Economic Crime and Corporate Transparency Bill

Debate between Liam Byrne and Robert Buckland

Report stage
Wednesday 25th January 2023 Commons Chamber

[Liam Byrne]

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.

[Sir Robert Buckland]

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.

--- Later in debate ---

[Sir Robert Buckland]

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.

[Liam Byrne]

I am incredibly grateful to the right hon. and learned Gentleman for his generosity in giving way. We appear to have an overload of rumness here.

[Liam Byrne]

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?

[Sir Robert Buckland]

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.”

We have taken the Canadian approach.