Police Conduct and David Carrick

Alison Thewliss Excerpts

Tuesday 17th January 2023 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

I thank the Home Secretary for her statement and I put on record the SNP’s tribute to the victims in this case for their bravery in the face of ongoing trauma.

The charges that have been brought against David Carrick are incredibly disturbing—49 charges, including 24 counts of rape against 12 women over two decades, with accounts of domestic violence and coercive control. Through that, the Met has sought to protect its own, which is also incredibly disturbing and has led the former Victims’ Commissioner Dame Vera Baird to question the commitment to culture change at Scotland Yard.

It has been reported that the Met is checking back through 1,633 cases of alleged sexual offences involving 1,071 officers in the past decade. What retrospective action does the Home Secretary expect from that review? It should be a worry to all of us that those officers are still out there in their jobs, and that we may face what David Carrick reportedly told women when he flashed his warrant card: “I’m a police officer, you’re safe with me”—a chilling prospect. How does she intend to ensure that the review is thoroughly carried out? What updates can the House expect?

Lady Elish Angiolini has worked with Police Scotland to improve standards on this, and work is ongoing in Scotland too. How can women and people with vulnerabilities have the confidence that, if something happens to them while they are in London, the Met will respond in a proper way that respects their dignity?

[Suella Braverman]

The hon. Lady asks a series of good questions. To give more detail about the Met Commissioner’s commitments to strengthen the procedures, there is already a strengthening of the vetting of officers; an active review of historical cases is ongoing, where there may be a flag on the system for domestic incidents; and a data washing process is ongoing to ensure that the Met’s data is being very extensively checked against rigorously managed national databases. That is all being led by a new anti-corruption and abuse command unit, which is instilling an institutionally higher standard of managing and overseeing the important issue of vetting.

Windrush Lessons Learned Review: Implementation of Recommendations

Alison Thewliss Excerpts

Tuesday 10th January 2023 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

Whitehall sources have been quoted in The Guardian as saying:

“The Williams review is not set in stone”.

It would be a betrayal of that review and of those affected if there is to be no migrants commissioner, no reconciliation events and no extra powers for the independent chief inspector of borders and immigration. The Windrush compensation scheme has been painfully slow, with at least 23 people known to have died while their claims were being processed. So will the Minister confirm that none of the planned changes will affect the already ineffective compensation scheme and that the claims still outstanding will be concluded at the earliest opportunity? What confidence can those who do us the honour of coming to these islands for sanctuary, for work, for study and for love have in this Government when the UK Tory Government ignore the terrible injustices of Windrush, fail to learn the lessons and double down on attacking their fellow human beings?

[Miss Dines]

The hon. Lady should not believe everything she reads in the paper because there is no end date to Wendy Williams’ appointment, she continues to review and the Government take her views very seriously. I do not accept the premise of the “delay”. These issues are dealt with sensitively. It is important not to have a knee-jerk reaction and rush. Detailed, fundamental work needs to be done and Members must judge the “delay”—or the progress, as I would rather say—by the fact that there is a 59% success rate and so much money paid out. What is important is that the engagement, which has improved over the past three to six months, has meant a dramatic increase in the number of those taking up the scheme. There is always more to do and the Government will not say that they are doing everything right, but they are 100% committed and I do not accept that there is delay or a willingness to ditch, as is implied, the independent reviewer, whose work is so important.

Oral Answers to Questions

Alison Thewliss Excerpts

Monday 19th December 2022 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

My casework in Glasgow Central speaks to the fundamentally broken asylum system, and a failing immigration system more widely, as other types of applications are regularly delayed and people are left waiting for years. The barrister Colin Yeo suggests that, to get the asylum backlog down to 20,000, the Home Office would need to make 8,000 decisions a month. In the year to September, only 16,400 decisions were made in total, so precisely how will the Minister meet his target?

[Robert Jenrick]

Last week, my right hon. Friend the Prime Minister set out our plan to re-engineer the process and hire more decision makers. It is about not just people and resource, but ensuring that the process is faster and less bureaucratic, and that the guidance is cut and simplified. If the hon. Lady wants to help us with the issue, perhaps she will get on to her colleagues in the Scottish Government, because today in Scotland, in contrast with the rest of the United Kingdom, only one city—Glasgow—is doing its fair share and taking asylum seekers. In the whole of Scotland, only a dozen hotels outside of Glasgow are taking asylum seekers, which is not fair and equitable. She might sound pious, but her words and rhetoric are not matched by action from the Scottish Government.

[Alison Thewliss]

Local authorities in Scotland are reticent to take more because they know that the UK Government are not funding asylum seeker provision properly, and that pressed budgets due to another round of austerity are coming down the road, as the Minister knows just fine. Can he confirm that the Home Office is recruiting asylum decision makers from people in customer service and sales positions at McDonald’s and Aldi who have no prior experience of the asylum system, who are consulting Lonely Planet guides for knowledge of applicant countries, and who have described being

“left to fend for themselves”

after two days to conduct complex interviews and make life or death decisions? Is that really an adequate way to conduct sensitive decision making?

[Robert Jenrick]

I do not recognise anything that the hon. Lady just said. The problem with the current system is that it is too complicated and too bureaucratic. We want to simplify that, speed up those decisions and make sure that the teams are more productive. To come back to her first point, the Scottish Government are refusing to take any of the asylum seekers who are arriving in the UK on small boats, which is not right. There is a widening gulf between the actions of the Scottish Government and their rhetoric, which I ask her to consider.

