(1 year, 4 months ago)
Lords ChamberMy Lords, I have looked through these amendments but not put my name to any of them. I have to say that they—in particular Amendment 8—drive a coach and horses through much of what this Bill stands for. Therefore, I am going to ask my noble friend to make sure he resists them.
This is important because we face some very serious challenges in our society as a result of the rapid growth in our population. I will go over this issue only briefly because we are time-constrained, but I just remind your Lordships that this is already a relatively overcrowded island. Last year, we admitted permanently 600,000; the year before last, we admitted 500,000. Stoke-on-Trent has a population of 250,000, Milton Keynes 288,000 and Derby 259,000. If we are going to house those people properly—and we certainly should —we will have to build four Milton Keynes or four Derbies over just two years. On dwellings, we all know how fiercely fought this is. In 2001, there were 21 million dwellings in this country; there are now 25 million—in 20 years, we have built 4 million dwellings.
It is not just at that very high level. The fact that we are introducing hosepipe bans in the south-east of England now is because the population is rising so fast we are running short of water. When we debated this in Committee, I took a certain amount of incoming from the most reverend Primate the Archbishop of Canterbury. He said:
“everyone who has spoken so far has agreed, that we have to control migration. I do not think there is any argument about that, but does the noble Lord accept that of that 700,000 last year, or whatever the number turns out to be exactly, the Bill will cover only 45,000? The Bill is not about overall immigration”.—[Official Report, 24/5/23; col. 897.]
That is a fair point. However, the figure turned out to be 600,000 and it may well be that that 45,000 is 60,000, in which case it is 10%, not a sufficiently significant number, but the real challenge to us is that everybody thinks it is not their challenge. Everybody thinks it is somebody else’s challenge.
We have heard persuasive, dreadful, heart-rending speeches about the positions that people find themselves in—on behalf of interest groups of various sorts—and no doubt we shall hear them again. However, one group has essentially not been heard during our debates, and that is the 67.3 million people who live in this country, 18% of whom are from minority communities.
When I undertook my polling—which, as I have said to Members of the House, is freely available to anyone—I did not want it to be said that it was going to be old white Brexiteers living in the country, as opposed to young trendy hipsters living in the towns. In response to the question “The UK is overcrowded”, between 60% and 70% of people polled, across all social classes, all regions of the country and all age groups, felt that was the case. Every interest group, including those that are seeking to blunt the effect of the legislation before us, has to play its part in reducing the number. Unless we are seen to be responding to between 60% and 70% of our fellow citizens, uglier and nastier voices will emerge to capture that. We need to be conscious of that.
In my view, the amendments would punch holes in the bucket. How much water would flow out I do not know, but I hope the Minister will think very carefully before allowing the bucket to lose too much water because that way difficulties lie for us, for our communities and for generations ahead.
My Lords, in Committee I tabled a similar amendment to Amendment 10, so I will not say much now because I said it then. I listened with interest to what the noble Lord has just said, and I recognise that we do not want illegal migration. However, there are broader and more important issues.
Children have rights. A child who is unaccompanied comes to this country, sometimes quite young, and is settled here in local authority care, placed perhaps in a foster family or a residential home. They go to an English school and become fluent in English but then, at the age of 18, are then removed either to Rwanda—the only country with which there is an agreement apart from Albania, and Albanian children are unlikely to be in this group—or to some other country or home that they have fled. Quite simply, to uproot children at 18 is, as I said in Committee, cruel.
My Lords, I am a member of the Secondary Legislation Scrutiny Committee, which considered this order, under the chairmanship of the noble Lord, Lord Cunningham, who I am happy to see in his place. I understand clearly the reasons why the undercover policing inquiry—which, as it stretched back into history, had to look a long way back—needed to be able to consider early offences. However, as the committee inquired, and we were concerned about how this might be applied and how it might affect individuals, we began to see the extent to which this narrow point might affect individuals in the future in an unattractive way. Therefore, although it is dangerous to take on an ex-Lord Chancellor, I say to my noble and learned friend Lord Mackay that I do not reach his conclusion, which is that one change should justify a change across the piece.
