Economic Crime and Corporate Transparency Bill (Eighth sitting)

James Daly Excerpts

Committee stage
Thursday 3rd November 2022 Public Bill Committees

Much as I would love to get on with this, I think it is incredibly dangerous for us to press the button and start the reforms. I desperately want unique identification, which is hugely important—I welcome it—but it is incredibly dangerous to put that in place when we cannot trust the professionals whose job it is to set up companies. It is for that reason that I tabled amendment 78. If the Minister can come back with a better system—

[James Daly (Bury North) (Con)]

I refer to my entry in the Register of Members’ Financial Interests as a practising solicitor and a partner in a firm of solicitors. The right hon. Lady has essentially said that everybody involved in the legal sector and financial advisers are potentially dishonest. They absolutely are not. The vast amount of people involved in the sector are honest, decent people who have a lot of regulation and try their damnedest to abide by all of it. The picture that the right hon. Lady paints is not correct.

[Dame Margaret Hodge]

That is not what I said. The hon. Gentleman may have chosen to interpret it that way—

[James Daly]

You said we cannot trust people in the sector.

[Dame Margaret Hodge]

No, I did not. I said that none of the professions has sufficient supervisory or regulatory capabilities, policies or practices in place to pull out the bad apples. I have nowhere ever stated that that applies to everyone, but I hope the hon. Gentleman agrees that the extent of people setting up shell companies —we are talking largely about shell companies—as vehicles to move illicit finance, whether through drugs, kleptocrats or people trafficking, is shocking.

Let me tell the hon. Gentleman my most egregious story, which has been mentioned—the Savaro story. We had this terrible explosion in Lebanon, with hundreds of people killed and lots of property destroyed. We were told that it was fertiliser held in the warehouse that was going to Mozambique. A couple of months after the explosion, I was rung up by a Reuters journalist with whom I have worked down the years, who said, “Did you know it was a UK limited company—Savaro Ltd?” He went on to say that not only was it a UK limited company, but, interestingly enough, it had told HMRC it was dormant, so it had not filled in its tax returns. It was registered in the name of a company service provider, a woman who lived in Cyprus. There were two lies in the system: a lie about the company service provider, and lying to HMRC.

I gave the usual quote and was then overwhelmed by people from Lebanon contacting me, including the Bar Association, all of whom were trying to find out the origins of what had happened. It then emerged that three Ukrainian Syrians—this was before the Ukrainian war—were the real owners. There was no way the fertiliser was going to be used in Mozambique; it was going to Assad to drop as barrel bombs on the civilian population of Syria. That is the sort of shocking outcome that comes from lack of proper regulatory control.