“(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.

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

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.

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.

New clause 3 would prevent anyone who

“has been convicted of a prescribed offence relating to the promotion, incitement, or use of political violence” from making donations to political parties. It is a straightforward proposition: those who have sought to undermine democracy through violence should have no financial role in shaping it. We firmly hold the principle that our democratic institutions must command public confidence and that those who have sought to undermine them should face serious consequences. Certain terrorism and national security offences should be treated as a special case to maintain confidence in our democratic institutions. It is right to protect the integrity of those institutions against those who seek to undermine them through violence and extremism.

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?

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.

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.

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.

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?

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.

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.

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 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.

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.

Through new clause 39, we are trying to help the Government get to the place I think they eventually want to reach: increased information-sharing on the sources of donations, particularly to minimise the risk of foreign influence—I have absolutely no doubt that is the Government’s aim. In fact, one of the key recommendations in the Rycroft review is having a centre of excellence to ensure that data and information are shared between the necessary organisations, but we do not think the Government are there yet. Indeed, the Rycroft review, as we have said a significant number of times, is running in parallel to this legislative process, and we do not currently see information-sharing that would necessarily allow the identification of foreign influence by organisations such as the police or the intelligence services.

We do not have a principled objection to greater information-sharing, as I have just outlined. For example, we would argue that the Electoral Commission has already been given new powers to access Companies House information under the Economic Crime and Corporate Transparency Act 2023, although the regulators chosen should obviously be relevant to the enforcement of political finance legislation. However, we would argue that information-sharing should go both ways.

That is why the last Conservative Government, during the parliamentary stages of the National Security Act 2023, committed to look at greater information-sharing powers between relevant agencies and political parties to help to identify irregular sources. It is disappointing that the current Administration has so far not implemented those changes, which are important for the implementation of the “Know Your Customer” checks.

We are trying to steer the Government in the right way on this issue. As I have said repeatedly, the Rycroft review is a huge opportunity to really tackle foreign interference in our electoral process. Actually, the cost of foreign interference on the British political system is very cheap, compared with the United States or other countries—it perhaps takes only a couple of thousand pounds to influence a Member of Parliament into taking up a case. I am really concerned that, with the Bill potentially being such a landmark piece of legislation that makes real changes in foreign interference, the Government have not grasped that or taken up that mantle enough to make those solid changes.

We would argue that new clause 39 is a first step. However, if the Government legislate retrospectively to bring in the recommendations of the Rycroft review, particularly on having a centre of excellence and information-sharing—I look to the Minister to reassure us with an indication of how she might do that—it may shape our view on new clause 39. I hope she will see the intention behind enhancing that information-sharing.

At the moment, we see a blindingly obvious loophole in identification, and we want to ensure that all organisations have a level playing field and a statutory ability to communicate with each other, so that we can highlight any potential or ongoing attempt at foreign influence in our political process. I look forward to the Minister’s response to those concerns.

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.

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?

I have said this before and I will say it again: the Bill is not designed to prevent specific individuals from participating in or undermining elections. It is about the general regulatory framework and criminal law that we intend to implement, uphold and shore up to prevent certain behaviours in the future. It is not about specific individuals, so I decline to respond the hon. Member’s comments, except to say simply that the legislation, in its entirety, aims to root out political violence, harassment and intimidation.

New Clause 15 proposes to require candidates at UK parliamentary elections, in order to be validly nominated, to complete a declaration on whether they have received any income or gifts from foreign nations or connected entities. A registered political party would be responsible for ensuring that such a declaration had been completed before allowing a candidate to be nominated as a candidate for that party. The Government are strengthening the rules around political finance to protect against foreign interference and have introduced several measures, which we have discussed, that will apply to candidates. The reforms will make it significantly more difficult for malign actors to interfere in our elections.

As hon. Members know, and as I have said many times, the Rycroft review has recommended that the Government look further at enhancing rules for candidates to ensure that money received previously and then used in campaigns comes from permitted sources. The Government are carefully—and I underline that point—considering that recommendation, among all the others. The Government share the concern of the hon. Member for Hazel Grove but, in light of that ongoing work, I ask her not to move new clause 15.

