Sanctions and Anti-Money Laundering Bill [HL]

Lord McNally Excerpts

Committee: 4th sitting (Hansard): House of Lords
Tuesday 12th December 2017 Lords Chamber

[Baroness Kramer (LD)]

My Lords, perhaps I may just add a word on this occasion. I welcome the comments of the noble Lord, Lord Collins, and the speech of my noble friend Lady Bowles, but I would be far less concerned about trying to change the regulatory procedures we are considering today if we had in Clause 41 an appropriate policy framework under which regulations were to be placed—that is, the safeguards, the range of powers and the proper kind of scope that I think every noble Lord has considered normal in primary legislation. That layer is completely missing. The whole range of safeguards, including policy safeguards, rests with the Executive, while Parliament will have an opportunity to express itself only through its response to statutory instruments. If that were the end state at which we arrived then I think that anything other than provision for the super-affirmative procedure would be so undemocratic as to be offensive to this House.

I still think that the better solution is for the Government to accept that this is an area of genuine policy which requires genuine safeguards and genuine scope, and they should take on the responsibility of putting those safeguards in primary legislation. I do not understand why they have chosen not to do so. The reasons they have given are, first, that some things need to be done fast, though I think we have agreed across the House that it could be done through a carve-out; and, secondly, that there will need to be a transposition from EU law, although that too can be handled on a mere technical basis.

The issue is the absence of primary legislation as the framework for this process. There is no sunset clause on this provision; that is almost a side issue. The fact that the Government are seeking to manage this entire process without bringing crucial issues back to be dealt with by Parliament, in the proper and democratic way, troubles me hugely. I do not think we have heard any explanation from the Government as to why it is crucial to change the balance of power between Parliament and the Executive or why they are using this Bill as an instrument to do so.

[Lord McNally (LD)]

My Lords, there is always a temptation in these processes, as the noble and learned Lord, Lord Judge, said, to make the same speech over and over again, but perhaps this speech will suffice for the other issues we will cover today and in the course of this Bill and other Bills.

Of course one of the big worries about the process on which the Government are embarked is—as has been said before, and has just been remarked on—this movement of sovereignty from Parliament to the Executive. I think that this House is doing its job by being very aware of that, but there is another issue in the background to this. I welcome the publication of the anti-corruption strategy. It is keeping faith with a process that has gone on over the past number of years, with all three parties that have been in government, to try to get our house in order regarding our reputation in dealing with corruption, money laundering and associated crimes.

The truth is that we must not be complacent about this. The noble Lord, Lord Hain, was quite right: there is a taint about the behaviour of some in the City. There is a taint about some of the operations of overseas territories, which we will be looking at later. When I was the Minister responsible for the Crown dependencies, my one piece of advice to them was to make sure that they were as transparent as possible in meeting the highest national and international standards. One of the things that the Government and both Houses have to think about as we go through this process that the Government are embarked on is that there are still those who see our future as the buccaneers of world trade, and believe that London and the UK will become a haven for practices that we do not approve of.

That is why it is important that what we put in place during this period will be the base and foundation of our reputation. Those of us who want to see that reputation based on upholding the highest standards—and I fully accept that the Minister shares this—have to understand that each piece of legislation we put forward will be tested against the questions: what do they mean by this, are they going to slip from previous commitments, and are they going to be as tough as they were? Those are the tests that are going to be put to us. Both Houses, and this House in particular, will have to be on their guard to make sure that those highest standards are maintained.

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[Lord Beith]

The noble Lord bears out my point. The process of challenging anything found to be unsatisfactory is one to which the dependencies are open. That may come from European Union sources or non-governmental organisations, but these are open and democratic societies, in which those challenges can be made. The UK Government have responsibilities and have the means of exercising them already at their disposal.

[Lord McNally]

My Lords, these exchanges show some of the dilemma of dealing with this issue. I ask a fairly simple question when I look at these things. Why should a financial services organisation decide to base itself on some microdot in the Caribbean to provide its services? Once you ask that question, you begin to wonder whether it is to avoid the kind of rigour and inspection that they get in more well-established centres. As I said in my earlier intervention, I worked for three years with the Crown dependencies, ably aided by the Minister, in his then capacity as a Whip. I made two points. One, which I mentioned earlier, was my advice to them to make sure they answered the various questions put to them with full candour and transparency. I pay tribute to the Justice Committee under the chairmanship of my noble friend, who put forward a range of suggestions. Another point was that the British Government should get their act in better order. Sometimes, the job was to make sure that, when getting this dealt with, Whitehall departments were sufficiently accessible and aware of the particular status of the Crown dependencies.

