A “modest step in the right direction”– Peers accept amendment requiring UK political parties to identify and manage risks of donations from foreign powers

2 March, 2023 | 4 minute read

Members of the House of Lords last night took a small but significant step towards tackling the immense harm caused by foreign influence over the UK’s political system, with 207 Peers voting in favour of amendment 51 to the National Security Bill, and 168 mostly Conservative Peers opposed.

The amendment would for the first time require UK political parties to identify and manage the risks of donations originating from foreign powers. If the Government wants to show that it’s serious about national security, it should support this modest reform when the Bill returns to the Commons and implement other long overdue changes to protect our democracy.

Our electoral system is vulnerable to foreign influence

No one disputes the fact that donations from foreign sources harm our democracy and are a serious threat to our national security. A 2020 report by the Intelligence and Security Committee found that members of the Russian elite linked to Vladimir Putin have donated to UK political parties. The Government’s own Defending Democracy Taskforce has said that “foreign interference in…political parties” is a threat to our democratic institutions. The Home Office similarly believes that foreign interference in UK elections is a direct attack on our sovereignty, national interest, institutions and values. Meanwhile, the growing catalogue of media reports about dodgy donations has caused huge reputational harm to political parties and our democracy.

The UK’s rules do not provide a sufficiently robust safeguard to protect our electoral system from the effects of this money. One key problem – among a litany of loopholes – is that political parties are not required to take a risk-based approach to donations or to identify the true source of their funds. The minimal checks that parties are required to undertake are a stark contrast to the requirements on banks, charities and other sectors. Both the Electoral Commission and the Committee on Standards in Public Life have called for parties to take a risk-based approach to donations, to protect the UK’s electoral integrity and public confidence in the system.

The Government has so far resisted this reform, claiming that the current rules are proportionate and achieve this balance. But with a majority in the House of Lords now supporting reform, the Government’s position is becoming increasingly unsustainable.

A modest step in the right direction

The National Security Bill includes measures to tackle foreign interference in elections. But it will not achieve this goal unless UK political parties start asking questions about where their funding comes from and weigh up the risks of foreign influence. That’s where amendment 51 comes in.

The amendment – sponsored by Lord Carlile, Lord Wallace, Baroness Hayter and Lord Evans – would require UK political parties to publish, and keep updated, a policy to ensure they identify donations from foreign powers, whether made directly or through an intermediary; and to provide an annual statement of risk management to the Electoral Commission that identifies how they have managed the risks. The Home Secretary would be required to publish guidance on these requirements.

A number of Peers spoke persuasively in support of the amendment. Lord Carlile identified that it is hard to understand why any political party would object to the proposal. Baroness Hayter added that the amendment has the full support of the Electoral Commission, and that there should be a culture of “know your donor” in political parties – something we have also been calling for. Lord Wallace emphasised that “It is entirely desirable, reasonable and appropriate to ensure that British political parties play their part in mitigating the risks of foreign interference in British elections.” Lord Evans meanwhile said that we should take this “modest step in the right direction” because our electoral system has been under attack, and it is vital to maintain public confidence. Lord Coaker noted how small steps, such as those set out in the amendment, can contribute to confidence in our democracy and democratic system.

The Government previously argued that the UK has a “stringent regime of controls on political donations”. It rejected amendment 51 last night on grounds that the existing regime is sufficient – although in light of the strength of Peers’ speeches, the Minister was “slightly more reluctant” to assert that the controls on donations are stringent. The defeat will put pressure on the Government to take action to address what is a very modest reform – to tackle a very significant problem – when the Bill returns to the Commons. 

More ambition is needed

This is a golden opportunity for the government to show it is serious about tackling undue influence in our democracy, not least as part of its Defending Democracy Taskforce process. Requiring political parties to identify and manage the risks of donations from foreign powers is a small part of what should be a more ambitious agenda for tackling the various ways in which foreign and dirty money corrupt our political system. This should include swift implementation of recommendations made by CSPL in 2021 on election finance. The upcoming elections will be a crucial test of how robustly our democracy can be defended against those who mean us harm. We cannot afford to fail it.

Lord Carlile of Berriew was one of four sponsors of Amendment 51.
Photo: © UK Parliament 2023

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