Economic Crime and Corporate Transparency Bill

Lord Leigh of Hurley Excerpts

Committee stage
Tuesday 25th April 2023 Grand Committee

[Lord Agnew of Oulton (Con)]

My Lords, my Amendment 79 asks that HMRC be given a specific requirement to prioritise the exercise of its AML supervisory role. The reason I ask is the criticism that the Government have raised against HMRC. The Financial Action Task Force observed that tax issues

“carried too much weight compared to other”

money laundering risk factors. It is concerning that HMRC has a repeated tendency to view AML risks from a more narrow tax perspective instead of considering a broader set of AML risks, despite being identified as a weakness. That is not my diagnosis but the Government’s diagnosis of the problem.

I raised several specific issues in our previous days in Committee, but they are absolutely relevant to support this amendment. The most recent assessment of HMRC’s effectiveness in this area showed that it was failing to keep pace with the requirement to register a business within 45 days, with performance worsening over the year from 78% in 2020-21 to only 70.71% in 2021-22. In practice, this means that more businesses—nearly one-third—are operating outside the scope of its supervision for longer periods than in previous years.

The next point is that the self-assessment highlights issues in the ECS recruitment process and delays in appointing staff, which have resulted in existing staff members being asked to fill in with training duties. That goes back to my earlier point on the last amendment about the lack of qualified resource. HMRC discloses that there continues to be delays in publishing guidance for businesses under its supervision on the steps required to meet their regulatory obligations as well as on responding to specific money laundering risks.

Fourthly, the volume of face-to-face visits conducted by HMRC has slowed down—there has been a downward tendency in the number of on-site visits. There were 1,265 in 2018-19, and in the year 2021-22 that had slumped to 289—for most people, Covid was behind us, so I am not sure that that is an entirely legitimate explanation.

The next point is that HMRC has not yet used civil powers it has at its disposal to issue censuring statements for failing to comply with the MLR, or injunction powers to prevent a future breach. Again, I am sure that is happening because it simply does not have the resources available.

Lastly, an increase shows signs that HMRC is ramping up its enforcement as a supervisor, but the penalty amounts being recovered are reducing. A total of £44.8 million in fines were issued between 2018-19 and 2021-22 have now been revised down to just £8.6 million. Again, I am sure that this all goes back to resource and specifically to focus.

As I said in my opening comments—I know this from my experience of being an HMRC oversight Minister for Brexit border readiness—there is a huge cultural focus on tax collection in HMRC. There is nothing wrong with that, but this is a first cousin and it is HMRC’s responsibility to look after this stuff, and, frankly, it is not doing the job properly. My amendment would simply put some focus on that in the Bill. Again, I know from my experience as a Minister for five years that officials respond to these kinds of controls in the way they manage the resources in their department. I hope my noble friend the Minister will listen. I beg to move.

[Lord Leigh of Hurley (Con)]

My Lords, I will make a disclosure further to my subsequent disclosure of being a member of the Institute of Chartered Accountants in England and Wales; I am also a member of the Chartered Institute of Taxation, also by examination, which means that in theory I am capable of giving tax advice but, sadly, not in respect of anything after 1985. None the less, I feel that I should disclose that when discussing this issue.

It is customary to congratulate a noble friend on the introduction of an amendment, and I very much congratulate my noble friend on the introduction of this amendment. He speaks with great knowledge of the inside track of what is going on in the Treasury, and he is the one person who stood up against potential fraud taking place. As such, I hope that my noble friend the Minister, the noble Lord, Lord Sharpe of Epsom, will listen to my noble friend’s words. I appreciate that this has been thrust upon the Minister and it is not normal Home Office territory; it is not even the Business and Trade territory of my noble friend Lord Johnson of Lainston but Treasury territory.

However, this amendment is particularly important. It seeks to amend the HMRC Act of 2005. The problem with the Act as it stands is that it does not make stopping tax avoidance or even evasion a big enough priority for HMRC, and as a result HMRC views it as part of a sort of cost-benefit analysis rather than as a deterrent. This is particularly worrying with regards to VAT, where VAT avoidance can distort competition. As a result, the EU Commission used to occupy an oversight function with regard to the application of VAT and would always take action where a member state did something with VAT that distorted competition. For example, Italy tried to give an amnesty to companies which had not paid VAT in order to save money in Italy, but the Commission stepped in and stopped that. However, now it has lost that oversight, so the question is: who polices HMRC with regard to the application of VAT?