During those three years of experience, I was impressed by the qualities of the Civil Service and the representatives of the Crown dependencies in dealing with these issues. That does not take away the fact that they, and we, have to face the fact that, as the noble Lord, Lord Collins, said, it is our reputation that is at stake. I had nothing to do with the overseas territories, but there is a qualitative difference which needs to be looked at between their standards of supervision of financial services and those of the Crown dependencies. I take the point made by the noble Lord, Lord Anderson, about the Isle of Man and Jersey. I hope they are both addressing what it is that has landed them on that list. That is something for their processes, because this is damaging to them, although there may be other jurisdictions within the EU which could not bear too close examination.

This is in our national interest. It is not us playing the neo-colonial or trying to order them about. We are defending our national interest when jurisdictions are seen as British Overseas Territories. When I had to learn that very peculiar lesson, the first thing I was told was that we joined them; they did not join us. The difference in constitutional relationship is because they were part of the Duchy of Normandy that conquered us. Nevertheless, the Channel Islands and the Isle of Man have to understand that their meeting the highest standards is going to be a legitimate interest of the British Parliament and British Government, in defence of Britain’s reputation.

[Lord Ahmad of Wimbledon]

I thank all noble Lords who have taken part in this important debate. As we have heard, the UK is responsible for the foreign affairs and security of both the Crown dependencies and overseas territories. That is the constitutional position. Our long-standing practice is that we do not generally legislate for these jurisdictions without their consent. This point was well made, in the context of the Crown dependencies, by the noble Lord, Lord Beith. Sanctions are tools of foreign policy, or are used to protect our national security. It is clear that the overseas territories and Crown dependencies must follow the UK Government’s foreign policy, including the sanctions we apply. I assure noble Lords that the Foreign Office has discussed this with the overseas territories and Crown dependencies and they also accept this central point of principle.

There are currently two ways in which sanctions are implemented by the overseas territories and Crown dependencies. The UK legislates directly for the majority of these jurisdictions through Orders in Council. Other jurisdictions legislate for themselves, but follow precisely the sanctions implemented in the UK. This model is well established and respects the rights of these jurisdictions.

The Bill is drafted in a way that reflects this reality. It is consistent with the current implementation model for UN and EU sanctions as well as measures under the Terrorist Asset-Freezing etc. Act 2010. It allows those jurisdictions that wish to follow UK sanctions through their own legislation to continue to do so. It also allows the UK to legislate directly for certain overseas territories as appropriate.

With regard to anti-money laundering laws, all the Crown dependencies, and each of the overseas territories with a significant financial centre, subscribe to the international standards for anti-money laundering and counterterrorist financing set by the Financial Action Task Force. They are assessed in their own right for compliance with these standards and have responsibility for implementing them within their own domestic frameworks.

The Government, of course, retain an interest in ensuring that the Crown dependencies and overseas territories have robust anti-money laundering regimes. As noble Lords are aware, and as I stated in a previous debate—this point was raised with the overseas territories at the recent joint ministerial council—we are already working very closely with those jurisdictions which do not already have national company beneficial ownership registers on establishing such registers or similarly effective mechanisms, and ensuring that information held on these can be shared in near real time with UK law enforcement authorities.

I remind noble Lords that we legislated earlier this year, through the Criminal Finances Act, to establish a statutory review of how these arrangements have been implemented. This will take place before 1 July 2019 and will inform any further debate about the effectiveness of measures relating to beneficial ownership in place in individual Crown dependencies or overseas territories. We should also recall that full implementation of these arrangements will put these jurisdictions ahead of the international standards in this area, and ahead of the approach taken by many G20 countries and individual states of the United States.

This demonstrates the benefits of the co-operative relationship that we have established with the Crown dependencies and overseas territories in combating money laundering and terrorist financing. These jurisdictions are self-governing and take their compliance with the FATF standards very seriously. The anti-money laundering regimes of each of the Crown dependencies have been evaluated since 2015, with overseas territories, including the Cayman Islands and the British Virgin Islands, both scheduled to be evaluated in the coming year. The commitment of these jurisdictions to international standards in this area is the best way to ensure that they continue to have robust anti-money laundering and counterterrorist financing regimes. As I said in the previous debate in Committee, this is a point we have once again emphasised in all our communications, and it was emphasised by my right honourable friend the Prime Minister in her recent meeting with the overseas territories. These are long-standing arrangements.

