Sanctions and Anti-Money Laundering Bill [HL]

Lord Naseby Excerpts

Ping Pong (Hansard): House of Lords
Monday 21st May 2018 Lords Chamber

Moved by

[Lord Naseby]

Leave out “agree” and insert “disagree”.

[Lord Naseby (Con)]

My Lords, in speaking to Amendment 22A I declare an interest as vice-chairman of the All-Party Group for the Cayman Islands; I also have family working in financial services in the Cayman Islands.

Last weekend, 100,000 people lined the route of the wedding party. There was great joy there and in the rest of the country. Some 100,000 people in the overseas territories shared the joy of the Royal Family, except that every one of them was fearful for the future of their families. As matters stand today, what happened in the Commons—we have now heard from the Minister that the Government are not prepared to overturn it—is a catastrophe for financial services in the overseas territories. That cannot be taken lightly.

Your Lordships will remember that Prime Minister Cameron, who started the idea of public registers, thought he should lead in the world. He did not work out, however, what the impact would be on the rest of the overseas territories. He was more interested, I suspect, to lead, and to lead at a time when, if you look at our own Companies House, you cannot today get a really up-to-date situation on a great many companies, because Companies House is rarely up to date. Indeed, Companies House looks carefully at perhaps only one-third of companies that register. So that is not the answer. Why did Her Majesty’s Government not think a little further at that time about what was going to happen?

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, I am grateful to all noble Lords for an extensive, well-reasoned, well-argued and expert debate in your Lordships’ House. I am grateful in particular to my noble friend Lord Naseby, who presented a case for the overseas territories which I empathise with. Noble Lords who were in the Chamber when I opened this debate would have heard the points that I made. I will respond to a few specific points and questions raised, but I want first to set the record straight. First and foremost, the Government’s position is what it was when the Bill left your Lordships’ House. As the noble Baroness, Lady Northover, said, the Government defeated the amendment tabled by the noble Baroness, Lady Stern. That was done because of reasoned debate and expert insight, which has been reflected in your Lordships’ House again today.

As my noble friend Lord Hunt said, my noble friend Lord Naseby has allowed us all an opportunity again to demonstrate the wisdom, insight and expertise your Lordships have, but the point of principle highlighted by the noble and learned Lord, Lord Brown, remains: notwithstanding the valuable discourse that we have had, the House of Commons has sought to vote otherwise. In that regard, I want to clarify a few points.

My noble friend Lord Northbrook mentioned that it was a government amendment. Of course, it was not; it was tabled from the government Benches—it was a joint amendment. In light of the support that the amendment had gathered, the Government decided not to oppose it. My noble friend Lord Naseby referred to the Government’s amendment being tabled late in the day. Let me assure my noble friends and your Lordships’ House that we had been in extensive negotiations with many Members of Parliament, including those of other parties and most notably the Scottish National Party, on the important issues of the constitution and about this Parliament voting on something that would apply to parliaments that did not have a say in the debate taking place—a point well made by the noble Earl, Lord Kinnoull. We were trying to find a way forward that respected both the drive for transparency, which many noble Lords have raised today, and the constitutional settlement with the overseas territories and Crown dependencies. It was also important that we continued to do this to reach the cross-party consensus that was being sought. We brought further amendments forward on 30 April and brought that to the attention of the House to find that consensus. That is why conversations were still ongoing throughout that morning. The amendment we tabled was taken as in order but, as I said in my opening remarks, it was not then debated or taken for debate by the Speaker of the House of Commons.

That said, we have had an extensive debate. The noble Lord, Lord Anderson, who I see is not in his place as such, asked for comment on the Foreign Affairs Committee’s report. We are looking at that report, which was issued this morning, carefully but the Prime Minister has made the general principle clear. I say to all noble Lords that there is not a difference between ourselves and the Governments of the overseas territories. Everyone wants to see us tackle illicit finance effectively. Let me assure the noble Lord, Lord Collins, that it remains a priority for this Government and that we will continue to take a leading role in this respect.

The noble Lord, Lord Beith, my noble friend Lord Naseby and my noble and learned friend Lord Mackay all touched on the important issues of the constitutional arguments. Our position in the light of the circumstances set out in the 2012 White Paper has not changed. We believe that the fundamental structure of our constitutional relationships is the right one. Of course, we retain the power to legislate directly and have done so, as I said in my opening remarks, but in this case we would prefer not to have done so without consent. However, as we have all heard, we are all in this situation since the decision taken by the House of Commons.

