Economic Crime and Corporate Transparency Bill

Lord Browne of Ladyton Excerpts

2nd reading
Wednesday 8th February 2023 Lords Chamber

[Lord Browne of Ladyton (Lab)]

My Lords, it is an immense privilege to follow the noble Lord, Lord Clarke of Nottingham. He invites us all to be repetitive, and I will try not to be, except to this extent: I agree with every syllable, every word that was uttered by my noble friend Lord Ponsonby, followed by the noble Lords, Lord Fox, Lord Vaux and Lord Clarke of Nottingham. In trying not to be repetitive, I may inadvertently touch on some of the subjects they mentioned.

My thanks go particularly to the noble Lord, Lord Fox. His speech covered almost all the points that I want to make, so maybe I should go on to his Back Bench and support him, as he suggested his noble friends will be doing. I also welcome the Minister to his Front-Bench position and congratulate him. I look forward to working with him, particularly on this Bill, as we all do.

I noticed that the Minister used a form of words that the Government almost always use when talking about economic crime. He is not to be criticised for that consistency; it is a good thing. Almost every time I go on a government website about economic crime, in which I have an interest, the first sentence is to the effect that economic crime is not merely an enforcement or regulatory issue but—and this is what interests me—it poses a threat to the UK’s national security, economy and institutions, as well as causing serious harm to society and individuals. It is a threat to our national security because we seem to have an open door to some of the most dangerous and violent people in the world who either send their money or, in some cases, come to live with us because they can, partly because, at one stage, they could buy visas that would allow them to do that if they invested a significant amount inwardly.

It is not only that. I was pleased that my noble friend Lord Ponsonby started with the scale of this crime, which is extraordinary. It is estimated that economic crime costs this country somewhere in the region of £300 billion per year, but everybody who says this also says that the difficulties of assessing the scale of undiscovered economic crime means that this is almost certainly an underestimate. As we heard in the fraud Select Committee, which I will come back to, a large number of people are so embarrassed about being defrauded that they do not report the crime so it is never entered into the statistics. Even so, at that rate, it constitutes 15% of GDP. I do not think there is a measure of London buses that would help people realise what that means, but it is seven and a half times what the UK spends on defence.

The prize for all this and the contribution it would make to the good order of this country is that, if we can interdict this behaviour, there is an enormous amount of money to be gained. There would be no problem with the Government paying public servants what they want if we could get that money back or, better still, stop it leaving the country in the first place. That is where our focus should be.

This debate takes place directly in the shadow of the UK’s fall from 11th to 18th place in the Corruption Perceptions Index. This should concern us because it suggests that the systemic failures, which we have often discussed in your Lordships’ House and will be discussing today and throughout the passage of this Bill, are being noticed by our partners abroad and causing trust in the probity of our institutions to ebb.

Against this backdrop, the provisions in this long-overdue Bill are welcome. I think they will be welcomed by all the speakers who contribute to this debate, but my welcome is not unqualified. The reforms to Companies House, the enhancement of transparency, the disclosure requirements for limited partnerships and the strengthening of the scope and ability of law enforcement agencies to confiscate illicitly acquired crypto assets—although I share the bemusement of the noble Lord, Lord Fox, about how that is going to be done, because I have no idea how you can take an illicitly acquired crypt asset off somebody; that will have to be explained to me at some stage—have all rightly garnered cross-party support, but with this support, and we have the other place to thank for it, comes a helpful, cross-party and expertly informed call for the Government to strengthen certain measures further and include a few well-thought-out additional provisions.

In the 10 or more years that I have been in this House it has been almost a tradition for many speeches at Second Reading to include a criticism of the other place for a failure to scrutinise the detail of the legislation, consequently delivering it to your Lordships’ House in a state where fundamental repair or, in some cases, reconstruction work is necessary. Nothing could be further from the truth in respect of this Bill. The Report stage debate on 24 and 25 January in the other place is a model of parliamentary legislative scrutiny. It was cross-party, informed and detailed, and in almost every line of the excellent speeches an improvement of the Bill emerged. It turns out that—people who have been around Parliament long enough know that this invariably happens in debates on Bills—the Government resisted the temptation to accept any of those amendments although, in this case, they promised to come back to some of them.