The noble Baroness and the noble Lord, Lord Collins, talked about progress and moving forward. We are moving forward positively and I have already talked about the results. In this regard, I do not believe that these amendments are needed. I am sure noble Lords would not wish to jeopardise the achievements that we have seen thus far, which have come from direct co-operation and working with these jurisdictions, and the progress that has already been made. With that, I ask the noble Lord to withdraw his amendment.

Sanctions and Anti-Money Laundering Bill [HL]

Lord McNally Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 21st November 2017 Lords Chamber

[Lord Faulks (Con)]

My Lords, the noble Lord, Lord Lennie, was very quick off the mark: the noble Lord, Lord McNally, and I wanted to make brief interventions. It seems that the case made for these amendments is a pretty strong one, but of course I will listen with great interest to what the Minister has to say. It might be said, I suppose, that the amendment put forward by the noble Baroness, Lady Northover, is more or less understood by the other two amendments. I simply say to the Minister that it might be helpful if he could give some example, prospectively, of where a Minister might think this action “appropriate” but not “necessary”. That would help to clarify the Committee’s thinking.

[Lord McNally (LD)]

My Lords, I agree that the noble Lord, Lord Lennie, was a bit quick off the mark. Just have a glance behind you occasionally—you might find that somebody wants to come in.

I was rather diffident about putting my name to such illustriously signed amendments. My noble friend Lady Northover spoke about the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Judge. I am not sure that I would trust the country solicitors “Judge and Pannick” or “Pannick and Judge”; I am not sure whether it is best to panic after you have judged or judge before you panic. Nevertheless, any sensible Minister who sees those names on an amendment thinks very hard about it. Of course, as the noble Lord, Lord Lennie, said, this will be a very necessary Bill if the Government succeed in their Brexit aims, but that does not mean that every Bill that comes before us has to be given a nod through because of the pressures of the Government’s own making. There is a real danger.

I can almost imagine the discussions in the Cabinet Office: “How on earth do we get this shedload of legislation through?”. Then somebody says, “The only way you can do it, Ministers, is by lots of Henry VIII clauses and lots of powers by secondary legislation”. “Okay, we will do it that way.” The irony of that, as I have said before from these Benches, is that an exercise that was intended to return sovereignty to this Parliament is becoming an exercise in returning power on an unprecedented scale to the Executive. I fear that, unless the Government come up with some new and ingenious proposals for dealing with this flood of legislation short of these broad powers, they will run into trouble time and again.

Of course, we want to get the bad guys, and there is always a temptation, especially if you are the Minister, to go for the Eliot Ness solution—how do we kick down the door and get at the bad guys?—but we cannot ignore a report such as that referred to by the noble and learned Lord, Lord Judge. Go through every page of it. There is reference to the Henry VIII powers, but then:

“We do not consider it appropriate for ministers to have powers … We are concerned about the breadth of the power … We are deeply concerned that the power in clause 16”,


et cetera. It goes on right through the report. This is a really serious warning to Ministers and to Parliament from a very well-respected committee.

Of course, Whitehall does not have a pure record on this. Even in the days when we were simply transferring European law into our own law, there was a well-established practice in Whitehall to do a bit of gold-plating on the way and dig in a few regulations that people had wanted to get anyway. We have to resist this gold-plating. As I say, when someone such as the noble Lord, Lord Pannick, talks about “unjustifiable breadth”, and someone such as the noble and learned Lord, Lord Judge, talks about “a bonanza of regulations” and “extravagant powers”, it is not only the Committee that would be wise to take note; the Minister should as well.

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, I had been waiting for the noble Lord, Lord McNally, to speak, so have come in rather later than perhaps I should have. The arguments advanced by the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Judge, are compelling. I would throw one other word into the mix: “expedience”. Under the Bill as drafted, it might be thought appropriate because it is expedient to make a provision, but that is not good enough here. These powers are so draconian that nothing short of necessity alone could justify their exercise. Therefore, I echo what the noble Lord, Lord Faulks, said: unless the Minister can give a convincing illustration of a regulation which is justifiably expedient but short of necessity, we cannot possibly allow the Bill to go forward in its present form.

