Economic Crime and Corporate Transparency Bill

Baroness Blake of Leeds Excerpts

2nd reading
Wednesday 8th February 2023 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Wallace, one of my fellow Yorkshire advocates; we have done a lot of work together in that part of the country. I add my thanks to the Minister, the noble Lord, Lord Sharpe of Epsom, and his team for meeting us earlier this week. I also welcome the new Minister, the noble Lord, Lord Johnson of Lainston, to his place, and very much look forward to continuing to work with both in a constructive way.

I am very heartened by the debate, as there was so much consensus from all Benches; many have remarked on the universal welcome for the Bill. Both Ministers must be aware of the grit and determination to make sure that something comes from this that is meaningful, challenging and effective. I have a sense that there will be several Committee days where we will look at the detail in so many of the areas we have covered tonight but with which we cannot deal in the few minutes we have left. As well as that consensus, we have also heard concerns in the incredibly well-informed contributions across the House about the time taken to bring in the legislation and the gaps that remain within it.

There are some interesting questions that I would like some answers to from the comments that have been made. For example, where is the register of overseas properties? The noble Lord, Lord Vaux, made a couple of interesting comments that have not been picked up, and asked a very simple question. What have the Government learned so far from attempts that have been made to bring legislation forward?

I was very struck by the comments of the noble and learned Lord, Lord Garnier, about the victims of fraud. We should, as my noble friend Lord Sikka, said, look at the police response in this case.

[Lord Leigh of Hurley (Con)]

I do not think that the House needs to be detained by references to the noble Lord, Lord Sikka, as he is not in his usual place. This is the second time in a debate that he has not been in his usual place, and therefore we need not spend time analysing and commenting on his remarks.

[Baroness Blake of Leeds (Lab)]

I apologise and accept the noble Lord’s point entirely—forgive my lack of experience in these matters.

On the experience of cyber mentioned by my noble friend Lord Davies, and to pick up on the point made by the noble Baroness, Lady Morgan, I have received a text telling me that my parcel has not been delivered. I can tell noble Lords that I do not do ordering online for parcels. My kids do—they have them piling up by the door—but I do not. That is exactly what we are all subject to. One momentary loss of concentration and we go down a terrible pathway that is very difficult to get out of.

I am also interested in alternative ways in which to pursue litigation, raised by the noble Lord, Lord Faulks. We do not do enough in this area; there is too much of a confrontational approach, which perhaps holds us back. We have to be honest that the delay between 2016, when the Government first promised reform, and today, has seen years of economic crime coming through and affecting so many people. As we heard earlier in the debate, we have also seen a significant increase in the scale of the issue in recent years. As the noble Lord, Lord Clarke of Nottingham, said, this is the money laundering capital of the world. What a terrible state of affairs.

My noble friend Lord Ponsonby gave us detailed statistics that I shall not go through again. I think that we all know the scale of the problem that we are facing. What we do know is that economic crime has far-reaching consequences for individuals, businesses, our broader economy and our national security. My noble friend Lord Browne gave such a brilliant and passionate exposure of the impact across such a wide piece. He described it as being on an extraordinary scale—the noble Baroness, Lady Morgan, called it “prolific”. We should remember the extent of what we are talking about here.

I am not sure that we have paid due attention to the huge damage that this does to our national finances, and we should look through the prism of that. The numbers quoted by different organisations are extraordinary. The National Crime Agency estimated £100 billion annually, and Spotlight on Corruption estimated £190 billion annually. These are extraordinary numbers that we cannot afford. Of course, what we know is that we have to follow the money. Where does this money actually go and what is it then used for, in the hands of criminals and corrupt Governments, with economic crime funding other serious organised crime such as people trafficking, drug smuggling, arms dealing and fraud? As we have heard from many contributions, it also helps those in power abroad looking to silence whistleblowers, muzzling democratic opposition and, as we know, waging war against other nations.

Britain’s reputation as an excellent place to do business and a supporter of the rule of law and democracy worldwide risks being eroded further if we continue to allow criminals and oligarchs to use London as a safe haven for their ill-gotten gains and to use the law to silence whistleblowers. And what a day to talk about this, when we have had the enormous privilege of President Zelensky coming to address both Houses.

As we have heard, there is much to welcome in the Bill, but much more work is needed to achieve the necessary improvements. I am pleased, as others have expressed, that the Government have responded to concerns from the other place relating to corporate criminal liability, recognising the significance of failure to prevent, to disclose in order to prevent, detect or investigate economic crime. We will be examining the wording from the Government on this issue closely. They must be strong enough to effectively tackle fraud at the scale at which British people and businesses are exposed to it, as we have heard expressed so eloquently this evening.

We have heard a lot of contributions on the provisions on the reform of Companies House. I do not want to dwell on that here; we will obviously come back to it. I will just say that I believe that the changes that are being proposed are root-and-branch changes and should be welcomed. But, as so many have expressed, it remains questionable whether the scale of the problems has been fully taken into account and whether enough resource and, importantly, capacity are on hand to deal with the massive task before us.

The Bill also misses the opportunity to strengthen labour market enforcement, including infringements of national minimum wage law. As we have heard, the loopholes in the overseas register need to be looked at again, as does the strategy for recouping assets seized during economic crime enforcement and, again, ensuring that they reach the victims. Businesses will be looking to the proposed legislation to provide long-overdue consistency and clarity and—above all—transparency in proceedings. Achieving adequate accountability and the ability to close loopholes will remain priorities in the next stages of the Bill.

As I have said, this Bill is welcome, but it is certainly not finished. The speeches across the House today pay testament to that and demonstrate the House’s desire to get this legislation right. There is an expectation of movement from the Government. I look forward to working with both Ministers to make sure that we get the legislation to the place it needs to be.