Representation of the People Bill (Eighth sitting)

Lisa Smart Excerpts

Committee stage
Thursday 16th April 2026 Public Bill Committees

[Samantha Dixon]

I thank the hon. Lady very much.

Question put and agreed to.

New clause 14 accordingly read a Second time, and added to the Bill.

New Clause 60

Power of Scottish Ministers to vary sums in Schedule 7 to PPERA 2000

“In section 155 of PPERA 2000 (power to vary specified sums or percentages), in subsection (1A)—

(a) after ‘vary’ insert ‘—

(a) ’;

(b) at the end insert

‘, or

(b) any sum for the time being specified in Schedule 7 so far as that sum applies in relation to a donation to a member of a local authority in Scotland who is not also a member of a registered party.’”—(Samantha Dixon.)

This new clause, which would be inserted after clause 62, amends section 155(1A) of the Political Parties, Elections and Referendums Act 2000 to provide a power for the Scottish Ministers to vary the sums in Schedule 7 (control of donations to individuals and member associations), so far as they relate to areas of devolved competence.

Brought up, read the First and Second time, and added to the Bill.

New Clause 2

Permissible donors not to include individuals serving a foreign administration

“(1) Section 54 of PPERA 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 is, or has been—

(a) a member of, or

(b) a politically-appointed adviser to

a foreign administration.’

(3) After subsection (8) insert—

‘(9) In subsection (2A)—

“foreign administration” means the government or state apparatus of any country or territory outside the United Kingdom;

“member” includes elected and appointed members.’”—(Lisa Smart.)

This new clause would ban those who are or have been members of a foreign administration, or advisers to a foreign administration, from donating money to a political party, think tank or campaigning body.

Brought up, and read the First time.

[Lisa Smart (Hazel Grove) (LD)]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to discuss the following:

New clause 3—Permissible donors not to include persons who have promoted political violence—

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

(2) After subsection (3ZB) insert—

‘(3ZC) A person is not to be treated as a permissible donor in relation to a donation if the person has been convicted of a prescribed offence relating to the promotion, incitement, or use of political violence.

(3ZD) The Secretary of State must by regulations prescribe the offences which fall within subsection (3ZC).’”

New clause 15—Declaration of income or gifts from Foreign Governments—

“(1) Schedule 1 to RPA 1983 (parliamentary elections rules) is amended as follows.

(2) After rule 8 (consent to nomination) insert—

‘Declaration of income or gifts from Foreign Governments

8A (1) A person is not validly nominated unless the person makes a declaration stating whether they have received in the past or are currently in receipt of any income or gifts from—

(a) the government of any foreign nation, or

(b) any person or organisation connected to the government of any foreign nation.

(2) The declaration must be—

(a) in the prescribed form,

(b) signed by the person, and

(c) delivered at the place and within the time for the delivery of nomination papers.

(3) For the purposes of this rule, a person or organisation connected to the government of any foreign nation mean anyone who has at anytime been—

(a) a member of, or

(b) a politically-appointed adviser to a foreign administration.’

(3) In rule 6A (nomination papers: name of registered political party), at the end insert—

‘(4) A registered political party is under a duty to ensure that a candidate has made the declaration required by rule 8A, and a certificate under paragraph (1) or (1B) may not be issued by or on behalf of the registered nominating officer of the party in respect of a candidate unless this duty has been discharged.’”

This new clause would require candidates to declare any income or gifts from foreign nations or connected entities in order to be validly nominated. It also places a duty on political parties to ensure their candidates have made this declaration before authorising them to stand on behalf of the party.

New clause 16—Annual statements on foreign donation risks and independent investigations—

“(1) Part 4 of PPERA 2000 (control of donations to registered parties and their members etc) is amended as follows.

(2) After section 66 (Declaration by treasurer in donation report) insert—

‘66A Annual statement on mitigation of foreign donation risks

(1) The treasurer of a registered party must, in respect of each calendar year, prepare a statement setting out the steps taken by the party to mitigate risks relating to donations originating from a foreign nation.

(2) The statement must be delivered to the Commission alongside the party's statement of accounts for that year.

