Economic Crime and Corporate Transparency Bill

Kevin Hollinrake Excerpts

Report stage
Wednesday 25th January 2023 Commons Chamber

[Stephen Kinnock]

As always, I agree absolutely with my right hon. Friend’s views on the matter. That cannot be beyond the wit of this place or the Government. I know there are legal complications around property and international law, but those are not insuperable. We cannot allow them to be insuperable because, with every day that passes, the people of Ukraine are suffering, and the barbaric acts of Vladimir Putin and his regime are not being held to account in a way that would contribute to the massive reconstruction effort that will be required for Ukraine. It is absolutely right that the person guilty of the crime should pay for the crime and that has to be the fundamental basis of our approach. We need urgency on this in the G20, the G7, and the United Nations. We need Ministers to get a grip of this issue so that we can do justice and deliver for the people of Ukraine, which we must do with great urgency.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)]

New clause 27 is interesting. It is about setting up a fund for compensation of victims of economic crime. We have heard estimates that economic crime costs UK citizens £200 billion to £300 billion a year. How much will this cost and who will pay for it?

[Stephen Kinnock]

The Minister tempts me to write Labour’s manifesto right here at the Dispatch Box. It is an issue of principle: how will we ensure that victims of economic crime are compensated? Clearly, we cannot finalise in the Chamber today the quantum of that amount, but we did raise that in Committee and are open to discussing it with the Government. We hope that they will be open to having that discussion in the fullness of time.

[Kevin Hollinrake]

Will the hon. Member confirm that he is expecting the taxpayer to contribute to the fund? Is that what the new clause would effectively lead to?

[Stephen Kinnock]

No. This is based on a fund that is generated through fines and through accountability for those committing the crimes. It is along the lines of what I said about Ukraine: the people who commit the crime, rather than the victims, should be paying for the crime. How will we address that question now? If the Government think that the current system is absolutely fine and that there is justice and equity in the system, the Minister should come to the Dispatch Box and say that. However, if he thinks that there is a clear, principled and moral argument in favour of ensuring that the people who commit a crime should be made to pay for it, and that that should contribute to the compensation, we can have that conversation.

Economic Crime and Corporate Transparency Bill (Fifteenth sitting)

Kevin Hollinrake Excerpts

Committee stage
Tuesday 22nd November 2022 Public Bill Committees

[Tom Tugendhat]

I do not want to know what they advertise to the right hon. Gentleman. They don’t do it by pigeon.

The reality is that there are different ways in which people are trying to hack and attack, to steal from individuals in our country and around the world. That is why the work we are doing on the Joint Fraud Taskforce, which met yesterday, and on many other aspects of regulation, such as the Online Safety Bill, which the hon. Member for Glasgow Central quite rightly spoke about, is so important. The FCA has moved forward on many of those areas, in a sensible way, to balance the need of the technology to advance with the protection of society. It is certainly true that many people have lost a lot in recent weeks and months. I do not think anybody was under any great illusion, though, that cryptocurrencies were not a high-risk item, to put it politely. Anything worth about $1 10 years ago and $60,000 a few years later is probably not a stable currency. It may be many things, but it is probably not stable. It is now worth about $10,000 or so—

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)]

Thirteen.

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[Tom Tugendhat]

Large amounts of financial data flow through the United Kingdom every hour. The majority relate to entirely legitimate and proper activity; however, a small proportion involve criminal activity. As hon. Members heard from several witnesses to the Committee, the sharing of information regarding criminal activity between businesses is currently constrained by duties of confidentiality. These clauses and the associated Government amendments address that constraint.

Clause 148 enables direct disclosure of information between two businesses in the anti-money laundering regulated sector for the purposes of preventing, investigating and detecting economic crime, without a breach of their obligation of confidence to their customers.

[Kevin Hollinrake]

Hear, hear.

[Tom Tugendhat]

I am glad to have support from further down the Treasury Bench.

To request information, a business must have reason to believe that the other business holds information that will, or may, assist in carrying out its relevant actions. Relevant actions include deciding whether further customer due diligence is needed, restricting access to products, or terminating a business relationship with the customer as a result of the additional information obtained.

Amendments 122 to 135 amend clause 148 to expand the provisions to offer protection from civil liability owed by the person sharing information to the person to whom the disclosure relates. As the Committee heard when UK Finance gave evidence, the banking sector maintains that without greater protection, information is unlikely to be shared, as doing so creates limited benefit in comparison with the risk of potential protracted and expensive litigation from customers. Greater use of the provisions will make it harder for criminals to exploit UK businesses. We have listened to the sector and tabled these amendments.

Clause 149 enables indirect information sharing by certain businesses via a third-party intermediary, on a similar basis to elements of clause 148. A business may share information about a current or former customer whom they have already decided to take action against due to an economic crime risk—or who would have been subject to that decision were they still a customer—either by terminating a business relationship or by refusing or restricting access to a product or service. The business must be satisfied that sharing the customer’s information will assist other businesses in carrying out their relevant actions. As with clause 148, the Government have tabled amendments 136 to 141 and 143 to 151 to disapply civil liability for a person who discloses such information.

Government amendments 142, 152 and 155 extend the scope of the indirect information-sharing provisions to cover large and very large accountancy and legal businesses. The benefit of bringing those businesses within the scope of the provision is that those firms have experience of dealing with high-risk clients. Criminals are known to exploit the information gaps that currently exist between businesses in these sectors, and encouraging further information sharing creates greater opportunities to prevent economic crime.

Clauses 148 and 149 do not disapply any liabilities arising under data protection legislation. The hon. Member for Feltham and Heston tabled amendment 167, which would expand clause 148 to include the accountancy sector. I hope that she is reassured that the Government amendments that I have just described achieve that objective.

Government amendments 153 and 154 make express provision for aiding, abetting, counselling and procuring in the definition of economic crime. Schedule 8 sets out the offences that are included in the definition of economic crime for the purposes of direct and indirect disclosures of information, the Law Society’s fining powers, and the objectives of regulators of legal services. The schedule is divided into common-law and statutory offences. No new offences are created by the Bill; the schedule has been included because there is no existing relevant definition of economic crime. The schedule is essential to provide clarity and certainty about the meaning of economic crime, in order for individuals, regulators and businesses to use the disclosure of information provisions effectively and to properly apply the new measures relating to legal services.

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[Seema Malhotra]

Clause 159 provides that regulations under the Bill are to be made by statutory instrument. To a large extent, we have had clarification that any subsequent changes will be made through the affirmative procedure in Parliament, enabling greater scrutiny and transparency over the Bill’s implementation. I am not sure if there is a list anywhere of all the regulation-making powers that have been specified in the Bill. I feel like there is probably a summary somewhere of all of those powers, and whether any are subject to the negative procedure. I think that would be a helpful review for the Committee to have.

New clause 22 allows regulations to be made about the registration of certain Scottish partnerships, and to apply law related to companies or limited partnerships. It will allow the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 to be amended or replaced in relation to those partnerships. We welcome the inclusion of amendment 43 alongside the new clause, which provides for regulations under new clause 22 to be subject to the affirmative procedure, unless they make provisions corresponding to provisions made by statutory instruments that are subject to the negative procedure. In light of my previous comments, I think it is healthy for us to clarify and have a clear summary of which are affirmative and which are negative, and the safeguards around them. That would ensure the transparency of regulation making subsequent to the passing of the Bill.

[Kevin Hollinrake]

It is a pleasure to speak with you in the Chair, Mr Paisley. I will speak briefly to amendment 43 and new clause 22, which are minor technical changes necessary due to the European Communities Act 1972 having been repealed. They give the Secretary of State the power to apply company or limited partnership law by regulations to Scottish qualifying partnerships, as well as to impose new requirements of Scottish qualifying partnerships not included in company or limited partnership law, such as identity verification. It allows the Government to retain the measures introduced by the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 in relation to SQPs and to amend them in the future. Provisions about the registration of Scottish qualifying partnerships exist in the 2017 regulations, made using powers under now repealed section 2(2) of the European Communities Act 1972.

That has two consequences. First, there is no existing power to amend the regulations, other than by an Act of Parliament. Secondly, if not replaced under section 1 of the proposed retained EU law Bill, the 2017 regulations will be revoked at the end of 2023. This power will allow us to keep the existing requirements on Scottish qualifying partnerships and to add new ones. Without the amendment and new clause, it will not be possible to extend key measures introduced via the Bill, such as identity verification, to Scottish qualifying partnerships, thereby creating a dangerous loophole. I hope that my explanation has provided further clarity.

It is clear that regulations made under the Bill may make consequential, supplementary, incidental, transitional or saving provisions and regulations under specified clauses must be subject to the affirmative resolution procedure. I am sure we can write to the hon. Lady to set out exactly what those situations are.

[Alison Thewliss]

I am glad to see any loopholes getting closed, even if the amendment is sneaking in at the end of the Bill. It is good to see it. As I have said at many points in Committee, enforcement needs to be laid down on all these things, because at the moment all things to do with Scottish partnerships are not being enforced. People are not being fined for not complying with the regulations. I hope that it will result in some tightening up and some fines being issued—and, if required, in some people being jailed for not complying with the regulations as set out.

Economic Crime and Corporate Transparency Bill

Kevin Hollinrake Excerpts

2nd reading
Thursday 13th October 2022 Commons Chamber

[Suella Braverman]

No, I disagree. I will not repeat the points that I have made, but I am very proud of our record. The action was tough, unprecedented and far-reaching, and I am very glad that other countries followed suit soon after.

The Bill includes essential reforms of Companies House and measures to prevent the abuse of limited partnerships. It creates additional powers to seize cryptoassets more quickly and easily. The Bill will enable more effective and targeted information sharing to tackle money laundering and economic crime.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Late last year, NatWest was fined £265 million for facilitating money laundering through its UK branches. Sacks of cash, literally, were being taken into NatWest branches. Despite the £265 million fine, no person at NatWest has personally been held to account. Does my right hon. and learned Friend not agree that these fines are simply a cost of doing business, because this is profitable business? The only way in which we will clamp down on this is to hold individual executives at the top of organisations to account and, if necessary, put these people in jail.

[Suella Braverman]

I agree with my hon. Friend, who has a huge amount of expertise and has achieved a huge amount in Parliament to crack down on fraud and economic crime. I will come to the Bill’s anti-money laundering measures, so I will have to detain him a bit longer until I get there. I agree, however: we have to make sure that we can build on the regime, powers and law enforcement frameworks that are in place. We can go further.

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[Suella Braverman]

We want to ensure that there are more restrictions on who can register with Companies House so that we prevent the abuse of the regime. As I said, we have one of the most open, liberal and business-friendly economies, but we are exposed to some degree. The reforms in the Bill very much address the issue that the hon. Member raises.

Furthermore, the Bill introduces a regulatory objective into the Legal Services Act 2007; removes the statutory cap on the Solicitors Regulation Authority’s fining power for disciplinary matters relating to economic crime offences; extends pre-investigation powers to all Serious Fraud Office cases; and streamlines the process for updating the UK’s high-risk third country list. The Bill will also ensure that we have more effective and targeted information sharing to tackle money laundering and economic crime. It provides new intelligence-gathering powers for law enforcement and removes regulatory burdens on businesses. Altogether, the Bill is a formidable tool in the fight against illicit finance.

The Government have consulted widely on the Bill and won broad support from business and professional groups, law enforcement agencies and civil society. We are, of course, working closely with the devolved Administrations on this legislation, as the Bill contains several provisions that engage devolved powers in Wales, Scotland and Northern Ireland.

I will now set out the Bill’s measures in more detail, turning first to Companies House reform. Companies House is one of the foundations of the UK’s business environment. It operates the UK’s open and flexible corporate registration framework. The UK’s business community enjoys a simple system for creating and maintaining companies and other legal entities. Information on those entities is made available for the benefit of investors, lenders, regulators and the public. The companies register was accessed 12 billion times last year. Inevitably, that makes it a target. In recent years, the Companies House framework has been manipulated, particularly with the use of anonymous or fraudulent shell companies and partnerships. That gives criminals a veneer of legitimacy to help them to commit crimes, ranging from grand corruption and money laundering to fraud and identity theft.

We will reform the role of Companies House and improve the transparency of UK companies. The Bill will ensure that we can bear down on the use of thousands of UK companies and other corporate structures as vehicles for economic crime, including fraud, international money laundering, illicit Russian finance, corruption, terrorist financing and illegal arms movements. These are the most significant reforms to the UK’s framework for registering companies in 170 years. We will introduce identity verification for new and existing directors.

[Kevin Hollinrake]

It is very good news that we are moving from a register to a regulator. On the capacity of Companies House to do that, there are around 5 million companies in the UK, with probably two directors on average, and 500,000 companies are registered every year. Does Companies House today honestly have the capacity to properly verify the ID of all those directors?

[Suella Braverman]

Resourcing the agencies and organisations, such as Companies House, to better fight the threat of fraud and economic crime will be part of the equation. I am pleased to be in constant discussion with the various agencies, although, obviously, Companies House is the responsibility of other Departments. However, we have to ensure that it has the tools, operationally and from a resource point of view, to be able to carry out its legal duties.

