Further consideration of Bill, as amended in the Public Bill Committee
[Relevant documents: the Eleventh Report of the Treasury Committee of Session 2021-22, Economic crime, HC 145; and theGovernment Response, Session 2021-22, HC 1261; the oral evidence taken before the Business, Energy and Industrial Strategy Committee on 8 November 2022, on Fraudulent company registrations: Economic Crime and Corporate Transparency Bill , HC 862; the letter from UK Finance to the Chair of the Business, Energy and Industrial Strategy Committee relatingto Fraudulent company registrations and the Economic Crime and Corporate Transparency Bill, dated 21December 2022; and the letter from the Minister for Business, Energy and Corporate Responsibility to the Chair of the Business,Energy and Industrial Strategy Committee relating to the Economic Crime and Corporate TransparencyBill, dated 28 December 2022.]
New Clause 14
Approved regulators: information powers relating to economic crime
“(1) The Legal Services Act 2007 is amended as follows.
(2) After section 111 insert—
“Part 5A: Approved regulators: information powers
111A The Law Society’s information powers relating to economic crime
111A The Law Society’s information powers relating to economic crime
(1) The Law Society may, by notice, require a person falling within subsection (3) to—
(a) provide information, or information of a description, specified in the notice;
(b) produce documents, or documents of a description, specified in the notice.
(2) The Law Society may only exercise the power in subsection (1) in relation to information or documents which the Law Society considers it necessary or expedient to have for the purposes of, or in connection with, the performance of its regulatory functions for purposes relating to the prevention or detection of economic crime.
(3) The persons are—
(a) a solicitor;
(b) an employee of a solicitor;
(c) a body recognised under section 9 of the Administration of Justice Act 1985;
(d) an employee or manager of, or person with an interest in, such a body;
(e) a licensed body;
(f) a manager or employee of a licensed body;
(g) a non-authorised person who has an interest or an indirect interest, or holds a material interest (within the meaning of Part 5 of this Act), in a licensed body;
(h) a person who was, but is no longer, of a description mentioned within any of paragraphs (a) to (g).
(4) A notice under subsection (1)—
(a) may specify the manner and form in which the information is to be provided or document produced;
(b) must specify the period within which the information is to be provided or document produced;
(c) may require the information to be provided, or document to be produced, to the Law Society or to a person specified in the notice.
(5) The Law Society may pay to any person such reasonable costs as may be incurred by that person in connection with the provision of any information, or production of any document, by that person pursuant to a notice under subsection (1).
(6) The Law Society, or a person specified under subsection (4)(c) in a notice, may take copies of or extracts from a document produced pursuant to a notice under subsection (1).
(7) In this section “economic crime” has the meaning given by section 179(1) of the Economic Crime and Corporate Transparency Act 2023.
111B Enforcement of information powers relating to economic crime
(1) If a person refuses or otherwise fails to comply with a notice under section 111A(1), the Law Society may apply to the High Court for an order requiring the person to comply with the notice or with such directions for the like purpose as may be contained in the order.
(2) On an application under subsection (1), the High Court may order a person other than the person to whom the notice was given to provide information or produce documents specified in the notice, if the High Court is satisfied that there is reason to suspect that the information or documents have come into the possession or custody or under the control of that other person.
(3) Section 111A(4) applies in relation to an order under subsection (2) as it applies in relation to a notice under section 111A(1).
(4) An order under this section may direct the Law Society to pay such reasonable costs as may be incurred by a person in connection with the provision of any information, or production of any document, by that person pursuant to the order.
(5) A person may take copies of or extracts from a document produced to them pursuant to an order under this section.
111C Provision of information relating to economic crime by other persons
(1) The Law Society may apply to the High Court for an order requiring a person who does not fall within section 111A(3) to—
(a) provide information, or information of a description, specified in the order, or
(b) produce documents, or documents of a description, specified in the order.
(2) The High Court may make an order under this section only if it is satisfied—
(a) that it is likely that the information or document is in the possession or custody of, or under the control of, the person, and
(b) that it is necessary or expedient for the Law Society to have the information or document for the purposes of, or in connection with, the performance of its regulatory functions for purposes relating to the prevention or detection of economic crime.
(3) Section 111A(4) applies in relation to an order under this section as it applies in relation to a notice under section 111A(1).
(4) An order under this section may direct the Law Society to pay such reasonable costs as may be incurred by a person in connection with the provision of any information, or production of any document, by that person pursuant to the order.
(5) A person may take copies of or extracts from a document produced to them pursuant to an order under this section.
(6) In this section “economic crime” has the meaning given by section 179(1) of the Economic Crime and Corporate Transparency Act 2023.
Other approved regulators: information powers relating to economic crime
111D Order to confer information powers on other approved regulators
(1) The Lord Chancellor may by order amend this Part so as to—
(a) provide for sections 111A to 111C to apply in relation to an approved regulator other than the Law Society as they apply in relation to the Law Society, and
(b) specify the persons to whom notices under section 111A(1) may be given by that approved regulator.
(2) The Lord Chancellor may make an order under this section in relation to an approved regulator only if—
(a) the Board has made a recommendation in accordance with section 111E in relation to that approved regulator, and
(b) the persons specified in the order to whom notices under section 111A(1) may be given by that approved regulator are the same as those persons specified in the recommendation.
111E The Board’s power to recommend orders under section 111D
(1) The Board may recommend to the Lord Chancellor that the Lord Chancellor make an order under section 111D in relation to an approved regulator.
(2) A recommendation must specify the persons to whom the approved regulator should be able to give notices under section 111A(1).
(3) A recommendation may only be made with the consent of the approved regulator.
(4) Before making a recommendation under this section, the Board must publish a draft of the proposed recommendation.
(5) The draft must be accompanied by a notice which states that representations about the proposed recommendation may be made to the Board within a specified period.
(6) Before making the recommendation, the Board must have regard to any representations duly made.”
(3) In section 206 (parliamentary control of orders and regulations), in subsection (4), after paragraph (n) insert—
“(na) section 111D (order to confer information powers on other approved regulators);”.”—(Tom Tugendhat.)
This new clause would allow the Law Society and any other approved regulators specified by the Lord Chancellor to obtain information or documents for exercising their regulatory functions for purposes relating to the prevention and detection of economic crime.
With this it will be convenient to discuss the following:
New clause 1—Disclosure of information in the public interest likely to be relevant to the investigation of economic crime—
‘(1) It is a defence to an action based on the disclosure or publication of information for the defendant to show that—
(a) the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime, and
(b) the defendant reasonably believed that the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime.
(2) Subject to subsection (3), in determining whether the defendant has shown the matters mentioned in subsection (1), the court must have regard to all the circumstances of the case.
(3) In determining whether it was reasonable for the defendant to believe that the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime, the court must make such allowance for editorial judgement as it considers appropriate.
(4) For the avoidance of doubt, the defence under this section may be relied upon irrespective of whether the statement complained of is a statement of fact or a statement of opinion.”
New clause 2—Economic crime: power to strike out statement of case for abuse of process—
The court may strike out the whole or part of any statement of case which can be reasonably understood as having the purpose of concealing, or preventing disclosure or publication of, any information likely to be relevant to the investigation of an economic crime.”
New clause 3—Home Office review of the Tier 1 (Investor) visa scheme: publication—
Within a day of the passage of this Act, the Secretary of State must publish in full the findings of the Home Office review of the Tier 1 (Investor) visa scheme which relate to economic crime.”
It is a pleasure to see you in your place, Mr Deputy Speaker, and it is the first time I have had the privilege of speaking under your chairmanship on these matters. It is also a pleasure to see so many of the usual faces on this matter. Many of us have gone over these questions in Committee and, actually, in the many years beforehand in various different ways, so it is an enormous privilege to be here. It is particularly a privilege to be speaking after the Minister my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) did such a brilliant job yesterday. I am only picking up where he left off, so I am afraid the second act will not be nearly as compelling as the first.
All those who participated in the Bill Committee gave enormous insights into various different perceptions of how we should be thinking about economic crime and corporate transparency. We have had many interesting debates, and I thank enormously those who have taken part in the various different ways. The fact that we have a two-day debate on Report speaks pretty clearly about the significant size and complexity of this Bill.
Yesterday, we debated parts 1 to 3, which cover Companies House reform and corporate transparency. Today, we turn our attention to parts 4 to 6. The clauses in part 4 create new powers that allow law enforcement to more quickly and easily seize and recover cryptoassets. The creation of the civil forfeiture power for cryptoassets will mitigate the risk posed by those who cannot be criminally prosecuted, but who use their funds to further criminality or for terrorist purposes. This did not prove to be particularly contentious in Committee.
In part 5 of the Bill, we are making it easier for businesses to share information more effectively with each other and with law enforcement to prevent and detect economic crime. We are also creating new exemptions to reduce unnecessary reporting by businesses carrying out transactions on behalf of their customers. We are also giving frontline legal services regulators enhanced enforcement powers to support them as they uphold the economic crime agenda within their regulated community.
On the SRA, will the Bill address the strategic lawsuits against public participation that we have been discussing for the last couple of days, or does it purely concern money laundering and other offences unrelated to SLAPPs?
The Bill is concerned only with economic crime and corporate transparency, and the regulations will cover only that. Many Ministers, including the Lord Chancellor, have spoken about SLAPPs—I will touch on them later—but the reality is that they require a separate jurisdiction and a separate Bill.
Government amendments 48 and 49 concern information sharing. In Committee, Opposition Members rightly pointed out that our proposed definition of large accountancy firms did not include insolvency practitioners, auditors and tax advisers. I thank them for that. These amendments will rectify that omission by expanding the scope of the indirect information sharing clauses to include those sectors.
In addition to the Government amendments, several other amendments on a broad range of topics will be debated today. As in Committee, I look forward to what I anticipate will be a lively but extremely well-considered debate. The contributions of all hon. Members who participated in earlier debates have helped to shape the Bill into an effective tool to tackle illicit finance and ensure that the UK is a great place to do legitimate business.
I know that there are places where hon. Members would like the Bill to go further and do more. Indeed, I am as keen as many of them to solve some of the outstanding problems that we all wish to address, but we need to ensure that those ambitions are delivered in the most effective way and that we use the appropriate legislative vehicles to ensure that they have the desired outcome. Limiting the scope to just economic crime can, in several cases, create more problems than it solves, and I assure right hon. and hon. Members that I have strenuously tested what can be effectively delivered within the scope of the Bill.
Will the Minister expand on that interesting point? How would any of the amendments on SLAPPs, a duty to prevent or seizing assets limit what could be done in future?
The question is at what stage do we bring a Bill forward—do we wait for it to be perfect or do we bring forward what we can get at a certain point? The right hon. Lady raises some interesting points. She knows my views on SLAPPS; indeed, in a former incarnation, I may have expressed them extremely clearly. She knows that we share views on asset seizures too. I should point out, however, that no common law jurisdiction has successfully solved the question of asset seizures, although many of us have tried and, indeed, some of us are in conversation with others to try to work out ways of doing it—forfeiture and seizure are not quite the same thing.
I will give way; I should have known that I was lining that up.
Mr Djanogly
Yes, because my right hon. Friend touched on asset seizures and tempted me. Of course, Canada has enacted an Act of Parliament that provides for freezing orders to be translated into seizing orders at the request of the Attorney General of Canada.
My hon. Friend is absolutely right, but he is also no doubt aware that there is much discussion in the Canadian legal community about whether those orders will be challenged in different ways and how exactly they will work. There is still a serious debate about the nature of translating from forfeiture to seizure.
Mr Djanogly
My right hon. Friend is generous in giving way again. All this law is new: our unexplained wealth orders were new, and they have been questioned in the courts, so that is not the question. The question is whether we have the guts to stand up and move on this issue, as the whole western world wants to see.
My hon. Friend is absolutely right, but I note that some hon. Members cheering would also cheer the provisions of the European convention on human rights that guarantee the right to private property and many of the areas that cause the difficulties that the UK has and Canada does not.
I do not deny that there is an enormous question for debate here and that many hon. Members would like to move quickly to seizure on many areas, but sadly, that may take a bit longer. One thing on which we all agree is that the UK’s place as a rule-of-law jurisdiction and as a home for justice, not just to ourselves but to many others around the world, is essential to our prosperity and to liberties around the world. It is therefore important to ensure that we correctly transfer from forfeiture to seizure, and recognise the rights and limits that we should respect.
I salute the Minister’s leadership on much of this agenda when he was a brilliant Chair of the Foreign Affairs Committee. He will not, however, want to go down in history as the Minister for mañana. In his responses to the hon. Member for Huntingdon (Mr Djanogly), he has said that the timing is not right and we must wait for future Bills. Can he put our minds at rest and give us a sense of when we might expect a Bill to come forward to address the concerns of the hon. Member for Huntingdon?
The right hon. Gentleman is extremely kind about my former work and, typically, slightly less so about my current employ. He can be assured that, no doubt, it will be temporary, as it is for all occupants.
That matter has seized my attention and has been of some interest to me in further discussions in different areas. I will not put a time on it, because it is not my ministerial responsibility; the right hon. Gentleman will know from his time in Government that talking across other Ministers’ briefs does not always help to advance the case. I assure him, however, that it has come up frequently in conversation with an intent to bring something forward. As I said, the Lord Chancellor has spoken about it to highlight that it is an area where various elements of change are necessary, so I look forward to hearing the proposals as they come forward. I certainly do not think that the matter can wait. We have sadly seen SLAPPs used against such inspiring examples as Eliot Higgins and Catherine Belton, who have stood up for justice in this country and around the world.
Despite all the areas that we could have gone into, and would like to go into at a different time, the Bill is closely focused on economic crime and corporate transparency for the purpose of passing a series of measures that are essential to ensure that we keep our country safe and our economic jurisdictions clean.
We on the Opposition Benches have been clear that the Bill is long overdue. It has been painful to witness London becoming the world’s laundromat for dirty money with the National Crime Agency calculating that £100 billion of illicit finance flows through the UK every single year. Add to that the Government’s abject failure to properly scrutinise the issuing of golden visas to Russian oligarchs—seven now-sanctioned Russians were awarded such visas even after the invasion of Crimea in 2014—and we see a pattern emerging of Ministers failing to treat economic crime with the seriousness it deserves.
This legislation, which is finally wending its way towards the statute book five years after it was promised—and, let us face it, was only brought forward in response to Putin’s invasion—is a step in the right direction that we on these Benches support. However, it still falls short in a number of areas, as I will cover in my remarks.
On golden visas, I think the hon. Member will agree that the response we have had so far is unpalatable. I look forward to speaking to new clause 3, which I hope we will be able to divide on later, so that we can get to the bottom of that.
Does the hon. Member agree that the whole point of sanctions is that they are actually adhered to and that the Government do not in any way allow them and their effect to be diluted? There is the case of current Conservative party treasurer Mohamed Mansour, who owns a company called Unatrac that sells Caterpillar equipment to Russia in contravention, it would seem, of one of the sanctions we have set. Is he aware of that case, and what would he urge the Government to do about it?
I thank the hon. Lady for her intervention. The new clause on golden visas that she mentioned is spot-on, and we are very happy to support it. I am afraid there are a number of examples of the role Russian money is playing in the Conservative party, including the one she mentioned. I do think that that has acted as a constraint on the kind of action the Government could and should have been taking for many years now, and I really hope Ministers will start to wake up to that reality.
The public need to know that the Government and parliamentarians are taking this issue very seriously indeed, and I am proud of the way that Labour Front Benchers—including my hon. Friend the Member for Feltham and Heston (Seema Malhotra), who is alongside me on the Front Bench—and others have sought to work constructively with the Government to improve this legislation. Members of the Bill Committee considered the Government’s proposals in great detail during 19 sittings, covering hundreds of pages of legislation and amendments. Both the quality and the tone of the debates were of the highest standard, reflecting not just the widespread interest in these issues across the House, but the depth of knowledge and expertise in a wide range of areas. In that regard, I must pay tribute to my right hon. Friends the Members for Barking (Dame Margaret Hodge) and for Birmingham, Hodge Hill (Liam Byrne). The Committee benefited greatly from their thoughtful and well-informed contributions, which I have no doubt will be shared more widely in this debate.
It is therefore profoundly disappointing that, in Committee, there was little in the way of movement from the Government, even in areas where they struggled to find fault with our amendments and new clauses. While I welcome the constructive tone that both Ministers brought to our debates in Committee, the disappointing fact remains that every single effort by Opposition parties to strengthen the Bill met with resistance from Ministers, and every Opposition amendment pressed to a vote was defeated. As a result, the Committee stage amounted to little more than a litany of missed opportunities, forcing us to return to these arguments once again in this debate, and no doubt we will have to do so during the Bill’s remaining stages.
I thank the shadow Minister for giving way—I have an enormous amount of time for an awful lot of what he does and says. I want to challenge him a little on whether these potential changes about the duty to prevent might be more effective and game changing than he is describing, because not only should they reduce the burden of criminality, which is reducing our economic performance and our productivity as a nation, but they could be quite deregulatory. They sweep away a raft of largely ineffective and deeply costly measures, and replace them with something that is simpler and easier to comply with, but more effective at the same time.
The hon. Gentleman speaks with great knowledge on this issue, and he is right that we need a streamlined, simple approach that clearly places responsibility and liability where they need to be. That is smart regulation. Over-complicating regulation is precisely where the lawyers, fixers and those who so often facilitate this illicit activity find their niche, and how they exploit it is their leverage. Let us make this a game-changing Bill, along the lines that he suggests, and let us hope that the Government’s scale of ambition matches his and that of other hon. Members across the Chamber.
As far as the record of this Government goes, the evidence is hardly encouraging, with just 168 prosecutions and five convictions brought against companies by the Serious Fraud Office between 2016 and 2021, and increasing reliance on US-style deferred prosecution agreements that fall well short of providing full accountability for corporate criminal behaviour. I pay tribute to the work of my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), who has set out detailed plans to reverse the SFO’s loss of senior staff and expertise, transform the agency’s approach to prosecutions, and allow more of the proceeds of successful cases to be retained by the SFO, as part of a renewed crackdown on corporate malfeasance under the next Labour Government. Labour’s blueprint is there, and Labour Members would be delighted to see the Government adopt it when addressing this issue.
Other new clauses tabled by Back-Bench Members address additional areas that the Government could and should address, but that unfortunately they have not addressed in the Bill. New clause 23, tabled by the hon. Member for Huntingdon (Mr Djanogly) is one example. Its call for a review of the need for further regulations
“to prevent the circulation in the UK economy of the proceeds of economic crime controlled by individuals or entities subject to sanctions”
is welcome, as is new clause 25, tabled by the right hon. Member for Stevenage (Stephen McPartland). If I were to raise any slight criticism, it would be that the new clauses fall a little short of what is needed, but Labour supports them nevertheless. Specifically, both new clauses fail to mention the enormous and central role that is played not just by the UK, but by individual Crown dependencies and overseas territories in enabling—and all too often actively facilitating—global flows of illicit finance, and the ill-gotten assets of kleptocrats and crooks.
