Economic Crime and Corporate Transparency Bill

Baroness Bennett of Manor Castle Excerpts

2nd reading
Wednesday 8th February 2023 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Thomas of Gresford, to agree with everything he said, particularly as a former newspaper editor, and to offer Green support for work to take his ideas forward. He made me think of many nights huddled over a screen with an evening lawyer, anxiously worrying about whether we could get away with a few certain words. There is a huge temptation to go down the easy and safe route and just knock those words out, but that is almost invariably knocking out, and denying the public, a truth.

I begin by reflecting, as a number of other noble Lords have done, on the scheduling issue, which is far from trivial. The Grand Committee Room is empty today—it is where we were to be in Committee on the Financial Services and Markets Bill—because representations to the usual channels succeeded, as they so rarely do, in saying that that Bill should not be conducted in parallel with the Economic Crime and Corporate Transparency Bill, as the same people and issues are involved. The noble Lord, Lord Davies of Brixton, said that there was overlap. There is much more than overlap; we have two Bills pulling 100% in 180-degree opposite directions.

This Bill is heading in the right direction. I am delighted to say, as I so rarely do, that the Green group backs the general tenor of the Bill and wants to work with many other Members of your Lordships’ House to strengthen it. I agree with much of what the Minister said in his introduction. As well as discussing the weakness of Companies House, he said that the current system exposes the UK to corruption, that we are open to crime and that criminals are provided with the veneer of legitimacy—all of which was laid out in forensic detail by the noble Lord, Lord Sikka. I entirely agree with the noble Lord, Lord Vaux, who said that

“high levels of economic crime … have been allowed to build up … for far too long.”

I have to go back a second and reflect on what a difference two years makes. I perhaps need to apologise in advance to the noble Lord, Lord Agnew of Oulton, because I am going to quote his own words from two years ago back at him. I know that he is speaking after me. I would say in advance of that that what the noble Lord was saying then reflected what many other people in your Lordships’ House were also saying. This was in the Second Reading of the Financial Services Bill two years ago. The noble Lord, Lord Agnew of Oulton, said:

“The UK is internationally recognised as having some of the strongest controls worldwide for tackling money laundering and terrorist financing”,


and he claimed that we had

“a whole-system response to economic crime.”—[Official Report, 28/1/2021; cols. 1880-81.]

I do not think that that reflects the tenor of the debate today from all sides of your Lordships’ House, including from the Dispatch Box.

We are in an area here where, as with so many, the Green Party has led and others are now following. We have been saying, as the noble Baroness, Lady Stowell of Beeston, said, that London is the “best place” to hide from legitimate scrutiny. That is something that the Green Party has been saying for a very long time —that the centre of global corruption is the City just down the road from here.

I want to lead your Lordships’ House further in the direction of making a link with the Financial Services and Markets Bill, as the rescheduling itself acknowledged. There are two particular elements of that: the addition of “competitiveness” to the aims of the Financial Conduct Authority; and, indeed, the way in which the Financial Services and Markets Bill seeks to deliver what has been known as the Chancellor’s Edinburgh package of reforms, which, to quote Transparency International, reinforces a “strongly deregulatory approach”.

It is worth looking back and highlighting the speech of the noble Lord, Lord Browne of Ladyton, and to add to that some of the Transparency International figures, which refer to 929 cases, with 89 companies involved in corruption and money laundering in the 10 years from 2009. Some £137 billion in economic damage has resulted. For thousands and thousands of UK companies—maybe tens of thousands—their business model is based on facilitating crime and being enablers.

We have too much finance; that is the name of a growing body of literature. We suffer from a finance curse, just as some countries suffer from a resource curse. It is too expensive for us to continue to base so much of our economy on this—and the damage, of course, is far from happening just here in the UK. The High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda, or FACTI, focuses on how the poorest and most vulnerable pay for so much of this corruption and fraud.

In your Lordships’ House, the noble Lord, Lord Goldsmith, and I had an exchange on corruption and its impacts on the Democratic Republic of the Congo. In a subsequent Twitter exchange, the noble Lord felt that perhaps I had been unfair to him in that he said that, yes, he had acknowledged that corruption was a big issue—but the noble Lord spoke about corruption in the Congo. I wanted acknowledgement from the Government that a huge amount of the corruption affecting the Democratic Republic of the Congo originates just down the road from here.

A number of points have been made so well that I shall not go over them again. I shall just note Green support for what the noble Lord, Lord Sikka, said. The idea of transparency for corporate tax returns is an excellent idea, and I look forward to working with the noble Lord on that in future. The noble Lord, Lord Vaux, gave us a very clear outline of how Transparency International has shown that the first economic crime Act is not working and has a huge way to go, albeit that it represents some progress. Many noble Lords, including the noble Lord, Lord Thomas, focused on SLAPPs.

I want to take a moment to focus on the absolutely crucial importance, as I see it, of the “failure to prevent” amendment, and the detail of how important it is going to be. I point out that, in the 2015 Conservative Party manifesto, it said:

“We are also making it a crime if companies fail to put in place measures to stop economic crime, such as tax evasion, in their organisations and making sure that the penalties are large enough to punish and deter.”


That was something promised in 2015, and we are getting on for a decade on from there, and it is clearly desperately needed. Of course, the Law Commission paper of June 2022 focused on the importance of this, as did your Lordships’ House’s committee in its report on the Fraud Act 2006, Fighting Fraud: Breaking the Chain, published in November 2022. The UK Serious Fraud Office and the Crown Prosecution Service have expressed their desire to see this delivered.

I finish by returning to where I started, and the shocking idea, which we have not yet heard from anyone else in your Lordships’ House, made by making the link between the Financial Services and Markets Bill and this Bill. A cleaner financial sector will be a smaller financial sector—it has to be, because fraud and corruption are a built-in design feature of so much of our current system. We have to rethink the Financial Services and Markets Bill and rethink the structure of our economy around finance, and we have to think that, if this Bill really delivers on its promises, there will be a lot of empty offices in the City and Mayfair that we will have to find a new use for, and there are many things that we could do to deliver much better for the British people and the world than the current corrupt financial sector elements that now occupy them.

--- Later in debate ---

[Baroness Bennett of Manor Castle (GP)]

My Lords, can the Minister briefly address my central point, that the Financial Services and Markets Bill, with its deregulatory direction, goes in the opposite direction to the Government’s stated aim in this Bill?

[Lord Sharpe of Epsom (Con)]

Yes, I can. I do not think that deregulating legitimate financial operations and going after economic crime deserve to be talked about in the same sentence. They are very different things.

I have endeavoured to address all the contributions made by noble Lords today. I look forward to further debate and discussion in Committee as the Bill continues its passage. I very much welcome the grit and determination of the noble Baroness, Lady Blake, and am very happy to continue engagement as we go forward.