Migration and Economic Development

Alison Thewliss Excerpts

Monday 19th December 2022 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

This is a dark day indeed with this judgment, particularly when the Home Secretary comes to the House to imply that having morals is fanciful. Enver Solomon of the Refugee Council has called the policy

“wrong in principle and unworkable in practice”,

and I am certain that this will go to appeal as charities and those involved in the issue have stated. SNP Members will never get behind this policy—not in our name—and I remind Members that slavery, apartheid and marital rape were all lawful at one time, but none of them were right.

The Court found that the Home Office had failed to consider properly the circumstances of the eight who challenged the policy. How exactly does the Home Secretary intend to approach such cases now, and what will happen to those eight individuals? What happens to those who have already been issued with notices of intent, and what confidence can they have in a system that previously did not properly consider the cases of eight people?

The Home Secretary claims that this will be a deterrent. The Tories also claimed that the hostile environment would be a deterrent and that the Nationality and Borders Act 2022 would be a deterrent. Now they claim the Rwanda policy will be a deterrent. None of them is working because they fail to recognise the desperate circumstances that drive people to come here in the first place. Safe and legal routes will work and prevent people from losing their lives in the channel.

The Home Secretary talked about the trade in human cargo. We all want to tackle the people smugglers who exploit people in the most vulnerable of circumstances. However, what else is the Rwanda policy but state-sponsored people trafficking? How many people are actually going to be removed to Rwanda? It is going to be a tiny proportion, so any deterrent effect that the Government claim is not going to be proper. What is the total cost of this unworkable scheme? How much money has been spent on it already? How much has gone on the legal case? How much of it would have been better spent dealing with the catastrophic backlog of cases that the Tories have created?

[Suella Braverman]

I am afraid that the hon. Lady’s ideological zeal is blinding and preventing her from taking a rational approach. I am proud of the fact that we have welcomed 450,000 people through safe and legal routes to this country since 2015. I do not think that anyone can claim that we are not forward-leaning on all of this. She and her party need to be honest about their position with the British people: they stand for open borders and uncontrolled migration.

Manston Update

Alison Thewliss Excerpts

Monday 28th November 2022 Commons Chamber

[Robert Jenrick]

The hon. Lady raises an important point. No doubt it is correct that there will be wide variances across the country, and I will raise that point with the Dame Jenny Harries and the UK Health Security Agency, if I may, and one of us will write back to her with our national strategy.

[Alison Thewliss (Glasgow Central) (SNP)]

It obviously should have come as no surprise to the Government that these conditions would break out because the all-party parliamentary group on immigration detention, which I chair, found similar circumstances at Napier barracks, including scabies outbreaks in that accommodation. Can the Minister tell me in a bit more detail what exactly is being done to ensure that the widest possible screening is done, rather than sending people off into the world with conditions such as scabies and no treatment? At Napier, people were forced to share cream between them and did not have proper washing facilities for their clothes and bedding.

[Robert Jenrick]

As I said in answer to earlier questions, there are thorough screening procedures, both immediately on arrival in Dover and then later at Manston. There is an extensive medical facility at Manston, where anyone presenting with symptoms of diphtheria or any other condition can get access to medical care. That is designed to ensure that they have good care, but also to put as little pressure on the local NHS in Kent as possible. It is frequent that individuals go to local GP surgeries or emergency departments in hospitals, and we make sure that they have access to the NHS, as any member of British society would do.

Hotel Asylum Accommodation: Local Authority Consultation

Alison Thewliss Excerpts

Wednesday 23rd November 2022 Commons Chamber

[Robert Jenrick]

We want to get to a point where there are multi-agency meetings prior to a final decision on a hotel or other sort of accommodation. That would involve full engagement with the local police force so that we could test, for example, far-right activity or public disorder. In my short tenure at the Department, I have seen a number of cases in which we have chosen not to proceed with accommodation on that basis, because it is very concerning when residents, or indeed migrants, are put in that situation. More broadly, when migrants arrive at Dover, we take biometrics, have counter-terrorism police officers there and do everything we can to screen them, prior to their moving on to other accommodation.

[Alison Thewliss (Glasgow Central) (SNP)]

The independent commission of inquiry into asylum provision in Scotland, which was set up by Refugees for Justice and is chaired expertly by Baroness Helena Kennedy, laid bare the deficiencies in the Home Office’s approach to accommodating vulnerable people, which resulted in the Park Inn incident in my constituency and a suspected suicide in other accommodation in the city. At my surgeries week in, week out, I see families and people with vulnerabilities who have been sent to shoddy, poor, substandard accommodation by the Home Office while contractors rake in the profits. Will the Minister tell me how long it will be before people in my constituency can expect to be treated with dignity and respect by the Home Office?

[Robert Jenrick]

I have been clear from the beginning of my tenure that I want to ensure that we always provide decent, but not luxurious, accommodation to all asylum seekers. I will say, however, that the Scottish Government have a poor record in that regard. They have consistently failed to find hotels in Scotland and to disperse individuals. The fact that Scotland is the only part of the United Kingdom housing Homes for Ukraine individuals in cruise ships shows the Scottish Government’s failure to find better accommodation.

