Criminal Finances Bill

Lord Flight Excerpts

2nd reading (Hansard): House of Lords
Thursday 9th March 2017 Lords Chamber

[Lord Flight (Con)]

My Lords, I first declare my interest as in the register, and in particular as director of Metro Bank and as a regulator in Guernsey. I very much echo Dominic Raab’s comments on this Bill in the other place. I want Britain to be a competitive and successful global hub open to international talent, as it has been for 400 years, and I want us to be known the world over for our integrity, our commitment to the rule of law and our adherence to moral principles. We need to stop turning a blind eye to the blood money of despots that may flow all too freely through London and other UK businesses, through banks and into properties. The new sections in Clause 1 are designed to address the weakness in the current UK asset-freezing regime.

I briefly make the point that I do not actually agree that compulsory public registers are going to help with the issue, particularly in Guernsey and Jersey. The law enforcement agencies do not support public registers. David Lewis, head of anti-money-laundering standards in the Financial Action Task Force has made the point that incomplete and unverified public registers are not nearly as useful as law enforcement agencies keeping the right and detailed information. Tax authorities do not support public registers, as they reduce the candour of reporting in central platforms. UK intelligence and law enforcement is a key foreign policy asset, and will be undermined. The proliferation of standards hurts multilateralism, and the OECD reported, when the UK announced its own plan, that,

“proliferation of inconsistent models is in nobody’s interest”.

The most positive organisational aspects of the Bill are the greater contact and interaction that it facilitates among the various entities working in the area, in both public and private sectors. It has been the absence of this to date which is largely responsible for a pretty poor showing in terms of actual success of anti-money-laundering activities.

I support particularly the objective of stronger partnership with the private sector. I am pleased to report that Metro Bank has signed up to be part of the Joint Money Laundering Intelligence Taskforce and I believe that that entity can be much more effective in increasing the volume of discoveries. The BBA will create a register of the business specialities of particular banks and make it available to the Joint Money Laundering Intelligence Taskforce, to bring the relevant experience into JMLIT to work on money laundering and terrorist financing. The BBA, Home Office and Treasury will operate a public private partnership to educate consumers and businesses about the risks of becoming involved in money laundering.

The Bill will create some key new relevant instruments, particularly the unexplained wealth order. The noble Lord, Lord Rooker, raised that issue. It is an extremely important instrument and I believe that huge use will be made of it in the future. Part 3 creates an offence of corporate failure to prevent tax evasion. If the person acting on behalf of a company criminally facilitates a tax evasion offence by another person, that company would be guilty of the offence. There are various other measures which, in the main, will be effective in increasing the volume of money laundering discovered.

However, I have concerns that the additional costs created versus the likely cash recovery will continue to be unsatisfactory. As others have pointed out, the NCA estimates that the amount of money laundered in the UK could be up to £90 billion. In the period 2014-15 the NCA received 381,882 suspicious activity reports, but the amounts of money that have been recovered look pathetically poor. In 2015-16 only £255 million was recovered under the Proceeds of Crime Act. In the whole period between 2010 and 2016, £2 billion was recovered using all powers in the Proceeds of Crime Act. In 2015-16 HMRC secured 1,135 charging decisions and collected £2.7 billion in additional tax and penalties, but that was significantly less than forecast and anticipated. The BBA estimates that its members are now spending £5 billion annually on core financial crime compliance. A lot of that seems to me to be pretty wasted. I accept the problems that are presented, but what is missing are more effective and determined policies to deal with the real criminals.

Let me also raise the issue of PEPs, which is relevant to this House. The Bill defines a PEP as an individual who is or has been entrusted with prominent public functions by an international organisation or by a state other than the UK, another EEA state or a family member of that person. Yet the FCA requires banks to treat domestic UK politicians as PEPs. I would be grateful if the Minister could clarify the law. At a personal level, I was somewhat surprised to discover that the bank where one of my daughters banks was inquiring about her boyfriend’s income as part of a PEP inquiry, arising from my political involvement. That struck me as somewhat inappropriate; the time and effort might have been better spent somewhere else.