--- Later in debate ---

[Lord Hylton (CB)]

My Lords, I follow on very much from what the noble Baroness, Lady Sheehan, has just said. I am old enough to remember the sanctions against Southern Rhodesia. More recently, there were atrocious humanitarian consequences when sanctions were imposed against Saddam Hussein’s regime in Iraq. I think Sudan and South Sudan were mentioned. If they were not, I do so now. There are also the current sanctions against Syria. Therefore, these amendments are very practical; they are not just theoretical. On those grounds, I urge the Government to take them very seriously.

[Lord McNally]

My Lords, en passant, the noble Lord, Lord Hylton, mentioned sanctions against Southern Rhodesia. As I am sure that at some stage a comment will be made about these Benches being overrepresented, it is worth remembering that one of the five times when this House defied the Government of the day was in relation to sanctions against Southern Rhodesia. On that occasion, a grotesquely overrepresented Conservative Party in the House of Lords voted down those sanctions. It is always useful to have a historical perspective on these matters.

I want to speak to these amendments because, like the noble Lord, Lord Collins, I attended the briefing by NGOs. It was quite surprising and shocking to find that unintended consequences were putting lives in peril. People who are in these countries for humanitarian reasons—and doing a terrific job—might suddenly find themselves hit by sanctions for using an airline connected to a regime under sanctions, even though it was the safest airline to use. Lots of other examples were given to us. Therefore, I hope the Minister will take up the invitation of the noble Lord, Lord Collins, and explain to the House whether he is aware of these unintended consequences that hit the NGOs and, if he is, how he intends to mitigate the impact of sanctions on individuals and organisations who are in these places not to bust sanctions but to carry out humanitarian work.

--- Later in debate ---

[Lord Judge]

My Lords, this amendment and the others in my name in the group arise in the context of the imposition of financial sanctions, and so on, on designated individuals. The process of designation is subject to regulation and is another part of the bulky regulation power that is being sought. I simply want to highlight how Amendments 10, 11, 12, 13, 14, 16, 17 and 81 relate to Clause 2(1)(b)(ii) and (iii),

“persons connected with a prescribed country, or … a prescribed description of persons connected with a prescribed country”.

My argument in this debate is that we do not need this to be dealt with by regulation; we can deal with it by way of primary legislation.

I have no difficulty with making specific identified individuals subject to the sanctions regime when that is justified, including where the individual is identified in the context of the United Nations having information to give us or in accordance with our treaty obligations. My concern arises because of the way in which the Minister is empowered to prescribe a country and include in the sanctions regime anyone—here is the magic word—“connected” with it. I respectfully argue that “connected” in this context is a weasel word: it is very wide and all-embracing.

My mother was Maltese and my father was English. I was born in Malta in the middle of the war, the hospital being bombed as my poor mother gave birth to me. I accept and am proud to claim my connection with Malta—I would not mind being included on a connection list such as that. My children are one-quarter Maltese but have never lived there, and my grandchildren are one-eighth Maltese but have never lived there. Is this a connection for the purposes of this legislation? Which one? Is it the blood or the residence? For how many generations does such a connection endure? For how long must residence be? Is it for so many years or for a certain proportion of an individual’s life? How recent must it be? In business, is it one transaction or many; one huge transaction or a lot of small transactions of little value?

What I am driving at is that, in the end, the Minister will choose by regulation to define what this connection shall be. Surely this should be done by primary legislation, with parliamentary scrutiny of the definition which the Minister decides that he wishes to ask Parliament to consider. I should add that a specific designated person does not have to be a British citizen, so given the regulation-making power in Clause 2(1)(b)(i), which we are not challenging, for identifying specific individuals whose conduct brings them within the sanctions regime, such persons are not going to escape from this. We have no objection to provisions that would not prevent a foreigner with such habits falling within the definition.

I turn now to Clause 50(4), which we suggest should no longer be part of this Bill. It is a classic regulation:

“Regulations under section 1 may make provision as to the connection that is required between—


(a) a person, or a person of a prescribed description, and

(b) a country,

in order for the person to be regarded as ‘connected with’ that country for the purposes of any provision of the regulations”.

