Safety of Rwanda (Asylum and Immigration) Bill

Debate between Lord Sharpe of Epsom and Lord Garnier

Committee stage
Monday 12th February 2024 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I do not rely on that at all. As I tried to explain, a variety of aspects of the UNHCR’s work are included in our safety assessment—and that is just one of them.

[Lord Garnier (Con)]

I apologise for interrupting, because I know that my noble friend the Minister wants to sit down for good. When he spoke to Clause 1(2)(b), was he speaking for Parliament or the Government?

[Lord Sharpe of Epsom (Con)]

As my noble and learned friend is aware, I speak for the Government.

Economic Crime and Corporate Transparency Bill

Debate between Lord Sharpe of Epsom and Lord Garnier

Consideration of Commons amendments
Wednesday 18th October 2023 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I thank all noble Lords who have contributed to this relatively short debate. Like my noble and learned friend Lord Garnier, I am in danger of sounding like a cracked record on this subject, so I will keep my remarks brief. I reassure my noble and learned friend that I still find his joke funny and I am glad he keeps making it. I thank him for being incredibly gracious although we continue to disagree on these matters. I have to say I do not believe the Bill is a dog’s dinner or that these arguments are dog’s-dinnery. We are not in a sticky hole on this; it is a difference of opinion, and I will make a couple of the arguments that I have rehearsed before in support of that.

I shall deal with my noble and learned friend’s amendment by first reminding him and the House that this may be a relatively small number of companies but, as I have said many times before from this Dispatch Box, they account for 50% of economic output in this country. The heart of the argument comes down to why there is a threshold for this offence but not for the offences of failing to prevent bribery or the criminal facilitation of tax evasion. As I have reminded the House on numerous occasions, the Law Commission has identified the disparity here: it is easier to prosecute smaller organisations under the current law, which this failure to prevent offence will address. The new offence is less necessary for smaller firms, where it is easier to prosecute individuals and businesses for the substantive fraud offence. The Government therefore believe it would be disproportionate to impose the same burden on them. The fact is that this is not an exemption from the law; the law applies in a different way to these smaller companies, as we have tried to explain on a number of occasions. I think I will leave that there.

On Motion B1 in the name of the noble Lord, Lord Faulks, I do not think that this represents a tender approach to fraudsters. As we have said and made the case on a number of occasions, fundamental changes are being proposed here, and the review that we have proposed seems like a fair way of assessing precisely the implications of making those changes.

I thank my noble friend Lord Wolfson for highlighting some of the complexities in this area in his particularly acute legal way, which I am not equipped to follow. However, I can perhaps answer the question about the difference in introducing the cost protection amendment for civil recovery compared with unexplained wealth orders. This issue has come up in previous debates as well. The fact is that the difference between the changes made to the unexplained wealth order regime by the first Economic Crime Act last year and what is proposed in this amendment is that unexplained wealth orders are an investigatory tool that do not directly result in the permanent deprivation of assets, whereas the civil recovery cases covered by the amendment could do so. There could therefore be a host of serious unintended consequences of such a change to the wider civil recovery regime, so the Government cannot support the amendment. A review is the appropriate way to look at this issue. As I tried to make clear in my opening remarks, that may well be a very good idea, but we would like to be convinced of that and to do the work before we actually accept it.

I thank the noble Lord, Lord Coaker, for generously accepting that we have made significant improvements to the Bill through its passage. I say to the noble Lord, Lord Wallace of Saltaire, that we have engaged extensively with all noble Lords in this House on the Bill. I thank him for his explanation of how he believes a revising Chamber should operate. The fact is that we are not sufficiently persuaded of the arguments against this, so there is a genuine difference of opinion. I do not think the noble Lord would mean to imply that this House should necessarily have a veto where there is such a difference of opinion. I think that is a fairly straightforward argument and a perfectly respectable one.

Throughout the passage of this Bill, the Government have worked hard to ensure the right balance between tackling economic crime and ensuring that the UK remains a place where law-abiding businesses can flourish without unnecessary burdens. The Motions tabled by the Government today achieve that balanced and proportionate approach. I therefore urge all noble Lords to support them.

[Lord Garnier (Con)]

My Lords, I will make one point in total agreement with my noble friend the Minister—we are not having a row, we are having an argument. He and I have a different view about the merits of our respective arguments. If the House listens to no other speeches, and if it wishes to forget mine, I urge noble Lords to remember what the noble Lord, Lord Eatwell, and my noble friend Lord Agnew said. From both sides of this House, they perfectly summed up the lacuna in the Government’s case.

