UK’s Politics Now Wide Open to Foreign Donations, Peers Warn, as Government Scraps Time Limit on Brits’ Donations from Abroad
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The floodgates have been opened to foreign interference in British democracy, peers have warned, as ministers pushed through the extension of votes - and donations - for life for Brits who live abroad.
The Government has just extended voting and political donation rights to British citizens living abroad, irrespective of how long they have been away from the UK. It was a manifesto pledge from the Conservatives in 2019, but critics have noted there are few checks to ensure that the sources of donations from abroad can be vetted.
This move has sparked a heated debate about the integrity of the UK's democratic process, particularly in light of the lack of checks on political donations from abroad.
On Tuesday, Byline Times covered a damning new report finding that the UK Government is “almost certain that Russian actors sought to interfere in the 2019 general election”.
The Joint Committee on the National Security Strategy, comprising MPs and peers from both Houses of Parliament, said it was alarmed that attempts to interfere may be made in the next general election – with no proper protection for politicians and political parties – and have sought an urgent meeting with the National Cyber Security Centre to discuss the matter.
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In the debate on changes to the Representation of the People (Overseas Electors Amendment) Regulations on Tuesday night (12 December), Minister Baroness Penn, representing the Government, argued that overseas electors should be considered an integral part of the democracy and have the same rights as other citizens, including making political donations.
But Labour’s Lord Khan, supported by a majority in the House, warned the changes could "dangerously weaken" restrictions on overseas political donations and allow more foreign money to influence British politics.
With some 30 seats in the last general election decided by fewer than 1,000 votes, even a small number of overseas votes could swing results. And the new registration rules, which allow any UK voter to attest to the identity and past location of an overseas voter, were seen as potentially vulnerable to manipulation. This loophole, critics argue, could be exploited by those wishing to influence elections in specific seats by claiming they lived in swing seats some decades ago.
Bungs from Moscow
Under current rules, political donors who contribute more than £500 must be on the electoral register. The removal of the 15-year limit, however, might allow individuals with minimal connections to the UK, possibly from states hostile to Britain, to exert significant influence through financial contributions, opposition peers warned.
And Lord Khan noted that Brits who live in Russia and haven’t returned to the UK for decades could now donate vast sums from Moscow to political parties here.
“It is beyond belief that the Government [is] seeking to risk opening our system at such a critical time for our world. What would a political party do if, for instance, it were offered a donation of £50,000 by somebody who lives and works in Moscow today?” Lord Khan said.
The Labour front bench, represented by Lord Khan, as well as Liberal Democrats stressed that this could open the door to manipulation by hostile foreign actors.
There is no single body responsible for investigating the sources of donations, and donations made by Brits living abroad for decades will likely be treated the same as any other - rather than as ‘foreign’ donations which are theoretically illegal in the UK.
Lib Dem peer Lord Rennard was particularly concerned about the changes, arguing: “The absence of any cap on the size of donations will no doubt encourage more donations of, say, £5 million-plus to come from people whose real interests are not in this country.
“Why should a billionaire tax exile be able to fund a political party in the UK, and who knows where their money really comes from?”
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He added that the Government has “clipped the wings” of the previously independent Electoral Commission through the Elections Act 2022, and stripped it of the ability to launch criminal investigations into election finance laws.
There is also doubt over how fines can be levied to Brits abroad who are abusing the new rules.
“Political parties themselves have very little capacity to scrutinise overseas bank accounts, or to inspect the accounts of companies operating overseas, even if they want to. Earlier this year, the Government rejected an amendment to the then National Security Bill which would have insisted on greater scrutiny of the original sources of donations to parties. I wonder why?” Lord Rennard asked.
The chair of the Intelligence and Security Committee, Julian Lewis, earlier this year backed tougher checks, noting that “the UK has clearly welcomed Russian money, including in the political sphere … We must protect against covert, foreign state-backed financial donations if we are to defend our democratic institutions from harmful interference and influence”
However, the Government voted against tougher checks by parties on sources of donations. “I think perhaps we should be told [why]” Lord Rennard said.