That issue was addressed in yesterday’s debate by the Opposition in new clause 26 on beneficial ownership registries. The fact that we are still dealing with local administrations in overseas territories that are dragging their feet on the introduction of these registers, while the Government look on in apparent admiration of their supposedly sincere efforts, is deeply frustrating. Labour Members will keep pressing the Government to take the action that we all know is necessary and long overdue.
The other point worth making about reporting requirements of the kind envisaged by new clauses 23, 25, 30, 32, and 39 is that they sometimes amount to asking Ministers to mark their own homework. We should not have to rely on the willingness of future Ministers and Secretaries of State to provide an impartial, balanced view of their own record. For that reason, the Opposition’s new clause 33 calls for the establishment of a joint parliamentary committee on economic crime. The Intelligence and Security Committee provides a useful model, with its special powers to review sensitive or otherwise confidential material, and that is worth the serious consideration of Ministers.
Perhaps the most gaping hole in the Bill, at least in its current form, is the total omission of any measures to provide support and redress for victims of economic crime. To say that that is a missed opportunity understates the issue. Given the scale on which such measures are needed, and the overwhelming weight of evidence about the need for new measures, that gap in the Bill is baffling. The Opposition’s new clause 27 represents the first of many steps that the Government ought to take as a matter of urgency to fill those gaps. It calls for a strategy to be published, setting out a range of specific policies to improve access to justice for victims of economic criminals, both in the UK and internationally.
I am grateful to my hon. Friend for making such a brilliant speech. Among the greatest victims of economic crime right now are the people of Ukraine. One virtue of his own proposal and the amendment tabled by the hon. Member for Huntingdon (Mr Djanogly) is that they propose a shift not just to freezing assets, but to seizing assets and recycling them into the reconstruction of Ukraine. Surely we should legislate for that work now and crack on with it forthwith.
As always, I agree absolutely with my right hon. Friend’s views on the matter. That cannot be beyond the wit of this place or the Government. I know there are legal complications around property and international law, but those are not insuperable. We cannot allow them to be insuperable because, with every day that passes, the people of Ukraine are suffering, and the barbaric acts of Vladimir Putin and his regime are not being held to account in a way that would contribute to the massive reconstruction effort that will be required for Ukraine. It is absolutely right that the person guilty of the crime should pay for the crime and that has to be the fundamental basis of our approach. We need urgency on this in the G20, the G7, and the United Nations. We need Ministers to get a grip of this issue so that we can do justice and deliver for the people of Ukraine, which we must do with great urgency.
New clause 27 is interesting. It is about setting up a fund for compensation of victims of economic crime. We have heard estimates that economic crime costs UK citizens £200 billion to £300 billion a year. How much will this cost and who will pay for it?
The Minister tempts me to write Labour’s manifesto right here at the Dispatch Box. It is an issue of principle: how will we ensure that victims of economic crime are compensated? Clearly, we cannot finalise in the Chamber today the quantum of that amount, but we did raise that in Committee and are open to discussing it with the Government. We hope that they will be open to having that discussion in the fullness of time.
No. This is based on a fund that is generated through fines and through accountability for those committing the crimes. It is along the lines of what I said about Ukraine: the people who commit the crime, rather than the victims, should be paying for the crime. How will we address that question now? If the Government think that the current system is absolutely fine and that there is justice and equity in the system, the Minister should come to the Dispatch Box and say that. However, if he thinks that there is a clear, principled and moral argument in favour of ensuring that the people who commit a crime should be made to pay for it, and that that should contribute to the compensation, we can have that conversation.
Is my hon. Friend scandalised as I am that at the moment only 40% of fines from economic criminals are recycled back into the business of tackling economic crime, whereas in the United States it is 100%?
That is precisely the point. There is an opportunity to generate revenue that could be deployed to address the causes of the problem. It is a win-win. We have criminals. We need to crack down on those criminals. We need to ensure that the agencies are given the resources to do that. It is the criminals who should be paying for that process. That seems logical to me.
Further to that point, does my hon. Friend agree, and I hope that the Government agree, that if they were more assertive in pursuing the people who enable economic crime and those who commit economic crime, more fines could be generated, which they could ringfence for a fund to be used in part to compensate victims of crime? It need not be a burden on the taxpayer and it could be a just way of ensuring that the victims of economic crime do not suffer inappropriately.
Again, my right hon. Friend has hit the nail on the head. We need a war chest and that should be built up on the basis of moneys paid by criminals. That war chest should also be looked at and used, where possible, to support the compensation of innocent victims of economic crime. The new clause is a two-pronged attack on the issue. The opportunity is there because the better we get at going after these criminals, the more we will have coming into the war chest.
I am convinced by my hon. Friend’s argument, but one thing worries me. Having the resources would be good, but having the determination to deliver on the policy is more important. I have had a long-running campaign over the years to improve the efficacy of the Serious Fraud Office. We need a fundamental change in our attitude to how we deliver these policies.
My hon. Friend is absolutely right. As I mentioned earlier, my right hon. Friend the Member for Islington South and Finsbury has set out a clear and detailed blueprint for how we need to boost the institutional capacity, human resources capacity, financial capacity and firepower of the SFO. The blueprint is right there. I very much hope that the Government will look at it and perhaps even adopt it. Of course, if they do not, we will soon have a Labour Government who will.
The Opposition’s new clauses on victims intend to go much further than victims of economic crime in the UK alone. It is our hope—in government, it will be our intention—to work with our allies and partners internationally to provide robust mechanisms for the seizure of proceeds of corruption, kleptocracy and other crimes under international law, and to use such assets to provide funds for the reconstruction and other forms of financial redress to victims—in Ukraine, for instance—of the criminal acts of dictators such as Vladimir Putin.
For months, we have had nothing but warm words from the Government on such proposals. We know that there have been international discussions, including with our G7 partners and our allies in Ukraine, but we need more than warm words and vague promises of jam tomorrow. While Ministers stall on this issue, we are increasingly at risk of being left behind by our allies in the US, Canada and elsewhere, who are already taking the actions that we want to see in the UK. New clause 27 would therefore direct the Secretary of State to publish a strategy for using the proceeds of crime to compensate victims, and to do so within 90 days of the Bill receiving Royal Assent.
We welcome the Bill, but it is a great shame that the Government are failing to take more substantive action in the crucial areas that I mentioned. The Bill is a step in the right direction, but, as it stands, it lacks ambition and is therefore a missed opportunity. I hope that Conservative Members will support our amendments today, so that we can finally begin to clean up our country’s reputation as the go-to destination for dictators, oligarchs, kleptocrats and gangsters, and for their dirty money.
I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests.
This issue has been a concern of mine not just for months but for many years. Anybody who has even a passing acquaintance with the issue at hand will know that its history is somewhat tortuous. A series of options were set out comprehensively in a Law Commission report published in June last year, which I commend to hon. Members. However, there is much that predates that. Indeed, much that has happened in the last few months in this place—in both Houses—reinforces the thrust of the argument that I seek to advance by way of new clauses 4 to 6, which stand in my name and those of many other right hon. and hon. Members, from all parties in the House, to whom I am extremely grateful.
In 2015, my party’s manifesto rightly committed the Government to make it illegal for companies to fail to put in place measures to prevent economic crime. It would be unfair to say that nothing happened. We had the Criminal Finances Act 2017, which created a new offence of failing to prevent tax evasion. That was a development on the failing to prevent bribery offence contrary to section 7 of the Bribery Act 2010, which opened the door to the development of the principle across a range of criminality in this space.
Subsequent to that, the Ministry of Justice launched a call for evidence in early 2017 on corporate liability reform for economic crime. However, it is right to say that progress on that was exceedingly slow. It was not until November 2020, when I was serving as Secretary of State, that it was agreed across Government that the Law Commission would be given the task of examining the issue and producing a report. It was right to acknowledge at that stage that there were a number of potential models that could be deployed here, and it was important for an independent body such as the Law Commission to look at different jurisdictions, as of course it did. It looked in particular at the United States, Canada and Australia: common law jurisdictions that have long been wrestling with the same challenges that we face. To differing effect, they have brought in and deployed their own particular regimes. More on that slightly later.
I am grateful to the hon. Member for Aberavon (Stephen Kinnock) for his kind words about me, and I have read new clause 40. I say gently to the Labour party that we do not need six months for a further discussion of this issue. We have a wealth of documentation, which is spread around me on the Bench, including the Law Commission report—I have it here because I believe in primary sources and I am trying to be faithful to it—which comes to the view that the Government should pursue options to create further offences of failing to prevent. Page 119 states:
“any decision to introduce new ‘failure to prevent’ offences needs to be considered alongside the issue of retention or reform of the identification doctrine.”
That relates to new clause 5, which I will speak to shortly. The report goes on to say:
“If the identification doctrine is retained as at present, the case for new failure to prevent offences, is inevitably more compelling. We therefore consider that ‘failure to prevent’ offences are an option for reform, but note that the evaluation of this option must take place alongside the evaluation of the options for reforming the identification doctrine.”
I will now direct my remarks to my right hon. Friend the Minister for Security. The Government were given that challenge back in June, and I strongly submit that it is vital that they rise to it and deal with the identification doctrine in the Bill. That could deal not just with the offences I mentioned in my proposal, which I have been very specific about, but has wider ramifications for other aspects of criminal liability. It is highly germane to new offences under the online harms Bill that is going through Parliament at the moment.
I have not sought to be overly ambitious in my proposal. I have confined it to offences that can be described under the genus of economic crime. I have tried not to use such terms in legislation, because I readily accept, as the Law Commission said, that the definition of economic crime is somewhat broad—hazy, perhaps—and does not descend to the detail of existing criminal offences, be they offences under the Fraud Act 2006; the offence of false accounting, which is a well-known offence under the Theft Act 1968; or the offence of money laundering, introduced by the Proceeds of Crime Act 2002. I have therefore resisted the temptation to be too vague.
I commend the Government’s economic crime action plan of 2021, which I think I helped sign off. Rightly, the action plan describes economic crime as a
“broad category of activity involving money, finance or assets, the purpose of which is to unlawfully obtain a profit or advantage for the perpetrator or cause loss to others.”
It is important that we put this in context and look at what the action plan is saying. It goes on:
“This poses a threat to the UK’s economy and its institutions and causes serious harm to society and individuals.”
I strongly agree. There is no such thing in this sphere as a victimless crime. We are all the victims of this behaviour, whether we are investors, consumers or taxpayers. Everybody is diminished as a result of such behaviour. It damages and undermines the reputation of our country.
The right hon. and learned Member is making a brilliant speech, and the proposals he is stewarding are incredibly important. Did he hear the independent reviewer of terrorism legislation’s evidence to the Bill Committee, when he said very clearly that economic crime is a national security issue? That is exactly the argument the Minister for Security made when he was Chair of the Foreign Affairs Committee—[Interruption.] I am told he still makes that argument today. That underlines why the right hon. and learned Member’s proposals are so important, not least because we have become the country of choice for corporate structures set up to launder billions of illegal money.
I am grateful to the right hon. Gentleman. Jonathan Hall, the independent reviewer of terrorism legislation, was absolutely right. Indeed, his evidence echoed the Government’s own statement in pursuance of the action plan. The action plan says that it covers criminal activity that
“poses a risk to the UK’s prosperity, national security and reputation.”
That is the point. The policy direction the Government have adopted in recent legislation—most notably in legislation to protect industry from takeovers from parts of the world that we regard as a potential threat to this country—increasingly includes economic security as part of the wider national security agenda, and that is absolutely right.
This debate is happening in the context of a world where the old order is changing and giving way to forces that we cannot control and that we should rightly be suspicious about. Therefore, although we want a vigorous, lively, free market economy in this country, we need to be ever more vigilant about ensuring that its boundaries are policed effectively. I will say more about the prosecution of these offences, because it is, shall we say, a vexed question, and there are right hon. and hon. Members here who have direct experience from their work of the evidential challenges that prosecutors face day in, day out.
I do not want the Government to adopt new criminal offences only to find that their use becomes sporadic or ineffective. However, the offences I propose help to further drive a culture of compliance and lawfulness where corporates behave responsibly. There are examples of previous legislation that we can point to that have driven that culture forward positively. I think of the Health and Safety at Work etc. Act 1974, which the Under-Secretary of State has used as an example, and he was absolutely right to do so. As a result of the passage of that legislation, we saw a dramatic drop in the number of industrial accidents. Why? Because employers were enjoined to take the issue damn seriously. If they did not, there would be liability at the end of it.
Mr Djanogly
Has my right hon. and learned Friend also considered the Bribery Act, where a similar set of procedures was forced on corporates, with dramatic results?
My hon. Friend is absolutely right. Of course, he was a Minister in the Ministry of Justice when the Bribery Act was brought into force at the end of the 2005 Parliament, and he has direct experience of this issue. He is absolutely right that the Bribery Act has been of huge value. In fact, under the regime of deferred prosecution agreements that the Government brought in in the early part of the last decade, of the 11 DPAs that have been made by the Serious Fraud Office with corporates, nine were for “failure to prevent offences”—failure to prevent bribery—and just three were for the offence of fraud. That accounts for 90% of the £1.7 billion in revenue that the SFO has brought in through DPAs. It is clear that that has been an important step change in the way we deal with wrongdoing or indeed the threat of wrongdoing.
For people who think this is some sort of academic exercise, I draw their attention to the LIBOR scandal and the forex rate rigging scenario. There was no bringing to account of anyone involved—there was impunity. That is not good for the rule of law or the economic wellbeing of this country.If we want people to invest in the United Kingdom—we do and we have excelled in direct foreign investment over generations—then they need to have the confidence that if there is a problem, there is redress of grievance, accountability and a way of recouping the loss or making sure their investment is safe. That is what I believe the new clauses go to.
We have been careful in the test we wish to apply to the “failure to prevent” offences that form the subject of new clauses 4 and 6. It was tempting to follow the recommendation in the report by the House of Lords’ Fraud Act 2006 and Digital Fraud Committee, chaired by my noble Friend Baroness Morgan of Cotes, to apply the wider test contained within the Criminal Finances Act 2017 relating to failing to prevent tax evasion. That would not require an intention by the corporate or the individual to confer a benefit on the company or a benefit on a person to whom the suspect—the defendant— is providing services on behalf of the company. I have sought not to go that far, but to replicate the Bribery Act test, which is the intention to confer a benefit. It is important that when we seek to draft legislation, we are as mindful as possible of not widening it to an extent that could in many ways create further unfairness. We have an obligation to ensure that balance is maintained.
I want to add to the excellent speech that the right hon. and learned Gentleman is making and to thank him for it. In the Barclays case, there was an attempt to prosecute both Barclays bank and individual directors of Barclays bank. There was an unsuccessful appeal against Mr Justice Jay’s decision, in which the SFO argued that the dual rulings would allow directors to “insulate themselves from liability” and make such alleged offences “impossible to prosecute”. Later, Ms Osofsky, who runs the SFO, said she felt herself completely hamstrung by the directing mind principle. She told parliamentarians in evidence that
“I can go after main street but I can’t go after Wall Street.”
In other words, she could prosecute small companies, but not corporates with layers of control.
The right hon. Lady leads me to the thrust of my argument on new clause 5, which is the identification doctrine itself. She deals with the precise point of the doctrine. In the Barclays case, Mr Justice Jay at first instance was widely seen as having defined it by a narrow interpretation—I do not criticise the learned trial judge, but many people saw it that way—but the decision was upheld on appeal. With a real-life set of facts, a trial judge made a ruling that had quite important consequences for the law.
But this issue is not new. The principle was set out in the Tesco Supermarkets Ltd. v. Nattrass case 50 years ago. The directing mind and will principle, which is how it was described in the Tesco case, now needs to be revisited. That is why I have sought, in new clause 5, to look carefully at options 2A and 2B in the Law Commission report. In particular, in the wording of the new clause we have sought to look at other types of liability, most notably the 2007 corporate manslaughter provisions, to ensure that we are faithfully replicating what is already an established principle in statute. I do not seek, through new clause 5, to suggest that there need be a choice for the Government, so that if the Government reform the identification principle the need for “failure to prevent” offences falls away. The two should go hand in hand. Perhaps I depart slightly there from where the Law Commission placed its emphasis in its report.
As the right hon. Member for Barking (Dame Margaret Hodge) says, it is a pretty rum situation when the public prosecutorial authorities of England and Wales are telling us repeatedly that there is a problem with the identification doctrine. Indeed, as she said the current director of the SFO put it in very eloquent American terms. Sir David Green, the former director of the SFO, has said on many occasions that, particularly given the sometimes byzantine structures of very large corporates, he views the concept of directing mind and will as somewhat confusing and very difficult to understand, let alone to present to a jury. I therefore think that the time is now for reform of that identification principle.
There is some concern that a change in the identification doctrine in criminal law could potentially go on to have effects across the piece and create some contradictions with civil law itself. The Law Commission addressed that point. It took that view that changing the basis of criminal liability in those terms would not have extensive consequences for civil law. I will set out why it said that, because it is important and no doubt Government officials will be giving it some consideration.
I congratulate my right hon. and learned Friend on making a powerful speech in favour of his new clauses, several of which I have signed. Before he moves on, may I press him on the point about this being a slightly rum affair? I think that was the phrase he just used. It is rum because we have two options set out by the Law Commission—as well as many other analyses—neither of which are being taken into the Bill. There are two good options, and they are being completely ignored. Also, at least one of the two Ministers on the Front Bench has repeatedly—and rightly, in my view and that of many other people—been a dedicated advocate of precisely the ideas my right hon. and learned Friend is putting forward in his new clauses, yet they are still not in the Bill. How much more rum can it get?
I was going to spare the blushes of the Minister for Security, my right hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), but my hon. Friend has said it for me, and he is right. They know that what I am saying does not just have force, but that they agree with it. That will no doubt carry great weight—
What I am enormously enjoying in this Session is the way in which Bills are being picked up and put down by different Ministers. When they are on the Front Bench, they do one thing; when they are on the Back Benches, they say another—sadly, that is the nature of our current political system. It is taking a little while, I admit, for many of us to realise quite how long it can take to get things through in government. Those who have been in government for many years are sharing their knowledge very generously.
Well, my right hon. Friend must speak for himself. I will tell the House a story: I remember when the present Secretary of State for Defence, my right hon. Friend the Member for Wyre and Preston North (Mr Wallace), held the office of Minister for Security, which my right hon. Friend the Member for Tonbridge and Malling now enjoys. We used to have cross-governmental committee meetings—this was during the Government of my right hon. Friend the Member for Maidenhead (Mrs May)—and I remember having a very fierce argument with a very senior permanent secretary at the Treasury about this very issue. I will not name them, because that would be wrong, but they told me that there was concern about the proliferation of criminal offences in this area because somehow it would add more of a regulatory burden to business. I disagreed hotly with that civil servant then, and I disagree hotly now.