The deep irony was that the two Ministers who were being persuaded—one was the current Security Minister and the other was Kevin Hollinrake—were partly responsible for the process that generated these amendments in the first place. Behind this—a virtual industry, over the years—were two All-Party Parliamentary Groups. The people who spoke in the debate were either members of those groups and had contributed to these amendments or were members of the Treasury Select Committee, which had been debating and promoting them for some years. It was a virtual treasure-trove of advice and suggestions to improve the Bill significantly.

Over the period of time that we have the Bill, it is almost certain that this House will nurture it and bring it forward through a process in which all this will be repeated and debated. From my experience of the House, particularly recently, the Government will have greater trouble here in getting the votes to go with them when they resist common-sense and well-thought-through improving amendments to the legislation. I am not suggesting that we just jump to that process—we have to go through it and we will—but that is my confident prediction about where this Bill will end up. We will give it back to the other place in the state that it hoped it would come to us in.

This will be a big challenge for the Government but, in my view, it will be a much-improved piece of legislation that starts to deliver what the Government want, which is to make us more resilient against what has become a disease in this country, that is, corruption and fraud. It is costing us phenomenal amounts of money. There is a big prize.

I had intended at this point to refer to some of these points, but since the noble Lords, Lord Fox and Lord Vaux, have done it for me, I will not. I think that we have laid out the menu. However, I will ask the Minister one important question. I too was a member of the fraud Select Committee, immensely ably chaired by the noble Baroness, Lady Morgan of Cotes, and there are other speakers in this debate—such as the noble Lord, Lord Young—who were also members. I think that we are all very proud of the work we did and commend the report, which should be read. However, I say to my noble friend Lord Vaux that I am not certain I want the fraud strategy to be published in the current circumstances, for the reason that I am about to come to.

Coincidentally, alongside the publication of the committee’s report—we did not set this up—the National Audit Office published a value for money report on combating fraud, which is the responsibility of the Home Office. Five years before, it had published a value for money report and been deeply critical of the Home Office for not having, among other things, data about the level of fraud, so it must have been to its surprise—it was to mine—that this report, which it published at the same time, said among other things that the Home Office had no reliable way of measuring the financial impact of fraud or the value for money of its own policies to tackle it. That is because its data was—guess what—six years out of date, coincident with the last time that the Home Office told it that it had no data to measure fraud. That struck me as appalling, given the Home Office’s responsibility, as I am sure it did the National Audit Office. This is now with the Public Accounts Committee, so we cannot debate it in any more detail in this House until that comes out.

Believe it or not, the Home Office put up a spokes- person on the day who said, and I paraphrase—responses of all Governments of any hue to crises start off by saying, “We take this issue very seriously”; the answer to that in many cases is, “No you don’t, because if you did then there wouldn’t have been a crisis”—that they took this issue very seriously, were in the process of drafting a national fraud strategy and would take into account the criticism of the National Audit Office. They should have said: “We will delay the publication of our national fraud strategy until we have some data on which to base it.” I am not so desperate to get from this machine a national fraud strategy until they have corrected the problem that the National Audit Office described.

I am conscious of time; I had promised myself that I would not go any further than eight minutes. I think that I have said enough; I will say no more. I support this legislation, but it must be improved, exactly as the other place tried to improve it.

Asylum Seekers

Lord Browne of Ladyton Excerpts

Tuesday 17th January 2023 Lords Chamber

[Lord Murray of Blidworth (Con)]

Yes. Any such revised guidance will take into account input from a whole range of stakeholders, no doubt including those of the type mentioned by the noble Baroness.

