission: powers to obtain information outside of a formal investigation—

“(1) The Elections Act 2022 is amended as follows.

(2) After Schedule 12, insert—

“SCHEDULE 13: Electoral Commission powers to obtain information outside of a formal investigation

1 The Secretary of State must, by regulations, make provision to allow the Electoral Commission to issue a notice requiring certain information from a regulated user-to-user service or search service, at any time during any regulated election period.

2 Any regulations made under paragraph 1 must specify that a person to whom a notice is given under this paragraph must comply with it within such reasonable time as is specified in the notice.

3 Any regulations made under paragraph 2 must specify the information which may be requested by the Electoral Commission, and include the following where they relate to elections—

(a) information relating to paid-for political advertising;

(b) algorithmic systems;

(c) coordinated inauthentic behaviour; and

(d) automated or bot accounts (whether domestic or foreign).

4 Any regulations made under paragraph 2 must also provide for any safeguards considered necessary by the Secretary of State as regards data protection or commercial confidentiality.

5 Any regulations made under paragraph 2 must be laid before and agreed by both Houses of Parliament.

6 For the purposes of this Schedule, “user-to-user service” has the meaning given by section 3 (“user-to-user service” and “search service”) of the Online Safety Act 2023.””

New clause 27—Government review of the “regulated periods” in relation to elections—

“(1) The Secretary of State must, within 12 months of the passing of this Act, commission a review of the adequacy of the current regulated periods for elections and referendums.

(2) The review must consider the following—

(a) the impact of campaign activity outside the relevant regulated period on elections;

(b) whether the length of the regulated periods are sufficient to tackle the prevalence of—

(i) manipulated content,

(ii) misinformation,

(iii) disinformation,

and their potential influence on elections.

(3) The review may make any recommendations it feels necessary for legislative or regulatory reform as a result of its findings.

(4) For the purposes of this section, “campaign activity” includes—

(a) digital campaigning;

(b) targeted advertising; and

(c) automated content distribution.

(5) For the purposes of this section “regulated period” means any period regulated under the Representation of the People Act 1983.

(6) The Secretary of State must lay a report of the review before both Houses of Parliament, together with their response to any recommendations for legislative or regulatory reform.”

This new clause requires the government to establish a review of the “regulated periods” in relation to elections which would consider whether the length of the regulated periods are sufficient in relation to the prevalence of manipulated content, misinformation and disinformation.

New clause 28—Information to be included with electronic material: data provenance—

“After Section 41 (requirement to include information with electronic material) of the Elections Act 2022 insert—

“Requirement to include information with electronic material created through generative artificial intelligence

(1) This section applies to electronic material which—

(a) meets the conditions in section 42 (paid for electronic material), or

(b) meets the conditions in section 44 (other electronic material),

and has been generated wholly through generative artificial intelligence.

(2) Electronic material to which this section applies must not be published unless it includes the following information—

(a) a statement that content was wholly generated by a generative artificial intelligence system;

(b) the name of the system used to generate the content.

(3) The Secretary of State may, by regulations, specify—

(a) additional requirements for information to be required under subsection (2);

(b) the form in which the information required under subsection (2) is to be provided.

(4) The form prescribed by regulations under subsection (3)(b) must be a form which can be detected and processed by regulated user-to-user services for the purpose of providing the required information to users of such services.

(5) Any regulations made under subsection (4) must be laid before and agreed by both Houses of Parliament.

(6) For the purposes of this section, “generative artificial intelligence” means computer system or software that—

(a) is capable of producing text, images, audio, video, or other content autonomously, wholly or substantially, based on prompts or instructions provided by a user;

(b) uses machine learning or other algorithmic techniques to generate content that mimics human-created material; and

(c) may produce content that is not pre-existing but is synthesized based on patterns learned from existing data.””

This new clause requires campaign material which has been generated by generative artificial intelligence to include a statement to that effect along with the name of the system used. It creates a power for the Government to make regulations about the information to be included.

Amendment 4, in clause 80, page 100, line 35, at end insert—

“(ha) Section (Guidance on the law relating to digital communication offences in relation to elections)”.

This amendment is consequential on NC10.

Any campaigner wishing to influence the electorate should be prepared to be transparent. Imprint rules play an important role in upholding trust in UK democratic processes by ensuring that voters can see clearly who is behind political campaigning material. Under existing rules, third-party campaigners who spend under a certain threshold are not required to include imprints on their organic digital campaigning material. That creates a loophole allows third-party campaigning groups to disseminate potentially influential content without disclosing its origin, which is concerning when such material is designed to be shared virally, especially if the material is misleading, controversial or intended to manipulate public opinion without accountability.

Clause 63 strengthens the transparency of digital imprint rules by ensuring that third-party campaigning groups spending under a certain threshold are also required to include imprints on their organic digital campaigning material. This requirement will ensure that the rules promote transparency and public trust, while protecting free expression and avoiding undue burdens on individuals simply expressing their political opinions online.

Following consultation with the Scottish Government, it was agreed that applying a single UK-wide regime uniformly will enable voters from across the UK to benefit from a level of transparency and will avoid confusion. The clause therefore also repeals part 8 of the Scottish Elections (Representation and Reform) Act 2025 consequentially upon the extension of the UK-wide digital imprint regime.

Turning to clause 64, it is important that campaigners have access to clear and up-to-date guidelines. The Electoral Commission’s guidance on digital imprints plays an important role in helping campaigners to understand and comply with the rules and supports enforcement authorities in maintaining transparency and public trust in UK democratic processes.

Does anyone on the Committee intend to speak to new clauses 10 or 24?

indicated assent.

In that case, I reserve my right to speak until after the hon. Member for North Herefordshire.

I will speak to new clauses 10, 24, 25, 27 and 28—I will rattle through them. First, new clause 10—tabled by the hon. Member for Milton Keynes Central (Emily Darlington), whom I thank for her work on this—relates to guidance on the law regarding digital communication offences in relation to elections. We need this clause and, although it is more complex, one word explains why: deepfakes. This new clause is, to a significant degree, about deepfakes.

Tackling deepfakes is complex, but we can take practical steps now to modernise election law and improve our ability to regulate in this area. Both the Electoral Commission and the Crown Prosecution Service have highlighted the need for clearer guidance on whether deepfakes fall within existing election offences. Unfortunately, the law on digital election offences is currently unclear. That uncertainty creates confusion for candidates, platforms and law enforcement, weakens democratic protections and leads to inconsistent enforcement.

New clause 10 would require the Government to address that gap by publishing clear guidance within 12 months of the Bill’s passage, setting out how digital communication offences apply during elections, so that expectations are clear and enforcement is consistent. In terms evidence for why this is needed, we all know that deepfakes and manipulated content targeting politicians are already circulating, including outside election periods. Existing laws may technically cover those harms, but their application in digital context remains unclear.

Recent examples include a deepfake video in October last year of a Conservative MP, the hon. Member for Mid Norfolk (George Freeman), which falsely claimed that he had defected. I was part of an event where he explained that, under the Online Safety Act 2023, he could potentially make a complaint about that, but would have to demonstrate that he was psychologically terribly damaged by it. That is not really what this is about—it is politics that is damaged by the proliferation of such material, so we should take our collective responsibility to deal with it very seriously.

In October 2023, a deepfake audio of our current Prime Minister went viral and has repeatedly resurfaced. In Ireland last year, an AI-generated video disrupted a presidential election. Those cases and many others demonstrate the growing risk. Clear guidance is needed to ensure that the law can be effectively applied during election periods. The new clause is very reasonable. It does not require the Government to commit absolutely to something right now; it simply requires the Government to publish guidance to clarify the situation.

The Government, in their response to the Speaker’s Conference report published recently, said:

“The Government recognises that there are potential issues with Section 106 of the Representation of the People Act 1983. We are reviewing how this legislation should apply in a modern electoral setting. Where necessary, we will take appropriate action to clarify the scope of Section 106, particularly to ensure that it captures emerging technologies (such as deepfakes and other AI technologies) and is future-proofed.”

Where better to do that than in this legislation? This is the point when the Government should action the commitment that they have already made.

