Double standards: If APPGs should know the true source of their funds, why shouldn’t political parties?

20 July, 2023 | 5 minute read

Earlier this month, the government accepted and enlarged upon recommendations from Parliament’s Committee on Standards for stronger rules for the UK’s All-Party Parliamentary Groups (APPGs) – the informal groups that have long been criticised for creating a backdoor for big money and foreign governments to influence legislators. 

In particular, the government recognised the need for stronger requirements on APPGs to conduct appropriate checks to find out who is ultimately behind any benefits or funds they receive, to ensure that foreign organisations and governments cannot provide support. 

This is a very welcome move by the government. The Committee on Standards’ proposal for an APPG’s officers to undertake “due diligence as to whether a foreign government is the eventual funder of a secretariat” – which will now come into force after the Commons agreed to a government motion approving the proposals yesterday – is an important step towards protecting parliament and UK democracy from foreign interference. But it begs the question: why doesn’t the government think political parties should do the same? 

Vulnerabilities to foreign interference

There is no doubt that both political parties and APPGs face very real risks of interference from hostile foreign powers. 

Just last week, the Intelligence and Security Committee’s (ISC) China report warned that individuals linked to the Chinese Communist Party (CCP) received funds from overseas sources for onward donation to UK political parties. An earlier ISC report identified that members of the Russian elite linked to Vladimir Putin had donated to UK parties. MI5 meanwhile has said that an alleged Chinese agent sought to influence UK parliamentarians on behalf of the CCP and donated to political parties. 

That same agent was “instrumental” in setting up an APPG, while foreign governments are alleged to have used APPGs in an attempt to influence UK parliamentarians. Real questions have also been raised around overseas trips for APPG members funded by foreign governments, though the government last year rejected the Committee on Standards’ proposal to bar MPs from accepting, whether through an APPG or otherwise, any overseas trips paid for by a foreign government.    

What would the recommendations mean in practice?

The government agreed with the Committee on Standards that “there is no place for foreign funded activity and direct influence in our parliamentary democracy, including in the running of APPGs” and that APPGs should be prohibited from having a secretariat provided or funded by a foreign government. The government actually went further than the Standards Committee’s recommendations, proposing in its response to the report that APPGs be banned from receiving funding from any foreign organisation.

To keep foreign money out of APPGs, the government said the rules on APPG funding should be brought into line with the rules around party political donations, by requiring them to undertake checks on the status of potential funders, as parties do under the Political Parties, Elections and Referendums Act 2000, though noted that this is a complex area which would benefit from further assessment by the Committee. APPGs would need to check, for example, whether an individual is on a UK electoral register or whether a business is registered and carrying on business in the UK.

The government also approved the Committee on Standards’ recommendations that Members should check the ultimate source of benefits or support offered to them, with APPGs that receive more than £1,500 funding a year required to publish a “a due diligence statement in relation to foreign government funding” once the new rules come into force. 

Double standards?

The government’s recognition of the need for due diligence and checks on APPGs’ ultimate source of funding is striking, given that it has repeatedly resisted calls from independent experts including the Electoral Commission and the Committee on Standards in Public Life (CSPL) for political parties to do due diligence on donations. Indeed, CSPL recommended that parties ”have appropriate procedures in place to determine the true source of donations”. 

The government also rejected amendments to the National Security Bill to make political parties take steps to identify potential donations from foreign powers, despite the amendments winning two votes in the House of Lords. 

Notably, the amendments were supported by a former Conservative Attorney General Sir Jeremy Wright, and by parliament’s Intelligence and Security Committee, with its Conservative Chair Sir Julian Lewis saying the government was inexplicably rejecting the opportunity significantly to improve the transparency and accountability of our political system”. 

The government’s compromise was to commit to a consultation on “enhancing information sharing” within the next year between political parties and relevant agencies such as Companies House and the Electoral Commission relating to the “provenance” of donations. This is long overdue: the Electoral Commission and Metropolitan Police Service called for enhanced information-sharing powers two years ago.

While it is positive that the government recognises that due diligence and source of fund checks will help to tackle the foreign influence over our democracy, it is deeply disappointing that it thinks this solution should not also apply to political parties, despite the obvious and shared risks.  

And none of this addresses other fundamental problems with the rules around political party funding, such as the risk highlighted by expert bodies that foreign funds may be channelled through unincorporated associations.    

What next? 

To address the clear and ongoing vulnerabilities faced by political parties, the government should ensure the consultation it has committed to on information sharing is effective by:

  • publishing the terms of reference;
  • ensuring full transparency;
  • ensuring recommendations are acted on in time for the next general election; 
  • genuinely strengthening the incredibly weak criminal enforcement when electoral rules are broken. 

In addition, as parties fill their war chests before the next General Election, there could not be a more critical time for them to play their part in protecting UK democracy from foreign and undue influence. 

That’s why we are urging parties to commit to a robust “Know Your Donor” policy to protect themselves and the UK’s democracy from those who wish it harm. 

Ultimately, to drive dirty money out of political finance, and protect against foreign interference, we need to place a legal requirement on political parties to do proper checks, and ensure tough enforcement when they fail to do so.

Houses of Parliament at dusk

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