66B Annual independent investigation of donations by foreign-owned UK entities

(1) A registered party must, in respect of each calendar year, arrange for an independent investigation to be conducted into any donations received by the party from a foreign-owned UK entity.

(2) A report of the independent investigation must be submitted to the Commission by the treasurer of the party within six months of the end of the calendar year to which it relates.

(3) The Secretary of State may by regulations make provision about—

(a) the appointment and qualifications of an independent investigator for the purposes of this section;

(b) the definition of a “foreign-owned UK entity”; and

(c) the required contents of the investigation report.

(4) Regulations under subsection (3) are subject to the affirmative resolution procedure.’”

This new clause requires registered political parties to produce an annual statement detailing how they have mitigated risks relating to donations from foreign nations. It also requires parties to commission an annual independent investigation into donations they receive from foreign-owned UK entities, with the findings submitted to the Electoral Commission.

New clause 17—Payments from foreign state broadcasters to politicians and candidates—

“(1) Schedule 7 to PPERA 2000 (control of donations to individuals and members associations) is amended as set out in subsection (2).

(2) After paragraph 6 insert—

‘Prohibition on payments from foreign state broadcasters

6A (1) A regulated donor must not accept any payment, remuneration or other financial benefit, whether or not on commercial terms, from a prescribed foreign state broadcaster.

(2) The Secretary of State may by regulations proscribe a foreign state broadcaster for the purposes of this paragraph where the Secretary of State considers the broadcaster is acting on behalf of, or producing propaganda for, a foreign power.

(3) For the purposes of this paragraph, a payment or benefit includes, but is not limited to, remuneration for appearing on, hosting, or contributing to broadcasts or programmes.’

(3) Schedule 1 to RPA 1983 (parliamentary elections rules) is amended as set out in subsection (4).

(4) After rule 8 (consent to nomination) insert—

‘Declaration of past earnings from foreign state broadcasters

8A (1) A person is not validly nominated unless the person makes a declaration stating whether they have received any past or current earnings, payments or benefits from a foreign state broadcaster prescribed under paragraph 6A of Schedule 7 to the Political Parties, Elections and Referendums Act 2000.

(2) The declaration must be—

(a) in the prescribed form,

(b) signed by the person, and

(c) delivered at the place and within the time for the delivery of nomination papers.’”

This new clause prohibits politicians (regulated donors) from receiving any payment from prescribed foreign state broadcasters. It also amends the parliamentary election rules to require candidates (including incumbent MPs) to formally declare any past earnings from these entities in order to be validly nominated to stand for election.

New clause 38—Permissible donors: foreign citizens—

“(1) PPERA 2000 is amended as follows.

(2) In Section 54 after paragraph (2) insert—

‘(2AA) For the purposes of this section, subject to the exemptions in section (2AB), an “individual registered in an electoral register” does not include a person who is on a register by virtue of being a “qualifying foreign citizen” for the purposes of—

(a) Section 2 of the Local Government and Elections (Wales) Act 2021, or

(b) Section 1 of the Scottish Elections (Franchise and Representation) Act 2020.

(2AB) The exemptions in this subsection are that the person is on an electoral register because they are—

(a) a qualified Commonwealth citizen,

(b) a citizen of the Republic of Ireland, or

(c) a citizen of the European Union who would be eligible to vote in local elections under the English and Northern Ireland franchise.’”

This new clause prevents people who are on electoral registers because they fulfil certain conditions in the Local Government and Elections (Wales) Act 2021 and the Scottish Elections (Franchise and Representation) Act 2020 from being permissible donors but are not qualifying Commonwealth, Irish, or EU citizens.

New clause 39—Mitigating the risk of foreign interference in political donations—

“Within six months of the passing of this Act, the Secretary of State must publish a consultation paper on how Government will enhance information-sharing between relevant agencies and public bodies and registered political parties to help to identify and mitigate the risk of foreign interference in political donations that are regulated by electoral law.”

This new clause would require the Secretary of State to consult on how to enhance information sharing between relevant public bodies or agencies and political parties to minimise the risk of foreign interference in political donations.