New clause 24 proposes a repository of digital political advertising. Such advertising plays a key and increasingly central role in election campaigns, but remains significantly less transparent than traditional campaign materials. Voters are often unable to see who is targeting them, how much is being spent or whether messaging is consistent across audiences. Campaigners are able to use targeting on social media platforms, for example, to make very targeted adverts, so that nobody can see what material is going to whom.

That lack of transparency creates real opportunities for misinformation. It undermines trust in the democratic process and leaves the system vulnerable to manipulation by foreign or domestic actors, as well as opaque funding sources. While the Bill, as it stands, makes progress on digital imprints, it does not go far enough to ensure meaningful, real-time transparency.

New clause 24 would address those gaps by requiring the creation of a comprehensive, publicly accessible repository of digital political advertising and strengthening existing disclosure requirements. The reasons for that are well understood. Digital adverts can be micro-targeted to specific groups without wider scrutiny and there is currently no single public record of what ads are being run, by whom, at what scale or with what funding. International evidence, including from elections in the US and Europe—and, I would argue, in the UK—has shown how online political advertising can be exploited to spread disinformation and obscure funding sources.

That issue was addressed by Philip Rycroft in his very useful report; I note that, on page 47, he says:

“Strictly speaking, this issue of advert libraries strays beyond my remit”,

but that he has

“heard enough evidence to suggest that there would be considerable benefit”

from establishing this practice, and he calls on the Government to take action. I welcome that point and very much hope that the Government will consider this new clause, a practical and proportionate transparency measure that would align digital campaigning more with offline political advertising.

New clause 25 relates to the Electoral Commission’s powers to obtain information outside formal investigations. That is something we heard about in oral evidence and Philip Rycroft speaks about it specifically in his recommendations 9 and 10. The regulation of digital campaigning requires timely access to information, especially during very fast-moving election periods. At the moment, the Electoral Commission can effectively gather information from online platforms only through formal investigations, which can be initiated only once there is sufficient evidence of wrongdoing. There is a bit of a chicken-and-egg situation there—a significant gap.

The Commission cannot proactively monitor or respond to emerging risks in real time, including the risk of foreign interference or bot activity—a growing problem that we have seen in previous elections. As election campaigns increasingly take place online, that reduces the effectiveness of enforcement. Philip Rycroft has made a clear case for that change, so I do not need to labour the point. I very much hope that that is one of the recommendations that the Government will take away and come back on, and I would welcome some warm words from the Minister on that.

New clause 27 would require a Government review of regulated periods in relation to elections—again, something addressed in the Rycroft report, which covered the need to ensure that transparency requirements apply year round. Philip Rycroft is clearly seriously concerned about the risk of gaming the system. Currently, because regulation applies only within the regulated period, but expenditure applies during the entire year, there are strong incentives for political actors to front-load expenditure just before the regulated period kicks in. There is huge evidence of that; I have seen it from another party in my own area, with huge chunks of spending coming in just before the regulated period. That is a clear loophole.

Philip Rycroft draws attention to that issue, stating that high spending limits,

“combined with unlimited spending possibilities outwith the regulated period, drives a sort of arms race among political parties and actors to out-raise and out-spend their competitors.”

The net effect is extremely problematic for our politics. He goes on to state:

“Reducing the spending limits and introducing such limits across the whole electoral cycle could potentially relieve some of the fund-raising pressure, in turn diminishing the inducement to look to non-permissible sources to stay ahead.”

Rycroft acknowledges that the issue was beyond his direct remit, but it is useful that his report comments on where issues to do with foreign influence overlap with broader questions about how we regulate finance in our system. He states:

“The issue of spending limits and wider caps is one for the political class as a whole to consider if it wishes to restore confidence in the political process and to keep big money out of UK politics. This might be something that could be usefully debated during the passage of the Representation of the People Bill.”

Indeed—so today is our opportunity to debate it. I am saddened that the Bill, as it stands, does not address the need for year-round spending limits or for caps on overall donations—we will come to that a bit later—but this is the moment when we can and should respond to Philip Rycroft’s call to discuss this issue. I challenge the Minister on this: there is a clear need for regulation outwith the regulated period—for year-round regulation of political expenditure—and I hope that she will address that and take it forward.

Finally, new clause 28, also in the name of the hon. Member for Milton Keynes Central, is essentially about labelling AI-generated material. Just in the past 24 hours we have seen a global controversy over the use of an AI-generated image, posted by a person who shall perhaps remain nameless. It is clear that AI-generated material is widespread in politics. Sometimes it is easily spottable, as in the case I have just referenced, but at other times it may not necessarily be so. Legislation has not yet caught up with that issue. This new clause, like new clause 18 on the same topic, which I suspect the hon. Member for Hazel Grove may speak to shortly, is a much-needed step to improve transparency so that we know when material is produced using AI.

The Electoral Commission briefing raises some questions about the specifics of how the issue is addressed, and makes the point that there is a need for similar approaches to be taken across digital and non-digital formats. I take that point broadly, but I do not think it is beyond the wit of civil servants to come up with a form of words that will address the issue. The use of generative AI has been particularly prevalent in the digital space, so this is a real opportunity for regulation to catch up. I look forward to hearing from the Minister on all these very useful new clauses.

I support clauses 63 and 64, and I warmly welcome the comments from my colleague, the hon. Member for North Herefordshire, on new clauses 10, 24, 25, 27 and 28, tabled in the name of the hon. Member for Milton Keynes Central. A number of us who have been concerned with the issues that we are talking about today and which the Bill seeks to address were very pleased to see some of the measures that the Government put in the first draft of the Bill. But we were disappointed by what was not there: the lack of discussion of regulated periods, generative AI deepfakes, and mis and disinformation felt like a missed opportunity. On Second Reading, the Secretary of State spoke of the need to ensure that regulation keeps up with digital reality, and this legislation feels like the opportunity to address some of those issues.

I will not repeat what has just been said, but a number of the new clauses overlap slightly, in trying to fill in the gaps that quite a few of us feel are present in the Bill as drafted. The hon. Member for North Herefordshire and I are pleased to be co-vice chairs of the all-party parliamentary group for fair elections, which is the leading organisation within Parliament campaigning for reforming the electoral system—of which there is no mention in the Bill. We spent some time today discussing some measures around getting dark money out of politics, and we hope that the Government move further on that. We look forward to the Minister introducing the Government’s response to the Rycroft review, and also to stopping mis and disinformation in our politics.

I would like to test the mood of the Committee by pushing new clause 18 to a Division. We need to see action on these issues ahead of the next general election, and it feels like this piece of legislation is the opportunity to do that. We have talked repeatedly in this Committee about trust in our electoral processes being already very fragile—too fragile. We have seen years of scandal—of varying sorts—tarnish our political structures. Confidence in our politics and democratic processes is vital, and we should be doing everything that we can to bolster that confidence, which is too low. We should not be allowing new systems to be adopted in these structures and used to undermine our politics. Existing systems can be used to show voters completely fabricated content; some recent examples of AI-generated content that is damaging in different ways have already been mentioned. Transparency is the foundation of democratic legitimacy, and new clause 18 seeks to protect that foundation.

On deepfakes, we are deeply concerned about the increase in AI-generated material that is produced to harm individuals and our broader democracy. We should be ensuring that there is transparency and accountability within political campaigning, and we need to limit the level of mis and disinformation that could be spread through AI-generated material. Requiring that political campaign material be properly labelled when it includes AI material feels like a sensible and moderate step. This is the time for us to protect our election integrity in the digital age, and I hope that the Government accept new clause 18 and take the opportunity before it is too late.

I hope that the hon. Member for North Herefordshire did not mind that I gave up speaking to enable her to do so, but I wanted to check whether someone would speak to those new clauses. I wanted to allow her to elaborate the argument so that I could come in with some of my thoughts at the end.

As the shadow Minister, I was intrigued, in various meetings that I have had, as we have all had, with outside organisations about the Bill, by the ideas outlined in new clauses 10 and 24. I pay tribute to the hon. Member for Milton Keynes Central for tabling them; they are substantive new clauses that I think are very well intentioned. The number of Members who have supported them on the amendment paper shows the importance of tackling some of these issues in a cross-party and urgent way.