The Minister for Security now has a great opportunity. It is a great privilege as a Minister to get on with a job that others would have wished to finish. We have passed the parcel to him, and he can open it and enjoy the gifts within.
My right hon. and learned Friend is being very generous with his time. May I say very gently that the anecdote that he told just now and the intervention that the Minister for Security has just made both come under the category of explanations, rather than justifications, for where we now find ourselves? The Bill is here, now. What has been said explains why we are here, but they do not justify why this stuff is not in the Bill.
Well, I am trying to be the diplomat and the reasonable interlocutor here. My hon. Friend is playing the bad cop with the Minister, and I am trying to play the good cop. I know that the Minister will eventually yield to that persistent approach; I hope that it will be done in a way that is neither oppressive nor unreliable.
Yes. It is unusual for unity to break out on both sides of the House and on the Front and Back Benches. Given that ubiquity of unity, what, in the right hon. and learned Gentleman’s analysis, is the problem that is preventing these proposals from becoming the law of the land?
I think that there are two things: time and capacity. I do not criticise officials. I have never believed in doing so: it is a bad Minister who blames their officials, just as a bad workman blames his tools. Officials have a lot of work to do under immense pressure, and obviously they want to get it right. I want to get it right, too—we all do—but the Bill might be our last chance to do so in this Parliament. My goodness me, if we cannot get it right here, the Government are really going to have to get it right in the other place.
Let me deal further with the identification doctrine. Opposition new clause 40, which is very well worded, alludes to the US concept of respondeat superior. In effect, it is a wrap-all approach to vicarious liability that captures the acts or omissions of even very junior members of a corporate, which can lead to that corporate being liable. In some ways that has proved advantageous to prosecutors in the US: they have been able to identify more junior officials in corporates and, in effect, get them to co-operate with the authorities, which has opened up evidence that might not otherwise have been available.
The Law Commission looked at that approach. It also looked at what I might call the corporate culture approach in Australian Commonwealth law, and at Canadian legislation on the acts and mental states of senior managers. The Law Commission said—rightly, I think—that neither the US approach nor the Australian approach would be right for our jurisdiction.
The wording of my new clause 5 reflects the Law Commission’s recommendations in two ways. First, as the Law Commission’s report sets out, it would allow conduct to be
“attributed to a corporation if a member of its senior management engaged in, consented to or connived in the offence.”
Senior management is defined as
“any person who plays a significant role in the making of decisions about how the whole or a substantial part of the organisation’s activities are to be managed or organised, or the actual managing or organising of the whole or a substantial part of those activities.”
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
I am intrigued by and have a great deal of sympathy with my right hon. and learned Friend’s amendments. As he knows, we discussed the issue when we served as Law Officers together. In the light of the Law Commission recommendation from which he has just quoted, I wonder why his new clause 5 includes the
“neglect of a senior manager.”
It seems conceptually a rather odd proposition that a fraud could be committed by neglect. The Law Commission did not go that far. Why has my right hon. and learned Friend included that provision?
That is a fair question. What I seek is to tease out from the Government the juxtaposition with the money laundering regulations. My right hon. and learned Friend will remember my making mention of regulation 92 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which uses the word “neglect”. To be frank, I think that there is a problem with that, but it is important for us to tease out from Ministers a way to find a wording that is comprehensive.
I have enormous sympathy with my right hon. and learned Friend, who is doing the House a service by bringing these amendments to its and the Government’s attention. However, is it not reasonable—Opposition new clause 40 has this purpose in mind as well—that there should be quite a detailed consultation within the financial services industry and among any other commercial organisations that might be affected? New clause 5’s use of the word “neglect” creates an extraordinarily broad possibility for the application of the criminal offence.
I know what my right hon. and learned Friend is doing, and I applaud it. However, it seems to me that it is reasonable to require of the Government that they get it right, but, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said, that must not become an excuse simply to say “mañana” and kick this into the long grass.
I am always grateful to my right hon. and learned Friend; I greatly enjoyed our time working together as Law Officers, and I yield to no one in my respect for him. He is right to make that point. I think I couched my remarks in a way that was faithful to the Law Commission’s options, which say that the Government do not necessarily have to do it all—there is a choice here, potentially. On a wider basis, I think that the identification doctrine needs to be looked at. There could be an opportunity for further refinement, perhaps in the other place, and for provision to be made that refers specifically to the offences that I list in new clause 5.
Let me take my right hon. and learned Friend’s point in the spirit in which he made it, and build on it. New clause 5 includes the specification in Law Commission’s option 2B that an
“organisation’s chief executive officer and chief financial officer would always be considered to be members of its senior management.”
I am sorry to interrupt the right hon. and learned Gentleman’s excellent speech again, but does he share my view that we are past the stage of consultation? There has been a lot of consultation on the issue, from 2015 to 2017 and up until the Law Commission’s proposals in 2022. Choices now have to be made. The opportunity must be grasped to legislate on this issue, on which there is such wide consensus and such strong feelings.
I had not quite finished outlining the Law Commission’s point correctly refuting, or at least addressing, the perception of any problems with a knock-on effect on civil law liability. It sets out the case very well, giving two basic reasons why it does not think that there will be extensive consequences.
First, the Law Commission rightly says that in civil law, vicarious liability or liability for negligence will very often apply to civil disputes between companies and third parties even if the identification doctrine test threshold is not met, so those very important parts of civil liability will not be undermined.
Secondly, many civil cases in which the identification doctrine is invoked involve matters of liability existing between culpable directors—usually people who have gone—and those now running the company. Culpable directors often try to invoke the doctrine of illegality to try to seek some form of immunity or to resist any liability. That is usually dealt with under the doctrine that if someone has behaved fraudulently they cannot use that as a means of evading liability. That is right. We should not baulk, therefore, at addressing this issue head on.
In new clause 6, I seek to introduce new concepts of “failure to prevent” an individual liability. It is important that we make sure that when corporates are prosecuted it does not become a binary choice. Prosecutors should not seek to focus exclusively on the corporate at the expense of bringing individuals to book. I am afraid we have seen numerous examples in recent years of individuals who have escaped with impunity, rather than being held to account for their wrongdoing. I repeat all the arguments I have made about the international reputation of this jurisdiction, which is so important for our economy. Nothing under the sun is totally new: the language in new clause 6 is taken from section 36 of the Financial Services (Banking Reform) Act 2013, and we have taken the definitions of an “officer” in a corporate from the Online Harms Bill—that Bill keeps popping up in ways that people may not expect.
All these issues are inextricably linked. Let us view this issue not as some arcane question of criminal liability, but as a reputational issue, an economic issue, a security issue and an issue that matters for the future life and health of our society. If we are to make this work, it is essential that we give prosecutors the tools that they need to do the job. I have long been a supporter of the Roskill model, the Serious Fraud Office and the way that it has sought to prosecute crimes, but I am worried that the current structures do not allow us to put the focus on fraud that we need to maintain and enhance. Gone are the days, when I was not even a young barrister but still a law student—I am much younger than perhaps I look—of the big corporate prosecutions in the 1980s that occupied suites of rooms in Chichester Rents. In those days we made a virtue of going after the big boys and girls and making sure that they were brought to book. That seems to have gone out of fashion, and I do not think that is a good thing. Things are slipping through the cracks, whether it be what might be regarded as minor fraud or even major fraud: we are not giving them the seriousness they deserve.
We need to look again at the architecture of the prosecution of fraud. Indeed, Clare Montgomery KC spoke eloquently about this in the media the other day. She is a very experienced and senior prosecutor. I am where she is: after many years of thinking that the SFO was the right model, I am no longer so sure. We need to start a proper and mature debate about the mechanism and framework for prosecution in England and Wales. That is why the idea of a Committee commends itself to me and, I hope, to right hon. and hon. Members. A Joint Committee of both Houses considering this in proper time might produce a mature set of recommendations that could lead to an improvement in the practice of these measures. The House is littered with good intentions. We pass legislation with the best will every year, but we are constantly disappointed when it is not utilised properly. It is our responsibility as legislators to make sure that those who are given the job of carrying out legislation are able to do so in a way that restores our public reputation.
My exhortation is twofold: if the Government cannot accept the amendments, they should bring measures forward in the other place to make sure that the thrust of this reform will happen, and for the Government to work with me and other right hon. and hon. Members to help us improve the way in which we deal with the prosecution of fraud in this jurisdiction.
It is a pleasure to follow the expertise of the right hon. and learned Member for South Swindon (Sir Robert Buckland), who outlined in great detail the significance and importance of the new clauses. Yet again, the House has the opportunity to get it right, and to get it right now, today, rather than at some point or when parliamentary time allows or after consultation or in due course. Why not do it today?
I have heard no arguments from Ministers in Committee, on Second Reading or here this afternoon to excuse why it cannot be done today, now, with the new clauses that have been so diligently and expertly proposed by right hon. and hon. Members. As I said yesterday, these are cross-party new clauses. They are the most widely supported new clauses I have seen, and there is no reason why the Government cannot accept not only the proposals from this side of the House but the diligent work of their own Back Benchers on the new clauses. It makes absolute sense.
I support the Government amendments before us, both the correcting ones and those that allow Scottish Ministers and their responsibilities to be added to the Bill. It is good that they have been brought forward now, although I am slightly wary that that happened at such a late stage and that the problem had been missed. Regardless, I am happy to see them today. I also support the amendments on information sharing between agencies, which make sense.
I am, however, concerned that the Government will not accept the “failure to prevent” amendment. As I said in Committee, when the hon. Member for Thirsk and Malton (Kevin Hollinrake) was a Back Bencher he was very supportive of the “failure to prevent” provisions, right up until 13 October 2022, when he said:
“Of all the measures we have talked about today, this would have the biggest effect in terms of cutting down on economic crime, because lots of our financial organisations are complicit when it suits their interests to be so.”—[Official Report, 13 October 2022; Vol. 720, c. 310.]
One Minister is on his phone and the other—the hon. Member for Thirsk and Malton—is sitting at the back of the Chamber having a gab. This is not ideal, but perhaps the Minister has already heard what I have to say and does not want to hear it again.
It is not, and it certainly will not be the last. It could be if the Minister accepted the amendments, but he is not going to do that, and he will keep hearing this speech until he does: that is the truth of the matter.
As other Members have said, there is a precedent for a “failure to prevent” measure. It is in the Health and Safety at Work etc. Act 1974 and the Bribery Act 2010, so the concept already exists, and there is no reason why it cannot be applied today. Even if the Government are saying, “We want to extend it to other areas”, that should not limit us today, when the Bill gives us the opportunity.
I also support new clauses 4, 5 and 6. The right hon. and learned Member for South Swindon made an important point about what senior managers have to do, which is also relevant to the Online Safety Bill. I rather like the definition of an offence committed with
“the consent, connivance or neglect of a senior manager.”
All those things contribute to economic crime. This is, if you will, a sin of omission, and we should take the opportunity to tighten up these loopholes. It is one thing to know about something that is happening, it is another thing to look the other way, and it is another thing not to do your job properly and allow that something to happen. This would cover all those eventualities.
New clause 7, in the name of the hon. Member for Cheadle (Mary Robinson) deals with whistleblowing. It is an excellent new clause which would enhance the Bill and offer protection to the very people who flag up these economic crimes. Whenever I think about whistleblowing, I remember a little cartoon that I saw many years ago showing a man sitting at a computer terminal in an office with a sign above his head saying, “Congratulations Frank, whistleblower of the month.” I understand that the cartoonist was Bill Proud. Every time I think about that, I think about the lack of protection offered to whistleblowers, and how much more the Government could be doing to ensure that those who do speak up are protected.
The hon. Lady’s new clause 39 on reporting on economic crime to this House is important, as is the new clause from the official Opposition on having a Committee of this House to deal with economic crime. At the moment, this is spread too far across too many Committees and there is no accountability to one place in the House on all the aspects of economic crime. The Treasury Committee, of which I was a member, produced a good report and other Committees—some Members here are former Chairs of those Committees—have produced excellent reports on these things, but there is no gathering mechanism to put all these different aspects of economic crime in one place and to be accountable for them. Given the scale of economic crime across these islands, a Committee that had that specific job would be important; it would be significant to have somewhere where all that information could be stored. The members of that Committee could also take evidence in private, if that was appropriate, from the agencies involved, if that was not to be done in public.
There is an awful lot more the Government could and should be doing in this Bill. It is an opportunity that should not pass us by. It is Burns night, so I shall finish with a wee bit of Burns that seems topical, given the discussion:
“Far be’t frae me that I aspire
To blame your legislation,
Or say, ye wisdom want, or fire,
To rule this mighty nation.”
There is a lot more the Government could be doing. Let us get this done and get it right this time.
I am going to be brief and speak simply to new clauses 1 and 2, which stand in the name of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), in my name and in the names of a number of other long-standing defenders of justice in Britain. The new clauses, in effect, make SLAPPs near impossible where they are used to protect economic crime. The provisions are far too narrow, by the way, but that is what the Bill demands. I will leave it to him to explain the mechanism, but I want to talk for a couple of minutes about how important this is and how we got to where we are today.
The issue dates back to about 2000, or perhaps a bit earlier, when London had become liberalised and the Putin oligarchs and others, including some Chinese people, were looking for places to hide their ill-gotten gains and behaviour. London was a wonderful target for that. There were vast flows of money in which they could hide the billions they were stealing from the Russian people and others.
At the time, there was pretty slapdash corporate admin—we were talking about that yesterday in respect of Companies House—and, I say this quite brutally, the complete feebleness of the British establishment, by which I mean everybody: both parties; and the agencies tasked with controlling this, the Serious Fraud Office, which has been a waste of space, and the NCA, which has not been good enough. It was created to tackle this but has not been good enough. All those things were happening. I say to the hon. Member for Aberavon (Stephen Kinnock) on the Opposition Front Bench that it goes wider than the Conservative party. It starts with Blair/Brown and goes on to Cameron/ Osborne. All of them made mistakes. The golden visa that the hon. Gentleman talked about was created just as we were rushing into the collapse of western financial capitalism under the previous Government. We were too soft—
The right hon. Gentleman makes a valid point. I agree that the creation of the scheme was under the new Labour Administration, but the point I made in my speech was that a number of those golden visas were given after the Russian invasion of Crimea in 2014. He is right that successive Governments are guilty of naivety and complacency, but there is a point in 2014 when we really needed a different approach.
There is no doubt that the more recent you are, the more salient the case. Frankly, I can remember being ashamed of a British Prime Minister hosting Putin at the Olympics only a few years after Litvinenko was murdered in our country in the most cruel and overt act of state terrorism. Neither Government dealt with that. Cameron’s action was grotesque in the extreme, but neither Government dealt with it. Similarly, both Governments kowtowed to China after Tibet and all the rest of it. That has been done too many times. It is the entire system, not just one Government or another.
London is a fabulously attractive place for the Russians or the Chinese. If you want to be somewhere else than Russia, this is the place to be. We have facilitated that at every turn. Here comes the issue to which SLAPPs relate. We have a legal system that is probably the most brilliant in the world in delivering fair outcomes and good justice, but it is also phenomenally expensive, which means it is one-sided in its operation between an oligarch and an ordinary citizen, journalist or whoever they may be.
In conjunction with that are the things that flow from it, such as the behaviour of solicitors, to some of whom my hon. Friend the Member for Isle of Wight (Bob Seely), who is not in his place, gave a fair old pasting yesterday, but one that was deserved. The private investigators industry, unregulated, undertakes crimes to gather information for use as weapons against other people. Our courts—not uniquely, but outstandingly—allow that information to be used. In each individual case that might be the right decision, but the collective effect of that is to suck criminally based information into our system and therefore engender and help the industry.
All that is why new clause 1 and 2 are vital. That all had the effect of creating a vast, possibly unintentional institutional cover-up for criminal activity: money laundering, fraud and concealment of evil actions abroad. Let us bear in mind that some of the oligarchs we are talking about are murderers. The system murders people. It is evil activity. That is why new clauses 1 and 2 are incredibly important.
I shall be very brief, because I took a lot of time in the House yesterday. I strongly support many of the new clauses being moved by Back Benchers across the Chamber today. If I can just say something about politics, this heartens me and shows that there are ways in which we can work together to pursue the national interest across the political divide. It breathes a bit of confidence and life back into the political process that we have all chosen to join in our careers, so I commend those individual Back Benchers who have put themselves forward and who are speaking today.
The proposals from the hon. Member for Cheadle (Mary Robinson) on strengthening the support for whistleblowing are hugely important. Whistleblowers are an essential part of our armoury in the fight against money laundering and fraud, and we know that, despite all the legal rights, they are not protected. People lose their jobs, their families get destroyed and they are left penniless. Therefore, the establishment of a capability that will do nothing other than protect and promote whistleblowers in the crucial work they do is really important, and I hope that it will be adopted.
The importance of legislating to tackle the abuse of our legal system by oligarchs and others, which the right hon. Member for Haltemprice and Howden (Mr Davis) has just talked about so eloquently, is also really important. I want to be blunt about this and say to those on the Government Front Bench that, if they do not accept this new clause, they will not get a Bill during this Parliament. I bet that is right, so for heaven’s sake let us use this opportunity to get this bit of legislation in. It does not cover everything we would like it to cover, but it will have an impact. It will also give us the experience to see whether we have got the legislation right. I am sure that all the lawyers who helped to draft these new clauses put their best brains into them, but if they have not got them right, we will be able to learn those lessons when we come to extend these measures beyond economic crime.
If the right hon. Lady can come up with a way to seize assets and use them for the purposes we have been discussing—notably for the reconstruction of Ukraine, but for other purposes, too—I am all ears. I have had long conversations with the representatives of Governments around the world, and I am yet to hear an idea that works. If she has one, I am happy to hear it.
This is not our idea. It comes from a recent seminar we held with lawyers who support the Royal United Services Institute and Spotlight on Corruption. I will leave it to the hon. Member for Huntingdon to expand on it, but I think it is a very interesting chink that we can exploit, although it is not the total answer.
A draft Bill is being prepared by another group of lawyers, but I do not think we can add it to this Economic Crime and Corporate Transparency Bill. I am sceptical that we will find a chance to introduce the draft Bill in this Parliament, but I assure the Minister that we will pursue it after this Bill has passed. I just hope the Government examine the chink we have identified and run with it.
New clause 21 on cost caps, which stands in my name, is part of the way in which we could better fund the enforcement agencies in their fight against economic crime while also preventing economic criminals from exploiting our legal system. At the moment, we have a “loser pays” law, which has two consequences. First, when our enforcement agencies embark on litigation and lose, there is a massive cost to the public purse. We saw that with the unexplained wealth order against Kazakhstan’s Nazarbayeva family. Subsequent investigative journalism suggested that the family told mistruths to the court, but that has never been rectified. Nevertheless, the costs vary from £1.5 million to £2 million.
