Economic Crime and Corporate Transparency Bill

Debate between Lord Browne of Ladyton and Lord Coaker

Committee stage
Monday 27th March 2023 Grand Committee

[Lord Coaker (Lab)]

My Lords, I start by thanking the Minister and his colleagues for their approach to the Bill and for his remarks at the beginning, which were very welcome. We all have an interest in trying to ensure that the Bill works, so I thank the Minister for his comments about that—and I can reciprocate with regard to how the Government have approached this in trying to enhance and improve the Bill. I appreciate what the Minister said about the amendments in this group, and all the various amendments that have been introduced, as we have heard, in a positive way, in seeking to improve the Bill.

I do not intend to speak at great length about the various amendments. I start by thanking the noble Lord, Lord Leigh, for his support of my Amendment 4 and by saying that I very much agree with much of what the noble Lord, Lord Agnew, said on his Amendment 63. Essentially, what we are saying here is that the Bill has a lot within it that we appreciate, accept and think are important steps forward—but alongside that, most of us want to see the Bill having some teeth and the Government explaining to us how the various details are laid out, how the measures will be enforced and how we will see the change of culture that we have just heard about.

I will speak specifically to my Amendment 4. Noble Lords will see that, in essence, we are probing what the Government’s intentions are. Clause 1 has four objectives for the registrar. The amendment in my name and those of my noble friends Lord Ponsonby and Lady Blake seeks to understand whether anything could be gained by inserting a new objective 5. No doubt the Minister will say that objective 4 means the same, which may be why the amendment in the name of the noble Lord, Lord Agnew, is not needed. We are suggesting that there needs to be a more proactive statement in the Bill about what the Government are seeking in terms of the information that the registrar collects and how it is then assessed to see whether it should be shared more widely, particularly with the various enforcement bodies.

The objective I am proposing—I will not read it all out—includes in paragraph (b)

“sharing information about any issues of concern regarding companies with relevant public bodies and law enforcement agencies.”

Why would the Government not put that in the Bill? I suspect they will say that objective 4 deals with that, but I think there is a difference between acting proactively and what the Government have in objective 4, which is

“to minimise the extent to which companies and others … carry out unlawful activities”.

I suggest that is not quite strong enough. It is not about minimising the extent; it is about wherever information comes to light with the registrar that something untoward is happening. Surely there should be an obligation on the registrar to share that with the relevant law enforcement bodies. Minimising the extent is not sufficient; we do not do that with any other law—we do not minimise the extent to which violence takes place, for example. That may be the aim, but overall the intention of the law is to stop it. So I suggest that objective 4 could be strengthened.

On Amendment 63 in the name of the noble Lord, Lord Agnew, the noble Lord can and did speak for himself, but in his proposed new subsection (1B)(b) he is getting at that very point in stating that the registrar must

“share any evidence of unlawful activity it identifies with the relevant law enforcement agency”.

That is exactly the same point I am trying to address in my amendment. It is not about minimising the extent to which it takes place; it is saying that the information should always be shared. Can the Minister outline the Government’s thinking? Is their objective with the registrar that all information that may be of concern should be shared with the relevant law enforcement agencies?

Without wishing to be pedantic about this, can I ask: what is the relevant law enforcement agency with which the registrar should share the information? There is the Serious Fraud Office; there is the City of London Police; there are local police forces; there is HMRC and all sorts of other enforcement bodies. The Government will have given thought to this, but can the Minister explain to the Committee where that information should go and who is responsible for enforcing it? Is there any report back to the registrar? Once the information has been shared, is it then just a matter for the law enforcement body, or does the registrar have an obligation to see where that has got to and what has happened to it? We all know that an issue that frustrates people is not knowing what happens when things are reported and where they have got to. Alongside that, given the significant numbers that the Minister quoted of those that have to register, what are the resource implications for those other bodies in taking that up?

My final point may seem a bit obscure. I am not a great expert on this, but I know from one limited case that I had some experience of that one of the problems was a lack of forensic accountants and the ability to understand what was going on within various company accounts. I was told it was a skill area that is never really talked about. I wonder whether the Government, given their intentions, have given any thought to how they ensure that the necessary skill base is there within police forces and the Serious Fraud Office for crimes that are referred to them to be properly understood and investigated. I am sure that some people are experts in company law and all this, but the problem is that when people say “Follow the money”, sometimes it is pretty difficult to do that. I wonder whether the Minister might say something about how he sees that.

In general, we welcome the Bill and the government amendments before us. I think the amendments that the noble Lords, Lord Leigh and Lord Agnew, have tabled make some very important points. I hope that my Amendment 4 also helps the Government explain to the Committee what their intentions are. If the Bill is to mean anything, it has to be properly enforced.

[Lord Browne of Ladyton (Lab)]

I had not intended to speak on this group, but my noble friend Lord Coaker has drawn my attention to the active verbs in the subsections of Clause 1. I am at a loss to understand why they are used. Why is objective 3

“to minimise the risk of records kept by the registrar creating a false or misleading impression to members of the public”

and not “to prevent companies and others carrying out unlawful activities or facilitating the carrying out of unlawful activities”? It seems odd that the objective is not the complete protection of people who may be duped or defrauded or have their money stolen from them by the devices created here. I appreciate that one cannot guarantee perfection, but it seems to me that by legislating in this fashion we recognise that there will be an element of that, since the objective we set the registrar is only to minimise, not to prevent it altogether.