Amendment 40

National Security Bill - Report (1st Day) – in the House of Lords at 6:30 pm on 1 March 2023.

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Lord Sharpe of Epsom:

Moved by Lord Sharpe of Epsom

40: Clause 13, page 12, line 11, leave out subsection (8)Member's explanatory statementThis amendment removes an amendment to the Online Safety Bill which makes an offence under Clause 13 a priority offence.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

My Lords, Amendments 40, 41 and 50 relate to the offence of foreign interference.

Amendment 40 makes a procedural and technical tweak to address changes to the timetables of this Bill and the Online Safety Bill. The addition of foreign interference to the list of priority offences in Schedule 7 to the Online Safety Bill is government policy, which has been agreed at every stage of this Bill since its introduction. Designating foreign interference as a priority offence under the Online Safety Bill would disrupt state-backed disinformation targeted at the UK through the duties imposed on platforms by the relevant provisions in the Online Safety Bill.

However, now that the National Security Bill has overtaken the Online Safety Bill in its parliamentary passage, we must address the procedural challenges posed by this change to respective timetables. Government Amendment 40 will remove the reference to the Online Safety Bill from Clause 13(8) of the National Security Bill. The Government will then seek to add the offence of foreign interference to Schedule 7 to the Online Safety Bill via an amendment to that Bill. The effect of this amendment will be exactly the same as the current approach; it is simply the change in timetabling that means this amendment is necessary.

Government Amendment 41 clarifies the scope of the foreign interference effect contained within Clause 14(1)(a) to ensure it is not misinterpreted. Foreign interference includes interference with rights and freedoms that are protected under domestic law, such as freedom of speech. We know that foreign states have sought to intimidate or threaten diaspora communities with punishment to prevent them engaging in lawful protest activities. We want such activity taking place in the UK to be covered by the offence of foreign interference. Government Amendment 41 simply changes the wording in the offence to “in the United Kingdom” as opposed to

“as it has effect under the law of the United Kingdom”.

This will ensure that it is not misinterpreted to have a broader effect than we intend. It does not change our policy or affect the operational utility of the offence.

Amendment 50 is minor and does not introduce new policy. It simply reinforces the Government’s intention behind what is originally meant by “political decisions”.

Some concerns have been raised that references to proceedings in Parliament in both the offence of foreign interference and the foreign influence registration scheme risk creating unhelpful ambiguity about the prohibition on impeaching or questioning proceedings in Parliament contained in Article 9 of the Bill of Rights. The Government’s position is that such references did not and could not displace provisions in the Bill of Rights and were not intended to do so. However, we have amended the provisions to ensure there can be no suggestion of interference with privilege.

To address these concerns, government Amendment 48 removes references to proceedings of the UK Parliament and devolved legislatures from the definition of “political processes”. A key element of foreign interference is the infiltration of our democracy, including the institutions and processes which uphold our democracy. The other amendments we have tabled therefore seek to ensure that the offence still protects against such interference.

Amendment 49 adds to the definition of “political processes” a reference to

“the activities of an informal group consisting of or including members of” the relevant legislatures of the United Kingdom. The policy intention remains the same—to capture foreign interference in Parliament targeted at the heart of our democracy—but we are achieving it in a slightly different way. I will briefly explain how we will do this.

The majority of what we wish to capture in relation to interference with Parliament will be covered by the effect in Clause 14(1)(b)—the limb relating to public functions—as MPs and other officials within Parliament will be exercising their public functions. It is right that we seek to criminalise activity where, for example, somebody is acting for a foreign power and threatens violence to affect how a person exercises their public functions.

However, with this amendment we ensure that we also capture activity that is part of our democratic processes but which does not have official status within Parliament. We have therefore added reference to informal groups, which will include APPGs, to the definition of “political processes”. Foreign powers seeking to interfere in political processes through those who do not have public functions—for example, an external secretariat—will continue to be caught by the offence.

I turn briefly to government Amendments 42 and 44, which give effect to the new approach I have outlined, with Amendment 44 relating to the “legal processes” limb. They give effect to the new approach such that those interference effects apply otherwise than in the exercise of public functions. Government Amendments 43 and 47 are consequential amendments following from the change in definitions.

Taken as a whole, the amendments do not introduce new policy but simply reinforce the existing policy on the interference from foreign states that this offence is designed to protect against. I therefore ask noble Lords to support the inclusion of these amendments and beg to move.

