Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022

Lord Paddick Excerpts

Thursday 24th November 2022 Grand Committee

This statutory instrument forms part of a package of reforms to the DAML regime within the Economic Crime and Corporate Transparency Bill currently in the other place. I therefore commend this motion to the Committee. I beg to move.

[Lord Paddick (LD)]

My Lords, again I thank the Minister for explaining this order. Raising the threshold from £250 to £1,000, the £250 limit being unchanged since 2005, seems quite a reasonable increase. I understand from the Explanatory Note that some organisations wanted the threshold to be raised to £3,000. I think The Home Office is right to limit the increase to £1,000. Law enforcement must focus its limited resources on transactions that are likely to be the result of money laundering. This order has the additional benefit of reducing the burden on commercial organisations, which can, in any event, report suspicious activity to law enforcement despite the changes in the limits in this order. Therefore, we support it.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, we support this order as well. As the noble Lord, Lord Paddick said, it seems a reasonable increase and some organisations would have gone to £3,000. However, there were other respondents to the consultation who were against the increase to £1,000; they wanted to keep it at the lower limit. Can the Minister say what their concerns were? Although I agree with the noble Lord, Lord Paddick, that £1,000 seems reasonable, other people thought it should have stayed at its original level: does the Minister know why they thought that? He indicates that he does not know why—okay.

I have some of the same figures that the Minister quoted. The Explanatory Memorandum states that the volume of DAMLs is rising steeply and gave those figures. The question is: what percentage of those 105,000 referrals were over the new £1,000 threshold—what difference will increasing the threshold to £1,000 make?

On the further figures that the Minister quoted, he said that only 2% of all DAMLs were refused consent in 2019-20, of which only 1,062 progressed towards asset denial. The question is, of that 2%, how many of those DAMLs were for amounts over £1,000 and so would still be caught? Both those questions are about how much the amount of work will be reduced by increasing this limit, although we of course approve of the objective.

One of the main benefits suggested by the Government, with which we agree, is that this measure should free up law enforcement to pursue other activities. We welcome that in itself. We heard from the current Home Secretary’s predecessor that the National Crime Agency has been asked to make staffing cuts of up to 20%. Can the Minister say anything about whether that previous expectation is still in place or has now been ruled out?

The Explanatory Memorandum states:

“A full Impact Assessment has been published alongside the Economic Crime and Corporate Transparency Bill, which considers the impact of the changes in this instrument.”


One of our key concerns about that Bill is its failure to tackle fraud and economic crime, with falling rates of enforcement and prosecution. I understand that this change is intended to reduce the number of ineffective DAMLs, but what action is being taken alongside that to try to increase the prosecution rate? It is a huge problem and it is very time-intensive to secure successful prosecutions—I understand that—so although we support this SI I would be grateful if the Minister could set out in a slightly broader context how he will try to increase the possibility of getting successful convictions.