On new clause 10, on the guidance on law relating to digital communication offences in relation to elections, the hon. Member for North Herefordshire outlined the problems that we are currently having. Digital communication offences are becoming a bigger problem, and they cause harm to people. The current duty is to demonstrate that the person has been harmed emotionally. She used the example of the deepfake that went out of my hon. Friend the Member for Mid Norfolk, showing him saying that he was leaving the Conservative party and going to Reform. Although that has not necessarily been a strange development in the last couple of months, anyone who knows my hon. Friend knows that that is incredibly unlikely. It would also cause a great deal of distress to many of us moderate Conservatives for it to ever be thought that we could go to Reform. There is serious point behind that, which is that for anyone harmed by something like that, there should be laws relating to digital communication offences.

We do not think that new clause 10 would be arduous on the Government. It asks them to publish guidance on the operation of certain offences, and it does not ask for immediate action. It allows the Minister and the Government to go away and provide guidance. The Minister has said many times today that she is considering, for example, the Rycroft review, and that she will come back with suitable guidance and proposals. The new clause is in that spirit. It would allow her to go away and look at what we need to do in this increasingly concerning area of election campaigning. The call from the hon. Member for Milton Keynes Central is eminently sensible, and so we will support new clause 10 if it is pressed to a vote because we want that guidance to be brought in.

New clause 24 proposes a repository of digital political advertising. I do not expect Committee members to remember the questioning in the oral evidence sessions—particularly my questions—but I was really quite fascinated by the proposal. Like the hon. Member for North Herefordshire and other members of the Committee, I have met some organisations that have advocated for it. I do not think that we should be fearful, as politicians and members of any political party, or of none, of standing by the things that we put out in elections. Therefore, instead of going in the bin, as some of mine do, they should be kept online to ensure transparency and accountability through a simple repository regime.

The Government have repeatedly proposed to put more burdens—more regulatory responsibilities, I should say—on the Electoral Commission. I do not think this proposal would be a particularly bad burden to place on it. There is a question about resourcing the Electoral Commission, but I know that the hon. Lady and the various organisations that are advocating for new clause 24 are pretty relaxed about who would manage holding the information and transferring it to the National Archives, so I think that is something that the Government should explore.

I was interested that the hon. Lady outlined that she is concerned about misinformation, manipulation and the exploitation of the electoral process by foreign actors. I hope that when we come to new clause 37, she will be equally concerned about the exploitation of votes using foreign languages in electoral literature. I hope she will look as favourably on that proposal as I am on this one, because I believe that is equally exploitative of various communities in the country.

We support new clause 24, which we think is radical, but sensible and transparent. If we stand by what we put out there, we should not fear the people who elect us holding us to account for what has been put out, so I think that is actually quite an exciting prospect for democracy.

That is where the consensus between me and the hon. Members for Milton Keynes Central and for North Herefordshire ends. I have a number of concerns about new clause 27, not because I am opposed to having a general conversation about the regulatory period. The hon. Member for North Herefordshire is right that parties of all colours front-load and send out a lot of stuff before the regulated period starts. The regulated period is inherently there to protect the smaller parties from the bigger parties and to give everybody a level playing field.

I know that when the regulated period starts—and we are all currently going through the start of one—every party has equal right to put out an equal amount of election literature to people in our constituencies, boroughs or counties. All parties are held to the same standard and it can be proved if there has been—I hope not—manipulation of the election expenses. The regulated period is there to protect parties.

Do not get me wrong: in my constituency five Liberal Democrat “in touch” communications go out every year. It drives me mad. I do not like it. I do not like its content, but the Liberal Democrats have every right to communicate with their residents. Putting an annual limit on the amount of literature that can be put out is anti-democratic. It is quite good to have some element of competition, where many parties can put out election communications throughout the year. I worry that having an arbitrary annual cap on the amount of literature that we can put out will harm independent candidates and local parties—they may exist: we have the Eastleigh borough independents, of whom three were successfully elected councillors. They should not be held to the same standard as national parties, which can absorb the cost. I am slightly concerned about the unintended consequences of that.

New clause 27 does not outline whether it covers material related to the Independent Parliamentary Standards Authority, which some of we elected representatives, choose to put out. We have a budget to communicate to our constituents. Are we going to be held to the same reporting threshold for those IPSA communications, which are not party political but are elected literature? [Interruption.] Would the hon. Member for North Herefordshire like to intervene to correct me?

I will pick up the hon. Member’s points in my summing up.

I am not being adversarial; there is an argument that although the literature that goes out via IPSA is not party political, as an elected official, IPSA is giving me the ability to send out literature that would not be included within the threshold. Other parties that oppose me at the next general election should be entitled to put out resources to match those, and I do not think that should be governed within an annual spending limit.

It worries me that if we get to a period in which we are controlling smaller, larger, regional and local political parties and holding them to the same standard in election spending as national, established parties such as those that hon. Members on the Committee represent, that would start to erode free and fair democratic access to the people who elect us and elect our colleagues in local government across the country. I am uncomfortable with that, although we could have a conversation about the lengths of regulated periods.

I am genuinely intrigued in several ways by the shadow Minister’s contribution. He talks about a level playing field. Most of us would always agree with a level playing field, in pretty much all circumstances. Does he think that the national spending limits for the larger political parties should be brought down significantly? He expressed real concern about smaller parties, whether localist parties or groups of independents, that do not have a national political machine with a multimillion-pound budget at a general election. If I understand correctly what the shadow Minister says, he would not see that as a level playing field. Does he agree that spending limits for local candidates should probably go up a little but spending limits for national parties should come down significantly because, after all, people put a cross in a box next to an individual’s name, not just a political party?

We are discussing a new clause that starts a conversation about the regulated period and would create a year’s limit on the amount of literature that can go out, outside of an election period. That seems different from what the hon. Lady is describing, which is the regulations and limits on political parties, and candidates not in a party, during an election period. Those are two very different things. I am quite happy with the fact that I have to raise the money to stand for my seat at a general election, and that national parties have to account for that.

The new clause includes provisions not just for general elections but for outside election periods. What I find concerning is that council groups—such as those of the hon. Lady’s party in Eastleigh, or my party’s in Fareham, Hampshire and all across the country—would have to be accountable for putting out communications to people who end up putting councillors in their jobs. I do not think that we should get in the habit of limiting political parties outside an election period, because I think that is an entirely different prospect, and an entirely different area from how we are governed in an election period.

I am perfectly okay to start talking about funding levels during an election period, but I do not want to do so for candidates who wish to start a campaign before the current regulatory period. As the hon. Lady will know—she is a very successful politician, both locally and nationally—we do not begin to build an election campaign just in the regulated period. Many of us started trying to get involved in politics a long time before we were elected, and I think that limit is a very dangerous thing in today’s democracy.

However, I would say to the hon. Lady that I am open to a conversation about election financing. I am looking at my Whip—my hon. Friend the Member for Ruislip, Northwood and Pinner—who is probably horrified by me saying that, but I am not against that argument or discussion. I just think that this goes a bit too far, and it does not sit well with me. After that rambling oratory, I just say to Green and Liberal Democrat Members that, if they choose to push new clauses 10 and 24 to a vote, the Opposition will support them, but we would vote against new clause 27.

The Opposition also think that the accountability in new clause 18 is very sensible. If we use AI, we should be honest about it—it is as simple as that. If any politician wants to put forward an AI-generated image, I first think there is a question about why they would want to do so anyway. We all think that our constituencies are beautiful, and we would not want to change them. We also all know that politics is acting for ugly people, so why would we want to change the way we look?

I do not understand why someone would want to use an AI-generated image, but if they do, they should actually be big enough and strong enough to own it. Therefore, it is important to have some extra regulation, particularly as some people might not be au fait with AI-generated images, as some are very believable—not the one of Donald Trump pretending to be Jesus, but the more sensible ones. People cannot necessarily pick that up, so if the hon. Member for Hazel Grove chose to push new clause 18 to a vote, the Opposition would also support it.

New clause 18 seeks to require digital campaigning material, in scope of the digital imprint regime, that contains images, audio or video generated or materially altered to include a statement that such artificial intelligence has been used. The Government fully recognise the challenges posed by AI-generated content, including deepfakes, and the risks they present to democratic processes and public trust in the online information environment. We agree that helping voters understand the authenticity of digital campaigning material is an important objective.

