To ask His Majesty’s Government what plans they have, if any, to tighten the rules regarding donations to political parties.

My Lords, foreign interference is a threat to our democracy. That is why we are currently legislating to tighten the rules on who can make political donations and strengthening checks on and the transparency of those donations. We are also acting on the recommendations of Philip Rycroft’s independent review into foreign financial interference. We are capping donations from overseas electors and bringing forward a moratorium on crypto asset donations. We will issue a full response to the Rycroft report in due course.

My Lords, I am grateful to my noble friend the Minister for that really helpful Answer. I agree with everything that she has said. However, will she now consider tightening the rules on the expenditure of Short money which is allocated specifically to opposition parties at Westminster? If there is any misspending of that money, who is responsible for dealing with it? Is it the Public Accounts Committee or the Government? Does she agree with me that whoever it is should be dealing with it as a matter of urgency?

It is important that any money spent from the public purse is spent in a way that commands the confidence of the public. It is critical that processes are in place to monitor that spending and to make sure that it is used for the purposes it is there for. It is critical that it is properly and legally audited, so that we can all be assured of that. One of the big problems we have in the political world is an undermining of confidence in the political system. That is not helped when people do not have confidence in the financial systems that surround it. Those things are really important, and we continue to keep them under review.

If the Government consider making any changes to Short money, will the Minister make them retrospective for the last 10 years?

The allocation of Short money is beyond my ministerial brief, but all parties must think when they are in government about the proposals around Short money.

My Lords, under the Government’s current plans, Donald Trump could split ownership of a UK company between himself and his family members, keeping each individual share below the threshold that would trigger the significant control test in the Representation of the People Bill that is coming our way. That would then enable the company to legally donate to UK politicians or political parties, and indeed any foreign dictator or billionaire with family members could do exactly the same. Does the Minister agree that that is a dangerous and unwelcome loophole that needs to be closed?

I do not want to comment on such donations, particularly from the President of the United States’s family. However, we are taking immediate steps to implement Philip Rycroft’s recommendation for a cap on donations made by overseas electors. We will implement that through the Representation of the People Bill which is currently before Parliament—it is at Report stage in the Commons at the moment. We are committed to upholding and strengthening our democracy by protecting against this kind of foreign interference, improving political transparency and adding tougher checks for donations. However, it is the responsibility of receiving parties as well to carry out the necessary checks involved. I hope that all responsible parties will take their part in doing so.

My Lords, if we are concerned about preventing foreign interference and plugging loopholes, as I think we all are, will my noble friend the Minister consider personal donations—small change such as £5 million to a particular Member of Parliament, for example—and foreign money to UK think tanks that are really quite political in their activities?

With any donations, it is for those receiving them to make sure they are clear about where those donations come from and what they are for. There are investigations currently going on by the Parliamentary Commissioner for Standards, as we know, so it is probably best that I do not comment specifically on those. Everyone must stop and think about how these donations are used and donated. We need to make sure that the rules that are set for political donations apply to everybody involved in political life, and that there are no exemptions for anybody.

My Lords, while the independent Rycroft review consulted political parties on political donations, the Government have singularly failed to do so. Why did Ministers fail to consult the Parliamentary Parties Panel on these measures?

My understanding is that there was extensive consultation with political parties during the course of the drawing up of the Bill. The Bill is being debated in Parliament now, and representations can still be made in Parliament. It will be debated in this House in due course.

My Lords, how are the Government going to get at the increasingly shadowy area of what the Minister has just called political life, where donations are not specifically to political parties but are being used to support particular causes? It is widely reported, for example, that Elon Musk is using Twitter to promote the Restore candidate in the forthcoming by-election and to support Restore altogether. Is that a political donation? At the Unite the Kingdom rally, Tommy Robinson specifically thanked two US donors who had helped to fund the rally. That is not, within the current terms, a political donation, but it is clearly financial interference in British political life. How are we going to get at that?

As the noble Lord indicated, this is a complex area, but we must endeavour to make sure that, as we pass the legislation, we close loopholes that allow donations that are not subject to the usual checks and balances—they must be subject to those checks and balances. We intend to commence existing provisions in primary legislation that will require donors to declare any benefits or sources of funding connected to their donation and render them liable to criminal prosecution for false declarations. We need to go that far to make sure that we avoid the kind of circumstances that the noble Lord raised.

My Lords, my friends in the Liberal Democrats talk about money from America. Unfortunately, we in Northern Ireland have been dealing with money from America for quite some time, which is coming to Sinn Féin through the Irish Republic. Will that be dealt with in the legislation? It gives an unfair advantage to Sinn Féin in elections in Northern Ireland, whether it is standing for the UK Parliament or the Northern Ireland Assembly.

