Urgent review into foreign financial interference in UK politics
An independent review, led by Philip Rycroft, into foreign financial interference in UK politics has been commissioned by the government.
- Independent review launched in response to shocking case of former MEP Nathan Gill
- Former Permanent Secretary Philip Rycroft will assess finance and bribery rules and how to reduce risk of foreign interference
- Builds on new rules set out in Elections Strategy to guard against foreign political interference
Further work to tackle the scourge of foreign financial interference in UK politics and protect our democracy has been announced today.
An independent review, led by former DExEU Permanent Secretary Philip Rycroft, into foreign financial interference in the UK’s political and electoral systems has been commissioned by the government.
Widely respected, Mr Rycroft brings extensive experience from across government, including leading the UK Governance Group, which had responsibility for constitutional and electoral affairs, and three years as Director General in the Deputy Prime Minister’s Office.
The review, which builds on the major reforms announced in the Elections Strategy in July is a response to the evolving threat posed by political interference to British democracy, including the shocking cases of former MEP Nathan Gill, and Christine Lee, the UK-based lawyer identified as working covertly on behalf of the Chinese Communist Party.
It also follows the National Protective Security Authority (NPSA) taking the unprecedented step of publishing guidance in October on how members of Parliament and their staff can protect themselves from foreign states and its proxies in relation to espionage and foreign interference.
The review will build on the launch last month of the Counter Political Interference and Espionage Action Plan to disrupt and deter spying from states. Announced by Security Minister Dan Jarvis, the plan will see; the intelligence services deliver security briefings for political parties and issue new guidance to election candidates to help them recognise, resist and report suspicious activity; work with professional networking sites to make them a more hostile operating environment for spies; and work to tighten rules on political donations through a new Elections Bill.
The review will provide an in-depth assessment of the current financial rules and safeguards and offer recommendations to further mitigate risks from foreign political interference.
Mr Gill was convicted last month and sentenced to 10-and-a-half years in prison for accepting bribes to promote pro-Russian narratives.
The case has shone a light on potential vulnerability in the political and electoral system, highlighting the need for urgent action through the independent review.
Mr Rycroft’s report, which will be sent to the Housing Secretary and Security Minister at the end of March, will focus on the effectiveness of the UK’s political finance laws, as well as the safeguards in place to protect our democracy from illicit money from abroad, including cryptocurrencies. It will also examine the rules governing the constitution and regulation of political parties and the Electoral Commission’s enforcement powers, as well as explore the role of the current checks and balances in the system.
As outlined in a statement to the House today, Housing Secretary Steve Reed said:
“Following discussions with ministerial colleagues, I have today ordered an independent review into foreign financial interference in UK politics.
“This will be led by the former Permanent Secretary Philip Rycroft, reporting both to me as Secretary of State responsible for elections, and to the Minister of State for Security, as the Chair of the Defending Democracy Taskforce.
“The facts are clear. A British politician took bribes to further the interests of the Russian regime, a regime which forcefully deported vulnerable Ukrainian children and killed a British citizen on British soil using a deadly nerve agent.
“This conduct is a stain on our democracy. The independent review will work to remove that stain.”
Security Minister Dan Jarvis said:
“This independent review will help to strengthen our democracy against covert attempts to interfere with our sovereign affairs.
“It will rigorously test the financial safeguards we currently have in place and ensure we have all the tools necessary to disrupt and deter threats.
“Protecting national security is our first duty and we will not tolerate those who trade our national interest for personal gain.”
The independent review builds on decisive government action already taken to modernise UK democracy, including tougher new rules to guard against foreign political interference.
As set out in the Elections Strategy in July, a major loophole allowing foreign donors to influence political parties via ‘shell companies’ will be closed. The government is also introducing stronger requirements on unincorporated associations, greater due diligence on those receiving significant donations under a new ‘know your donor’ framework, and requirements for donors to declare benefits or sources of funding connected to their donation. Together these will tackle foreign interference and protect UK politics from those who attempt to undermine it.
Further details on the forthcoming reforms will be set out through an elections and democracy bill, putting in place the legislation for the biggest change to UK democracy in a generation.
The findings of the independent review will inform the bill, due to be brought forward during this Parliament.
Further information
While the review will consider recent cases, it will focus on contemporary events and threats and not consider previous allegations over interference in the Brexit referendum.
On 17 July, the Government published Restoring trust in our democracy: Our strategy for modern and secure elections. The Strategy sets out major reforms to UK democracy. This includes tough new rules on political finance, including:
- Ensuring that in the future, ‘shell companies’ will not be permitted to make political donations to UK political parties. This will end the status quo, where a new company registered today, owned by anyone, funded from anywhere, without even a single day of trade, can donate and have influence in UK politics.
- The introduction of ‘Know your Donor’ checks, which will increase scrutiny of donations, requiring recipients to conduct enhanced checks to decrease the risk of illegitimate donations entering our system, guarding against foreign interference. This will close loopholes, reinforce our democracy and protect our citizens from those who seek to undermine and harm our society.
- Requirements for donors to declare benefits or sources of funding connected to their donation, and to be liable for criminal prosecution for false declaration.
- Unincorporated associations will no longer be able to make significant campaign contributions without undergoing proper checks and disclosing the source of their funding.
- New powers to allow the Electoral Commission to take action and enforce heavier fines of up to £500,000 on those who breach political finance rules.