Donations to Political Parties

Lord Leigh of Hurley Excerpts

Thursday 12th February 2026 Grand Committee

[Lord Leigh of Hurley (Con)]

My Lords, I declare my interest as a senior treasurer of the Conservative Party. I congratulate the noble Lord, Lord Sikka, on his very prescient timing, securing this debate just as the Representation of the People Bill is introduced today.

The Government are proposing to introduce “enhanced due diligence” measures in the forthcoming elections Bill. One has to ask why. If the intent of the legislation is to protect against foreign interference, the new regulatory regime should be targeted in that respect, rather than seeking to envelope genuinely domestic and permissible transactions in extra and excessive red tape. Political parties and regulated donees have a legal obligation to ensure that they receive donations only from permissible sources, which in the case of companies must be companies carrying out business in the UK. Foreign donations are already banned. There are criminal offences in relation to fraud declarations and funnelling unlawful donations via the back door.

However, parties could do with more information from government agencies. In the case of Christine Lee, who gave some £700,000 to Labour Party recipients, it would have been helpful if the security services had alerted Labour to the Chinese Communist Party involvement, for its benefit. Likewise, HMRC has recently declined to share information with national political parties because of so-called tax confidentiality. This fails to recognise an important fact: political parties are not banks or tax authorities. Their assessment of risks is otherwise limited to what is in the public domain. If there are particular risks from specific foreign threats, there should be mechanisms to inform parties of those risks.

The greatest risk of foreign influence lies in third parties, rather than highly regulated and very transparent political parties. That is why we see money flowing into Islamist causes and Gaza independence-style campaigns, which is very worrying. Certainly, the Conservative Party undertakes due diligence checks on its donors, in terms of, first, regulatory compliance and, secondly, political screening and reputational impact. Donations from shell companies are not allowed and not taken. In government, the Conservatives tightened the law against foreign interference and foreign spending; it is the Labour Government who are now dragging their feet by failing to implement properly the foreign influence registration scheme and by not adding China to the enhanced tier. Also, I add my name to those advocating banning cryptocurrency donations. I can see no reason to use them other than for nefarious purposes.

The Government need to recognise that donors are generally good citizens who want to help a political party and want it to succeed. Some do so by giving their time, some by giving financial resources. Over the years, Labour, Lib Dems and all parties have had many such folk, albeit that some may have now withdrawn, given the performance of their party. Of course, that has left Labour completely beholden to the unions. Is this healthy? The result has been the morally offensive Employment Rights Act, where Labour has been forced to allow unions to clip members’ fees into their political funds unless members object. This is the wrong direction of travel. Genuine donors need to be thanked and applauded, not demonised.