The SFO took a similar case against Serco involving prisoners who were—I have forgotten the word.
I thank the Minister. I am having a senior moment.
The SFO had clearly prepared the case badly, but there was a discovery point that got the litigation thrown out of court, and a huge sum was claimed in costs. The cost to the public purse is enormous.
I understand the right hon. Lady’s point about the cost to the police and other authorities of failed investigations but, in my experience, much of the problem stems from the division of the spoils in those cases that succeed in securing the proceeds of crime. As she will know, the money is divided between the Treasury, the Home Office and the police.
When I was at City Hall, we tried to cut a better deal in which the police would effectively recover the full cost of a prosecution, and any profit would then be split, so that pursuing such prosecutions would be costless to the police. Tim Godwin was then deputy commissioner of the Metropolitan police, and his view was that the police would then have a strong case to invest even more in this line of investigation, and they would therefore have more success and there would be more money to go around for everyone. It is not necessarily the case that legislation will solve the problem. It is more to do with the deal between the police and the Government.
Indeed, and we considered an amendment in yesterday’s debate to address that specific issue, so that any funds arising from a confiscation order, or other such order, could be enjoyed by the enforcement agencies themselves, which would provide an additional incentive. We discussed last week’s Danske Bank settlement of criminal issues in the United States, from which the enforcement agencies received $2 billion. Just imagine the amount of enforcement activity that could be funded from that fee. We are timid in that regard, so I completely concur with the right hon. Gentleman on that.
The other argument in relation to cost caps is that the fear of facing huge costs if one fails in a case provides a disincentive to the enforcement agents to pursue as vigorously as one would like economic crime prosecutions. The Minister has said to me previously that there is no evidence to back that up, but I just do not buy that. A proper analysis of how people in the NCA, the Serious Fraud Office and other agencies think before they decide to pursue a prosecution would very quickly reveal that there is a disincentive. It is for those two reasons that we considered cost caps. The US is our model. Each party bears its own costs, which is much more effective. We heard figures yesterday—I will not repeat them because I have to get on—that the US gets much more money in and it does not cost as much to its enforcement agencies.
Those are the things that I wanted to cover. I hope that, in summing up, the Minister will please give us some concessions. I urge him to reflect on the degree of unanimity across the House and on the very senior figures on his own Back Benches who have chosen to work, in particular, with members of the two all-party groups to reach consensus. We do argue these things out. We come to a view after an extensive debate on a subject; it is never an open and shut case. Back Benchers are in a better position at present than those on the Front Bench, so I ask the Minister to listen to us because we may just be right and it would be good if there was a concession on something.
I rise to speak to new clause 7, which is in my name, and the names of Members across the House. It would require the Secretary of State to set up an office for whistleblowers within 12 months of the Bill receiving Royal Assent, and as chair of the all-party group for whistleblowers, I wish to register my interest.
The office for whistleblowers would be an independent body, which reports to Parliament and would have three main duties: to protect whistleblowers from detriment resulting from their disclosures; to ensure that these disclosures are investigated; and to escalate information and evidence of wrongdoing that is outside its remit to the appropriate authority, including regulators or, if appropriate, the police.
I thank the right hon. Member for Barking (Dame Margaret Hodge), who introduced this new clause at Committee stage and spoke to it robustly and with the knowledge and passion of someone who has been pursuing this for many years.
Despite a complete lack of reference in the Bill, whistleblowers and whistleblowing have a pivotal role in the fight against economic crime. Indeed, when this proposal was debated at Committee, the right hon. Member for Barking referenced her time as Chair of the Public Accounts Committee and noted that all the work that the Committee did on economic crime came from whistleblowers, and yet, in a Bill that seeks to tackle economic crime, whistleblowers are not referenced.
One statistic that has been shared many times when debating this subject in Parliament is that 43% of economic crime is detected and exposed through whistleblowers. However, in his response to the Committee debate, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) noted that he believed that about 100% of economic crime detection could be attributed to whistleblowing. Once again, that appears to be confirmation that, if we want to know where an economic crime is being committed, it is most likely to be a whistleblower who exposes it.
The UK was once a world leader in whistleblowing protections, and we were the first EU country to introduce whistleblowing legislation—the Public Interest Disclosure Act 1998. That was seen as a landmark moment for whistleblowers, with protections for workers in employment tribunals and an expectation that wrongdoing would be addressed. However, as I have previously outlined in this place, PIDA applies in reality only to some employees—not contractors, not trustees and not volunteers—and it does not cover those connected to financial crime who may wish to disclose information. In addition, although workers can bring claims to an employment tribunal, just 4% of whistleblowing claims are successful. With results that low and potential risks so high, how can we expect the public to have confidence in the system? That is why we need to take measures to protect and support whistleblowers, which will in turn encourage people to speak up and report economic crime.
I do not intend to press the new clause to a vote, but I note that the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton, intervened on Second Reading to express his wish for whistleblower provisions to be introduced to the Bill. By supporting the new clause, the Government would be doing exactly that, and I hope that they will feel able to do so.
I rise to speak to the Liberal Democrat new clauses tabled in my name, with a particular focus on new clauses 3, 30, 31 and 39. Before I come to those new clauses, I put on the record my support and thanks for the many varied new clauses that we have been discussing, including those tabled by the hon. Member for Cheadle (Mary Robinson), the right hon. Members for Barking (Dame Margaret Hodge) and for Birmingham, Hodge Hill (Liam Byrne), the right hon. and learned Member for South Swindon (Sir Robert Buckland) and many others.
In their breadth and depth, those new clauses reflect my own somewhat conflicted feelings about where we are with the Bill. On the one hand, it is very clear that we are much further on than a year ago, which is surely a good thing. That has come off the back of strong cross-party working, and I echo what the right hon. Member for Barking said earlier about that restoring faith in the democratic process. If only our constituents could see that we do work together and that it results in positive things.
However, it is also fair to say that we still have much to do. I know that those are not just my thoughts, because they have also been expressed by the former Chair of the Foreign Affairs Committee, the right hon. Member for Tonbridge and Malling (Tom Tugendhat), who is now the Minister for Security. Indeed, in a sense, he and others are the great hope—the men on the inside who we hope are going to push much of what we want to see. I hope that they are hearing yet again in this debate, and in the hopefully very brief Third Reading debate later, just how much further we want to go. Notwithstanding that positive movement in the right direction, I am worried that we have started to back-pedal in some areas.
One of those areas is golden visas, which new clause 3 would address. Let us look at them in some detail. Tier 1 investor visas were the “blind eye turned” route straight into the UK that was used and abused by so many of Putin’s cronies, not to mention kleptocrats from other regimes. They were a golden ticket—quite literally—to come to the UK and launder money with barely any scrutiny or transparency. Recognising that, the then Conservative Home Secretary instituted and launched a review, and the promise was that the findings would be published. For a long time, I—and others, I am sure—had been tabling and asking questions of the Home Office to show that we had not forgotten and that the delay was inexcusable.
The hon. Lady is making some excellent points about the golden visas. Does she find the lack of curiosity from the Government about these golden visa holders and what they have been up to as remarkable as I do, when compared with some of the difficulties that our constituents have in asking for something as simple as a visitor visa to have their granny come over and visit from Iran?
I thank the hon. Lady for her point, which is well made. The thing is that the Government were curious, and they did this review, which is sitting there. That is clear—the one thing that the written statement confirmed was that a review had been done and recommendations had come from it, but all we got was a summary of the recommendations. What I take from that is that they were curious and they found out, but now they do not want to tell us. What on earth happened? It is not a good look.
To move on from golden visas, we desperately need to see more action in a number of other areas to ensure that we properly tackle economic crime, particularly by kleptocrats. It is right that we focus on Russians, but it is worth saying that the Bill will apply to many other flavours of kleptocrats and bad people. As other hon. Members have said, this could be our last chance for many years to get this right, so we should consider how else it might apply. Last year, for example, Hong Kong Watch highlighted concerns about the dirty money that Hong Kong officials had gained through corruption and that has now been spent by the families of officials in the UK, including on property. I raised those concerns at the time and I will continue to press Ministers on them.
I tabled new clause 30, about Iran, to show how important it is to focus not on a single country, but anywhere there are human rights abuses. Anoosheh Ashoori made the point that
“there are a large number of children and relatives of the regime that, like the Russian oligarchs, like living the high life here and have assets here.”
Why are we not pursuing them? The new clause asks the Government to use existing legislation to do an audit and report back to Parliament. We should apply the Bill to as many places as it can be effective.
All that takes resourcing—a familiar refrain in the House—which is addressed by new clause 31. Frankly, resourcing is a lacuna in this Bill and its predecessor. I was encouraged by the number of amendments on establishing an economic crime fighting fund, which shows that it is clearly the shared will of hon. Members on both sides of the House that we put the resourcing and money behind this legislation to ensure that it is done properly. The Liberal Democrats wholeheartedly share that commitment. I say to the Minister that that money would not be frittered away; it would be an investment, because if we fund the agencies properly, they will start to bring the money back in. We know the exorbitant amount that we think we are losing to economic crime, so any investment in getting some of that money back would surely be good.
Mr Djanogly
I rise to speak to new clause 23, in my name and those of the right hon. Member for Barking (Dame Margaret Hodge) and 17 other hon. Members on both sides of the House, for whose support I am grateful. This comprehensive Bill is significant in its scope and its intention to counter fraud, which is wholly welcome, but new clause 23 speaks to its lack of focus on the proceeds of economic crime, which are the proceeds resulting from acts committed in the UK and overseas.
Such proceeds have circulated in the national economy, largely unimpeded, for too long, and a host of existing limitations and issues, such as the lack of proper financing for related law enforcement bodies, which has been much discussed over the last two days, have a compounding negative effect. Unfortunately, those limitations are all too frequently at the expense of and to the detriment of hard-working and honest taxpayers in all our constituencies—not least mine—and those who often stand to benefit are the criminals and those sanctioned for reasons related to foreign affairs. Tackling that issue is the primary motivation behind the new clause.
More broadly, like-minded countries are increasingly focusing on this area, including our fellow parliamentarians in Canada. In June last year, they made technical yet significant changes to their economic sanctions legislation, including the Sergei Magnitsky law regime. Effectively, those changes allow existing sanctions for freezing assets to be converted into orders for the seizure of those assets. Similar measures are being considered by the European Commission, in other European capitals such as Tallinn, and in the United States. Unless our regulatory measures vis-à-vis the proceeds of economic crime are reviewed and strengthened, the UK risks falling behind, which I believe would be both morally and politically unpalatable.
I also believe that new clause 23 speaks to the wider lack of a much-needed national conversation about such proceeds, where they are held, why they are in the UK and, crucially, what the potential benefits of clamping down on them could be. It would, I suggest, be to the clear benefit of the taxpayer, but also crucially to those elsewhere in need of financial reparations such as in Ukraine, if the proceeds could be seized, repurposed and put to work. I say this recognising that in September it was estimated by the World Bank that at least $349 billion would be needed for Ukraine’s reconstruction, and one can only imagine that the figure is now much more significant.
It is, however, important to recognise that it is not enough for measures to be simply passed into law; their implementation must be backed, supported and seen through. The American authorities have provided a notable example of one such action that I thought would be of interest to the House. In May last year, a $300 million yacht, the property of a sanctioned Russian oligarch, was seized by Fiji at the request of the United States in a joint law enforcement operation. This followed the issuance of a seizure warrant that declared the yacht in question to be subject to forfeiture based on probable cause of violations of US law, including money laundering and conspiracy. In other words, it was not the asset-freezing sanctions themselves that enabled seizure, but rather the active enforcement of the breach of such sanctions.
Such violations and action should not, however, be looked at in isolation. Instead, they should be considered in the wider context of international affairs—namely Russia’s brutal, illegal and ongoing invasion of Ukraine. Co-ordinated through the US Justice Department’s KleptoCapture taskforce, the seizure of the yacht in question sent a blunt message that, in the words of the FBI director, Christopher Wray, those who contribute to the advancement of Russia’s malign activities will be sought and
“brought to justice, regardless of where, or how, they attempt to hide.”
This is a message—a strong message—that cannot be ignored or overlooked.
This yacht seizure was a clear example of the rigorous enforcement of the law, and one that I believe should be emulated here in the UK, with related regulatory measures subsequently strengthened on top. The recent arrest of another oligarch in London on suspicion of money laundering in breach of asset-freezing sanctions was a step in the right direction. The problem in the UK, however, is that the criminality of breaking sanctions attaches to the quantum of the breach, not to the overall value of the amount sanctioned. For example, if a sanctioned oligarch were to be found with a carrier bag full of sanctions-breaching cash, that cash amount is all that is liable for confiscation, not his wider sanctioned wealth.
This was why we attempted to table a cross-party amendment—the so-called chink in the armour amendment, as described by the right hon. Member for Barking. It proposed, in short, that non-disclosure of all assets by a sanctioned individual would itself be a criminal offence, and that the total frozen amount could be subject to seizure as a penalty for such an offence. Of course, this is a much lighter step than providing, as in Canada, for the Attorney General to be given the power to convert freezing orders into seizing orders, and I also tried to table such an amendment, by the way. Unfortunately, these proposals were deemed to be out of scope of the Bill, which is why we are only debating the broader terms of new clause 23.
However, given that this Bill follows on from the Economic Crime (Transparency and Enforcement) Act 2022, which involved fast-tracking sanctions laws in response to the invasion of Ukraine, it does seem slightly ironic to me that updating that sanctions regime falls outside the scope of this follow-on Bill. None the less, I of course accept the House’s ruling on that issue, but I implore the Minister and the Foreign Office who lead on this issue to stop passing the buck between Departments, as we keep seeing, and to listen to the majority of hon. Members across all parties who feel that Russia and Russians as the aggressors must pay for their barbarity and devastation of Ukraine, and not leave it up to British and western taxpayers to foot the Bill for Ukraine’s reconstruction.
New clause 4, which was so powerfully and expertly introduced by my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), would create an offence of failure to prevent fraud. That important proposal attempts to close a large gap in our existing fraud legislation book. I go back to 2010 when, as shadow Solicitor General I led for the then Conservative Opposition on the Bribery Act, which we also did once we came into government. Working on a cross-party basis, we added into that Act the concept of senior managers of a venture being liable for bribery happening at the coalface, if they could not show that they took all reasonable steps to prevent that bribery from happening. Before that, prosecutors had to prove at each layer of management that those above them, the so called “directing minds”, were guilty of the crime. In practice, that was almost always impossible with larger companies—my right hon. and learned Friend explained this at some length earlier so I will not go into great detail. As he said, that Act focuses the minds of those in management, especially in big companies, so that they think carefully about the processes they have in place, and regularly review such processes. Such an approach also states that inaction is not acceptable, let alone an excuse.
The resulting new bribery law was considered a great success. I recall a discussion about a decade ago with the then SFO director, Sir David Green, who was publicly advocating for the same change to be made for the offence of fraud, and I note the SFO’s current director is saying exactly the same. To put that in context, the main fraud prosecutors in this country have consistently been saying for more than a decade that they need this legislation in order to do their jobs properly, yet here we are some dozen years later, and it still has not happened. I am frankly amazed by that, and I am not quite sure why it has not happened. I heard from my right hon. and learned Friend the history of how the measure was delayed, but I am still not sure why it was delayed. I recall the now Lord Chancellor talking of consulting on this issue back in 2016, so again—why the inaction?
Together with other right hon. and hon. Members I got a letter dated 20 January from Ministers from the Home Office and the Department for Business, Energy and Industrial Strategy saying that they are “carefully assessing options”. Does that imply another dozen years of assessing something that we all know needs to happen? If we are to be serious about combating fraud, we must get on with this. If the Government are not happy with the wording in new clause 4, they should come up with their own wording. Fraud now constitutes just under half of all crime committed in the UK, and we must be doing more to counter it at all levels.
I have now to announce the result of today’s deferred Divisions.
On the draft Environmental Targets (Biodiversity) (England) Regulations 2022, the Ayes were 302 and the Noes were 166, so the Ayes have it.
On the draft Environmental Targets (Woodland and Trees Outside Woodland) (England) Regulations 2022, the Ayes were 302, the Noes were 166, so the Ayes have it.
On the draft Environmental Targets (Water) (England) Regulations 2022, the Ayes were 300, the Noes were 170, so the Ayes have it.
On the draft Environmental Targets (Fine Particulate Matter) (England) Regulations 2022, the Ayes were 301 and the Noes were 170, so the Ayes have it.
On the draft Environmental Targets (Residual Waste) (England) Regulations 2022, the Ayes were 301 and the Noes were 170, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
It is a pleasure to speak to new clauses 1 and 2 in my name and those of many others, and it is a pleasure to follow so many excellent contributions to the debate. I hope it has become clear that there is a wide and deep cross-party consensus about the need to take this overdue Bill and repower it with not only good laws but proper resourcing so that we can begin to ensure that economic criminals in this country are put under rather more pressure.
A lot is in a name, and the Bill’s name is the Economic Crime and Corporate Transparency Bill. As the hon. Member for Cheadle (Mary Robinson) pointed out, what is crucial to ensuring the corporate transparency we need to police economic crime is information. Much of that information comes from whistleblowers and, crucially, from courageous journalists who are prepared to take tremendous risks and go to tremendous lengths to pursue the truth, publish the truth and hold the guilty to account.
The challenge we have is that we know we cannot police economic crime without such transparency, but that old advice to journalists to follow the money in pursuit of the truth is becoming almost impossible because our courts—English courts, London courts, which were sanctuaries for justice for 1,000 years—are becoming the strike point of choice for oligarchs around the world to intimidate, to cow and to deter journalists from publishing the truth with the threat of sky-high legal costs. My friend the right hon. Member for Haltemprice and Howden (Mr Davis), who is not in his place, and I, together with the hon. Member for Isle of Wight (Bob Seely), have been pushing this argument for almost a year. Yesterday, the hon. Member for Isle of Wight presented to the House a first-class private Member’s Bill, which I was proud to sign. I commend the Minister for the work that he did when he was Chair of the Foreign Affairs Committee on ensuring that the cancer of strategic legal action against public participants is something that we know about and are collectively determined to act on.
Within the sub judice rules and exemptions that govern the debate, I can talk about some of the evidence that we now have on the record. There are now so many cases that it has become clear that there is a playbook for oligarchs. It is a playbook that all of them know and all of them follow. It is a playbook that is now predictable, and it is a playbook that we must draw to a close. We could draw it to a close this afternoon by agreeing to the amendments that we have tabled with cross-party support.
