Economic Crime (Transparency and Enforcement) Bill

Debate between Baroness Hodge of Barking and John Baron

2nd reading
Monday 7th March 2022 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab)]

I will try to keep my remarks short. Like others in the House, I welcome the Bill, but it should never have taken the nightmare of a war in Ukraine for us to act and to halt the avalanche of dirty money that has been allowed to enter Britain today. We are the jurisdiction of choice for not just Russian oligarchs, but kleptocrats, money launderers, people traffickers, smugglers, terrorists and other villains. That is the result of the failure of this Government and previous Governments to act. The Labour Government also had some responsibility for this, but the inaction over the last decade or so is down to this Government and the previous Conservative Governments.

As every other hon. Member has said, the Bill has to be the first step. I look forward to a further Bill coming forward swiftly at the beginning of the next Session so that we can enact other important measures. The other point that other hon. Members have made is that the Bill is not something great or inventive. It was first promised to us by David Cameron; I think that was in 2015, although others think it was 2016. There was then a massive consultation, pre-legislative scrutiny and a Bill in 2018. It was in the Queen’s Speech in 2019 and reinforced in the G7 summit in Cornwall, and then we heard that there was not going to be an economic crime Bill. It was all gone, and then war came in Ukraine and suddenly it has re-emerged.

The implications of the Bill go well beyond Ukraine, although the Bill is vital as we try to put pressure on Putin and his utterly dishonourable gang of cronies, and to de-escalate the conflict through economic sanctions. We need to move faster and go further. Some very important amendments have been tabled; I will not use my time on them now, because hon. Members will want to talk about them in Committee, but they include freezing an oligarch’s assets while lawyers consider the case for sanctions, and ensuring appropriate funding so that we do not just put something into law without using it to go after the oligarchs properly.

[Mr Baron]

Is the right hon. Lady as concerned as I am that some estimates put the cost to this country of economic crime at nearly £300 billion, yet we spend something like only £850 million on all the nationwide enforcement agencies? Other countries spend a lot more and seem to have a higher prosecution success rate. Is that a coincidence?

[Dame Margaret Hodge]

No, of course not; I completely concur. The latest figure I have seen for the cost of economic crime to the economy is £260 billion, so the Government must provide tougher regulations, more effective enforcement, proper resourcing and clear accountability—those are the key things we need.

I thank the Government for listening to our representations. Even the Bill before the House includes some very welcome changes, such as tougher penalties and greater accountability, with an annual report to Parliament—I remember arguing that case as the legislation went through, and it being resisted. The Government’s new clauses will speed up the processes, and I hope that in Committee there will be further improvements.

When the Minister winds up, will he say whether he has looked at amendment 3, which stands in my name and that of other hon. Members? It would address the loophole that I think the hon. Member for Bromley and Chislehurst (Sir Robert Neill) mentioned; I think it is a drafting mistake, but it looks as if individuals could escape the transparency that the Bill intends by using nominee directors and corporate trust providers. We have received legal advice, a copy of which I have shared with the security Minister; I wonder whether the Minister answering this debate has looked at it and whether he will respond on the drafting issue.

This is not an economic crime Bill; it is important legislation that should have been put in place years ago. The economic crime Bill is still desperately needed and I look forward to urgent discussion of it. In the meantime, I hope we will have time for the proper consideration of our amendments.

Economic Crime (Transparency and Enforcement) Bill

Debate between Baroness Hodge of Barking and John Baron

Committee stage
Monday 7th March 2022 Commons Chamber

[Mr John Baron (Basildon and Billericay) (Con)]

The right hon. Member knows that I am supporting her amendment tonight, but may I suggest that we need to look innovatively at how we fund these agencies? Perhaps they should be taking a share of successful prosecutions. Initially, we need a big increase in funding for these enforcement agencies to get them off the ground and make them fit for purpose, then we can explore longer-term funding solutions.

[Dame Margaret Hodge]

It always seems to me absurd that it costs £12 to establish a new company in Companies House. Obviously we want to make it easy for new businesses to enter the market, but £12 is absurd. We know that that gets exploited in relation to shell companies, but does it also facilitate economic crime? If we quadrupled that figure to £50, it would still not be a fortune, but we would then have a massive investment that we could put into our enforcement agencies without raising any further money through taxation. There are a whole range of mechanisms that would not have a direct impact on public spending. They may mean that the Treasury gets a little bit less than it thought it would, but they would not have a direct impact on public expenditure and we could employ them to make these enforcement agencies fit for purpose.