New clause 45—Permissible electors to include overseas electors with previous tax residence etc—

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

(2) In subsection (2)(a), at end insert ‘(but this is subject to subsection (2ZA))’.

(3) After subsection (2) insert—

‘(2ZA) An individual registered in an electoral register who at the date of a donation qualifies as an overseas elector in respect of a constituency is only a permissible donor for the purposes of this Part if—

(a) the individual was at any time resident in the UK for tax purposes,

(b) the individual has a Unique Taxpayer Reference, and

(c) the individual holds funds or assets that may be charged to tax in the United Kingdom that are at least equivalent to the value of the donation.

(2ZB) For the purposes of subsection (2ZA)—

(a) whether a person qualifies as an overseas elector is to be determined in accordance with section 1A of the Representation of the People Act 1985;

(b) whether a person was at any time resident in the UK for tax purposes is to be determined in accordance with Schedule 45 to the Finance Act 2013.’”

This new clause limits permissible donors who are overseas electors to those who have previously been resident in the UK for tax purposes, have a Unique Taxpayer Reference and holds funds or assets that may be taxed in the UK which have a value of at least the amount to be donated.

New clause 51—Annual report regarding foreign interference in political funding—

“(1) The Electoral Commission and the National Crime Agency must each produce and publish an annual report about—

(a) the risk of foreign interference in relation to controlled donations, and

(b) the adequacy of any systems designed to address risks of foreign interference in relation to controlled donations.

(2) The Electoral Commission and the National Crime Agency must send a copy of the report to the Secretary of State, and the Secretary of State must lay it before Parliament.

(3) In this section—

‘controlled donation’ means—

(i) a donation to a registered party, individual or members association that is subject to Part 4 of the Political Parties, Elections and Referendums Act 2000, and

(ii) a donation to a candidate or their agent that is subject to Schedule 2A of the Representation of the People Act 1983;

‘foreign interference’ includes the commission of a relevant electoral offence to which section 16 of the National Security Act 2023 applies (foreign interference in elections).”

This new clause would require the Electoral Commission and the National Crime Agency to make annual reports about the risks of foreign interference in the UK’s political finance system and the adequacy of systems in place to address those risks.

[Lisa Smart]

It is a pleasure to serve with you in the Chair, Dame Siobhain. Trust in our democracy is not something that we can afford to take for granted; it is earned, and it is increasingly fragile. Years of scandals, sleaze and foreign money flooding into our politics have eroded that trust, and we must act to restore it. My new clauses are designed to restore transparency to our democracy, and to restore that trust.

New clause 2 would ban anyone who is or has been a member of, or a politically appointed advisor to, a foreign Administration from donating to a political party, think-tank or campaigning body. If a person has served in a foreign state in a political capacity, they should not be able to use their personal wealth to shape British politics—that is the reason behind the new clause. The resulting risk of strong potential conflicts of interest, and of foreign influence by proxy, is self-evident. The current permissible donor rules focus on nationality and residency; they do not ask whether a UK-registered donor has served a foreign Government in a political role, which is a gap that a determined adversary could drive a coach and horses through.

The Liberal Democrats have long called for reforms to prevent foreign interference and increased transparency in political donations. We believe that protecting democracy is a national security policy priority. If Ministers are serious about closing the loopholes that exist, which allow foreign and dark money to shape British politics, they will welcome new clause 2.

--- Later in debate ---

[Dr Chowns]

I completely support the thrust of these new clauses tabled by the hon. Member, in terms of protecting British democracy. I have a specific question in relation to new clause 3. Last year the Government proscribed a protest organisation. That proscription has since been overturned in the High Court, and it is still being considered. Is the hon. Member concerned about her new clause might interact with that particular case? Is there a case for thinking carefully about that issue?

[Lisa Smart]

I am grateful to the hon. Member for giving me the opportunity to wade into such a thorny political issue—and an issue where it is important to stay on the right side of what can be said in discussing a proscribed organisation. The Government should use their powers of proscription proportionately, in all cases, and should be able to robustly back up their decision to proscribe an organisation with very clear evidence that is made public. I am on the record many times as saying that.