However, AI technologies are developing at pace, and there is not yet a reliable or widely adopted technical basis for determining when content has been generated or materially altered by AI. That would make enforcement by the Electoral Commission and the police difficult in practice, and it would risk undermining campaigners’ compliance with the rules.

The new clause, as drafted, would also create uncertainty and disproportionate legal risks for campaigners. For example, it would create a new criminal offence for failing to include a statement about AI use, even where the AI involvement may be trivial, automated or outside the campaigner’s knowledge or control. Further consideration would also be needed on how liability for offences should apply to those who republish material.

There would also be a considerable chance of the new clause quickly becoming obsolete. AI is evolving rapidly, so adopting a definition of “generative artificial intelligence” in primary legislation might struggle to keep pace with technological developments and it could quickly become outdated. Although we share the intention to strengthen transparency in digital campaigning, the Government do not believe that the new clause is currently workable or proportionate. The Secretary of State for Science, Innovation and Technology recently announced that the Government will establish a taskforce to put forward proposals for Government on best practice for labelling AI-generated content, with an interim report to be published in the autumn. I urge Members to follow the progress of that taskforce.

I turn to new clause 10 and amendment 4. I thank my hon. Friend the Member for Milton Keynes Central for those and for her commitment to strengthening online protections. I know Members feel strongly about that area. I share the objective of seeing the powers of the Online Safety Act 2023 being fully and effectively utilised. With that in mind, the Government have carefully considered new clause 10, which would require the Government to publish guidance on the operation of certain offences relating to digital communications, as they relate to candidates and elected officials.

Under the Online Safety Act, in-scope service providers are already required to have effective systems and processes in place to identify and remove illegal content. That includes content that amounts to the two offences identified in new clause 10: the “false statements about candidates” offence and the offence of undue influence. Those duties apply equally to AI-generated and manipulated content where such material meets the threshold of either offence.

As the independent regulator, Ofcom issues codes of practice that provide clear guidance on what action providers should take to manage and mitigate illegal content. The codes recommend various measures across risk management, user reporting and content moderation. Ofcom has already produced guidance to assist providers in making judgments about whether certain content is illegal, and such guidance includes usage examples where possible. As the independent and expert online safety regulator, Ofcom, not the Government, is best placed to offer such guidance.

The Government have no plans to widen their role within the Online Safety Act regulatory regime by issuing guidance on matters within Ofcom’s remit. Introducing a new duty for Government to publish parallel guidance on two specific offences, and committing to regularly updating that guidance, would blur the lines between Government and the independent regulator, undermining the model for which Parliament has only recently legislated.

The Government remain firmly committed to ensuring that protections keep pace with evolving threats to democracy, and I welcome continued engagement with parliamentarians on that important issue. As Members will know, Rycroft made recommendations in his review supporting the principle of advertising libraries and suggested that the Government could use their convening power to work with social media companies to extend the practice of advert libraries to achieve consistency in how they are presented. That is not the same as setting a legal requirement for a repository of digital political advertising, as intended by new clause 10. None the less, we are carefully considering all of the recommendations in the Rycroft review and will issue a response in due course.

New clause 24 seeks to establish a repository for paid-for digital political advertising. Digital political advertising plays an important role in supporting democratic engagement. It remains one of the most accessible and cost-effective ways for political parties and campaigners to connect with the public and have their message heard. However, the Committee will be aware that the European Commission introduced similar requirements to new clause 24 in 2024, including mandatory transparency notices containing information such as spending and targeting, and the requirement for platforms to upload all political adverts to a European repository.

In response, major platforms such as Meta and Google chose to cease hosting paid political advertising entirely in the EU, citing operational complexity and uncertainty as to whether compliance by platforms and campaigners was realistically achievable. If the UK were to adopt comparable measures without fully understanding their operational impact, we could see similar unintended outcomes here.

The potential removal of political advertising from major platforms in the UK could risk reducing political pluralism online by restricting the ability of political parties, civil society organisations and candidates, many of whom rely on digital platforms to engage effectively with the public. Smaller, newer parties and independent candidates may be disproportionately impacted by such an outcome, losing an affordable channel to reach voters, while larger, well-followed parties and campaigning groups would likely be less affected. That would make campaigning more challenging for newcomers, potentially undermining the level playing field.

The Government agree that transparency in digital campaigning is important, but any reforms must be carefully balanced to protect freedom of expression and avoid placing undue burdens on campaigners and platforms. This is a complex area, and the implications need detailed consideration to avoid replicating the unintended consequences seen in other jurisdictions. In the meantime, we welcome the steps already taken by platforms such as Meta and Google, which have created publicly accessible political advert libraries. We encourage other platforms to do the same.

The measures in the Bill will extend the scope of digital imprint rules and place enforcement on a clearer and more proportionate footing, ensuring that voters can continue to make informed decisions on digital material in elections and referenda. We will continue to keep wider policy relating to electoral campaigning under review.

I turn to new clause 25. The Government absolutely recognise the importance of protecting our elections from online interference, including concerns about how algorithms, such as recommender systems, can amplify harmful or misleading content. The current legal framework to tackle online electoral mis and disinformation has the Online Safety Act 2023 as its core pillar. New clause 25 would risk creating overlap and confusion with Ofcom’s responsibilities under the Online Safety Act.

Under the Online Safety Act, in-scope services must take action in relation to any content that amounts to existing election offences during an election period. The Online Safety Act already provides Ofcom with extensive powers to gather information from services and scrutinise how algorithms operate as well as a mandate to require services to conduct illegal content risk assessments. That includes assessing the likelihood of users encountering illegal content through algorithms, how systems may exacerbate or mitigate those risks, and what safeguards are required. From 2027, categorised services will also be required to report information about their algorithms, including how they influence the display, promotion or recommendation of content. Creating overlap or confusion with Ofcom’s responsibilities under the Online Safety Act also increases the risk of regulatory uncertainty. For those reasons, we cannot accept the new clause.

That said, the Government fully recognise the importance of ensuring that the commission has the tools it needs to enforce compliance with the regulatory framework it is responsible for enforcing. That is why we commissioned the Rycroft review to consider whether political finance rules and their enforcement can be strengthened in the light of emerging risks, including covert funding and foreign interference.

As Members know, we are carefully considering relevant recommendations from the Rycroft review to ensure that political finance rules and their enforcement remain robust and fit for purpose, including recommendations relating to the Electoral Commission’s investigatory powers. We will revert with a full Government response to the review and consider whether to make further amendments to the Bill in the light of that work.

New clause 27 would require the Government to establish a review to consider the adequacy of regulated periods of elections and referendums. More specifically, it would consider whether they are of sufficient length to combat mis and disinformation, and the impact of digital campaigning outside regulated periods.

I have a lot of sympathy for what the Minister is saying. It seems to me that there is a risk of a “may contain nuts” kind of solution emerging: campaigners could simply put, “This may contain artificially generated imagery” on every item of digital campaigning and comply with the law, but that would not tell us whether what is being represented has been materially altered. In the light of her earlier comments about the autumn timeline, will she give the Committee a clear commitment to work not just with political parties but with industry, with a view to ensuring that we have effective copywriting and watermarking, which we know many of these organisation are already developing, so that anybody looking at political content can be confident that what they are seeing is genuinely what was said by that politician, candidate or party?

The hon. Gentleman makes a really important point. As I mentioned earlier, the Secretary of State for Science, Innovation and Technology announced that the Government have established a taskforce to take forward proposals for Government on best practice for labelling AI-generated material. With the interim report due to be published in the autumn, I think it is timely that I should write to the Secretary of State for Science, Innovation and Technology to outline the concerns that have been debated in the Committee—I am looking to my officials to ensure that we pick this up—because I think it will be very informative for the taskforce’s work. If the hon. Gentleman is happy for me to do that, I will do so.

Finally, the Government recognise that there are potential issues with section 106 of the Representation of the People Act 1983, which the hon. Member for North Herefordshire mentioned. We are reviewing how that legislation should apply in a modern electoral setting and, where necessary, we will take appropriate action to clarify the scope of the section, particularly to make sure that it captures emerging technologies such as deepfakes and other AI technologies and is future-proofed.

Question put and agreed to.

Clause 63 accordingly ordered to stand part of the Bill.