The key objective should be to improve the identification of those involved in corruption overseas and the laundering of the proceeds of their crimes in London. That is why collaboration is so important, to enable law enforcement agencies to satisfy demands at the outset of such investigations, given that all the relevant information may be outside the UK. An unexplained wealth order made in relation to a PEP living overseas does not require a suspicion of serious criminality. This should be particularly helpful in cleaning up the UK money laundering activities of corrupt overseas politicians. The Bill also provides for the civil recovery of assets belonging to those involved in or profiting from human rights violations.

As I said, I am concerned that the Bill will add substantially to costs, so it will be important that it achieves a major increase in the amounts recovered from money laundering and terrorist funding activities. I believe that the most useful change will be that of allowing entities within the regulated sector, such as banks, to voluntarily share information on suspected money-laundering activities—subject, that is, to informing the NCA. The private sector holds data on financial transactions and related personal data. The law enforcement agencies hold details of criminals and intelligence on crime. When these data have been shared in the past under the Joint Money Laundering Intelligence Taskforce, there have been positive outcomes for both sectors. Although existing data protection legislation allows for the sharing of information for prevention and detection of crime, regulated companies are understandably concerned that there should be express legal cover directly related to the anti-money-laundering regime to reduce the risk of civil litigation for breach of confidentiality.

It is the Government’s intention that allowing entities to share information should allow so-called super SARs to be submitted to the NCA which would draw on multiple sources of information on suspected money laundering. At present, I feel that the NCA is just weighed down with hundreds of thousands of reports which often amount to little more than many banks protecting themselves.

Immigration: Public Services

Lord Flight Excerpts

Tuesday 10th May 2016 Lords Chamber

[Lord Roberts of Llandudno (LD)]

My Lords—

[Lord Flight (Con)]

My Lords—

[Lord Bilimoria (CB)]

My Lords—

Women: Dishonour-based Violence

Lord Flight Excerpts

Wednesday 15th July 2015 Lords Chamber

[Lord Bates]

I recognise that a great deal of work is going on. I hope that I have demonstrated that the Government are taking this very seriously. If there are particular organisations about whose work Members of your Lordships’ House wish to make representations, then of course I am always available on this very important issue.

[Lord Flight (Con)]

My Lords, some element of mistreatment of women surely arises from the practice of Sharia law, in contradiction to the law of the land. Is it not time that something was actually done to control this and potentially to ban the practice of Sharia law in this country?

[Lord Bates]

I think that is a wider point. There will be an opportunity for the House to consider that in the forthcoming counterextremism legislation, where we will look at the effort that has been made to challenge certain views in our society and to reaffirm British values.

Anti-social Behaviour, Crime and Policing Bill

Lord Flight Excerpts

Monday 18th November 2013 Lords Chamber

Moved by

[Lord Flight]

21: Clause 3, page 3, line 20, at end insert—
“(c) the anti-social behaviour in which the respondent has engaged, or threatens to engage, consists of intentional or deliberate anti-social behaviour of a potentially persistent nature”

[Lord Flight (Con)]

My Lords, I have tabled this amendment in support in particular of Westminster Council—my wife is a councillor there—but it has been supported on a cross-party basis by the other main city councils of Birmingham, Manchester, Nottingham and Southampton. I suggest that they cannot all be wrong in believing that there is an issue here. These major city councils have the quite demanding job of keeping public places free of nuisance for both residents and tourists, particularly in their city centres. Westminster has self-evidently the particular issue of a huge tourist presence in, effectively, most of the key places in London’s city centre.

This is not my natural territory. It has taken quite a lot of effort to get my mind round fairly obscure, and certainly complicated, legal issues. If I make the odd technical error, please accept my apology. This amendment is largely about the problem of persistent and aggressive begging in city centres. This has been an area where the ASBO has worked reasonably well. Local authorities can address the problem by applying for ASBOs; they can be obtained without the individuals involved having a criminal record, but when the ASBO is breached a criminal offence is committed and the local authority can have offenders arrested and prosecuted. Certainly, not only the politicians at Westminster but Westminster City Council staff believe that the present arrangements have worked pretty well in dealing with the problem of inner-city aggressive begging.