New clause 16 seeks to require registered parties to produce an annual risk mitigation statement relating to donations originating from foreign nations, and to commission an annual independent investigation into donations that they receive from foreign-owned UK entities. Foreign money has no place in the UK’s political system. We recognise the hon. Member’s concerns that the nature of foreign interference is evolving, with threats becoming increasingly sophisticated. That is precisely why the Government have introduced a package of measures that work together to close potential loopholes and address vulnerabilities to foreign interference.

Via secondary legislation we will require donors to declare any benefits linked to their donations and we will strengthen donation rules to ensure that companies must demonstrate a genuine and substantive UK connection. Those changes will help to ensure that political donations genuinely reflect UK-based interests and will prevent the use of shell companies to channel impermissible donations. In practice, where behaviour is not already criminal, the new “know your donor” regime already addresses much of the issue that new clause 16 seeks to tackle. However, the new clause’s approach of annual risk mitigation statements and retrospective investigations of foreign nation donations is less proactive than the risk-based duty that the Bill introduces.

As a reminder, rather than relying on parties to report annually about what they consider appropriate, the “know your donor” regime introduces risk-based due diligence on significant donations across the electoral regime. For the first time, recipients of donations will be required to adopt a risk-based framework for assessing the permissibility of donors, supported by Electoral Commission guidance, which will set out how donees can mitigate potential risks. That means that anyone receiving significant donations, not just parties, must carry out risk assessments, ensuring that the system as a whole is strengthened.

Crucially, the “know your donor” regime has been designed to be proportionate and flexible in identifying a range of relevant risks. Imposing an additional set of statutory reporting requirements would be disproportionate and unnecessary. Those obligations would create additional financial and administrative pressures, particularly for smaller parties. We therefore do not consider these changes necessary. The Government’s proposals already deliver enhanced transparency and due diligence against foreign interference without imposing disproportionate burdens on parties or the regulator.

The purpose of new clause 17 is to prevent regulated donees from accepting any financial benefit from a proscribed foreign state broadcaster. It would also require a candidate for election to issue a declaration as to whether they had received any past or current financial benefits from a proscribed foreign state broadcaster.

The Government are working to improve political transparency and add tougher checks on donations, and we are acting to close loopholes by reinforcing electoral legislation against foreign interference. As already discussed, the Bill will require company donors to show that they have made sufficient revenue to fund their donations; that their company is headquartered in the UK or Ireland; and that they are Majority owned or controlled by UK electors or citizens. That further reduces the risk of foreign state media providing remuneration to regulated donors.

The Government strongly believe that it would be contrary to the standards expected of public office holders for Members to try to leverage their office to earn additional income and gain experience for private gain. The House of Commons code of conduct has robust rules requiring MPs to declare any relevant interests they hold. As part of that, Members must declare any payment received over a value of £300, including its source. The rules also require Members to provide any contract of employment to the Parliamentary Commissioner for Standards upon request.

The Modernisation Committee is also working to drive up standards in public life and address matters of culture and procedure in the House of Commons. Appropriate safeguards are in place already to mitigate the risk of hostile states influencing UK politicians in this manner, and provisions in the Bill will further expand on that. I therefore ask the hon. Member for Hazel Grove not to press the new clause.

I turn to new clauses 38 and 39, tabled by the Opposition. The Government are clear that our new political finance system must have strong safeguards against undue foreign interference—we will prevent that. New clause 38 is not a targeted safeguard against foreign interference. It would exclude an entire category of people who are lawfully registered to vote under devolved franchise arrangements, including individuals who are resident in the UK and have substantial connections to our communities. It would decouple donor permissibility from electoral registration, and use devolved franchise provisions as a trigger for exclusion. That is not the right way to address this problem.

The independent Rycroft review’s recommendation in this space is clear: cap donations from overseas electors, as a targeted safeguard against foreign financial interference. The Government have acted decisively on that, and announced our intention to cap donations from overseas electors at £100,000 per year. That cap will be backdated to the date of the announcement so that it addresses the risks immediately. Our actions are direct, proportionate, clear and consistent with the principles of electoral law.