Clause 64 ordered to stand part of the Bill.

Clause 65

Decriminalisation of certain requirements

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to consider the following:

Schedule 10.

Clause 66 stand part.

Schedule 11.

Clauses 67 to 69 stand part.

New clause 41—Electoral Commission: civil penalties and enforcement—

“(1) PPERA 2000 is amended as set out in subsection (2).

(2) In Schedule 19C, in paragraph 1, after sub-paragraph (1) insert—

‘(1A) When deciding whether to impose a fixed monetary penalty under this Act, the Commission must have regard to whether the penalty will—

(a) change the behaviour of the offender;

(b) eliminate any financial gain or benefit from non-compliance;

(c) be appropriate for the particular offender and regulatory issue;

(d) be proportionate to the nature of the offence and the harm caused;

(e) restore the harm caused by regulatory non-compliance, where appropriate; and

(f) deter future non-compliance.’”

This new clause would put the ‘Macrory principles’ for regulators on to a statutory footing as regards the Electoral Commission.

New clause 46—Power of Electoral Commission to require disclosure from financial institutions—

“In Schedule 19B of the Political Parties, Elections and Referendums Act 2000 (investigatory powers of Commission), after paragraph 1 insert—

‘Power to require disclosure from financial institutions

1A (1) The Commission may give a disclosure notice to a financial institution requiring the institution—

(a) to produce, for inspection by the Commission or a person authorised by the Commission, any documents which—

(i) relate to the income and expenditure of an organisation or individual to which paragraph 1 applies, and

(ii) are reasonably required by the Commission for the purposes of carrying out their functions; or

(b) to provide the Commission, or a person authorised by the Commission, with any information or explanation which relates to that income and expenditure and is reasonably required by the Commission for those purposes.

(2) A financial institution to whom a disclosure notice is given shall comply with it within such reasonable time as is specified in the notice.

(3) In this paragraph, “financial institution” has the same meaning as in Schedule 6 to the Terrorism Act 2000 (see paragraph 6 of that Schedule).’”

This new clause gives the Electoral Commission the power to require information from a financial institution relating to the income and expenditure of political parties and associated individuals.

New clause 53—Electoral Commission: pre-investigation decision notices—

“(1) PPERA 2000 is amended as set out in subsection (2).

(2) In Schedule 19B, paragraph 3, subparagraph (5), at end insert—

‘or;

(b) relevant to determining whether to start an investigation.’”

This would enable the Electoral Commission to require information before launching a formal investigation.

New clause 57—Electoral Commission fining power—

“(1) Schedule 1, paragraph 5, to the Political Parties, Elections and Referendums (Civil Sanctions) Order 2010 is amended as set out in subsection (2).

(2) For ‘is £20,000’, substitute ‘is the greater of—

(a) £500,000, or

(b) 4% of the total campaign expenditure incurred by the person or organisation during the relevant regulated period.’

(3) At end of sub-paragraph (1) of paragraph 16 of Schedule 19C to PPERA 2000 insert—

‘(1A) Notwithstanding sub-paragraph (1), the Secretary of State may only make a supplementary order which amends the percentage of campaign expenditure incurred by the person or organisation during the relevant regulated period which can be used as a maximum monetary penalty by the Electoral Commission, if the condition in sub-paragraph (1B) has been met.

(1B) The condition in this sub-paragraph is that a recommendation for the amendment has been made to the Secretary of State by the Electoral Commission following consultation with the Ethics and Integrity Commission.’”

This new clause amends the Electoral Commission’s power to fine, increasing its maximum from £20,000 to £500,000 or 4% of campaign spending, whichever is higher. It further prevents the percentage used being changed through Order unless a recommendation has been made by the Electoral Commission following consultation with the Ethics and Integrity Commission.

On a point of order, Sir Desmond. Do we need to check whether any of the amendments debated with the previous clauses need to be moved, including the ones that I tabled?

While it was convenient to debate those new clauses with the last group, it will not be convenient to reach a decision on them until much later in our proceedings.

I will speak to clauses 65 to 69 before turning to the new clauses tabled by hon. Members.

Under the current enforcement framework, most political finance offences, regardless of their severity, are treated as possible criminal offences, even when they amount to minor administrative breaches, such as the late submission of campaign expenditure reports. While criminal investigation and prosecution for such offences is rare, key stakeholders, including the Electoral Commission and the Ethics and Integrity Commission, have expressed concerns that the possibility of criminal prosecution for minor errors can deter participation in campaigning. Clause 65 and subsequent secondary legislation will address this by decriminalising administrative offences under the Political Parties, Elections and Referendums Act 2000, so that they will be punishable only through civil sanctions by the Electoral Commission rather than criminal prosecution.

We have worked closely with the Electoral Commission to determine which offences under PPERA should be decriminalised. Broadly, they relate to failures to comply with reporting requirements, such as failing to deliver a campaign expenditure return within the statutory time limit or failing to deliver a proper statement of accounts. Serious breaches, including intentional or reckless misreporting, will remain criminal offences and will continue to be investigated by the police and subject to criminal prosecution.

This will provide much-needed clarity that the Electoral Commission is responsible for enforcing such administrative breaches, allowing police resources to be directed towards tackling more serious criminal offences and clamping down on foreign money entering politics. In addition, by removing the threat of criminal prosecution for minor infractions, the clause will encourage participation by individuals and organisations that wish to campaign, while ensuring more proportionate enforcement of the rules.

Turning to clause 66, robust and proportionate enforcement of political finance law is essential for sustaining trust in our democracy. However, there is currently an enforcement gap in electoral regulation. Since 2010, to provide for more flexible and encompassing enforcement, the Electoral Commission has been able to impose civil sanctions for certain offences committed by political parties, third-party campaigners and referendum participants. In contrast, offences committed in relation to candidates and recall petition campaigners are subject only to criminal sanctions and enforcement by the police. Practically speaking, this means that breaches of the rules can be addressed only through police investigation and criminal prosecution, even where a breach is minor or unintentional. Yet criminal prosecution for minor infractions is frequently considered disproportionate to the offence and not in the public interest, which means that breaches of the rules often go unaddressed and unsanctioned.

This enforcement gap risks undermining public trust in the integrity of the electoral system by creating the perception that the rules are not being enforced and that campaigners are not complying with them. At the same time, it can create a fear of criminal prosecution for candidates, election agents and recall petition campaigners, who could face police investigation for relatively minor breaches of the law.

Clause 66 is intended to close that gap by extending the Electoral Commission’s enforcement remit, including its investigatory and civil sanctioning powers, to cover offences in relation to candidates and recall petition campaigners. Criminal prosecution will remain available for the most serious offences involving intentional or reckless breaches of the rules, but the EC will also now be able to apply its considerable knowledge and expertise to the enforcement of breaches across the political finance framework, providing for a more encompassing, proportionate and robust regime.

Clause 67 removes the statutory cap on the maximum fine that the Electoral Commission can impose for certain offences. Currently, where an offence is punishable on summary conviction by a fine, the penalty imposed by the EC may not exceed that which can be imposed by the court. The maximum fine that can be imposed by a court in such instances is unlimited in England and Wales, but £10,000 in Scotland and £5,000 in Northern Ireland.

The purpose of removing these restrictions is to ensure that the Electoral Commission’s maximum fine can be applied uniformly across all relevant offences around the UK. We will be increasing the maximum fine level in secondary legislation. This will ensure that the Electoral Commission’s new maximum fine provides a meaningful deterrent against violations of the rules across the UK, no matter where the offence is committed.

As the regulator, the Electoral Commission is invaluable in upholding trust in our democracy. That is why we are expanding the commission’s role and powers, including extending its enforcement remit and increasing its maximum fine. We intend for the Electoral Commission’s expanded role and powers to apply UK-wide at all elections, including parliamentary and local government elections.

I am sorry to ask this question, because it is completely and utterly about my ignorance—could the Minister believe it? Is she setting a maximum fine at secondary legislation, or is she removing the maximum fine?

As I understand it, we will be setting the maximum fine in secondary legislation, but I will confirm that, because I have almost lost the thread of what I was saying.