A lot of the points that I wanted to make have already been made, so I shall be brief. However, first, these are public inquiries, so a person’s conviction, no matter how trivial or long ago, may well be revealed. We drew the attention of the MoJ to this, and its response to us, quoted in the third bullet point of our report, was quoted pretty extensively by my noble friend in her opening remarks. It is, perforce, fairly general, as it is bound to be, and somebody looking to it for protection might wonder how it will be interpreted in the event, given the wide powers the chairman has to interpret where the public interest and private interest overlap. The MoJ went on, in the fourth bullet point of our report, to say that of course a person had some redress in the sense that they could always apply for a judicial review of the decision. That appeared to be largely fanciful. The idea that an individual, swept up into an inquiry like this, would have the time, resource, energy and confidence to seek a judicial review is not realistic, particularly since it would have to happen quickly. Once the name is out, the point of the judicial review is completely lost.
This is not the only place in the regulations which shows a lack of realism. Paragraph 7.5 of the Explanatory Memorandum says:
“The disclosure and consideration of the spent convictions and cautions will not affect any ex-offender’s protection against disclosure when applying for work”.
However, once a person’s identity is revealed, inevitably their positioning in a job interview is worse, or at least affected. In real life, if a recruitment committee is looking at two people of equal skills, and one has a bit of a black mark—it may be a small one which happened a long time ago, but nevertheless it is a black mark—there will be an inevitable tendency for the recruitment committee to decide not to take a risk and choose the other candidate, to the detriment of the person who has been swept up by these regulations we are talking about today.
The Minister justified this by saying that there was a lack of parliamentary time and that there would be bureaucracy and inflexibility if we required individual SIs to allow for exceptions to the Inquiries Act. However, as has been pointed out, so far there have been 23 in 12 years, so one application is not a huge use of parliamentary time to allow for something which offers better protection to individual citizens, who may have done something quite stupid or silly when they were young—which of your Lordships could look in the mirror tomorrow morning and say, “I’ve never done anything silly”? In many cases, we just have not been caught doing it. We therefore need to think more clearly about this. The case for widening the remit, especially without offering better protection and anonymity to individuals whose offences may have been trivial and long ago, has not been effectively made.
My Lords, I am happy about the breadth of the instrument. I see very well the points that the noble and learned Lord, Lord Mackay of Clashfern, made, but I am also unhappy at the suggestion that if someone is told that their past is about to be disclosed, they can go to judicial review. That is a very unsatisfactory system. As I understood it, the Government were doing their best to reduce judicial review rather than increasing the opportunities for it. As the noble Lord, Lord Hodgson, said, that is indeed not a very satisfactory way to proceed.
Could there be some sort of filter, by which I mean: is it possible to keep the instrument as it is but require a chairman? I was chairman of various inquiries over the years, one of which was under a previous Act, the Cleveland child abuse inquiry, so I have some experience of the requirements of a chairman balancing public and private interests. I can see that it is highly desirable not to bring this back to the House again and again, but I wonder whether the Minister could go back to the Ministry of Justice to find out whether any chairman who wanted to invoke that would have to go through some procedure for it to be checked as to whether it was appropriate.
(7 years, 6 months ago)
Lords ChamberMy Lords, in moving Amendment 20, I will speak also to Amendments 21 and 22. With these amendments we return to an issue we discussed in Committee in a somewhat different format, but the underlying purpose this evening is the same: to increase the effectiveness and value for money of the current money laundering regime. Let me make it clear again, as I did in Committee, that this is not an attack on the utility of money laundering regulation in the fight against financial crime. However, I argue strongly that the present regime encourages mindless compliance, whereas it should be encouraging principled behaviour. As a consequence of this, the money laundering regime enjoys a very low level of public support and is too often regarded as a form-filling joke. That is a bad place for a regulatory regime to find itself. Its efficacy would be greatly improved if it were able to win over the hearts and minds of people, as opposed to earning their solemn acceptance.