The right hon. Member is making his point powerfully. Does he not agree that they are laughing at us, surely? We impose sanctions, yet this still happens. We are talking about the head of the Wagner Group—a group that is operational in many countries across the world. Are we seriously meant to believe that he had no access to money in any other jurisdiction anywhere else in the world—that he had to access his British pounds in order to instruct lawyers to do exactly as the right hon. Member has described? The whole thing is farcical, is it not?
The hon. Lady is absolutely right. Here we are, licensing a warlord to draw down funds and move them into the NatWest bank account of a London law firm to prosecute a case that undermines the sanctions we imposed on that warlord in the first place.
Let us briefly go through the timeline of the case because it is so important and illustrative of just how broken the system has become.
I commend my right hon. Friend for the work he has done consistently over a long period on this issue. It is important to highlight the scale of the problem in London. Is it not true that there are more SLAPP cases being taken in the London courts than there are in Europe and America put together? Does that not illustrate the scale of the problem and the urgency with which we need to deal with it?
My hon. Friend is absolutely right. I said earlier that London is now the preferred strike point for oligarchs in intimidating journalists. When the Foreign Policy Centre, whose work I must commend, surveyed investigative journalists, it found that three quarters of them had suffered some kind of legal attack to silence them. The UK legal system accounted for more of those legal actions than the United States and Europe put together. That is how bad this has now become. That is how rotten our system has now become. That is why it is so outrageous that the head of the Wagner Group was given the licences. Let us be clear about this guy. This is someone who has been running mercenary operations in Sudan, Mozambique, Syria, Central African Republic, Libya and Mali—and, of course, his forces have now been redeployed to the theatres in Ukraine.
It was in August 2020 that Eliot Higgins and Bellingcat began running a series of stories that exposed the barbarities of the Wagner Group in Africa, including offences such as the murder of CNN journalists. It took the British Government and the Foreign Office until 31 December 2020 to put sanctions on Prigozhin, even though, by the way, he had been sanctioned much earlier in the Unites States for the quiet sin of running troll farms intervening in the American presidential campaign. None the less, we got around to it at the back end of 2020. In the citation for sanctions, the Foreign, Commonwealth and Development Office wrote that Prigozhin was providing
“a deniable military capability for the Russian state”.
That feels quite a big sin to me, running a deniable military capability for the Russian state. That sounds like a pretty good reason for sanctions. That sounds like a pretty good reason for not offering carve-outs to sanctions to undermine them in British courts.
When Mr Prigozhin found out about the sanctions he was not very happy, so he sought to undermine them by suing Bellingcat, or Eliot Higgins in an English court. He had a choice and in fact a debate: “Do we do it in a Russian court, a Dutch court or an English court?” The conclusion was to go for Eliot Higgins in an English court. To prosecute the case, he had to fly the lawyers out to St Petersburg, so the Treasury licensed £4,788.04 to help make that happen: over £3,500 for business class flights, £320 for accommodation at the Grand Hotel Europe Belmond, £150 for subsistence—that’ll buy a pretty good dinner—£200 for PCR testing and £400 for express visas. That is what servants of the Crown, under the supervision of Ministers of the Crown, signed off.
It is a great pleasure to follow my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne). I applaud his commitment and thoroughness in the work that he has done.
I rise to support new clauses 1, 2, 4, 5, 6, 7 and 21. Economic crime is usually committed in the shadows, yet its impact is as clear as day: there are the American candy stores down Oxford Street, there are thousands of empty flats in London and—closer to my home—in Liverpool and Manchester, and we know how dirty money laundered here has financed the Russian invasion of Ukraine.
The crimes that the Bill aims to prevent are so often shrouded in secrecy. The Bill is necessary, as we can all agree, but the Government need to do it right. They need to accommodate sensible amendments—notably those investigated and researched by groups such as the all-party parliamentary group on anti-corruption and responsible tax, which my right hon. Friend the Member for Barking (Dame Margaret Hodge) has led tirelessly. Indeed, the Minister—the hon. Member for Thirsk and Malton (Kevin Hollinrake)—co-signed the manifesto on which many of today’s amendments are based, so I would expect him to support them. I urge him to do so.
New clauses 1 and 2 are crucial to getting a grip on the London laundromat. Journalists are the fourth estate in our society. They investigate and shed light on the secrecy that surrounds economic crime, yet only this week it was reported that journalist Eliot Higgins was hounded by a British law firm that was given permission by the Government to work on behalf of the murderous and barbaric Wagner Group. My right hon. Friend the Member for Birmingham, Hodge Hill has clearly outlined what has come out today and what he has been researching.
Wealthy oligarchs cannot be allowed to use English courts to threaten journalists with huge legal costs. If these wealthy individuals are able to abuse their wealth and power, no light will be shed on the secret world of economic crime.
New clauses 4 to 6 aim to introduce a corporate offence of failing to prevent economic crime. They are critical to removing the veil of secrecy. Fraud, false accounting, money laundering, bribery and tax evasion are witnessed by finance directors, accountants and chief executives. Whether they are willing participants, trying to keep quiet or, crucially, failing to take action, it must be a crime. Ignorance or neglect cannot be a defence, but it is not only senior management who should be held responsible. If senior management were involved, or knew and did nothing, the corporation must be liable. After all, a business is the people who work for it. Corporations are not faceless bodies. Putting the responsibility on the individual and the corporation will help to create a culture of transparency, which is one of the core purposes of the Bill—to bring economic crime out of the shadows.
New clause 7 covers whistleblowers, possibly the most important issue of all. As I have said, the best way to prevent economic crime is by removing the veil of secrecy. Whistleblowers provide the sunlight to do just that. Economic crime is not committed by faceless organisations, it is committed by people. If the Government introduce the protections for whistleblowers outlined in new clause 7, they will help law enforcement to do its job. Having laws in place to prosecute economic crime will do little unless whistleblowers can alert law enforcement agencies, but it is important to remember that whistleblowers are people and they have families and livelihoods to protect. Far too many lives have been shattered by a failure to protect whistleblowers. If the Government want to remove the veil of secrecy surrounding economic crime, protecting whistleblowers simply must be part of the strategy.
The past year has put a spotlight on the work that my right hon. Friends the Members for Barking and for Birmingham, Hodge Hill, my hon. Friend the Member for Rhondda (Sir Chris Bryant) and many others have done to put a spotlight on economic crime. Russia’s actions towards Ukraine have brought about the political will and urgency to get this Bill passed. The oligarchs, dictators and their supporters have had their money here for decades. The Bill needs to make sure that Britain is not a safe haven for economic crime. The veil of secrecy must be lifted and it must never return. It is not who we are. Britain should be playing no part in propping up their regimes.
I urge the Government to use the good will they have on this Bill and to support the new clauses I have mentioned. They should not waste this opportunity. The new clauses are bipartisan and based on evidence and politics. It is sickening and heartrending to see what is going on in Great Britain, America, China and Russia. Around the world, people are asking, “What is going on? What are politicians doing?” Many of us are ashamed and cannot hold our heads high. I urge the Government to give the public something worth having. The Bill gives us huge opportunities. I know the people on the Government Front Bench, I know where their hearts are, and I ask them to be brave, to use this opportunity to the maximum for today and tomorrow—it can be finalised in the future.
My apologies, Madam Deputy Speaker. For some reason I was under the impression that the hon. Member for Aberavon (Stephen Kinnock) would be speaking first.
Order. I think I should explain, for the benefit of Hansard, that the shadow Minister will be coming back on Third Reading. It is customary to go straight to the Minister, given that he moved the motion for the lead new clause.
I thought that we were to have the joy and the privilege of hearing from the hon. Member for Aberavon, who can never say too much in this Chamber, or indeed anywhere else—which is lucky, because he very rarely says too little.
It is a huge pleasure to have been here this afternoon. Members in all parts of the House have made extremely powerful points, but I will touch on just a few of them, because many have been covered at length and in detail on numerous other occasions. If Members will forgive me, I will deal straight away with a few of the matters that I think require immediate attention.
I thank my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) for tabling new clause 6 and for the way in which he has approached the area of corporate criminal liability, in which he and I agree that reform is required. That is why the Government commissioned a review by the Law Commission, which my right hon. and learned Friend cited and which showed a definite need to clamp down on economic crime conducted by commercial organisations. We have been working closely across Government and with prosecutors in carefully considering its recommendations and how improvements can best be made. It is vital that any reform can be used by law enforcement agencies, does not duplicate what already exists and avoids placing unnecessary burdens on legitimate businesses, but we must also operate within the constraints of the Bill.
I share my right hon. and learned Friend’s passion for change. I am immensely grateful for his thoughtful input, and I greatly value my engagement with him, and with other Members, on this issue. I can assure him that the Government intend to address the need for a “failure to prevent” offence in the other place, and I would welcome further discussion with him about the most effective way in which that can be done.
I am extremely grateful for what my right hon. Friend has said, but may I gently press him on the issues of “failure to prevent”, fraud, money laundering and false accounting offences—I accept that they may well have to be separate—and a further discussion on the identification doctrine? If so, I will not need to press my new clauses to a vote.
My right hon. and learned Friend is certainly more learned than me, and I will certainly be listening to his views. There are a number of areas that I am sure we will be able to discuss, and I am sure we will reach a conclusion that is acceptable to all sides.
I am grateful for the assurance that an amendment will be introduced in another place, but may I also have an assurance that it will cover both corporations and individual directors?
The right hon. Lady knows very well that I would find it impossible not to listen to her. I look forward to seeing how we can return to this issue. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), will no doubt wish to have a strong input as well, so I shall say no more at this stage.
Let me now touch on the question of whistleblowers, and pay enormous tribute to my hon. Friend the Member for Cheadle (Mary Robinson), who has been a friend of many of us for a number of years since she was first elected and who has championed, consistently and clearly, the need for an office for whistleblowers. She is absolutely right: what the country needs is an office for whistleblowers, and what we need to do is ensure that we have the updates to the legislation that she so correctly highlighted. The establishment of such an office would, however, be a significant undertaking. It would have major financial applications owing to its size, it would require significant staffing, and, as matters stand, it might duplicate the role of regulators without the same level of sector expertise. I know that my hon. Friend had the opportunity to meet my hon. Friend the Under-Secretary of State earlier this week to discuss her new clause and plans for the review, which I understand will be set out soon, I hope that the meeting was constructive.
I have indeed had a meeting with the Under-Secretary to discuss this. There is a long way to go on it and I am steadfast about setting up the office for whistleblowers. However, the conversations have been constructive, I am grateful to Ministers and I will not be pressing my new clause to a vote.
I am grateful to my hon. Friend for that and to the Under-Secretary for having had those conversations. He knows my support for her interest in this important matter.
Clearly, many amendments have been tabled today. The last point I wish to make before we move on to Third Reading is that the Government listened an awful lot on this Bill. Many of us, including myself and the Under-Secretary, who have been taking it through this place, have been listening extremely carefully, for many reasons. One of those reasons is that we picked this up, as many people do, a long way down its process of drafting and through its progress through this House. No doubt there are areas where all of us could tweak, adjust, test and push, but we think that the Bill offers major progress on the situation where we began; I am delighted that that point was shared across this House. So although there are areas where we could have further discussion—I am sure the other place will have criticisms and comment, and we will have improvements and additions—we feel that this Bill, as it stands, is a vast improvement on where we are. Although there is progress to be made, and there always will be, we believe that the Bill marks a useful point of progress for our country in fighting economic crime.
Question put and agreed to.
New clause 14 accordingly read a Second time, and added to the Bill.
New Clause 3
Home Office review of the Tier 1 (Investor) visa scheme: publication
“Home Office review of the Tier 1 (Investor) visa scheme: publication
Within a day of the passage of this Act, the Secretary of State must publish in full the findings of the Home Office review of the Tier 1 (Investor) visa scheme which relate to economic crime.” —(Layla Moran.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
159|17:11|220|290|The House divided:|Question accordingly negatived.||0|0
New Clause 26
Beneficial owners in overseas territories
‘(1) The Sanctions and Anti-Money Laundering Act 2018 is amended as follows.
(2) In section 51, after subsection (5) insert—
“(5A) The Secretary of State must ensure that the Order in Council under subsection (2) above comes into effect on date no later than 30 June 2023.”’—(Stephen Kinnock.)
This new clause would amend the Sanctions and Anti-Money Laundering Act 2018 to ensure that an Order in Council requiring open registers of beneficial ownership in the British Overseas Territories comes into force no later than 30 June 2023.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
160|17:27|222|289|The House divided:|Question accordingly negatived.||0|0
New Clause 27
Compensation for Victims of Economic Crime
“(1) The Secretary of State must, no later than 90 days from the date on which this Act comes into force, publish and lay before Parliament a strategy for the potential establishment of a fund for the compensation of victims of economic crime.
(2) The strategy may include provisions on the management and disposal of any assets realised by the government, or any body with law enforcement responsibilities in relation to economic crime, under relevant UK legislation.”—(Stephen Kinnock.)
This new clause would require the Secretary of State to prepare and publish a strategy on the potential establishment of a fund to provide compensation to victims of economic crime.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
161|17:40|221|289|The House divided:|Question accordingly negatived.||0|0
Clause 171
Information orders: money laundering
Amendments made: 44, page 152, leave out lines 20 to 29 and insert—
“(a) a request has been made by a foreign FIU to the National Crime Agency for the provision of the information required to be given under the order,
(b) the National Crime Agency has reasonable grounds to believe that the information would assist the foreign FIU to conduct—
(i) operational analysis of information that is relevant to money laundering or suspected money laundering, or
(ii) strategic analysis identifying trends or patterns in the conduct of money laundering, or systematic deficiencies or vulnerabilities which have been, are being or are likely to be, exploited for the purposes of money laundering,
and that the information is likely to be of substantial value to the foreign FIU in carrying out such analysis,
(ba) the provision of the information by the National Crime Agency to the foreign FIU would be for the purposes of the criminal intelligence function of the National Crime Agency, so far as it relates to money laundering,”.
This amendment modifies the conditions that have to be met before an information order can be granted by a court to provide information to the National Crime Agency in a case where a request for the information has been made by a foreign financial intelligence unit.
Amendment 45, page 152, leave out lines 32 to 34.—(Tom Tugendhat.)
This amendment is consequential on Amendment 44.
Clause 172
Information orders: terrorist financing
Amendments made: 46, page 155, leave out lines 29 to 38 and insert—
“(a) a request has been made by a foreign FIU to the National Crime Agency for the provision of the information required to be given under the order,
(b) the National Crime Agency has reasonable grounds to believe that the information would assist the foreign FIU to conduct—
(i) operational analysis of information that is relevant to terrorist financing or suspected terrorist financing, or
(ii) strategic analysis identifying trends or patterns in the conduct of terrorist financing, or systematic deficiencies or vulnerabilities which have been, are being or are likely to be, exploited for the purposes of terrorist financing,
and that the information is likely to be of substantial value to the foreign FIU in carrying out such analysis,
(ba) the provision of the information by the National Crime Agency to the foreign FIU would be for the purposes of the criminal intelligence function of the National Crime Agency, so far as it relates to terrorist financing,”.
This amendment modifies the conditions that have to be met before an information order can be granted by a court to provide information to the National Crime Agency in a case where a request for the information has been made by a foreign financial intelligence unit.
Amendment 47, page 155, leave out lines 41 to 43.—(Tom Tugendhat.)
This amendment is consequential on Amendment 46.
Clause 175
Indirect disclosure of information: restrictions on civil liability
Amendments made: 48, page 160, line 12, leave out “1(1)(l) or” and insert “1(1)(j) to”.
The amendment extends the categories of business in the regulated sector in relation to which clause 175 applies, to include business in the audit, insolvency and tax sectors.
Amendment 49, page 160, line 13, leave out “accountancy” and insert
Amendments made: 50, page 169, line 4, at end insert—
“(1A) Section (Reports on the implementation and operation of Parts 1 to 3) comes into force at the end of the period of 2 months beginning with the day on which this Act is passed.”
This amendment provides for NC15 to come into force 2 months after royal assent.
Amendment 57, page 169, line 7, at end insert—
“(2A) The following come into force on the day on which this Act is passed—
(a) paragraph 1 of Schedule 7 so far as it inserts section 303Z25 into the Proceeds of Crime Act 2002, and
(b) section 167 so far as it relates to that paragraph.”
This amendment provides for inserted section 303Z25 of the Proceeds of Crime Act 2002 (requirement to prepare codes of practice in relation to powers to search for cryptoasset-related items) to come into force on the day on which this Act is passed.
Amendment 51, page 169, line 8, after “subsection” insert “(1A) or”.
This amendment is consequential on Amendment 50.
Amendment58, page 169, line 8, after “(2)” insert “or (2A)”.—(Tom Tugendhat.)
This amendment is consequential on Amendment 57.
Schedule 6
Cryptoassets: confiscation orders
Amendments made: 59, page 201, line 39, leave out “sheriff” and insert “relevant court”.
This amendment and Amendments 60 and 61 amend inserted section 131ZB of the Proceeds of Crime Act 2002 (realisation of confiscated cryptoassets) to provide that (as well as the sheriff) the High Court of Justiciary and the Sheriff Appeal Court may make an order under that section requiring confiscated cryptoassets to be realised.
Amendment60, page 202, line 11, leave out “sheriff of the sheriff’s” and insert “relevant court of its”.
See Amendment 59.
Amendment 61, page 202, line 19, at end insert—
“(7) In this section ‘relevant court’ means—
(a) the court which makes the confiscation order, or
(b) the sheriff court responsible for enforcing the confiscation order under section 211 of the Procedure Act as applied by section 118(1).”
See Amendment 59.
Amendment 62, page 203, line 24, leave out “sheriff” and insert “relevant court”.
This amendment and Amendments 63, 64, 65 and 66 amend inserted section 131AA of the Proceeds of Crime Act 2002 (destruction of seized cryptoassets) to provide that (as well as the sheriff) the High Court of Justiciary and the Sheriff Appeal Court may make an order under that section requiring seized cryptoassets to be destroyed.
Amendment 63, page 203, line 41, leave out “sheriff of the sheriff’s” and insert “relevant court of its”.
See Amendment 62.
Amendment 64, page 203, line 43, leave out “sheriff’s” and insert “relevant court’s”.
See Amendment 62.
Amendment 65, page 204, line 3, leave out “sheriff” and insert “relevant court”.
See Amendment 62.
Amendment 66, page 204, line 12, at end insert—
“(8) In this section ‘relevant court’ means—
(a) the court which makes the confiscation order mentioned in subsection (2)(a), or
(b) the sheriff court responsible for enforcing that confiscation order under section 211 of the Procedure Act as applied by section 118(1).”
See Amendment 62.
Amendment 67, page 204, line 14, leave out “131ZB(3), 131A(3) or 131AA(2)” and insert “131A(3)”.
This amendment is consequential on Amendment 68.