I apologise to the Minister for making her lose her trail. I also am at that stage in the afternoon where things are not going in as well as they probably were this morning. I asked the question because, at the moment, the courts have an unlimited maximum fine. I just got confused about whether the Minister was setting a maximum fine through secondary legislation, which she has now clarified. As we on the Committee are discussing the changes to the Electoral Commission’s responsibilities, which the Minister has been clear about throughout the day, would she give us an indication of what that maximum fine might be? Why is she waiting until secondary legislation to set the level of that fine?

It is our intention to increase the maximum fine level in secondary legislation, as I stated earlier. Its level will be debated at that time. We will debate it in secondary legislation, but it needs to remain proportionate, and we need to move towards it in a considered way and debate it then.

I think there is a high degree of political agreement that this is the right direction of travel. Could the Minister say a little bit more about the assessment that the Department will have done about the resource implications for the Electoral Commission? We are all conscious that regulatory enforcement can come at an enormous cost to the regulator, especially where bad actors have specifically structured arrangements to evade rules and enforcement.

We have seen examples in other jurisdictions where political action committees, fake political parties and short-term political parties have been set up specifically to get around the regulations set out in light terms in the Bill. Given that that is likely to be partially funded by a costs award in the event of somebody having been found to be in breach, alongside the fine, could the Minister indicate what she thinks the cost implications are for the Electoral Commission? That is especially given that we have seen regulators in multiple jurisdictions face enormous costs for the legal process required to enforce their judgments.

My officials work very closely with the Electoral Commission and would not have acted without consideration and with consultation with it. I remind the Committee that decisions about the resourcing of the Electoral Commission fall to the Speaker’s Committee on the Electoral Commission. That is the route by which it is funded. We would not want to make regulation too burdensome, but correspondingly, the Electoral Commission reports to the Speaker’s Committee regularly about its resourcing needs. Indeed, mostly recently, it returned money to the Speaker’s Committee that it did not feel it needed. To reassure Members, officials work closely with it to ensure there is sufficient resource.

Our policy ambition is for these legislative changes to be consistent across reserved and devolved elections and to be commenced in a way that provides clarity to campaigners on how the rules will be enforced across all elections. Clause 68 provides for that, as it allows the Secretary of State to make provisions that could otherwise be made by Scottish or Welsh Ministers, but only with the consent of Scottish or Welsh Ministers. In practice, subject to the agreement of the devolved Governments, that will enable us to introduce a uniform set of changes to the role and power of the Electoral Commission in relation to local government elections in Scotland and Wales.

I turn to clause 69. The Electoral Commission currently lacks an explicit statutory gateway to disclose information to other regulators and law enforcement bodies. The lack of an explicit legal basis for information sharing forces the commission to rely on incidental powers or bespoke memorandums of understanding to disclose information. Those arrangements create unnecessary complexity and delays, and make information sharing more burdensome than it ought to be. They have embedded unnecessary friction into the system, slowing co-operation between regulators on important cross-cutting regulatory issues, and frustrating the very bodies charged with upholding the integrity of our democratic processes.

To underpin our wider reforms to strengthen enforcement, the clause provides a clear legal basis for information sharing, enabling the commission to disclose information to specified regulators and enforcement bodies. It will nurture an environment of collaboration between relevant bodies on cross-cutting issues such as foreign interference, data protection and digital campaigning. To ensure that the information-sharing gateway remains effective as the regulatory landscape evolves, the list of bodies can be amended by the Secretary of State, following consultation with the Electoral Commission and subject to parliamentary approval via the affirmative procedure.

The Government note that one of the recommendations of the Rycroft report is to build on this measure and make the information-sharing gateway reciprocal, to provide clarity that the Electoral Commission can also receive information from relevant bodies. We are carefully considering all the recommendations from the Rycroft review. We will issue a full Government response in due course, and, where appropriate, we will introduce new amendments to the Bill.

With those assurances, I commend clause 69 to the Committee. I will allow other Members to speak to the new clauses and I will respond to them in due course.

I reinforce that this is the only opportunity that the Committee will have to debate those new clauses.

I thank the Minister again for—I am not being facetious—her comprehensive explanation. We have been here for most of the day. These are very complicated issues, and she has been speaking an awful lot because of the importance of this legislation. I do not envy her. I will speak to new clause 41 in my name, to be voted on at another point. We welcome clause 65, but we have some questions on clause 67.

As the Minister outlined, clause 65 and schedule 10 decriminalise certain offences in PPERA. They relate to administrative requirements for political parties and others regulated by that legislation and the commission. For example, it is currently an offence for a party treasurer to fail to deliver annual accounts or reports of election expenses to the commission. The provisions will also make the necessary consequential amendments to allow the requirements to come under the commission’s civil sanctioning regime.

Clause 66 is a fairly simple clause, which extends the Electoral Commission’s remit to be the primary enforcer of all imprint rules. I would like to pick up on a theme from my hon. Friend the Member for Ruislip, Northwood and Pinner, which I also brought up earlier: the impact on the Electoral Commission’s ability to do its job properly, in relation to what it currently does compared with what the Government will ask it to do after the legislation passes.

The Minister has made it clear that officials are working with representatives of the commission. I know that she works with them as well, and they have not necessarily said that they are unhappy about receiving this new responsibility. However, my general experience from working in the public sector and serving as a local authority councillor is that, in this world of organisations that are often controlled by Treasury spending budgets, or, as the Minister outlined, the Speaker’s Committee on the Electoral Commission, no one says no to extra responsibility if they think they are going to get some more dosh—let us put it that way.

Will the commission get enough cash to be able to manage the regulatory burdens that the Government are placing on it? I am beginning to worry that with the plethora of new responsibilities, we will have to see quite a large uplift in the commission’s budgets. I have not heard convincing defences that the Electoral Commission has verbally or formally remarked to the Government that it is content to receive that much responsibility. I am sure that the Minister will come back to talk about that.

Clause 67 will increase the maximum fine that the commission could impose in a civil sanction for some summary offences. We have concerns about the size of the proposed increase in Electoral Commission civil sanction fines. The courts already have powers to levy unlimited fines. At the very least, the Macrory principles on proportionate regulatory enforcement should be embedded in law—that is what we aim to achieve in new clause 41. The Electoral Commission’s strategy and policy statement recommends the application of the Macrory principles, including

“the use of requests for improvements before resorting to fines and the need to conduct investigations in a timely manner.”

The Electoral Commission has civil sanctioning powers that apply to national referendums and elections. More serious criminal matters can be—and are—referred to the police and Crown Prosecution Service, and are then considered by a court of law. The courts already have the power to levy unlimited fines and criminal sanctions. Unlimited fines are potentially a heavy, significant punishment. That is why it would be appropriate for a judicial check and a fair hearing in a court of law. Indeed, such massive civil fines would likely be challenged via lawyers in the courts anyway, as we have seen with the Information Commissioner and general data protection regulation fines.

In relation to the Minister’s opening remarks about setting the level of the Electoral Commission fine at secondary legislation, I am concerned that that is because of, quite frankly, the unpreparedness of the Government. They have put a lot of legislation forward without properly consulting the Electoral Commission and are rushing, as we have said all along in this legislation, to try and legislate without necessarily thinking things through.

Opposition Members did ask about the level at which we would set the fine. I have now consulted my notes; we intend, through secondary legislation, to increase the limit to £500,000 per offence. That will be done through secondary legislation.

I thank the Minister for that; that clarity is welcome. I still question why that needs to be done at secondary legislation. If the Minister knows the maximum fine limit for the Electoral Commission today, she could have put that in the legislation or brought forward an amendment to be discussed in Committee. She has chosen not to do that; I am interested to know why she has chosen not to do that and is waiting for secondary legislation to do so. Perhaps she will come back and tell the Committee why that is the case.

My point still stands. The fact that she is looking to set the fine at the secondary legislation stage outlines that, once again, the Government are asking the Electoral Commission to do a great number of things that it currently does not do. I am not convinced, unless the Minister can reassure me in writing or come back after this Committee, that the Electoral Commission has been properly consulted. Let us not forget that it was the Electoral Commission that criticised the Government for not consulting it on trying to postpone the elections. That was a process where the Government were found to be unlawful—by the Secretary of State on the Floor of the House.