I thank all noble Lords who have taken part in this short debate. Despite the fact that this is not an argument about party politics—it has nothing whatever to do with the Salisbury convention—I regret that I am insufficiently persuaded by my noble friend the Minister that he has quite got the point. I must therefore ask the House if it will join me in agreeing with my Motion by testing the opinion of the House.

Economic Crime and Corporate Transparency Bill

Debate between Lord Sharpe of Epsom and Lord Garnier

Report stage
Tuesday 27th June 2023 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, my apologies again for my early start on this; my enthusiasm keeps getting the better of me today.

As I was saying, corporate criminal liability is a topic that many across the House care deeply about, and one where the Government are committed to making significant reforms. I thank noble Lords for the robust and constructive debate we had in Committee on this topic and for the ongoing engagement which many noble Lords have afforded me in the weeks leading up to this debate.

I reiterate the Government’s commitment to reforming corporate criminal liability and tackling fraud. Since this Bill was introduced, significant steps forward have been taken. I hope, with the further government amendments to which I will speak shortly, noble Lords will recognise that we have gone to great lengths to strengthen the Bill in this area. In addition, government action continues outside of this Bill. The recently published Fraud Strategy further demonstrates the ongoing work across government and with partners to take action to tackle fraud.

I will speak first to government Amendments 104, 105, 106, 109, 138, 139, 140, 144 and 145, which introduce new clauses to this Bill to reform the identification doctrine. As noble Lords will be aware, the identification doctrine is outdated and ineffective in the way in which it holds corporates to account, given the breadth of business we see in the 21st century. Companies have grown tenfold since the “directing mind and will” test was devised in the 1970s. As companies have grown, their operations and governance have become spread across different areas, making it incredibly difficult to pinpoint the directing mind of a company, particularly in a large organisation. Individuals with significant authority can escape corporate liability by asserting that the directing mind and will is elsewhere.

Meanwhile, there is an unfairness here. Smaller companies, perhaps with one or two directors, have much more easily identifiable directing minds, meaning that corporate liability is more easily attributable and a prosecution is more likely to be successful. It is this inequality in the law that we need to address. The government amendments place the identification doctrine on a statutory footing for economic crimes for the first time, providing legislative certainty that senior managers are within the scope of the rule.

Under these new measures a corporate will be held liable if a senior manager has committed an offence under the new schedule, or if they have encouraged or assisted an offence by another, or have attempted or conspired to commit an offence under the schedule. The corporate will be criminally prosecuted and, if convicted, will receive a fine, in addition to any sentences imposed for individuals who are separately prosecuted and found guilty of the same offence. The reform will apply to all corporate bodies and partnerships established in England and Wales, Scotland and Northern Ireland.

These amendments build on the extensive work and consultation conducted by the Law Commission in this area. Building on feedback from prosecuting bodies, business representatives and Members of both Houses, some tweaks have been made to the Law Commission’s proposal to ensure the reform is applicable to the widest set of cases. Under the Government’s reform, economic crime is defined according to a new schedule in the Bill—introduced via Amendment 109—which reflects existing Schedule 10 but without those offences that principally apply to a corporate body, such as failure to prevent bribery.

For the purpose of these amendments, “senior management” will be defined in accordance with the well-established definition provided for in the Corporate Manslaughter and Corporate Homicide Act 2007. This model considered the senior managers’ roles and responsibilities within the relevant organisation and the level of managerial influence they might exert, rather than their job title.

The clauses tabled by the Government also seek to capture instances where a senior manager commissions or encourages a lower-ranking employee to do their “dirty work” by making it clear that the corporate can also be held liable where the senior manager encourages or assists a listed offence in the schedule.

To be clear to the House, subsection (3) of the new clause introduced by Amendment 104 ensures that criminal liability will not attach to an organisation based and operating overseas for conduct carried out wholly overseas simply because the senior manager concerned was subject to the UK’s extraterritorial jurisdiction; for instance, because that manager is a British citizen. Domestic law does not generally apply to conduct carried out wholly overseas unless the offence has some connection with the UK. This is an important matter of international legal comity.

However, some offences, wherever they are committed, can be prosecuted against individuals or organisations who have certain close connections to the UK. Subsection (3) makes sure that any such test will still apply to organisations when the new identification doctrine applies. Extending the identification doctrine test to senior management better reflects how decision-making is often dispersed across multiple controlling minds, mitigating the ability to artificially transfer, remove or create titles to escape liability. This is a positive step to increasing lines of clear governance and accountability in corporations.

