Corruption

Lord Graham of Edmonton Excerpts

Thursday 18th June 2015 Grand Committee

[Lord Graham of Edmonton (Lab)]

My Lords, I first congratulate my colleague for his initiative in bringing to our attention aspects which I think deserve to be better treated. I ask you to switch your minds to the other end of the spectrum: from talking about houses that have been built deliberately and sell for many millions of pounds to the right-to-buy sector at the other end of the housing market. It was during the period when I was the Member of Parliament for Edmonton—now 40 years ago—that the idea of selling council houses to tenants emerged. I have no objection to that. The argument then was that people had been there for many years, their families were bedded in and they wanted to live there. That coincided with the then Government’s property-owning democracy, which is what they were telling people it was all about.

In my time in Edmonton, by the time things were sorted out you were offered the occupation and ownership of your house for perhaps £5,000 or £6,000. You had to keep it for five years but then you had the right to sell it, and many people did. The nexus that I want the House to record is what happened after that. The right to sell your own house is certainly, in the year of Magna Carta, a right you are entitled to have. But then what happens to the housing situation? People who were proud and grateful to have a house built by direct labour in Edmonton suddenly found that the house they looked forward to leaving to their children was no longer there because it had been sold. When it was sold it was sold and sold again. A house costing less than £10,000 in the early 1980s is now on the market for many hundreds of thousands of pounds, as are flats. You might say this is marvellous, and along the chain, the people who bought and sold made money. My direct question to the Government is: do they have a mechanism to trace what happens to the properties after they are sold?

A couple who operate in the Ashford area own 1,000 homes, which they rent out. The argument is that there are people who need housing and the people that they house, in the main, are immigrants, families who have difficulty getting on to a housing list and so on. They not only have in their portfolio 1,000 units, but they are preparing their portfolio for sale. In an article that I read—a copy of which I am glad to give to the Minister—they say they have already decided to sell their portfolio, and they have had estimates of £100 million for their property.

I simply say to the Minister that he and his colleagues should think very hard about the fact that these houses were built in order to accommodate poor people who were living in dreadful, overcrowded conditions. Twice in my time as the Member of Parliament for Edmonton, I left my surgery, sat in my car and cried because of the conditions—twice in 10 years. A home, a house, which you can call your own is priceless in that situation.

We need to understand that people are ruthless in lining their own pockets. It is now 30 years since I was the Member of Parliament for Edmonton, and in my time evidence was already growing in the Tottenham, Enfield and Southgate area that what I would call villains were at large and causing mayhem among people who were desperate. The Government should at least be able to tell me that they are monitoring the situation. At one time, there might have been one or two people with a portfolio of 10 or 12 houses, which they were entitled to, but the man from the couple I referred to earlier—I will not give a name—says that if tenants have more than two children, if they are on a zero-hours contract, if granny moves in or if they are on housing benefit and at risk of not paying the rent, then they are going to evict them. Here you have a situation where people are evicted, under the law, from their home, for which they paid rent. We are not talking about a few pounds’ rent: some people pay £200 a week and are assisted by all sorts of government agencies.

One end of this is now being looked at very closely thanks to my noble friend Lord Rooker—Jeff—and then there is the other end of it. One can ask what Labour did in the 13 years that we were in a position to do something about it. I am afraid that housing in this country is in a mess and has been for a very long time. If the Minister wants to make a name for himself, he ought to be telling me and other noble Lords that there is a solution. There is no solution, because it is so difficult, but I wanted to put on record the fact that housing is the greatest single cause of unhappiness in our communities. I rest my case.

--- Later in debate ---

[Lord Ashton of Hyde]

I will let the noble Lord know in writing. I am relying on my brief on this—I am sure it is true, in that case. But I certainly will write to the noble Lord.

Bermuda already has a private central registry. Gibraltar will implement a central registry under the EU’s fourth money-laundering directive. The Prime Minister has made it clear that he would like a publicly accessible central register of company beneficial ownership to be the new international standard. We would therefore like the overseas territories to match our policy. However, we respect the fact that the overseas territories and Crown dependencies are separate jurisdictions with their own elected governments who are responsible for fiscal matters. We want to continue to work in partnership with overseas territories and Crown dependencies on this important issue.

The noble Lords, Lord Rooker and Lord Watson, also mentioned unexplained wealth orders. We are always interested in proposals for new powers that will help law enforcement agencies and prosecutors to tackle money laundering, and will carefully consider Transparency International’s proposals on unexplained wealth orders as part of the national risk assessment.

On the Government’s response to recommendation 3 in Transparency International’s report for a supervisors’ forum, supervisors already attend forums where cross-cutting issues are discussed. The next meeting of the supervisors’ forum is on 5 November. If customer due diligence cannot be completed as far as recommendation 2 is concerned, including identifying the beneficial owner, then the estate agent cannot do business with the prospective client.

The noble Lord, Lord Graham of Edmonton, made some interesting points, mainly about housing policy rather than corruption per se. Buying and selling is legal and is registered with the Land Registry but, of course, if the behaviour breaks the law either corruptly or through intimidation then the full force of the law will be applied and the Government support that. Sir Eric Pickles will bear down heavily on any corrupt activity.

[Lord Graham of Edmonton]

Can the Minister tell me whether the phenomenon I mentioned of individuals buying up properties and misusing them is monitored by the Government? Can he indicate whether the Government intend to do something in the future?

[Lord Ashton of Hyde]

I will answer that in writing as I have only three minutes left. The noble Lord also talked about the mechanism to trace properties sold under the right to buy. We have a comprehensive anti-money laundering regime. Money laundering through property has been assessed in the UK’s first national risk assessment, which will be published in due course.

Lastly, corruption in foreign countries was mentioned by the noble Baroness, Lady Stern. As noble Lords will know and as I think they have acknowledged, the Prime Minister has urged world leaders at the G7 meeting to tackle the cancer of corruption.

I hope noble Lords will accept that the Government are doing a lot despite the remaining problems. My time has nearly run out, so I am going to have to write to noble Lords in due course on the questions I have not answered.