Amendment 68, page 204, line 14, at end insert—
“(1A) After subsection (1) insert—
‘(2A) If the relevant court decides not to make an order under section 131ZB(3) or 131AA(2), the prosecutor may appeal to the Court of Session.’”
This amendment amends section 131C of the Proceeds of Crime Act 2002 (appeals under sections 131A and 131B) to make provision for prosecutors to appeal to the Court of Session against a decision of the relevant court not to make an order under section 131ZB or 131AA of that Act.
Amendment 69, page 204, line 15, leave out sub-paragraph (3) and insert—
“(3) For subsection (2) substitute—
‘(2) If—
(a) a sheriff makes an order under section 131A(3), or
(b) the relevant court makes an order under section 131ZB(3) or 131AA(2),
a person affected by the order may appeal to the Court of Session.’”
This amendment amends section 131C of the Proceeds of Crime Act 2002 (appeals under sections 131A and 131B) to make provision for a person affected by an order made under section 131A, 131ZB or 131AA of that Act to appeal to the Court of Session.
Amendment 70, page 204, line 17, at end insert—
“(4A) After subsection (7) insert—
‘(8) In this section “relevant court”—
(a) in relation to a decision or order made under section 131ZB, has the same meaning as in that section, and
(b) in relation to a decision or order made under section 131AA, has the same meaning as in that section.’”
This amendment is consequential on Amendments 68 and 69.
Amendment 71, page 204, line 32, leave out “the sheriff” and insert “a court”.—(Tom Tugendhat.)
This amendment is consequential on Amendment 62.
Schedule 7
Cryptoassets: civil recovery
Amendments made: 72, page 218, line 25, at end insert—
“(2) A requirement in section 303G(2), 303H(2) or 303I(2), as applied by subsection (1), to carry out a relevant action may be satisfied by the carrying out of that action before this section comes into force.
(3) In subsection (2) ‘relevant action’ means any of the following—
(a) publishing a draft code of practice;
(b) considering any representations made about the draft;
(c) modifying the draft in light of any such representations.
(4) The requirement in section 303G(3), as applied by subsection (1), to consult the Attorney General may be satisfied by consultation carried out before this section comes into force.”
This amendment amends inserted section 303Z25 of the Proceeds of Crime Act 2002 (cryptoassets: codes of practice) to provide that certain preliminary steps in relation to the making of a code of practice under that section (for example, consulting on a draft code of practice) may be carried out before that section comes into force.
Amendment 73, page 220, line 36, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A (evidence overseas).”
This amendment and Amendments 74, 75, 79 and 80 provide that a “request for assistance” in inserted Chapters 3C to 3F of Part 5 of the Proceeds of Crime Act 2002 (cryptoassets: civil recovery) includes a request made by the Scottish Ministers to an authority exercising equivalent functions in a foreign country or a request made under section 375A or 408A of that Act.
Amendment 74, page 222, line 45, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A (evidence overseas).”
See Amendment 73.
Amendment 75, page 227, line 17, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A (evidence overseas).”
See Amendment 73.
Amendment 76, page 229, line 6, leave out from “detained” to “or” in line 7 and insert “under Chapter 3C”.
This amendment provides that cryptoassets detained under any provision of Chapter 3C of Part 5 of the Proceeds of Crime Act 2002 (forfeiture of cryptoassets) (including under section 303Z31 of that Act) are subject to forfeiture under section 303Z41 of that Act.
Amendment 77, page 230, line 20, leave out from “detained” to end of line 21 and insert “under Chapter 3C”.
This amendment is consequential on Amendment 76.
Amendment 78, page 230, line 22, leave out
“in pursuance of the order”
and insert “under Chapter 3C”.
This amendment is consequential on Amendment 76.
Amendment 79, page 246, line 18, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A (evidence overseas).”
See Amendment 73.
Amendment 80, page 247, line 18, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A (evidence overseas).”
See Amendment 73.
Amendment 81, page 254, line 41, after “303Z30” insert “, 303Z31”.
This amendment and Amendments 82, 83, 84, 85 and 86 provide that where cryptoassets are detained under section 303Z31 of the Proceeds of Crime Act 2002 (seizure of cryptoassets) or paragraph 10Z7AF of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (seizure of terrorist cryptoassets) and are subject to an application for forfeiture, those cryptoassets are not “free property” for the purposes of the Proceeds of Crime Act 2002.
Amendment 82, page 255, line 2, after “10Z7AE” insert “, 10Z7AF”.
See Amendment 81.
Amendment 83, page 255, line 26, after “303Z30” insert “, 303Z31”.
See Amendment 81.
Amendment 84, page 255, line 32, after “10Z7AE” insert “, 10Z7AF”.
See Amendment 81.
Amendment 85, page 256, line 8, after “303Z30” insert “, 303Z31”.
See Amendment 81.
Amendment 86, page 256, line 14, after “10Z7AE” insert “, 10Z7AF”.
See Amendment 81.
Amendment 87, page 258, line 12, at end insert—
“(5A) After section 311 insert—
‘Chapters 3C to 3F: supplementary
311A Financial investigators
(1) This section applies where an accredited financial investigator of a particular description—
(a) applies for an order under section 303Z28, 303Z32, 303Z57 or 303Z58 (further detention of cryptoassets etc),
(b) applies for forfeiture under section 303Z41 or 303Z60 (forfeiture of cryptoassets etc), or
(c) brings an appeal under, or relating to, Chapter 3E or 3F (cryptoassets etc).
(2) Any subsequent step in the application or appeal, or any further application or appeal relating to the same matter, may be taken, made or brought by a different accredited financial investigator of the same description.’”
This amendment contains a consequential amendment to Part 5 of the Proceeds of Crime Act 2002. It inserts new section 311A, which includes provision about accredited financial investigators making certain applications or appeals in relation to Chapters 3C to 3F of that Part.
Amendment 88, page 258, line 13, after “Scottish Ministers)” insert
“—
(a) in paragraph (c), for “271(3) and (4)” substitute “271”, and
(b) ”.
This amendment amends section 312(2) of the Proceeds of Crime Act 2002 (performance of functions of Scottish Ministers by constables in Scotland) to provide that all functions of the Scottish Ministers within section 271 of that Act (agreements about associated and joint property) may not be performed by constables.
Amendment 89, page 258, line 16, at end insert—
“(ra) section 303Z28(5)(b) (further detention of seized cryptoasset-related items);
(rb) section 303Z32(5)(b) (further detention of seized cryptoassets);
(rc) section 303Z34(4) and (5)(b)(i) (release of cryptoassets and cryptoasset-related items);”.
This amendment and Amendments 90 and 91 consequentially amend section 312(2) of the Proceeds of Crime Act 2002 (performance of functions of Scottish Ministers by constables in Scotland) to provide that certain functions of the Scottish Ministers in inserted Chapters 3C to 3F of Part 5 of that Act may not be performed by constables.
Amendment 90, page 258, line 20, at end insert—
“(ua) section 303Z44 (agreements about associated and joint property);
(ub) section 303Z45(10) (associated and joint property: default of agreement);
(uc) section 303Z46(2) (continuation of crypto wallet freezing order pending appeal);
(ud) section 303Z47(1) (sections 303Z41 to 303Z45: appeals);”.
See Amendment 89.
Amendment 91, page 258, line 25, at end insert—
“(y) section 303Z61(1) (appeal against decision under section 303Z60).”
See Amendment 89.
Amendment 92, page 263, line 6, at end insert—
“11A In section 453B of the Proceeds of Crime Act 2002 (certain offences in relation to SFO officers), in subsection (5), after paragraph (g) insert—
‘(ga) section 303Z21 (powers to search for cryptoasset-related items);
(gb) section 303Z26 (powers to seize cryptoasset-related items);
(gc) section 303Z27 (powers to detain cryptoasset-related items;’.” —(Tom Tugendhat.)
This amendment consequentially amends section 453B of the Proceeds of Crime Act 2002 (certain offences in relation to SFO officers) to provide that the offences in that section apply in relation to an SFO officer who is acting in exercise of certain cryptoasset-related powers in inserted Chapter 3C of Part 5 of that Act.
Schedule 8
Cryptoassets: terrorism
Amendments made: 93, page 267, line 19, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”
This amendment and Amendments 94, 95, 99 and 100 provide that a “request for assistance” in inserted Parts 4BA to 4BD of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (cryptoassets: terrorism) includes a request made by the Scottish Ministers to an authority exercising equivalent functions in a foreign country or a request made under section 375A or 408A of the Proceeds of Crime Act 2002.
Amendment 94, page 270, line 12, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”
See Amendment 93.
Amendment 95, page 274, line 33, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”
See Amendment 93.
Amendment 96, page 277, line 3, leave out from “detained” to “or” in line 4 and insert “under Part 4BA”.
This amendment provides that cryptoassets detained under any provision of Part 4BA of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (seizure and detention of terrorist cryptoassets) (including under paragraph 10Z7AF of that Schedule) are subject to forfeiture under paragraph 10Z7CA of that Schedule.
Amendment 97, page 278, leave out line 4 and insert “under Part 4BA”.
This amendment is consequential on Amendment 96.
Amendment 98, page 278, line 5, leave out “in pursuance of the order” and insert “under Part 4BA”.
This amendment is consequential on Amendment 96.
Amendment 99, page 295, line 20, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”
See Amendment 93.
Amendment 100, page 296, line 16, at end insert—
“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or
(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”—(Tom Tugendhat.)
I beg to move, That the Bill be now read the Third time.
I will briefly thank a few people on my behalf and on behalf of the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). I must thank my noble friend Lord Callanan, the Minister for Business, Energy and Corporate Responsibility, who continues to do so much to support the Bill and has been a great help. I also thank the Home Office Minister, Lord Sharpe of Epsom, who is a fantastic asset to our Department.
I thank my right hon. Friend the Member for East Hampshire (Damian Hinds) and my hon. Friend the Member for Sutton and Cheam (Paul Scully), who helped so much to prepare the Bill. Furthermore, I thank my hon. Friend the Member for Watford (Dean Russell), who ably shepherded the Bill through its early parliamentary stages, and the Lord Commissioner of His Majesty’s Treasury, my hon. Friend the Member for North Cornwall (Scott Mann), and his team for their excellent assistance, particularly when he courageously stood in and answered on behalf of the Department in a brief moment of surprise—mostly to him. I also thank the Home Secretary and the Secretary of State for Business, Energy and Industrial Strategy for their contributions.
I thank the Minister for his positive response to the amendments tabled by my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) and others in relation to the reform of corporate criminal responsibility. That is welcome. Will he take on board the importance of including in that the reform of the identification principle, which is a major bar to corporate prosecutions? The Justice Committee has called for that more than once in its recent reports, and it is supported by the current and previous Directors of Public Prosecutions and the current and previous Directors of the Serious Fraud Office.
I thank my hon. Friend the Chair of the Justice Committee. As he knows, this is an area of great interest and for further discussion, which we are indeed looking at taking forward.
I finish by saying an enormous thank you to the Bill team, who are in the Box today—Tom Ball and the rest of the clan—who have done a fantastic job on Burns night, of all times. Because it is a time for us to find that we are no longer wee and tim’rous beasties, but are instead going to look for that fair trojan of the human race, the “puddin’-race”—forgive me—I look forward very much to being freed of the Dispatch Box and skipping off to the whisky and the haggis. On that, Mr Deputy Speaker, thank you.
Like the Minister, I am keen to thank colleagues who have done so much and made so many valued contributions both to this Bill throughout its progress and in the debate today. I would very much like to thank the Bill team for the excellent work they have done, as always supporting us through our work and on many occasions helping to shed light where there was more or less total confusion, so we really appreciate that. I also thank our own staff. My hon. Friend the Member for Feltham and Heston (Seema Malhotra) and I are very fortunate to have wonderful teams supporting us—particularly colleagues such as Joe Bishop, Danny Hathaway and Joe Jervis—who have done so much in our teams to help us to get to this point.
It is worth just casting our minds back to October, when the Prime Minister stood on the steps of Downing Street and stated that he wanted a Government of “integrity, accountability and professionalism”. Well, we are almost 100 days into his tenure, so we are bound to take stock of how that is going, and I think it is fair to say that progress has been somewhat mixed. His Home Secretary has committed multiple breaches of the ministerial code, his chairman has just been exposed for tax avoidance on a massive scale and his claims—
Thank you very much, Mr Deputy Speaker. I was just about to make the point that the Home Secretary has talked of learning the lessons from the golden visas issue, but she still has not published the full report. Of course, we have seen many oligarchs getting those visas since the invasion of Crimea, so I would contend that that is directly relevant to the debate we are having today.
That is the key point. It is about striving for integrity, professionalism and accountability. Of course the Bill offers an outstanding opportunity to deliver the change we all want to see. As we have said on many occasions, it is a step in the right direction and we are supporting it on Third Reading, but of course it still does not go far enough on SLAPPs, golden visas, information sharing, corporate transparency, corporate criminal liability, compensating victims or, indeed, structures for enforcement.
That final point is critical. We can have all the laws we want, but if we do not enforce them—whether we are talking about economic crime or anything else—they are pointless. These were points that Bill Browder made forcefully during the evidence that he gave to our Committee and, on cryptocurrency, that the expert Aidan Larkin made in a recent meeting with me. So we need to ensure that the agencies and institutions that should be fighting the illicit finance we all want to combat are given the resources they need, and are given the political support and licence to operate they have to have if they are going to be able to deliver on what we want them to deliver.
In conclusion, the fact is that we have left the back door open and allowed our country to become a kind of fixer for the world’s dictators, kleptocrats and gangsters. We cannot go around the world preaching about the rule of law and transparency until we get our own house in order. We should not have to wait for the next “Panama Papers” or the illegal invasion of another country to force us into taking action. I said at the outset of the debate that the Opposition have approached this Bill in a spirit of constructive engagement. That has not changed and it will not change. However, we have not so far seen from Ministers sufficient openness to input from Opposition Members, or even from many of their own Back Benchers, but we welcome the remarks that the Minister made in his winding-up speech. We look forward to the progress that we wish to see being made in the other place as rapidly as possible. It is not too late, there is still time, and I genuinely hope that the remaining stages of the Bill will see the gaps filled, the loopholes closed, and the opportunities seized.
I thank everybody who has contributed to the Bill. It has been a cross-party and worthwhile effort, and everybody who has been part of it has felt that. I hope the Government do their bit and take that cross-party effort in the spirit in which we meant it. We want to improve the Bill and for it to do everything it can do right now, rather than waiting for some distant point in the future when we come back and say, “We’ve still got these problems and this Bill, which could have addressed them, has not.” We have been there before. We had the Sanctions and Anti-Money Laundering Bill, and other Bills while I have been in this House could have addressed or fixed these problems, yet we are here again today still not fixing all the problems. Who knows when parliamentary time will allow us to pass this way again.
I thank the experts who have given so much evidence to us individually and as parliamentarians in Committee and other places. In particular I thank Helena Wood of the Royal United Services Institute, Duncan Hames of Transparency International, Bill Browder, Oliver Bullough and Graham Barrow, the expert on Companies House. He has had his own health issues but has continued to campaign on Companies House. We wish him well and a speedy recovery, and all the best with his treatment.
I also thank my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands). He came on board with this Bill and was very supportive and helpful throughout its passage, raising the issue of phoenixing, which is of concern to many of our constituents. I encourage the Government to look at how they can fix phoenixing, and ensure that our constituents and companies based in our constituencies do not fall victim to companies that seek to abuse the system in such a way. I give great thanks to the right hon. Member for Barking (Dame Margaret Hodge) who has been such a tremendous champion for all these issues over a long period. Her expertise, her contribution, and the way that she convenes people within this place has been incredibly important for this agenda, and I cannot thank her enough for that work.
New clause 4—Offence of failure to prevent fraud, false accounting or money laundering—
‘(1) A relevant commercial organisation (“C”) is guilty of an offence under this section where—
(a) a person (“A”) associated with C commits a fraud, false accounting or an act of money laundering, or aids and abets a fraud, false accounting or act of money laundering, intending—
(i) to confer a business advantage on C, or
(ii) to confer a benefit on a person to whom A provides services on behalf of C, and
(b) fails to prevent the activity set out in paragraph (a).
(2) C does not commit an offence where C can prove that the conduct detailed in subsection (1)(a) was intended to cause harm to C.
(3) It is a defence for C to prove that, at the relevant time, C had in place procedures that were reasonable in all the circumstances and which were designed to prevent persons associated with C from undertaking the conduct detailed in subsection (1)(a).
(4) For the purposes of this section “relevant commercial organisation” means—
(a) for the offence as it relates to false accounting and fraud, “relevant commercial organisations” are defined as—
(i) a body which is incorporated under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere),
(ii) any other body corporate (wherever incorporated) which carries on a business, or part of a business, in any part of the United Kingdom,
(iii) a partnership which is formed under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere), or
(iv) any other partnership (wherever formed) which carries on a business, or part of a business, in any part of the United Kingdom, and
(v) for the purposes of this section, a trade or profession is a business;
(b) for the offence as it relates to money laundering, “relevant commercial organisations” are defined as—
(i) credit institutions;
(ii) financial institutions;
(iii) auditors, insolvency practitioners, external accountants and tax advisers;
(iv) independent legal professionals;
(v) trust or company service providers;
(vi) estate agents and letting agents;
(vii) high value dealers;
(viii) casinos;
(ix) art market participants;
(x) cryptoasset exchange providers;
(xi) custodian wallet providers.”
This new clause introduces a new criminal corporate offence for failure to prevent fraud, false accounting and money laundering, by aligning it with other corporate criminal offences.
New clause 5—Identification doctrine—
‘(1) A body corporate commits an offence of fraud, money laundering, false accounting, bribery and tax evasion where the offence is committed with the consent, connivance or neglect of a senior manager.
(2) An individual is a “senior manager” of an entity if the individual—
(a) plays a significant role in—
(i) the making of decisions about how the entity’s relevant activities are to be managed or organised, or
(ii) the managing or organising of the entity’s relevant activities, or
(b) is the Chief Executive or Chief Financial Officer of the body corporate.
(3) A body corporate also commits an offence if, acting within the scope of their authority—
(a) one or more senior managers engage in conduct, whether by act or omission, such that, if it had been the conduct of only one representative, that representative would have been a party to the offence; and
(b) the senior manager who is responsible for the aspect of the organization’s activities that is relevant to the offence — or the senior managers collectively — fail to take all reasonable steps to prevent that offence being committed.”
This new clause reforms the “identification doctrine”, so that a body corporate commits an economic crime offence where the offence is committed with the consent, connivance or neglect of a senior manager or senior managers.
