Criminal Finances Bill

Debate between Lord Leigh of Hurley and Lord Rosser

Committee: 2nd sitting (Hansard): House of Lords
Monday 3rd April 2017 Lords Chamber

[Lord Rosser (Lab)]

My Lords, I will speak to my Amendment 166, which is also in this group. It would require the Secretary of State to issue a public consultation on new criminal offences for corporate criminal liability and for economic crime within six months of the day on which the Bill becomes an Act, and for the Secretary of State then to bring forward legislative proposals in response to the consultation within 12 months of the day on which the Bill becomes an Act.

The Bill makes it a corporate offence to fail to prevent tax evasion and adopts a similar approach to prosecution of bribery offences. However, as the noble Baroness, Lady Bowles of Berkhamsted, said, gaps remain in the law as regards the practical possibility of prosecuting companies for important economic crimes such as fraud, false accounting and money laundering, let alone the severe harms caused to individuals, including those overseas.

As the noble Baroness, Lady Bowles of Berkhamsted, again indicated, the issue was raised at Second Reading, when the Government said that,

“it would be wrong to rush into legislation in this area”,

of corporate liability for economic crime, and that there was,

“a need to establish whether changes to the law are justified”.

The Government said that they launched a public call for evidence—the closing date for which has now passed—and that if the responses,

“justify changes to the law, a consultation on a firm proposal would follow”.

Accordingly, the Government declined to comment on a timetable for reform,

“should that be the way forward”.—[Official Report, 9/3/17; col. 1518.]

The Business & Human Rights Resource Centre recorded just over 300 allegations of human rights abuses made against 127 UK-linked companies between 2004 and 2014. Although there is clear evidence that some companies were potentially serial offenders, it seems that there have been no corporate criminal prosecutions. Nearly half the allegations were made against extractive companies.

If there is a consultation following the call for evidence—and that may well be a big if—will the Government also consult on the need, or otherwise, to change the law on corporate criminal liability on human rights violations as well as economic crime? When an individual injures or kills another person, a criminal prosecution is initiated, but when a company is involved in causing similar harm—not least overseas—the ability to prosecute companies successfully is much reduced to the point of it being almost a deterrent to proceeding at all.

Overall, the corporate criminal law needs to provide that companies can be held liable for committing offences and not just for omitting to prevent them. No UK financial institution has faced criminal charges as a result of the 2008 financial crisis, and there appear to have been some recent serious issues which have resulted in no prosecution against companies as opposed to an ability to resolve the matter through financial payment.

There is also the issue that it appears from a relatively recent case that, under corporate liability laws, it is not illegal for companies to mislead their auditors. As has been said, current laws seriously disadvantage small and medium-sized businesses compared with larger businesses. SMEs, where directors are more involved, are much more easily prosecuted under the existing corporate liability regime, since current UK corporate liability laws rely on a “directing mind” test that requires prosecutors to prove that senior board-level executives intended the misconduct to occur. The Crown Prosecution Service, for example, stated that because of corporate liability laws it could not mount a successful prosecution against the companies involved in the phone-hacking scandal.

When do the Government intend to commit themselves to address this issue of the deficiencies within the current corporate criminal liability laws? They could do so today by accepting one of the amendments in this group. They could do so today by accepting my amendment, with its timetable for a public consultation and then legislation. If that is more than the Government are prepared to do, they could today at least announce that there will definitely be a public consultation on a firm proposal on the issue, following the call for evidence, and say when that public consultation is likely to commence.

[Lord Leigh of Hurley (Con)]

My Lords, I declare my interests, principally as a member of the Chartered Institute of Taxation. I wish to speak particularly on Amendment 161. The noble Baroness, Lady Bowles of Berkhamsted, is right that the mood of the public has changed dramatically and significantly against those who practise tax evasion—and to some extent tax avoidance, which I think she mentioned, although we are focusing here on tax evasion—so having such a clause in the Bill is very welcome.

Turning my mind back to 20 or 30 years ago when I was a tax practitioner, in many respects it would have been remarkable to think that this clause might appear in a Bill. Indeed, many of your Lordships may have noticed in Sunday’s and today’s national papers a two-page advertisement by a large Swiss bank protesting that it does not in any way condone tax evasion. It is quite extraordinary to see that—and most welcome—and it has no doubt come about in part because of the pressure to change public opinion brought to bear by the Government and Members of this House.