The police and any authorities that we are asking to implement the law must do so according to the law as it is at the time. At the moment there is a live case where an organisation was proscribed and there are relevant court cases. The hon. Member is absolutely right to highlight that. Over the weekend, arrests were made in relation to that proscription. New clause 3 is about donations to political parties. If an organisation is proscribed—and it is still proscribed—it would fall under the scope of new clause 3, even if there are ongoing legal processes that have not yet concluded.

[Dr Chowns]

Just to be clear, my concern is that literally hundreds of people have been arrested for holding placards in relation to that organisation. Potentially, under the hon. Member’s new clause 3, all those hundreds of people could be forbidden forever from donating to any political party. I am not sure that that is proportionate. It strikes me that there is complexity there, relating to the specific new clause. I am fully on board with excluding promotion of political violence and so forth, but that particular case highlights a complexity, particularly around the hundreds of people arrested for holding placards.

[Lisa Smart]

The arrests were made for support for a proscribed organisation via holding a placard that said the holder supports that organisation. I think we are talking about the same case. I understand the point that the hon. Member makes. Proscription of organisations is a tool that the Government rightly uses, although I have questioned the proportionality of the use of that tool. New clause 3 particularly mentions political violence; the hon. Member is talking about peaceful protest, if I understand her correctly. All hon. Members on this Committee, and everyone beyond it, should support the right for people to tell a Government that they think the Government have got it wrong. We should all support that and not make it harder for people to do it. If, however, someone is guilty of a

“prescribed offence relating to the promotion, incitement, or use of political violence”,

I do not think that they should be able to financially support a political party. The promotion of an organisation is the same as supporting an organisation. There are ways of supporting organisations and causes that stay exactly the right side of the law. While I am not of the view that the Government have always used proscription rules proportionately in recent months, I do think that, if those rules exist, they should be able to be used in that way by those who are enforcing the law.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I am sympathetic to the point that the hon. Member is trying to make. I have listened carefully to what she said about new clauses 2 and 3. With respect to new clause 3, it would be helpful to consider the treatment of those who may have been opponents of an oppressive foreign political regime who have been convicted in this country of an offence that might be a proscribed offence under mutual recognition arrangements, but where they perhaps sought asylum in the UK. We have seen examples of people who were vocal opponents of the Putin regime in Russia coming to the UK and joining a political party. Those are people who we recognise as good citizens. How would they be treated should that offence be on that proscribed list?

In respect to new clause 2, again, I have sympathy, but I raise the issue of business people undertaking consular roles in other countries. It is quite common, for example, for a British business person who may be the British consul in a particular town to then be appointed by a series of other Governments to act for them as an agent in that respect. Subsequently, on returning to the UK that business person would be caught by the rules in new clause 2, even though those restrictions are in no way intended to target those types of activities. Has the hon. Member given some thought to how those types of roles would be captured and how they might be excluded?

[Lisa Smart]

New clause 3 talks specifically about political violence. While we can sometimes agree with the message that opponents of our adversaries use, it is right that we are against political violence and those who promote political violence. I think that covers his question on new clause 3.

[Dr Chowns]

There are some people who renounce political violence— Nelson Mandela comes to mind. Obviously, he was never a British citizen, but there is a genuine question there.

[Lisa Smart]

We should all be against political violence. People who propose and promote political violence should not be permitted to donate to political parties in the UK. I am thinking about people who have various convictions in the UK for promoting political violence and about people who own tech platforms but are based on the west coast of the United States and have spoken at rallies that promote political violence. We should not be welcoming their interference in our politics and new clause 3 seeks to stop them from doing so.

On new clause 2, the hon. Member for Ruislip, Northwood and Pinner talked about people who have been politically appointed to be an adviser for a foreign Administration, whether in a business ambassadorial or trade envoy role, and I see his point. I would have thought those are politically appointed, rather than on a civil service basis. However, there are people who are not political appointments who would not fall within new clause 2, so they could continue to operate both as an envoy or an ambassador in that informal business ambassadorial role and continue to donate. I do not think that is covered under new clause 2 as it is currently written.