The first argument is, to put it simply, “If it ain’t broke, don’t fix it”. It is a difficult area. Under this Bill, as we know, ASBOs are to be replaced by IPNAs, but a breach of an IPNA is no longer an automatically arrestable offence. Local authorities can apply for an IPNA, but they would have to take evidence of a breach to court and apply separately for an arrest warrant relative to cases of persistent begging. This is not only hugely bureaucratic and cumbersome but simply would not work, because the offenders invariably have no fixed address; by the time the subsequent power of arrest were granted, it would be useless, because they would not be able to find the offenders. Concerns have been raised about the provisions in the Bill for this problem by Westminster council with Jeremy Browne, who was the Minister, and now with Norman Baker, but there have not been any meetings or no direct response has been received. Concerns have also been raised in the other place by Westminster’s MP, Mark Field.

My amendment in essence seeks to enable an IPNA to be used on a similar basis to ASBOs to deal with the aggressive begging problem. It adds a wider but not universal set of circumstances of,

“intentional or deliberate anti-social behaviour of a potentially persistent nature”,

to enable a court to be able to grant an IPNA with an automatic power of arrest if the IPNA is breached.

The Government’s response so far has been that IPNAs are designed to deal with lower threshold offences and to operate as a pre-emptive tool, so they do not want them to have beefed-up powers attaching to them across the board. My two comments are that IPNAs already are to have powers of automatic arrest for violent or a threat of violent behaviour, so the principle has already been breached. Secondly, my amendment does not give beefed-up powers across the board but only under special conditions of intentional or persistent and deliberate anti-social behaviour, which is what persistent and aggressive begging constitutes. Norman Baker’s stated objection to the stance of the main city councils was that what is proposed is a power of arrest to every injunction, but that is not correct; it is a quite specific power.

The Government’s main argument and objection to this amendment is that it is not needed as the Bill contains new powers that can deal with the problem of aggressive begging and, in particular, the two powers of the CPN and the public spaces protection order—and, I might add, in extremis the dispersal power under which police can clear an area of undesirable people. If a community protection notice’s warning is first issued and then breached, a CPN can then be issued whereby, if it is breached, police can have an automatic power of arrest. But the key is the additional stage prior to issuing a CPN, when the relevant offending individual or group has to be issued with a written warning notice.

Westminster, in particular, argues that warning notices would increase the time and costs of addressing the problems of persistent begging, and would be likely to decrease the ability of local authorities to respond promptly to these problems. If the requirement for the written prior notice of offending behaviour were removed, my understanding is that local authorities would be perfectly happy to use CPNs to address this issue. There is also the financial point that, under the present ASBO arrangements, the Crown Prosecution Service handles the prosecutions but, with CPNs, the local authorities would have to pay the prosecution costs.

--- Later in debate ---

[Baroness Hamwee (LD)]

My Lords, the noble Lord knows that I have concerns about this amendment. I hear what he says about other cities. I have obviously not been able to undertake a scientific assessment but there seems to be quite a variation in views—in London, at any rate—about whether this is the right way to go about the matter.

The language in the amendment seems to be very general;

“intentional or deliberate anti-social behaviour”,

could mean pretty much anything, as we heard earlier. I would have thought almost all anti-social behaviour could potentially be persistent; most conduct would be potentially persistent, but that is not really my concern. The begging that we have heard about troubles me a lot for a variety of reasons; one of them is the criminal gangs behind the beggars. I am not immediately convinced that this measure, dealing with those who are forced into the activity, will actually solve the problem or deter the activity. I am also concerned—though I accept this might be the position with the current arrangements—about the revolving door of arrests. Some are in the cells overnight and then they are out again.

There is other legislation as well; I am sorry that the Minister has apparently not responded at length. I had understood that quite a long letter giving the Government’s views had gone out. That is a matter for my noble friend. I have not seen the letter; I just heard that there was one. It dealt with the other legislation, which might be quite old. That does not mean to say that it is necessarily bad.

I went to the noble Lord’s briefing with Westminster City Council. I heard Councillor Aiken’s views very powerfully expressed. I did not gain the impression that everything was okay now, so I was a bit confused as to the argument against scrapping the current system. I may have been wrong, but I picked up the feeling that there were problems now.