Looking forward, although these government amendments are a strong step to improving corporate criminal liability laws, they are not the final step. The Government have committed in the Economic Crime Plan 2 and the Fraud Strategy to introduce reform of the identification doctrine to apply to all criminal offences. This will take place when a suitable legislative vehicle arises.

I move on now to the government amendments on failure to prevent fraud. In Committee, the Government tabled amendments which introduced a new corporate offence of failure to prevent fraud. Under the new failure to prevent offence, a large organisation will be liable to prosecution where fraud was committed by an employee for the organisation’s benefit and the organisation did not have reasonable fraud prevention procedures in place. The new offence will help to protect victims and cut crime by driving a culture change towards improved fraud prevention procedures in organisations and by holding organisations to account through prosecutions if they profit from the fraudulent actions of their employees.

Following this, noble Lords have raised further points with me on where the Government clauses could be strengthened. I have listened to the points raised, and the Government have tabled further amendments on the definition of large organisations and the treatment of subsidiaries. I thank the noble Lord, Lord Vaux of Harrowden, for bringing this point to my attention.

As I have set out on many occasions, the failure to prevent fraud offence is designed to balance the fraud prevention benefits with minimising burdens on small business. Amendments 111, 112, 113, 114, 115, 116, 118, 119, 122, 123 and 124 will help prevent companies from avoiding responsibility by moving high-risk operations into subsidiaries that fall below the size threshold for the offence. They will also ensure that groups of companies with significant resources are incentivised to take steps to prevent fraud.

First, we have made a clarification to ensure that an assessment of whether an organisation meets the size criteria, and is therefore in scope of the offence, is made cumulatively across the parent company and its subsidiaries—that is, the group—rather than being based on each individual entity. We then have to consider where liability would attach within that group. The group itself is not a legal entity so cannot be liable. It may be more appropriate for the subsidiary or the parent to be accountable directly, depending on the circumstances. We have therefore clarified that whichever of the individual entities within a group was responsible for the fraud can be directly liable for a failure to prevent fraud, in the same way as any other entity in scope of the offence.

Additionally, we have clarified that an employee of a subsidiary can be an associated person of its parent or owning company. That makes it more feasible to attach liability to the parent company should the approach of targeting the specific subsidiary be inappropriate. A test would still have to be met that the fraud by the subsidiary employee intended to benefit the parent, and the parent would have the defence that it was reasonable to take no steps to prevent the fraud—for example, if the structure was such that the parent had no say over the activities of the subsidiary.

Finally, Amendment 120 ensures that the views of the Scottish and Northern Ireland Governments are taken into account before any future changes to the offence threshold based on organisation size.

I hope noble Lords will recognise that this is a hugely meaningful package of amendments. I recognise that a number of noble Lords will have hoped the Government would go further, particularly around the threshold in the failure to prevent fraud offence. However, I stress that we have already taken tremendous strides forward. The Government firmly believe that our reforms to the identification doctrine; the introduction of a failure to prevent fraud offence covering around 50% of economic activity; measures to prevent avoidance via subsidiaries; and our existing ability to identify and prosecute fraud more easily in smaller organisations will cumulatively have the desired effect of tackling and deterring economic crime, without unnecessarily imposing billions of pounds of burdens and bureaucracy on actual or potential small businesses. I hope noble Lords can recognise the great progress we have made, and I beg to move.

[Lord Garnier (Con)]

My Lords, I thank my noble friend the Minister for his opening remarks and for the advance that the Government have made on two fronts. The first is by clarifying the senior management officers within a company; in doing so, they have clarified the way in which the identification doctrine can be applied in modern Britain.

As I have said on previous occasions, I have an interest to declare. I will not specifically recite it again because I did so in Committee, at Second Reading and, I think, on the three or four previous pieces of legislation into which a failure to prevent amendment could have been inserted—but of course it was not the right Bill, the right vehicle or the right time, and in fact it was just not right. So here I am again.

I shall speak to my Amendments 110 and 125A, which at the appropriate time I will move to a Division unless the Government persuade me otherwise. I am not engaging here in party politics or even in a rebellion. I am doing nothing by surprise; anyone who has followed discussions on economic crime over the last 13 years will know precisely what I am going to say. Indeed, my noble friend the Minister is adept at moving from one corridor to the next to avoid having a yet further conversation with me about my favourite subject. He has also heard all my jokes before, but not every Member of our House has had that advantage so it may be that, unless the Government accept my amendment, my little Aunt Sally will have another canter around the course. However, I will take things in stages.