Returning to new clause 3, the principle that our democratic institutions must command public confidence, and that those who seek to undermine them should face serious consequences, is one that we hold firmly.

On new clause 15, voters have a right to know who is financing the people seeking their vote. That is a basic condition of democratic accountability. Real-time disclosure of donations in a publicly searchable database of all online political ads and spending are commitments we have held for years. New clause 15 is entirely consistent with that agenda. There have been other amendments and proposals from other Members that have touched on some of those issues, which we also support.

New clause 16 would require the treasurer of each registered political party to prepare an annual statement setting out the steps taken to mitigate risks relating to donations originating from a foreign nation, to be delivered to the Electoral Commission alongside the party’s statement of accounts. We have heard a great deal throughout this Committee about the importance of transparency, and we agree.

This new clause makes transparency operational. It requires parties not simply to accept or reject donations, but to demonstrate annually that they have actively assessed and mitigated the risks of foreign money entering their finances through UK-registered vehicles. Foreign-owned UK entities are a known vector for influence. The public record of recent years—Russian money, oligarch links and opaque corporate structures—makes that plain. An independent annual audit is a proportionate and practical response.

New clause 17 is about prohibiting politicians from receiving payment from proscribed state broadcasters. State-controlled broadcasters have been used as instruments of foreign influence, disinformation and political interference for decades. It would be extraordinary to allow individuals seeking or holding elected office to receive financial benefit from those very organisations. That is not a blanket ban on media appearances—heaven forbid—it is a prohibition on financial relationships with broadcasters acting as foreign propaganda arms.

Moving on to new clauses 45 and 51 proposed by the hon. Member for Warwick and Leamington (Matt Western), the Joint Committee that he chairs noted potential risks around permissible donors being used as “conduits” to channel foreign money into UK politics. It further noted a discrepancy between corporations needing to have a UK connection—for example, generating enough revenue in the UK to cover their donation—and individuals, for whom there were apparently fewer such requirements. The report considered various options, balancing security interests against the risk of creating chilling effects.

New clause 45 would mean that overseas individuals wishing to donate would need to hold funds or assets that may be taxed in the UK, sufficient to cover the cost of their donation. That broadly mirrors the Government’s proposals for corporations to have generated sufficient UK-based revenue.

On new clause 51, the Joint Committee’s report also highlighted the resourcing challenges faced by the Electoral Commission and law enforcement bodies such as the National Crime Agency, and noted that legislative changes will be effective only if there is adequate resourcing to enforce the rules. New clause 51 would require the Electoral Commission and the National Crime Agency to report annually on the risks of foreign interference in the UK’s political finance system and the adequacy of systems in place to address those risks.

[Paul Holmes]

I rise to speak briefly to Opposition new clauses 38 and 39 in my name. They are proportionate measures to enhance the legislation and assist the Government in their aim of tightening up on foreign political donations.

New clause 38 would prevent people who are on electoral registers because they fulfil certain conditions in the Local Government and Elections (Wales) Act 2021 and the Scottish Elections (Franchise and Representation) Act 2020, but are not qualifying Commonwealth citizens, from being permissible donors. We have tabled it because we are concerned that modern changes to devolved legislation have created loopholes in who can give money from foreign origins.

The Labour Government in Wales have given all foreigners the right to vote in local and devolved elections. The SNP Scottish Government have done the same in Scotland. Those Administrations have made those changes through section 2 of the Local Government and Elections (Wales) Act and section 1 of the Scottish Elections (Franchise and Representation) Act.

Such legislation has also given foreign residents the right to make unlimited donations to UK politicians and political parties. We contend that that opens the door to Russian, Chinese and Iranian foreign influence. For example, a Chinese “student” resident at a Scottish university can legally make political donations to any UK political entity. We have raised that issue in Parliament, but the current Government have declined to address it. The new clause would essentially ban that from happening, except where a person is a Commonwealth, Irish or EU citizen, as we believe those historical links are much more in keeping with the current electoral guidelines and legislation.

