A Westminster bill to scrap a time limit on donations to political parties from UK citizens living abroad could unleash a new wave of ‘dark money’ into politics, campaigners have warned.
The UK government-backed Overseas Electors Bill would give UK citizens abroad the right to vote and donate to parties without ever having to return to the UK.
Campaign group Unlock Democracy warned that the bill “risks dark money flooding our politics”, which is “increasingly a problem for Scotland”.
Scottish Labour said the UK government had “adopted a dangerous and cavalier approach that will simply undermine credibility in our democracy.” The SNP promised to “challenge any aspect of it which has the potential to further undermine the integrity of democratic life.”
The Electoral Reform Society (ERS) said that while they thought the bill to be well-intentioned, it could allow “tax exiles and shell companies” to “exert a disproportionate sway over our politics”.
They are urging for a significant update to the UK’s “outdated, loophole-ridden electoral laws”.
If passed, the Overseas Electors Bill would remove the current 15-year time limit that UK citizens living outwith the UK can register as overseas electors.
A debate surrounding the bill, which reached its third and final reading in the House of Commons on 22 March, was not completed after time ran out due to dozens of tabled amendments.
Following the bill’s second reading in the House of Commons in February, UK election watchdog, The Electoral Commission, published a briefing which urged MPs to consider the impact of the bill on ensuring lawful donations.
“Changes to the eligibility of overseas voters will present practical difficulties for political parties and campaigners to determine the permissibility of donations, and for the Electoral Commission to take enforcement action where the rules have been breached”, the briefing said.
Increasing the number of overseas voters would “add strain to already stretched resources of electoral administrators in terms of volume and complexity of registration applications, requiring verification of identities and eligibility of applicants who have not lived in the UK for some time”, it added.
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A spokeswoman told The Ferret that the Electoral Commission still holds the view that “this issue is one that MPs should consider”.
The briefing noted that until 2015, the number of registered overseas voters “had never risen above 35,000”. However, the number swelled to a record 285,000 by the time of the 2017 UK General Election.
This rise was attributed to overseas voter registration campaigns in the run up to 2015 and 2017 General Elections, and the 2016 Brexit referendum.
Dark money ‘increasingly a problem for Scotland’
Alexandra Runswick, Director of Unlock Democracy said that electoral law has been proven to be “woefully inadequate in the UK” due to “large numbers of loopholes that allow people to buy access and influence our politics”.
She highlighted that “dark money is increasingly a problem for Scotland as well, as the investigation into Scottish Unionist Association Trust (SUAT) shows.”
Runswick stressed that if the UK’s “outdated and inadequate electoral laws” are not reformed, “we risk our democracy being for sale”.
The ERS are working alongside FairVote, which also advocates electoral reform, and Labour MP Stephen Kinnock to launch a new All-Party Parliamentary Group on Electoral Campaigning Transparency in Westminster.
Earlier in March, the ERS urged the government to close a major loophole which allowed ‘non-dom’ donors, many who are domiciled abroad for tax purposes, to channel money into UK politics. The group stressed that while a law was passed to close the loophole in 2009, the provision was never implemented by ministers.
An investigation by The Times found that millions of pounds has been donated to UK parties by ‘tax exiles’ in recent years, with the Conservatives raising more than £1 million from UK citizens living in tax havens and their UK companies ahead of the 2017 general election.
These donors were permitted due to donate legally because they moved overseas in the last 15 years and were registered to vote in the UK, or because the donations came from their UK companies.
Darren Hughes, chief executive of the ERS warned against scrapping the 15-year limit. He said that “unscrupulous states will be looking for loopholes to steer our politics, meaning we should pause before opening the floodgates further.”
He urged the government to “carefully consider the risks of allowing unfettered donations from abroad”, highlighting that UK campaign finance laws “have not been updated since 2000” despite “mounting evidence that our elections are potentially exposed to interference.”
Hughes added: “We need clear, consistent principles for the funding of our parties in the modern age. Our parliament and parties should not be available to the highest bidders around the world.”
The SNP promised to scrutinise the bill at Westminster “and seek to challenge any aspect of it which has the potential to further undermine the integrity of democratic life.”
SNP MPs “have been at the forefront of challenging the infiltration of our democracy by dark money”, said a party spokesperson.
“We must all of us must be constantly vigilant of any measures that could undermine the basic principle that every election and referendum must be free and fair.”
Scottish Labour said that by backing the Overseas Electors Bill, the UK government had “adopted a dangerous and cavalier approach that will simply undermine credibility in our democracy.”
Labour’s spokesperson added: “The government claim that they are committed to building a safe and secure democracy, yet this bill carries with it many loopholes which could be taken advantage of by determined individuals wishing to unduly influence our elections”.