First, I thank the Government, as I hope I have done —and I mean it sincerely—for their Amendments 104 to 106 and 109—essentially, the modernisation of the identification principle, so far as it goes. We are now slowly catching up with the Americans; they did something similar to this in 1912, but this is the United Kingdom and we must not rush.

Public Order Bill

Debate between Lord Sharpe of Epsom and Lord Garnier

Report stage
Tuesday 7th February 2023 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I apologise for my slightly tardy arrival.

Amendment 54, tabled by the noble Baronesses, Lady Chakrabarti and Lady Boycott, and the noble Lord, Lord Paddick, seeks to establish a specific safeguard for journalists and bystanders during protests. It follows the wrongful arrest and detention of the LBC journalist Charlotte Lynch in November. May I reassure the House that it is not okay? I agree with the noble Baroness, Lady Jones, that it is absolutely not okay to arrest a journalist who is doing their job.

I thank the noble Baroness, Lady Chakrabarti, for tabling this amendment, and agree with the need for journalists and innocent bystanders to be adequately safeguarded during protests. The Government are clear that the role of members of the press must be respected. It is vital that journalists be able to do their job freely and without restriction. I agree with the noble Baroness, Lady Fox, the noble Lord, Lord Coaker, and my noble friend Lord Cormack that a free press is the hallmark of a civilised society.

The police can exercise their powers only in circumstances where they have reasonable grounds to do so. Hertfordshire Constabulary has accepted that its wrongful arrests of journalists on the M25 were unlawful. Noble Lords will be aware that an independent review was conducted into Hertfordshire Constabulary’s arrest of journalists during the M25 protests. With your Lordships’ indulgence, I will go into a little of the detail on that. Cambridgeshire Constabulary’s report specifies that:

“The power of arrest is principally governed by PACE 1984 and to be lawful, the arrest must be necessary by reference to statutory powers set out within PACE 1984. Code G provides additional rules and guidance on the use of the power of arrest. Of particular relevance to this operation, it is important to observe the judgement laid out following O’Hara v Chief Constable of Royal Ulster Constabulary 1996—an officer cannot exercise the power of arrest based on instruction from a superior officer. In order to satisfy the requirements under section 24 of PACE 1984, the superior officer must convey sufficient information in order for the arresting officer to develop reasonable grounds.”


I went into that in some detail because Section 24 —“Arrest without warrant: constables”—is very clear. A constable may arrest without warrant

“anyone who is about to commit an offence; anyone who is in the act of committing an offence; anyone whom he has reasonable grounds for suspecting to be about to commit an offence; anyone whom he has reasonable grounds for suspecting to be committing an offence. If a constable has reasonable grounds for suspecting that an offence has been committed, he may arrest without a warrant anyone whom he has reasonable grounds to suspect of being guilty of it.”

Under those criteria, I struggle to see how the primary purpose of being a journalist, which the noble Baroness, Lady Chakrabarti, referred to, and reporting on a protest, would ever constitute reasonable grounds.

Going back to the Cambridge case, the constabulary also specified that code G of PACE 1984 gives some separate guidance on necessity criteria:

“The power of arrest is only exercisable if the constable has reasonable grounds for believing that it is necessary to arrest the person.”


It is very clear. We are all protected by those rules and that includes journalists. The review revealed that the issue was one of training and proposed several recommendations to fix this, including ensuring that all public safety officers and commanders carry out the College of Policing and National Union of Journalists awareness training. The constabulary has promptly implemented these recommendations. This is not an issue of law but one of training and guidance, which is already being addressed.

[Lord Garnier (Con)]

My Lords, PACE is nearly 40 years old. Is not the training completed?

[Lord Sharpe of Epsom (Con)]

My noble and learned friend makes a very fair point, but the College of Policing and the National Union of Journalists awareness training is a little more recent than the 40 year-old PACE codes.

The College of Policing’s initial learning curriculum includes a package of content on effectively dealing with the media in a policing context. In addition, the authorised professional practice for public order contains a section on the interaction of the police with members of the media. This includes the recognition of press identification. It should also be noted that it is entirely legitimate for a police officer to inquire why an individual may be recording at the scene of a criminal offence if they deem it appropriate. We do not want to suggest that this is unlawful.

In light of those factors, while I completely understand the direction and purpose of the amendment, we do not support it because we do not deem it to be necessary. These defences are already covered in law.