--- Later in debate ---

[Samantha Dixon]

The Government fully recognise the seriousness of the threat posed by foreign interference in our democracy. Protecting the integrity of UK elections is essential, which is why it is a criminal offence to accept or facilitate donations from foreign sources, and why the Bill seeks to strengthen the system further. However, while I can understand and appreciate the intention behind new clause 2, we do not believe that it is the right way to address this threat.

First, new clause 2 takes a broad and untargeted approach that would permanently bar any individual who

“is, or has been…a member of, or…adviser to a foreign administration”

from making political donations, regardless of how long ago that role was held, its nature or whether there is any ongoing connection to a foreign state. That risks excluding individuals who are entitled to participate in UK political life, and who pose no credible risk of foreign interference.

Secondly, there would be issues of enforceability. I will not spend much time on this particular point, because it is important that I set out our arguments on the principle, and what I think the right answer to this is, but following the approach of new clause 2 would mean relying on definitions of persons that are difficult to get right and can be unenforceable in practice. The amendment relies on concepts such as a “politically-appointed adviser”, which is opaque, legally speaking, and risks creating legal uncertainty for campaigners and regulators.

Thirdly, and more fundamentally, where the concern is hostile activity by, or on behalf of, foreign states, we already have robust and targeted tools in our national security legislation, which is complemented by safeguards in electoral law that we are seeking to enhance through the Bill. The National Security Act 2023 provides a clear criminal framework for tackling hostile state activity, including the foreign interference offence, which is specifically designed to capture conduct carried out on behalf of a foreign power to influence the UK’s political system.

Existing electoral law is designed to ensure that money can only come from permissible sources and criminalises the acceptance or facilitation of donations from impermissible foreign sources. The Bill significantly strengthens the existing rules so that in future even donations that are potentially risky are identified earlier, scrutinised more closely, and returned where necessary.

By introducing robust “know your donor” checks and requiring all donors to declare any benefits they have received in connection with their donation, we are reducing the space in which individuals who pose a real risk, or their proxies, can operate under the radar. Our new measures directly respond to the concerns raised by the hon. Member for Hazel Grove, as well as those of other key stakeholders, such as the Electoral Commission, the Committee on Standards in Public Life and the National Crime Agency. With that, I hope she feels she can withdraw her amendment.

New clause 3 seeks to prevent those convicted of a prescribed offence relating to the promotion, incitement, or use of political violence from making political donations. Currently, if an individual is convicted of such an offence, that conduct rightly affects their democratic rights, including their ability to stand for election or to hold elected office. This helps to deter those who would undermine the democratic rights of others, such as candidates contesting an election.

The Government are absolutely aligned with the intention behind this proposal. Political violence and its promotion or incitement have no place in our democracy, and we are clear that those who seek to undermine democratic participation through violence or intimidation should face serious consequences. The question, however, is not whether this behaviour is unacceptable—it plainly is—but whether this is the right legal mechanism to address it.

If this amendment were to be accepted, it would represent a significant shift in the purpose of political finance law, which is about ensuring only those individuals who have a legitimate interest in our elections can support candidates and campaigns through their vote, volunteering their time or offering financial support. Although I share the hon. Member’s concern, the Government believe that this amendment does not address a regulatory gap and would not further our shared aim of reducing harassment and intimidation in politics.

The harassment and intimidation of voters, electoral staff and campaigners is unacceptable and has a profoundly detrimental impact on our democracy. That is why we are taking forward several interventions in the Bill to tackle this issue, which we have already discussed in great detail, and are doing so through criminal law, electoral offences and disqualification, rather than through political finance rules, which are not designed to address conduct. With those reassurances, I hope the hon. Member will withdraw her amendment.

[Lisa Smart]

I listened closely to what the Minister said, and I understand the thrust of her view that existing rules would cover the conduct that we are seeking to avoid. Will the Minister think of the specific case of Elon Musk, the owner of X? He spoke at a rally via video link and incited violence. He has also talked, at separate times, about donating to a UK political party. UK companies are part of his group; there would be a way for him to channel funding through a UK company. Will the Minister let me know what I am missing that would stop Elon Musk doing that?