Surely we do not need to wait for regulations at some future unspecified date and surely it is open to the Government to decide what definition should now be applied; in other words, to prepare the regulations now, but, rather than proceed by way of regulation, proceed by primary legislation and deal with the matter in that way. I beg to move.

[Lord McNally]

My Lords, I have added my name to these amendments, again with all due humility. I speak not as a distinguished and learned lawyer like the noble and learned Lord, Lord Judge, but as a parliamentarian now of some years. One can say this only so many times: in the face of the difficulties and sometimes tempting siren words of officials saying how simple this is all going to be, I warn again that the noble and learned Lord is giving the right advice to the Government. Primary legislation is always a bind for Ministers because it is almost always much more complex—but we are talking about the sovereignty of Parliament. The more crisp and focused we can make legislation by taking out wide-ranging powers based on subjective judgments, the better the legislation will be, and I suspect the less trouble the Minister will have.

[Lord Judge]

If noble Lords will allow me, I forgot to draw attention to what the Constitution Committee had to say about this clause at paragraph 18, where it expresses concern about the,

“breadth of the power conferred on ministers”.

I thank noble Lords for letting me have a second go.

--- Later in debate ---

[Lord McNally]

My Lords, I am pleased to see the Chief Whip in his place because we are getting to a point now where it is quite unfair for the Minister—and a whole succession of Ministers, I suspect, over the next few months—to come to this House, and to Parliament in general, to sell the unsellable. The Chief Whip should report back to the Cabinet that it has to come up with a better idea for handling this legislation. My noble friend Lady Northover said that surely with the noble and learned Lord, Lord Judge, in the Committee, he will come up with some brilliant overarching principle—such is the confidence we have in our former Lords Chief Justice.

I was on the Cunningham committee when it was the Labour Government who were getting impatient with the way that this House and Parliament in general could slow down the progress of a great and reforming Government. It was clear then that the principle that the House of Lords has the right to say no is very important—it may well be tested in the months ahead. But we have also acknowledged that ours is mainly a revising and advisory House, so we have to get the right machinery to handle that. What the noble and learned Lord, Lord Judge, said, from his experience, has to be taken into account.

The present way of doing this just will not work. We have to look at some of the suggestions made by the Cunningham committee for progressing legislation. One was a Joint Committee of both Houses—as with the Congress and the Senate—to resolve difficulties. Another was to allow amendments to certain pieces of secondary legislation. There are ideas around and there are fertile minds that could address this. But if we are going to continue to have Bills with massive amounts of secondary legislation, with massive discretionary powers given to Ministers, and Henry VIII clauses scattered through them, we will have a constitutional car crash. It is the responsibility of the Chief Whip to go and tell No. 10 that that is the truth.

[Lord Falconer of Thoroton (Lab)]

My Lords, I apologise for intervening in the debate at this late stage. I support what the noble and learned Lord, Lord Judge, has said. Reading the Bill, it would appear, despite what the Minister has said, that it would allow regulations to be passed which would allow a Minister to designate any group of people that the Minister considered, by designating them, would further a foreign policy objective of the United Kingdom. For example, if a Minister thought it would further the foreign policy of the United Kingdom to treat everybody from one particular country as a designated person, the Bill would give that Minister the power to do that.

I am absolutely sure that that is not what the Government intend by this, because I have heard the Minister say this evening that the purpose of the Bill is only to allow the Government—the Executive—to join in with sanctions that are imposed by another international organisation, such as the United Nations. It is not intended to give the wide powers that I have just identified. Can the Minister confirm that I am right that it is not intended to give such wide powers? Assuming that I am right, I sound a very loud clarion warning that whatever Ministers say, in either the Commons or the Lords, ultimately the Executive always reaches for the Act of Parliament and sees what the Act of Parliament allows. While I completely respect the good intentions of this Minister—indeed, of the Executive—in relation to this, the only answer, constitutionally, is to limit the powers to precisely what the Government intend. Anything wider, in the months and years to come, could be used by another Government when it was never intended for that to be the case.

Commonwealth Summit 2018

Lord McNally Excerpts

Thursday 2nd November 2017 Lords Chamber

[Lord McNally (LD)]

My Lords, it is a pleasure and a delight to follow the noble Lord, Lord Parekh; I may return to some of his remarks later. I thank my noble friend Lord Chidgey for a speech that was delivered with the authority which comes from his long experience of the Commonwealth. When you ask a question, it is always good when half the question is already answered. Interestingly, we received a good briefing from the City of London, which he referred to, and which explained how the corporation is getting behind the idea.