[Lord Browne of Ladyton (Lab)]

My Lords, I know from my own experience when I was Minister for Immigration that when backlogs are large it is imperative to look after the most vulnerable people in custody. Why then did the Home Secretary end the system of annual investigations into the treatment of vulnerable adult detainees? Is the detention system working so well now that these investigations are no longer necessary, or are there some other protections for those people to ensure that the welfare of vulnerable adult detainees has not been compromised?

[Lord Murray of Blidworth (Con)]

Certainly the inspection of detention facilities will continue. I am not aware of any change in policy in relation to the particular category of detainees that the noble Lord mentioned, but I will make inquiries in the department and write to him on that.

Police: Employment and Discipline

Lord Browne of Ladyton Excerpts

Monday 9th January 2023 Lords Chamber

[Lord Sharpe of Epsom (Con)]

From memory, there is a face-to-face aspect to the vetting and interviewing process—if I am wrong on that, I will come back and correct myself. On the report to which the noble Lord referred, he will be aware that there is a requirement for policing bodies to provide a response to the recommendations in that report within 56 days of its publication. Those responses will be imminent, in that case.

[Lord Browne of Ladyton (Lab)]

My Lords, the Met’s own figures show that the number of officers suspended from duties on full pay has risen by almost 600% over the last three years. This excludes a growing number of others subject to management or restricted duties owing to concerns about their performance or conduct. This is not a statistical quirk but a consequence of systemic issues with the disciplinary procedures. This needs to be addressed urgently, because it affects forces across the country and compromises the safety of the people whom these police officers serve. We do not have time to wait for a review; it needs to be dealt with now.

UK Asylum and Refugee Policy

Lord Browne of Ladyton Excerpts

Friday 9th December 2022 Lords Chamber

[Lord Browne of Ladyton (Lab)]

It is a privilege to follow the noble Baroness, Lady Nicholson. We have heard three excellent maiden speeches: I thank my noble friends Lady Twycross and Lord Sahota and the right reverend Prelate the Bishop of Leicester for their excellent contributions. I thank the most reverend Primate for the opportunity to debate this important question today. It is timely for many reasons: in addition to the seasonal context offered to us by the noble Lord, Lord Cormack, my noble friend Lady Chakrabarti reminded us that tomorrow is Human Rights Day.

Only two weeks ago, the Home Secretary admitted that we have “lost control” of our borders. In that loss of control, we have a gridlocked asylum system: 144,000 people are awaiting an initial decision on their asylum applications. For six months or more, 70% have been unable to work, to access key services or accommodation and, most importantly for a significant proportion of these people, to live without the fear and torment of being sent back at the risk of persecution and torture. Over a third are from five countries with grant rates of 80%, meaning they will likely have a legitimate claim to asylum.

As the noble Lord, Lord Carlile, emphasised, within this appalling chaos, there are children at risk. In the year to September, of those who applied, over 14,000 were children, including 5,152 who were unaccompanied, and far too many have gone missing and disappeared, including 39 child refugees in Kent. The Home Office has a legal duty to safeguard the welfare of those children, which it is failing to do. Not only have children gone missing but there was a 212% rise in age disputes this past year. It is worth emphasising that the Home Office policy on this was revised so that those who look “significantly over 18” are treated as adults, a policy which has resulted in children as young as 14 being placed in immigration detention or alone in adult accommodation facing significant risk of harm. That is a breach of our duty of care and of the provisions of the UN Convention on the Rights of the Child and our own consequent legislation.

I will now ask the Minister a question that he must have anticipated. I will quote Tim Loughton’s question before the Home Affairs Select Committee on 23 November. He role-played as follows:

“I am a 16-year-old orphan from an east African country escaping a warzone and religious persecution, and I have a sibling who is legally in the United Kingdom … What is a safe and legal route for me to come to the United Kingdom?”


