Economic Crime and Corporate Transparency Bill

Kit Malthouse Excerpts

Report stage
Wednesday 25th January 2023 Commons Chamber

[Dame Margaret Hodge]

I thank the Minister. I am having a senior moment.

The SFO had clearly prepared the case badly, but there was a discovery point that got the litigation thrown out of court, and a huge sum was claimed in costs. The cost to the public purse is enormous.

[Kit Malthouse (North West Hampshire) (Con)]

I understand the right hon. Lady’s point about the cost to the police and other authorities of failed investigations but, in my experience, much of the problem stems from the division of the spoils in those cases that succeed in securing the proceeds of crime. As she will know, the money is divided between the Treasury, the Home Office and the police.

When I was at City Hall, we tried to cut a better deal in which the police would effectively recover the full cost of a prosecution, and any profit would then be split, so that pursuing such prosecutions would be costless to the police. Tim Godwin was then deputy commissioner of the Metropolitan police, and his view was that the police would then have a strong case to invest even more in this line of investigation, and they would therefore have more success and there would be more money to go around for everyone. It is not necessarily the case that legislation will solve the problem. It is more to do with the deal between the police and the Government.

[Dame Margaret Hodge]

Indeed, and we considered an amendment in yesterday’s debate to address that specific issue, so that any funds arising from a confiscation order, or other such order, could be enjoyed by the enforcement agencies themselves, which would provide an additional incentive. We discussed last week’s Danske Bank settlement of criminal issues in the United States, from which the enforcement agencies received $2 billion. Just imagine the amount of enforcement activity that could be funded from that fee. We are timid in that regard, so I completely concur with the right hon. Gentleman on that.

The other argument in relation to cost caps is that the fear of facing huge costs if one fails in a case provides a disincentive to the enforcement agents to pursue as vigorously as one would like economic crime prosecutions. The Minister has said to me previously that there is no evidence to back that up, but I just do not buy that. A proper analysis of how people in the NCA, the Serious Fraud Office and other agencies think before they decide to pursue a prosecution would very quickly reveal that there is a disincentive. It is for those two reasons that we considered cost caps. The US is our model. Each party bears its own costs, which is much more effective. We heard figures yesterday—I will not repeat them because I have to get on—that the US gets much more money in and it does not cost as much to its enforcement agencies.

Those are the things that I wanted to cover. I hope that, in summing up, the Minister will please give us some concessions. I urge him to reflect on the degree of unanimity across the House and on the very senior figures on his own Back Benches who have chosen to work, in particular, with members of the two all-party groups to reach consensus. We do argue these things out. We come to a view after an extensive debate on a subject; it is never an open and shut case. Back Benchers are in a better position at present than those on the Front Bench, so I ask the Minister to listen to us because we may just be right and it would be good if there was a concession on something.