Why do I think the present regime is ineffective? It is based very largely on the SAR regime—the suspicious activity report regime. Last year, just under 400,000 SARs were delivered. In the years since the present regulations were introduced in 2007, probably over 2 million SARs have been recorded. Consider the cost of their preparation and analysis. According to a freedom of information request, the outcome was that there were no convictions at all under the regulations in the first five years, from 2007 to 2012, and only four convictions and five more proceedings in the five years since. The National Crime Agency managed to recover assets totalling only £25 million last year, but claims that there are billions passing through London illegally all the time. If that represents success, I find it hard to think what failure would look like.
There is a Faustian pact between, first, the regulators, who are pressed to gather even little scraps of information, no matter how irrelevant; secondly, the compliance departments of the regulated firms, which are enjoying the opportunity for untrammelled growth in their activities and personnel; and thirdly, the professional firms that enjoy the fees earned from checking these ever-increasing compliance activities. No one ever steps back to get perspective and to see how this undoubtedly important activity could be done more effectively.
In Committee, I argued that to break into the cycle the National Crime Agency should be required to follow the principles of best regulatory practice, as laid out in Amendment 21, which we are discussing tonight. My noble friend would not, I am afraid, accept this line of argument, saying that:
“The NCA can and will act where there is criminal activity relating to money laundering. However, it does not have a regulatory remit, and to require it to have one would deflect it from its purpose of tackling serious and organised crime”.—[Official Report, 28/3/17; col. 532.]
I am not sure that I follow exactly that line of argument, but never mind—we have moved on from there. Now, we have the new body: the office for professional body anti-money laundering supervision, or OPBAS. It clearly should follow the principles of best regulatory practice. Amendment 20 requires the Government to set this body up within six months. This is an important body with an important role and therefore we need to get on with it, and to give Parliament sight of its structure and remit by means of requiring its establishment through an affirmative statutory instrument.
Amendment 22 lays down the principles that the body must follow. It must be proportionate, accountable, consistent, transparent and, most importantly, targeted at cases in which action is needed. Amendment 22 also lays down a series of processes by which the new body will ensure that the bodies it is responsible for regulating follow these principles. There is a series of ways of doing that, including publishing advice and guidance, and carrying out investigations to ensure that the operation is working effectively.
Before I conclude, to underline the seriousness of the situation we now find ourselves in, let me give the House a couple of examples of the mindlessness and the consequent drawbacks of the present regime. My most recent money laundering inquiry included a couple of dozen questions. Among them was the following: “We see you have links with a company called NS&I. Please explain these”. Since the inquirer had access to my bank account, they could see that it was an entry of £25 alongside NS&I. NS&I is, of course, National Savings & Investments. It was a premium bond winning; sadly, not £1 million, but never mind—every little helps. Does the NCA really think that the Government’s own saving authority is involved in money laundering?
A second question was: “We see that you worked in North America in the 1960s. What were your earnings?”. That was half a century ago. It is hard to think that I started money laundering the year after I left university and have so far carried on for more than 50 years, undetected. I was sufficiently irritated to answer this second question with the words, “I haven’t a clue”. Patently, that was an inadequate response, but comeback there was none. Perhaps the form was not read and just filed and the box ticked, or it was read and it was concluded that this was not an important or relevant question. Either way, it was an awful waste of the bank’s and my time. This is going on thousands and thousands of times around the country.
One can laugh about my case, but for many people triggering a money laundering inquiry catapults them into a Kafkaesque world where no one can discover who is accusing them or what they are being accused of. Since we last met in Committee, I have been sent various examples but will give only one this evening. A 43 year-old ex-soldier with a 16-year good-service record built up a capital sum of about £69,000 from his Army redundancy and other sources. On 14 February it was paid into his account at the bank where he had banked for 20 years. On 27 March, when he tried to withdraw part of the money to make his annual ISA subscription and to buy a car, he was told that the account had been frozen. Now, a month later, it still is. He has missed the opportunity to make his ISA investment because the tax year has ended. The bank will not—perhaps cannot because of the regulations—tell him what the problem is, and the Financial Ombudsman appears unable to intervene. He is also concerned that this incident will damage his future credit rating and he will have no way of obtaining redress. So there are very serious cases where this money laundering regime is not working effectively to catch the individuals it should really be aiming at.
