Economic Crime (Transparency and Enforcement) Bill

Viscount Colville of Culross Excerpts

2nd reading
Wednesday 9th March 2022 Lords Chamber

[Viscount Colville of Culross (CB)]

My Lords, I was the BBC’s Moscow producer for “Newsnight”. I have been back many times to make television programmes in Russia. Throughout that time, Russians often spoke admiringly of the UK as a bastion of political stability and democratic freedom. It is ironic that the British ideals and institutions they so admire have been repeatedly traduced by the Russian elite. Few Russians have had the political influence and absolute ruthlessness to become oligarchs, but they have been drawn to the great honey pot of the City of London to hide their wealth and live lives of unimaginable opulence. Many are people who surround Putin.

They live in stark contrast to the vast majority of Russians, who are desperate pawns in his heinous plans. As if proof was needed, only yesterday, the mothers of Russian soldiers fighting in Ukraine told how their sons had been forcibly signed up to the army for a salary of £180 a month—a subsistence wage that barely helps you live in rural Russia. They even had to buy their own uniforms. One mother said that she had a text from her son Nikolai two weeks ago saying that he was on a drill and was going to continue drilling. Since then, she has not heard from him and fears the worst.

I am pleased that our Government have started to sanction Putin and the elite who surround him. I hope that this Bill will be used to extend sanctions to at least 1,000 people around Putin—not just Ministers but members of the Duma, all the military and security service leaders and, most importantly, their families. Putin does not care what happens to the people of Russia but he does care about what happens to those around him. I, like many noble Lords, welcome the Economic Crime Bill and add my calls for its companion Bill to follow shortly.

According to Transparency International—it has been mentioned many times in this debate—hundreds of oligarchs from around the world own property in the United Kingdom, many of them Russians. If you count corrupt politicians and public officeholders, the figure is higher. The NGO calculates the known value of assets in the UK bought with suspect wealth to be at least £6.7 billion, although it adds that this is likely to be the “tip of the iceberg” given how little we know.

I welcome the property register of oversea entities set out in this Bill. It is good to know that the United Kingdom Government have finally decided to track down the beneficial owners of so much property in this country. My concern is that much of it is held by companies registered in the Crown dependencies and overseas territories.

The sanctioned oligarch Alisher Usmanov, said to be worth £13.4 billion, bought the grade 2 listed Beechwood House in Hampstead in 2008 for £48 million. It is owned by a company called Hanley Ltd, based in the Isle of Man. Likewise, the industrialist Oleg Deripaska, who is sanctioned in the United States—but not yet here—for close links to President Putin, has a multimillion house in Belgrave Square. It is owned by Ravellot Ltd, registered in the British Virgin Islands. Transparency International estimates that £1.5 billion-worth of London property is owned by Russians, 55% of it registered in the CDOTs. I am pleased that the new register will identify the true beneficial owners but, like my noble friend Lord Faulks, I am concerned about what happens if they decide to sell the company’s shares to a new owner, possibly another friendly oligarch. The new beneficiary will have to be notified in the register, but only during the annual update. That gives the original beneficiaries plenty of time to salt away their wealth from the shares they have sold. I ask the Minister to consider more frequent updates of true beneficiaries on the register.

The registers of companies established in the CDOTs allow UK authorities only to make a search on individual companies, but many oligarchs and money launderers hide their money in a web of companies. The only way this can be uncovered is for the Government to request full access to their registers so that authorities can take an overview and piece together the web. At present, the registers will be open in over 21 months’ time. Some overseas financial centres such as the BVI, however, already have a professionally maintained up-to-date BOSS register. It would take only a short time for that to be made public. I ask the Minister to ensure that the Government do everything in their power to open these registers this year and uncover the truth about the wealth of so many Russian oligarchs, including Putin and his friends.

The other area which concerns me is the huge growth in SLAPP orders, so eloquently described by the noble Lord, Lord Thomas of Gresford. Recently they have been used aggressively by oligarchs and corrupt players around the world to close down exposure of their wealth and, in the case of many Russians, their links to the Kremlin, by journalists and writers in this country. I am proud to have helped shape the Defamation Act 2013. Its threshold of a publication that

“has caused or is likely to cause serious harm to the reputation of the claimant”

was successful for a time in controlling libel tourism. But new threats of defamation, breach of privacy and data protection are being used by British lawyers to intimidate journalists and writers. These cases can be time-consuming and costly, involving an expensive and lengthy disclosure process, continuing for many years and dragged out by rich claimants. The noble Lord, Lord Thomas, mentioned the cases of Catherine Belton and Tom Burgis, to name but a few.