[Lord Flight]

I would like to respond to that. Yes, there are problems; persistent begging is a very hard thing to deal with. I think that the Westminster argument is that its present tools include a tool which has had some success; it is concerned that the new arrangements, because of the double doing, would be less useful.

[Baroness Smith of Basildon]

My Lords, I listened carefully to what the noble Lord, Lord Flight, had to say in this debate. I noticed at the beginning that he was not 100% convinced that he had the right words in the amendment. That is less important in Committee than the intent of what he is seeking to do. Likewise, I was sorry not to get to the briefing last week with Councillor Aiken, but she also wrote to me. I was very struck by the comments she made in her letter. I do not think it is the point that the noble Baroness, Lady Hamwee, made that everything is perfect now. Her concern is that there are serious problems and she would be quite happy to see improvements in the legislation to help the council address the issues it is facing. The fear is that the new legislation will weaken its ability. The noble Lord is indicating that I am correct in my understanding of her views.

Councillor Aiken, who, I understand, is the cabinet member for community protection, is probably at the sharp end of this more than any of us in your Lordships’ House are in dealing with these matters. She says:

“While I recognise that the current legislation to deal with anti-social behaviour may require review”;

I think that all of us would accept that improvements can always be made. She goes on to say:

“It is therefore worrying that a Government committed to ensuring people feel safe in their homes and communities and are intent upon freeing up crime fighting capacity, is instead seeking to pass legislation which will weaken local power to protect communities and increase bureaucratic process around enforcement”.

It takes a lot for a councillor to be writing to Ministers and Members of your Lordships’ House with those kinds of comments, when all they are seeking to do is improve their position.

My impression from her letter, as well as information which I have looked for myself, is that the council is being pretty effective in tackling this very serious problem, and there may be a case that more tools are needed to assist them in doing so. They have some suggestions. The noble Lord, Lord Flight, suggested meeting councillors to listen to their concerns. I think that they would be very pleased to know whether their approach and their tackling of this issue would be improved by the Government’s proposals and whether their fears could be allayed. Clearly, there cannot be a situation whereby a council dealing with a serious problem affecting our capital city, and, presumably, a number of other cities, is worried that it is going to lose the capacity to deal with something that has to be addressed and which causes great concern to local residents.

I hope that the Minister or his colleagues can undertake to have a meeting with the council. That would be a sensible way forward and perhaps the noble Lord, Lord Flight, would report back on Report. He mentioned aggressive begging, and there are other kinds of aggressive behaviour, including harassment, that cause great distress to residents and visitors. I hope that the noble Lord will accommodate the comments made by the noble Lord, Lord Flight.

--- Later in debate ---

[Lord Taylor of Holbeach]

In some circumstances there is undoubtedly some suggestion that people involved in begging have been brought here as part of criminal gang activity. But that is another crime and there are other measures to deal with it. Meanwhile, local authorities’ concern is to make sure that members of the public, tourists and businesses are not interfered with by beggars in public places.

[Lord Flight]

My Lords, I thank the Minister for that very detailed response. I am hopeful that what he described will be an effective measure for dealing with this issue. The only area where I still have some uncertainty, and where Westminster and other councils have uncertainties, is the double-stage aspects of both CPNs and the new public spaces protection orders. There is concern that warnings will be given out to people who will disappear and then come back again as soon as the police have gone. But I am grateful that the Minister has accepted the request to meet not just Councillor Aiken but any other of the local authorities concerned, to go through their concerns and thrash out a mechanism that can work. On that basis, I beg leave to withdraw the amendment.

Amendment 21 withdrawn.

Electoral Registration and Administration Bill

Lord Flight Excerpts

Monday 14th January 2013 Lords Chamber

[Lord Norton of Louth]

My Lords, I will assume it is a case of leaving the best till last. I very much agree with the point that the noble Lord, Lord Wills, has just made. I have raised the issue before about people in that very situation.

On the point made by the noble Lord, Lord Lipsey, about the Long Title, the Long Title is that this is a Bill,

“to make provision about the registration of electors and the administration and conduct of elections”.

I would have thought that amendments about the registration of electors fall quite clearly within the subject matter of the Bill—unlike, I think, what is to follow.