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[Damian Hinds (East Hampshire) (Con)]

I support this important Bill, which seeks to tackle this most international of criminal problems. The scale of global financial crime is mind-boggling, accounting for up to 5% of gross world product and, depending on which estimate we look at—we cannot say absolutely for certain—worth between $2 trillion and $5 trillion. On an optimistic view, the confiscation rate runs at around 1%.

Economic crime is sometimes thought of as being in a separate category from other crime but, no, it is part of those other crimes. There is a particularly close link between fraud and cyber-crime. Money laundering, fraud and cyber-crime collectively—distance crime—make up the majority of crime by volume in this country. More broadly, virtually all crime with a financial motivation touches on money laundering at some level. There is a mix of organised crime groups pulling off huge cyber-crimes, down to individually small but cumulatively very large-volume frauds. Some groups have undergone a sort of vertical integration, controlling every part of the chain; others specialise in one particular part of the chain, such as ransomware as a service. There is a merging of criminal actors with a nexus to states. Then, of course, there are the kleptocrats who got filthy rich on plunder from their fellow citizens.

There is a huge amount that needs to be done in this area. Much of it needs to be done globally, but countries such as ours need to be in the lead. The world has made quite some progress in this area, and in key aspects we have been a leader, but we have also had our lacunae. High on that list is transparency about who is really behind and ultimately benefits from corporate structures and economic assets.

For some time, we have had a substantial and, in many ways, effective architecture to tackle money laundering, but there is an important question whether the suspicious activity reports regime is sufficiently efficient, and whether it is focused enough to make the most difference while minimising dead-weight. There is also the question whether we are fully harnessing the power and capabilities of banks, particularly if we compare our legislation with section 314(b) of the American Patriot Act. Should there be more direct intelligence sharing between banks, and if so, how do we manage the competition policy aspects of that? Finally, however much we improve and innovate, the criminals are doing the same, with ever more sophisticated technology, and they are increasingly bypassing the systems that we have been used to in the past by using cryptocurrency and cryptoassets.

The most important thing about the Bill is that it moves to plug the transparency gap, with reforms to Companies House and limited partnerships as its backbone. It modernises seizure by bringing cryptoassets into scope of the civil forfeiture powers, and it moves from a compliance-driven anti-money laundering system to one that is more proactive and intelligence-led, with rationalised SARs and DAML—defence against money laundering—requirements.

I welcome all the aspects of the Bill, but especially the information-sharing provisions, and in particular their broad scope to include all types of economic crime, including, importantly, volume fraud. I ask the Home Secretary and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Dean Russell), to really test whether these powers go as far as they productively can. I press not just the Home Office and BEIS Ministers we have here today, but the Treasury, regulators and the private sector, to come together to ensure that we link up the different parts of our financial services sector and the wider professional services sector to best effect.

Information and intelligence sharing could be so much more powerful if we reformed the way that payments are made so that in certain circumstances, where suspicious activity is detected, it is possible to slow down or pause payments and use the system not just to track down money laundering payments or fraudulent payments after the fact, but to stop them happening before the fact. That could be a genuine game changer. As I say, I strongly encourage the two excellent Ministers present today to communicate with the Treasury and others about that.

I support the Bill and I wish Ministers well with it. It is of course part of a wider set of reforms that includes the sanctions regime, the creation of the National Economic Crime Centre, the kleptocracy cell, the overall economic crime plan, and, importantly, our international work with like-minded partners, the Financial Action Task Force, and the Crown dependencies and overseas territories. The reform of visas, which came up, is part of this too, and of course we recently passed the Economic Crime (Transparency and Enforcement) Act 2022. There will be more to come, I am sure, including on corporate criminal liability.

[Kevin Hollinrake]

rose—

[Damian Hinds]

On that point, I give way to my hon. Friend.

[Kevin Hollinrake]

I am very supportive of that, as my right hon. Friend knows, but I rise to make another point. He mentioned that putting some friction in the payments system might reduce instances of economic crime. At the moment, banks are refunding a much higher proportion of authorised push payment fraud, but all the onus is on the sending bank. Nothing is reimbursed by the receiving bank, yet it is the receiving bank where the dodgy account is held. Does he agree that we should look at that and create an incentive for the companies that host those bank accounts to tackle it more effectively?

[Damian Hinds]

I do think we need to look at this more closely, although it is even more complex than my hon. Friend suggests, because we get this ping-on system as well, where a body can be both a receiving bank and a sending bank, and so be a sort of transmission mechanism. We certainly need to look at this more broadly. Madam Deputy Speaker might get cross with me if I try to unpack it too much now, because it is a broader subject. However, as my hon. Friend rightly mentioned, we also have to address the questions of who is liable and how much of the liability now sits within the banking sector, full stop, as opposed to other parts of the consumer interface—different channels through which people come—that might reasonably be expected to share some of that burden too and be properly incentivised.

I am going to close my remarks by saying that these reforms are important and they are not in tension with the success of our financial services sector—quite the reverse. These reforms are about enhancing the reputation of both British financial services and, more broadly, the UK and our reliance on and respect for the rule of law. They are about protecting and growing our business; and doing the right thing, ceding no space to the criminals and the kleptocrats. In the unlikely event that we divide this afternoon, I will be proud to vote “Aye” for this Bill.

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[Dame Margaret Hodge (Barking) (Lab)]

It is a pleasure to follow the hon. Member for Cheadle (Mary Robinson), who has been a passionate and strong advocate on behalf of whistleblowers and the very important part they play in fighting economic crime, money laundering and fraud.

Many of us have waited with eager anticipation for the Bill that the Government promised would enable us to rid Britain of the influence of oligarchs and kleptocrats and of the cancer of money laundering, fraud and other economic crime. That is particularly true of the large and ever growing group of Back Benchers who are working together across the House on these issues. Although we all welcome the fact that the Bill is now before us, many of us deeply regret that, yet again, the Government have failed to demonstrate the strategic vision, determination and ambition that are plainly needed if we are to translate our shared aim into reality on the ground and convert our warm words on economic crime into real action. The Bill contains good and important changes, but it does not allow us to make the big leap forward that we need to systematically drive this pernicious and pervasive illegal activity out of our economy and our society.

Let me remind Members why tackling economic crime really matters. Bluntly, the cost to the UK economy is immense. People have talked about the figure of £290 billion a year, but a recent study by the University of Portsmouth gives us a figure just short of £350 billion. The mind boggles. That is somewhere between a quarter and a third of total public spending every year. It is the enormity of the sums that gives the UK the shameful and dubious distinction of being the jurisdiction of choice for oligarchs, kleptocrats and criminals around the world—people who choose us to hide and launder their ill-gotten gains.

Governments of both the main political parties have long championed the UK's financial services, and the success of our financial services has contributed significantly to economic growth over recent decades. We boast of our professionals, our institutions, a trusted legal jurisdiction, the English language, an attractive property market and the lure of London as a place in which to live and work—all things that help to create a vibrant financial services sector. At the same time, though, our weak regulations, our woefully inadequate enforcement capability, our relationship with the UK tax havens in the Crown dependencies and overseas territories, our lack of transparency and our deficient accountability protocols have meant that it has become all too easy to wash the dirty money along with the clean here in Britain.

The human impact of this is beyond awful. We have all seen the horrific, heartbreaking images of Putin’s vicious assault on Ukraine and the effect that it is having on innocent Ukrainians. However, we must face up to the understanding that the dirty cash is laundered and cleaned by Putin and his kleptocratic friends both in and through the UK. Ukraine is now paying the price for corruption and economic crime. We are helping to enable Putin’s assault. Our corporate structures, our lawyers, bankers, company service providers and accountants, and our links with places such as the British Virgin Islands all facilitate the accumulation of stolen wealth and power that helps to fuel the criminal onslaught on an independent nation and its people.

We have allowed that to happen. It is an utterly appalling truth that, since Putin came to power more than 20 years ago, there has not been one single prosecution for economic crime launched against any individual Russian oligarch—not one. Similarly, the explosion of fraud in Britain has led to endless instances of misery and harm, which other Members have cited. The authorities, as my right hon. Friend the shadow Home Secretary said, reported 5.1 million incidents of fraud in the year to September 2021, and we know that much fraud remains unreported. The published figure means that at least one in 11 adults were the victim of fraud in that year. People such as Len, who, at the age of 96 and with a proud record of service in the Army and a successful career as a chartered surveyor, was getting 600 scam communications a month. Although he did not keep track of his total losses, he knew that in one 10-day period he had spent and lost £600. It is the lack of enforcement action that contributed to Len’s misery and that has allowed fraud to spiral into the most common crime in Britain today.

The Government are absolutely right to bring forward legislation. In fact, I would argue that if we do not eradicate money laundering, fraud and other economic crime we will cause lasting damage to our financial services sector, because we will lose our reputation as a trusted jurisdiction, and the plentiful supply of clean money across the world will go to other more reputable countries. We will lose business, not attract it. Britain can never enjoy sustained economic growth on the back of dirty money.

I welcome the good and important changes the Bill will bring about when it is passed into law. The reform of Companies House, which other hon. Members have talked about, is warmly welcomed and hugely important. None of us wants more regulation, but we do need much smarter regulation, and that is what these provisions aim to achieve. We need to tackle and stop scandals such as the Danske Bank scandal, where an Estonian branch of the Danish bank allowed $8.3 billion of suspect payments to move through the bank using British registered companies. Many of those companies were limited liability companies, and we now know that 90% of the more than 800 limited liability companies involved in the scandal were set up by one rogue company service provider and registered at the same address in Birmingham. We need to stop the practices that meant that in the FinCEN files leaks 3,267 UK shell companies were named—more than in any other country. We need to tackle the reasons that led to Transparency International’s finding in a 2017 investigation that 766 UK shell companies were involved in corruption and money laundering cases worth up to £80 billion, with half of those 766 companies registered at just eight different addresses.

[Kevin Hollinrake]

The right hon. Lady is making a fantastic speech, and it is always a pleasure to listen to her and to work so closely with her from our respective positions on the Back Benches. She refers to Danske Bank; the total amount of money laundering through that Estonian branch was €200 billion, much of it Russian money from kleptocrats moving the money out of Russia. The bank has not been fined yet. It will probably get a fine of £2 billion or £3 billion, but the likelihood is that not a single individual will be held to account. That is absolutely wrong. Fines are seen as a cost of doing business. I know she agrees that we need to extend the failure to prevent an offence to include economic crime and things such as false accounting, and we must have individual directorial responsibility.

[Dame Margaret Hodge]

Hear, hear! I completely concur with the hon. Gentleman, and it is a real pleasure to work with him on all these matters. He is completely right. The interesting thing about Danske Bank is that, were there to be any prosecutions, they would not happen in the UK. They might happen in other jurisdictions, particularly America, but they will never happen in the UK because of the weakness of our enforcement agencies.

The provisions in the Bill are essential to help tackle some of the wrongs in the examples I have given, but I hope the Minister will assure the House when he winds up the debate that he will seriously consider amendments that we intend to table to strengthen the reform of Companies House and prevent potential loopholes. I also welcome the proposals to allow organisations such as banks to share information where that could help to prevent or detect wrongdoing, and the proposals to treat cryptoassets just like cash or any other assets for the purposes of seizure and enforcement.

However, the Bill too often tinkers with the challenges at the margin instead of boldly adopting a more holistic and systemic approach to bearing down on dirty money. For example, instead of proper and much-needed reform of the supervision of the professional enablers who are responsible for implementing anti-money laundering regulations, we get new cost caps for the Solicitors Regulatory Authority and new powers for the Legal Services Board—piecemeal reform, not systemic reform.

Instead of reforming the present outdated criminal offences in relation to the responsibilities of companies and their directors to prevent economic crime, which the hon. Member for Thirsk and Malton (Kevin Hollinrake) referred to, so that we can really hold those who enable, facilitate or collude with economic crime to account, we get new pre-investigation powers for the Serious Fraud Office—important, but piecemeal reform. Instead of a systemic reform of the broken suspicious activity reports regime, we tinker at the edges by reforming part of the regime, the defence against money laundering SARs—again necessary, but yet another example of the piecemeal approach being taken.

Not only does the Bill tinker at the edges; it also fails to address key matters that are all vital to a comprehensive approach to preventing, detecting and punishing money launderers and fraudsters. Where are the proposals to seize, as well as freeze, the assets taken from sanctioned individuals and states? We want the money that Putin and his kleptocratic cronies stole from Russia to be used to fund the reconstruction of Ukraine. We need similar powers to those that already exist in other European countries such as Italy and in nations across the world such as Canada.

Where are the proposals for a sustainable funding regime for the enforcement agencies, so that they can use the powers they have? For instance, as the hon. Member for Glasgow Central (Alison Thewliss) stated, the cost of registering a new company with Companies House is a mere £12. It would still be a bargain at £50 or £100, with the extra income ringfenced to fund Companies House properly.

Where are the proposals to do away with the requirement that our enforcement agencies pick up the tab for the legal costs incurred by individuals who succeed in resisting a prosecution for economic crime? The US enforcement agencies, which are far more successful in securing convictions, do not have to pay the costs of the person prosecuted if they lose a case. We should follow that example. Our system acts as a brake on our enforcement agencies. They fear the financial costs of losing, so they fail to prosecute aggressively, and because of that fraudsters, criminals and money launderers get away with awful actions.