Economic Crime and Corporate Transparency Bill (Fifteenth sitting)

Alison Thewliss Excerpts

Committee stage
Tuesday 22nd November 2022 Public Bill Committees

[Stephen Kinnock]

But is it not simply the case that we are not putting enough resources into the enforcement of laws and the policing of such markets? That is fundamental to achieving the regulatory aim of that side of the equation.

Crypto-expert Aidan Larkin recently told me how the US Government’s money laundering and asset recovery section brings in around $800 million a year in crypto-recovery alone, while the UK brings in close to nothing, because the UK Government fail to employ the handful of experts required simply to study the blockchains via things such as bitcoin analytics and to follow the illicit finance—“to follow the money”, as the saying goes. I cannot pretend to be an expert on the technical aspects of that, but it feels like a missed opportunity to go after illegal activity. We have surely reached a point in time when that could be self-funding, if we did it properly.

I am simply not convinced that the system for regulating cryptoassets is working as well as intended. Indeed, it is pretty telling that in response to written questions 86505 and 86504, which I tabled last week, the Minister admitted that none of the 200-plus crypto businesses operating without commission had been subject to any criminal or civil penalties.

As I mentioned, since January 2020 there has been a requirement for new businesses carrying on cryptoasset activity in the UK to register with the FCA. The requirement was extended to existing businesses the following year. The implementation of the register, however, has been beset by problems, not least of which is the fact that a very large number of the firms required to register have not done so. The FCA seems to have been unable to do much about that.

Only a couple of weeks ago, the Financial Times reported that only 16% of applications for registration have been approved by the FCA. The FCA has said that a large number of firms that failed to meet the conditions for registration have withdrawn their applications and that many of those appear to have carried on doing business without the requisite permission. Indeed, the FCA maintains a list of unauthorised cryptoasset businesses operating in the UK. As of last week, 245 firms were on that list. Will the Minister explain what is being done to prevent those 245 firms that operate outside the money laundering rules from scamming members of the public, facilitating money laundering or assisting the evasion of economic sanctions?

The Government have been aware for some time of problems involving the use of cryptoassets to defraud members of the public. In October 2018, the Government’s own Cryptoassets Taskforce published a report that identified advertising that misleads people deliberately, by overstating the potential gains from investing in such assets and downplaying the risks involved, as a significant problem for the Government to address. Only now, after four years, are new rules being introduced to expand the FCA’s remit to include consumer protection in relation to misleading financial promotions.

Despite that, however, a clear gap remains between the scale of criminal activity in the sector and the ability of the FCA and police forces to respond. In recent evidence provided to the Treasury Committee, Ian Taylor of the crypto trade body, CryptoUK, said that the recent collapse of high-profile crypto exchanges such as FTX could have been prevented had a stronger regulatory system been in place. Multiple witnesses testified to the Committee that, without additional staff with the right expertise, the FCA was unlikely to be able to regulate the crypto sector effectively.

Let me turn to the substance of the clause and schedule 6. It is clearly necessary for the law to be brought up to date to reflect the use of digital assets for criminal purposes. The clause and schedule amend the Proceeds of Crime Act 2002, to extend to intangible assets the same confiscation powers that are already used to recover physical assets like cash. That is an important first step, but in many ways the Bill leaves open more questions than it answers.

For instance, the Bill provides new powers to seize cryptoasset-related items, but the definition of those items is incredibly vague, encompassing any item of property that may provide access to some kind of information that could be relevant to an effort to seize a cryptoasset. Given the broad scope of the powers, alongside the related provisions on the destruction of confiscated property, we need more information from the Minister about how the powers are likely to be used in practice.

[Alison Thewliss (Glasgow Central) (SNP)]

I agree very much with what has been said from the Labour Front Bench. I ask the Minister about the interaction between this Bill and all the other Bills that are considering crypto at the moment, including the Online Safety Bill, which addresses some aspects of people being exposed online to financial crime. The Treasury Committee report on economic crime pushed quite strongly on having an aspect on economic crime in the Online Safety Bill, because it is important that people are not scammed online. To me and to many others, crypto seems very much a place where people do get scammed and lose all their money.

I draw the Committee’s attention to an interview by Henry Mance in the Financial Times yesterday with Stephen Diehl, who is very cynical about the crypto industry and its ability to rip people off. We have to be incredibly careful about the areas we are getting into; we are legislating for something that is moving very quickly. Given the number of Government amendment that will be made to the schedules in this part of the Bill, we need to think carefully about what we are putting in and whether it is suitable for seizing assets and for protecting people against crypto-related fraud more widely.

My other point is about expertise. I have talked an awful lot about the Government having expertise in various areas on the enforcement side, because if there is no expertise in enforcement, the laws that we are considering will just not be enforced. In our evidence session, Andy Gould said:

“We have been investigating cryptocurrency since 2015 or 2016. One of my sergeants has just been offered 200 grand to go to the private sector. We cannot compete with that. That is probably the biggest risk that we face within this area at the moment.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 24, Q37.]

If the money is not there in policing to retain the expertise to prosecute crypto crimes and to make sure that the legislation works in practice, rather than just on paper, the Government will be very much behind the curve.

I add my hesitation on the messages the Government are giving out on regulating and encouraging and on cracking down on a sector that has the potential, as we have seen with the collapse last week, of losing an awful lot of people their money and of making some people an awful lot of money out of those who have lost it.

[Tom Tugendhat]

If I may, I will just give a quick explanation of what crypto is because there seems to be some misunderstanding. Crypto is both a technology and a financial instrument. The financial instrument element is only part of it. Allowing for crypto technology is basically allowing for mathematics. Passing laws against crypto is like passing laws against mathematics—we can try, but it is not going to work.