I have added my name to Amendment 25, as my noble friend Lord Lexden mentioned, but I also support the amendments that he has brought forward. My noble friend’s amendments raise an important issue of principle. The noble Lord, Lord Anderson, was raising matters of practice, but there is a fundamental principle. It is perfectly clear that some British citizens live abroad because they wish to do so. Some live abroad because they consider that they have to do so. Most emigrants from these shores move abroad, as my noble friend said, for work-related purposes. Some will be working for British firms; some will be teaching English; some will be paying taxes in the UK.

The important point is that they are and remain British citizens. So long as they remain British citizens, I see no reason why they should be disenfranchised. If they no longer feel any connection with the United Kingdom then it is open to them to seek the citizenship of the nation in which they reside. The fact that they chose to remain British citizens should not be dismissed but rather regarded as an asset for this country. British citizens are often important ambassadors for the United Kingdom. Just as overseas students in this country return home with British degrees and serve arguably as the most important source of British influence abroad, British expatriates are a notable source of British influence around the globe. Rather than discouraging our own citizens, and indeed overseas students, we should be treating them as an important resource in maintaining our influence on a global scale.

The principle is one that appears to be accepted by other EU member states. We are, as my noble friend has said, in a somewhat anomalous position. The largest number of British citizens who live in a non-English-speaking state reside in Spain, with the second largest number in France. Neither of those states disenfranchises its citizens who live abroad in the way that we disenfranchise ours. The link with constituencies is not particularly relevant in terms of the fundamental principle involved. Other nations, such as the United States, do not disenfranchise their citizens either and I see no reason why we should disenfranchise ours.

Like my noble friend, I have been struck by the number of British citizens presently living abroad who have been in contact to make the case for ending this anomaly. The fact that they feel intensely about the subject reflects their commitment to this country. They are not seeking any material benefit through this route—they are clearly proud to be British citizens and wish to retain the intrinsic feature of citizenship in the form of the franchise. At a time when we are having difficulty persuading many of our citizens at home to vote, it seems inappropriate to prevent citizens who do wish to vote from doing so.

My noble friend’s amendments therefore address an important issue, but they do so in a modest and ingenious manner. They are modest in relation to the principle and ingenious in relation to the practical problems involved. The Minister may claim that we need more time to reflect on the principle and that we should not rush to abolish the 15-year limit. My noble friend’s amendments would not abolish the limit but would rather allow the Secretary of State to introduce an order to extend the time period. There is thus time to reflect and build a consensus in order to extend the period.

There are practical problems, as no doubt the Minister will emphasise, in the process of registering British nationals who live abroad. My noble friend’s amendments seek to address those problems. The Minister may argue that they are not adequate, in which case, if the principle is conceded, the onus rests on the Government to come forward with proposals of their own. It is thus incumbent on the Minister to address the principle and explain why British nationals living abroad are treated less favourably than the citizens of other EU nations living abroad, and why we seem unwilling to acknowledge what constitutes a great British resource. We should not be encouraging EU nationals to desert their commitment to the United Kingdom but should rather be acknowledging that commitment. I hope therefore that the House will support my noble friend’s amendments.

[Lord Flight]

My Lords, I support my noble friend’s amendments. I have lived as an expatriate and, unless you happen to have parents resident where you want to register to vote, it is extremely difficult to get registered, particularly if people are busy with whatever their careers are.

My particular point is this: in most places, you are not entitled to vote in national elections wherever it is that you are living abroad. If such individuals cannot vote in the country of their nationality or in the country where they live, which is indeed the case with this country, then effectively you are denying them any major political vote whatever. No one seems to be concerned about that, but it is an unreasonable thing to do.

I was rather proud that in the most recent French elections London was, I think, the seventh largest-voting French city of the French electorate, as a result of so many French citizens living in London. Clearly there would have to be changes in the way that representation deals with expatriates if we were to adopt permanent voting by passport-retaining British expatriates, and the concept of the local constituency where they might have lived 10 or 20 years before does not work particularly well, but I suggest that for once it is worth while looking at how France runs its affairs because it deals rather more fairly with its expatriates than we do.