Where are the proposals, which the hon. Member for Cheadle called for in her contribution, to protect the brave whistleblowers on whom we are so dependent? Where are the proposals to ensure accountability to Parliament and the public, so that we can see whether our reforms deliver? Where are the proposals to tackle the abuse of our defamation laws by oligarchs who want to silence those of us wanting to hold them to account? Where are the proposals to close the loopholes on transparency for trusts and the ownership of land, which continue to act as secret ways to launder money into or through the UK? Where are the reforms to the SARs regime, to the supervision of AML supervision or to corporate criminal liability laws?

In the wake of the 7/7 attack in Britain, we treated the reform of counter-terrorism as a mission requiring strong and comprehensive action, and we are now rightly proud of our capabilities in that area. The war in Ukraine should be our 7/7 moment in the battle to eradicate dirty money. It has helped us to understand the horrors that allowing illicit finance to infect our financial services sector, our economy and our society can bring, both at home and abroad.

This Bill is a once-in-a-generation opportunity to put things right. We cannot and must not waste it. I look forward to working with my colleagues across the House and with Ministers in Government to achieve our shared and crucial objective: to show that we are a country that consistently demonstrates zero tolerance for all illicit finance and is determined to grow a strong, trusted financial services sector in a jurisdiction that boasts the smartest regulation, first-class enforcement of the rules, maximum transparency and strong accountability. There lies the way to economic growth.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to speak in this debate and a particular pleasure to speak after the right hon. Member for Barking (Dame Margaret Hodge). She has done incredible work in this area for many years, for which we should pay tribute to her, and I hope she will continue for many years to do the same. I know that she has talked once or twice about hanging up her political boots—if the accommodation Whip is listening, I would very much like to inherit her office if she ever does—but nevertheless I hope she continues in Parliament for many years to come.

On a more serious note, all hon. Members deal with tragic cases and I want to refer to a couple of mine. Leah Heyes was a 15-year-old girl whose life ended in a carpark in Northallerton in 2019. Andrew Bellerby took his own life aged 35 in 2015. The connection between those two tragic cases is, of course, drugs. Lia suffered an adverse reaction to her first experiment with ecstasy, and Andrew’s life had been devastated by drug dependency. We also try to help families in those tragic cases, who are trying to pick up the pieces and make the best of what has happened to them, by putting in place measures to stop such things happening again. Too often we look at ways to try to deal with suicide cases more effectively or clamping down on people who deal drugs, but that is treating the symptoms, not the causes.

The causes are linked to economic crime. Many people will have watched the television series “Narcos”. The big cartels make a huge amount of money distributing the drugs that result in those tragic cases. They make so much that they bury hundreds of millions of pounds, because it is difficult to legitimise the money. They are not supposed to be able to pay that dodgy money into a bank or buy a yacht or a house with it, because questions should be asked about where the money has come from. Without the ability to launder the money, it is pointless perpetrating those horrendous crimes and being the linchpins behind those tragic cases.

The reality, however, is that many of our large financial institutions facilitate the laundering of that money. In 2012, HSBC, which we regard as a trusted organisation, was fined £1.9 billion for laundering money for the Sinaloa cartel, which was run by El Chapo. It is incredible that that would happen, but the obvious reason it does is money. The banks can make huge amounts of money themselves. My friend the right hon. Member for Barking mentioned the Danske Bank case. Normally a regional branch of a bank would have a profit margin of about 20% on turnover. The Estonian branch of Danske Bank that dealt with the £200 billion of Russian kleptocrat money had a profit margin of 460%, and that huge amount of money was the incentive. It is inconceivable that the people at the top of HSBC and Danske Bank did not know what was going on. It is impossible to make such extraordinary profits without those at senior levels knowing what is going on. But time and again we simply fine the bank and do not hold the individuals to account.

Drugs are not the only issue. Some of them are problems that we are trying to solve, such as the small boats crisis. Traffickers are making huge amounts of money and they need to be able to move that money around. Paul Stanfield, the head of economic crime at Interpol, says that it is all about the money and

“If you want to tackle organised crime, you have to go after the money”.

But the reality is that the UK makes all this easier. Because of some of our lax regulations on shell companies, which allow money to be hidden behind the veils of different companies in different jurisdictions, and because of the expertise in London and our overseas territories, the UK is the destination of choice for money laundering. The money may go to different places but it is laundered through London.

That is why many of the measures in the Bill are welcome, including those on transparency and Companies House. This is a big job. It is not only new companies whose directors must be verified, but existing ones. That is millions of companies. The Minister has been excellent in engaging on these issues, as was the previous Security Minister, but I would like to understand how that will be achieved. We may be putting £63 million into Companies House, but verifying the identities of people who have significant control over organisations will be a big job.

The resources going to Companies House need to be beefed up, and it makes sense to increase the very low fee of £12 for setting up a company in the UK to £50 or £100. I have set up quite a lot of companies in my time, and a fee of £50 or £100 would not have deterred me. That could increase resources to make sure that the enforcement happens. Too often, we look at innovation and legislation but we do not look closely enough at implementation. Without that, it is pointless having this debate. Implementation is key, and resources are key to that.

We are bound to focus on measures that are not in the Bill—that is what Back Benchers do. I have said many times that the No. 1 measure we need is an extension of the failure to prevent provisions on bribery and tax evasion, which have been so effective. People say that we talk a lot and never get anything done, but the bribery provisions have been massive in holding corrupt companies to account. The Serious Fraud Office has deferred prosecution agreements for Rolls-Royce for Airbus, with almost £1 billion in fines going to the Treasury. The SFO also prosecuted the GPT Special Project Management Ltd case. The SFO does not get many successful convictions but GPT Special Project Management Ltd pleaded guilty in Southwark Crown court in 2020, and paid £28 million in financial forfeitures as a result, on the back of the Bribery Act 2010.

I pay tribute to my hon. Friend the Member for Cheadle (Mary Robinson) for her work on whistleblowers. It is an area that the Bill does not cover at the moment, but I hope that the Minister will introduce more provisions. My constituent Ian Foxley blew the whistle in 2011, resulting in a conviction 10 years later. He was well paid, operating in the middle east for GPT, but he has had 11 years without any remuneration. He was earning probably £200,000 a year, so he is millions of pounds down. We do not protect or compensate whistleblowers, and that is wrong. Those people do the right thing and come forward but—not to put too fine a point on it —we hang them out to dry.

[Peter Grant (Glenrothes) (SNP)]

Does the hon. Gentleman agree that there is a grave injustice when those who have done the right thing have a lifetime loss of earnings of millions of pounds, but when crooked accountants are called up before and disciplined by the Financial Reporting Council, their loss of earnings from being suspended for a short time, which could run into millions of pounds, is taken into account? The sentence is often more lenient if it will have a significant financial impact on an accountant who has given false information to the FRC. It appears that the crooks are better treated than the people who try to bring them to justice.

[Kevin Hollinrake]

The hon. Gentleman makes a very interesting point. We need to clamp down on enablers of all kinds, and we need to get tougher in lots of ways to crack down on this in the way that we would all like to see. I know that provisions on whistleblowers will not be part of this Bill—although there may be amendments in Committee to that effect—but we want those brought forward as quickly as possible.

The failure to prevent is so important. It has to include the ability to hold an individual director to account, which would start to reduce the incidence of money laundering and the facilitation of all kinds of offences, including the huge profits made from drug dealing. An illustration of this is what happened with health and safety legislation back in 1974, when directors were made individually responsible and could go to jail if they did not prevent or seek to prevent serious injuries on their building sites. It became a health and safety offence that could be pinned on the individual. After that happened, deaths and serious injuries dropped by 90%. Of all the measures we have talked about today, this would have the biggest effect in terms of cutting down on economic crime, because lots of our financial organisations are complicit when it suits their interests to be so.

There are many other things we should do. We should extend what we did with unexplained wealth orders in terms of cost protection to other elements of the Proceeds of Crime Act 2002 such as property freezing orders and recovery orders. Bill Browder, who is very outspoken in these cases, has come up with an interesting idea. If an individual is sanctioned, anyone who has dealt with that individual—whether it be an accountant, a solicitor or anyone else—should have to hand over their records in connection with that individual to the authorities, so that we can track down the money more effectively. I cannot see a good argument against that.

We have talked about freezing and seizing assets. That is difficult to do, because we have to prove that there was a crime, and we believe in property rights and the rule of law in the UK, so taking these assets off individual oligarchs is tough. One thing that seems like an open goal is the fact that we hold about £30 billion in Russian foreign currency reserves. It is clear that Russia is guilty of international crimes in its invasion of Ukraine. We could legislate to ensure that that money is not just frozen, as it is currently, but confiscated, seized and used to pay reparations to Ukraine.

There are many other things we could do, which I will talk about further during the later stages of the Bill. I may well table one or two amendments, which I know Ministers will continue to engage with and, I hope, will look kindly on, because all these measures will clamp down on economic crime, which is good for the UK and good for business. It is not bad for the economy—it is good for the economy—and it will drive out these heinous crimes all around the world, not just in the UK. We will then be able to point proudly at our record on tackling economic crime, and I hope the Minister will take credit for that as this legislation passes through the House.

--- Later in debate ---

[John Penrose (Weston-super-Mare) (Con)]

I guess the simplest way to greet this Bill is with a massive cheer of hooray. Many of us in this place today have been waiting and waiting for a very long time, and it is really good to see it arriving on the Floor of the House at last, and to see it being welcomed from both sides. There is cross-party agreement on the fact that it is due and, frankly, past due to plug some of those gaps, and it is great news that it is here.

Many of us have been pushing for a very long time to get such things as beneficial ownership transparency, so that if we want to find out who owns a particular company, we do not have to go through multiple layers of shells and other bits and pieces, and finally end up in a secrecy jurisdiction. We are, at least in theory, able to find somebody in charge or exercising effective control over that company who has a pulse, and that is the ultimate guarantee that we are getting somewhere.

We have already heard that many further steps will be required to make that actually bite properly, but in principle is it not great that we are here and is it not great that this stuff is happening? I am delighted to be able to welcome it along with everybody else here today. However, you can probably tell, Madam Deputy Speaker, that I am working up to a but at the end of that sentence. In fact, I am working up to two buts, if I may.

The first but is the point raised by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) about the failure to prevent mechanism or indeed any other effective mechanism ensuring that for a corporate—I am using “corporate” in the broadest sense to mean not just companies, but all corporate vehicles, including things such as trusts—there is some sort of proper personal liability for the people running it if they allow things such as money laundering to happen. Failure to prevent is probably the most obvious way to do it, and it was blessed and agreed to for fraud, as an extension of where we are now, by the Law Commission in its recently published report. However, there is a whole range of other crime and economic crime that it does not cover, and the Law Commission said that there may be other mechanisms than failure to prevent.

It does not really matter what that the mechanism is, except that it has to be better than what we have at the moment, and we absolutely have to push forward on what is one of the biggest remaining holes in the coverage of our protections. My hon. Friend is quite right that until we do this—until we plug this particular gap—we will still end up with a huge opportunity for thieves, kleptocrats and organised criminals of all kinds to do what they do. I am afraid that they are incredibly entrepreneurial people, and they are very creative and stay ahead of whatever mechanisms we come up with. It is only by doing something like that that that we will close the gap properly and get an all-encompassing roadblock to what they do.

It is therefore absolutely essential that, whether it is with failure to prevent or some other mechanism, we do not accept that the status quo is adequate in this area, and we must, all of us from all parts of the House, send a resounding message to Ministers and to law enforcement that this must not be allowed to persist. I may be being a little bit over-optimistic, but I think we heard from the Home Secretary earlier that the Government plan to come back to, look at and take forward—I think that was the phrase she used—the report from the Law Commission. I hope she will hear from all of us here that that is good news, but that we would like to take it forward briskly, promptly and with maximum energy, if we can.

The second but is the point about enforcement. It is all very well to have brilliant legal structures, brilliant laws passed and regulations in place saying, “Thou shalt do this” and “Thou shalt not do that”, but it is no flipping use at all if there is no one there to actually police it and enforce it. While there are an awful lot of people working extremely hard in all sorts of organisations —the National Crime Agency and others—to try to do this enforcement, we all know that there is an enforcement gap in this country compared with, for example, America, which is an awful lot better at it than we are, in this particular area at least.

Therefore, we are going to have to raise our game here. I wish there was a Home Office Minister sitting on the Bench alongside the excellent BEIS Minister at this moment, because the Home Office is the Department that will be under funding pressure to raise its game in order to make sure there are enough resources for these enforcement organisations to do their job, and to do it better, more effectively and more efficiently than they are at the moment. Until they do that, we are always going to be a weak link internationally. I do not think we should kid ourselves about where we are at the moment, because we are a bit of a weak link at the moment.

That brings me on to the other half of my point about enforcement, which is that the points made about whistleblowing by the APPG chair, my hon. Friend the Member for Cheadle (Mary Robinson), really matter. As I said to the shadow Home Secretary earlier, we can turbocharge and maximise the effectiveness of our existing enforcement organisations if we get our whistleblowing regime upgraded and improved very dramatically from where it is now, because whistleblowers are force multipliers for the police. They make the police’s life easier, bring them good, warm leads, blow open cases and provide the evidence that is needed to create effective prosecutions. Without them, the job is a great deal more expensive and less effective; with them, the police can do their job much faster and better. The kleptocrats, the oligarchs and the various different crime lords are a great deal more scared of the UK with a decent whistleblowing regime than they are without one.