In Committee, I referred to the increasing prevalence of de-risking by regulated entities. Under pressure from the money laundering authorities, they close down whole categories of accounts irrespective of their behaviour and performance because they might be risky from a money laundering point of view. I referred to a long-standing friend of mine who lives in Pakistan—a British citizen—who has had his account unilaterally closed. Since Committee, I have heard more examples of smaller charities about how they are finding it difficult to operate overseas because of money laundering regulations. Most recently, the Gurkha Welfare Trust is having difficulty obtaining banking facilities to transmit money to ex-Gurkha soldiers living in Nepal who have fallen on hard times. They live in Nepal and that is a red flag.
In the event that my noble friend cannot accept my amendments, although I am sure she is going to—
I am extremely interested to hear—I fear that I did not hear it in Committee—about the proposal in Amendments 21 and 22. But how does the noble Lord see this office of professional body anti-money laundering supervision working, for instance in the case of the man whose money has been frozen? It is an interesting idea but I just wonder, as a former lawyer, how it would work in practice.
I am grateful to the noble and learned Baroness for that intervention, but I can glide this down to third man, if I may use a cricketing analogy, because this is a government proposal. The Government are proposing to set up this new body, so I am sure my noble friend, when she comes to wind up, will have all the detail of how this body will work. I merely wish to ensure that it is sent down the right channels. I know that my noble friend, with her usual aplomb and ability, will deal with that by stroking it effortlessly to the boundary, if I may continue the cricketing analogy.
It is important to do some serious re-engineering of the general approach to money laundering to increase its effectiveness and public confidence in it. That the National Crime Agency can, in its annual report, trumpet the fact that SARs went up by 7.82% over the last year as a badge of success without any reference to the impact it is having, shows that there is much to do. I beg to move.
(7 years, 7 months ago)
Lords ChamberMy Lords, as vice-chairman of the All-Party Parliamentary Group on Gibraltar I am grateful to the noble Baroness, Lady Stern, for having noticed that I was here and expressly excluded Gibraltar from Amendment 167. It is possible, however, that the omission of Gibraltar might be misunderstood; consequently I want to put on record Gibraltar’s position on its financial affairs. It is compliant with all the financial requirements. The OECD, in its phase 2 review of Gibraltar, ranks it equal with the United Kingdom and the United States on transparency, effectiveness and exchange of information.
Gibraltar, as we know from earlier discussions in this House, is the only overseas territory within the European Union at the moment. It continues to be bound by EU law for at least the next two years and is transposing the fourth anti-money laundering directive by June of this year. That includes the creation of a central register of beneficial ownership, which points out that Gibraltar is doing well as a financial centre and is compliant.
My Lords, the theme of corruption and the damage it does to society has been the thread running through all our debates this afternoon and, indeed, on our first day in Committee last week. When you have powerful speeches from the noble Baronesses, Lady Stern and Lady Meacher, the right reverend Prelate the Bishop of Peterborough and my noble friend Lord Kirkhope, you have to be influenced by what they are telling you. When they link it to the idea of a gold standard of a publicly available register—although after the noble Lord, Lord Eatwell, had finished with Companies House, gold was no longer the metal that I would associate with that institution—you feel that there may be an exceptionally strong case. Equally, as you reflect on it, you begin to wonder whether the best may not become the enemy of the good.
In trying to clarify my thinking on this very difficult issue, I ask my noble friend on the Front Bench to focus in her reply on three points that are important to me. They relate to the big three of the overseas territories mentioned in the amendment: Bermuda, the British Virgin Islands and the Cayman Islands. The others are much smaller; they may be important in the future but the major difficulties will arise with the first three.
First, can my noble friend confirm what the noble Lord, Lord Beith, said—that those three territories are going to have an up-to-date register of company ownership—and the date by which it is going to be in place? If it is going to be in place, are the Government satisfied that each register operates effectively and accurately?
Secondly, I come to the verification point raised by the noble Lords, Lord Eatwell and Lord Naseby. Since information is put into these registers by third parties, which have titles such as corporate service providers—CSPs—trust or company service providers, and so forth, are the UK Government satisfied that the regulatory regime in each of these territories ensures that the CSPs operate to timely and accurate standards? Are there adequate checks on their performance? For example, are there, as we have in the City of London, fit and proper person tests to make sure that those who are providing the information have decent standards of behaviour imposed on them?