What the now Prime Minister was talking about was encouraging the mathematics, the algorithms and the technology to develop in this country to create the kind of industry and the kind of infrastructure that would allow the technological use of algorithms for the transfer, sometimes of wealth, sometimes of knowledge, sometimes of contractual obligations. That is what blockchain fundamentally is.

On top of the blockchain, there are various forms of currency. There are bitcoins, which are proof of work, and then there is ethereum, which is proof of stake. These are different kinds of technologies and different ways in which cryptoassets use the blockchains and the technology that has underwritten them.

Having regulation for the currency is not the same as having regulation for the underlying mathematics. We would not say that we have regulation for the economist in the same way that we have regulation for the bank—they are different things. The Government are doing the right thing. We recognise that there is technology, and supporting it; we recognise that there are financial instruments, and are looking to work with others to make sure that those financial instruments are regulated in a sensible way. Now, that is difficult: I will be honest. It is difficult because the technology and its use are changing remarkably. The hon. Member for Aberavon spoke about FTX. As he may know, other companies such as Celsius and Gemini have stopped trading in various different ways, as well. It is not just about one instrument. It is certainly arguable that FTX got into difficulties for reasons other than lack of regulation.

The hon. Member’s point about advertising is extremely valid. There is a real challenge. That is different—it does not quite relate to this element of the Bill. We are seeing increasing amounts of financial advertising online in different ways. I do not know how many members of the Committee have Instagram accounts, but the number of Instagram messages I get advertising foreign exchange trading is frankly bizarre.

--- Later in debate ---

[Stephen Kinnock]

Clause 154 would lift the current statutory cap on the penalties that may be imposed by the Solicitors Regulation Authority, as delegated by the Law Society, for breaches of the law on economic crime. I am sure that Members on both sides will welcome the change if, as the Government argue in their impact assessment, it increases the deterrent effect of the financial penalties that may be levied for disciplinary matters. Although the Government provide limited evidence to support that claim, it is at least a reasonably logical conclusion.

However, the proposals raise a number of questions, principally around the degree to which clauses 154 and 155 reflect the input received from the sector in response to consultation earlier this year. Specifically, a number of serious concerns were expressed by the Solicitors Disciplinary Tribunal when the SRA consulted on planned increases to its powers to impose fines.

The tribunal argued that the SRA’s powers should be limited to imposing relatively low penalties for minor technical or administrative errors. It argued that increasing the maximum level of fines that the SRA could impose would erode transparency by preventing cases of serious misconduct from coming before a public hearing, which could also remove the scope for a detailed, publicly accessible explanation of any penalties, as is generally provided by the tribunal’s decisions under the current system. In summarising its concern, the tribunal argued that the diminution in the transparency of decision making and detailed reason would be in neither the public’s nor the profession’s interest.

It should be noted that those objections were raised, not in response to the proposed changes set out in this Bill, but in the context of the increase in the maximum level of financial penalties that the SRA may impose from £2,000 to £25,000, which came into effect in July. That change in itself begs a number of questions. In particular, can the Minister explain how many and what proportion of the fines imposed by the SRA since July have been at the £25,000 maximum? Could it not be argued that the Government have not provided enough time for the effectiveness of recent changes to be adequately assessed?

Can the Minister also set out the Government’s reasoning in lifting the cap on the SRA’s fining powers, with specific regard to the objections raised by the Solicitors Disciplinary Tribunal, and other stakeholders, around the transparency of the process?

Clause 155 would amend the Legal Services Act 2007 to set an additional objective for regulators in the legal sector to prevent economic crime. Given the objections that have been raised in the sector relating to clause 154, I would be grateful if the Minister provided further details of any consultation between his Department and providers of legal services, as well as the Legal Services Board, on this proposal.

Finally, it would be helpful if the Minister explained the rationale for the decision to set out, in this Bill, an explicit objective to prevent economic crime for providers of legal services, but not for other sectors covered by the money laundering regulations. The impact assessment sheds limited light on the Government’s thinking in this area, so any additional detail that the Minister could provide today would be welcome.

[Alison Thewliss]

My understanding is that the Law Society of Scotland has no particular objections to the amendments.

[Tom Tugendhat]

The hon. Member is asking about various of the different fining elements. Clearly, the fines discussion is a matter for the individual cases, and would be determined on a case-by-case basis, but I think that removing the cap, which, in modern terms, is actually relatively low—certainly, when compared with financial abuses and other forms of regulation—is entirely reasonable.

The Solicitors Regulation Authority does not, in any way, have any power to strike off a suspended solicitor, so the SDT remains an extremely important part of the disciplinary process. There are various different aspects at play here, but the proposals make good sense and are reasonable. I will happily write to the hon. Member on the issue he raised separately and come back to him about it later.

--- Later in debate ---

[Kevin Hollinrake]

It is a pleasure to speak with you in the Chair, Mr Paisley. I will speak briefly to amendment 43 and new clause 22, which are minor technical changes necessary due to the European Communities Act 1972 having been repealed. They give the Secretary of State the power to apply company or limited partnership law by regulations to Scottish qualifying partnerships, as well as to impose new requirements of Scottish qualifying partnerships not included in company or limited partnership law, such as identity verification. It allows the Government to retain the measures introduced by the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 in relation to SQPs and to amend them in the future. Provisions about the registration of Scottish qualifying partnerships exist in the 2017 regulations, made using powers under now repealed section 2(2) of the European Communities Act 1972.

