Economic Crime (Transparency and Enforcement) Bill

Eleanor Laing Excerpts

Committee stage
Monday 7th March 2022 Commons Chamber

[Dame Margaret Hodge]

Cryptocurrency has become the new way in which money is laundered. Corrupt and stolen money ends up in the pockets of one individual, and then gets back into the system for them to spend it elsewhere. I completely agree with the hon. Gentleman: it is important that we get our heads around cryptocurrency and that we legislate appropriately to tackle it.

The other way of looking at this issue, and the reason why we have tabled the new clause, is that our law enforcement bodies, while they are not as good as the Americans’, bring resources back to the UK through fines. Between 2016 and 2021, the law enforcement bodies brought £3.9 billion back into the UK coffers. If that money had been reinvested, which is one of the ideas for funding the enforcement agencies, it could have brought an extra three quarters of a billion pounds to be spent on enforcement by all those agencies. That is a lot of money, and it would have been effective; it would have had a snowball effect of increasing our budget.

New clause 2 is there to ensure that we get the enforcement right—that we have not only the powers but the resources we need to make sense of and put into effect the important legislation we are passing today. I hope it will have support right across the Committee; it certainly has support among Back Benchers, and I would love it if the Government accepted it and it became part of the Bill.

[The Chairman of Ways and Means (Dame Eleanor Laing)]

We have a great many amendments to consider this evening, and it would not be right if the people who tabled those amendments did not have the chance to speak to them so that the Committee can be helped to make its decisions on them, so I must appeal for shorter speeches now. I am not complaining, because so far we have had substantial speeches about substantial amendments, but will Members who are supporting amendments rather than speaking to their own amendments please consider making shorter speeches?

[Kevin Hollinrake]

It is a real pleasure to speak after the right hon. Member for Barking (Dame Margaret Hodge). We have worked together on so much, and we have worked on this legislation for a long time.

I will talk about new clause 2 when I come to my comments on whistleblowers, but the main thing I want to talk about is amendment 64. Many hon. Members have spoken about the danger of asset flight. In reality, we know it is happening already; people are not going to wait for this legislation to come into effect to try to hide their money. Whether the transition period is 18 months, six months or 28 days does not really matter, because the individuals in question can move their money around so quickly that much of it will have happened already.

I have supported amendment 16 in the name of the official Opposition, but I would like to think that my manuscript amendment 64, which I am very grateful to Mr Speaker and the Deputy Speakers for selecting, might be more effective. There are some other important amendments that have been tabled, such as new clauses 28 and 29, on freezing orders, but the difficulty with those new clause, as I said in my earlier intervention, is that we cannot freeze something that we do not know exists. That is very difficult to do. We need to look behind the curtain at who owns the assets. That is obviously what this Bill does; it is primarily about transparency and being able to see who owns what.

I am grateful for the support of many people on manuscript amendment 64, including my hon. Friend—he should be right honourable—the Member for Weston-super-Mare (John Penrose), the Government’s anti-corruption champion. We have worked closely on this, and as soon as we looked at the Bill we thought, “There’s something missing here. Clearly, these people are going to move this money around very quickly to make sure it’s not touched.”

I think this amendment probably does something, although I am not a lawyer—I looked at this over the weekend and I did not have any legal input, so I cannot say it is totally fit for purpose and I am interested to hear what the Minister has to say about it. He has engaged on this issue all the way through and been willing to discuss with me, as we did yesterday, what we can do to close this potential loophole. The amendment would simply require beneficial ownership to be registered with Companies House, which links into the Land Registry’s requirement to ensure that something is properly registered with Companies House before it allows a transfer or a sale to happen. Without the Land Registry doing that, of course, people cannot sell or transfer a piece of land or property.

--- Later in debate ---

[Kevin Hollinrake]

That is what it will do. It is a public register, of course, so the beneficial owner will be revealed and, if that person is on the sanctioned list, that asset can be frozen. That is how it would work. In the legislation, schedule 3 paragraph 6 requires the Land Registry to do that, and it can prohibit or restrict a transfer or a sale. That is the key to this. The only respect in which the legislation is not currently fit for purpose, in my view, is that that does not take effect for 18 months. If we took those clauses out or changed the timescales so that it came into immediate effect on the commencement date of the legislation—that is, from day one—it would potentially prevent that sale or transfer of assets from one person or entity to another and the moving of those assets around, and thus prevent what we are all concerned about—asset flight.

