Economic Crime and Corporate Transparency Bill

Baroness Morgan of Cotes Excerpts

2nd reading
Wednesday 8th February 2023 Lords Chamber

[Baroness Morgan of Cotes (Con)]

My Lords, I draw attention to my interests as a director of the Financial Services Compensation Scheme, chair of the Association of British Insurers and a director of Santander UK. I welcome my noble friend Lord Johnson to his position on the Front Bench, and I thank my noble friend Lord Sharpe for our very helpful meeting and conversation yesterday.

Like others in this House, I welcome this important Bill, which, as we have heard, is the second instalment, after the Bill we saw last year. But I agree with the noble and learned Lord, Lord Brown, and others that the Bill will need to be significantly strengthened as it goes through this House, for the reasons set out so far. If noble Lords did not know by now, I was asked, and was delighted, to chair the House of Commons special inquiry into the Fraud Act 2006 and digital fraud last year. I pay tribute to the work of the committee staff—the clerk, the research assistant and those who handled communications—who were truly excellent. The difficulty with having such competent and engaged members of the committee is that all of those who have spoken so far have taken all the best lines from the report and all the key points, so I will not trouble your Lordships for too long.

I will confine my remarks in this debate to fraud in particular, because, as we heard, the scale of fraud, particularly fraud committed online, is truly prolific now. A person in England and Wales aged over 16 is more likely to be a victim of fraud than of any other crime, including violence and burglary. To anybody who thinks, as we have heard, that these are victimless crimes where simply paying out money will put it right, I say: that is simply not the case.

I will raise four specific areas briefly. First, we have already heard the committee’s calls and those of many others to introduce a “failure to prevent” offence. The committee was very clear in its support, and the noble Baroness, Lady Bowles, clearly set out what the committee called for. This is as much about changing behaviours, and the behaviours of those at the top of these organisations, as it is about launching many prosecutions—although that would perhaps not be a bad thing either in some cases. I understand that the Government are interested in, and committed to, introducing such an offence. The Law Commission has also stated that this is necessary and I want to recognise the work of Sir Robert Buckland in the other place, who led part of the debate on this.

The committee specifically looked at the whole of the fraud chain—not just the end, when the money is eventually paid out to the fraudster, but right at the start, as the noble Lord, Lord Vaux, said. I would be very disappointed—in fact, I think it would prompt some of us to want to strengthen the Government’s hand on this—if such a “failure to prevent” offence did not cover all of those along the fraud chain, particularly, as we have heard, the telecoms companies, which are responsible for, and do not seem to have much interest in, the significant number of phishing texts, smishing and all sorts of other “ishings” that you could possibly think of, which come via our mobile phones. But this applies to the online platforms and the internet service providers as well.

My noble friend mentioned the Online Safety Bill, but this is not sufficient, because we are talking about not just fraudulent advertisements but fraudulent emails and text messages containing these links. I defy any Member of this House, or anyone listening to this debate, not to have received at least one of those emails or text messages, inviting them to click on a link and share their details, in the course of even just the last week or so. Obviously, we will wait for the drafting, but I hope that Ministers are getting a clear sense from this House of what we want to see in that. As my noble friend Lord Young said, this drafting will also need to address the identification doctrine.

Moving on, we have heard that Companies House fees need to be significantly increased. As we explored in the committee, there was a question about whether fraud is underresourced, underprioritised and under- appreciated by the law enforcement authorities. As we have also heard, many good, decent citizens access Companies House to check whether a company looks legitimate before they part with their hard-earned cash, so, if Companies House charged more for the setting up of companies, could that money be recycled back into paying more for our law enforcement?

Thirdly, on the sharing of information, I say to the noble Lord, Lord Davies, that there is a fourth Bill that we should also be interested in: the Data Protection and Digital Information Bill. I understand that, in Clause 175 of this Bill, there is a carve-out in relation to information sharing for data protection. But, until we have seen how the Data Protection and Digital Information Bill progresses—I am not sure when the next stage is—it is important that these two Bills work together to make sure that, yes, information sharing is perhaps subject to data protection rules but also that there is not such a carve-out that what we are approving in this Bill becomes worthless because of what is in the other Bill.

Finally, as we have already heard, the committee report was published in November last year. The response from the Government was due by 12 January, and today is 8 February. I am relatively patient, but patience is wearing thin, because the Government owe us a response—this is an important issue. As we also heard, we are waiting for the long-awaited fraud strategy from the Government, as well as the national economic crime plan. I heard what the noble and learned Lord, Lord Brown, said about the fraud strategy; perhaps he is more patient, but I think it is time we saw it, because we as a committee found that there was just not enough information about fraud or enough knowledge about who the fraudsters are and where the money is going. But we do not see the fraud strategy and cannot start to understand in particular who in government is responsible. We were very clear: a Cabinet sub-committee, with the Minister for Security chairing it and being responsible, is one way to go—that is what we thought, but there may be other options. A lot about fraud needs to be moved on in this country, as we have heard. So I urge Ministers to publish the fraud strategy in the next few weeks, and I suggest that a good publication alongside it would be the response to our committee.

In conclusion, I welcome the Bill, but it will need to be strengthened. As we have heard, the Bill really matters for how this country is seen around the world. So I hope we will be able to work together to significantly strengthen it.