I am concerned that, as we have gone through this legislation, a huge amount has been asked of the Electoral Commission in terms of its responsibility and purview, and the Minister has not reassured me that it is happy with that. I am not convinced that the resource that it currently has would allow it to conduct its operations or, if necessary, investigations on its current physical envelope.

The reality is that the Electoral Commission already imposes fines; it is just that they are not big enough. I argue that, by not setting the level in primary legislation but doing it in secondary legislation, it can be responsive should it need to be changed in the future, which it may need to be. We have talked about the revolving nature of foreign interference; in similar ways, the offences and their gravity may change over time. To be able to respond to that through secondary legislation is important, and we should not be hidebound by requiring primary legislation.

The Electoral Commission is accountable to Parliament, not to Government. It is a very important point to make that the consideration of its comfortableness, abilities or capacity is a discussion for Parliament. My officials work with it collaboratively, and I meet with it regularly. It is comfortable, but we must always remember that it is accountable to Parliament, not to Government.

I absolutely accept the Minister’s point that it is accountable to Parliament, but her party and her Government have a majority in this Parliament, and her Government are asking the Electoral Commission to do a huge amount more. She says that it has been consulted, but all I would say is that, in other areas, it was not consulted when the Government have arbitrarily gone ahead and decided to do what they want to do.

The Minister is also correct, and I thank her for her correction, that the Electoral Commission already issues fines. I do not dispute that, but this Government, through schedule 10 and clause 65, are trying to remove some of the fine elements from the judicial system and place more responsibility on the Electoral Commission. That is my concern about the extra responsibility it would have, which has been taken away from the judicial system, as well as some of the other responsibilities that it is being asked to take on, as we have discussed in relation to previous clauses.

Does my hon. Friend agree that, when we look across the system, we see other regulators—Ofcom probably comes to mind—where fines have been issued through a civil process like the one this legislation envisages. We know that Ofcom is currently engaged in a battle with 4chan, which it has fined a very significant sum for failing to meet legal requirements in the United Kingdom for age verification checks for online pornography. 4chan’s response has been to refuse to pay the fine and to counter-sue in the courts of the United States, arguing that, because it has a headquarters in the US, it is effectively a restraint on trade by the British Government and a breach of its rights under US legislation.

Clearly, there is a significant possibility, given that civil courts have a different burden of proof than criminal courts, that this could end up entangling the Electoral Commission in all sorts of long-running and extremely expensive disputes in a way that is not currently envisaged. We need to foresee that risk and plan for it appropriately.

I agree. I am all in favour of streamlining and making things more efficient, but I am worried that the unintended consequence of essentially removing the judicial oversight element is that the Electoral Commission cannot actually enforce—or, if it does try to enforce, adherence can simply be refused. The Government have done this in another organisation, Natural England, through measures in the Planning and Infrastructure Act 2025. They gave Natural England—an organisation that has limited finances—an enforcement role in legislation, but with no teeth. Therefore, I share my hon. Friend’s concern that this simply will not work.

I have said what I have to say on those clauses, and I would like to press new clause 41 to a vote. We will not oppose any of those clauses, but I warn again that we are concerned about the Electoral Commission’s ability to undertake its responsibilities, and I know that the Minister has responded to that.

I should start by reminding the Committee that I am a member of the Speaker’s Committee on the Electoral Commission, so I have been a part of some of the discussions the Minister mentioned. I also met the chief exec of the Electoral Commission to talk about what is in the Bill, what the Electoral Commission welcomed and worked with officials on, and what it would have liked to have seen more on. That was a useful and productive meeting. The commission made some public comments, and I cannot remember the exact wording used, but it was underwhelmed at some elements, I think.

I am particularly keen to speak to new clause 46 and new clause 53, which is in the name of my hon. Friend the Member for Guildford. New clause 46, in the name of the hon. Member for Warwick and Leamington (Matt Western), has drawn attention to Electoral Commission comments about a Catch-22 in its powers to investigate suspicious transactions:

“Despite our statutory duty to monitor and take all reasonable steps to ensure compliance…we currently have no ability to obtain any information from financial institutions that we can use to monitor and independently verify provenance or the permissibility of funds, unless we open a full investigation. This is a weakness: to open such an investigation needs clear evidence—but we can’t always obtain that in the first place.”

The Government said that they would keep the Electoral Commission’s powers under review, and noted that they were increasing planning powers per offence to provide a greater deterrent. However, the report emphasised that the Electoral Commission can impose fines only if it can prove an offence has occurred in the first place. The fact that it often cannot do so is precisely the problem and underpins the need for stronger information-gathering powers. New clause 46 would increase the commission’s powers to require financial institutions to provide it with information in relation to the permissibility of donations.

New clause 53 is complementary to new clause 46. It would enable the Electoral Commission to require information before launching a formal investigation. When I met the commission’s chief executive with my hon. Friend the Member for Guildford, who tabled the new clause, we talked about exactly that issue. The Rycroft review, which has been mentioned many times today, states that the Electoral Commission, unlike the other regulators, cannot demand information outside a formal investigation, meaning that it cannot work in real time to head off offences. The review recommends extending powers so that the commission can require information from relevant bodies and persons.

By comparison, the Charity Commission has the option of a regulatory inquiry, which gives information-obtaining powers without the necessity of enacting a lengthy statutory inquiry. The Joint Committee on the National Security Strategy report, describing the Catch-22, recommends powers for the Electoral Commission to compel information, deployable in appropriate cases outside formal investigations. The Committee on Standards in Public Life’s 2021 review recommended extending the commission’s powers to compel document information and explanation outside an investigation.

Election-related harms are increasingly amplified online. The Electoral Commission evidence to the Speaker’s Conference explicitly links disinformation and platform algorithms to harassment and intimidation, and it describes concrete candidate harms, including deterrence and avoidance. The Speaker’s Commission earlier called for electoral law review, including addressing the disinformation that can fuel abuse and intimidation, and a number of people involved in the democracy sector and the implementation of the enforcement of electoral law would welcome looking at a review of all the many Representation of the People Acts that have taken place over time, so that we can look at where they complement one another and where, on occasion, they do less than that.

The last point to make is that if platforms can micro-target voters in real time, surely the regulator must be able to obtain basic information in real time. On that note, I commend new clauses 46 and 53 to the Committee.

I will keep my remarks brief in the interests of avoiding repetition. It is important to put on the record the changes in the Bill, which are hugely welcome. One of those is massively improving the information sharing and investigatory powers of the Electoral Commission to ensure closer working with regulators and law enforcement.

It should go without saying that the commission is the key watchdog in our democratic process and that it ensures that our elections and our political parties operate with integrity day to day. That is why it is particularly important that we look at some of the points being made as part of new clause 46. As has been said often today, that is touched on in some detail as part of Philip Rycroft’s review; the need to ensure that the information-sharing and investigatory powers of the Electoral Commission are as effective as they need to be, and that they work in a two-way direction to ensure that that work is undertaken.

I note that the Minister already touched on this at the start of this grouping, and that her and her officials will be wanting to look at it in more detail. I look forward to that, because it is important that we get this right as we make these positive steps forward in this part of the Bill. We must ensure that the Electoral Commission, as our key national watchdog for elections and the democratic process, has the powers and information at its fingertips to operate as effectively as possible.

I strongly support measures to strengthen the capacities and powers of the Electoral Commission, which plays a crucial role in regulating our politics. I will speak briefly to new clauses 46 and 53. As has already been highlighted, they are basically fully in line with Philip Rycroft’s recommendations 9 and 10, so I hope that Government amendments will be tabled in due course to address those recommendations, the justification for which has been clearly outlined.

My new clause 57 concerns the Electoral Commission’s fining power. I very much welcome the Government’s announcement that they will bring forward secondary legislation to increase the commission’s maximum fine to £500,000 from £20,000, which is clearly peanuts and no disincentive at all. That will be a significant improvement, and of course will bring the measure in line with the penalty that can be imposed for breaches of electoral finance rules in relation to referendums in Scotland.

Does the hon. Member share my view that the old system that we inherited meant that foul play by a political party was essentially priced into the system, because the fine was so small? What the Government are doing, by increasing the fine to £500,000 for a single offence via secondary legislation, means that that type of culture, in any political party, will come to an end—no party can simply say that these fines are the cost of doing business.