Thirdly and finally, as my noble friend Lord Kirkhope said, are UK law enforcement agencies satisfied with the level of co-operation and assistance provided by these regulatory authorities? Do they get prompt and helpful responses or are the responses dilatory and evasive? If my noble friend was to say that she could give the Committee assurances on those points, my concerns about the best being the enemy of the good would rise in significance. Of course we are seeking a gold standard but surely in the short term what is vital is not that I or other Members of your Lordships’ House should be able to interrogate the register but that the relevant law enforcement agencies should be able to do so, and should be able to do so promptly and to get information promptly. Then, I hope, as enforcement standards rise and, as my noble friend Lord Naseby said, the United States begins to bring all parts of its dominion into proper behaviour, the gold standard of full public disclosure may well be appropriate.
I quite understand why the noble Baroness wishes to do this but my concern is that if we go too far, too fast now, the malfeasant—and it will be those who go first—will drift away to still murkier regimes. We may have only half a loaf and the noble Baroness would like the full loaf, but at least we have half a loaf. If we go to murkier regimes, there will be no way of getting any sort of collaboration, co-operation or help at all to tackle what I think everybody in your Lordships’ House agrees is a really important problem and is imposing terrific damage and harm on our fellow citizens, particularly in the developing world.
I hope my noble friend can answer my questions. Are there going to be prompt and accurate registers in the major territories—and, if so, by when—or are they there now? Are those who upload information into the registers properly checked, verified and regulated? Do our law enforcement agencies really get wholehearted collaboration and assistance from their opposite numbers in those three territories?
(9 years, 10 months ago)
Lords ChamberMy Lords, I have forborne to say a word on this Bill until this moment. I rise only to say that the phrase “act or omission” is extremely well known in the law and is one which judges—I, too, sat as a judge for many years—understand perfectly well. The word “activity” is ambiguous. The noble Lord, Lord Pannick, and Simon—I am sorry, I should have said “my noble and learned friend Lord Brown of Eaton-under-Heywood”; the trouble is I know him so well—have made absolutely clear the ambiguity of this word. I cannot understand why the Government do not just take the perfectly sensible phrase “act or omission”.
My support for this Bill has been very well documented. Notwithstanding the attacks on it from noble Lords and, especially, noble and learned Lords, I continue, albeit as a non-lawyer, to believe it will play a useful role in encouraging, or at least not discouraging, individuals getting involved and participating and in consequence strengthening our civil society and so improving social cohesion. I fully admit there are aspects of the Bill which overlap with the provisions of the Compensation Act and that the provisions of the Bill will not provide a complete solution to what some people argue risks becoming an increasingly atomised and introverted society. It is just as important that the Bill will help with better insurance provision and the busting of myths.
One of my principal reasons for supporting this short Bill is that it provides clarity; it uses short, uncomplicated language that is comprehensible to the regulars in the saloon bar of the Dog and Duck. On Report, this approach seemed to come under attack from what seemed to be two diametrically opposed reasons, which have started to reappear in our debate this afternoon. The first approach, which was adopted by the noble and learned Lord, Lord Lloyd, and which was supported on Report to some extent by the noble Lord, Lord Pannick, at col. 17, which I will not quote this afternoon, appeared to argue that this legislation was superfluous in that judges could always be relied upon to take into account the factors that form the subject of the Bill. Later on in our debates, the focus changed and a number of noble Lords, in particular the noble and learned Lord, Lord Walker of Gestingthorpe, at col. 46, argued that the provisions of the Bill were too wide and required focus and definition to guide the courts and judges.
This amendment in the name of the noble and learned Lord, Lord Brown, seems to be moving towards the second approach. I therefore have concerns about the impact this amendment may have upon the clarity of the Bill, at least as it is seen through the eyes of the regulars in the saloon bar of the Dog and Duck. I have listened carefully to the two noble Lords who proposed the amendment, and I hope that they will forgive me if I say, again as a non-lawyer, that I have concerns about what they propose. My question to my noble friend on the Front Bench is: do we need three words in the place of the current one word? “Activity” has a simplicity and a clarity which may be clouded by those additional words. Generally, the shorter the better, so my instinct is to resist this proposal. However, I await his further advice.
