Economic Crime and Corporate Transparency Bill

Lord Faulks Excerpts

Committee stage
Tuesday 9th May 2023 Grand Committee

I go back to what the noble Lord, Lord Fox, and other noble Lords have said all the way through the passage of this Bill. We basically support the Bill and want it to work, although there are improvements that need to happen. However, if the Bill has no teeth and no enforcement, and there is no way in which it will change the culture and deal with some of its seriously dysfunctional parts, it will not achieve what it wants. That is not what we want. Everyone in this Committee wants it to succeed, so I hope that the Minister will respond positively to my amendment and those in the names of the noble Lord, Lord Fox, and the noble Baroness, Lady Bennett.

[Lord Faulks (Non-Afl)]

I want briefly to add to that. I am sure that the Serious Fraud Office is full of capable and conscientious men and women who go about their jobs with enthusiasm. However, they are often pitted against rather formidable adversaries in terms of lawyers and the resources that are available to those lawyers to defend people who are the potential targets of the Serious Fraud Office.

It may be that one of the problems with the Serious Fraud Office is the career structure. The American equivalent often engages lawyers with very considerable abilities who are at a relatively stage in their practice. They may not be paid particularly well when they do it, but it is a feather in their cap. In other words, the Serious Fraud Office’s equivalent in America often has extremely high-quality lawyers. I wonder whether thought has been given to restructuring our whole approach to those who prosecute these matters so that we can somehow incentivise the very best people to get engaged in this business to render the playing field a lot more level than it currently is.

[Lord Agnew of Oulton (Con)]

My Lords, I rise to support the amendments tabled by the noble Lord, Lord Coaker, in particular Amendment 106B. He is becoming quite an expert on an area that has troubled me for 18 months or so.

The figure of £37 billion used in Amendment 95 is only a small part of the story. The National Audit Office talks about a separate £30 billion bottom-end estimate of losses to fraud in the public sector, so this is a huge issue; that is why I have tried to put as much effort into it as I can. The noble Lord, Lord Coaker, made the point that it is a hotchpotch landscape. There are 22 economic crime-fighting agencies scattered across the whole landscape. They do not join up or talk to each other. They have different remits and different legislation to use to effect any kind of outcome.

A report of the kind that the noble Lord suggests would bring real clarity to this. It would explain to people what is going on. It would not cost very much; indeed, as usual, it would save money because there is, I am sure, a great deal of duplication going on in the system. I urge my noble friend the Minister not to respond today, because it is so hard to respond on the hoof to these sorts of things, but to take this away and write to us to explain what is against the logic of a single reporting point once a year for all the agencies involved in economic crime.

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[Baroness Wheatcroft (CB)]

My Lords, I shall speak to Amendment 103. Thanks to the comprehensive introduction from the noble Lord, Lord Oates, I can be relatively brief.

The International Criminal Court in the Hague was established in 2003. Later this month, it will take evidence from representatives of some of the victims of war crimes in Darfur. That is typical of the essential work that the International Criminal Court can do. It is no wonder that there are now calls for Putin to be indicted to this court. Few today would question the need for such an organisation, and now it seems clear that there is a need for an international anti-corruption court.

The noble Lord, Lord Oates, made the case very positively. Kleptocrats are financial war criminals, inflicting huge damage on their countries but, like the dictators who commit genocide and other war crimes, they have impunity to act as they wish in their home countries. They control the police, the prosecutors and the courts. The damage that their greed inflicts on their countries is huge, but those countries are rarely able to bring them to justice. That is why this new court is so essential.

The Panama papers and Pandora papers provided appalling glimpses into the scale of the corruption in which senior officials in many jurisdictions have been involved. The proceeds are scattered around the world. The international anti-corruption court would provide a mechanism for prosecuting those individuals and retrieving those funds.

The United Nations has demonstrated its ineffectiveness in this area. The General Assembly adopted the UN Convention against Corruption in 2003. Getting on for 200 countries have signed it but, sadly, those signatories include most of the worst offenders on Transparency International’s corruption index. Too many countries treat the convention with contempt because their leaders and senior officials preside over corruption-rife regimes. That is why we need this court, and why I put my name to this amendment. It could be set up relatively quickly and could be hugely effective. Its very existence would deter corruption. If the Government want to fight corruption, why would they not support this project?

[Lord Faulks (Non-Afl)]

My Lords, of course, I echo the concern that has been expressed in the speeches so far about international corruption on an enormous scale.

In our debates, we have very much focused on what happens here in the United Kingdom. In our attack on the Government, it is worth bearing in mind that, in 2016, this Government hosted an international corruption summit; it was hosted by the then Prime Minister David Cameron, so many Prime Ministers ago. It was partly as a result of that that we had the then Criminal Finances Bill and there was an impetus—a very slow one, sadly—to set up a register of overseas entities. It was felt that, at least in this country, we should do all we could not to allow our properties and companies to be infected by corruption. Indeed, this Bill seeks to improve what has already been achieved although, in many ways, it has not gone far enough.

I respectfully submit that what is contained in this amendment is pretty aspirational stuff. There is nothing wrong with being aspirational. The International Criminal Court—I have been to conferences there—has had some success, but it must be remembered that Russia is not a party to the ICC and nor is the United States. It is one thing to say that it is relatively easy to set up a court, but you must have the proper means to enforce it and you have to invest huge sums of money in infrastructure. There has to be a degree of realism about this. Surely we should sort out matters at home as best we can first of all; that in itself will contribute to reducing international corruption. Putting on the statute book an obligation to set up an international court of this sort, which is what this amendment suggests, is premature at this stage, although one can do nothing but applaud the sentiments that lie behind it.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, this has been a very interesting debate; it is the first debate in which we have spoken on a more international level. As we heard in our earlier debates, a large proportion of the quantity of money involved in fraud—well over 90%; probably 99%—has an international element; that is at the core of so much of the fraud with which we are dealing.

I congratulate the noble Lord, Lord Oates, on the way in which he introduced this group. I found his introduction rich and compelling. He set out things very fully. The other noble Lords who have spoken have talked about the aspirational nature of this amendment. I do not think that that is a criticism. It is good to hear about the other countries that are already taking a lead in trying to get the IACC set up.

From the Labour Party’s point of view, I have looked at what David Lammy has said on this matter. He has spoken about working internationally—I know that my noble friend Lord Hain led the work on that when he was a Foreign Office Minister—and promised that an incoming Labour Government would fight against dirty money in the UK by creating a transatlantic anti-corruption council alongside the US, EU and other allies. That is a different model from the one proposed in these amendments.

I do not want to stand here as an opposition spokesman saying that we are against what the noble Lord, Lord Oates, and the noble Baroness, Lady Bennett, are proposing but there are other potential models for bearing down on corruption. I listened with some interest to what the noble Lord, Lord Faulks, said about the practicalities of doing this and using legislation such as this to do everything we can on a domestic level, and internationally where we already have direct interest, to bear down on this huge level of corruption. Nevertheless, I thank the noble Lord for introducing this amendment.