Economic Crime and Corporate Transparency Bill

Debate between Baroness Stowell of Beeston and Lord Wallace of Saltaire

2nd reading
Wednesday 8th February 2023 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, it is a pleasure to follow that fascinating speech. I think I need to read it again before I fully understand it. I had not heard it on the five previous occasions on which the noble and learned Lord, Lord Garnier, made it. Halfway through this debate, the noble Lord, Lord Agnew, commented that there seemed to be an extraordinary amount of consensus. That carried on through the rest of the debate. The question behind all the speeches is how serious are the Government about making sure that this Bill becomes an Act which successfully tackles economic crime, rather than one making another tiny step—a shuffle perhaps—in the direction of saying that it will, but not actually managing to implement it?

We have heard a range of arguments that the Government should accept amendments on several issues to strengthen the Bill, in so far as they can be fitted within its remit: SLAPPs, whistleblowers, greater transparency, asset seizures for reparations, tighter enforcement of the register of overseas entities and penalties for failure to prevent fraud or for assisting fraud actors and activities.

On the question of fees, we do not need that in the Bill, as the noble Lord, Lord Leigh, remarked. I disagree with him on whether Companies House needs more powers. It needs more powers, and for that it needs more resources. What we want is an assurance from the Government that they will substantially raise the fees. I sat thinking with amazement that the fees for Companies House are the way they are. With my wife, I am working through the process of downsizing our house after 45 years in one place. I gather that this is in line with the Government’s preferences and policy. They would like people our age to move out of their large houses into smaller flats so that housing problems are moderated. Yesterday, I sorted out how much it will cost me in stamp duty, conveyancing fees et cetera. In comparison with the fee for registering a company, there is rather a large gap.

We all know—I say this to our Conservative friends—that over the past 12 years a number of regulatory bodies have had their budgets slashed. The Environment Agency’s budget has been slashed by 80% and—surprise, surprise—it does not seem to have kept up with discharges of sewage by water companies. The Charity Commission, as the noble Baroness, Lady Stowell, will know, had its budget severely cut, and that badly affected some of the things it had previously done to regulate and advise charities.

[Baroness Stowell of Beeston (Con)]

Forgive me for interrupting. I am grateful to the noble Lord for giving way. I ought to make the point that the Charity Commission’s budget was very severely cut, but it has been increased. Its operating budget is now pretty healthy. It might not be healthy compared with a lot of other regulators, such as Ofcom, when you look at what is required of the Charity Commission, but it had a quite dramatic reversal of its fortunes in terms of its operating costs.

[Lord Wallace of Saltaire (LD)]

I take that correction happily. I was the Lords Minister responsible for charities from 2012 to 2015 and remember these arguments very painfully.

I hope that the Conservatives will say to those in their party, like our last Prime Minister, who say that the answer to every question is tax cuts and for that you have to cut spending wherever you can that there are some areas in which sufficient resources from whatever means—whether fees or taxes—provide very substantial public benefits and sometimes economic advantages as well. This is clearly one of them.

The noble Lord, Lord Clarke, added that greater accountability for Companies House is an important factor that we need to get into this Bill if we can. My career was in dealing with international issues. When I look at a Bill, I always start by asking where the international dimension is dealt with. The international dimension in this Bill is remarkably thin. I said to the noble Lord, Lord Clarke, that I could challenge him on Clause 190 when we get to it. The extent clause is always the one you have to start by looking at.

As the noble Lord, Lord Gold, said, a lot of economic crime is extraterritorial. When I briefly dealt with some police matters at the beginning of the coalition, I recall being taken around Yorkshire to discuss organised crime. The first statement that the chief constable made was, “There is no domestic organised crime”. All organised crime is cross-border—it is international—and, for that, one clearly needs international co-operation. The Conservative Peer who said in a debate here two years ago that we did not need Europol because we had Interpol and that that provided everything we needed did not understand the complexity of the co-operation one needs among national authorities. I, and I think many of us, would appreciate a briefing from the team on how the pursuit of economic crime will be managed in co-operation with other countries if the Government are going to be more serious about this. There is a brief reference to the Financial Action Task Force in the Explanatory Memorandum, but the whole ethos of coping with a massive transnational problem is almost absent from the Bill.

This leads me on to the question of the Crown dependencies and the overseas territories, which the noble Lord, Lord Faulks, raised. I have been interested in this for many years. The frustration is that they fall between the domestic and the international. One is usually assured that one does not have to legislate for them—indeed, that it is improper to do so—but we ask them to follow British domestic legislation. Three years later, we are told that most of them have not got round to doing so yet, but they will, soon. I recall going to one Crown dependency many years ago and gathering from the chief Minister’s enthusiastic briefing that their chief message to me was, “We are so much better than the other two”. That is not a good area. I strongly suggest that this House needs to consider a sessional committee to look at the relationship between the Crown dependencies, the overseas territories and the United Kingdom. It is always being pushed to one side. It is dealt with by a junior Minister in the Ministry of Justice or the FCDO, but some very knotty issues come with it.

The noble Lord, Lord Stevens, remarked that half the registered overseas entities come from the BVI. The largest numbers among the others, adding up to more than three-quarters, came from Jersey, the Isle of Man and Guernsey, and then, I think, Luxembourg. This leads me on to the other point made by the noble Lord, Lord Faulks: Luxembourg is of course also a tax haven and it has its own interests. I must look at that ECJ judgment. I am certainly for transparency against privacy when one draws the balance, and it sounds as though the ECJ has been persuaded on this occasion to support privacy against transparency. It seems to me that corporate privacy should be valued a great deal less than personal privacy, but I will look at the case. International co-operation is clearly an essential part of where we need to have this. The British Government’s deep reluctance to assert sovereignty over the overseas territories and Crown dependencies is very odd for a Government who have spent a lot of time saying that they want to take back control.

