Economic Crime and Corporate Transparency Bill

Lord McDonald of Salford Excerpts

2nd reading
Wednesday 8th February 2023 Lords Chamber

[Lord McDonald of Salford (CB)]

My Lords, like every noble Lord who has spoken so far, I support this clearly important Bill. I would like to a make one general point and three specific points. I apologise, as the specific points have all been made already but I will, I hope, expand them a little.

My general point goes back to something the noble Lord, Lord Ponsonby of Shulbrede, mentioned, which is the impact of this area of life on our international reputation. To illustrate this, I refer back to the 12 May 2016 Anti-Corruption Summit, organised by Prime Minister David Cameron. Early in 2016 he took a close interest in corruption and decided that the UK had to lead the way, and officials came up with three compelling objectives for the summit. First, we should expose corruption so that there was no place to hide. Secondly, we should punish the perpetrators and support those afflicted by corruption. Thirdly, we should drive out the culture of corruption. All were estimable objectives. At this point, Mr Cameron’s Government were hit by the Gospel of St Matthew; in particular, the parable of the mote and the beam, from the Sermon on the Mount. Participants piled in and pointed out that the United Kingdom itself was guilty of many of the things it was liberally accusing others of doing.

Mr Cameron took the point but, unfortunately for him, his political career suffered a significant personal reverse the following month and this area of action was down-prioritised. One Prime Minister finds it very difficult to persuade a successor to take up the things he or she cares about. But it is good that, these years later, we are coming back to this issue because when we consider our international reputation, nothing is as damaging as a charge of hypocrisy that has substance.

The first of my three specific points concerns beneficial ownership. There is clearly an ambition to be more rigorous about this, and I agree very strongly with the point made by the noble Lord, Lord Clarke of Nottingham: that the overseas territories need to be included explicitly. They hate it, they wriggle out of it, they delay, but they need to be included. They would not have the financial sectors they have if they did not have the very strong link with the United Kingdom. They must feel the heat of this, and maybe it will be chance for them to diversify their economies away from a sector which, in the end, provides a benefit for very few citizens of the overseas territories.

The second issue is the proper underpinning of Companies House. There has been lots of discussion about increasing the amount of money a new company has to pay to register. I can see that this does not need to be argued in the Bill, but as the noble Lord, Lord Agnew, said, it is going to be addressed somewhere, so let us be honest. It is amazing that last year, 800,000 companies were registered in the United Kingdom. It does not take the brains of an Archbishop to work out that they cannot all be legitimate, so subjecting that large number to greater scrutiny would, I suggest, be a good thing.

The third issue is freeze and then seize, mentioned by the noble Lord, Lord Browne. This is clearly a difficult area, but other countries are tackling it. I hope the Government will be in touch with, for example, Italy, which is making progress. One idea which has been floated is that when a person or entity is sanctioned, they have to give a full list of their assets. If authorities subsequently establish that the list is incomplete, then all their assets might be subject to seizure. That would focus minds.

This is an important Bill which can and must be improved and strengthened. It is very striking that tonight’s debate has shown cross-party agreement. Like others, I pay tribute to the work of Dame Margaret Hodge and Sir Robert Buckland in the House of Commons. I hope that, in Committee, this House can strengthen the Bill.