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Representation of the People Bill

My Lords, I will focus my remarks on Parts 4 and 5 of the Bill, relating to election finance and to the work of the Electoral Commission.

In 2021, the Committee on Standards in Public Life, of which I was then chair, issued a report on the regulation of election finance. The report recommended

a number of necessary—albeit modest—changes to election regulation to simplify the rules, increase transparency and reduce the risk of bad actors gaining influence through financial donations. Regrettably, the then Government under Boris Johnson failed to respond to the report and failed to act on the recommendations. The report was effectively buried. One can only speculate as to why. I am therefore delighted that the current Government have revisited this important issue, and I was pleased to have the opportunity to discuss the process of review by Philip Rycroft which underpins many of the measures in the Bill as presented.

The measures in Part 4 of the Bill go a considerable way towards meeting the recommendations that CSPL made in 2021. But if anything, as the Minister said, the need for change in this area is even more urgent now than it was five years ago. Public trust in our political system is under great pressure, the risk of foreign money infiltrating our election system remains, the risk of huge individual donations unbalancing the political process has grown, and hostile states, including, but by no means only, Russia, are energetically seeking to influence our public life and subvert our institutions. We must protect them for our national security and for the health of our democracy.

One of the absolute cornerstones of our democracy is maintaining the integrity of our elections, so that it is clear that they are fair, transparent, independent of government and resilient against improper attempts to influence the outcome. We are fortunate to have an independent Electoral Commission which, broadly speaking, has the confidence of the parties and the public. I am therefore delighted to see that the Bill would abolish the right of the Government to set out a strategy and policy statement for the Electoral Commission. The Government of the day do not own the electoral system and have no business imposing their own strategy and policy objectives on the Electoral Commission.

I also welcome the measures that reduce the risk of dirty or untraceable money getting into our electoral system. Given the strict demands on the banking sector—with which I was very familiar when I was a non-executive director at HSBC Holdings—and on other parts of the professional services industry to ensure that they know their customers, it is increasingly anomalous that there is so little duty on political parties to know their donors. The Bill requires parties to assess the risk posed by their donors, but without expecting them to do so to such a level of detail that it would be unreasonable in terms of the resources deployed.

Similarly, preventing donations being made from cryptocurrency is only prudent, given the untraceability of crypto assets. There is a reason why cyber criminals normally want their ransom payments made in crypto. The new measures relating to unincorporated associations are also vital. Unincorporated associations currently provide a convenient route to obscure the source of funds going into the election system. That must change.

On the well-rehearsed and, indeed, now very fashionable question of a cap on individual donations other than from overseas contributors, my long-held view is that there should be such a cap and that it should apply to companies, trade unions and other

bodies as well as to individuals. I welcome the fact that companies, unions and individuals are willing to donate freely to the political process, but we need some degree of proportionality as to the influence of any particular voice. A donation cap—and I personally would set it at quite a high level—would help to do that, but it is vital that such a cap should not be so designed that it penalises or advantages any one party. So, cross-party consultation on this matter is essential, if we are to have a stable and credible system, and that applies to the other measures in the Bill.

Even if all the measures in the Bill were passed into law, there would still be a need to reform regulation of the election system, which is complex, fragmented and subject to different statutes. As has been argued elsewhere, there is a strong case for a root and branch review of election law. The Bill is not based on such a review, but it does propose some sensible and proportionate improvements that will reduce some of the risks that the current system faces.

4.38 pm