Economic Crime (Transparency and Enforcement) Bill

Lloyd Russell-Moyle Excerpts

Committee stage
Monday 7th March 2022 Commons Chamber

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

I am pleased to see the amendments that would lower the threshold to 10%. In the prelegislative scrutiny of the Registration of Overseas Entities Bill, the Government indicated that they were willing to lower that threshold through secondary legislation. Has the hon. Lady received word from the Government that they will now honour that promise that they made to us only a few years ago?

[Alison Thewliss]

I have not received that assurance from the Minister, but I would be glad to do so. The hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) and I served on that Bill Committee together, and a lot of the evidence that was given at the time still stands today. Many of the things we were warned about, such as shifting things into trusts, have happened, and the Government need to act on the warnings that they were given.

Turning to schedule 4, the register proposed in the Bill is not as transparent as the Scottish register, which will come into force on 1 April. Transparency International and the Chartered Institute of Taxation have said that the UK Government could learn from Scotland on this. As I say, Scotland’s register of persons holding a controlled interest in land in Scotland goes live on 1 April, and I would like to thank Jennifer Henderson, the Keeper of the Registers of Scotland, and her team of experts for taking the time to meet me last week to discuss this.

Transparency International has warned that this Government’s proposed register could not be as transparent as Scotland’s because the legislation as drafted does not require the disclosure of the ultimate beneficial owner of the property, but rather the disclosure of the beneficial owner of the overseas entity that in turn owns the property. Scotland’s register notes, per piece of land, who the beneficial owner of the land is. For example, it notes which companies have land registered to them, and who has significant control of those companies. I am sure that I could draw a diagram that would explain this better than my description, but my understanding is that if a holding company has five or six different pieces of land for three oligarchs, the Scottish register would show which oligarch each piece of land belonged to, but that the register as laid out in this Bill would not. I ask the UK Government to consider taking a lesson from Scotland, to speak to Registers of Scotland and to review changes such as this, so that we can properly understand who owns what.

The Chartered Institute of Taxation said that

“if the government’s aim is a public register of ownership of land it does not achieve this”.

It also said:

“The UK Government may also want to look at the Scottish approach which is to reveal the person who has ‘significant influence or control’ over the owner or long-lease tenant of land and property in Scotland.”

According to the Scottish Government, this means that

“it will be possible to look behind every category of entity in Scotland, including overseas entities and trusts, to see who controls land.”

Further to this, I would be grateful if the Minister could provide the clarification that the Law Society of Scotland has asked for on the way in which the two registers will interact, on how any disputes will be resolved—including on what is registered and what takes precedence—and on whether any additional resource will be provided directly from the UK Government to Registers of Scotland so that it can continue this work.

It is vital that Companies House reform does not slip off the agenda. We would have pressed new clause 4 to a vote, had it not been so similar in intention to the official Opposition’s new clause 7. It is unfortunate that all we are getting on Companies House will be a White Paper. We have already had extensive consultation on this, and we know the problems. They are obvious, and the Government have no excuse for not acting on them today.

--- Later in debate ---

[Kevin Hollinrake]

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

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

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

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

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

[Lloyd Russell-Moyle]

The hon. Gentleman is making a very good speech on the importance of that relationship between the Land Registry and Companies House. Does he agree that the requirement still to pay to access the Land Registry dims the light that is shone, rather than enhancing it, and that making it an open registry, with Companies House as an open registry as well, would aid the process of light-shining?