In researching this speech, I have spoken to a number of journalists writing about Russian wealth, who have received very aggressive legal letters. Not only do they threaten a list of legal actions, but even the letters themselves are secret. The recipients were threatened with actions for breach of confidentiality or even copyright if they made the letters public. I have obtained one such letter from a leading London law firm to a freelance journalist who exposes corruption on a regular basis. They were threatened with breach of privacy and given severe warnings against mentioning the law firm unfavourably. I fear that these SLAPP orders pose a chilling effect on free speech in this country. During the debate on the Bill in the other place, the Minister announced that Dominic Raab has made a call for evidence. I hope that this includes setting up a bespoke judicial mechanism tailored to look at these orders at an early stage to decide whether publication is in the public interest. I also support the noble Lord, Lord Thomas, if his Private Member’s Bill comes before the House. Meanwhile, can the Minister confirm the scope of this call for evidence and when it might conclude its findings?

We need to rid this country of its reputation as a safe haven for corruption and criminality. We need to clamp down on the activities of Putin’s people and their families. I look forward to a second Bill coming before the House very soon to close the other glaring loopholes, especially at Companies House.

Small Business Commissioner: Late Payments

Viscount Colville of Culross Excerpts

Tuesday 7th December 2021 Lords Chamber

Asked by

[Viscount Colville of Culross]

To ask Her Majesty’s Government what plans they have to extend the powers of the Small Business Commissioner to deal with late payments for small businesses and freelancers by (1) allowing the Commissioner to deal with complaints against companies with fewer than 50 employees, and (2) requiring the chief executive officers and chairs of offending companies to respond to the Commissioner.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, we have consulted on extending the scope and powers of the Small Business Commissioner, including extending their scope to deal with complaints against a small business by a small business, and the power for the commissioner to compel information from a business in relation to a complaint. We are working through the impact of any changes with the new commissioner to better understand the resourcing implications of each option and the likely impact on businesses.

[Viscount Colville of Culross (CB)]

My Lords, three-quarters of self-employed people suffer from late payments; many of them do not get paid at all and the situation is getting worse. It adversely affects their business and a lot of their valuable time is taken up with chasing unpaid invoices. Why, on such an urgent issue, when the consultation finished last December, have the Government still not come forward with proposals? When will proposals be forthcoming?

[Lord Callanan (Con)]

The noble Lord makes a good point, and I very much sympathise with his concern. However, we received a lot of replies to the consultation and are currently working through the options. He will be aware that any proposals in this area will require primary legislation and have resourcing implications for the Small Business Commissioner, so we are currently working through all the options.

Self-employment Income Support Scheme

Viscount Colville of Culross Excerpts

Tuesday 5th May 2020 Lords Chamber

[Lord Callanan]

I thank my noble friend for his question. Yes, as well as relaxing the minimum income floor, we have increased the standard rate of universal credit and working tax credit for this year by around £1,000. We have increased the local housing allowance, which is worth something like £600 in people’s pockets. We have also redeployed staff to the front line and therefore temporarily suspended the recovery of some government debts such as tax credits, benefit overpayments and social fund loans. We stand ready to take additional measures if they are required.

[Viscount Colville of Culross (CB)]

I declare an interest as a freelance series producer working for Netflix and the Smithsonian Channel. The current SEISS creates considerable concern for large numbers of freelancers who operate under a personal services company and are therefore not covered. Is it not possible for HMRC to distinguish between PSC-derived dividends and other dividend income, which could be verified through an online HMRC portal?

[Lord Callanan]

The Chancellor has referred to this difficulty a number of times. We are satisfied that the system as it currently operates is the best one at the moment, but as I said in response to an earlier question, we keep all these things constantly under review and will reflect on what the noble Viscount has said.

Covid-19: Employment Support

Viscount Colville of Culross Excerpts

Thursday 19th March 2020 Lords Chamber

[Lord Callanan]

The noble Lord speaks with great authority on these matters. This might be a small point, but I agree with him that it is important. Actually, within my ministerial portfolio I have responsibility for the Insolvency Service, although not for the Treasury and the guarantees that it will provide. I take on board my noble friend’s point and will make sure that it is conveyed to the Chancellor. My noble friend’s intervention is welcome.

[Viscount Colville of Culross (CB)]

I declare an interest as a freelance series producer working at Raw TV making content for CNN. The Minister was asked about coverage for the self-employed and freelancers who have been made unemployed and he said that he was looking at that and wanted it done properly. However, these people have no prospect of work at the moment. Their income has suddenly stopped, and their bills have not. Is it not possible very quickly to put in place an emergency fund, as has happened in other countries, and at the very least to extend statutory sick pay to all workers affected by Covid-19? Surely that could be done very quickly.

[Lord Callanan]

I think, again, the noble Lord makes a very good point. We have of course already announced extensions to statutory sick pay and the qualifying period. His points are well made and echo the points made earlier about freelancers. All the different sectors of the economy need to be looked at. We will do whatever it takes. We will put in place a comprehensive package and will announce details of that as soon as we are able to.