If he is unable to better the Home Secretary’s floundering and seeming inability to provide a coherent answer and her Permanent Secretary’s offer that they should engage with the UNHCR—while, at the same time, admitting that there are many countries in Africa and, indeed, elsewhere where it is not possible to apply for asylum via the UNHCR—should we infer that the principles informing contemporary UK asylum and refugee policy are not in compliance with the refugee convention and that that is by design?

My final point is about the Government’s now-notorious Rwanda policy: an immoral policy that shames Britain. On the release of government documents about the process by which Rwanda was selected for the offshoring of asylum seekers, we saw the degree to which the then Prime Minister and the Home Secretary overrode the concerns of senior officials, their own equality impact assessment, the UNHCR, the British high commissioner in Rwanda and the UK’s Global Ambassador for Human Rights. So we have spent £140 million, but what have we received in return? The answer is: the prospect of years of ongoing litigation, disquiet among many of our key allies and partners, the disapproval of the UNHCR and other supranational agencies, and a further erosion of our reputation for compassion and adherence to international law.

In its latest country report, the US State Department said that among the things that characterise Rwanda are arbitrary detention, ill treatment, torture in official and unofficial detention and the fact that fair trial standards are routinely flouted. Last Sunday, the US Secretary of State called President Kagame. He reported having

“discussed credible reports indicating that Rwanda continues to support the M23 rebel group and has its armed forces inside the DRC”.

In an Oral Question yesterday in your Lordships’ House, the noble Lord, Lord Goldsmith, twice reminded us that this egregious behaviour in sponsoring conflict in a neighbouring country undermines peace efforts and is causing insecurity and significant human suffering there, so much so that the FCDO has raised its concerns at the highest levels with Rwanda. How do our assessments of the robustness of judicial systems, the likelihood of arbitrary arrest and the propensity for agents of the state to use torture in Rwanda differ from that of the US State Department? I am interested to know whether we have a superior methodological practice that might explain this disparity in outlook.

Of course, the Government are right to emphasise the importance of breaking the grip of people smugglers, but there is no evidence at all that the Rwanda policy will accomplish that. Since it was announced, the number of arrivals has gone up, not down. Cynics may be forgiven for thinking that the Government are happy to invest money in a policy that is purely symbolic. Small boat arrivals continue at record levels, due in part, at least, to a lack of safe and legal routes for asylum. We face significant systemic challenges to our immigration and asylum systems, and it is time we confronted them constructively and not just symbolically. I welcome this debate as a step towards doing exactly that, and I commend the most reverend Primate’s proposals as a good starting point, particularly when they are read in the context of the detailed interviews with my right honourable friend Yvette Cooper.

Metropolitan Police: Crime and Misconduct

Lord Browne of Ladyton Excerpts

Thursday 1st December 2022 Lords Chamber

[Lord Browne of Ladyton (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Gold, and I thank him for sharing his experience with us. Like others, I want to take the opportunity to thank the noble Lord, Lord Lexden, for securing this important debate. These issues affect millions of people’s lives every day. I commend him also for in a short time—10 minutes—making a compelling case for action now. In a sense, the rest of us are just corroborating witnesses to his introduction.

The thread that links together the concerns we have heard is accountability and it takes many forms: the accountability of those guilty of misconduct, of senior officers, including the Commissioner, to the Mayor of London and to the Home Secretary, and of all police officers to the public they serve. Surveys reveal that public confidence in the police has been in a downward trend from 2017.

Today, I want like others to focus on the accountability that the Government face for political decisions that may have exacerbated, and in some cases have exacerbated, the difficulties faced in holding to account officers guilty of misconduct and, much more importantly, ensuring that those likely to commit offences are debarred from joining the police force in the first place.

A key principle of good government is consistency. The last decade of Conservative Government—first in coalition and then straightforwardly—has seen an approach wildly at variance with that principle. Police numbers have been slashed: 23,500 police were cut because of the political decision to pursue austerity-related measures, only to be followed immediately by two years of equally grave announcements of the urgent necessity to increase police numbers back to the level at which they existed in 2010.