I know the Minister has responded to this question a couple of times from the Dispatch Box, but I think there is a good chance this particular amendment would pass if pushed to a vote. I would appreciate confirmation from the Minister at the Dispatch Box whether the Government will, as he has indicated they would, table an amendment in the Lords that has a similar effect, so that we have a day one restriction or prohibition on the sale or transfer of assets from one to another. If he is willing to do that—[Hon. Members: “Do it now!”]

[The Chairman of Ways and Means (Dame Eleanor Laing)]

Order. We are not having this—we are getting on with things. Otherwise, people who have something to say will not get a chance to say it. Mr Hollinrake, come on!

[Kevin Hollinrake]

I was just trying to establish whether this would be done in the Lords if it was not done here tonight, Dame Eleanor. Perhaps the Minister will say it later in his summing-up.

--- Later in debate ---

[The Chairman of Ways and Means (Dame Eleanor Laing)]

Order. That was a very long intervention and it was too confusing. Was the hon. Lady speaking about something completely different from that which the hon. Member for Oxford West and Abingdon (Layla Moran) was discussing?

[Sarah Olney]

I was talking about my new clause 13—

[The Chairman]

It is not the hon. Lady’s new clause; it is down as the Liberal Democrats’ new clause. Is it the official Liberal Democrat—

[Sarah Olney]

I beg your pardon, Dame Eleanor. The new clause is in my name, but I apologise for taking too long on my intervention.

[The Chairman]

We have to be careful not to allow things to be confused at Committee stage. Everyone gets their turn.

[Layla Moran]

Thank you, Madam Deputy Speaker. I thank my hon. Friend for her intervention. When the Secretary of State for Business, Energy and Industrial Strategy was at the Dispatch Box, he said that he would look closely at that amendment—it was the day before the vote on the National Insurance Contributions Bill—and I urge the Minister to look at that again.

--- Later in debate ---

[Liam Byrne]

Thank you for calling me to speak, Dame Eleanor. I thank the Minister for his presentation to the House and for the spirit that I thought he brought to his remarks at the outset. He slightly walked back from some of that consensus, but I make the point to him that many of us across the House think that the Government’s approach to tackling economic crime is all holes and no net. We have tried, in 27 pages of amendments, to turn what should be a net into some snares. That is why we cannot understand why the Government are not taking on board some of the smaller, technical drafting amendments that we proposed tonight—and frankly, some of the bigger moves. The Minister has it in his power to drive those through tonight so that by the time the sun rises tomorrow, we would have in our country a much stronger framework for tackling economic crime to take to the other place.

I want to speak to the two amendments in my name—amendments 37 and 38—and weigh in on the debate on amendment 26 and new clauses 2 and 29. Let me start with amendment 26, because I was a Home Office Minister for a couple of years, and I have won and lost many cases as a Home Office Minister. I have to say to the Minister that the failure to remove the words “knowingly or recklessly” from the Bill is frankly the oligarchs’ loophole—their “Get out of trouble free” card. I add my plea to those of other hon. Members that we remove those words. Otherwise, frankly, we will stand by and watch the richest people on earth driving a coach and horses through our legislation.

My second point is about new clause 2. As my right hon. Friend the Member for Barking (Dame Margaret Hodge) said, the heart of our problem with sanctioning—our frankly embarrassing performance on it—is that as well as not having the right powers, we just do not have the right resources in place. The fact that the Government took away the title of Minister for Economic Crime tells us everything we need to know about their performance and attitude hitherto.

As my hon. Friend the Member for Rhondda (Chris Bryant) said, the United Kingdom has sanctioned 34 individuals and entities since the extension of the invasion; the EU has sanctioned more than 500. Of the Navalny list of 35 that the hon. Member for Oxford West and Abingdon (Layla Moran) read out in the House the week before last, the UK has sanctioned just eight; the EU has sanctioned 19. However, what really troubles me is the question of resources, because that is obviously the core problem.