My noble and learned friend Lord Mackay raised how this provision will come into force. As I always do, I listened carefully to his insight on this matter and I can confirm that it will not come into force through Royal Assent; it will come into force and commence by regulations. We need to establish the detail, as he said, but I listened carefully to the points he raised in this respect.

My noble friend Lord Faulks asked about the next Bill and I again pay tribute to his efforts in this regard. Let me assure him once again that we have committed to bring forward legislation early in the next Session on the important issue, which he has raised during debate on this Bill, of the register of overseas companies that own UK property. We anticipate that that register will be ready for use in 2021.

The noble and learned Baroness, Lady Butler-Sloss, pointed to other jurisdictions such as Gibraltar. At this point, I acknowledge the contributions of my noble friend Lord Naseby and other noble friends, and noble Lords across the Chamber, who acknowledged the efforts that our overseas territories have made. While I totally accept the principle highlighted by the noble Lord, Lord Collins, and the noble Baroness, Lady Northover, of the importance of transparency—of seeing that flow of illicit finance coming to an end—let us not forget that, in the UK, we have a public register. This is not a panacea to end this issue. It needs concerted action, which is why I have been vocal in my defence of the overseas territories and not just, as the noble Lord, Lord Beith, pointed out, because I am the Minister responsible. Genuinely, when we look at the track record from the overseas territories—the exchange of notes that are operational and which we are reporting back on, or the accessibility for tax and law enforcement agencies—those jurisdictions have been co-operating fully and effectively. That is why I, as the Minister responsible, made that robust defence of the overseas territories. Not only has progress been made; the overseas territories are ahead of the curve. There is just not a case for not doing something until the others catch up, as they are already fully co-operating.

Several noble Lords alluded to the EU list. Anguilla, Bermuda, the BVI, the Cayman Islands and all three Crown dependencies are not included on any list because they are deemed to have been holding back by the EU Code of Conduct Group. They have been put on lists and acknowledged for being co-operative jurisdictions. All our Crown dependencies and overseas territories with financial centres are already committed to global tax transparency standards, which we all agree on, and the commitments that they have made go beyond those. I say again for the record that there is no grey list. All the overseas territories, as the noble Earl, Lord Kinnoull, highlighted, have made great strides, ahead of many other jurisdictions, in ensuring that they adhere not to any international standard but to the principles of ensuring that they can address the fact that law authorities and tax authorities can access such registers.

That said, we are in a position where the other place has decided—on a cross-party basis in certain respects, as the noble Lord, Lord Collins, said—that it is its will to go forward with public registers for the overseas territories, and it is the Government’s position that we have accepted that point of the elected Chamber. In doing so, though, I assure my noble friend Lord Naseby and others who have spoken about the overseas territories that from a government perspective we will seek to ensure that we collaborate and co-operate fully and work with the overseas territories to ensure that we get the results we want. We do not want to disable the overseas territories and we do not want them to lose out, but there is a reality of decisions that this Parliament has taken, and they have implications. We need to ensure that we work effectively and collaboratively with those overseas territories to ensure that we can still sustain and strengthen their economies for years to come.

I put on record for my noble friend Lord Naseby that I am very grateful to him for once again allowing me to articulate the Government’s position and my position as the Minister responsible for the overseas territories. I am also grateful for, as I am sure my noble friend has acknowledged, the great and wise expertise that we have heard from around your Lordships’ House, demonstrating again the wise insight on this subject and many. However, mindful of the fact that the other place has decided to pursue the issue of public registers with the overseas territories, an amendment that the Government have now accepted, I hope that after listening to the debate my noble friend is minded to withdraw his amendment.

[Lord Naseby]

My Lords, those were fine words from the Minister, and we have heard fine words from my colleagues who have supported me this evening. I hope those fine words have some strength behind them. Many noble Lords will know that I have been in the two Houses for 44 years. I deeply respect the rights of the House of Commons, so it is not with an easy heart that I resist the temptation to test the views of this House.

I have reflected deeply on this. I am trusting my noble friend on the Front Bench to move this forward. As my noble and learned friend Lord Mackay of Clashfern said: justice for all—which means, in particular, justice for all the overseas territories. I shall watch, be vigilant and challenge, but on this occasion I beg leave to withdraw the amendment.

Amendment 22A withdrawn.