As the noble Baroness will probably be more aware than I am, donations from Ireland are permitted in some circumstances. I will take back the issue she raised. It is important that all donations to all political parties are subject to the same legal requirements, and that is what the Representation of the People Bill is seeking to achieve.

My Lords, the present system has some controls during an election period but then, in a non-election period, there seems to be very little control, with one right-wing individual donating £10 million to one political party. Will the review deal with this issue?

We are still assessing the Rycroft review, which comments extensively on the evolving threat posed by political interference to British democracy. We will publish a full response to the Rycroft review in due course, but we have taken immediate steps in the Bill to implement the recommendation for a cap on donations made by overseas electors.

In the light of the various issues that have been raised today, can the Minister say whether the Government would reconsider, and possibly put some amendments to, the Bill?

It would be a very strange Bill that came before this House without any amendments, in my experience. However, we have endeavoured to structure the Bill to deal with many of the issues around donations that have been raised over the past couple of years. I hope that, when it is debated here, Members will take the opportunity to see just how extensive this legislation is and how far it goes. If further issues are thrown up by the Rycroft review, we will endeavour to make sure that they are incorporated as quickly as possible.

My Lords, the term political donations is misleading. This is really about political corruption. The donors are buying power and influence, subverting public choices, getting government contracts, et cetera. Simply capping it does not end political corruption. The only way forward is to criminalise the receipt and payment of political donations, because no ordinary person can play this game.

I have said to my noble friend before that I do not always share his conspiracy-theory approach to life. However, the new legislation will introduce “know your donor” schemes, where recipients of donations over £11,180 will be required to consider the risk of those donations being from illegitimate sources, to prevent the risk of foreign interference. There are serious penalties where those laws are not followed.

My Lords—

I think we have concluded the Private Notice Question.

My Lords, in 2011 the Committee on Standards in Public Life recommended that the amount that any organisation, individual or institution can give in political donations should be limited. It is now 15 years later. A few years ago, the noble Earl, Lord Howe, said from the Front Bench that, hypothetically, he agreed that there should be some kind of limit on the percentage of funding that one party should be able to get from one individual donor. Will the Government act after all this time?

That is exactly what the Representation of the People Bill will attempt to do; it will make sure that we are clear about how donations to political parties should work. We will debate this in due course and, I am sure, at great length in this House. It is important that the public can have confidence in how this system is working.

My Lords, immediately prior to the last general election, the then government party decided to increase the maximum expenditure by political parties standing in every seat in Great Britain by 80%, increasing the amount of money that could be spent from around £20 million to £36 million. It did not do it any good. Should we not now reverse that increase, which invites massive donations from sources that political parties find hard to check the origins of?

We are introducing tougher rules on political donations to protect UK elections. The limits have changed because circumstances change. That is an important part of the system. We have to strike the right balance between safeguarding against foreign interference and making sure that legitimate donors can continue to fund election campaigns.

Further to the suggestion from the noble Lord, Lord Sikka, that those who make political donations should be criminalised, hundreds of thousands of people in this country subscribe to their political parties because they share their values. Surely that should be encouraged and not criminalised.

I absolutely agree with the noble Lord—and not for the first time. It is important that people are not only able to donate to a political party if it meets their values, principles and objectives for our country but that they can be absolutely reassured that that money is used in a legitimate way by political parties for their aims and can have confidence in the system that that is the case.

My Lords, I am in favour of the legislation that we will be planning. Does the Minister think that it would be a good idea to look at the PPERA and ensure that the rules are strict enough that every party’s accounts are properly audited and are accurate?

I absolutely agree with my noble friend. I am sure that Mr Rycrotft, in his extensive review of the electoral system, took that into account. Having been a member of a political party for a long time, I know that the auditing process is an important part of the system. We all want to make sure that that works properly for political parties, as it should do in all parts of public life.

My Lords, the noble Lord, Lord Sikka, suggested that those seeking to influence policy through donations are guilty of some sort of corruption. Does the Minister agree that that is an incorrect characterisation and that the law should apply equally, not just to private individuals and businesses but to unions?

The law applies to all those who donate to political parties, and it is right and proper that it does. As I said, I do not agree with my noble friend’s characterisation that all donations are potentially corrupt. However, where they are corrupt, it is important that the system can deal with that effectively and has proper sanctions to make sure that we deter those who would try to use their own personal money to corrupt our democracy.

My apologies to the noble Baroness, Lady Bennett of Manor Castle. That does now conclude the Private Notice Question.