Foreign Interference in UK Politics

Debate between Lord Wilson of Sedgefield and Lord Lemos

Thursday 9th July 2026 Lords Chamber

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Lord Lemos) (Lab)]

My Lords, I will come to that question at the end, if I may.

The Secretary of State commissioned Philip Rycroft to conduct an independent review of risks posed by foreign financial influence in UK politics. In March, we welcomed Mr Rycroft’s comprehensive assessment and announced immediate plans to accept two recommendations responding to urgent risks. A week ago, in your Lordships’ House, I said that the Government would publish their response very soon, and I am delighted to say I was right. They have now published their full response and, as noble Lords know, the Government have accepted all of Mr Rycroft’s recommendations. I will come to the specific points that the noble Lord, Lord Pack, made in a moment. I welcome the support—I would not say it is qualified support—from all the Benches opposite for Rycroft and our acceptance of the recommendations.

In response to Mr Rycroft’s recommendations, we will strengthen our political finance rules through amendments to the Representation of the People Bill. I should note, because this is an important point that the noble Baroness made, that the Minister will be writing to political parties to set out these measures in much more detail, and that letter will be publicly available on GOV.UK. I will come to the question of discussions and engagement in a moment.

We will introduce an annual £100,000 cap on donations and regulated transactions from overseas electors. It is materially more complex to trace the true source of political donations made by voters living overseas, and this creates a clear avenue for the channelling of illicit funds. There is a simple principle at stake here, which I think we all share: we want the people who make donations to political parties to have a genuine stake in the life of the UK. That is the principle we are seeking to achieve. A cap recognises legitimate participation while ending the risk of unlimited overseas money entering our politics. The noble Baroness referred to those risks, and the Government are very alive to them.

Recognising that risk continues when British citizens return to the UK, and therefore we are introducing a minimum residency period. The risk is very clear. An overseas elector returning to the UK must be here for a full calendar year before that cap is lifted, to prevent circumvention of the regime. Once the measures come into force, that minimum residency period will apply retrospectively, from the date of our original announcement on 25 March. I note the comments that the noble Baroness, Lady O’Neill, made about retrospection, but the Government’s view is that there are clear risks and we should address them in the way that we have.

We will apply the same cap and the minimum residency period to anyone who moves to the UK after the date of the Statement and was not previously an overseas elector, to ensure these individuals cannot circumvent the rules before commencement. That is the risk. A modified cap will apply retrospectively and an annual cap of £100,000 per recipient will apply to donations they make between today and the date of the commencement of the measures, including any regulated transactions they enter into from today. On commencement, the cap and the minimum residency period will apply in the same way as for those who were formerly overseas electors.

As we previously announced, we will introduce a moratorium on all political donations of any amount made via cryptocurrency. The arrangements around crypto are simply too opaque.

Building on previous announcements, and in response to the review, we will go further to strengthen our political finance safeguards. We will amend the corporate donation test, so that it is based on post-tax profits rather than revenue, measured over five years to prevent double counting. We will introduce a new donor declaration to be made by anyone donating above a specified threshold. We will engage with the Electoral Commission and political parties as we develop the declaration, including an appropriate threshold. We are introducing a raft of transparency measures.

We will also strengthen rules and transparency on donations to candidates. Candidates will have to declare that donations to fund campaigning—as the noble Lord, Lord Pack, said—made prior to formally becoming a candidate are from permissible sources. Donations in that period above £2,230 will need to be cleared. The noble Lord, Lord Pack, asked me about aggregation. We have no plans to legislate on aggregation at the moment.

We recognise how vital it is for the health of our democracy that we have a regulator that is fearlessly independent and, to the noble Baroness’s point, properly resourced to do the job that we are asking it to do. That is why, to ensure its independence, we are also repealing the Government’s powers to designate a strategy and policy statement for the Electoral Commission. Beyond political finance, we will take steps in the Representation of the People Bill and more broadly to implement these important reforms.

If I do not manage to cover everything in the time I have left, I will come back to noble Lords. On consultation, I do not have anything to add. The noble Lord, Lord Pack, gave a very adequate response on the history, so I shall not go over that again. I do, however, accept the noble Baroness’s point that we are trustees, not proprietors, of the political finance system. I take that very seriously. I take very seriously the risks of tit for tat—I said this in the debate last week—and the risk that future Governments might get into a prisoner’s dilemma.

I do not, however, accept that these reforms are partisan, hyper-partisan or otherwise. I agree with the noble Baroness that that is not a scenario we want to see. The Parliamentary Parties Panel of the Electoral Commission has continued discussions between parties. I assure the noble Baroness that I will, as this legislation proceeds—I will be taking it through your Lordships’ House—engage in a lot of detail with anyone who is keen enough to talk to me. The noble Lord, Lord Hayward, has already had the pleasure of my company on these matters; I bow to his superior knowledge. I can see him waiting to rise to his feet. On the resources of the Electoral Commission, I take the point that the noble Baroness made.

On a point from the noble Lord, Lord Pack, I take very seriously the question of online adverts and, indeed, misinformation online generally. I see the noble Lord, Lord Clement-Jones, nodding. I do not think any of us feel we have cracked it, to be blunt, and this is an area that we will have to continue to think about in relation to political representation, online advertising and so on. We will all be here on this subject for some years to come.

On foreign ownership of the media, I hope the noble Lord, Lord Pack, will forgive me if I do not get drawn into that, but I take the point he made. I have already discussed our plans on aggregation.

On consolidation, I think I did answer this last week, but I am very happy to repeat my answer, which is that the Government want to fulfil the commitments they made in their manifesto. I was going to say “as a first step”, but I had better not say that because it might get me into a whole lot of trouble. That is our priority, and noble Lords can understand why. I understand the arguments, and the noble Lord, Lord Hayward, made the same arguments to me yesterday about consolidation.

On the 1695 Act, I will have to come back to the noble Lord. I commend the Statement, despite that absence in my knowledge, to your Lordships.

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

My Lords, before we move on to Back-Bench questions, I remind the House that the next 20 minutes are reserved for questions from Back-Benchers only. I know that the whole House would appreciate these rules being adhered to in order to ensure that as many noble Lords as possible get a suitable opportunity to ask questions to the Minister—that means questions, not speeches or statements.