We can’t have clean politics if politics is awash with dark and dirty money. That’s why MP’s have today tabled the ‘Pandora amendments’ to the Elections Bill to stop millions of pounds pouring into British political parties from the secretive off-shore world of Moneyland. 

Thanks to the Guardian’s courageous reporting of the Pandora Papers, along with Carole Cadwalladr’s forensic exposure of Brexit financiers like Aaron Banks, we now know the staggering scale of generous donors with offshore accounts and fondness for a Brexiteering Tory Party.   

 

Yet right now, Britain is defenceless to stop this flood-tide. It was Carole Cadwalladr’s investigations that helped expose Aaron Bank’s donations to Leave.EU were financed with multi-million pound loans from his Isle of Mann based firm, Rock Holdings. The National Crime Agency eventually dropped its investigation but failed to explain just how the money arrived in Rock Holdings in the first place. Bluntly, where was the fountain-head of cash? Surely we have a right to know? The Electoral Commission was so worried by the NCA’s conclusion that they warned the outcome left them concerned about the ‘apparent weakness’ in the law that risks allowing ‘overseas funds into UK politics.’

 

The warnings are only getting louder. Last month, Chatham House cautioned “Westminster – and the Conservative parliamentary party in particular – may be open to influence from wealthy donors who originate from post-Soviet kleptocracies, and who may retain fealty to these regimes”. Parliament’s Intelligence Select Committee has questioned whether the Electoral Commission has sufficient powers to ensure the security of democratic processes where hostile state threats are involved. ‘[I]f it [the Electoral Commission] is to tackle foreign interference, then it must be given the necessary legislative powers“ the committee concludes. 

 

That’s why a cross-party group of MP’s have tabled our ‘Pandora amendments’ to insist that party donations must come from profits made in the UK, and to establish a new call-in regime that allows the Electoral Commission to investigate suspicious donations on national security grounds. The government has just introduced this regime for investments in critical national infrastructure, so why not ‘investments’ in political parties?  

 

Here's the text of our amendment:

 

Liam Byrne

To move the following Clause—

Restrictions on foreign and foreign-influenced donations

  1. PPERA is amended as follows.
  2. In section 54(1) (circumstances in which party may not accept donation), after paragraph (aa) insert—

“(ab)     the party has not been given a declaration as required by section 54C; or”.

  1. In section 54(2) (permissible donors), in paragraph (b)(ii), for “carries on business in the United Kingdom” substitute—

“satisfies the condition set out in subsection (2ZAA)”.

  1. After section 54(2ZA) insert—

“(2ZAA)        The condition referred to in subsection (2)(b)(ii) is that the company or limited liability partnership’s profits generated and taxable within the United Kingdom over the previous 12 months are greater than the value of the donation given.”

  1. After section 54B (declaration as to whether residence etc condition satisfied), insert—

“54C      Declaration as to whether profit condition is satisfied

  1. A company or limited liability partnership making to a registered party a donation in relation to which the condition set out in section 54(2ZAA) applies must give to the party a written declaration stating whether or not the company or limited liability partnership satisfies that condition.
  2. A declaration under this section must also state the company or limited liability partnership’s full name, address and registration number.
  3. A person who knowingly or recklessly makes a false declaration under this section commits an offence.
  4. The Commission may issue a notice to a person to a person to provide accounts for the purpose of verifying whether a declaration made under this section is accurate.
  5. A person who fails to comply with a notice under subsection (4) commits an offence.
  6. The Secretary of State may by regulations make provision requiring a declaration under this section to be retained for a specified period.
  7. The requirement in subsection (1) does not apply where, by reason of section 71B(1)(b), the entity by whom the donation would be made is a permissible donor in relation to the donation at the time of its receipt by the party.
  8. For the purposes of the following provisions, references in this section to receipt by a registered party should be read instead as follows—
          1. for a relevant donation controlled under Schedule 7, receipt by the regulated donee;
          2. for a relevant donation controlled under Schedule 11, receipt by the recognised third party;
          3. for a relevant donation controlled under Schedule 15, receipt by the permitted participant;
          4. for a relevant donation controlled under Schedule 2A of the Representation of the People Act 1983, receipt by the candidate or the candidate’s election agent.

