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Mark Field
I very much take on board what my right hon. and learned Friend says, and I understand his concerns. He made a powerful point towards the end of his speech about the importance of there being public trust in the financial services sphere if it is to be the success we all hope it will be in the post-Brexit world.
To effect the necessary sea change in attitude and create a body with the powers of its US equivalent, we would need to be able to impose substantial fines on wrongdoers. Such fines could play a role in covering the costs of any new organisation. Clearly, there would be a need for some legislative changes, but measures would also need to be put in place to protect whistleblowers and offer genuine immunity to those who were aware of anti-competitive practice when they came forward.
The Solicitor General (Robert Buckland)
I am very interested in the point that my right hon. Friend outlines. What standard of proof would be applied in the proposed new regime?
Mark Field
I understand the point about moving away from a criminal more to a civil standard of proof. This is a back-of-the-envelope-type suggestion. I am just putting a few broader proposals forward because, as has been referred to elsewhere, the power of deferred prosecution is very much a positive step in the right direction. As Members know, deferred prosecutions will enable proceedings in a criminal case to be delayed for a given period, subject to certain conditions being met by the company in question. At the end of the set period, if all agreed conditions have been met—often, that includes paying a substantial fine along the lines of the one that Rolls-Royce had to pay—charges can be dismissed and the judgment of conviction can be entered. It is a more pragmatic prosecution-related process.
I could go on and on, but I know that at least one other Member wishes to speak and that we all want to hear from the Front-Bench spokespersons. Let me just say this, if I may: the incentives provided by healthy competition and the deterrent of stiff punishments should have formed the backbone to the new era of banking and business in the aftermath of 2008. The past two Administrations have missed the boat in restoring both the confidence of market professionals and the trust of the British public in our financial institutions. I very much hope that in addition to addressing the important issues raised in the thoughtful contributions made by the right hon. Member for East Ham and my right hon. and learned Friend the Member for Harborough, the Government will use this opportunity to take a fresh, broader look when it comes to the overall workings of the SFO, as well as its funding, and ensure that it has its rightful place within the enforcement sphere in the years to come.
The Solicitor General (Robert Buckland)
It is a pleasure to serve once again under your chairmanship, Mr Owen. I thank and pay tribute to the right hon. Member for East Ham (Stephen Timms) for securing this debate, which has been wide-ranging and well informed. Perhaps we should expect that when we have a former Chief Secretary to the Treasury in the room and one of my predecessors as Solicitor General, my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier). Indeed, my right hon. Friend the Member for Cities of London and Westminster (Mark Field) also has long expertise in and knowledge of combating financial crime.
The hon. Member for East Renfrewshire (Kirsten Oswald) raised a specific case. I am grateful to her for raising such a serious matter. She is right to say that from the layperson’s point of view, it can be—to borrow a phrase from my right hon. and learned Friend the Member for Harborough—a bit of an alphabet soup when it comes to the investigation of serious crime. I have not had notice of that particular issue. I make no criticism of the hon. Lady for that, but my advice would be to write directly, if she has not already, to the director of the SFO, copying in the Law Officers, so that we can have full and up-to-date knowledge of the serious case she raises.
I will do my best in the 10 minutes or so that I have to answer the questions posed by the right hon. Member for East Ham. I come straight to blockbuster funding. I have to confess that I am too young for glam rock, and perhaps that is a good thing. In my mind, the word “blockbuster” conjures up the golden age of Hollywood. I do not know whether that is an appropriate metaphor, because we are dealing with an independent prosecutorial authority that, for the best part of 30 years, has worked in a particularly specialised way, bringing together investigators and prosecutors from the outset. That is the Roskill model to which right hon. and hon. Members have referred. To be scrupulously fair to the right hon. Gentleman, he conceded—I think properly—the point that some element of blockbuster funding is desirable and, indeed, appropriate. When he was in the Treasury, I am sure the same rules were applied to the SFO. The question is not one of principle therefore, but of degree.
I come back to the age old question of balance and how to maintain that from year to year. The particular criterion that is now used by the Treasury was set out back in October 2012, when the then Chief Secretary to the Treasury came to an agreement with the director in relation to the funding of very large cases. Blockbuster funding is applied for when it is expected that costs to investigate and potentially prosecute a case will exceed 5% of the SFO’s core budget, which, at present, are cases likely to exceed £1.7 million. The ability to have recourse to funding for very large cases is a model that the Law Officers fully support. The SFO has to present a business case to the Treasury, but I reassure right hon. and hon. Members that it is not the Treasury’s function to perform the role of gatekeeper and assess the legal merits of a particular case. That is not its function at all. As the right hon. Member for East Ham will well know, its function is to make sure that the case is sound and that there is evidence on which to base that application; that the SFO has demonstrated that there is a real need for the money based on specific investigations or day-to-day needs. It is on that basis that we would see an advance being made.