I will make one comment as background to this debate. There is a newsreel clip which will be shown many times between now and the Commonwealth Heads of Government meeting next year. It is of the young Princess Elizabeth, in South Africa on her 21st birthday, pledging that her whole life, whether it be long or short, shall be devoted to the service of the British people and what is now the Commonwealth. Thankfully, the caveat about “long or short” has proved unnecessary, so the meetings in the spring of next year will be a celebration—as the noble Lord, Lord Mendelsohn, indicated—and a thanks for a promise so magnificently honoured for the last 70 years that have followed that pledge of service. In South Africa Her Majesty referred to the “imperial family”. Thanks in no small part to the Queen’s leadership, that “imperial family” has transmuted and transformed into a Commonwealth of Nations.

This debate calls for the meetings planned for next year to be more than Heads of Government meetings. We have already had indications that they will not be. Yesterday I attended a meeting in the Commonwealth Parliamentary Association Room here in Westminster Hall to hear about what the CPA was planning for next year. I was much encouraged to hear of work already in hand for meetings of parliamentarians as part of the programme, as well as other ideas about young people and communities, which have been referred to. This is all excellent news. I hope that the Chambers of both Houses and Westminster Hall can be used for such meetings. This building has much symbolism throughout the Commonwealth, and I think the groups covered by this debate today would welcome the opportunity to speak and take part in events in the mother of Parliaments.

Education has always been part of the cement which holds the Commonwealth together. I have the honour, along with the noble Lords, Lord Judd and Lord Luce, of being a patron of the Council for Education in the Commonwealth. Earlier this year the CEC held a very successful conference in Namibia and is already planning a series of seminars and lectures that look forward to the 20th Commonwealth Education Ministers’ meeting in Fiji in February 2018. They will be looking at the skills required for the jobs of tomorrow and the financing of higher education and early childhood education, and will feed those ideas into the Commonwealth Heads of Government Meeting.

The Commonwealth is at its best when it focuses on real problems and brings shared experience and expertise to a problem. It runs into problems when we start to lecture or patronise each other. I remember when I was a Minister at the Ministry of Justice attending a meeting of Commonwealth Justice Ministers, and my brief had me advocate no longer using the death penalty. This ran me into quite choppy waters with the representatives of Commonwealth countries that still retain the death penalty. It was a useful reminder that although we have many shared values, there is still a diversity of views on many issues in the Commonwealth.

I return to what the noble Lord, Lord Parekh, said. I thought I might be the only one to be the party pooper. If I have any advice to Ministers about the coming Commonwealth Heads of Government Meeting, it is on the need for some deft diplomacy and to resist trying to turn it into a showcase for the new, shiny, post-Brexit global Britain. Almost all Commonwealth countries are members of their own regional economic co-operation organisations. They will not take kindly to some kind of PR stunt through which the British Government try to package the Commonwealth as some ready-made alternative to our EU membership.

We must remember that it is the Commonwealth of which Britain is a proud and active member, not the British Commonwealth, and that next year we are hosting a conference, not a durbar. I trust the Minister to use his influence over some of his more exuberant colleagues to get the balance right. With that Gypsy’s warning, I look forward to a Heads of Government meeting where real work will be done and where we can say a heartfelt “Thank you, Ma’am” to Her Majesty, putting in place a programme of work that plays to the Commonwealth’s strengths as we grapple with the multifaceted problems of the 21st century.

Sanctions and Anti-Money Laundering Bill [HL]

Lord McNally Excerpts

2nd reading (Hansard): House of Lords
Wednesday 1st November 2017 Lords Chamber

[Lord McNally (LD)]

My Lords, that speech provided the Minister with an interesting dose of realism on the range of responsibilities and the size of the problem that this Bill seeks to cover. As the noble Lord, Lord James, said with some emphasis, these things are still going on and we should consider the Bill in that light.

I advise the Minister never to start a speech by assuring the House that a Bill is just technical, and that we should therefore move along as there is nothing to see. That only stirs us up. I remember that my mother was very fond of the saying, “The more she spoke of her honour, the more I counted the spoons”. Ministers who say that a Bill is technical provoke our learned friends in particular. As has been emphasised, we want to see the Bill pass into law, but we want to examine its wider context of setting high standards and taking global leadership in the fight against corruption.