A number of noble Lords have talked about the role of enablers within our system, and I am a bit partisan on that issue. Liz Truss talked about the liberal establishment that blocked her radical reforms, but if one is to talk about the enablers who have assisted oligarchs and others—the Intelligence and Security Committee’s Russia report had some extremely strong language on that—one must acknowledge that they were at the heart of our financial, accountancy and legal establishment in the City and that they successfully penetrated the Conservative Party. That is a real problem for us, and we must do something much more strongly about it. When I criticised sleaze within the Government the other week, the noble Lord, Lord Clarke, said to me, “This is a different Government.” I say to him: to demonstrate that we now have a different Government, we need now to take some stronger action, with the Bill, on that problem.

The noble Lords, Lord Leigh and Lord Browne of Ladyton, my noble friend Lord Fox and others all praised the quality of debate on the Bill in the Commons, adding that the Ministers there were clearly listening to concerns and criticisms. I hope that the Ministers here will take very much the same attitude and accept that the Bill can be improved and strengthened, as everyone here has asked. I found it dispiriting, as others have, that on several Bills over the last two Sessions, Ministers here have been told to resist amendments as vigorously as they can. On one recent occasion, a Lords Minister told me that they had to go back on a concession made in the Lords because there was resistance to it from her party in the Commons.

This is a debate in which we have had remarkable consensus on all Benches. We are concerned with the quality and reputation of this country, and we think that the Bill can make a significant difference on that in a number of areas. Let us all pursue the further progress of the Bill with that in mind. I look forward to the conversations which I hope that the Ministers will offer us before we reach Committee, and then again between Committee and Report. Let us see what we can do to put on the statute book a strengthened and improved Act on economic crime and transparency.

National Security Bill

Debate between Baroness Stowell of Beeston and Lord Wallace of Saltaire

Committee stage
Wednesday 11th January 2023 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, I declare an interest as the chairman of the Communications and Digital Select Committee. It was because I was chairing a meeting of that committee that I was unable to speak at Second Reading.

I will speak briefly about the potential effect and unintended consequences of this important legislation on investigative journalism. Before I go any further, I should say that I am grateful to the noble Baroness, Lady Jones, for the opportunity to debate this matter. As my noble friend Lord Black already explained, comprehensively and very powerfully, the potential chilling effect on legitimate journalism is of particular concern. That is real and we must find a way of avoiding it, without diluting the intentions and objectives of this Bill, which I, like other noble Lords, support.

I am grateful to my noble friend the Minister for meeting me and others, with some of his officials, in December to discuss our concerns. I look to him for reassurance that the Government remain alive to this problem and open to discussion. I am not sure whether Amendment 66A from the noble Baroness, Lady Jones, is the answer to the problem; it may need to be combined with Amendments 65 and 66, which have already been debated. As my noble friend Lord Black already said, what we need here is a holistic approach to the point in question, which is around making sure that important investigative journalism is able to continue.

As a result of this very important legislation, I would not want, for example, deficiencies in military equipment that cost the lives of our Armed Forces not to be exposed. That example was put to me by some of the media organisations that have been in touch. They reminded me that that particular piece of journalism led to a change in the then Government’s commitment to defence expenditure and, subsequently, a ministerial apology—albeit several years later in a public inquiry. I do not want us to legislate in a way that risks journalists not exposing these important matters, if they fear that doing so would lead to them committing a crime that would attract serious penalties. I support the arguments that my noble friend Lord Black has put forward, and I look forward to my noble friend the Minister’s response and, as I have already said, to our continuing discussions on this matter.

[Lord Wallace of Saltaire (LD)]

My Lords, my name is on Amendment 70 and I want to speak to Amendments 68 and 71. I stress that, in getting this Bill right, we need to make sure that it does not lead to a level of overreporting that swamps the Home Office, with a great deal of cynicism and a negative reaction from those who are asked to do the reporting. In the last week, I have received a dozen representations, not just from media and academic sources—the liberal metropolitan elite, whom the Minister may regard as not terribly important—but from the City and commercial enterprises, which are as worried about the negative impact that the Bill could have on their international activities as those in universities are.

I admire the speed with which the Minister talks when he responds to our questions, but I hope that he is carefully considering the reasoned and sometimes expert criticisms that we have of this Bill, that he is more concerned to get the Bill right than to get it through and that, between Committee and Report, we will have some long, further conversations on particular aspects of the Bill about which the House has been concerned.

To expand on that a little, I thought the Minister was a little flippant about my suggestion that there were non-state threats from the right in a number of countries, including the United States. He may have been following the attempted coup in Brazil. The reports of it that I read suggested that the Conservative Political Action Coalition in the United States was actively tweeting in support of Bolsonaro and may well have provided funds, and that Steve Bannon and his organisation were also actively in support of Bolsonaro. These things should worry us as much as terrorist and state threats, and this is another dimension that we need to think about in this Bill.

We know that foreign money has come into this country, that there have been some very odd things, such as the Conservative Friends of Russia element, in which the right has appeared to work with what we regard as the foreign left. Those sorts of things need considering. I look forward to the letter that the Minister will be sending me shortly—I hope—on the question of spiritual injury, which the discussion last week suggested is unenforceable and almost undefinable, and therefore should not be in the Bill. I also hope that we will have further discussions on the impact on diaspora communities and dual nationals, because the extent to which our diaspora communities have relations with parties in the other countries to which they have links, and with the Governments of those foreign countries—be it Pakistan, Israel or wherever—is going to be complicated further by the Bill. We need to get to the end with an Act which commands public acceptance and public consent. Incidentally, it is likely to come into effect just before the next election, and if there was an adverse reaction to its implementation, the Government are likely to suffer.