That causes a problem because Ministers will say, “Ah yes, but there isn’t enough space in this Bill to provide upgrades to the whistleblowing regime.” Many of us asked that question before we got here today and we all had the same answer, which is, “Yes, it is very important, but not here, not now, and not just yet.” Frankly, that is not good enough or adequate.

I appreciate that the constraint on space is real and I am not trying to pretend it is not, but there are other things that Ministers could do that do not require this Bill and that could be done through, for example, little bits of secondary legislation. If Ministers can commit to make those changes—ideally in the Minister’s summing up this afternoon or certainly in Committee—the pressure for primary legislation and, dare I say it, for endless rounds of proposed amendments, which people may be minded to table later in the Bill’s progress, either here or in the other place, will be greatly reduced. So it is in everybody’s interest for Ministers to say, “Yup, we are going to do that.” If the Minister is able to stand up later this afternoon and say, “Yes, we will do these four things during this parliamentary Session”, that will relieve an awful lot of pressure in this area, because we will all know that proper progress will be made.

The things that would reduce the pressure and the need for primary legislation in the Bill are very simple. First, we could extend the Public Interest Disclosure (Prescribed Persons) Order 2014 to include all the professional regulators. At the moment, that order includes some of them, but if all the professional regulators were included that would massively improve the protection available. It would mean that when somebody says, “I have seen something that is wrong that needs to be dealt with, and I am going to blow the whistle and provide the information,” they would not be the ones who end up as victims, unemployable or completely monstered, either by their former employer or the profession in which they work. Extending the prescribed persons order would mean that those professional regulators have a duty to look after them. At the moment there are big gaps in the list, but it would be relatively straightforward and would not require primary legislation to plug those gaps. Why on earth are we not doing that? Why can we not do that now? It would only take secondary legislation, so let us get on and do it.

Secondly, we could expand the definition of “a worker” under the existing regulations. At the moment, employees who blow the whistle are better protected than trainees, non-executive directors or suppliers. Those sorts of people are very well placed to see wrongdoing, may know what is going on and may have good audit trail evidence to provide, but woe betide them if they blow the whistle, because they ain’t protected as they should be and as they would be if they were an ordinary employee. That seems to me and an awful lot of people to be jolly silly and a massive gap, and it would be easy to fix.

[Kevin Hollinrake]

My hon. Friend is making a fantastic speech. On that point, I talked about my constituent, Ian Foxley, who was a contractor working overseas. Those sorts of people are not covered by the existing legislation. Had they been, he would have been able to seek redress through the company he worked for. As it is, he cannot.

[John Penrose]

That is absolutely right and a very good example. Again, it is relatively simple to fix. It would not require primary legislation, it would reduce the pressure on the Bill and the pressure from all of us here trying to shoehorn extra things into the Bill. In the interest of giving the Minister an easy time, which we all want to do, if he could make these commitments for some time in this parliamentary Session, that all goes away. We would end up with something an awful lot better and quicker.

Thirdly, there are a series of money laundering regulations that can be upgraded and improved. Again, that will not need primary legislation and, again, that will help dramatically.

Finally, we must improve the process for raising concerns. Lots of other countries have online systems, with websites that work easily and are centralised. People know that if they raise concerns through the centralised system, they are automatically engaged with the necessary protections and have the right degree of protection, so they are much more comfortable that they will not end up on the receiving end of victimisation from the people they are trying to blow the whistle about.

Those are the four items. They are easy for the Minister to say—nice and simple. Not only that, I am sure he will have the support of his Home Office counterparts, because they will be the ones whose budgets will be under pressure to improve and upgrade the resources available to the investigative organisations, such as the NCA. Such organisations will otherwise have to be paid more money in order to carry out investigations; they will still need a bit, but they will be able to use it much more effectively if we can make those four changes. I hope that is helpful. I look forward to the Minister’s comments. I will have my pen poised to tick these points off. I am hopeful that he will be able to be helpful.

Economic Crime: Law Enforcement

Kevin Hollinrake Excerpts

Thursday 7th July 2022 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I beg to move,

That this House notes that economic crime costs the UK economy at least £290 billion per year; recognises that law enforcement agencies are significantly under-resourced to deal with the scale of the problem and can be unwilling to properly enforce existing laws; is concerned at the fragmented nature of the enforcement landscape; and calls on the Government to bring forward an economic crime enforcement strategy that allows for a significant increase in resource to expand and restructure the fight against economic crime, including money laundering and fraud.

I thank the Backbench Business Committee for granting this important debate and the right hon. Member for Barking (Dame Margaret Hodge), who has worked closely with me on this issue. Too often in this place, we talk about legislation and not implementation. As the motion says,

“economic crime costs the UK economy at least £290 billion per year”—

probably a lot more than that—and our agencies are “significantly under-resourced” and “fragmented”.

I would like to say that things will get better, but actually they will get much worse. That is not a criticism of the Government or any of our agencies, although there are criticisms to be levelled; the reality is that things are moving so quickly in this space and in the ability of organised criminals—people who deal drugs, traffic people across continents, fund terrorism, and steal assets from foreign jurisdictions and foreign nations —to move money around.

Let me set out an example of how easy this is becoming—these are all instances running through one platform. There is a hackers group called Lazarus, which is in effect a state-funded agency for North Korea that funds the North Korean weapons programme. There is also Hydra, a dark net drug dealing network, as well as Grandefex, which is run by organised criminals, and Russian Government agencies. The thing they all have in common is that they use a crypto-exchange platform called Binance, set up by a guy called Changpeng Zhao.

Reuters has investigated how those organisations used Binance to move money around totally anonymously between 2017 and 2021. Until 2021, this was regulated by the Financial Conduct Authority, but still for this crypto -exchange, which moved bitcoins and lots of other currencies totally anonymously for those enterprises —for those funding terrorism and other nefarious enterprises —all people needed to do in order to register an account was to enter an email address. That was all people needed to do. There were no “know your customer” checks, no “know your client” checks and no ID requirements. People just had to enter an email address, which could easily be a fake one, and the money was moved around totally anonymously.

The owner of the organisation, Mr Zhao, said as recently as 2020, when speaking to his own staff, that he was driven by one thing and one thing only: growing his enterprise. This platform has now been banned in the UK as a regulated activity, but that does not stop UK people actually using it, because that is obviously how the internet works. He told his staff to “do everything” to increase market share, and spoke about “know your client” checks as being “unfortunately a requirement”.

The investigation by Reuters found that £2.35 billion was moved around in this way for nefarious ends, but a couple of billion pounds is just scratching the surface when we know that the amount of money washing through the UK is in the hundreds of billions of pounds. The UK plays a key role in this, and it is a role that we must acknowledge, and we must take responsibility for clamping down on this. We are getting nowhere near doing so at the moment.

We know that roughly 40% of our crime is economic crime, yet only 0.8% of our resources in man hours are dedicated to tackling economic crime, so there is a huge disparity. I think it is fair to say that the figure of £290 billion a year is a conservative estimate. It represents about 14.5% of our GDP as a cost to the UK economy, yet the application of resources to it adds up to 0.04% of GDP. There is a massive gulf in the cost to society and to this nation, as well as in many other ways. It is not just a financial cost, of course. As I say, there is drug dealing, people trafficking and all the things we are trying to tackle, yet money goes out through the backdoor to all these illegal enterprises.

Action Fraud reports on the impact on individuals, and I think that all of us, as constituency MPs, deal with individuals who have had money stolen from their accounts through things such as authorised push payment fraud. Action Fraud is not the most fit for purpose organisation on the planet. Anybody who has used it knows that the information just goes into a black hole, which is what Action Fraud is. It is going to be reformed, but just changing something’s name does not make it work. However, according to Action Fraud’s figures, £2.35 billion a year goes in that kind of small-scale fraud, which damages our constituents and small businesses directly.

[John Penrose (Weston-super-Mare) (Con)]

I congratulate my hon. Friend and the right hon. Member for Barking (Dame Margaret Hodge) on bringing this important debate to the House. Does he agree that to some extent our public debate about this is stuck in a 1980s time warp? We are all still talking about bobbies on the beat, when increasingly we need to have bobbies behind screens, patrolling digital highways rather than pavements. Without that, public trust in maintaining law and order and maintaining the credibility of the system will continue to be serious eroded.

[Kevin Hollinrake]

That is absolutely right. My hon. Friend has much experience and expertise in this area as the former Government anti-corruption champion. He is absolutely right that we are tackling this in an analogue way in a digital era, and that we need to look at it completely differently. This is about enforcement and resources, and understanding the scale of the problem and meeting that with the right scale of response. However, we also need to look at legislative areas, because there are things we could do to make sure we get a better bang for our buck from our enforcement agencies, rather than just have more and more people, and I will talk about some other measures shortly.

On my hon. Friend’s point, at the moment 0.8% of our police and enforcement agencies’ time is spent tackling economic crime. Of the 20,000 new police officers who are going to be recruited, 725 are going to be dedicated to economic crime. That is better, but it is still only 3.6% of that cohort, so he is absolutely right. Her Majesty’s inspectorate of constabulary says that 90% of cases of economic crime are not even looked at, which is shocking.

The FCA is responsible for controlling money laundering in our financial organisations. Most of this runs through financial organisations—not just through the likes of Binance, which are shadowy enterprises—and I will talk about our main institutions in a moment. For money laundering purposes, the FCA regulates 22,000 organisations, which is a huge number, of which 5,000 are defined as high-risk organisations for money laundering. Last year it did 200 checks—only 200 out of those 5,000—and some of those were desktop checks, for money laundering. I would argue that we are never going to be able to tackle this just by having more and more people, although we do need more people.

This is not just about Binance. I am sure that, sooner or later, we will catch up with Binance. At some point in time, it will be banned, fined or something. In particular, the German regulators and the US enforcement agencies are on to it. Binance is based in the Cayman Islands, as Members might imagine. This is about our UK institutions as well.

If we look at our banks, we see that they have a horrendous record. HSBC was fined £1.4 billion for facilitating money laundering for Mexican drug cartels—the Escobars of this world—in 2012. That was a £1.4 billion fine, and it was fined another £64 million in 2021 for facilitating money laundering offences. In 2019, Standard Chartered was fined £840 million in the US and £102 million in the UK. In 2021, MT Global was fined £23 million by Her Majesty’s Revenue and Customs for money laundering offences. NatWest was fined about £260 million this year, which was the first ever corporate criminal prosecution by the FCA. I welcome the fact that this year is the first time this has ever happened for historical money laundering offences. UBS has had the biggest ever fine—£3.2 billion by the French authority in 2019.

Danske Bank has facilitated £200 billion of money laundering offences, but it has not been fined yet. This has been identified, and it will be fined for the £200 billion of Russian money coming out of Russia and being spread around the world, with it all going through small banks in Estonia via Danske Bank—horrendous. We talk about how Putin funds his invasion of Ukraine. He does so by keeping a coterie of people around him who are stealing Russian assets and making him—there is no doubt about this—the wealthiest person in the world. However, we are facilitating this, because UK companies are involved in the shell companies moving that money around.

I could cite other examples of economic crime from my involvement with the all-party parliamentary group on fair business banking. Criminal fraud at Lloyds HBOS was proven in 2017, and the cover-up associated with that is an utter disgrace. We are yet to see the Dobbs review, which later this year should identify the scale of the cover-up by Lloyds of what went on at HBOS. We have also seen the problems with Royal Bank of Scotland’s Global Restructuring Group, which devastated tens of thousands of businesses, in effect by defrauding businesses of their assets. On all those occasions, all those businesses ever got was a fine. Not a single senior executive in any of those cases has gone to jail. What we need is personal liability or this stuff will just be seen as a cost of doing business. That is the reality.

[Mims Davies (Mid Sussex) (Con)]

My hon. Friend speaks with knowledge and clarity about these crimes, and about the impact on constituents and the global impact—the two are very much interlinked. Many of my constituents have been impacted, to the tune of hundreds or thousands of pounds, which then filters into the global impact. How can we tackle this problem without people feeling that the answers are beyond them? We are talking about the global scale but this is affecting individuals; the two are inextricably linked and people want to see action.

[Kevin Hollinrake]

That is the right question. These problems are not difficult to solve if people are willing to apply the right rules. On the money taken from my hon. Friend’s constituents, there is probably an organised criminal gang behind that, contacting the constituent, saying they should move the money, and when they do that the money is probably moved through a mule account in one of the major banks and then off somewhere else, offshore, and it then disappears into the ether. The reality, of course, is that the banks would clamp down on mule accounts if they had the right incentive or the willingness to do so. These crimes can be stopped, but people will not stop them until that is in their interests to do so, and we need to make sure that is the case. Yes, we need the enforcement and enough people, but we need the people who are currently facilitating this, who are largely UK-based in this context, to be willing to prevent it.