I, too, am pleased to see the noble Baroness, Lady Anelay, in the Chamber. I spent some 11 years in tandem with her making this place run, when I was the leader of the Liberal Democrats and she was Chief Whip.

I take up the point made so forensically by the noble and learned Lord, Lord Judge, and warn against the overuse of secondary legislation and Henry VIII powers in this and other Bills. It is ironic that a Brexit campaign which called for the return of a supposedly lost parliamentary sovereignty has resulted in a power grab by the Executive which would have made Henry VIII blush.

I recommend to noble Lords the text of a speech given by the noble and learned Lord, Lord Judge, at King’s College London on 12 April 2016. In fact, I think that the Minister should get a copy, read it and show it to the Prime Minister, because it is a masterly analysis of the problem that we now face in abundance. In it he quotes from an earlier speech made at the Lord Mayor’s banquet for the judiciary in 2010, when he said that this increasing accretion of executive power via secondary legislation and Henry VIII powers,

“will have the inevitable consequence of yet further damaging the sovereignty of Parliament and increasing yet further the authority of the executive over the legislature … Henry VIII clauses should be confined to the dustbin of history”.

However, now Henry VIII clauses proliferate across Bill after Bill. Parliament will need to address the situation as a matter of urgency if it is not to be known as the jellyfish Parliament for lacking backbone in the face of such blatant usurping of its powers. I go back to the noble and learned Lord’s speech at King’s College. He did not give these quotes today, but this goes to the heart of it. He said:

“Since 1950, sixty-five years, some one hundred and seventy thousand statutory instruments, prepared not by Parliamentary Counsel but by government departments, exercising powers granted by legislation, have been laid before Parliament. In that time seventeen … have been rejected by one or other house”.


In essence, that is the answer to what we hear time after time from Ministers: “Of course it will come before Parliament!”. Some of it will be by the super-affirmative or affirmative procedures, but the truth is that the use of affirmative, negative and super-affirmative procedures is no check or balance. It is a sham, and one that works, as we found before. The Labour Opposition—the Official Opposition—always has the thought, “When it is our turn, if we unravel this rather nice idea that secondary legislation comes before proper parliamentary scrutiny, they’ll do it on us”. We have seen that in the past, with the Labour Front Bench backing off from confronting the Government.

I believe that, as we go into this period of legislation ahead of us, if the Government think that they can do this simply by Henry VIII clauses and secondary legislation, we will drive into a constitutional car crash. It would be wise if the Lord Speaker and the Speaker of the House of Commons could consider bringing together a committee of both Houses to look at this to devise ways to provide some parliamentary machinery to scrutinise these powers that the noble and learned Lord, Lord Judge, so eloquently warned us against.

Much of this Bill is anchored by the work of the European Parliament. For 40 years, British politicians and the British media liked to treat that organisation as one of those funny foreign assemblies—not like the real thing. In the Bill—and in the Data Protection Bill, which I am also working on—we have evidence of just how thorough the European process of lawmaking really was. We are fortunate to have on our Benches two outstanding examples of European lawmakers in my noble friends Lady Bowles and Lady Ludford. In the Bill we will have the immense benefit of their experience. As a Minister I saw at first hand their skills in making EU legislation better, more effective and—yes, of course—in our national interest. That is real sovereignty in action—being there and being able to influence. I hope that the Minister will listen carefully to what is said as the Bill progresses.

One of my proudest moments as a Minister was when, in 2011, Ken Clarke and I were able to bring into force the previous Labour Government’s Bribery Act 2010. That was by no means a done deal. There were the usual complaints that this would lose us vast orders—it was usually implied that the French would get them if we did not. But it was a significant turning point in taking a legislative stand against the corruption of free and fair trade. It is equally important in keeping Britain at the forefront in delivering sanctions against regimes and individuals whose behaviour undermines human rights and violates established international law.

My noble friends Lady Northover and Lady Sheehan will be casting their expert eyes over the sanctions part of the Bill as regards national security and our ability to contribute fully to humanitarian and peacebuilding works. Yesterday we were briefed on the Bill by NGOs. I think that in Committee we will have to reflect on some of their concerns about the unintended consequences of the regulations on their operations.