New clause 6—Failure to prevent fraud, false accounting or money laundering: individual liability—
‘(1) A person (“S”) commits an offence if—
(a) at a time when S is a senior manager or corporate officer of a corporate body (“C”), S—
(i) takes, or agrees to the taking of, a decision by or on behalf of the corporate body as to the way in which the business of the corporate body is conducted, and
(ii) fails to take any steps that S could take to prevent such a decision being taken;
(b) at the time of the decision, S is aware of a risk that the implementation of the decision may lead to the commission of an offence of money laundering, fraud, false accounting, bribery or tax evasion; and
(c) the implementation of the decision causes C to commit such an offence.
(2) For the purposes of this section—
(a) an individual is a “senior manager” of a corporate body if the individual plays a significant role in—
(i) the making of decisions about how the entity’s relevant activities are to be managed or organised, or
(ii) the actual managing or organising of the entity’s relevant activities;
(b) “officer”, in relation to a body corporate, means—
(i) a director, manager, associate, secretary or other similar officer, or
(ii) a person purporting to act in any such capacity;
(c) in paragraph (b)(i) “director”, in relation to a body corporate whose affairs are managed by its members, means a member of the body corporate.
(3) A person guilty of an offence under this section is liable—
(a) on summary conviction—
(i) in England and Wales, to imprisonment for a term not exceeding 12 months (or 6 months, if the offence was committed before the commencement of section 154(1) of the Criminal Justice Act 2003) or a fine, or both;
(ii) in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both;
(iii) in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine, or both.”
This new clause introduces direct criminal liability for corporate officers who take a decision, or fail to take a decision, that knowingly results in an offence being committed.
New clause 7—Whistleblowing: economic crime—
‘(1) Whistleblowing is defined for the purposes of this section as any disclosure of information suggesting that, in the reasonable opinion of the whistleblower, an economic crime—
(a) has occurred,
(b) is occurring, or
(c) is likely to occur.
(2) The Secretary of State must, within twelve months of the date of Royal Assent to this Act, set up an office to receive reports of whistleblowing as defined in subsection (1) to be known as the Office for Whistleblowers.
(3) The Office for Whistleblowers must—
(a) protect whistleblowers from detriment resulting from their whistleblowing,
(b) ensure that disclosures by whistleblowers are investigated, and
(c) escalate information and evidence of wrongdoing outside of its remit to another appropriate authority.
(4) The objectives of the Office for Whistleblowers are—
(a) to encourage and support whistleblowers to make whistleblowing reports,
(b) to provide an independent, confidential and safe environment for making and receiving whistleblowing information,
(c) to provide information and advice on whistleblowing, and
(d) to act on evidence of detriment to the whistleblower in line with guidance set out by the Secretary of State in regulations.
(5) The Office for Whistleblowers must report annually to Parliament on the exercise of its duties, objectives and functions.”
New clause 21—Civil recovery: costs of proceedings—
After section 313 of the Proceeds of Crime Act 2002 insert—
“313A Costs orders
(1) This section applies to proceedings brought by an enforcement authority under part 5 of the Proceeds of Crime Act 2002 where the property in respect of which the proceedings have been brought has been obtained through economic crime.
(2) The court may not make an order that any costs of proceedings relating to a case to which this section applies (including appeal proceedings) are payable by an enforcement authority to a respondent or a specified responsible officer in respect of the involvement of the respondent or the officer in those proceedings, unless—
(a) the authority acted unreasonably in making or opposing the application to which the proceedings relate, or in supporting or opposing the making of the order to which the proceedings relate, or
(b) the authority acted dishonestly or improperly in the course of the proceedings.”
This new clause extends the cap on adverse costs introduced by the first Economic Crime Act (Transparency and Enforcement) 2022 for Unexplained Wealth Orders, to all civil recovery orders.
New clause 23—Review of measures to prevent proceeds of economic crime entering the UK economy—
Within six months of the passage of this Act, the Secretary of State must lay before Parliament the report of a review of what further regulatory measures could be taken to prevent the circulation in the UK economy of the proceeds of economic crime controlled by individuals or entities subject to sanctions.”
This new clause creates an obligation for the Secretary of State to report to Parliament on the merits of further regulatory measures for preventing the circulation in the economy of the proceeds of economic crime controlled by individuals or entities subject to sanctions.
New clause 25—Report into effectiveness of Act in addressing economic crime involving sanctioned individuals—
‘(1) The Secretary of State must, within six months of this Act being passed, lay before Parliament a report of a review into the effectiveness of the measures in this Act in addressing economic crime involving designated persons.
(2) The report must consider the case for further legislation to make provision for the seizing of assets of a designated person where there is evidence that the designated person has been involved in economic crime.
(3) In this section, “designated persons” has the meaning given in section 9 of the Sanctions and Anti-Money Laundering Act 2018.”
New clause 27—Compensation for Victims of Economic Crime—
‘(1) The Secretary of State must, no later than 90 days from the date on which this Act comes into force, publish and lay before Parliament a strategy for the potential establishment of a fund for the compensation of victims of economic crime.
(2) The strategy may include provisions on the management and disposal of any assets realised by the government, or any body with law enforcement responsibilities in relation to economic crime, under relevant UK legislation.”
This new clause would require the Secretary of State to prepare and publish a strategy on the potential establishment of a fund to provide compensation to victims of economic crime.
New clause 30—Assets of Iranian officials obtained through economic crime—
Within six months of the passage of this Act, the Secretary of State must lay before Parliament the report of a review of regulatory measures to prevent the circulation in the UK economy of assets of Iranian officials which have been obtained through economic crime.”
New clause 31—Fund for the purposes of tackling economic crime—
In the Companies Act 2006, after Part 29 insert—
Part 29A
Economic Crime
993A Fund for the purposes of tackling economic crime
‘(1) The Secretary of State must by regulations establish a fund for the purposes of tackling economic crime.
(2) The regulations must specify the purposes for which the fund may be used, including funding the activities of law enforcement agencies in tackling economic crime.””
New clause 32—Review of definition of cryptoassets—
Within 18 months of the passage of this Act, the Secretary of State must lay before Parliament the report of a review of the adequacy of the definitions of cryptoassets contained in this Act.”
New clause 33—Economic Crime Committee of Parliament—
‘(1) The Secretary of State must by regulations establish a body to be known as the Economic Crime Committee of Parliament (in this section referred to as “the ECC”).
(2) The ECC will consist of nine members who are to be drawn both from the members of the House of Commons and from the members of the House of Lords.
(3) Each member of the ECC is to be appointed by the House of Parliament from which the member is to be drawn.
(4) The ECC will have the power to meet confidentially.
(5) The ECC may examine or otherwise oversee any regulatory, enforcement or supervision agencies involved in work related, but not limited to—
(a) tax avoidance and evasion by corporations;
(b) illicit finance;
(c) anti-money laundering supervision;
(d) tackling fraud;
(e) kleptocracy and corruption; and
(f) whistleblower protection.”
This new clause would oblige the Secretary of State to establish an Economic Crime Committee of parliament to examine and oversee regulatory, enforcement and supervisory action against economic crime.
New clause 39—Duty to report on economic crime resourcing and performance—
‘(1) The Director General of the National Crime Agency must—
(a) prepare a report on the resourcing and staffing of its work to counter economic crime, and its performance tackling economic crime, and
(b) send it to the Secretary of State as soon as practicable after this section comes into force.
(2) The Director General must prepare and send to the Secretary of State further reports on these topics annually.
(3) Each report must include, in particular—
(a) a report of the total annual budget and number of staff allocated to economic crime for each unit within the National Crime Agency,
(b) a report of the number of investigations, arrests, prosecutions and convictions relating to economic crime for each unit within the National Crime Agency, and
(c) a report of other relevant data including, but not limited to, cases per year broken down by both type and outcome; number of restraint or confiscation orders obtained; and value of assets confiscated.
(4) Reporting under subsection (3) must provide a breakdown between domestic economic crime and international economic crime. Reporting on international economic crime under subsections (3)(b) and (3)(c) must provide a breakdown by the income classification of the countries affected.
(5) The Director General must publish every report under this section—
(a) as soon as practicable after they send it to the Secretary of State, and
(b) in such manner as they consider appropriate.”
Section 6 of the Crime and Courts Act 2006 currently places a duty on the Director General of the National Crime Agency to make arrangements for publishing information about the exercise of NCA functions and other matters relating to the NCA, and publish information in accordance with those arrangements. This new clause inserts a new section that places a specific duty on the Director General to prepare an annual report on the NCA’s resourcing and performance relating to economic crime. The section stipulates the minimum information that the Director General must include in the report.
New clause 40—Report into options for corporate liability for economic crime—
‘(1) The Secretary of State must produce a report on corporate criminal liability for economic crime offences.
(2) The report must consider the merits of different models for corporate liability in respect of economic crime, including but not limited to—
(a) the respondeat superior model; and
(b) the failure to prevent model, insofar as it has not already been introduced by the enactment of this Act.
(3) The report must be laid before Parliament within six months of this Act being passed.
(4) In this section—
“the respondeat superior model” means a model for corporate criminal liability in which an entity is guilty of an offence if an employee or agent commits an economic crime offence—
(a) in the course of their employment or agency, or
(b) with an intent to benefit that entity;
“the failure to prevent model” means a model for corporate criminal liability in which an entity is guilty of an offence if a person associated with that entity commits an economic crime offence, intending—
(a) to confer a business advantage on that entity, or
(b) to confer a benefit on a person or other entity to whom the associated person provides services on behalf of the entity with which it is associated, except that the entity shall not be liable where the conduct was intended to cause harm to that entity,
unless the entity can prove that it had in place such prevention procedures as were reasonable in the circumstances, or that it was reasonable not to have any such procedures in place;
a person is “associated with” an entity if they are a person who performs services for or on behalf of that entity, including in, but not limited to, the capacity of an employee, agent or subsidiary.”
Government amendments 44 to 49, 57 and 58 to 100.
I will briefly summarise the amendments we have tabled relating to parts 4, 5 and 6 of the Bill. Many of them address the debate that took place in Committee and will ensure that the Bill works as intended. I should acknowledge that the amendments are perhaps slightly greater in number than we would have liked. The vast majority—amendments 51 and 57 to 100—are minor technical or consequential amendments to ensure that the detail of the cryptoasset measures will work effectively and can be used as soon as possible. That reflects the technical detail of the subject area and the need to make the changes work for each of the jurisdictions of England and Wales, Scotland and Northern Ireland that are covered by the Proceeds of Crime Act 2002.
I now turn to the more substantive Government amendments. New clause 14 allows the Solicitors Regulation Authority to proactively request information from its regulated community for the purpose of monitoring compliance with the economic crime regime. It will enable the SRA to monitor and detect breaches of the rules and legislation related to economic crime, including offences related to money laundering, terrorist financing and sanctions.
Government amendments 44 to 47 to clauses 171 and 172 concern information orders. They seek to clarify the cases in which the information order power can be used and to provide clarity to operational partners about how they should be used. They will ensure that the power can be used only for the criminal intelligence functions of the National Crime Agency, and that when assessing a request for information from a foreign intelligence unit, the NCA must be satisfied that the information would support the FIU’s intelligence function.
That point is illustrated by the first amendment on today’s selection list, Government new clause 14 on information-sharing powers. The new clause seeks to expand access to information relevant to economic crime enforcement efforts, but focuses only on the Law Society and
“any other approved regulators specified by the Lord Chancellor”.
Put simply, local authorities need these powers, too. Tackling economic crime is a huge challenge for councils due to the lack of licence they have to act on their own intelligence about crime in their local areas.
Councils want to play their part in cracking down on illicit wealth as it manifests itself in their areas. For instance, I have heard at first hand from Westminster City Council how it is battling a growing number of shop fronts—so-called American candy stores—on Oxford Street in particular, that are being used to channel illicit finance, but the process for taking meaningful action against these illegal practices is simply too slow, and as a result it is a gift to the criminals. Disappointingly, following opposition from Ministers to amendments we tabled in Committee that sought to expand powers for local authorities to enforce economic crime laws, there are still no specific provisions to enhance the ability of councils to act.
Moving on to the many important amendments tabled by Front and Back Benchers on both sides of the House, my right hon. Friend the Member for Birmingham, Hodge Hill again raises the issue of strategic lawsuits against public participation—or, as they are commonly known, SLAPPs. This has, of course, been a deeply troubling issue for a very long time. SLAPPs are defined as
“a recognisable and pernicious form of litigation which seeks to silence, intimidate, and harass opponents”,
and they
“are designed to silence criticism and investigation conducted in the public interest.”
Those are not my words, but the Government’s own definition. Others refer to this practice as lawfare.
We have in the past seen this practice used by the lawyers of Russian oligarchs against investigative journalists seeking to uncover corruption, but we now know that these tactics have also been used by not one, but two Conservative party chairmen in recent years. In March 2019, I wrote to the right hon. Member for Great Yarmouth (Brandon Lewis) when he was chair of the Conservative party with my concerns regarding the origins of a £1.8 million donation from Ehud Sheleg, who was then the treasurer of the Conservative party, to the Conservative party. I was sent a reply by the right hon. Member threatening to sue me for libel. He might even have got away with it had one of Mr Sheleg’s donations not later been flagged by Barclays bank to the National Crime Agency because, in its view, it originated not from Mr Sheleg’s bank account, but from the bank account of his father-in-law, a former pro-Putin Russian politician. That is lawfare in action.
But there is more—this time from representatives of the current Conservative chair. Members may have heard his name, as he has been in the news quite a bit recently. In July 2022, Dan Neidle, a former head of tax at Clifford Chance who now runs Tax Policy Associates, accused the then Chancellor of the Exchequer of providing unsatisfactory answers about his tax affairs. What happened next? Mr Neidle received a letter from the law firm Osborne Clarke, representing the right hon. Member for Stratford-on-Avon (Nadhim Zahawi), demanding that he withdraw his claims. That was a truly audacious approach and move, one might say, given what we now know about the former Chancellor’s tax returns. The bottom line is that we have a Government who claim to be committed to tackling SLAPPs, while Ministers are actively using the practice to their own benefit. It is little wonder that legislative progress has been somewhat sluggish, and that the speed of action on the part of the Government does not reflect the urgency and gravity of the issue.
New clauses 1 and 2, in the name of my right hon. Friend the Member for Birmingham, Hodge Hill, would provide a much-needed shot in the arm to efforts to resolve the endemic use of SLAPPs in British courtrooms. New clause 21, tabled by my right hon. Friend the Member for Barking with cross-party support, addresses the related issue of costs orders, which clearly form part of the legal architecture that is all too easily exploited by criminals to exert a chilling effect on critics and journalists reporting in the public interest. New clause 7, tabled by the hon. Member for Cheadle (Mary Robinson), would incorporate much-needed protections for whistleblowers into the Bill. All of those Back-Bench amendments have the wholehearted 100% support of the Opposition.
After months of consultation on SLAPPs, the Ministry of Justice published a response, which confirmed that
“the Government intends to pursue legislative reform at the earliest opportunity.”
That was back in July last year. If there has been any meaningful progress since that time, it has not been apparent to me, to my right hon. and hon. Friends or to any other Members who have signed these new clauses, so I ask the Minister: how much longer will it take for the Government to act decisively on this issue?
In new clause 3, as has been mentioned, the hon. Member for Oxford West and Abingdon (Layla Moran) raises the important issue of the tier 1 investor—or golden visa—scheme, which was closed down last year amid much ignominy arising from its extensive use by Russian oligarchs and other kleptocrats. In April last year, I wrote to the then Home Secretary to call for the publication of the Government’s internal review of the scheme without delay. In that letter I said:
“It is simply not enough that the scheme is now closed and a small number of oligarchs sanctioned; politicians and the public alike must be able to understand the findings of the report and learn the lessons.”
Here we are more than nine months later, and that argument still holds true. It is deeply regrettable that the Home Secretary is refusing to publish the report in full.
New clauses 4, 5 and 6 on corporate criminal liability point to another of the Government’s missed opportunities. There is a well-established and proud tradition of groundbreaking UK law on holding company executives to account for misdeeds committed in their names, or in the names of corporations they are responsible for running. A precedent was set by the Bribery Act 2010, which was passed by the last Labour Government. The Government built on that example in the Criminal Finances Act 2017 by introducing new corporate criminal offences related to failures to prevent the facilitation of tax evasion both in the UK and overseas. Extending those “failure to prevent” offences to a wider range of economic crimes is the logical and natural next step. New clause 40 provides a starting point for reforming the law in that area, and would require the Secretary of State to publish a report, setting out the various options by which a new offence might be introduced. New clauses 4 to 6 would go further still, by taking forward specific proposals within the Bill. The Opposition are more than happy to support those measures, and I pay tribute to the right hon. and learned Member for South Swindon (Sir Robert Buckland) and the hon. Member for Bromley and Chislehurst (Sir Robert Neill) for their leadership on this important issue.
Even as we support these reforms, it is important to remind ourselves that new laws will not necessarily be game changers in themselves. These laws, like any others, will be only as useful as the willingness and ability of this or any future Government to enforce them. Legislation without implementation is not worth the paper it is written on—[Interruption.] The Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Thirsk and Malton (Kevin Hollinrake) is nodding, because we heard that from him frequently in Committee.
What is clear is that there is very much consensus in this place on the need for reform of corporate criminal liability. The Treasury Committee’s report of February last year urged the Government
“to act quickly in bringing forward any legislation flowing from the Law Commission’s review.”
In June, the Foreign Affairs Committee talked about
“reform of outdated and ineffective corporate criminal liability laws”,
and, in October, the Justice Committee spoke in similar terms. Finally, a report from the House of Lords Fraud Act 2006 and Digital Fraud Committee in November said:
“Reform of corporate criminal liability will be essential in order to maximise the impact of the Fraud Act and other legal tools going forward…to hold corporates across all sectors to account and to inspire behaviour change.”
I have set out three separate offences in the provisions: fraud, money laundering and false accounting. I think fraud and false accounting are probably self-explanatory, but the Government might have a bit of a question about money laundering. They might be thinking about the 2017 money laundering regulations, and regulation 92 in particular, where there is already a corporate offence where, with the consent or connivance of an officer of the company, an offence is committed or an offence is attributable to neglect on their part. What I would say gently to the Minister is that I do not think that cuts it. It still leaves significant evidential and prosecutorial challenges. The Financial Conduct Authority has, I think, used it vanishingly rarely. Therefore, I urge him very strongly to look carefully—I hope he will accept the thrust of my argument, even if he cannot accept the detail of my new clauses today—at bringing forward provision that covers money laundering as well as fraud. That would be my strong exhortation to him today.
We have taken the Canadian approach.
There is nothing in the Bill that would change that situation, but the new clause would. As I pointed out in Committee, now he is not just the hon. Member for Thirsk and Malton but the Under-Secretary of State for Business, Energy and Industrial Strategy. He has argued for a “failure to prevent” economic crime offence not just on 13 October last year, but on 7 July 2022, on 1, 22 and 28 February 2022, on 2 December 2021, on 9 November 2021, on 22 September 2021, on 18 May 2021, on 9 November 2020, on 25 February 2020, on 19 July 2019, on 23 April 2019, on 18 December 2018 and on 9 October 2018. Given that the hon. Gentleman has spent his parliamentary career arguing for this, it beggars belief that now he is a Minister with the power to implement it, he is not actually doing so.