The UK plays a particular role in all this economic crime. It is seen as a place where money is laundered, not necessarily where it is kept, although that is different in the case of kleptocrats or Russian oligarchs. The money is usually laundered in the UK and then goes off to other jurisdictions, largely the US. That is because of the consolidation of expertise in the City of London—we should be very proud of the City—and the financial organisations and the advisers who sit around them, who are also culpable in this regard. We have strong regulation in some areas and very weak regulation in others, particularly on offshore regulation, where in the UK there is a particular relationship between its domestic regulations and what happens offshore.

[Jim Shannon (Strangford) (DUP)]

Banks are very strict with local customers, and rightly so, but not with the movement of large sums of money, unfortunately, including the £200 million sent from Estonia to Northern Ireland, which I understand has been highlighted on “Panorama”. The Government seem to focus on the ordinary account holders being regulated strictly, but they do not seem to have any level of regulation for the big money movements. Does the hon. Gentleman agree that we need to focus on that bigger picture?

[Kevin Hollinrake]

The hon. Gentleman is right. The regulations are there but the penalties are not sufficient. The people within Danske Bank knew that they were doing wrong when they moved €200 billion out of Russia and into other parts of the world, but there was no incentive to do anything about it because they made a huge amount of money as it flew through their systems. A local manager, a mid-tier manager or even a senior executive would think, “Well, we’re making money and nobody’s going to find out, and if we are found out there will be a fine down the line and I will have gone by then anyway.” So where is the incentive to clamp down if they are going to make lots of money out of it? After all, everybody has budgets and targets to hit, and bonuses on the back of them. That is the problem: the penalties and enforcement need to be different.

Another key reason why money is washed through the UK is that we have the overseas territories, tax havens that work on the same basis of common law—Jersey, the Cayman Islands and the British Virgin Islands. Money launderers do not want to pay tax on their money, so they put it through a jurisdiction with low or zero taxation. That is why the UK plays a major role in facilitating this, and also why it must play a major role in clamping down on it.

We do not do clamping down very well here, however. Our enforcement agencies have success in some regards, but they are nowhere near as successful as other jurisdictions, for example the USA, which is far more focused on this. The US has similar bribery laws to the UK, introduced in 2011. In 2020 the US fined organisations in the US £1.85 billion for bribery offences, which is more than the UK has fined in 10 years. The situation for money laundering sanctions is very similar: in 2019 the UK fined our banks £260 million in the entire year for money laundering offences, while the US fined £7.5 billion, including £2.5 billion of criminal sanctions. Almost every one of our agencies is underfunded and under-resourced in tackling this problem.

What do we need to do? My colleague the right hon. Member for Barking will talk about some of the measures, but I will focus on the key things that I think we need. We must ringfence a budget for tackling economic crime right across the piece in the UK, to see exactly how much we are spending on tackling organised crime. We need fewer agencies, too; the effort must be more consolidated so the lines of reporting are less fragmented and more direct.

Action Fraud must not just be a rebadged enterprise. It needs to be meaningful, and people need to have confidence that the offences reported to it will be dealt with. I was recently nearly scammed through WhatsApp when I thought my son had contacted me, but it was another person. I wondered whether to report it to Action Fraud, but I thought, “What’s the point? It’s not going to do anything about it.” That is why people do not report such incidents. Clearly, therefore, there are many more offences than the number reported.

The No. 1 thing we need to do is something the Government have talked about. We already have a failure to prevent offence. There is corporate criminal liability in the UK if people fail to prevent bribery in their organisation—that offence was introduced some years ago, I think in 2011—and also an offence of failure to prevent tax evasion. People cannot just stop that happening; they have to put the rules in place to stop it happening. The key thing is what they can do to stop this. They therefore put systems in their organisation to alert them to certain things happening, and they train staff that they cannot get involved in bribery or facilitate tax evasion. We need to extend that to failure to prevent economic crime.

The Government have been talking about this for some time, and the Law Commission has reported on it. It said we should introduce such an offence but probably for fraud alone, not for money laundering or things like false accounting. I think that is a big mistake. It is also very mealy-mouthed on including personal liability for directors; it says it could be added if they have the mental something—what is the word?

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

Mens rea.

[Kevin Hollinrake]

Thank you; that is right, whatever it means in English.

[Sir Robert Neill]

A guilty mind.

[Kevin Hollinrake]

Thank you. On that basis, only if it can be proven that the directors had a guilty mind and were actually participating in the fraud can they go to jail. That is the wrong approach, and is not what the Health and Safety at Work etc. Act 1974 said. The Act said that those who fail to prevent accidents in their workplace could go to jail, and construction deaths dropped in the following year by 90%. We need to put in place an offence such that those who fail to take reasonable steps to prevent and clamp down on fraud can go to jail, without it also being necessary to prove that they deliberately facilitated the fraud. That would make a fundamental difference.

We must support whistleblowers, too. Most of the information on these offences will come not from our enforcement agencies or investigations by regulators, but from people within the organisations. Currently, those people are not protected—

[Mr Deputy Speaker (Mr Nigel Evans)]

I remind the mover of the motion that the guidance says they have up to 10 minutes, and the hon. Member has now spoken for longer than that times two. Perhaps, with a bit of focus, he will now bring his remarks to a conclusion.

[Kevin Hollinrake]

I have so much to say on this; I apologise, Mr Deputy Speaker.

Finally, as well as beefing up the numbers, we should consider doing what we have done on unexplained wealth orders. Welcome Government legislation that was brought forward in the last Session capped costs for UWOs, and we should consider capping costs for all prosecutions of economic crimes to stop very wealthy individuals preventing our enforcement agencies from taking them to court merely because they have huge financial firepower that is much stronger than ours.

On that, I will conclude. I am very sorry, Mr Deputy Speaker, that I have taken so long, but, as I said, I could talk for much longer on this given the chance.

[Mr Deputy Speaker]

I remind the hon. Member that, at the end of the debate, he will have two minutes to conclude, not four. [Laughter.]

--- Later in debate ---

[Liam Byrne]

Exactly. My hon. Friend is absolutely right.

I will quickly run through five parts of the economic manifesto that have to be at the core of the next economic crime Bill. One of the virtues of having this debate today, at this moment of great flux in our politics, is that I hope to put on the record the cross-party consensus that now exists about the provisions that need to go into economic crime Bill 2.

Many of us argued for a long time for the first Bill, which was rushed through the House in record time for obvious reasons. Many of the amendments that improved the Bill came from participants in this debate. What we are saying to the Government today, through the good offices of the Minister, is that the Bill did not go far enough—it did not begin to touch the scale of the problem. There is therefore an expectation that when the Government draw together the provisions of economic crime Bill 2, they will look at the economic crime manifesto, the Foreign Affairs Committee’s report and the text of this debate.

[Kevin Hollinrake]

The right hon. Gentleman is making an excellent speech. May I recommend that the Minister —or the Minister responsible, when that Minister is in place—also reads the Treasury Committee’s report “Economic Crime”, which sets out recommendations similar to those of the Foreign Affairs Committee?

[Liam Byrne]

The hon. Gentleman is absolutely right. The joy of the Minister’s position must surely be that Members of this House have done the heavy lifting for him. Between us, we have sketched out a pretty comprehensive catalogue of measures for the Bill: we have not quite put the clause numbers in, but I think we have set out most of the measures.

Those measures have to start with information about the crime. That is why we need the whistleblower provision, because whistleblowers are so often the source of intelligence, and it is also why we have to reform the suspicious activity reporting regime. Not only does the regime need widening so that it bites on more organisations such as estate agents but we have to find a way of pooling the intelligence that comes from suspicious activity reports and focusing on where we think the harm is greatest. Our Committee has heard that loud and clear, not least in New York last week, where our excellent consular team pulled together a wide-ranging discussion for us. Lots of banks, law firms and so on are saying, “Look, we are spending all our time running platinum-plated processes, but without sieving the information intelligently and focusing on the 0.01% of reports to which we really should pay some attention.”

My hon. Friend the Member for Hammersmith (Andy Slaughter) has drawn attention to the way our courts are being used to shut down journalists, which is the third piece of the puzzle. We need courageous journalists to speak the truth; we cannot use English courts to shut them down, as is happening in London.

There are some changes that we need to make to ensure that we have good information and intelligence. We then need to ensure that the regulator is in place. The argument about needing a better Companies House has been well rehearsed; it is just crazy that the “know your customer” provisions that bite on so many commercial organisations do not bite on Companies House, so it is recording directors with names like Mickey Mouse, and in some cases not recording directors at all.

I fully agree that we need criminal liability for directors as a third set of provisions. The hon. Member for Thirsk and Malton is absolutely right to sketch out the parallel with the Health and Safety at Work etc. Act, which requires people to identify the harms of which their organisation may be guilty and put provision in place to prevent those harms from happening in the first place. Prevention is always better than cure.

We obviously need to transform enforcement. We need to double, at least, the budget for the National Crime Agency. We need to match, at least, the money that the private sector puts into law enforcement. We need to take steps to reduce the costs, which is the only way to start getting unexplained wealth orders through. In America they would love the power of unexplained wealth orders, but we have had to explain that they are currently useless because we just cannot prosecute them successfully through the courts.

On top of that architecture, we need to create one further set of offences to tackle the problem that in cases of corruption, the evidence that our agencies need is not carefully organised and filed away in Britain; it is offshore in jurisdictions where it is not available to us. When we cannot onshore the evidence, we have to somehow onshore the offence. We need to think about creating tough obligations on enablers, on company directors and on politicians in this House and the other place to declare anything that is suspect or corrupt. We almost need a suspicious activity reporting regime that allows us to prosecute people for failing to disclose things that they should be disclosing. That needs to carry a sanction which leads to civil proceedings for confiscation of assets. Unless we find a way of onshoring these offences, we will continue to be bedevilled by the problem of getting hold of the evidence that we need.

Out in the world, people are asking why on earth this place has not acted on economic crime. It is understandable that people should draw a connection between the flood of dirty money into our politics and our failure to act. It is a matter of tremendous regret that more than £7 million of the £54 million that has gone to the Conservative party in high-value donations has come from individuals with very suspect links to Russia.

Ehud Sheleg, who has been discussed in The New York Times, is deeply connected commercially with his father-in-law, Mr Kopytov. The New York Times recently revealed the way in which money came from his father-in-law to Mr Sheleg as a result of business activity in Russia—that was in the suspicious activity report—but when a number of us reported it to the National Crime Agency, the NCA just said, “Well, it has come from the bank account of a UK citizen; nothing to see here.” That is nuts, not least because there is now further evidence that Mr Kopytov is closely linked to business in occupied Crimea, and that money from that Crimean business went into Mr Sheleg’s account in 2018. Worse than that, Mr Sheleg’s father-in-law is now closely connected commercially to Alexander Babakov, who has been sanctioned by countries all over the world.

It is not a good situation for any of us when we have to raise concerns of this kind in the House, not least because we in the House will make mistakes. During a debate on 17 January, for instance, I said that Yuriy Lopatynskyy had questions to answer. I am glad that he has now answered those questions, and has given me reassurances that he has never had links with the Russian intelligence services. I am glad to be able to accept those assurances, and to apologise to him for any distress caused. However, it is not a good situation when we do not have regulators, intelligence agencies and police services that are able to tackle this kind of dirty money.

Dmitry Leus, I am afraid, is another example. There is clear knowledge of his recruitment by the FSB, who got him out of prison. He has a criminal record in Russia., and according to intelligence sources that I have seen, he is

“absolutely dependent on the FSB”.

However, he is also a significant donor to the constituency of Esher and Walton, the home of—I am not quite sure what position he is in at the moment, but he was Deputy Prime Minister last time I looked. The donation that went to the Prince of Wales’s charity was returned, but the Conservative party has not returned its donation.

We are not in a good situation when we are having to discuss this kind of money coming into political parties, and I therefore hope that the future economic crime Bill will ensure that the only money that can come into a political party is from profits that have been created here, in this country.

Let me end by again thanking the hon. Member for Thirsk and Malton and my right hon. Friend the Member for Barking for initiating the debate.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to come to the House this afternoon. Even with all the chaos and politics outside, we have come together to have a very good debate and to share comprehensive ideas and solutions to the ongoing issue of economic crime.

I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) and the right hon. Member for Barking (Dame Margaret Hodge) for coming together to secure this debate. We often all agree whenever we have such debates, and it is for the Minister to respond to our comprehensive agreement and suggestions. I have often been in discussions on economic crime in which all the experts in the room have solutions but the Government are way behind in implementing them. I urge the Minister to work with his colleagues and others to bring those experts together so that we can get to some kind of solution. It feels like we have been talking about this throughout my time in Parliament, and there has been relatively little action.

Enforcement is crucial. The Government can have the best rules in the world, but if they do not follow through with enforcement, as they have not in many cases, there is almost no point in having those rules at all. If criminals realise that they are going to get away with it, the rules do not matter. I am sure the Minister will address what has been said about the Financial Action Task Force but, again, there is a gap between the rules and the enforcement; between what the FATF has said about the UK and the UK regime and the actual reality on the ground.

A number of Members highlighted that things move fast in this area. The hon. Members for Thirsk and Malton and for Strangford (Jim Shannon) both mentioned crypto-exchanges and cryptocurrencies, which is a fast-moving and fast-developing situation that means money can move away from people very quickly. Tracing that money then becomes incredibly difficult.