New clause 39 would require the Secretary of State to publish a consultation paper on options to enhance information sharing between relevant public bodies, agencies and political parties, to help identify and mitigate the risks of foreign interference in political donations within six months of the Bill receiving Royal Assent. The new clause would require the Government to consult on whether to act, but we are acting now with urgency and intent, as we committed to in our manifesto. The Bill puts in place new protections against foreign interference, and in designing them, we have already carefully considered what information needs to be shared, by whom and with whom, to ensure that these measures are effective in practice, without compromising security or public trust.

The Rycroft review also made a relevant recommendation in this space. It suggested not further legal duties but improved co-ordination between the Electoral Commission, the Government and the security services and police on sharing relevant threat information with parties. We will carefully consider that further, and we will issue a full Government response in due course. For those reasons, I invite the hon. Member for Hamble Valley not to push his new clauses to a vote.

I turn to new clauses 45 and 51, tabled by my hon. Friend Matt Western. New clause 45 would link the permissibility of donations to tax residency and having sufficient taxable funds or assets. As I have already outlined, the Government share the concern about the risks associated with political donations from overseas electors, which is why we acted following the independent Rycroft review.

The review considered the risks posed by overseas electors and recommended a clear, proportionate safeguard: an annual cap on the total value of donations that an overseas elector can make. It did not recommend a tax residency test or linking permissibility to taxable funds and assets, and there is a good reason for that: the applicability of tax law is complex and it can rightly be challenged, sometimes with long dispute resolution periods that follow. The risk of such action would be a high degree of uncertainty, and a high risk of inadvertent non-compliance by otherwise legitimate and responsible actors.

The Government have instead accepted Rycroft’s recommendation in full, and we are implementing a cap of £100,000 on donations from overseas electors—the low end of the range suggested. We believe that this strikes the right balance between ensuring the integrity of our system and allowing for legitimate participation. I hope I have reassured the Committee that the Government acknowledge the risk, and that we have taken targeted, proportionate and urgent action to address it.

New clause 51 seeks to require the Electoral Commission and National Crime Agency to produce and publish an annual report on the risks of foreign interference in political donations, and on the adequacy of existing systems to address those risks. The Government fully recognise the serious concerns about foreign interference in our democracy, and we share the intention to protect the integrity of the political finance system.

The commission and the NCA already have the freedom to publish reports, reviews and assessments on any theme within their responsibilities, as they judge appropriate. Both organisations take decisions on when and how to report based on operational need, emerging risks and the evidence available to them. We would not want to legislate a fixed annual requirement that could inadvertently restrict their ability to respond to other emerging issues that may demand more urgent or different forms of reporting.

For the Electoral Commission, the new clause would impose a new obligation in an area where the commission does not hold all relevant intelligence required to assess foreign interference threats. The commission already provides transparency on the political finance system within its statutory remit, but it is not a national security body, and it should not be mandated to publicly report on matters beyond its functions.

Our package of reforms already strengthens the electoral framework in a more effective and appropriate way. The new “know your donor” regime will require recipients of significant donations to undertake risk assessments on the origin of the funds, helping them to identify potential foreign or illicit influence at the point a donation is made.

I understand why the Minister is concerned about some of the new clauses, and as I said before, she is right that the Government are trying to tighten up the regime. On her argument that the Electoral Commission does not currently have the responsibilities she outlined, however, does she not agree that there is still a problem with two-way information sharing?

The Minister is absolutely correct to say that the Electoral Commission has the power to access Companies House information and powers under the Economic Crime and Corporate Transparency Act 2023. However, if we look at past examples of registered Chinese Communist party spies giving money to political parties in this House, does she not think it would have been useful if the Labour party, in that case, had known about that via the security services and could have refused the donation? I am not sure whether the Government are filling the hole of two-way information sharing, and that concerns me.

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.

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

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.

The Committee divided: Ayes 3, Noes 10.

Question accordingly negatived.