Economic Crime (Transparency and Enforcement) Bill

Lord Coaker Excerpts

2nd reading
Wednesday 9th March 2022 Lords Chamber

[Lord Coaker (Lab)]

My Lords, it is a pleasure to wind up for Her Majesty’s Opposition on this incredibly important debate and indeed to follow the noble Lord, Lord Fox, who made a powerful speech. I agreed with everything, really; there were other things that I might have highlighted, but I thought it was an excellent speech. It followed on from the many excellent speeches that we heard from across the House.

I start by setting the context because, as we debate this Bill in the Chamber, we are united in a common cause: to defend freedom and democracy and to stand shoulder to shoulder with Ukraine and its people against the illegal and immoral invasion by Russia of their territory. I highlight the speeches of the noble Lord, Lord Macdonald, and the noble Viscount, Lord Waverley, for pointing out and reminding us so powerfully of that. It really set the context for this debate and discussion today.

Many noble Lords have reminded us of this context, and indeed the Government themselves have said that the Bill is in part an urgent response to the Ukraine crisis. Our political outlooks may differ, but we all share a common belief about injustice, and there can be no bigger injustice than an unwanted invasion of a country’s sovereign territory. I remind us all of that, because it is why there is wide and general support across this House—and, I would say, within the country—for this economic crime Bill being rushed through in the way that it is. I say “rushed through” not as a criticism to the Government, but as something that it is important to do.

We as Her Majesty’s Opposition welcome it and, as we did in the other place, will support the Government in taking this through as quickly as we can. Although, as the right reverend Prelate the Bishop of Leeds, my noble friend Lord Rooker and the noble Lord, Lord Empey, and others have argued, should we not have acted before now? If money is dirty, then it is dirty. We must crack down; the UK’s role as a global centre for Russian money laundering has to stop. As the noble Viscount, Lord Colville, reminded us, Russian oligarchs secretly hiding money—as with all dirty money from anyone from anywhere—has to be stopped. There must be no hiding place or safe haven with hidden investments.

I say to the Minister that all the questions and challenges from me and other noble Lords are because we want the Bill to work. We want the sanctions to work and this economic crime Bill and the one that will follow it in due course to succeed. We all want the Government to succeed in this. It is not in any of our interests for the Government to fail or for these measures not to work. As the right reverend Prelate the Bishop of Leeds said, let this be the beginning of the new economic and monetary framework because it is ethically the right thing to do.

Turning specifically to some of the measures in the Bill on registration, these target those who exploit the UK property market by establishing a public register of beneficial ownership of overseas companies which own or want to buy real estate in the UK. Many noble Lords, including the noble Lords, Lord Macdonald, Lord Vaux, Lord Thomas of Gresford and Lord Faulks, the noble Baroness, Lady Kramer, the noble and learned Lord, Lord Garnier, pointed out the importance of this. We all welcome the reduction of the transitional period for certain overseas entities registering as such from 18 months to six months.

However, I do not think anybody who has spoken does not believe that six months is too long. As the noble Lord, Lord Fox, pointed out, we will table an amendment in Committee to further reduce that period. I think it was the noble and learned Lord, Lord Garnier, who pointed out that if you have six months to register it, it can be moved. I am not a genius in legalese and moving property, but if you have time to move the money we are trying to find out about, I suggest that many of these people—if they are bright and can pay for the advice, which they seriously can—will be able to do that. I say to the Minister that this is not out of anything other than that we do not believe six months will work in the way the Government want it to. I hope the Government will be able to listen to my remarks and those of noble Lords across this Chamber.

The noble Lord, Lord Carlile, and my noble friend Lord Eatwell pointed out Companies House. How will we ensure that it is fit for purpose? Companies House is essential to the functioning of the Bill. It is essential that Companies House works and is fit for purpose. In a brilliant speech, my noble friend Lord Eatwell—who brings an experience far beyond mine and that of, I suggest, many noble Lords—asked how the data will be verified. If the data is not verified as accurate, how can Companies House work effectively? Again, my noble friend Lord Eatwell is not bringing that forward to undermine the Bill or make a political point; he is bringing it forward as a man with all the experience in these areas that he has. He says to the Government that without the verification of the data, we cannot achieve. Without embarrassing the Minister, I think I am right in saying that my noble friend Lord Eatwell pointed to a book, or a preface to an article, that the Minister had written saying exactly the same thing. I hope the Minister can explain that and see how it will be done.

Unexplained wealth orders—again, measures to pursue and investigate unexplained wealth where property has been acquired with illegitimate cash—raise a question. We have had unexplained wealth orders; we all want to know what will make this version of them work this time, when the unexplained wealth orders that exist currently have not worked. Again, we all want them to work; but why will these work when others have not? The noble Lords, Lord Empey, Lord Carlile and Lord Macdonald, have again raised the issue of resources for the NCA to take the necessary action, as did the noble Viscount, Lord Waverley. If we are to have unexplained wealth orders, let them function in such a way that people who have unexplained wealth are fearful of the state taking action. At present, they do not fear it at all and do not expect anything to happen. We all want to see a solution to the issue of resourcing for the NCA.

The noble and learned Lord, Lord Garnier, in another powerful speech, noted that we must ensure that these measures are implemented sufficiently quickly to prevent people who have unexplained wealth shifting it before an order has been made affecting them. Again, that is an important point.

On sanctions, we have heard about the NCA, but the Government also talk about improving the Office of Financial Sanctions Implementation, giving it intelligence and information-sharing powers as stronger tools to carry out enforcement action. I had never heard of OFSI and had to look it up—it is in the Treasury—but these are people we will give stronger powers to. I have heard of the NCA, but what is happening with respect to giving these extra powers to OFSI?

As for sanctions, as the noble Baroness, Lady Bennett, and the noble Lord, Lord Hannay reminded us, how the Bill is enacted and enforced is essential, or else it is just warm legislative rhetoric. What we want to see is action. The noble Lord, Lord Clement-Jones reminded us that the Bill cannot be toothless. The Minister needs to reassure this Chamber that we have a Bill that will work and will carry sanctions with sufficient clout to take on the enablers and others.

As the noble Lord, Lord Fox, the right reverend Prelate the Bishop of Leeds, and the noble Baroness, Lady Kramer, mentioned, the Government need to explain the provision that someone will not be sanctioned if doing so is not in the economic interests of the country. The Bill as currently drafted appears to read as though there will be exemptions for occasions when it is not in the economic interests of the country for us to take action against a company or individual. Are we really saying that? Some clarification on that from the Minister will be welcome.

In his response, can the Minister explain and answer these comments made to him, and say who in government has ultimate responsibility for this legislation and its enforcement? Which Minister and which department will drive this forward? Will the resources to do it be made available? What further amendments are the Government considering and when will they be published? Will they be ready for Committee next week? What measures are the Government considering in their second economic crime Bill?

To conclude, we of course hope that this crackdown on Russian oligarchs and Russian dirty money will help undermine the regime and play its part in ending the war in Ukraine. The Bill allows us to take action against those who flaunt their wealth, predominately in London and the south-east, as the noble Lord, Lord Macdonald, reminded us. As the noble Lord, Lord Cromwell, said, however, it is those who are criminal whom we must act against, to stop them acting with impunity. Yes, the economic crime Bill is overdue, but it is a way we can act against Russia and those who support Putin now. Let us all hope that it plays its part in the defeat of Russia and the ending of the invasion of Ukraine, but also perhaps opens up the prospect of a more transparent financial system, not one so dominated by oligarchs with dirty money. We support the Bill and want it to work. It is in all our interests that it does.