Sanctions and Anti-Money Laundering Bill [HL]

Baroness Butler-Sloss Excerpts

Ping Pong (Hansard): House of Lords
Monday 21st May 2018 Lords Chamber

[Lord Beith (LD)]

We should surely consider very carefully when what seems like a very necessary measure to tackle a great evil confronts a constitutional objection; this is not the way in which such a measure ought to be introduced. There are also qualifications I might make about the potential effectiveness of the public open registers to be imposed on these territories in dealing with the evil being addressed. But there is no question that those who are advancing the case are doing so because they see an urgent need to tackle this evil and see this as likely to help.

However when it comes to a constitutional objection, we have to think carefully. There are two constitutional issues at play: one is that the elected House has made a clear decision, following debates in both Houses, that we should proceed along this road. We have to accept that, as the Government have done. But we cannot do so without reflecting on the impact this will have, and in particular on the constitutional status of the territories concerned. They are, of course, a wide variety of territories, defined in Schedule 6 to the Nationality Act. That includes not just the British Virgin Islands, the Cayman Islands and Bermuda but the British Antarctic Territory, the British Indian Ocean Territory and the Pitcairn Islands, with about 50 inhabitants. It is not entirely clear how the Minister with responsibility—the noble Lord, Lord Ahmad, of course—will deal with the situation as it will affect some of those territories.

That variety also illustrates that there is a range of democratic and other development in this list of territories which includes many at different stages. The territories that have attracted most attention are those which, by and large, have well-embedded constitutional arrangements, introduced by this country, of which a major component is legislative autonomy. The question that we now have to answer is: what do we do about the legislative autonomy that we purport to have given to people, if outside the parameters set when we gave that autonomy we then seek to legislate for them? That question remains unanswered in this process.

When Britain decided what its policy towards former colonies would be, it did not take the French approach. The French approach, in relation to a number of territories, including neighbours of the territories we are talking about today, was to treat them as integral parts of France and give them representation in the National Assembly. We are having this argument and nobody from any of the overseas dependent territories is able to take part in the debate; it is all being done by people who, for different reasons, are aware of them, friendly towards them or simply, in my case, see it as a constitutional issue for them.

We did not take that approach. Are we now saying that the idea of developing them as separate democracies through legislative autonomy is not one that we will pursue any more? We will have to give them some kind of assurance if they are to understand what their constitutional relationship is. Britain is not just a franchise brand that we offer and take away at a moment’s notice. It is a country which has promoted the democratic development of its former colonies and we have to ask whether we can really do that if we insist on legislating for them in areas for which we have given legislative autonomy.

There was a question from the Labour Front Bench a moment ago about what would happen if there was an international standard and one of the territories declined to implement it which, as has been pointed out, has not been their practice up to now. They have implemented all the international standards. However, it is a perfectly legitimate question and the answer is that this is an area in which we have not given legislative autonomy to those territories. We have retained UK responsibility to deal with their international relations and their compliance with international treaties. We would indeed impose, in those circumstances, exactly within the parameters of legislative autonomy that has been given.

I pay tribute to the efforts devoted to this subject by the Minister, which I think are partly motivated by the fact that he has to deal with the consequences. He is the person who is responsible for our relations with these territories. But how can we reassert the constitutional relationship between the United Kingdom and those territories to which it has given legislative autonomy in the context presented by the decision that the House of Commons has taken?

[Baroness Butler-Sloss (CB)]

My Lords, I am a vice-chairman of the All-Party Parliamentary Group for Gibraltar, which, apart from one brief mention by the Minister, has not been so far commented on. Listening to the noble Lord, Lord Anderson, I wondered, as between the United Kingdom and many of the overseas territories, where the mote and the beam lay. I will not pursue that any further, but I think that it may be where the noble Lord may not appreciate that it is.

Gibraltar is entirely compliant with all the current requirements. It is bringing a public register into its law early next year. It is unnecessary, unhelpful and inappropriate that Gibraltar should be held under the clause proposed in Amendment 22. It is not an appropriate way in which to deal, as the noble and learned Lord, Lord Neuberger, and the noble Lord, Lord Beith, have already said, with a country that has had its own constitution since 2006 and is entirely compliant. It is sad to find that countries such as Gibraltar should be under a proposed regime that would interfere with its constitution, as has already been set out.

It is obvious that what should have happened—it seems to me that the Minister was making it very clear—is that there should be encouragement to those countries that are not yet sufficiently compliant. However, that does not apply to any of the countries that have so far been referred to. It is very sad indeed that the way in which the other place has behaved on this matter brings us to this unhappy situation, pointed out so admirably by the noble Lord, Lord Beith.

[Lord Faulks]

My Lords, I think that the noble and learned Baroness is quite right with her mote and beam analogy. We must think about London, as my noble friend Lord Naseby, said. In 2016, David Cameron announced his intention in respect of anti-corruption and a register of beneficial interests. Since then we have had the Criminal Finances Act 2017 and this Bill. In both of those, my noble friend Lord Hodgson and I were keen to ensure that the Government did their best to stem the flood of dirty money, particularly into property money in London, by setting up a register of beneficial ownership which, when combined with unexplained wealth orders, might really do something to prevent what is a real obscenity about London property at the moment. So much money is flooding into the market yet so few people who start their work in London can afford to live. That is the mote that we have in London.

I wanted to press the matter to a vote, because our intention was to hurry this up, but I was met with formidable opposition from the Government, explaining how difficult the whole thing was. Finally, just before a vote might otherwise have taken place, I was reassured that there was much activity in this regard and there would be regular updates and a ministerial Statement. Sadly, the earliest the register would be legislation-ready was 2021—so five years after David Cameron’s summit. Here we have an amendment put down in the Commons after very little of the preliminaries, as has been quite rightly pointed out, with no consultation and nothing of the sort that one would expect with such a radical procedure. It states:

“The Secretary of State must, no later than 31 December 2020, prepare a draft Order in Council”.


It is a “must”, not a “may”. The only part of this amendment which is, perhaps, acceptable, is the very first part, describing the reasonable assistance to be given to the Governments of the British Overseas Territories. However, I apprehend that that is being—and has been—given for some considerable time. I disagree with my noble friend Lord Naseby on only one point: the Minister, not only today but in responding to the amendment so eloquently moved by the noble Baroness, Lady Stern, on Report, vigorously defended the position of the Government and of the British Overseas Territories in their attempt to comply with the natural desire that we all have to stamp out corruption.

This amendment goes on to require an Order in Council to be laid before Parliament, but then provides that it ceases to have effect,

“if not approved by a resolution of each House of Parliament before the end of 28 days”.

I wonder if a resolution of that sort would meet with the approval of both Houses of Parliament, having regard to the hasty way in which this amendment was introduced and to the real difficulties that it will cause to our friends in the British Overseas Territories.

This amendment is ill thought out, no doubt born out of an entirely proper desire to stem the flood of corruption. However, in so doing it damages our relationship with the British Overseas Territories at a time when we need all the friends we can get outside this country. The amendment asks them to do what is required in a timeframe which is much shorter than that for this country: the mote and beam analogy is entirely appropriate.