Before I conclude I turn briefly to government Amendment 2. I am grateful to my noble friend for having taken away the amendment I proposed on Report on 15 December and for having responded so positively. The amendment was originally put down in the name of my noble friend Lord Hunt of Wirral, whom I am glad to see in his place this afternoon and who unfortunately was not able to be present on Report. He will be able to speak far more eloquently about this than me. I close by repeating my thanks to my noble friend on the Front Bench. The change that he is proposing this afternoon will improve the balance by encouraging people to get involved but without encouraging them to do so in a thoughtless or irresponsible way.
(12 years, 7 months ago)
Lords ChamberMy Lords, I can be brief, having heard what the noble Lord, Lord Cameron, has said, setting out the facts about what works well in the county next to the one where I live. It is very impressive.
It is right to say that restorative justice is not for everyone. There is a sort of case where it would be quite wrong: someone who has been a victim of serious domestic violence, for instance, would seldom find it possible to meet the offender, who is often another member of the family. In suitable cases, though, and there is no shortage of suitable cases, it is good for the victim—as the noble and learned Lord, Lord Woolf, has said, it gives them a voice—but it is extremely salutary for the offender, as the noble Lord, Lord Cameron, has said.
I have had instances where offenders—young offenders in particular; those just grown up—have ended up in floods of tears because they had not appreciated the impact of the way in which they had behaved, particularly in something like burglary or theft when they took from someone elderly some not very valuable things that had enormous personal value for that victim. Being told, with the victim in tears, that a great-aunt’s cup that had been preserved through the family had been stolen and thrown on the ground can lead to the offender being in tears too, and this shows that there is a real value.
The figures from Somerset showing the high degree of non-reoffending, which is a great deal more than the noble and learned Lord said was the average of 27 per cent or 28 per cent, shows that restorative justice is a real tool. I find it utterly astonishing that this Government, who have been listening throughout so much of the Bill, have failed to listen on this issue.
My Lords, briefly, I support the amendment of the noble and learned Lord, Lord Woolf. I have been involved in restorative justice through a charity called Why Me? for some years. I became involved because it offered a victim-oriented strategy, as mentioned by the noble Lord, Lord Ramsbotham. Restorative justice offers an opportunity for the person who has been offended against to address the trauma that they have suffered, to see how and why it came about and, in that way, to achieve some sort of closure. On the other side, it has had significant effects on reoffending. As the noble and learned Baroness has pointed out, offenders will say, “There was just a name on a charge sheet but when I see that it belongs to a person with a home and a family, which I have broken into or broken up, I begin to see some of the dreadful things that my actions have done”. Therefore, I am anxious that the Government should accept this amendment.
There are only two reasons why they might not accept it that I can see. First, there might be a need to restrain public spending. I accept that there is a need for this sort of activity to be carried out by well trained people to be effective. However, there will be a net benefit. If we can continue to achieve the reduction in reoffending rates that has been achieved in the past, there will be a reduction in costs as we avoid some of the costs of reoffending. Secondly, the Government have said that this amendment is overly prescriptive but I have some difficulty in understanding why. As the noble and learned Lord pointed out in his opening remarks, this just adds to the menu of options available. Therefore, it is not prescriptive in my reading of how the amendment has been drafted.
In conclusion, my concern is that if we are not careful, the idea of RJ will fall victim to what I call the Daily Mail effect. Restorative justice is not an easy thing to defend. It can appear a bit touchy-feely. One or two cases that led to difficult headlines in the newspapers could lead to the Ministry of Justice saying, “This is a bit difficult. We had better back off from this one”. Therefore, my reason for strongly supporting the noble and learned Lord’s amendment is that if we get it into the Bill, we will then have something that can be used in the future and cannot be brushed away by some unfortunate event that might lead to public opinion turning against it and putting temporary political pressure on the Government of the day.