--- Later in debate ---

[Samantha Dixon]

I thank the hon. Gentleman for giving me a breather. As he knows, the Rycroft review considered this matter and—I mean this sincerely; it is not simply a form of words for the Committee —the Government are carefully considering those recommendations and will respond in due course. To give him that assurance: this is part of that consideration.

Alongside the measures I mentioned, enhanced company permissibility tests ensure that only organisations with a genuine and substantive UK connection can donate, closing off key vulnerabilities in our electoral framework. The Government are also committed to robust monitoring and evaluation of the Bill, and anticipate that this will include an impact evaluation assessing whether the policies introduced have achieved their intended aims.

We have discussed the Rycroft review, and I sincerely mean it when I say that we will respond fully in due course to all the measures in it, including on improved co-ordination between the Electoral Commission, the Government, the security services and the police. For those reasons, while I fully understand the commitment of my hon. Friend the Member for Warwick and Leamington to strengthening our defences against foreign interference, the Government do not consider this amendment to be the right mechanism to achieve that end.

[Lisa Smart]

I am grateful to all who have contributed. I plan to press to a vote all the new clauses that I have spoken to.

[Paul Holmes]

In the interests of ensuring that you call the right votes, Dame Siobhain, there is no doubt in my mind when the Minister says she is genuinely looking at trying to fix this problem—I believe her; she is a Minister of integrity and I know the Government absolutely want to achieve that aim—but this is happening now and, with no commitment to timescales, as the hon. Member for Hazel Grove asked for in relation to the Rycroft review, I am concerned that it will still be a problem.

I know the Minister will try to implement this carefully, but the lack of information sharing at this precise moment means that money is still being given, despite the fact that organisations that the Electoral Commission is not currently asking could provide that desperately needed clarity and transparency. Given the reassurance that the Minister has given to the Opposition on new clauses 38 and 39, however, I will not press them to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Lisa Smart]

I am happy to be speaking in support of new clause 4, and in favour of new clauses 12 and 20. New clause 20, which is in my name, would require parties to declare cryptoasset donations that they have received in the past. I agree with pretty much everything that the hon. Member for North Herefordshire said, and I note my earlier comments about the sticky wicket on which the Minister is being asked to play.

The Government’s statement on the publication of the Rycroft review was a rare moment in which they nailed both the timing and politics of an issue, and it was absolutely right to ban crypto from that day to stop any further gaming of the system. However, I completely agree with the hon. Member that this Committee is the place to have a conversation about what that will look like. Future Government amendments will be tabled at a later, as of yet unspecified date. I believe that the Minister is working with officials on the issue, but this Committee is where we can talk about the Bill on a cross-party basis.

The Rycroft review recommended that a moratorium be placed on political donations made in cryptoassets. The Government responded to the review on the date of its publication, but, although other amendments to the Bill have been tabled, there has not yet been a clear indication of how quickly that recommendation will be integrated into it. The Liberal Democrats look forward to getting some further detail, dates and quick action, but we also want the measures introduced in this Bill to be effective in the long term.

Cryptoassets are extremely difficult to trace. The difficulty in tracing the ultimate ownership of cryptoassets, the proliferation of different kinds of cryptoassets and the advent of AI-assisted technologies that can break cryptoassets into small amounts, below any threshold at which donations may have to be declared, create serious risks for political finance transparency. There is also a real risk of cryptoassets being used as a vehicle to channel foreign money into the UK political system, and neither the Electoral Commission nor political parties currently have the capability and expertise to manage that risk adequately. New clause 20 would require parties to declare the cryptoasset donations that they have received in the past. Given the clear issues with crypto donations, the public should surely expect transparency on them.

On new clause 12, tabled by the hon. Member for Warwick and Leamington, the Joint Committee on the National Security Strategy examined the merits and risks of allowing crypto donations, noting that benefits include the potential for greater transparency in some cases, and for regulations to gradually institutionalise alternative forms of payments. However, the Committee concluded:

“Crypto donations pose an unnecessary and unacceptably high risk to the integrity of the political finance system and public trust in it. We accept that future regulations may institutionalise the use of alternative payment systems for use in donations. At present, however, the opportunity to evade rules is too high, the adequacy of mitigations too low, and the resource cost of attempting to implement acceptable oversight is disproportionate. We see no democratic imperative to permit the use of crypto in political finance until adequate safeguards are in place.”