That has two consequences. First, there is no existing power to amend the regulations, other than by an Act of Parliament. Secondly, if not replaced under section 1 of the proposed retained EU law Bill, the 2017 regulations will be revoked at the end of 2023. This power will allow us to keep the existing requirements on Scottish qualifying partnerships and to add new ones. Without the amendment and new clause, it will not be possible to extend key measures introduced via the Bill, such as identity verification, to Scottish qualifying partnerships, thereby creating a dangerous loophole. I hope that my explanation has provided further clarity.

It is clear that regulations made under the Bill may make consequential, supplementary, incidental, transitional or saving provisions and regulations under specified clauses must be subject to the affirmative resolution procedure. I am sure we can write to the hon. Lady to set out exactly what those situations are.

[Alison Thewliss]

I am glad to see any loopholes getting closed, even if the amendment is sneaking in at the end of the Bill. It is good to see it. As I have said at many points in Committee, enforcement needs to be laid down on all these things, because at the moment all things to do with Scottish partnerships are not being enforced. People are not being fined for not complying with the regulations. I hope that it will result in some tightening up and some fines being issued—and, if required, in some people being jailed for not complying with the regulations as set out.

[Tom Tugendhat]

My hon. Friend the Under-Secretary has spoken to a lot of the issues, so I will just list clauses covered by the affirmative resolutions briefly—the others will be negative. That will include regulations under clauses 33, 35, 140(1), 141 and schedule 6, on powers to amend certain definitions relating to cryptoassets, clause 142 and schedule 7, on powers to amend certain definitions relating to cryptoassets and then clauses 143, 148, 149, 153 and 158. I am happy to write to the hon. Lady so that she has those details.

Amendment 43 agreed to.

Clause 159, as amended, ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned.—(Scott Mann.)

Western Jet Foil and Manston Asylum Processing Centres

Alison Thewliss Excerpts

Monday 31st October 2022 Commons Chamber

[Suella Braverman]

My hon. Friend is spot on. We have to tell the truth to the British people. These people are not all refugees fleeing war and persecution, having suffered human rights violations. They are coming here often at their own will, and often having paid tens of thousands of pounds to procure a dangerous and lethal journey illegally across the channel, because they know that our laws are not fit for purpose and they can get away with a spurious claim.

[Alison Thewliss (Glasgow Central) (SNP)]

It has been widely reported that children are being detained at the Manston site. Can the Home Secretary confirm—her Minister could not confirm it last week—how many children are on site right now?

[Suella Braverman]

We do not routinely detain children or unaccompanied asylum-seeking children at Manston, but a number of unaccompanied asylum-seeking children were accommodated, not detained, for a brief period this summer while accommodation was identified. Of course, people were evacuated to Manston yesterday, including children.

Cross-Channel Migrants: Manston Facility

Alison Thewliss Excerpts

Thursday 27th October 2022 Commons Chamber

[Robert Jenrick]

My hon. Friend raises an extremely important point, which gets to the nub of the question. These individuals are leaving a safe country, and they are leaving France, of all safe countries. We must do more to deter them from making the dangerous crossing. I will be going to France to meet my opposite number and other elected officials, both in Pas de Calais and in the French Government. An opportunity is afforded to us by the arrival of the new Prime Minister to improve relationships and see what further action we might be able to take together.

[Alison Thewliss (Glasgow Central) (SNP)]

As chair of the all-party group on immigration detention, I have heard many stories over the years of inadequate facilities for people who have come from very desperate circumstances, but the circumstances at Manston really do cause great concern. Can the Minister tell me how many children are currently housed at the facility, and what he is doing to ensure that there are no children or families held there, because it seems entirely inappropriate for anybody, least of all children?

[Robert Jenrick]

A small number of children are held at the facility. As I said in answer to an earlier question, we do prioritise families, so that families are, as swiftly as possible, allowed to leave the facility and taken to more suitable hotel accommodation. The same approach applies to vulnerable adults.

Economic Crime and Corporate Transparency Bill (Fourth sitting)

Alison Thewliss Excerpts

Thursday 27th October 2022 Public Bill Committees

[Liam Byrne]

Q That is very useful. Finally, the folks from Lloyds bank, and others, described how easy it is to move money through a network of banks and then consolidate it into a final bank, from which bad people may take their money out. We were worried about the way in which proxies in particular could be used by bad people to help with this kind of mechanism. In the Bill, we have a definition of “person with significant control”, which is someone with about 25%. Is that too high?

Angela Foyle: It is based on the Financial Action Task Force standards on beneficial ownership, which looks to people who own 25% or more, in some cases, or more than 25% in others. It is one of those challenging issues because, in relation to things such as proxies, often it is not the about the levels that a person owns, it is the fact that x purports to be the person who holds it, when actually they actually do so on behalf on y, which can be very difficult to track through.

Many people look below 25% in any event just to make sure. Particularly with sanctions, they will have a look there. But 25% is a global norm and changing it might cause other challenges. This is the question: are you satisfied that you understand who the people that you are dealing with are, and who is behind them, at all times? It is not necessarily a question of whether it should be 20%, 5% or 25%. It is a hard one for me to answer because I work with 25%, but I will generally have a good look around to see what else there is.