Lord Rennard suggested alternative models, such as overseas constituencies similar to those in France and Italy, to better represent citizens living abroad and avoid swing seat results being changed by those with little connection to the UK, as well as beefed up investigatory powers for the Electoral Commission and National Crime Agency.
Last month, the Government announced an increase in national party spending limits of 80%, allowing a party to spend up to £35 million in a general election year. The Conservatives are currently out-fundraising Labour by millions of pounds per quarter.
But Boris Johnson’s party spent just £16 million on his successful election campaign in 2019. “The reason for the new limits must in part be to allow for major new donations from abroad,” Lord Rennard said.
Lord Anderson of Swansea (Lab) also pointed out that the slogan of the Boston Tea Party which triggered the American war of independence was: “No taxation without representation”.
“What we have in this case is clearly representation without taxation, as people can have very vestigial links,” the Welsh peer said.
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Lord Anderson added that the idea of fining Brits abroad who breach election law - for example, by falsely claiming to have lived in a certain seat when in the UK - is “absurd”.
“How can any fines be enforced on someone who lives a good distance abroad? This is just window dressing; it is a spurious suggestion. What is the real motive of the Government in pressing this?..It is not the advance of democracy; instead, it gives the opportunity for many people to interfere in our elections.”
And he questioned whether the Government expects wealthy donors abroad to “suddenly surface” as a result of the proposals. “In their dying days, this Government have brought forward these proposals. My hope is that an incoming Labour Government will speedily reverse them,” the Labour peer said.
In theory, someone could have lived abroad for 50 years, with little evidence of where they used to vote, and a friend could vouch that they were telling the truth about their eligibility to cast their vote in a marginal seat and to make unlimited donations to a political party. The same “vouching” rules do not apply to voter identification, where the Government rejected people being able to “attest” for someone’s identity if they lack ID at the polling station.
There are an estimated 3.5 million British overseas citizens, amounting to roughly 5,500 per constituency, if they all registered. “If we assume that no more than 50% register, that is still well over 2,000 per constituency,” Lib Dem Lord Wallace said. Currently, around one million Brits abroad are eligible to vote (having lived abroad for up to 15 years), though that is now expected to grow to encompass nearly all the 3.5 million.
Lord Khan noted in the debate there were “already clear evidence of attempts by [foreign state] actors to influence UK democracy.”
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One of the largest donations to the Conservative Party this year, of £5 million, came from someone whose financial interests are centred in Dubai, one of the main offshore centres for Russian and Chinese money, Lord Wallace noted. Another of the largest such donations, of £2 million, came from a Tory-backer whose financial and commercial interests are in Indonesia and Thailand.
The Government appears to have noted the threat of foreign interference, with Penny Mordaunt, Leader of the House of Commons, writing to Tom Tugendhat, Security Minister, in September to call “for a new intelligence-sharing framework between the security services and the UK’s main parties”.
He added: “Some government insiders fear parties have too little access to sensitive information about potential donors.” Mordaunt was reportedly working with officials to identify new mechanisms for data sharing between intelligence officials and political parties. There is no allegation the rules were broken.
The Electoral Commission does not have powers to investigate either registration or the source of donations in other countries, Lords heard.
Lord Khan’s amendment to the Government motion, expressing “regret” over the heightened risk of foreign interference, passed after crossbenchers, Lib Dems and Labour peers got behind it. However, the changes as a whole are now law.
Baroness Penn, representing the Government, defended the move, saying, "Overseas electors are important participants in our democracy, and it is only right that they should be able to make donations to political parties in Great Britain in the same way as other citizens registered on the electoral roll in Great Britain…
“UK electoral law sets out a stringent regime of donations controls to ensure that only those with a legitimate interest in UK elections can make political donations, and that political donations are transparent. The same transparency measures will apply to those who are empowered to vote and donate through this expansion of the franchise, as applies to existing voters. Money from a foreign or unknown source is illegal.”
During the passage of the then National Security Bill, the Government committed to undertake a consultation on enhanced information sharing between parties, regulators and police to help “identify and mitigate” foreign interference in political donations. The Government will lay a report on that before Parliament by the end of next year, Baroness Penn said.
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