When I submitted parliamentary questions to the Foreign Office, the Treasury and the Home Office last week, I was frankly horrified. My question to the Foreign Office, which leads on sanctioning policy, was pretty straightforward: how much money is devoted to sanctioning, and how many civil servants are working on it? The answer from the Under-Secretary of State, the hon. Member for Chelmsford (Vicky Ford), was about 16 lines long and did not mention either how many civil servants are working on sanctioning or how much money is being spent.

An answer to the same question came back from the Minister for Security and Borders. In a way, I admire the number of tropes folded into his answer:

“The National Crime Agency welcomes the announcement on the Combatting Kleptocracy Cell…They have already surged additional officers to support existing efforts and will”—

wait for it—

“move at pace to enhance the unit further”.

I put the same question to the Treasury. The Treasury being the Treasury, it said:

“The staff in post in OFSI was 37.8 FTE…This information can be found in HM Treasury’s Outcome Delivery Plan”.

That is the level of precision that we ask of every Department. Frankly, the silence tells us that all is not well. That is why new clause 2 is so very important.

New clause 29, tabled by the right hon. Member for Haltemprice and Howden (Mr Davis), is incredibly important, but I push the Minister to go further. We need to be able not only to freeze assets, but to seize them. Paragraph 3.1.3 of the UK financial sanctions guidance in December 2020 says that the use of an asset, even when it is frozen, is not prohibited.

The Minister will forgive the Opposition for growing frustrated over the years at the economic policy that the Government have pursued, which has created a country of haves, have-nots and have-yachts. He can imagine how frustrated we are that the Government will not even seize the yachts when they belong to oligarchs. Somebody has very kindly shared with me a list of candidates that the Minister might want to consider: the My Solaris, owned by Roman Abramovich; the Eclipse, which is sailing in the north Atlantic and which the Government would have no means of either seizing or freezing as an asset if it docked at a UK port; the Valerie, owned by Sergey Chemezov, which is currently in Barcelona; the Lady Anastasia, which is currently in Mallorca in Spain; the Tango, which is also in Mallorca; the Palladium, which is currently in Barcelona; the Aurora, in Barcelona; Here Comes the Sun, in Mallorca; Ice, in Genoa; the Ragnar, in Narvik; Sailing Yacht A, owned by Melnichenko—

[The Chairman of Ways and Means (Dame Eleanor Laing)]

Order. I appreciate that the right hon. Gentleman has a long list. It is enlivening proceedings and we are all grateful, but we do not have time. Will he please truncate his speech? Just say, “and 12 more,” or something like that.

[Liam Byrne]

I am grateful for your guidance, Dame Eleanor, because I think I have made my point: the Government need to take on more power to seize and freeze these assets.

The final point I wish to make is about strategic lawsuits against public participation. We recently had a good debate on lawfare, sponsored by the right hon. Member for Haltemprice and Howden and myself. In amendments 37 and 38, we make proposals that the Government could adopt. I do not wish to press them to a vote tonight, but I would like the Minister to confirm what the Foreign Secretary and the Justice Secretary said in the media on Friday. The Justice Secretary told “BBC Breakfast” that SLAPPs were an

“abuse of our system and I’m going to be putting forward proposals to deal with that and to prevent that”.

The Foreign Secretary later told The Guardian that she had asked Government lawyers to “find literally any way” to crack down on SLAPPs. I would like this Minister’s confirmation that that is indeed going to happen, not in some consultation response to the Human Rights Act, but as a stand-alone piece of legislation, so that we can live in truth in this country. It is outrageous that English courts are being used as a means to silence journalists such as Tom Burgis, Carole Cadwalladr and Catherine Belton. I want great books such as “Butler to the World” by Oliver Bullough to be written with the freedom to tell the truth, and at the moment the oligarchs are denying us that freedom. They are launching a war on free speech in English courts, of all places. That scandal has surely got to stop.

I will conclude by saying that it is now clear that what our country needs Russia is a recontainment strategy towards Russia. That will entail a refortification of the NATO frontline to the east; resupplying the Ukrainian forces; and suppressing and repressing the Russian economy. Sanctions do not produce instant results—Presidents Mugabe and Maduro presided over economies in ruin for many years—but this would give us progress.