On the brighter side, we were told by the NGOs that one of the better outcomes of tougher laws on money laundering was that international banks, particularly in Africa, were pulling out, or threatening to pull out, of countries where a laxity of controls might cause those banks to fall foul of EU or United States sanctions. The result is that many of these countries are beginning to put their own houses in order. Therefore, sanctions and anti-money laundering legislation are good for our own economic and political health, but they can have a positive impact on others, too.

However, it would be very complacent of us to imagine that everything in our own garden is rosy. We still hear voices arguing that the real Brexit will come only when Britain cuts itself loose to be a free-trading buccaneer, roving the seven seas, taking booty where it can and operating a lightly regulated, small-government regime here at home. That goes back of course to my earlier concerns. It is all very well the cuddly, lovable noble Lord, Lord Ahmad, saying, “Give me these powers and I will use them wisely for the common good”, but what happens when we find ourselves in the post-Brexit wonderland, with Jacob Rees-Mogg at the helm and John Redwood in place of the noble Lord, Lord Ahmad?

That is why the Government must seize the opportunity to couple this Bill with some announcements that would provide reputational mood music demonstrating our firm commitment to fighting corruption and the money laundering that provides its lubrication. This is the front line against organised crime, terrorism, modern-day slavery, people trafficking and the abuse of state power by elites. He is not in his place now, but the contribution of the noble Lord, Lord Hain, was a very sobering and rather depressing account of how that can happen. It would, for example, be useful if, in parallel with the legislation before us, the Government could publish their cross-government anti-corruption strategy, which is now nearly a year overdue.

We need to make it clear that the UK is not a safe haven for corrupt capital and that there will be no race to the bottom when it comes to money laundering and offering a safe haven for the wealth of the world’s corrupt elite. In that respect, a key indicator of intent would be the delivery of the UK’s commitment to introduce a register of beneficial ownership of UK property. I was very pleased to hear what the noble Lord, Lord Freeman, said on that and the quotations that he gave from Transparency International’s briefing material, which I will not repeat.

Again taking up a point made by the noble Lord, Lord Freeman, there is also a need to beef up the number of those with responsibility for oversight in Companies House in order to tackle these issues in the countries that have been cited. All the evidence shows that Companies House is understaffed and, on occasion, overwhelmed. Surely what is needed is an elite squad of investigators, headed by an individual who will make his or her name by cracking down on the money launderers.

As I said, we want to help the Government use this Bill to send the right messages both at home and abroad. We need to look at the money laundering provisions for weaknesses and loopholes, as so ably analysed by my noble friend Lady Bowles. We need to give clear and unambiguous guidance to our banking system which will give them comfort and confidence in operating both sanctions and money laundering regimes. We have to examine the concerns of NGOs and humanitarian agencies about unintended consequences that might make them vulnerable to falling foul of international sanctions or the law. We agree with the Minister that we need to give the legislation flexibility and adaptability so that we can respond quickly to new emergencies and circumstances, but that must not be at the expense of parliamentary scrutiny.

Those are the tasks we will face in Committee over the next few weeks. I am glad to see that the Minister is back in his place because I want to reassure him, as he sets out on these tasks, that as he well knows, “We’re the Liberal Democrats and we’re here to help him”.

BBC: World Service

Lord McNally Excerpts

Tuesday 27th November 2012 Lords Chamber

[Lord Glenarthur]

My Lords—

[The Minister of State, Ministry of Justice (Lord McNally)]

We will hear from this side and then go to the Cross Benches.

[Lord Glenarthur]

My Lords, while sharing many of the concerns that the noble Lord, Lord Alton, raised, my noble friend mentioned the internet. Can she say to what extent the internet has provided an increasing advantage of opportunity for people all over the world to listen to the very valuable product of the World Service?

--- Later in debate ---

[Baroness Coussins]

My Lords—

[Lord McNally]

We will hear from the Cross Benches first, and then Labour.

[Baroness Coussins]

My Lords, the Minister said that only five foreign language services had been cut, but I understand that all radio broadcasting in seven languages has been cut as a result of the financial constraints. Is the Minister satisfied that the commercial sponsorship being sought—so that some of this at least can be restored, especially in Arabic and Russian—is on track and that, if it is successful, commercial factors will not compromise the independence and impartiality of the World Service?