It strikes me that perhaps the Government need to get further into the expertise of this sector, because the criminals who do these scams and financial crimes are always several steps ahead of the Government on the technology, skills and expertise. It takes the Government and legislation an awfully long time to catch up with the fraudsters’ expertise.

The issues with Action Fraud—or inAction Fraud—have been set out very clearly by many people. It has been a problem for years, and I understand that the Scottish Government do not pay into Action Fraud because they do not see the value. They get nothing from it, so instead they look to our police force to deal with fraud. I will talk a wee bit about that, too.

We have a crime campus at Gartcosh just outside Glasgow. When Assistant Chief Constable Patrick Campbell gave evidence to the Treasury Committee as part of its economic crime inquiry in early 2021, he talked about the value of the crime campus. There are 27 enforcement bodies in one location, so people can speak to each other as they go about their business. They are made to communicate because of the useful way in which the campus is set up.

Patrick Campbell also talked about Scotland’s economic crime and financial investigation unit, detailing that 150,000 officers are tasked with serious organised crime and high-level fraud, and 17,000 people are gathering that information on the frontline and making sure that people know where to report these crimes. That contrasts with the fragmentation across the plethora of UK agencies, as the Treasury Committee’s report highlighted. Nobody has proper responsibility and proper oversight over economic crime in the whole UK, which really shows when it comes to enforcement.

Some very good suggestions have been made, and I would welcome more executive responsibility and liability for economic crime. A duty to prevent economic crime is crucial, and a good comparison was made to the Health and Safety Executive. Because nobody is responsible or accountable for economic crime, it is difficult to see anybody doing anything about it. I would extend that to social media companies—some of the evidence we took in the Treasury Committee reflected this—because they are where an awful lot of fraud happens these days.

I went to an event in this place with TSB Bank, which sent me some more information about the levels of fraud on social media platforms. It reported that between January and March, 70% of that fraud came through Meta companies—24% on Facebook and 46% on Instagram—with 4% on Snapchat and 23% on other social media platforms. Why is Meta not being held to account for the fraud on those platforms? It is not Facebook, Instagram or Snapchat that have to pay up for such fraud, but the banks. That fraud is not the banks’ fault. They are not facilitating it; the social media companies are.

[Kevin Hollinrake]

The hon. Lady makes an important point. The point about the failure to prevent offence is, of course, that it does not just apply to the banks; it could also apply to the companies she talks about, which are facilitating the scamsters who facilitate the crime. It could also apply to the senior executives in the organisations she refers to.

[Alison Thewliss]

I absolutely agree. The hon. Gentleman made a point about the fraud coming through on his WhatsApp. There is a real problem there; such fraud is taking place on those platforms. If they did not exist, perhaps the fraud would happen in a different way, in a different place. However, social media companies ought to be taking real responsibility. TSB said that one of the highest value incidents within the period I have mentioned was a £3,000 fraud carried out against somebody on a social media platform, with the average amount of fraud being £415. That is a lot of money for people to lose. Many people on social media might not be on particularly high incomes, but they might buy and sell across marketplaces. We see fraud where someone advertises a games console, and when people pay the money over, it never arrives, because it was literally just a picture of a games console. Some people then try to pass that on to somebody else, and more people get scammed. This is a real issue. TSB ran a sample across a week and found that 67% of those purchase scams were happening on Meta. The Government need to do an awful lot more to understand the levels of such fraud, how it is happening and how we should go about chasing it down. There is an awful lot more that can be done in that regard.

I come to the issues that the right hon. Member for Barking (Dame Margaret Hodge) so excellently and comprehensively set out about kleptocrats, Londongrad and the dirty money washing through the City of London and other places. The Government should be seeking out the experts on that, getting them to come in and exploring these things with them. I am referring to experts such as Oliver Bullough and other journalists who have done so much to expose this. Why is this still happening? Why is it still being allowed? What opportunities are there in the economic crime Bill to nail this down and do more than the Government have done so far? Although the first economic crime Bill was a welcome reaction, it was pretty small scale, and an awful lot more needs to be done.

As I often say, more needs to be done on Scottish limited partnerships, which have been used so well to facilitate such fraud. It has spread, as it does—if we push down the bubble in the wallpaper, it will come up somewhere else—to Irish limited partnerships. What discussions have the Government had with the Irish Government about what our failure to tackle this has done to their limited partnership system? What progress and what dates can the Minister give in respect of the register of overseas entities? We have talked about that for years, and nothing has yet happened. The Scottish equivalent has been set up and is operating, and the UK Government are behind.

Let us consider the impact on the wider economic system, on sanctions and on Russia. I understand that Bill Browder said this week that the UK is the world’s biggest destination for dirty money from Russia, and that

“there has not been a single Russian economic crimes prosecution in the UK”.

Why is that? What are the Government doing to ensure that nobody can get off scot-free?

I wish to talk briefly about Companies House, because I always do, and I will continue to do so until it gets fixed. Companies House is utter guff, and the register is full of complete nonsense. Will the Minister meet Graham Barrow, an expert in this area, to talk about the timescales and the process for reforming Companies House? Graham Barrow pointed out that on Tuesday this week, 4,063 new companies were registered at Companies House. That is not a sign of a booming legitimate economy, but a sign that something is very wrong with Companies House. For example, Wendy Siegelman, a journalist in the States, pointed out that a company was registered in Edinburgh in December 2020 under the name of President Donald John Trump. When she flagged that up with Companies House, the response was:

“The person was no longer President of the USA at that time.”

That is entirely missing the point; I do not think that Donald Trump is living and registering companies in Edinburgh—I think he is somewhere else in the world, doing other things just now. Companies House should be taking these issues a lot more seriously.

More seriously for the Government, Martin Williams of openDemocracy has mentioned that fraudsters have been exploiting Companies House to set up companies in the names of officials at the Ministry of Justice and Her Majesty’s Revenue and Customs. This identity fraud being perpetrated through Companies House should be of great concern to the Government, not only because it is government officials being affected, but because you, I or anybody else, Madam Deputy Speaker, could be affected by a company being registered in our name. We would then become somehow liable for it, despite perhaps never knowing anything about it. Companies House reforms are well overdue. It must be an anti-money laundering supervisor in its own right, and it must ask for verification of not only our companies, but individuals.

I could talk for longer on this—I could talk until the cows come home or we lose a Prime Minister, whichever comes sooner—but I will leave it at that. There is an awful lot to be done on this, and the Government need to listen to the experts. The Government need to get them in, get them around the table and figure out how to fix this properly, once and for all—or give Scotland the powers to do so, and we will do so ourselves.

--- Later in debate ---

[Kevin Foster]

Obviously, it would be tempting for me, at the Dispatch Box in the current situation, to make a raft of pledges on behalf of the Government about all the things I might like to see happen. At this stage, I will say that I share my hon. Friend’s enthusiasm for coming to a conclusion on our assessment fairly quickly.

My hon. Friend the Member for Cheadle (Mary Robinson) in particular talked about whistleblowers. We recognise the value of whistleblowers’ being prepared to shine a light on wrongdoing and we believe they should be able to do so without fear of recrimination. I want to make it clear that workers can seek redress through the whistleblowing regime if they are dismissed or suffer detriment because they have made a protected disclosure. It is worth noting that uncapped compensation can be awarded by an employment tribunal to reflect this.

If a whistleblower does not feel they can blow the whistle to their employer, they may make a disclosure to a prescribed person. There are over 80 prescribed persons and the Department for Business, Energy and Industrial Strategy regularly publishes guidance for them and updates the list of prescribed persons.

[Kevin Hollinrake]

I appreciate the fact that the Minister is covering this brief. On the point he makes, if whistleblower legislation works, then why has my constituent Ian Foxley, who blew the whistle on GPT Special Project Management in 2011—a company that was found guilty last year and faced £28 million in financial sanctions—been without a single penny of compensation or a single penny of earnings for 11 years? The legislation is not broad enough or all-encompassing, and it needs urgent reform.

[Kevin Foster]

As always, my hon. Friend makes a powerful case for going further. He will be aware that the Government have committed to a review of the whistleblowing framework, and we are considering the scope and timing of that review. We would certainly be happy to engage with him about how that could be taken forward effectively, particularly given examples such as the one he has cited, although he will realise that I do not necessarily want to comment on individual cases from the Dispatch Box.

This has been a helpful and productive debate. I reassure colleagues that the Home Office and the Treasury, when leading the policy response for Government, ensure that we do so through a governance structure that oversees activity across the system. This is not the only area where our two Departments work together in the national interest to deliver the overall objectives we wish to see.

In closing, I again thank all right hon. and hon. Members for their contributions to this debate. This is an immensely important subject and an area in which we will shortly see significant legislation brought before the House for colleagues to scrutinise, examine and develop, as I know they will want to. Certainly, from what we have heard in this debate, there will be many positive and constructive engagements in that debate. That is something we very much look forward to, because, as has been said, this is not just about tackling crime; it is ultimately about keeping our nation and its allies safe.

[Kevin Hollinrake]

This has been an excellent debate. I thank all Members across the House for supporting the application for the debate and for their contributions, and the Backbench Business Committee for granting it. I have learned an awful lot in addition to what I know from having looked at this issue for some time. “Coalitions” is perhaps a bit of a dirty word in the Conservative party, but I am a big fan of them, actually. I invite everyone who has spoken in the debate and anybody else interested in this issue to work with our all-party groups on this agenda, because we are not going away—we will make sure that future legislation is fit for purpose.

It is fair to say that, for whatever reason, we have turned a blind eye to this issue for too long. Ukraine has been an eye-opener because we have suddenly realised what it means and facilitates. I welcome the economic crime Bill mark 1, but mark 2 is coming along, with the reforms that will come from it. I urge the Government to look at the economic crime manifesto and include what they can in there, and also make provision in other areas, particularly on failure to prevent, whistleblowers, and beefing up, co-ordinating and strategising our resources.

It is great to see so much cross-party agreement on this. With all the work of the Justice Committee, the Treasury Committee, the Foreign Affairs Committee and our all-party groups, it involves MPs and peers across the political spectrum. It is time we opened our eyes. We have been a world leader in facilitating economic crime; we now want to be a world leader in fighting economic crime.

Question put and agreed to.

Resolved,

“That this House notes that economic crime costs the UK economy at least £290 billion per year; recognises that law enforcement agencies are significantly under-resourced to deal with the scale of the problem and can be unwilling to properly enforce existing laws; is concerned at the fragmented nature of the enforcement landscape; and calls on the Government to bring forward an economic crime enforcement strategy that allows for a significant increase in resource to expand and restructure the fight against economic crime, including money laundering and fraud.”

[Angela Rayner (Ashton-under-Lyne) (Lab)]

On a point of order, Madam Deputy Speaker. I assure you that I have informed the Minister concerned. I hope you will be able to advise me on how to shed light on a series of confused and potentially misleading comments made by the Prime Minister and his Minister regarding Alexander Lebedev. During his appearance at the Liaison Committee yesterday, referring to a meeting in April 2018 in which he met Alexander Lebedev, the Prime Minister stated:

“I have certainly met him without officials.”

This is a significant revelation and something no Government Minister has ever commented on under questioning. But during the urgent question earlier today, the Minister appeared to contradict the Prime Minister’s claim that officials were not involved, saying that the Prime Minister did involve his officials. Later in the session, she received word from the Prime Minister that he thinks he told officials. We must get to the facts.

This is not just a question of integrity but demonstrates a complete disregard for British national security. What action can be taken from the Chair or by Members of the House to ensure that Ministers keep their promises to us, to the Crown and to the British people to allow us to get to the facts of this whole murky business?

Migration and Economic Development Partnership with Rwanda

Kevin Hollinrake Excerpts

Wednesday 15th June 2022 Commons Chamber

[Priti Patel]

If I may, there is a fourth option, which is that the right hon. Gentleman is wrong on all counts. The individuals coming over the channel are coming from a safe country, which is France. He will be aware, from debates we have had in the House about our Nationality and Borders Act 2022, about the changes being made to immigration courts and tribunals to stop the repeated claims that go through the courts, and to speed up processes and bring the scrutiny that is needed to stop claim after claim. We have just spoken about the exploitation of our system, which we have to stop. That is part of the measures and changes that this Government are determined to bring in, as well as long-term reform of our asylum system, which the right hon. Gentleman and his party, and Labour Members, voted against.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

In the absence of any practical, workable policies on this issue from the Opposition, I absolutely support the Home Secretary’s policy on Rwanda, and on the establishment of reception centres in the UK, rather than asylum seekers being housed in hotels. Does she agree, however, that those reception centres must be in the right location, so that they do not present an unfair or undue burden on any one community, including the 600 people who live in Linton-on-Ouse and who are expecting an intake of up to 1,500 young single men right in the centre of that village? Does she agree that that policy should be reconsidered?

[Priti Patel]

I thank my hon. Friend. We have been discussing this issue for some time and working together on it, and it is incredibly important, particularly for his constituents. He has raised with great candour some of the challenges that he feels his constituents will face, and I have committed to working with him on that. There is no doubt that reception centres are the right way forward, so much so that, as the House will be interested to know, the European Commission has been paying up to €500 million, or even more, for EU member states to build reception centres. We must also have the right provisions and facilities within those reception centres, and that is exactly what we are working to achieve.