Photo of Lord Carlile of Berriew Lord Carlile of Berriew Crossbench

My Lords, I will speak to Amendment 51, which stands in my name and those of the noble Lord, Lord Wallace of Saltaire, the noble Baroness, Lady Hayter of Kentish Town, and my noble friend Lord Evans of Weardale.

This is about transparency. When the electors go to an election, obviously they consider the policies that are placed before them. They also consider the personalities that are placed before them, because they are voting for an individual to carry out the important and valuable role of their Member of Parliament. They also should be entitled to enough transparency to judge the ethical matrix in which each political party operates, as represented by the individuals who stand as candidates. This moderate and temperate Amendment 51 is an attempt to improve the knowledge that voters have about the ethical matrix of the political parties that stand behind the candidates they are able to vote for and have to choose from.

We know that there are problems about the ethical matrix of political parties. Sometimes it is not their fault, because outside forces, hostile actors from foreign countries, make interventions into elections—for example, via the internet—in an attempt to slant the vote in one direction or another. However, there is also a serious risk—I accuse no party of impropriety in this respect, at least for the purposes of this contribution to your Lordships’ debate—that foreign actors, foreign powers, may seek to influence an election, for example by making substantial donations to that party’s election fighting fund which enable it to fight the election at an advantage compared with other parties.

I will not go back to my days as a very happy Liberal and then Liberal Democrat MP and talk about the disadvantage we always started from because we had less money than the other parties. However, we were always worried, in those days at least—I am sure it is still the same today—by contributions that might have come from foreign powers and that would give an even greater advantage, concealed from the electorate, to those political parties.

So what this amendment seeks to do is protect us from the likes of Putin’s cronies, who might, one way or another, find their way to dinners, contribution events and even meeting people in this great building. We seek to establish a register. In effect, each political party would have to create a policy statement which meant that they were obliged to disclose at least the outline of contributions made by a foreign power—we are not talking about rich foreigners or wealthy businesspeople but about a foreign power which has a political reason for trying to influence the result of an election, either made directly or through an intermediary.

By this modest amendment, a UK-registered political party would have to provide the Electoral Commission with an annual statement of risk management that would identify how risks relating to donations from a foreign power, directly or indirectly, had been managed and what measures had been put in place by the party to that effect. I cannot understand why any political party for one moment would want to object to this. I can imagine that every political party would say, “Well, it makes a level playing field and gives our voters the opportunity to understand the background—if there is any ugly background—in British politics that might influence an election”.

So I invite your Lordships—I am minded at the moment to test the opinion of the House on this matter in due course—to consider this with great care and to come up with some pretty good reasons if there are real objections to this and explain what they are based on broad and objective criteria, not on anything that could be suspected of being self-interest.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Chair, International Agreements Committee 6:45, 1 March 2023

My Lords, one of the reasons for supporting the amendment, to which I have added my name, as the noble Lord, Lord Carlile, said, is the Government’s recent change which allows long-term expats to continue to be on the UK electoral register and therefore to be permitted donors to UK political parties. This means that someone living —for the sake of this argument—for 40 years in, say, Russia, to take the example just given, can be on the electoral roll here. A British subject, living for 40 years in Russia, can now be on the electoral roll here, with no checks or questions asked, and that person can then donate money to a British political party—no names, no pack drill, and importantly, of course, no checks whatever on the source of the money they are able to donate to a British political party.

PPERA—the Political Parties, Elections and Referendums Act, as most of us know—requires parties to check only that the donors are “permissible”; no checks are needed on the source of their funds. They are not even required to carry out enhanced due diligence on donors operating in high-risk countries which are listed in the money laundering and terrorist financing regulations 2022. There are no obligations on political parties to do the due diligence that we would expect of anyone else handling money from any of the countries on that list.

Incidentally, that is very, very different from those of us—well, all of us in this House—who are PEPs under the AML rules. Indeed, at this moment in the Moses Room the financial services Bill is being discussed, which is trying to reduce the extraordinary number of hoops that we and our children all have to go through in our banking activities because of our presence here. However, Russian-based UK citizens, who long ago gave up paying taxes of any sort here, can donate money, without any question as to its provenance, to a UK political party, surely influencing our democracy way beyond some of the other minor activities that this Bill seeks to make transparent—an issue we will return to later.

Amendment 51, tabled by the noble Lord, Lord Carlile, would capture any possibility that the money could come from a foreign power. As the amendment states, it would include donations made through an intermediary. We on this side would certainly like to know the source of donations made from outside the UK to a political party, whether in government or opposition, or to a party with no elected Members.