The organisation Protect says that it has offered advice on whistleblowing to 2,500 people a year, and that of those who have contacted it about their experiences, 65% have suffered some kind of detriment as a result of their whistleblowing. There is no incentive for many people to speak out when they see something wrong. They feel that they will lose their job or their promotion and will have to work somewhere else, and also that this might follow them around if they are seeking references for a new job. There is a real problem here, and the Government could, if they wished, deal with it in the Bill: it would make sense for them to do so.
I also support the cost cap suggested in new clause 21. Bill Browder spoke about this issue very powerfully during the Public Bill Committee evidence sessions. The balance is completely skewed to the side of the criminals and away from the Government, and away from the prosecutors and the agencies who want to take on these crimes but simply cannot afford to do so. Bill Browder said:
“What I have learned is that the law enforcement agencies effectively refuse to open criminal cases unless they are 100% sure that they can win without any tough fight on the other side.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 65.]
And what we have learned, even just this week, is that the other side can afford anything that allows them to support their case. Indeed, that was made clear in the exchanges on the urgent question on the Wagner Group earlier today. The other side are very well set up financially: they can afford the very best lawyers, while the prosecutors sit there with nothing in their armoury to take on these oligarchs and kleptocrats. That is not acceptable, and a cost cap such as the one suggested in new clause 21 would go some way to addressing it.
Bill Browder has also talked powerfully about the Magnitsky case. He produced a load of evidence about money that been stolen and laundered, being put through various accounts. He had traced all the money, some of which had ended up in the United Kingdom. When he presented the case to prosecutors, to the National Crime Agency and to various other agencies, they all refused to take it on. A crime has been committed, and we know who committed it and where the money ended up, but prosecutors here do nothing about it because it would cost them money that they might never see again. As a result, crimes go unprosecuted in the United Kingdom. It is unacceptable that, by failing to take on new clause 21 and other such measures that would cap costs, the Government are allowing this to continue.
I would support further measures on sanctions. Further to the urgent question, monitoring of sanctions and their effectiveness needs to be a lot tighter. Any sensible sanctions scheme would not have waivers for warlords.
I very much support the new clauses on the proceeds of crime and compensation for victims, for the people of Ukraine and indeed for the people of Iran, as has been suggested by the hon. Member for Oxford West and Abingdon (Layla Moran). Those measures are important. There are schemes such as the financial services compensation scheme, but in many cases that does not fully compensate, or compensate at all, those victims of economic crime. Appropriate compensation should be given, given the real and devastating effect that financial crime can have on our constituents. People who feel that they have been duped will carry that around for a long time, so compensation is important, and there is real need for finance both to fight the war in Ukraine and to rebuild that country thereafter.
What the right hon. Member for Birmingham, Hodge Hill is proposing in new clauses 1 and 2 is a second best option. We already heard the best option in earlier interventions: a freestanding Bill immediately, because this is happening now. There are court cases going on as I stand here in which people are having their lives destroyed by SLAPPs. The next best is to have it in the Bill of Rights, but we know that that is way down the timetable, for all sorts of reasons. We may not see it before the next election, in which case we will have lost two more years.
The new clauses amount to a way of dealing with this criminal—or near criminal—activity in a way that is not susceptible to a finely turned piece of law. I listened with fascination to my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) on that point. Getting that right is difficult; getting this right is not, because the greatest enemy of evil is a free press. In our country in the last couple of decades we have allowed our free press to become gagged and crippled. If we can take that gag away and remove those bonds, we will suddenly expose all the things that we need to deal with. We will see the weaknesses I talked about—the SFO and the NCA—and put them right, one by one. That is why we should support new clauses 1 and 2. I talked before about the weaknesses of the SFO and the NCA. We will see those weaknesses and we will put them right, one by one. That is why we should support this measure today.
The right hon. and learned Member for South Swindon (Sir Robert Buckland) made an excellent contribution on the reform of criminal corporate liability, and I want to say something about that. It is not that we want to suddenly bang up a whole load of lawyers, accountants, companies, service providers and all those people who we know are the ones that facilitate or collude with much of the economic crime that takes place. Only the best preventive mechanism that we can think of will force a change of behaviour, and we are not doing that on the back of hope; we are doing it on the back of reality. We know from the Bribery Act 2010 and from the regulations on tax evasion and on health and safety at work that putting this sort of liability on individuals and corporations is the only way to transform behaviour. Last week’s amendment to the Online Safety Bill by the Conservative rebels showed the mood of the House, and I would urge Ministers to think about that. The mood of the House is to use this effective tool to try to transform behaviour in all spheres of life, whether in relation to online harms or to economic crime.
I hope that we will hear from the hon. Member for Huntingdon (Mr Djanogly) soon on the issue of “freeze not seize”. I know he is going to make a number of propositions, and I hope he will not mind if I say something about this. We have been working with an extensive group of lawyers to see whether we can move to a position where we do not just freeze the assets but seize them in order to repurpose them and, particularly in the current context, use them to support the reconstruction of Ukraine. We have finally got a chink in the armour in that regard, but let me say something else first. The lawyers we have talked to work with non-governmental organisations in this field, and the advice they give is always going to be slightly different from the advice that comes from the lawyers working in the Government service. I think we bring a new perspective, and I urge Ministers to listen to what we have to say. The chink is worth examining at this stage, even if we do not go for the further propositions, to show that we mean it when we say that we want to seize this money.
The objectives of the office I propose in this new clause would be to encourage support and advise whistleblowers, providing a safe place to share information and acting on evidence of detriment to the whistleblower. We simply must protect whistleblowers who speak out, risking retaliation, as we have heard, harassment and losing their job—or, in the case of serious organised crime, possibly a much worse outcome. The office will enhance protections of those who whistleblow, while at the same time incentivising such disclosures by providing a safe space to share information.
There is evidence that an office for whistleblowers does incentivise disclosures. In 2020, the International Bar Association measured countries with whistleblowing legislation against a list of 20 best practices. The UK met just five of the 20. Meanwhile, the United States, where an Office of the Whistleblower sits within the Securities and Exchange Commission, met 16 of the best practices. That office received 12,300 disclosures in 2022, nearly double that of 2020, and, as its chief stated:
“The significant increase in the number of whistleblower tips and awards since the program’s inception shows that the program, with its enhanced confidentiality protections, is effectively incentivizing whistleblowers to make the often difficult decision to come forward with information”.
This is a cross-party, cross-departmental issue. Whistleblowers are to be thanked for, among many things, uncovering waste in our public services, highlighting poor or dangerous medical practices and conduct, and revealing the laundering, funnelling and theft of vast amounts of public and private money. When people steal from the public purse, it is society that suffers and our constituents who pay the price. According to law firm Pinsent Masons, His Majesty’s Revenue and Customs received nearly 14,000 tip-offs regarding misuse of the covid furlough scheme. In just one case, £27.4 million of taxpayer money had been falsely claimed by a fraudster who, despite never having been to the UK, registered four companies in London and claimed furlough for more than 2,700 non-existent employees. Some £26.5 million of public money was recovered as a result, in a case that also reinforces the importance of Companies House reform.
We have heard details of the Danske Bank money laundering scheme in previous debates, so I will not delve into the details again, but in that case we know that criminals took advantage of UK limited liability partnerships. That is why the reforms at Companies House and to limited partnerships are needed. However, once again, it was a whistleblower who brought that $230 billion economic crime to light, halting the stream of illegal Russian money laundering. Without him, it might never have been uncovered and might have continued for years.
That was before Putin’s illegal invasion of Ukraine, but we know that illicit finance helped to fund the war and will continue to fund it, unless it is stopped. I welcome the swift action the Government have taken to tackle the scourge of financial crime, first by passing the Economic Crime (Transparency and Enforcement) Act 2022, then by introducing the Bill we are debating today. However, while the Government have introduced measures that will go far in preventing economic crime, as it stands, neither piece of legislation supports those very people who are key to its detection.
Having spoken to many dozens of whistleblowers over the years, I know that someone who reports wrongdoing can risk jeopardising their reputation, their career, their mental health, their wellbeing and that of their family. It is not a decision made lightly. Whistle-blowers who expose economic crime must balance the risk to themselves in the name of doing what is right. That should not be the case.
So imagine my delight when, the week before last, Members saw a written ministerial statement in the name of the Home Secretary entitled “The Tier 1 (Investor) route: Review of operation between 30 June 2008 and 6 April 2015”. My heart leapt for joy. Finally, five years on, were we going to get the answers that we sought to questions such as: to what extent had Putin’s cronies managed to embed themselves into the UK economy or even into the upper echelons of British society, and I include in that politics? How many of the golden visas issued went to Putin’s cronies or their family members? What other countries were these visa holders from? Crucially, where are these people now? How many of them are still in the UK? How many of them have acquired citizenship, and what have the Government done about that?
Given that we waited five years, and given that the Government and successive Ministers had promised from the Dispatch Box that we would get some or all of those answers, we were entitled to a substantive response. When the review was published, my heart sank, because instead of what they had promised, the Government published what they termed a “summary” of the recommendations—not even the actual recommendations themselves, but a summary. Furthermore, the summary frankly told us nothing that we did not already know. It is galling that we still do not know how many people have exploited this system. The statement did not even give us a number or a rough ballpark figure for golden visa holders who had been identified as a risk. The Government admitted that they had identified a “small minority”, but given that 6,000 visa holders were being reviewed—a figure that, by the way, we already knew before the publication of the statement—what is the figure for that small minority? Is it in the tens, hundreds or thousands? I think that anything under 3,000 would still qualify, so what is it?
We know that 10 oligarchs who were sanctioned held golden visas. In March, Liberal Democrat colleagues in the other place found out it was eight—presumably the difference is that we have sanctioned more people since then, so the number of people on the list who are sanctioned increases, and I can understand that, although confirmation would be helpful. That shows the Government can be specific when they want to be, so why can they not be specific on this? The statement does not say very much about how many acquired British citizenship, what nationality they were or what will happen to them now, beyond very broad generalities.
Furthermore, the bit that worries me most is that in the words of the Home Office, this written statement was its “final response”. Following my point of order that you, Madam Deputy Speaker, graciously answered in the House on the day of the statement’s publication, I wrote again to the Home Office to ask, “When are you going to do this? Why have you done this?” It said that was its substantive response, and
“we will not be commenting further”.
I sincerely hope, especially given the comments that the Minister has made in the past, that he will do the House the courtesy of giving us an answer or explanation for what on earth happened here. I seem to remember—it might even have been in the first week after his being appointed, and we were all very excited about that—that he confirmed from the Dispatch Box that the information would be released, and then it was in written statements later that the tone and the words changed. What happened? We deserve to know the answers.
I am afraid to say that from where I sit, the whole thing stinks. It undermines much of the good work we are doing here to try to get transparency. Sunlight is the best disinfectant. After years of the Government saying that they would do this, for them to back-pedal stinks of a cover-up. I am not accusing the Minister of doing that, but I think we can legitimately suggest that it could be perceived that way, and that undermines everything else we are doing. I sincerely hope, should we be allowed to divide on the new clause, that Members will come with us through the Lobby and do what the Government said they would do in the first place.
In conclusion, I urge Ministers to take note of the willingness of hon. Members on both sides of the House to act, and to take heart from it. There is much more to be done. I hope that the Bill is the next chapter, but not the last, in the House’s fight against economic crime in this country. I sincerely hope that Ministers will continue to work with us in our common aim of bringing about transparency and light to tackle this once and for all, so that we are never again left in this embarrassing position.
The first step in the playbook is to target the individual. Do not target the company, because companies are strong and individuals are weak. That is exactly why Arron Banks went for Carole Cadwalladr. He did not want to go for The Guardian or the Scott Trust; he wanted to go for an individual journalist. That is exactly why Prigozhin, as we now learn, decided to target Eliot Higgins and not Bellingcat, because of course an individual is always more vulnerable than a corporate organisation. In most of these cases, we see an oligarch taking aim fair and square at an individual and not the corporate organisation behind them to maximise the power of intimidation.
Secondly, having identified the individual, the task is to maximise the intimidation. Let us look at what Tom Burgis had to go through when he was writing his book about the Eurasian Natural Resources Corporation. The bad guys whom he was trying to expose actually went to the lengths of tapping his phone and bugging him. They must have done—that was the only way in which their investigators could turn up to a secret meeting that he was having with former Government officials in a car park. Those are the lengths that these people will go to.
Thirdly, there is the business of exaggerating the claims: taking some aside in a bit of written material and exaggerating it ridiculously to try to multiply legal costs. We saw that in particular with Mr Abramovich in his case against Catherine Belton and HarperCollins. It was a ridiculously exaggerated claim. Of course, the objective for Mr Abramovich was not to win his case. All he sought to do was maximise the legal costs for HarperCollins and Catherine Belton.
We see that now in a case in the Royal Courts of Justice, which I will not name but which I sat through a couple of weeks ago. That case is so thin. It entails an oligarch basically trying to claim that a number of emails that have been sent are in effect tantamount to a publication. Even though he is unable to name and specify the harm that has been done, he is seeking to bring a case for defamation. It is the flimsiest of cases anyone could imagine, yet hundreds of thousands of pounds have now been racked up in legal costs in an attempt to intimidate someone out of telling the truth.
Step four is to co-ordinate with others, which we saw in particular with Mr Abramovich, who decided to round up a number of his old mates to try to bring some kind of collective action—not just in this country, by the way, but in other countries such as Australia. That was a way to double the legal costs and maximise the pain against Catherine Belton and HarperCollins.
Then we have the attempts to rack up costs even though the grounds may be as flimsy as anything. Forensic News, for example, is being sued by Walter Soriano. Forensic News has a total of 12 subscribers in this country, yet Walter Soriano has been allowed to prosecute the case because of those 12 subscribers. Why could he possibly be doing that? Is it, as the right hon. Member for Haltemprice and Howden described, because our legal costs are so high that the pain can be maximised by bringing a case here?
We see the same in the case referred to by my right hon. Friend the Member for Barking (Dame Margaret Hodge) of the former rulers of Kazakhstan, who have brought a SLAPPs case against the Bureau of Investigative Journalism and openDemocracy. That was because openDemocracy had the temerity to expose the $8 billion siphoned off through Jusan Technologies, which is somehow now claiming that its economic interests in the UK have been damaged and therefore it is entitled to bring a case in the Royal Courts of Justice. As a result, openDemocracy and the Bureau of Investigative Journalism are forking out thousands of pounds to defend themselves against this onslaught.
The situation we now have in this country is so appalling that, as we heard in the urgent question this afternoon, we have the spectacle of a Russian warlord being licensed by His Majesty’s Treasury to fly his lawyers to London to polish a case to sue an English journalist in an English court in order to undermine the sanctions this country has imposed on him. That is how ridiculous, corroded and broken our system has become. An exemption was licensed by a servant of the Crown to spend thousands of pounds flying lawyers to service the needs of the head of the Wagner Group in St Petersburg and to refine a lawfare case in an English court.
The discussions went a bit like this. “What are the objectives here, Mr Prigozhin? Well, we think that, rather than seeking damages, what we really need is to get Mr Higgins for defamation because that is how we undermine all those irritating articles” that led to the sanctions against Mr Prigozhin. Literally, we enabled the enablers. We enabled the cash flow of a Russian warlord to prosecute an English journalist in an English court. And that is why we have to act. No one in this House today thinks that this is okay. The Minister for Security does not think that it is okay. All of us here think it has to stop, but if it is to stop, we have to take aim at the original sin: the fact that it is courts in this country that are being used by oligarchs around the world to silence journalists.
Our new clause, which has drawn cross-party support today, is very simple. It would not stop all strategic legal actions against public participants, but it would stop anybody attempting to silence journalists who are trying to reveal economic crimes. It is within scope; I am grateful to the Clerks for their work helping to refine it and make it good. I know that the Minister will say, as he said in Committee, that this is not the right Bill for it, or that it would not solve all the problems, but that is an argument for making the perfect the enemy of the good.
We have heard the Lord Chancellor talking about his ambition to change the law, but we have also heard that he seeks to do so through the Bill of Rights. The dogs in the street know that the Bill of Rights Bill is dead. It is not coming back to this House any time soon, yet today—this week, next week, next month—journalists and indeed ex-Members of this House are in court, having to pay legal bills because we allow oligarchs to abuse our courts. Let us at least make progress now.
I say to the Minister: please do not be the Minister for mañana. Please be the Minister who did not make the perfect the enemy of the good. Please be the Minister who seeks to do what he can with what we have, where we are, today. We could use this Bill to make progress. Why do we not seize that opportunity with both hands?
I am very grateful for the concerted campaign by Members across this House. I will end by saluting the courage, fortitude and determination of so many good journalists in this country. Oliver Bullough, who wrote the brilliant books “Moneyland” and “Butler to the World”, makes an excellent argument in his openDemocracy article today. He says that journalists going into the business of tackling economic crime have an uphill struggle as it is, with a lot of barriers in their way. They have a pretty difficult job, and the knowledge that the British Government are on the side of the bad guys does not make that job any easier. It is time that we put the force of the state and the force of the Crown behind the good guys for once—and that means agreeing to our new clause today.
I thank the Clerks and the Bill team for all they have done to help support us throughout the passage of the Bill. Putting together all the amendments is not easy, and under pressures of time they have been incredibly helpful in putting them together for us. I also thank Mhairi Love in my own office, and Sarah Callaghan in the SNP research office. Again, they have been incredibly helpful in putting together research on all these areas, and putting up with me when I go down a big rabbit hole of all the things about economic crime that live in my head most of the time. They have been very helpful indeed over the course of things.
I want to make an announcement, Mr Deputy Speaker, before everybody departs—[Interruption.] I am not going to the Government Benches; the Minister is welcome over here any time. I am not sure that his constituents would expect him to be an SNP Member, but any time he feels the need that is fine. As it is Burns Night, there is haggis in the canteen, and I encourage everybody to partake and get their honest, sonsie faces over to the canteen before it goes. I am looking forward to mine. Not related in any way to the Bill, the Ayrshire Fiddlers—not that kind of fiddlers—are in Strangers Bar, and Members should go and see them because they are very good indeed. Crucially for this Bill they are playing the fiddle and they are not on the fiddle, so please go and give them your support.
I finish with some lines from our national bard:
“O, wad some power the giftie gie us
To see oursels as others see us!
It wad frae monie a blunder free us,
An’ foolish notion.”
I ask Ministers to reflect on how others will see the Bill and make amendments to it in the other place to make it befitting of the commitment that we all have to seeing economic crime removed.