Absolutely. It is clear that the previous level, £20,000, was utterly inadequate, so I welcome the Government’s commitment to strengthen that. The purpose of my new clause 57 is to suggest ways in which it could be strengthened further, namely by putting the maximum fine into primary legislation, and by providing that the maximum fine would be £500,000 or 4% of campaign spending, whichever was the higher. I will explain why.

Most other regulators in the UK can impose unlimited fines, a high multimillion-pound fine or a fine as a percentage—for Ofcom, for example, 10%—of annual turnover. In its 2021 review of electoral finance, the Committee on Standards in Public Life recommended that the fine should be 4% of the value of campaign spending or £500,000, whichever was the higher. My new clause simply calls for what the Committee on Standards in Public Life argued for.

Analysis from Spotlight on Corruption has shown that the currently proposed increase to a £500,000 maximum fine would amount to a mere 1.5% and 2.1% of the campaign spending of the Labour and Conservative parties respectively, as the two largest-spending parties. If those parties had committed an egregious offence during the 2024 general election and the 4% measure had been in place, the maximum fines would have been £1.2 million or £955,000 respectively—double the current maximum. Arguably, it should be even higher—Ofcom can fine 10%—but my new clause simply puts forward the recommendation of the Committee on Standards in Public Life.

The Minister touched on the question of whether to have the limit in primary or secondary legislation. She argued—I think I am paraphrasing accurately—that one of the advantages of having it in secondary legislation is that it can be easily updated. However, the previous level of the fine, which was £20,000, was set out in secondary legislation—it was in the Political Parties, Elections and Referendums (Civil Sanctions) Order 2010—and it was never updated. The Minister said that the level of the fine might need to be set out in secondary legislation so that it could be more easily updated to make it higher, but the historical record shows us that we have had fines that are far too low and that they are not adapted.

I will speak to each of the new clauses, beginning with new clause 41, which seeks to place the Macrory principles on a statutory footing in relation to the Electoral Commission’s use of civil sanctioning powers.

We fully recognise the importance of the Macrory principles and agree that regulatory enforcement should always be flexible, transparent and proportionate. These principles were designed to guide the construction of regulatory systems and sanction regimes. As such, the Macrory principles directed the development of the Electoral Commission’s regime of civil sanctions, which was introduced by the Political Parties and Elections Act 2009 and therefore is already embedded in the commission’s regulatory practices. That includes the ability to issue fines for a wide range of offences, the use of stop notices and enforcement undertakings, and provision for representations and appeals.

The Electoral Commission is also required to publish guidance on its use of such powers, which it must have regard to when exercising its functions. It does this through its enforcement policy. Therefore, fairness and proportionality are already central to how the Electoral Commission operates. Indeed, the commission’s enforcement policy explicitly states that it will impose sanctions where appropriate, proportionate and in the public interest. For that reason, we do not consider it necessary or appropriate to apply the Macrory principles as the new clause proposes. The Electoral Commission is, and must remain, an independent regulator. It is vital that it retains the flexibility it needs to decide how best to use its enforcement powers, rather than being tied to a rigid statutory checklist for individual enforcement decisions.

The Government have been clear in our commitment to strengthening the Electoral Commission’s independence, including through the repeal of the strategy and policy statement, which the commission was previously required to consider in the exercise of its functions. Introducing further statutory requirements of this kind risks cutting across that principle and altering the balance of the commission’s operational autonomy. There is a very real risk that amending PPERA to codify these principles in this way is unnecessarily duplicative and could lead to legal uncertainty. Enforcement decisions could become a quagmire of legal challenge, which would delay action and weaken the commission’s overall effectiveness as a regulator. Having given these assurances, I hope that the hon. Member for Hamble Valley will not press new clause 41.

I turn now to new clause 53, which seeks to provide the Electoral Commission with powers to request information from any person where such information is relevant to determining whether to open an investigation. The Government recognise the importance of ensuring that the commission has the right tools it needs to make informed decisions about potential breaches of political finance rules. The commission already has substantial information-gathering powers to support its regulatory functions, including the enforcement of political finance and imprint rules. That said, the Government recognise that we cannot be complacent, which is why we commissioned the Rycroft review to consider whether political finance rules and their enforcement can be strengthened in the light of emerging risks, including covert funding and foreign interference.

Although we do not support the amendment, we are carefully considering relevant recommendations from the Rycroft review that reinforce measures already included in the Bill to ensure political finance rules and their enforcement remain robust and fit for purpose. There will be a full Government response to the review, and we will consider whether further amendments to the Bill are appropriate in the light of that work. With those reassurances, I hope the hon. Member will withdraw her amendment.

New clause 57 seeks to increase the Electoral Commission’s maximum fine from £20,000 per offence to a new maximum of £500,000 or 4% of campaign expenditure, whichever is greater. It also requires that any order seeking to amend the suggested percentage can be made only if recommended by the Electoral Commission following consultation with the Ethics and Integrity Commission. The Government fully recognise the importance of ensuring that the commission has robust enforcement powers. A strong and proportionate civil sanctions regime is essential for securing compliance with the rules and upholding trust in our democracy.

The current maximum fine of £20,000 does not provide a meaningful deterrent against rule breaking. The Electoral Commission has argued for a long time that it risks becoming a mere cost of doing business for the largest political parties and campaigners. The Government agree that increasing the maximum fine is essential, so that sanctions reflect the scale of modern political campaigning and ensure that all campaigners, no matter how large, face significant repercussions when the rules are broken. That is why we intend, through secondary legislation, to increase the commission’s maximum fine significantly to up to £500,000 per offence.

The reason why the change will be made through secondary legislation is that Parliament has already provided the Secretary of State with the power to make supplementary orders in relation to the Electoral Commission’s civil sanction regime. Any such order is subject to parliamentary approval under the affirmative procedure. It was through the exercise of that power, and through that process, that the existing maximum fine was established in the Political Parties, Elections and Referendums (Civil Sanctions) Order 2010, which is referenced in the new clause. It is therefore appropriate to follow the same process for making changes to the commission’s regime of civil sanctions where it is already provided for in legislation.

In terms of adding statutory requirements that must be met before the Secretary of State can make a supplementary order, the Government have seen no evidence that such conditions are necessary. We have worked closely with the Electoral Commission through the development of the measures in the Bill, and we will continue to work collaboratively as we develop the detail of proposals for increasing the maximum fine that it can impose. Those details will be set out in secondary legislation in due course, and at that time Parliament will rightly have the opportunity to scrutinise and debate the Government’s approach and consider whether to approve the legislation. For those reasons, and with those reassurances in place, I hope the hon. Member will withdraw her amendment.

The Minister will forgive me, but I did not hear her respond to the reference in my new clause to the 4% of campaign spending. Did I briefly drop off? Will she consider that when introducing secondary legislation?

We have considered it, and we have decided to opt for a fine of £500,000. However, when we introduce the secondary legislation, the debate may flesh out that argument, and the figure may change, should secondary legislation and the debate lead to that conclusion. However, at this stage, we will not accept the amendment.

New clause 46 seeks to give the Electoral Commission powers to compel financial institutions to disclose information related to income and expenditure of regulated entities, such as political parties and candidates, where it is reasonably required by the commission to carry out its functions. The Government fully recognise the importance of ensuring that the commission has the tools it needs to enforce compliance with political finance rules. The commission already has substantial information gathering powers to support its regulatory functions, including the enforcement of political finance and imprint rules.

That said, the Government recognise that we cannot be complacent, which is why we commissioned the Rycroft review to consider whether political finance rules and their enforcement can be strengthened in the light of emerging risks, including covert funding and foreign interference. As Members know, we are considering the relevant recommendations of the review that could reinforce measures already in the Bill to ensure that political finance rules and their enforcement remains robust and fit for purpose. I note that new clause 46 draws on a recommendation from the Joint Committee on the National Security Strategy and covers very similar ground to one of Mr Rycroft’s recommendations. We will revert with a full Government response to the review and consider whether to make further amendments to the Bill in the light of that work.

Question put and agreed to.

Clause 65 accordingly ordered to stand part of the Bill.

Schedule 10 agreed to.

Clause 66 ordered to stand part of the Bill.

Schedule 11 agreed to.

Clauses 67 to 69 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned.—(Deirdre Costigan.)