The noble Lord, Lord Sharpe, has been very helpful on this Bill. To our surprise, in Committee, he claimed that our existing electoral law has

“a stringent regime of controls on political donations to ensure that only those with a legitimate interest in UK elections”—[Official Report, 21/12/22; col. 1166.] can donate. I question that in respect of someone who has been out of the country for that long, does not use any of our services and does not pay our taxes. Even more, do we check the legitimate interests of those long gone who can put in money from another source?

I trust that the Government have now looked again at what was a rather complacent reply and that they share our interest in revealing full details, including instigating proper checks. I hope that they will therefore accept Amendment 51. As the Minister knows, it has the full support of the Electoral Commission. I hope that he would welcome a duty on political parties to check the true source of donations and assess the risk of accepting money from overseas, particularly from those on the list of the AML regulations. Rather along the lines of “know your customer” which the banks have to do, there should also be a “know your donor”. This should be a culture in all our political parties. It would mean assessing the risk that donors might pose, especially those from overseas countries. There would be an enhanced due diligence on new donors and proper recording of such checks.

I received a letter from the Minister today which I think has not yet been shared with the House. It says that it is in the national interest to have greater openness about the influence on British politics by foreign powers. We agree. Amendment 51 would ensure that all overseas donations were openly made and disclosed.

Photo of Lord West of Spithead Lord West of Spithead Labour

My Lords, I support Amendment 51, which would help increase the transparency and accountability of our political system. The ISC’s Russia report of 2020 recognised that the UK had clearly welcomed Russian money, including in the political sphere.

The Government have previously assured the House that the protections within the electoral financing laws are “sufficient”. However, as other noble Lords suggested in Committee, there are clear differences between the requirement on companies to undertake due diligence when receiving foreign money and that on political parties, which have no such duties. This would help close the gap.

I note that the amendment requires a political party to publish a policy statement within three months of the passing of the Bill. The Secretary of State also has three months to produce the accompanying guidance. It may be advisable for the Secretary of State to publish the guidance before political parties are required to produce their policy statements. I simply raise that as a practical point. It does not affect my support for the amendment.

As regards the government amendments, it is not clear why they seek to exclude parliamentary proceedings from the definition of political processes, thereby moving them outwith the scope of any new foreign interference offence. I appreciate that the Government have said that it is to clarify that the Bill does not intend to interfere with parliamentary privilege, but I do not see that the answer is to remove the concept entirely.

To commit the foreign interference offence, one needs to conduct “prohibited conduct” which has an “interference effect”. “Prohibited conduct” includes a variety of unacceptable behaviours—from a criminal offence to threatening to damage someone’s reputation or causing financial loss. Surely, it is critical to prevent any foreign interference in parliamentary proceedings which involves a person conducting such unacceptable behaviour. Perhaps the Minister could explain how including parliamentary proceedings in the foreign interference offence would undermine parliamentary privilege, given the need for the prohibited conduct of the offence to apply. Even if the amendment is warranted, could the Minister explain why the Government have not replaced it with wording similar to that in Clause 70, as amended. This refers to interference with

“a Member of either House of Parliament, the Northern Ireland Assembly, the Scottish Parliament” rather than “parliamentary proceedings”, which would ensure that no gap was created.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office)

My Lords, the all-Peers letter which the Minister sent to us on 28 February states clearly and strongly that what we need is in this Bill is

“transparency on which foreign powers are influencing our politics”, which it states

“is vital to defending our democracy”.

This reasonable amendment fills one of the loopholes left in the Bill. We are all concerned about the integrity of our elections. We are conscious that foreign donations are part of what can undermine that integrity.

The Minister may have had drawn to his attention a letter in yesterday’s Financial Times which points out that the new proposals for a football regulator include among its duties the need to ensure stronger due diligence and checks on the sources of wealth of those who wish to buy or own football clubs. It is anomalous, to say the least, that we should have stronger checks on people who wish to buy British football clubs than on people who wish to give sometimes very large sums of money to British political parties. I remind the Minister that the question of Arron Banks’s very large donation to the Vote Leave campaign is still being litigated in the British courts. We still have no assurance as to the origins of that donation, since he has refused to give one.

I support what the noble Baroness, Lady Hayter, has said, by reminding the Minister that there are now 100,000 British citizens living in the United Arab Emirates—some of whom already donate to British political parties. It would be quite easy for some of those to become intermediaries for the sovereign powers concerned. Other wealthy British expatriates live in Thailand, Singapore or Hong Kong. Their business depends heavily on the Chinese economy and state.