Asylum Reception Centre: Linton-on-Ouse

Kevin Hollinrake Excerpts

Tuesday 24th May 2022 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I very much appreciate this opportunity to debate on the Floor of the House the asylum seeker reception centre at Linton-on-Ouse. I must say that although the Home Office has been willing to engage on this issue, the approach it has taken has been pretty much an abuse of power. It has been indifferent all the way along. The approach has been very insensitive and quite uninformed in terms of the issues that we see on the ground.

I would summarise the proposals as a convenience, in that the availability of a site has taken precedence over its suitability. The site is simply not fit for the purpose outlined for it. A key indicator of that is that until now I have not been able to find—I am sorry to say this; I have hunted through Home Office and Cabinet Office Ministers, Secretaries of State and officials—anybody willing to take ownership of the decision and say that it is the right thing to do. No Member of Parliament or Minister has come up to me to say that they believe that this is the right place to put the facility.

Of course such a facility is always going to be controversial; I quite understand that. As I will touch on in a second, this is not about nimbyism. To put right at the heart of a village of 600 people a facility that will ultimately have a capacity of about 1,500 young single men between 18 and 40, coming from different cultures and different parts of the world—Iraq, Syria, Afghanistan, Eritrea—is absolutely disgraceful. I have lived all my life about six or seven miles away from the village, and I know many people in it. In North Yorkshire, we are lucky to have a great deal of freedom—that is what we are used to. But the people of Linton-on-Ouse will have those liberties taken from them as a result of this policy.

[Sir Robert Goodwill (Scarborough and Whitby) (Con)]

Does my hon. Friend agree that if a developer were to try to build a development of such a size on the edge of such a village, they would be laughed out of court?

[Kevin Hollinrake]

My right hon. Friend is absolutely right, and I very much appreciate his support and that of many other colleagues; this debate is well attended for an Adjournment debate, which I very much appreciate.

My right hon. Friend is absolutely right: the issue is not race or nimbyism, but scale—the whole facility is way out of scale for this development, as he says. I am talking about the simple liberties that we take for granted: walking to the village shop, sending a child to walk to the village school or playground, walking the dog alone in the morning or evening—all those liberties that have been pretty much taken for granted in Linton-on-Ouse will be taken from its residents. I do not think it is putting it too strongly to say that those residents are the sacrificial lambs to a national policy. That cannot be right and it cannot be something that the Minister will countenance.

[Julian Sturdy (York Outer) (Con)]

Is my hon. Friend not surprised that there was no consultation with local MPs, local authorities and local residents before the decision was actually taken?

--- Later in debate ---

[Kevin Hollinrake]

I am kind of surprised and kind of not. I can understand the political priority around the policy, which sits alongside the Rwanda policy. It was hastily rushed out and has not been properly considered.

But my hon. Friend is so right. I should point to the facility at Rivenhall, in the Home Secretary’s constituency. That was eventually removed because, according to the Home Office, there had been

“a failure to recognise that Rivenhall was not in a major conurbation”.

It said that asylum seekers should be placed in urban areas that encompass a number of cities or towns so that they can access support more easily. Crucially, to come back to my hon. Friend’s point, there was

“a failure to ensure that appropriate engagement had taken place with council officials and other service providers”.

Those are the Home Office’s own words, but exactly the same has happened again with this facility. There has been no consultation.

[Mark Menzies (Fylde) (Con)]

My hon. Friend is a tremendous champion for the people of Thirsk and Malton—that is not in doubt—but this issue is also about what is in the interest of the asylum seekers. We are dealing with people who are highly vulnerable, and the point he is making is very strong. It is about their ability to access support networks and to be in an appropriate environment, as opposed to being in an isolated, albeit incredibly beautiful part of the world. He is absolutely right to bring this question to the Floor of the House, and it is absolutely right that Ministers are held to account for this decision.

--- Later in debate ---

Motion made, and Question proposed, That this House do now adjourn.—(Amanda Solloway.)

[Kevin Hollinrake]

My hon. Friend is absolutely right. This is not just about the site not being right for the residents of Linton-on-Ouse; it is not right for the asylum seekers, either. I am yet to find any agency that supports this facility in this location, whether police or local authorities, or anyone in the community itself. Crucially, the refugee agencies that have attended all the public meetings I have attended have been clear that this is the wrong facility in the wrong place. That cannot be right for the asylum seekers themselves. Inevitably, in a small local village with no amenities other than a village shop, they will be bored, whatever is put on the site in terms of some amenities, which, to be fair, the Home Office is doing.

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful to the hon. Member for bringing forward the debate, which impacts on my city of York, as I have discussed with York City of Sanctuary. We are concerned about people’s access to vital infrastructure and services such as the NHS, which is based in the middle of my constituency. It is completely inaccessible outside of hours for people in Linton-on-Ouse without private transport.

[Kevin Hollinrake]

The hon. Member raises a good point. The first tranche of 60 people—service users, as they are called by the Home Office—are due to move in in seven days’ time. There was an indication by the Home Office today that that might be delayed. We do not know by how long yet, but nevertheless, none of the plan for mental health support, GP support or dental support has yet been articulated. The police plan has not yet been articulated. It is simply wrong. We are going far too quickly with this. We need to slow down, pause, look again, consult properly and make sure that we have mitigations in place.

I was on the call with the police and the Home Office today, and the police came out with the phrase that they use, that they want to keep people safe and for people to feel safe. Neither of those things do people in Linton-on-Ouse feel. People do not feel safe. I think those fears are rational; they are not irrational fears. In any cohort of 1,500 young single men, there will be some who do not play by the rules. The vast majority will, but that is of little comfort to people genuinely in fear of their lives and wellbeing. I have had children as young as nine writing to me and meeting me at these public meetings saying how panic stricken they are. I have had elderly residents saying that they have lost the sale of their home and they are in ill health, including one lady whose husband is in ill health. This issue is changing lives today.

Crucially, one thing that has not been considered at all—this was the subject of an exchange of correspondence with the Home Office only yesterday—is what happens to existing service personnel in accommodation on the site and in the village. According to the Home Office, they have been given an option to move elsewhere, but that should not need to be the case. What happens with someone in the armed forces, currently or previously, who has already bought a house in the village of Linton-on-Ouse? I speak with some experience in the property market, and there is little chance of selling any house in Linton-on-Ouse at the moment. We are basically saying to service personnel or former service personnel who live in the village—it is commonly known where they live, and it may be that some of these service users hold a grudge against service personnel who have fought in Iraq and elsewhere—that a grudge held against them might put their lives in peril. No consideration has been made of that. It cannot be right that the Home Office is not showing a reasonable duty of care.

[Jerome Mayhew (Broadland) (Con)]

My hon. Friend has spoken of some 60 or 70 service users due to arrive next week. That is already 10% of the entire population of the village. Can he clarify whether this will be a closed facility? Will there be any management of ingress and egress, or will the service users be widely open to move around the population at will?

[Kevin Hollinrake]

That is a good question; I should have touched on that earlier. It is a non-detained site, so the service users—asylum seekers—will be able to leave the site and return at will. There will be some management of that on the door to get the name of who is leaving and who is coming back, although there is always a concern that people will get out by other means as it is a very big site, but the point is that they are non-detained. There is an informal curfew at 10 pm, so there is no requirement for them to come back. Safeguarding calls will be made to them after 10 o’clock if they are not back, but there is no limitation on the number of times that they can leave the site. In fact, they can go and stay overnight elsewhere. They are free to come and go, which is clearly a big concern for the village.

I am sure that this is not the Home Office’s intention, but it appears to me that the village is collateral damage of a wider policy. It cannot be right to put the whole burden of a single national policy, however important it is, on one small community wherever it is in the UK—whether it is in my constituency or not. This is not about my popularity locally or my majority. I know many people in the village and was at school with many of them. It is simply unfair, it is simply wrong and Ministers must think again.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

My hon. Friend is making a valuable speech about the implications for that community. Has he had any indication from the Home Office about extra funding that may be available for local services such as extra policing or health? It is a small community facing a very large potential increase in the population. What happens to that funding?

[Kevin Hollinrake]

My hon. Friend is absolutely right, and that position is not yet clear. It has been made more apparent recently that there will be that kind of funding, but we have no plan in place. The police, fire and crime commissioner, Zoë Metcalfe, has been very helpful and engaged in the whole process, as have Hambleton District Council, Mark Robson, the leader of the council, and Mal Taylor, the local councillor. Apparently, there will be a double-manned police car in that village 24/7, which is good to hear, and there will also potentially be CCTV in the village, which does not currently exist. Those potential mitigations would help, but it is not clear that those plans will be in place on 31 May when service users move in. I have also not seen a clear plan anywhere.

On the funding of the centre, I understand that money will be made available from Home Office funds, but again that is not clear, which is why we are saying that the plans should be paused until we understand what is needed and how it will be deployed properly.

I have been called all kinds of things on Twitter since I objected to this facility, such as racist, which is complete nonsense. Thirsk and Malton has been welcoming of asylum seekers from all different parts of the world. We have some Syrian families in Malton and we have Ukrainian families all across the constituency, so it is complete nonsense. Nor is it a question of nimbyism. As I said, I would object to such a facility and support other hon. Members—I am delighted to see so much support in the Chamber—wherever it was going to be if that was the wrong location, as this is. We can tell it is the wrong location because Home Office guidance on dispersal is clear that there should be one asylum seeker per 200 head of population. This is on a completely different scale. The only comparable facility that we operate in the UK is at Napier in Folkestone, where there are now 320 service users against a population of 47,000. In this case, there will be 1,500 against a population of 600. Clearly, that is a trebling of the population.

[Alison Thewliss (Glasgow Central) (SNP)]

I very much support the debate that the hon. Gentleman has brought forward. As chair of the all-party parliamentary group on immigration detention, I have visited the Napier site and found that it was entirely inadequate for the needs of the asylum seekers based there, that it had put a burden on local health services, and that facilities had not really been put in place to deal with that number of people—and that was 300, not the 1,500 suggested for the site at Linton-on-Ouse. Does he share my concern that, without engaging with the local community, it would be difficult to get support for any size of facility on people’s doorstep?

[Kevin Hollinrake]

Yes, I think the hon. Member is absolutely right, and she does great work on the all-party group on immigration detention, which is heavily engaged with me on these matters. Whatever we do with these facilities, we have to plan them properly. That did not happen at Napier, hence the trouble. This is a better-planned site, there is no doubt about it—some of the issues of dormitory accommodation and other things have been solved, and the accommodation itself has been planned better—but it is much worse for accessing amenities and public services for the service users, which leads to all other kinds of problems.

As I say, we are where we find ourselves, but I do not think it is right that we can effectively use this village, which is clearly not the right the place for this facility. Everybody can see that. I am really interested to hear whether the Minister will defend this choice, because I have not heard a Minister or an official do that yet. There is lots of finger pointing going on.

[Graham Stringer (Blackley and Broughton) (Lab)]

Although I am from the other side of the Pennines, I find the hon. Gentleman’s case completely compelling. Is this site intended to be permanent or is it temporary? I would be grateful if he could explain that.

[Kevin Hollinrake]

I think it is more than temporary. We are not quite clear, and I appreciate the hon. Member’s support. Clearly, the Home Office is putting quite a big investment into this. It is putting a gym, a library and facilities for multi-faith worship activities on site. It is clearly a big investment, so I can only imagine that it is not a two-year but a decade-long thing, if not longer, depending on how the wider asylum and small boats issue carries on. I think people’s lives are going to be blighted for a decade at least—that would be my guesstimate—and that affects things in so many different ways in the village, not least the liberties that people should reasonably expect.

To me, the plans are half-baked. I cannot put it any more kindly than that. On the call today with Home Office officials, the words were, “This is going to be a journey.” I just do not think that is right. I just do not think we can treat a community of 600 people like that. Of course these matters are controversial wherever we put such facilities, but nevertheless it is clearly easier and more likely to work as part of a local community in a bigger community, for so many different reasons—not least the fear of crime, of course. In a bigger conurbation, when someone is walking down the street there are likely to be other people on that street, but in a village such as Linton-on-Ouse there often is not, so people are going to feel like prisoners in their own home much of the time there.

I said right at the start that this is an abuse of power, and I do not think that is putting it too strongly. The Home Office is using its emergency powers, with a Q notice, so it did not have to go through the planning process for this material change of use, which it undoubtedly is. The reason for those powers—why is it an emergency?—was, we were told, covid. Well, we thought that covid was actually largely behind us, especially at this time of year. I do not think it is right to say that covid can be one of the reasons why we are using emergency powers in this way. I know that Hambleton District Council is looking at enforcement action against the Home Office to find out the exact reasons behind the emergency powers, which should be used exceptionally rather than on a more frequent basis. So this really does not seem to have been properly considered or thought through, and it is ill-informed.

Where do we need to go now? There are other sites available. My belief is that this should stop completely. It is not just about putting mitigations in place; it is the wrong place, and there is no way to mitigate this facility in a way that will make residents feel safe and be safe, so we should stop completely. I have a list of other sites that could be considered. I am interested to see what the Minister says about the consideration of other sites, but the Linton-on-Ouse action group has put together a list of other sites, all from the MOD disposal list. I think that is where we should go next. We should suspend these plans, look at this and consult on other sites. We absolutely should delay right away, and there should be no talk of this happening in a week’s time. The police have asked for at least a month’s delay. If the police want a month’s delay, the Home Office surely cannot ignore the police and crime commissioner’s recommendation, which has the support of her senior officers, and carry on regardless without listening to the expert advice of those people.