[Alison Thewliss (Glasgow Central) (SNP)]

Q In your evidence to the Committee, you said that you wanted Ministers to amend the legislation to ensure that accountancy firms are in the scope for indirect information-sharing provisions. Will you tell us a bit more about why that is important?

Mike Miller: Indirect information provision essentially relates to a third-party database which would allow the easier sharing of information between financial firms. The ones that are already mentioned include banks, crypto exchanges and various different entities that could be privy to malicious financial movements, essentially. The accountancy sector has not been included in that, so for the purposes of a lot of the work that we are doing about the open sharing of information with law enforcement, between bodies, between other firms, it would be helpful for the streamlined moving of information. It would certainly help accountancy firms to identify more quickly, and thus reduce the likelihood of, any bad transactions taking place. An accountancy firm could avoid getting embroiled in things it does not wish to get embroiled in if it had pre-emptive access to any intelligence—that may have been discovered by a bank, for example, looking in more detail at specific financial transactions than accountancy firms tend to—that indicated that it should not be doing business with particular entities.

[Alison Thewliss]

Q Thank you, that is useful. As one of the organisations under the OPBAS umbrella, how do you feel that is going with anti-money laundering supervision because there has been some criticism of that regime and its efficacy? Looking at the 2019-20 figures, I understand that you cancelled 10 memberships and issued 39 fines totalling £117,000 to members. What does that stand at now, and is it an effective deterrent?

Mike Miller: I do not have the up-to-date figure with me today, but I can come back to the Committee with that in writing. Generally, in OPBAS, we are obviously very supportive on the need to have professional bodies for oversight of regulation for anti-money laundering. There is obviously a Treasury consultation going on into the potential restructuring of OPBAS. We have been working closely with it to ensure that our members are represented, but also so that it will be the most effective oversight that it can be.

ICAEW is the largest supervisory body in that space. We are very proactive in taking a risk-based approach. We cover a lot of firms, and it is necessary that a lot of those inspections are carried out based on where we assume there is a higher level of risk of illicit financial transactions. Whether that should be changed is obviously something that we will come back to in the consultation.

We have been speaking regularly to Treasury and other groups. They are collecting intelligence to try to determine, I think, some concrete proposals before they put it out to consultation, but we are very supportive of OPBAS. We continue to work closely with it and have a strong supervisory body in place for the PBSs.

[James Daly (Bury North) (Con)]

Q Under the Bill exemptions from the main money-laundering offences would apply in two sets of circumstances. One is when a regulated business ends a business relationship with a client or customer and hands over property worth less than £1,000 for that purpose. The second is where a regulated business is dealing with property for a client or customer and prevents access to property of equivalent worth. Do you have any view on those exemptions and how they would potentially affect your profession?

Angela Foyle: I am not so sure the first one will affect us, at £1,000. The second one may facilitate certain activities for our insolvency practitioners, particularly where they are appointed in circumstances where they know that there has been some form of fraud—be that tax fraud or what is often called “fresh air invoicing” or invoice discounting fraud, where there is a set amount of money that is known to be tainted—because, currently, all of the assets of the insolvent entity can often be tainted, and defence against money laundering applications have to be made for each and every transaction done. By having that, they will be able to ringfence certain amounts that they know to be tainted—they would obviously do investigations to ensure that they have got that amount correct—and then deal more quickly with creditors and others with the remainder of the funds. In that sense, we certainly welcome that amendment. It is one that we raised with the Home Office, alongside the banks and, I believe, the Prison Service may have wanted it as well.

--- Later in debate ---

[Seema Malhotra]

Q To be a bit more specific, what more do you suggest should be in the Bill?

Peter Swabey: For me, it should reference the role of the company secretary. I have a slightly wider issue than that. The Companies Act 2006 got rid of the requirement for a company secretary in all companies. That was deregulatory—that was fine—but we now rely much more on the reporting that companies do and the filings that companies make, so I believe there should be a requirement for a company secretary, not just in public companies, as there is now, but in larger private companies that also have to meet some of these requirements.

[Alison Thewliss]

Q We heard earlier about some of the deficiencies in the way that documents are delivered and uploaded to the Companies House website, and how they can be used thereafter. Are there practical improvements that could be made to improve that situation, both at your end of the process, in the filing, and for the use of those documents at the other end of the process?

Peter Swabey: Yes, I think there are. We have regular engagement with Companies House and that is one of the things that it is seeking to tackle already, but will also seek to tackle through the powers and resources that it will hopefully get as a result of the Bill. It would great if everything that has to be filed at Companies House can be filed electronically. There are still a number of things that cannot be. Again, that may be changed as a result of the changes that Companies House are making to their system but, as we stand at the moment, there are things that cannot be filed electronically.

In terms of use, there is a question that companies sometimes get feedback on from shareholders, which is on the availability of information, particularly about retail shareholders, and particularly for those companies that have large registers of members. Individuals on this Committee, or me, or whoever—their name and address might be at Companies House in respect of a holding of 100 shares in a company. If it is a big public company with millions and millions of shares, that is probably not that helpful. There are people who buy copies of the register for commercial purposes. It would be quite useful to tighten that up.

[Alison Thewliss]

Q We have heard an awful lot about deficiencies in the register in terms of the information that is on there and the practical difficulties that that causes for companies who wish to interrogate the information for their own due diligence. Is that an issue you have come across?