[Lord Brooke of Sutton Mandeville]

My Lords, my noble friend who moved this amendment is a historian, and I wish to add a historical footnote as well as to pay tribute to the chivalry of others involved in the exercise. In the late 1980s there was considerable embarrassment and concern that the amount of money being spent on parliamentary by-elections greatly exceeded the amount that agents, in signing for those expenses at the end of the election, were themselves putting down. It was a risk being run entirely by the agents, and all parties were involved in the problem.

I suggested to my noble friend Lord Hurd, who by coincidence I am sitting next to at the moment although I have not mentioned this to him, that it would be sensible if we managed to pass legislation briskly to correct this problem. He sensibly advised me that the only way in which that could be done would be if I could reach agreement with other parties, and it was sensible that that should occur. He referred me to the shadow Home Secretary, now the noble Lord, Lord Hattersley, who referred the matter to the noble Baroness, Lady Gould of Potternewton, who had some responsibility within the Labour Party for these matters. She and I had a meeting; we agreed that it was a problem and that, were we to recommend legislation to our respective Home Office Ministers and if there would not be a problem in getting it through the House promptly, then it was worth doing. We also determined that the same legislation should in fact increase the number of years from five to 20, and that was agreed between the noble Baroness and me.

I say that this is a matter of chivalry because she and I reached in private extremely rapid decisions on the matter that then went through the House of Commons in less than a month. I simply say that everyone has been involved in this story quite deeply in the past.

Alcohol: Strategy

Lord Flight Excerpts

Tuesday 27th March 2012 Lords Chamber

[Lord Henley]

My Lords, that is not part of what we are proposing at the moment but we will no doubt consider it when the legislation comes forward. I look forward to discussing the amendment that the noble Lord will put forward on that occasion.

[Lord Flight]

My Lords, perhaps I may counsel that describing something as bad and telling adolescents that they should not do it is about the best way of encouraging them to do it. That needs to be borne in mind when providing guidance.

[Lord Henley]

My Lords, that argument can be put forward but I am not sure that it is necessarily always the case. I still think that we have a duty to offer appropriate warnings. If those warnings are made in the right way by the right people, the right message can be got across to young people. That is why I referred to what is taking place in west Cumberland.

Criminal Records Bureau

Lord Flight Excerpts

Wednesday 21st March 2012 Lords Chamber

[Lord Henley]

My Lords, I accept that it was necessary to bring in the CRB and these checks, but things had become out of proportion. That is why my right honourable friend announced her review and is why we want to scale things back to allow people to take proper responsibility for these matters. That is what we are trying to do, and it was what we were trying to do in the Protection of Freedoms Bill, but we will obviously keep these matters under review. If we can further scale down the checks without putting children or vulnerable adults at risk, we will do so.

[Lord Flight]

My Lords, when I was at school, it was quite common for people to have school exchanges and stay with a family in France or Germany, pick up the language and learn a bit. These exchanges have virtually disappeared for the same reason that we have been hearing—checks have to be done on the families with whom the children will be staying. Does the Minister agree that this is yet another system that is over the top? Surely, the schools themselves can do checks on children’s parents.

[Lord Henley]

My right honourable friend brought in the review exactly because of those concerns—damage to exchange visits, volunteering and the like. That is why she conducted her review last year and is why we made changes during the course of the Protection of Freedoms Bill.

Universities: Non-EU Students

Lord Flight Excerpts

Monday 6th February 2012 Lords Chamber

[Lord Henley]

My Lords, the noble Baroness will appreciate that that is a completely different question from the Question on the Order Paper. We are discussing the actions of the Home Office and the UK Border Agency and the effect they are having on students coming in. If the noble Baroness wishes to put down a Question on that subject, I am sure that one of my noble friends will be more than happy to answer it.

[Lord Flight]

My Lords, when talking to the Cambridge Vice-Chancellor’s office a few months ago, it raised with me a problem about senior research students aged 28 or 30 who it wanted to attract from India, but who were mostly married. The problem was about their spouses coming in and I encountered the same issue in India. Has this issue been resolved?

[Lord Henley]

My Lords, the restriction on bringing family members applies to undergraduates. The sort of senior research students who my noble friend refers to would be allowed to bring partners or members of their family with them, so I think I can say to my noble friend that that issue has been resolved.