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 by being required to show that they are conducting careful risk management in accepting donations from overseas. There have been a number of instances in recent years of which we are all aware. Some of them were touched on in the ISC report on Russia. It is clear that such management has not been in place. It ought to be. I hope that the Government will accept this amendment as a means of filling this loophole.

Photo of Lord Evans of Weardale Lord Evans of Weardale Crossbench

My Lords, I declare an interest as the chair of the Committee on Standards in Public Life. In 2021, my committee reviewed the regulation of electoral finance. I have to tell the Minister that “stringent” was not what we concluded as to the rigour of the arrangements in place. We felt that there were a number of loopholes which could quite easily be remedied. We made recommendations to that effect. Regrettably, the Government decided that they did not wish to accept any of those recommendations; therefore, the loopholes are still there.

I have added my name to Amendment 51 because it is a modest step in the right direction. The rules that apply to the financial services industry and, as appears likely, are shortly to apply to the football industry are considerably stronger than those that apply to our elections. A modest step in this direction would not provide a high level of assurance that money from illicit sources of various sorts might not reach the electoral process, but at least it is a step in the right direction.

It is important that we should take that step because we know that the electoral system in this country and in other western democracies has been under attack. It is vital to maintain public confidence in the electoral system; it is still pretty good. The Electoral Commission publishes regular research on attitudes towards the electoral system. At the moment, we are in a reasonably good place, but it is very important for the health of our democracy that we retain that public support. This is a small step in that direction. I have been scratching my head to work out why, as the noble Lord, Lord Carlile, said, any political party would not support this for the integrity of our electoral system. It is not massively bureaucratic or intrusive. I look forward to hearing the Minister’s reply.

Photo of Lord Coaker Lord Coaker Shadow Spokesperson (Defence), Shadow Spokesperson (Home Affairs), Opposition Whip (Lords) 7:00, 1 March 2023

My Lords, I rise briefly to say that we very much support Amendment 51 in the name of the noble Lord, Lord Carlile; were he to push it to a vote, we would certainly support him in that Division.

I do not want to repeat much of what has been said by my noble friend Lady Hayter and the noble Lords, Lord Carlile, Lord Wallace, Lord Evans and Lord West. However, I think that the noble Lord, Lord Evans, was right to say that, although this is a modest amendment, its consequences are quite serious. There is no doubt that people are concerned about some of the issues that they have read about in the papers around foreign interference in elections and the funding of political parties. One of the things that we often debate in this House is confidence in our democracy and democratic system, including the threats to them and the erosion of that confidence. Sometimes, these may be small steps but they are important ones that can contribute in our trying to do all we can to protect our democracy. People are worried about foreign interference in elections and the integrity of our democratic system.

It is right to point out, as the noble Lord, Lord Evans, did, that, through this Bill, we are requiring significant steps to be taken by businesses, organisations, industry, financial services and all sorts of other bodies to ensure that they conform to certain regulations that protect our national security. It would be right for them to ask, “Why is there one rule for us but another for political parties?” It is quite right that this amendment is supported; I hope that the noble Lord, Lord Carlile, will seek to test the opinion of the House and that his amendment is supported by the majority of Members, because it is an important step in protecting the integrity of our democracy in the way that noble Lords, particularly my noble friend Lady Hayter on the Labour Benches, pointed out.

Having said that, I want to ask one practical question with respect to many of the amendments that the Government have brought forward, which, by and large, we support. I want to deal with Amendment 49, the explanatory statement for which says:

“This amendment adds to the definition of ‘political processes’ the activities of groups such as all party parliamentary groups.”

I understand the bit about all-party groups but the implication there is in “such as”. Are the Government saying that the amendment is relevant to other groups? If so, can the Minister explain that to us?

With that, as I say, I very much support Amendment 51 in the name of the noble Lord, Lord Carlile, because it is very important.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

My Lords, I thank all noble Lords who have spoken on this group.

I will start, if I may, by addressing the question from the noble Lord, Lord West, by repeating something that I said in my opening speech; I think it goes some way to answering him. The majority of what we wish to capture in relation to interference with Parliament will be covered by the effect in Clause 14(1)(b)—the limb relating to public functions—as MPs and other officials in Parliament will be exercising their public functions. It is right that we seek to criminalise activity where, for example, somebody is acting for a foreign power and threatens violence to affect how a person exercises their public functions. I hope that answers his question.