Peter Swabey: Yes, I think it is. It is an issue in a couple of ways. We just heard about the challenges in correcting deficient information. There are a number of plcs that have reported that their registered office address has been used for companies of whom they have never heard. If you are a plc with a large number of subsidiary companies, that could quite easily be overlooked by people. As somebody said in the last session, that is then used to give credibility to the potentially fraudulent company that is being set up. Being able to fix that more quickly is certainly an advantage.

[James Daly]

Q One of the things we have talked about with every witness—you will probably give a similar answer, Mr Swabey—is that we all want to see Companies House resourced to be able to carry out the requirements in the Bill. One witness this morning made reference to the sheer volume of companies and legal entities that are registered at Companies House on a daily basis. If one of the consequences of the Bill is that registration at Companies House takes longer because people have to go through the regulations and comply with other duties, is there any consequence to that?

Peter Swabey: I think it makes it a little more difficult for some people. I am a company secretary, so I would argue that you simply have to plan it all a bit better, and perhaps think about some of that a little more in advance. It will mean that some corporate transactions that you can currently deal with very quickly by simply having a meeting in a room and agreeing that so-and-so and so-and-so are the new directors will now have to go through a process. We are all hoping that, as promised, Companies House will manage the verification process for new directors expeditiously so that that will not hold things up unduly, but it is an additional factor to bear in mind.

--- Later in debate ---

[Seema Malhotra]

Q Thank you very much, Ms Belton, for joining us to give evidence today, and thank you for all you do as well. In terms of the scale of economic crime and how much needs to happen nationally and internationally, what gaps do you see in the legislation as it currently stands that stop the UK from being able to tackle economic crime on the scale that we need to?

Catherine Belton: There is a very simple answer to this, though I should basically preface all my answers by saying that I am not an expert on the Bill like some of my colleagues, such as Oliver Bullough. I have not studied it deeply, but what I can speak to is the urgency of these reforms, because of the threat posed to our national security. There is also a dire need to push through the anti-SLAPP legislation.

All these deep-pocketed oligarchs are essentially taking advantage of our system and are able to outspend not just journalists but financial watchdogs acting in the public interest. They are outspent and intimidated out of pursuing any real investigation into financial misconduct. They know from the outset that they may lose.

You only have to look at the example of the Serious Fraud Office and its battle against ENRC, which was once listed on the London stock exchange, then delisted and owned by a trio of Kazakh fraudsters essentially. The amount they spent annually on legal cases in the UK was £89 million, which is over the annual budget of the Serious Fraud Office. Though the Bill is of dire importance, without greater spending and funding for our public watchdogs—the National Crime Agency, Serious Fraud Office and other entities—we are going to be stymied from the get-go.

[Alison Thewliss]

Q Thank you very much, Catherine. Could you tell us a bit more about why the UK has become the destination of choice for people wishing to use corporate structures for money laundering and other purposes? Could you tell us about the impact that has internationally?

Catherine Belton: The UK, like many other countries, has welcomed capital from places such as Russia with open arms for the past 20 years. It is certainly a place that Russian oligarchs have flocked to, not only because they want to be part of the UK establishment but because they have clearly taken advantage of our lax legislation and regulation compared with the US, for instance. If you are listing a company in the US you face the Sarbanes-Oxley regulations, and you have committed a crime if you are found to have lied on your financial disclosures. Here, there seem to be so many loopholes; people can get away with everything.

We only have to look at our Companies House institution to see that there is very little scrutiny of filings that people are making. We have all heard the obvious examples of people not disclosing anything. I think you are a great expert in the use of limited liability partnerships by Russian money launderers. UK LLPs have seen tens of billions of dollars’ worth of illicit Russian cash move through them over the last decade or so.

Most of those money laundering schemes have been overseen by the Federal Security Service of the Russian Federation. It has a money laundering department called Department K, which has overseen all those schemes and has had an involvement in each and every one of them. I am told by security officials in Moldova—where one scheme used LLPs to move tens of billions of dollars of cash into the UK—that essentially the schemes are used not just by Russians seeking to move money to evade customs and tax, but by the Russian Federal Security Service itself, because it sees the greater flows of cash as cover for it to move its strategic cash into our jurisdiction.

I must again point to the need for SLAPP legislation and ask whether that could, or should, be attached to the economic crime Bill as it stands. If we do not enable journalists and financial watchdogs to look at those entities without fear of getting crushed by enormous lawsuits that will cost more than anyone’s budget allows, then we are going to be open to this type of abuse of our system forever. It was only July when Dominic Raab, the Justice Secretary, finally and wonderfully—it seemed like a miracle at the time—forwarded that anti-SLAPP legislation. It was going to allow for an early dismissal mechanism for cases that were clearly an abuse of the law, and aimed at intimidating journalists and financial watchdogs out of reporting matters of public interest—whether financial misconduct or something else. There has been a great deal of turmoil in Government since then, but we are seeing that SLAPP cases have very much not gone away.

The esteemed Chatham House think-tank recently had to remove the mere mention of a Tory donor, who had previously been convicted of money laundering, from a report on the abuses of the UK system by kleptocrats. The past of our Tory donors is something that we should know about, yet Chatham House had to erase its mention of that donor from its report. Staff looked into how much it was going to cost to defend, even though it was clearly public interest reporting. There was not really much to dispute about it, but they found it was going to cost them £500,000 before the case even got to trial, which means there is something so deeply wrong with our system, and we cannot even begin to combat any of these issues without having these anti-SLAPP measures in place. That is not just for journalists but for the Serious Fraud Office and for other public interest watchdogs.