 

  1. After section 55 (payments etc. which are (or are not) to be treated as donations by permissible donors), insert—

“55A     Donations and national security risk

        1. The Commission may give a notice (“a call-in notice”) if the Commission reasonably suspects that a qualifying donation has given rise to or may give rise to a risk to national security in relation to electoral integrity.
        2. If the Commission decides to give a call-in notice, the notice must be given to—
          1. the person who made the donation,
          2. the party that received the donation,
          3. the Secretary of State, and
          4. such other persons as the Commission considers appropriate.
        3. When assessing whether a donation has given or may give rise to a risk to national security in relation to electoral integrity, Commission must consider the characteristics of the person who made the donation, including—
          1. their sector or sectors of commercial activity or holdings,
          2. their technological capabilities,
          3. any links to entities which may seek to undermine or threaten the interests of the United Kingdom, including the integrity of its elections,
          4. their ultimate controller, or if they can be readily exploited,
          5. whether the acquirer they, or their ultimate controller, has committed, or is linked to, criminal or illicit activities that are related to national security, or activities that have given rise to or may give rise to a risk to national security.
        4. In this section, a “qualifying donation” is a donation of an amount exceeding £25,000.
        5. The Commission may, in relation to the Commission’s functions under this section, issue a notice to a person to—
          1. provide information, or
          2. attend, or
          3. give evidence

as if such a notice was a notice under section 19 or 20 of the National Security and Investment Act 2021.

        1. A person who fails to comply with a notice under subsection (5) commits an offence.
        2. In this section, “assessment period” in relation to a call-in notice under this section has the same meaning as in section 23 of National Security and Investment Act 2021 in relation to a call-in notice under that Act.
        3. The Commission must, before the end of the assessment period in relation to a call-in notice—
          1. make a final order, or
          2. give a final notification to each person to whom the call-in notice was given.
        4. The Commission may, during the assessment period, make a final order if the Commission—
          1. is satisfied, on the balance of probabilities, that the qualifying donation to which the call-in notice applies has given rise to or may give rise to a risk to national security in relation to electoral integrity, and
          2. reasonably considers that the provisions of the order are necessary and proportionate for the purpose of preventing, remedying or mitigating the risk.
        5. During the assessment period, the Commission may make an interim order in relation to a qualifying donation if the Commission reasonably considers that the provisions of the order are necessary and proportionate for the purpose of safeguarding electoral integrity during that period.
        6. An order under subsection (9) or (10) may—
          1. require a donation to be held unspent for a period as may be prescribed in the order,
          2. require a donation to be refused,
          3. require a donation to be returned, or
          4. prohibit the acceptance of any donation by any registered party from the person who made the donation to which the call-in-notice applies, or from a prescribed person or category of person connected to that person, for a period as may be prescribed in the order.
        7. The Commission must keep each order under review and may vary or revoke it.”

 

  1. In section 156 (orders and regulations)—
    1. in subsection (3), before paragraph (a) insert—

“(za)      any order under section 55A;”;

    1.  after subsection (4D) insert—

“(4E)     Subsection (2) does not apply to regulations under section 54C and regulations may not be made under that section unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.”

  1. In Schedule 20 (penalties), at the appropriate places insert the following entries—
    1. “Section 54C (making a false declaration as to whether profit condition is satisfied or failing to provide accounts)

On summary conviction in England and Wales or Scotland: statutory maximum or 12 months

 

On summary conviction in Northern Ireland: statutory maximum or 6 months

 

On indictment: fine or 1 year”.

    1. “Section 55A(6) (failure to comply with a national security call-in notice)

On summary conviction in England and Wales or Scotland: statutory maximum or 12 months

 

On summary conviction in Northern Ireland: statutory maximum or 6 months

 

On indictment: fine or 1 year”.

Member’s explanatory statement

This new clause is intended to provide safeguards against the risks of foreign influence in UK elections flagged by the Intelligence and Security Select Committee in its report on Russia, ordered to be printed on 21 July 2020 (HC 632).