The line of least resistance is that the Government simply change tack, have a change of heart, reverse their plans and look at this again, which I would welcome. If that is not going to happen, and I have no indication that it is, then as I have said, I will be working with Hambleton District Council on a legal challenge. I think it is serious enough that we should challenge the basis of the decision and the process by which it has been made in the courts if the Government do not change tack. I do not think it is right to do that unless we have a serious chance of reversing the plans completely and blocking them altogether. If all we were to achieve were simply to delay things or give the Home Office the opportunity it should have taken in the first place to consult properly, I would not want to waste taxpayers’ money. We are still waiting for legal advice, but if there is a realistic chance that we can block the proposals and make the Home Office think again, we should do that on behalf of those people who live in the village.

I am told all the time by Home Office officials that this is a political decision. It will take the Minister or the Home Secretary to intervene, either to own the decision and say, “This is my decision, this is the right thing to do”, or to own up and say, “It is not my decision, and this is the wrong place.” There is lots of finger-pointing going on, but it cannot be that the fortunes of that village hang on a decision that no one will take ownership of. That is very much where we are. I would like to understand who owns the decision, and the rationale behind it in the context of other sites. I want the Minister to tackle the issue that I believe is at the heart of all this —tell me I am wrong—that it is not simply that the availability of the site has superseded the suitability of the site. I cannot see any other justification for the selection of Linton-on-Ouse as the place for this asylum reception centre.

--- Later in debate ---

[Kevin Foster]

As my hon. Friend will be aware, we already have a consultation under way about a major reform to the dispersed accommodation system. As he will know, we are moving to a full dispersal system in which all local authorities will be involved—previously, not everyone was involved—and part of that is looking at the cost to local authorities. There is a slight difference with accommodation centres in that in such sites a number of facilities are provided that we would not provide at each individual location where dispersed accommodation is provided. We cannot realistically provide it in contingency hotels. As he will be aware, the London Borough of Hillingdon has quite a large number of people in contingency hotels and I think that, whatever our views on the proposal and some other aspects of asylum policy, we can all agree that we need to move away from that. It is not good for them, for the taxpayer or for the local communities.

[Kevin Hollinrake]

The Minister makes a good point that the number of sites that might fit the bill are few and far between and that the site’s accommodation may be suitable, but does he not agree that, in the interests of the asylum seekers, it would be better to have the centre where people could access other amenities, leisure facilities and public services? Surely he can see that the selection of a site that completely lacks all those things is pretty sub-optimal.

[Kevin Foster]

We can look at what will be provided on the site. For example, it is fully catered, so there will be three meals a day for those accommodated there. We will provide a number of basic services and facilities for recreation and entertainment and, on top of that—this is perhaps one thing we were to come on to—we will provide the ability to progress cases while on site, such as doing the pre-interview questionnaire and conducting the substantive asylum interview so that people’s cases can be processed more efficiently. We believe that that will deliver a better outcome overall. We are working on healthcare and other areas as well. Again, it is about the balance between having numbers in one location where we can provide a number of services versus more dispersed accommodation where we do not supply specific services and people may be more reliant on those in the community.

Foreign National Offender Removal Flights

Kevin Hollinrake Excerpts

Wednesday 18th May 2022 Commons Chamber

[Tom Pursglove]

We debated these matters in the Nationality and Borders Public Bill Committee. A person’s age upon arrival to the UK is not an exception to deportation. The length of time that a person has lived in the UK as well as the strength of their social, cultural and family ties are factors that are considered under the article 8 requirements of the immigration rules. Of course, there is ongoing dialogue with all our returns partners and all such matters are discussed as part of those deliberations and discussions.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The vast majority of the public—and, if truth be known, the vast majority in the House—support what the Minister is doing. The Home Office has a responsibility to keep citizens safe, but does he agree that it also has a responsibility to keep the villagers of Linton-on-Ouse safe, so while it is the right idea, it is entirely the wrong location to put 1,500 young, single men—the vast majority of whom will be law-abiding but some will not—in the middle of a village of 600? Will he look again at the plans and put them on hold until the impact on the community has been properly considered? When the refugee agencies are saying that it is the wrong location, the Home Office must pause, look again and stop the plans completely.

[Tom Pursglove]

I am grateful to my hon. Friend for raising that issue, which is pertinent to his constituency. I know that he and Members on the Government Benches recognise how important it is that we have a more sustainable accommodation model. We cannot continue to spend about £5 million a day on hotel accommodation in the asylum space. That is not acceptable or sustainable, so we must find solutions to that, including through the accommodation centre model that he is aware of. He raised a number of points and I know that ministerial colleagues in the Department are keen to continue to engage with him and work through those issues.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 25th April 2022 Commons Chamber

[Tom Pursglove]

I thank the hon. Lady for raising that point. Under the Vienna convention, it is for Parliament to interpret our international obligations. We will always act in accordance with our international obligations; we have made that consistently clear. The Bill has been through appropriate due diligence, and we will get on and deliver it.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

11. What recent steps her Department has taken to tackle economic crime.

[The Minister for Security and Borders (Damian Hinds)]

Tackling economic crime is a key Government priority. We have expedited legislation—the Economic Crime (Transparency and Enforcement) Act 2022—to crack down on Russian dirty money and corrupt elites in the UK. We have also set up a new dedicated kleptocracy cell in the National Crime Agency to target sanctions evasion and corrupt assets hidden in the UK.

[Kevin Hollinrake]

I thank the Minister for that answer. GPT Special Project Management was fined roughly £28 million by Southwark Crown Court last year for bribery offences. The key whistleblower in that case was my constituent, Ian Foxley. He has had 11 years without a single penny in income because he blew that whistle, as nobody will employ him now, of course. Does my right hon. Friend agree that if we want to crack economic crime, we must incentivise whistleblowers to come forward, and protect them when they do? Will he listen carefully what my hon. Friend the Member for Cheadle (Mary Robinson) says tomorrow in introducing her 10-minute rule Bill, when she will set out the case for whistleblower reform?

[Damian Hinds]

My hon. Friend is right about the value of whistleblowers, who should be able to come forward without fear of recrimination. We have continued to improve the whistleblowing framework, including by extending eligibility for protections and introducing a reporting requirement for prescribed persons—the bodies to whom people can make a whistleblowing disclosure. My hon. Friend has campaigned consistently on this matter and is expert in it, and I am keen to meet him to discuss his points further.

Global Migration Challenge

Kevin Hollinrake Excerpts

Tuesday 19th April 2022 Commons Chamber

[Priti Patel]

On eligibility, as I have already said, everyone considered for relocation will be screened and interviewed and have the right access to legal advice and services, and decisions will be made on a case-by-case basis. That is absolutely right and proper, but the fundamental principle in relation to this policy and the new plan for immigration, in which I am sure the right hon. Lady is well versed, is that it will apply to people who are inadmissible to our asylum system and to people who have come to our country illegally: through illegal and dangerous routes.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The asylum reception centre to which my right hon. Friend referred will be at Linton-on-Ouse in my constituency. I am not a nimby in any shape or form but, nevertheless, the RAF base on which it will be situated is at the centre of that small rural village. Local people are understandably concerned that this is not an appropriate place to put such a reception centre. Will she meet me to discuss that decision and to see what can be done?

Economic Crime (Transparency and Enforcement) Bill

Kevin Hollinrake Excerpts

2nd reading
Monday 7th March 2022 Commons Chamber

[Priti Patel]

I thank the hon. Lady for highlighting the role of our anti-corruption tsar, my hon. Friend the Member for Weston-super-Mare (John Penrose), who has been supporting the Government at every level. He has also supported me by helping with much of our work on illicit finance and economic crime. He comes to our roundtables, and spends a great deal of time dealing with matters concerning the City and transparency. I can therefore assure the House that we have that function up and running. We have a superb colleague supporting the Government on all those measures, and I am very grateful to him for his work.

Let me now explain the measures in the Bill in more detail. It sets a new global standard for transparency, which is thanks to the work of my hon. Friend the Member for Weston-super-Mare, but it also takes the whole-of-Government approach that many Select Committee reports have called for—I think it fair to say that I have read a few of those reports produced by colleagues and friends—in that it contains several measures from several Departments. It creates a register of overseas entities to crack down on foreign criminals who use the UK property market to launder money. A foreign company that wishes to own land in the UK will be required to identify its beneficial owners and to register them with Companies House. Once a company is registered, an overseas entity identity number will be provided, and that entity will be required to update its information annually.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome the measures that my right hon. Friend is introducing, but many Members fear that people who have already bought their properties through a discreet structure will sell them before the measures take effect. Will she look carefully at amendment 64, which Mr Speaker has graciously accepted—a manuscript amendment—and which would effectively prevent people from doing that by means of a prohibition through the Land Registry?

[Priti Patel]

I thank my hon. Friend for amendment 64. He was in touch with me about it over the weekend. He is absolutely right, and we are looking at the details of that proposal.

--- Later in debate ---

[Yvette Cooper]

Clearly we need updated figures, but my understanding is that 50 visas is the figure issued by the Home Office yesterday. I hope we will have a further update, but the problem is that we are now 10 days into the conflict, and the Home Office was warned—

[Kevin Hollinrake]

On a point of order, Mr Speaker. We have been waiting for the economic crime Bill for many years. There is a huge number of amendments on the Order Paper and a huge number of people wanting to speak. This is a very important issue—absolutely critical—but it does not relate to that legislation. Could we have a ruling from you on that point, sir?

[Mr Speaker]

I make the decisions, and I think it is all right. What I would say, in fairness, is that the Home Secretary spoke for well over 30 minutes—in fact, I think it was nearly 40—and I am therefore giving some leeway. It is a very important matter; it is also protected time, so one need not worry.

--- Later in debate ---

[Kevin Hollinrake]

New clauses 14 and 27 both deal with the establishment of a commission for the protection of whistleblowers to do exactly what my hon. Friend is setting out.

[John Penrose]

I acknowledge that point. I am not sure whether the Government will be able to accept those proposals, but if they do not, I hope they will be able to make some commitments about what they intend to do very soon to plug the undoubted gaps.

My final point is about trusts. My hon. Friend the Member for South Thanet (Craig Mackinlay) intervened on the Home Secretary to make a point about trusts, and it is essential that we do not forget that one of the issues we are dealing with here is to do with companies, because they have been proven to be an excellent vehicle for covering up the ownership of assets. We have also heard from the hon. Member for Glasgow Central (Alison Thewliss) about the problems that have accrued for Scottish limited partnerships. It is equally true that trusts could be, and potentially are being, misused in exactly the same way. This legislation does something on the use of trusts when it comes to unexplained wealth orders, but it does not do the same thing for the disclosing of the settlers, the trustees and the potential beneficiaries of trusts for everything else. Those vehicles could easily be misused, and we do not want to come back in a couple of years saying, “If only we had thought to plug that loophole at the same time.” I hope that my hon. Friend the Minister will be able to deal with that omission and promise us some progress on that very soon.

--- Later in debate ---

[Paul Scully]

I agree that it is, but let us come back to a sense of unity. We have had some ding-dongs throughout, but it is time now to make sure we can come together and send the most powerful message as a House and Chamber to the oligarchs that their behaviour will not be tolerated for a moment longer.

It is also important to remember that the majority of property held by overseas entities will be owned by entirely law-abiding businesses and people. We are talking about 95,000 properties in England and Wales owned by 30,000 or so overseas entities. Only a tiny fraction of them are likely to be held by criminal or corrupt interests. The transition period is an important protection of the rights of those legitimate owners of property. The Government do not interfere with individuals’ rights lightly and the interference could not reasonably have been expected when rights over the properties within scope of the register were acquired, so we must ensure that we respect those rights in a way that cannot be challenged. No doubt those who wish to avoid these requirements and who are able to afford expensive legal teams will take any advantage of opportunities to do so.

[Kevin Hollinrake]

The transition period—the debate on the timescale of 18 months, six months or 28 days—is key. Does the Minister agree that the most effective way of dealing with this and preventing the asset flight we are all concerned about is through something along the lines of manuscript amendment 64, which would require people who want to sell or transfer their asset to disclose the beneficial owner prior to doing so to Companies House and therefore Her Majesty’s Land Registry could block it? Will he accept that that is the right way forward?

[Paul Scully]

He will, and I thank my hon. Friend for his work and for raising that. I will come back to his point shortly.

There will also be law-abiding British companies that have adopted such structures and that type of ownership for legitimate commercial reasons, including real estate investment trusts, which are public companies, whose core business is to manage and own properties that generate income, and in particular pension schemes holding land and properties. Others will be British nationals who have adopted the arrangements for legitimate reasons of privacy—as we have heard, perhaps celebrities who do not want their address to be known publicly. They may wish to apply to Companies House for their personal details to be protected from public view on the new register, but the threshold for exemption from the public register will be high, so it is right for individuals to have time to seek advice on their options and how to make a case to the registrar.