[Alison Thewliss]

Q Thank you; that is very helpful. I just wanted to ask about something else. Bill Browder had suggested a sort of “adverse costs” amendment, to prevent law enforcement companies from not being able to afford to take a case against these people. Would you support that?

Catherine Belton: Yes, for sure. Obviously, the companies pursuing these abusive cases should face having to carry the full cost of the case. I have a colleague at the Foreign Policy Centre, Susan Coughtrie, and she and Charlie Holt of English PEN have been working on a new Bill for this SLAPP reform, and I very much recommend that you speak to them as well. That Bill would provide even tougher requirements for cases to really show a likelihood of success.

What the Ministry of Justice proposed was like a three-step set of criteria for judges deciding whether a SLAPP case is a SLAPP case, and whether it should be dismissed before the costs racked up too highly. One of those criteria was whether the case being pursued had a realistic chance of success and it is very clear that this type of criterion needs to be toughened up. I certainly recommend that you speak to Susan Coughtrie at the Foreign Policy Centre about ways in which to do that.

However, I guess that my question to you would be: “Do you think there is a significant possibility that the anti-SLAPP Bill could be attached to the Economic Crime Bill? Is that something that will this speed up?” It is so vitally needed—more than ever. I mean, it is completely—

[The Chair]

Catherine, I am really sorry to interrupt you—

[Alison Thewliss]

I think my colleagues and I are interested in hearing this.

--- Later in debate ---

[Seema Malhotra]

Q On the attractiveness of the UK, you have mentioned enforcement, but from your research in this area, what would you highlight as being the weakest points in enforcement?

Professor Jason Sharman: The UK has a combination of a good reputation and lax enforcement. From the point of view of a launderer, that is a bonus: you get double. You get the appearance of probity—other people have mentioned the use of UK companies to open foreign bank accounts—with not much scrutiny and even less enforcement. Transparency is all good and well, but more information by itself does not lead to stronger action against money launderers or corrupt officials.

[Alison Thewliss]

Q There has been a lot of discussion about anti-money laundering supervision, and the effectiveness of the agencies that the Government expect to carry out those duties. Are they the weakest link in the chain, and could more be done to tighten up that anti-money laundering supervision, to shut the door, and to stop these companies from beginning their business here?

Professor Jason Sharman: There is certainly more that could be done. Some of it has been mentioned by other people; more money is the obvious one, but that may be necessary but not sufficient. In some ways, the career structure and career incentives for people who work in these agencies needs reviewing: if they start an investigation and it goes well, they get a small bonus to their career. If they start an investigation and it goes badly, they get a very big, indelible black mark, so in terms of career progression, it is safer for them not to investigate things.

One of the main sources of support has not been fully used: there are a lot of people outside the formal enforcement agencies who are very keen to help in this cause, including journalists and those in non-governmental organisations, as well as in the for-profit sector. That potential has not been tapped, so there are certainly things that the Government and the state could and should do, particularly in terms of regulatory agencies; but the area where I think it is possible to make most progress is probably beyond that.

[Alison Thewliss]

Q That makes sense. Certainly, there have been lots of times when I have been in rooms with a group of people who have solutions to tackle this, and Government should be doing more to make sure that they are listened to. Could I ask about the abuse of limited partnerships, secrecy jurisdictions and things like that? Could more be done to tighten up those rules? It feels as though there is an awful lot of abuse of those corporate structures, and very little scrutiny.

Professor Jason Sharman: It depends what you mean by “secrecy jurisdiction”. A person who has studied this for a long time said this: “People are not surprised when I tell them that the most important tax haven in the world is an island. People are surprised when they hear that the name of that island is Manhattan. People are not surprised to hear that the second largest tax haven is a city on an island. The city is London, and the island is Great Britain.”

We recently formed a shell company with co-authors Michael Findley and Dan Nielson in the United States. It took 137 seconds to incorporate that company. Here, it would probably take you a little longer—it might take you as long as 10 minutes—but you do not really have to show ID in any case, so the barriers are pretty low. If you do not want to use anything as fancy as a limited liability partnership, you can just use a plain old company, and that works pretty well for holding a bank account overseas.

[Alison Thewliss]

Q The Government have talked up the benefits of being able to incorporate companies fast. Do you think there needs to be a bit more grit in the system to allow for scrutiny, rather than speed?

Professor Jason Sharman: I think so. For me, it is telling that in jurisdictions for which incorporations are their lifeblood, such as the British Virgin Islands, it is much slower to incorporate. It takes close to two weeks to incorporate in the British Virgin Islands, and it takes about $1,000. The British Virgin Islands get half of their Government revenue from incorporation fees. They have a real interest in making sure their company registry works well. No one likes red tape and filling out forms, but the idea that you might have to spend a couple of hours instead of 15 minutes, or £50 instead of £12 is, to me, not unreasonable.

[James Daly]

Q Thank you for that, Jason. You have given an example already, but I was wondering about the international context. We have Companies House. Can you give me an example of the equivalent in European countries or America and the difference you perceive between our Companies House and theirs?

Professor Jason Sharman: I feel sorry for British Companies House, because it has been given a lot of work without the resources to carry it out. The mismatch between what is expected of an institution and the resources it has to achieve those ends is greater. Company registries are passive, archival organisations.