In the year to March 2022, we saw the hurried recruitment of over 12,000 new police staff, on top of a record increase the previous year. That extraordinary staff churn not only compromised the institutional memory of police forces up and down the country but exacerbated already weak vetting and disciplinary processes, as well as appalling and systemic levels of misconduct and crime among serving officers.

This is not just a problem for the Met. The Conservative PCC for Bedfordshire described the vetting process as being “massively overwhelmed”. The chair of the National Police Chiefs’ Council said that the process is overwhelmingly manual and that it must become automated for it to be appropriate for modern procedures. The HMIC recommended that the system be made more coherent, with mandatory procedures put in place in all forces.

On 2 November, reporting on his investigation into vetting, Matt Parr revealed that, of the 725 files examined, in 131 the decision to grant clearance was at least “questionable”. He found successful applicants who had criminal records, had been suspected of serious crime and had family links to organised crime or substantial debt. He found serving officers who had attracted allegations of serious misconduct who had transferred to the Met from other police forces across the country. His report also revealed significant faults with misconduct investigations into serving officers, some of whom had gone through these inadequate vetting procedures. In a fifth of cases he examined, in a masterpiece of understatement, he described himself as “unimpressed” by their decision-making. In previous statements, the inspector criticised the promotions system in the police as “inconsistent”, “ineffective” and “unfair”.

Clearly, there are structural weaknesses throughout policing: a vetting system that is weak and inconsistent; a defective complaints system allowing a minority of serving officers, with impunity, to create a toxic work culture riddled with corruption, casual racism, homophobia, misogyny, prejudice and a lack of care and sensitivity towards victims of violence against women and girls; and a promotions system which is far from meritocratic.

There are many hard-working and principled officers who remain within the system—including Sir Mark Rowley, the focus of this debate, and others—and I hope the Government will give serious thought to how they can best aid them in improving the institutional resilience and culture of our police service nationwide.

Scammers

Lord Browne of Ladyton Excerpts

Tuesday 15th November 2022 Lords Chamber

[Lord Sharpe of Epsom (Con)]

I absolutely agree. I also point out that banks are heavily involved with the awareness campaigns. Many noble Lords will no doubt have seen a recent advert put out by Santander to stop scammers which features Ant and Dec, when they are not busy in the jungle. Also, the Scams Prevention and Support Programme, delivered by Age UK and funded by Lloyds Bank, is aimed at older people and helps them to spot and understand scams, and to take action to protect themselves from becoming a scam victim. Of course, I also agree that it is emotionally devastating to be a victim of these crimes.

[Lord Browne of Ladyton (Lab)]

My Lords, today the National Audit Office published a report on fraud, which says in terms that the Government do not have the data they need to understand the full scale of the problem and are unable accurately to measure the impact of their own policies on this growing area of crime, which is 41% of crime in this country. A spokesperson for the Government said, as we can expect:

“This government is absolutely committed to cracking down on fraud and economic crime”


and that the NAO’s recommendations will be “reflected” in the “upcoming fraud strategy”. What on earth use is a fraud strategy based on data that is now six years old?

[Lord Sharpe of Epsom (Con)]

My Lords, the noble Lord is quite right: the Home Office is leading work on a fraud strategy. The Prime Minister referred to it in the other place as recently as 2 November. We intend to publish on that shortly. It will consider all the possible tools required to go after fraudsters and to protect those who are most vulnerable. The strategy’s other aims will be to stop and block frauds being carried out, and to improve law enforcement. Considerable money is being invested in improving data collection, as well as law enforcement capability.

National Security

Lord Browne of Ladyton Excerpts

Wednesday 2nd November 2022 Lords Chamber

[Lord Sharpe of Epsom (Con)]

I thank the right reverend Prelate for that suggestion; I will read that speech, which to date I have not. He invites me to stray into areas where I would prefer not to go. There are differences of opinion when it comes to these laws; I will leave it there.