The hon. Member for Torfaen (Nick Thomas-Symonds) rightly refers to a written ministerial statement that I am laying today to outline the position. I agree with him that it might seem rather inelegant, but, when it comes to the need to be flexible and to recognise the ever-changing demands on the SFO, I am afraid a degree of inelegance is a price worth paying for the practical effect of making sure that the SFO has fleetness of foot for dealing with a case load that varies dramatically year on year.
Nick Thomas-Symonds
I do not think there is any dispute on the principle and the flexibility. The dispute is about the balance. Does the Solicitor General feel that the balance has been right in recent years? Should it be adjusted in favour of core funding?
The Solicitor General
The hon. Gentleman is right to bring me back to balance. From year to year, it is very difficult to predict. There will be times—he cited a year—when the amount of blockbuster funding exceeds the core funding, but there are other years when that is not the case. That underlines more eloquently than I can the essential fluidity of the system.
In replying to the right hon. Member for East Ham, I would deal with the question in this way. It would be troubling if either the Law Officers’ Department—there was once a suggestion that our Department should be the gatekeeper—or the Treasury acted in some way as a second opinion, second-guessing the professional judgments of members of the SFO. That would be wrong and is not what happens when it comes to blockbuster funding. No application for blockbuster funding has ever met with a refusal. That is a very important point to hold on to when it comes to the Government’s understanding of the reputational importance that the fight against economic crime has not just for the Government, but for the United Kingdom generally.
The Solicitor General
I give way to my right hon. Friend, who made that point.
Mark Field
The Solicitor General made a statement on the instances of refusal by the Treasury. I was going to come on to that. Has there been a refusal on the degree of blockbuster funding? It might not have been about the overall amount, but has there been a sense of haggling between the SFO and the Treasury over the amounts that should be given for particular cases?
The Solicitor General
My right hon. Friend invites me down a course that I am perhaps not fully qualified to talk about. There will of course have been discussions about the amounts, but at no time—this is again very important—has funding been a bar to the proper investigation of cases that are brought before the SFO and meet the criterion that the hon. Member for East Renfrewshire and the hon. Member for Strangford (Jim Shannon) set out. Previous Law Officers, including my right hon. and learned Friend the Member for Harborough, and current Law Officers have made it clear that funding issues will never be a bar to the prosecution of serious fraud in this country. That is why the reputation of the United Kingdom, to which organisations such as Transparency International have attested, is as one of the leaders in the field for the prosecution of economic crime.
In response to my earlier invention, my right hon. Friend the Member for Cities of London and Westminster conceded that his interesting ideas, which I very much hope will be fed into the Cabinet Office review of economic crime, must acknowledge the fact that we are dealing with not a regulatory but a prosecutorial authority. The tests, with which most hon. Members are familiar, of reasonable prospect of success and the public interest, as well as remembering the high standard of proof that needs to be reached, are vital when it comes to the criteria for an independent prosecutorial authority.
Right hon. and hon. Members will know that the Ministry of Justice is conducting a call for evidence on corporate responsibility. The Government have an excellent track record in that area, having supported and brought into force the Bribery Act 2010, particularly section 7, which created a failure to prevent bribery offence. A similar offence in the field of tax evasion is in the Criminal Finances Bill and the Government will seriously consider the outcome of the forthcoming consultation when it comes to failing to prevent economic crime.
I think the question of the attitude of the director to blockbuster funding has been adequately covered. I have described the system as inelegant, or imperfect. Although the director works within the system, at no point has he felt under any improper pressure from the Government, or the Treasury, on applications for funding. That is very important, bearing in mind the current director’s record in improving and enhancing the role of the SFO in our public life. In paying warm tribute to David Green, I also commend him for the creation of a chief operating officer post, which I think will go a long way to dealing with some of the human resources points raised by hon. Members.
On diversity, I am glad to say that when it comes to new starters at the SFO, 51% are female. I accept the diversity figures. However, before I sit down to allow the right hon. Member for East Ham to conclude the debate, I would say that it is tempting to seek to create a permanent cadre of staff at the SFO who might be able to build up expertise, but each large case stands very much on its own facts. The context of each case can vary widely. Therefore, the continuing need for flexibility in employing specialist agency staff who might be familiar with a particular scenario will not go away. I make no apology for the fact that flexibility of funding is important in terms of year-to-year demand, and employing and engaging agency staff can be of real benefit when it comes to the prosecution of specialist crime.