In answer to the question from the noble Lord, Lord Coaker, about Amendment 49, let me say that he is completely right. The reference to

“the activities of an informal group” in this amendment is, as I think noble Lords know, designed to capture interference activities in APPGs by foreign powers. We are seeking to capture interference whether or however any person participates in the activities of these informal groups. We expect that to cover MPs and people external to Parliament and government who participate in the actions of such groups, but we also envisage informal groups to include things such as “friends of” groups. The use of the term “acting in that capacity” ensures that we do not capture things such as parliamentary book clubs but instead focus on those caught, such as the 1922 Committee, although they could also be covered by the public functions limb of the test. I hope that clears this up.

I know that Amendment 51 is a duplicate of a previous amendment, now tabled by the noble Lord, Lord Carlile. The Government do not believe that this amendment is necessary, I am afraid. I was going to quote myself and say again that UK electoral law already sets out a stringent regime of controls, but I am slightly more reluctant to do so after hearing the comments from the noble Lord, Lord Evans. However, we believe that our regime ensures that only those with a genuine interest in UK elections can make political donations and that political donations are transparent.

I will go into more detail on this point, if I may, because I believe that the noble Lord’s ethical matrix is already in existence. It is already an offence to attempt to evade the rules on donations by concealing information, giving false information or knowingly being involved in an arrangement to facilitate the making of an impermissible donation. This provides a safeguard against impermissible donations via the back door. Political parties must already report all donations over a certain value to the Electoral Commission; these are then published online for public scrutiny. Political parties are by law required to undertake reasonable steps to verify whether a donor is permissible and obtain their relevant details for the reporting requirements. Donations that do not meet the permissibility tests or are unidentifiable must be reported and returned to the Electoral Commission, which also produces guidance outlining how the recipient of a donation can undertake these checks.

As I say, UK electoral law already sets out a regime of donation and spending controls to safeguard the integrity of our democratic processes, so only those with a genuine interest in UK electoral events can make political donations; they include UK-registered electors, UK-registered companies, trade unions and other UK-based entities, as well as otherwise eligible donors such as Irish citizens who meet prescribed conditions and can donate to parties in Northern Ireland. Parties and other campaigners are prohibited from accepting donations that are not from a permissible or identifiable donor. The failure to return such a donation either to the donor or, as I just described, to the Electoral Commission within 30 days of receipt is an offence; any such donations must also be reported to the Electoral Commission. The Elections Act 2022 introduced a restriction on ineligible foreign third-party campaigning above a £700 de minimis threshold.

The transparency of electoral funding is obviously a key cornerstone of the UK’s electoral system. All political parties recognise that third-party campaigners and candidates must record their election spending and report it to the Electoral Commission or their local returning officer; that information is publicly available. For transparency, all donations to political parties and campaigners must be recorded and certain donations must be reported to the Electoral Commission; as I said, these include donations from impermissible donors and donations from the same permissible source that amount to over £7,500 in one calendar year. To ensure transparency, donation reports are published online by the commission for public scrutiny.

To register as an overseas elector, a British citizen has to present ID. However, it is a long-standing principle first introduced by the Committee on Standards in Public Life in 1998 that, if you are eligible to vote for a party in an election, you are also eligible to donate to that party. We believe that overseas electors are important participants in our democracy, but it is only right that they should be able to spend in UK elections in the same way as other UK citizens registered on the electoral roll.

I think that this is a reasonably comprehensive set of rules. There may be some debate as to whether it qualifies as a stringent regime but the fact is that donations to political parties from foreign powers, whether they are made directly or through an intermediary, are illegal. Political parties already have a legal duty to check that all donations they are offered are permissible.

In closing, I very much thank noble Lords for engaging so constructively in this debate. I ask the noble Lord, Lord Carlile, not to press his amendment in this group and ask noble Lords to support the Government’s amendments.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office)

Before the Minister sits down, I just want to check one thing with him. He said that overseas electors will have to present ID. I was involved in the passage of the now Elections Act, which does indeed provide stronger, more limited ways in which correct ID has to be presented by people voting in person in British elections. However, I do not recall extra requirements around the presentation of ID for people who are resident overseas and wish to vote.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

I think that I made it reasonably clear that to register as an elector overseas, you must present ID.

Amendment 40 agreed.

Clause 14: Foreign interference: meaning of “interference effect”