[Lord Browne of Ladyton (Lab)]

My Lords, the daily and repeated Russian missile attacks on Ukraine’s critical national infrastructure are evidence of the importance of this to our national security. Is the Minister aware of the two week-old report of the Joint Committee on the National Security Strategy about critical national infrastructure, which is scathing about the Government’s ability to protect it? It specifically identifies a lack of leadership, an absence of co-ordination among government departments and the disbanding of the Civil Contingencies Secretariat. In short, it calls on the Prime Minister to

“get a much better grip on … national security”.

When will we see the long-awaited national resilience strategy?

[Lord Sharpe of Epsom (Con)]

My Lords, I cannot answer that specifically. I have seen that report and have read a variety of newspaper reports with mounting alarm, as I am sure the noble Lord has. I think the task force will address a good deal of the noble Lord’s concerns, and I look forward to hearing what it has to say.

Police: Vetting, Misconduct and Misogyny

Lord Browne of Ladyton Excerpts

Wednesday 2nd November 2022 Lords Chamber

[Lord Sharpe of Epsom (Con)]

Not as far as I am aware, but I defer to the noble Lord’s specialist knowledge on this subject and I will take the question back to the Home Office.

[Lord Browne of Ladyton (Lab)]

My Lords, in his first Prime Minister’s Questions last week, Rishi Sunak chose to close the session by bragging and baiting the leader of the Opposition—to braying from the Tory Benches—saying that there are 15,000 new police officers on our streets. When he did so, how much did he know about the scale and nature of this—that hundreds, perhaps thousands of those people may have passed through flawed vetting processes?

[Lord Sharpe of Epsom (Con)]

I have no idea what the Prime Minister knew or did not know.

Police and Crime Commissioners: Budget

Lord Browne of Ladyton Excerpts

Monday 28th March 2022 Lords Chamber

[Baroness Williams of Trafford (Con)]

My noble friend is absolutely right: local circumstances will dictate different needs in different places. He is absolutely correct to say that cyber and other types of crime—county lines, for example—may necessitate different solutions in different areas.

[Lord Browne of Ladyton (Lab)]

My Lords, following that specific question and the implication that somehow this money was being spent on cybercrime, the principal cybercrime in this country is fraud. Some 42% of reported crime is fraud—despite the fact that the Government regularly drop off this figure when they talk about crime. Some 1% of police resources are used in policing fraud—so it clearly cannot be the case that these resources are being used for other policing purposes; they must be being used for something else.

[Baroness Williams of Trafford (Con)]

I return to the point made by my noble friend: it is down to local elected PCCs to decide. Also, cyber is not just about fraud; it can be about all sorts of things, such as disruption et cetera. There are other bodies that deal with fraud as well, but, frankly, we deal with fraud and other types of crime across several agencies.

Enforcement of Lockdown Regulations

Lord Browne of Ladyton Excerpts

Tuesday 18th January 2022 Lords Chamber

[Baroness Williams of Trafford (Con)]

I think I answered the noble Lord’s question. I was not there; I was not witness to any events that may or may not have happened. As the noble Lord will know—and yes, I do speak for the Government—Sue Gray is doing her review, and the outcome of that will be known in due course.

[Lord Browne of Ladyton (Lab)]

My Lords, on this very point, the question did not require the Minister to have been present to be able to answer it. The question that troubles some people is that the Metropolitan Police has already publicly said that it will not investigate anything but will wait to hear what Sue Gray says and that it is in contact with Sue Gray. The Metropolitan Police has police officers in Downing Street, both inside the building and outside. Surely it is legitimate to ask: are statements being taken from those officers by Sue Gray, and is the Metropolitan Police offering them to Sue Gray’s investigation, seeing as it is not investigating this itself?

[Baroness Williams of Trafford (Con)]

The noble Lord asks a perfectly legitimate question. To that I would say that the police are operationally independent of government, but the review and the investigation will take their course.