However, in respect of Amendment 161, I agree that the damage caused by economic crime is very serious. I welcome the Government’s consultation on corporate criminal liability for economic crime, but this is an extremely complex legal area that could significantly impact on the UK’s financial sector, in which I work, and in particular on the UK’s SME financial sector, which has a lot on its plate at the moment. Therefore, I hope that the Government will bring forward a consultation on possible options for reform following the conclusion of the call for evidence, which I think has just ended or will close shortly. We should wait until that is completed before a decision is made on introducing new legislation.

Immigration Bill

Debate between Lord Leigh of Hurley and Lord Rosser

Wednesday 12th March 2014 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I attended some of the debate on Monday and heard my noble friend Lord Bourne refer to the £200—or £150 because he was talking about the student rate at about £3 a week—as being very reasonable and fair. As he said,

“it is the cost of a Sunday newspaper”.—[Official Report, 10/3/14; col. 1605.]

It seems sensible that there is some flexibility in this health charge.

The cost to the National Health Service for an individual between the ages of 15 and 44—presumably young enough to be in reasonably good health normally —is £700 a year. Of course, that rises for older people. As your Lordships may be aware, Professor Meirion Thomas has written extensively about the abuse of health tourism. Because we are not in the Schengen visa system, people do not need compulsory health insurance to come to the UK and as a result he has identified many instances of abuse by healthy people and particularly by people who are not well and pregnant women coming to this country to get health treatment without any coverage of costs.

It is true that the National Health Service has charged such “health tourists” some £300 million but it is also true that it has managed to collect only 16% of the amount it has invoiced. Other countries, such as America, Canada and Australia, have much more severe restrictions on people coming in without health insurance and consequently we get more than our fair share. I would argue for flexibility in the health charge and clarification, as the noble Lord, Lord Patel, requested, of the parts of the health service to which it applies.

[Lord Rosser (Lab)]

My Lords, I would hope that if the intention of the words that the amendment seeks to delete is as the noble Lord, Lord Leigh of Hurley, speculated, the Minister will stand up in response and say it loud and clear to get it on the record.

I did not intervene in the debate on Monday. I read Hansard subsequently and I, too, was left somewhat confused as to the Government’s position. So I looked at the Explanatory Notes, and they do not explain the significance or purpose of the words,

“and different amounts may be specified for different purposes”,

which rather seems to defeat the primary objective of a document headed “Explanatory Notes”. The notes refer only to what is in Clause 33(3)(f), which is a reference to a “reduction, waiver or refund”. I then looked at the Home Office factsheet on Clauses 33 and 34, which also remains silent on the intention of the words, except to say that those who have paid the surcharge will be able,

“to access free NHS care to the same extent as a permanent resident, subject to some exceptions for particularly expensive discretionary treatments”.

I then looked at the letter we all received from the noble Earl, Lord Howe, dated 6 March, in the hope that the Department of Health might be able to throw some light on this, but the letter provides no help on the purpose or intention behind these words, which this amendment seeks to delete—although obviously the amendment has been tabled with a view to getting an explanation from the Minister as to what this means.

I then looked at what the Minister said on Monday. I came to the conclusion that the Minister, too, was unable to tell us why these words are in Clause 33. He said on Monday that those who have paid the levy will be allowed the same access to all health services,

“as is available to a permanent resident”.—[Official Report, 10/3/14; col. 1573.]

As the noble Lord, Lord Avebury, pointed out, Clause 33(4) states:

“In specifying the amount of a charge under subsection (3)(b) the Secretary of State must … have regard to the range of health services that are likely to be available free of charge to persons who have been given immigration permission”.

The Minister also said on Monday that when the Bill was initially implemented, it was the Government’s,

“clear policy intention that there will be no further charges for treatments”.—[Official Report, 10/3/14; col. 1572.]

But the Minister accepted that this policy stance was not in the Bill. He said that the Government,

“will clarify the position on implementation”.—[Official Report, 10/3/14; col. 1575.]

Frankly, the Government should be clarifying what their Bill means today. Will the Minister now indicate what the words,

“and different amounts may be specified for different purposes”,

are actually intended to mean, and will he give some concrete examples? What different amounts and for what different purposes do the Government have in mind? Is Clause 33(3)(b) simply some sort of ghost paragraph that the Government think may come in handy at some time in the future for purposes about which they are currently unclear? Can the Government’s present position on why and at what stage these words in the Bill will be applied best be summed up as, “Don’t know where, don’t know when”?

I hope that the Minister can today give us clear reasons—which is what the noble Lord, Lord Patel, asked him to do—as to why these words are needed in the Bill and clear up the confusion that I think a number of Members of the Committee, both those who intervened in the debate on Monday and those who subsequently read Hansard, feel exists at present.