Noble Lords will recall that we discussed at Second Reading the case of 11,000 Chinese businesses that registered themselves at the flat of a Mr Dylan Davies in Wales, who was subsequently pursued by HMRC and the bailiffs for unpaid VAT. When we discussed the issue, we referred to it from a Companies House perspective, which had not picked up that 11,000 companies were registered in a two-bedroom flat in Wales. Actually, HMRC should have picked up on that; had this amendment been in place, maybe it would have done so. There is a history of HMRC not seeking to pursue fraud, never mind money laundering, so the very least we can do is make sure that it has a duty to detect money laundering where it sees it. I am indebted to Richard Allen of RAVAS, who has pretty much run a one-man campaign against VAT fraud and highlighted these sorts of issues. There are clearly other issues in the 2005 Act, but this is an opportunity to plug one very important hole.

Assisted Dying Bill [HL]

Lord Leigh of Hurley Excerpts

2nd reading
Friday 22nd October 2021 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I thank the very many people who have contacted me. I have received some very eloquent, personalised notes, and even a few handwritten ones. I can only apologise that I cannot reply to them all, but they were all very poignant, and helped me in addressing this very delicate and sensitive subject. I remind the House that I am president of Westminster Synagogue, and I also chair a number of faith-based charities, although I of course speak only in a personal capacity.

I am in favour of the Bill. It seems to me balanced and considered. I would, however, like to see within the regulations specified in Clause 3(8), assurances that the attending doctor and the independent doctor are truly independent of any commercial organisation which might be facilitating assisted dying, and a register established counting the number of times a person performs as either an attending or an independent doctor, to ensure that there is not some sort of go-to doctor who might be too malleable.

People live for far longer than ever before and, while this is to be welcomed, there are bound to be unintended consequences. Modern medicine can keep a person alive but cannot always control or negate the pain and suffering that some illnesses, such as idiopathic pulmonary fibrosis, which was identified by one of my correspondents, will inflict before death.

I also believe, like my noble friend Lord, Lord Vinson, that it is the right of every citizen to determine as much as possible about their own life. This is not a Bill about suicide or euthanasia. It is restricted to very specific circumstances, where a person is terminally ill and is reasonably expected to die within six months. Experience in Oregon shows that, surprisingly, very few people exercise their right to take this route. We are not at risk of opening the floodgates here but are more giving people an option which they find comforting.

I know that my noble friend the Minister is also someone of deep faith—indeed, of my faith, albeit that we are members of different strands. I count myself as a progressive Jew. It is a term for reform Judaism, as opposed to Orthodox Judaism. I am particularly indebted to a progressive rabbi, Dr Jonathan Romain. He and I do not agree on everything—in fact we had a debate on a Radio 4 Sunday show only a few weeks ago—but he explained to me that the biblical injunction that there is a time to be born and a time to die was assumed by many to mean that the time to die was to be preordained by the Almighty.

That has long since not been the case, as mankind’s ingenuity, medical expertise and skills—some would say, God-given—have allowed humans to extend life considerably. There is no doubt that the Old Testament believes in the sanctity of life, or, as Tevye the milkman used to say, “To Life”—I will not sing it.

“To Life” does not mean that we should believe in the sanctity of suffering. Suffering is to be avoided at all costs. Indeed, the public, medics and clerics are more and more in favour of welcoming the Bill. This House should do so as well.

Anti-Semitism: University Campus Incidents

Lord Leigh of Hurley Excerpts

Thursday 21st January 2021 Grand Committee

[Lord Leigh of Hurley (Con) [V]]

My Lords, I warmly welcome my noble friend Lord Wolfson to our House and look forward to his maiden speech. I declare my interests as I hold a number of positions in the Jewish community and that I have two daughters at university right now. How depressing to learn that they are facing anti-Semitism as I did 40 years ago; in those days, all the talk was about “Perdition” and, of course, anti-Israel rhetoric.

I welcome the CST report, but we have to recognise that it covers only reported anti-Semitism, not the huge amount of non-reported anti-Semitism, much of it online and some of it well away from campus, but which still affects the mental health of Jewish students, with torrents of vile extreme right and left-wing material. Does the Minister agree that we must ensure that higher education does not follow where the Labour Party went and even some parliamentarians seem to be going, of attacking Israel as a proxy for anti-Semitism?