Crypto also poses wider upstream risks to the integrity of political finance, with the Committee report going on to say that

“donors can convert ‘dirty’ foreign crypto funds into ‘clean’ UK fiat and then donate it without arousing much suspicion. A ‘last mile’ ban on crypto donations is therefore not a panacea. Specialist capabilities to address upstream risks are underpowered and require further work.”

New clause 12 therefore calls for an immediate moratorium on crypto donations until the Electoral Commission produces statutory guidance, which should be made using the affirmative procedure to ensure that Parliament has the opportunity to review its adequacy before it is accepted. That guidance could include measures regarding the donor’s identity and location, the original source of funds and maximum limits on the amount of crypto that may be donated.

It is also worth mentioning that, as we have seen in the press in the last couple of weeks, a leader of a UK political party has been promoting the use of cryptoassets and has gained financially from doing so. We should all spend a moment to reflect on why somebody would want to do that, particularly when cryptoassets are not risk-free. Promoting their use, and the use of gold bars as an investment tool, should be beyond what is acceptable for an elected Member of this House. I encourage anybody, particularly people who purport to lead a political party in this country, to really think about the impact of their actions, particularly when it is for financial gain. On that basis, I commend new clauses 12 and 20 to the Committee.

[Paul Holmes]

I will touch very briefly on the new clauses that have been tabled. I thank RUSI for the report that the hon. Member for North Herefordshire outlined. I had a meeting with RUSI yesterday, and the fact that it was able to even start to break the ice of my understanding of cryptocurrency and the regulatory framework that is needed was a miracle. It has done a lot of work on this issue, and I congratulate it on coming up with quite sensible proposals and information that goes into detail about the benefits of a ban versus a moratorium.

It is very easy in this House to ban things, but we do not want a ban that creates a worse problem by moving that cryptocurrency upstream. Therefore, as the official Opposition we welcome the idea that there should be a moratorium. We also welcome the fact that the Government implemented an immediate ban pending a review. If a moratorium goes ahead, we need to make sure that an adequate regulatory framework is implemented to prevent some of the exploitative measures that the hon. Member for Hazel Grove outlined in her excellent contribution.

As the hon. Member for North Herefordshire outlined, we are discussing in this Bill Committee probably the most important aspect of the integrity of the electoral process. There are plenty of others in that competition, but the most important aspect of that is foreign interference and donations, including cryptocurrency donations. We are being asked to give the Government our trust—and I do trust the Minister—that these changes are going to happen very soon. The hon. Member is absolutely correct to say that this is the most intense part of the parliamentary process. At the moment, we are being asked to debate new clauses put forward by Opposition parties. We are relying on the Government to give these matters just as much importance, yet they have not given that timescale.

I am torn on new clause 4. I understand the intention of the hon. Member for Warwick and Leamington, but at the moment my feeling is that new clause 4 is really not worth agreeing to. That is because of the evidence given to me by RUSI, which shows that preventing parties and candidates from accepting donations in cryptoassets does not solve the issue of those cryptoassets getting through to candidates and parties, or interested parties, later down the line.

The briefing that was given to me by RUSI about the potential drawbacks of a ban mean that I am not satisfied that new clause 4 would do anything at this precise moment. I rose to speak because I want to sincerely give the official Opposition’s commitment to assist if the Minister wants to engage on a cross-party basis. That has my contention at other stages of the Bill Committee—we stand ready to assist on a cross-party basis to really speed up the passage of elements of the Bill, including on this matter. I would never speak on behalf of other parties, but I am sure that stands for them as well.

[Lisa Smart]

As the hon. Gentleman is mentioning other parties and as I represent one of those other parties, it is only appropriate that I stand up and agree with him wholeheartedly. Everybody in the Chamber and beyond wants us to get this issue right. It is not a party political point. As the hon. Gentleman is, I and we are ready to work cross-party to get it right. If that means us doing some extra work between the various stages of the Bill, I would be completely content to be part of that.

[Paul Holmes]

I thank the hon. Lady.