Police: Restoring Public Confidence

Lord Sharpe of Epsom Excerpts

Wednesday 3rd May 2023 Grand Committee

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, I too am grateful to my noble friend Lord Lexden for securing this debate. I salute his tenacity—an easier word to pronounce. I also thank all those who have contributed. I apologise to my noble friend that our meeting has unfortunately been postponed more than once, but I promise we will get there in the end.

I agree with my noble friend Lord Cormack that the noble Baroness, Lady O’Loan, delivered a thought-provoking speech about Northern Ireland. She will not be surprised that I am singularly unqualified to discuss the legacy Bill, but I will make sure that her remarks are passed on to my colleague, my noble friend Lord Caine.

Today’s discussion is another reminder of the importance of this topic and I am pleased to have the opportunity to outline the Government’s work in this space. I found the debate extraordinarily interesting, as have all other noble Lords, and of course I agree with many of the remarks that have been made. I have also found some of the personal reflections rather moving; I will come back to those.

All noble Lords are right: public confidence is absolutely essential to policing. Without it, the ability of the police to carry out their core functions is undermined, as per our model of policing by consent. My noble friend Lord Lexden rightly mentioned the foundational Peel principles and he had the two ex-policemen on the Government Front Bench today nodding in agreement.

As we are all well aware, recent high-profile cases and reports have underlined the need to root out unacceptable behaviour and to reset cultures. Officers must be held to the highest standards. Before I talk about the Government, I pay tribute to the vast majority of police officers in this country, who serve with considerable fortitude, tenacity—to use that word again—and diligence. They deserve our support and we should not forget that they are the vast majority. I am sure that noble Lords also speak on a regular basis to those who protect us in this place. I would like to say—I place this on record—that they have made it very clear to me that they are also extremely keen to see the sorts of reforms that we are discussing pushed through.

Before I respond to some of the points that have come up during the debate, I will set out briefly some of the steps that the Government are taking to drive change. I will try to avoid the blizzard of statistics that my noble friend referenced but I feel that I need to point out the latest Crime Survey for England and Wales statistics. Other noble Lords, including the noble Baroness, Lady Harris, have put it on the record today—and it would be remiss of me not to point out—that we are making progress in some areas. For example, the figures for hospital admissions for assault by a sharp object for people under 25 are 25% lower in the year ending December 2022 than they were in the year ending December 2019. I deliberately omit the pandemic years. Neighbourhood crime as measured by the crime survey is down 28% in the year ending December 2022 compared with the year ending December 2019. Obviously, we need police to work with partners to make sure that those numbers are maintained. On homicide, levels have been falling since the end of 2021 and are now lower than they were before the pandemic in March 2020. The current level is 11% below the pre-pandemic level in March 2020. There were 708 homicides then. The picture is not an unqualified dystopia, as perhaps some would have us believe.

I will now try to respond to some of the points that have been made—obviously, if I fail in responding to any of the specific ones, I will catch up in writing. We have done a number of things, starting with establishing the independent Angiolini inquiry, which is currently examining the appalling cases of two former Metropolitan Police officers that have been widely referenced. Part 2 of the inquiry will investigate issues in policing such as vetting, recruitment and poor culture, as well as the safety of women in public spaces, a subject to which I will return. In January, we launched a review into the process for police officer dismissals, to ensure that the system is fair and effective at removing those not fit to serve—I will also come back to that—and the Home Secretary has asked the College of Policing to strengthen the statutory code of practice for vetting.

Most speakers have referenced the Casey review and holding the Metropolitan Police to account, specifically my noble friends Lord Lexden and Lord Hunt, the noble Baroness, Lady O’Loan, and the noble Lords, Lord Browne and Lord Ponsonby. The Casey review made for very sobering reading. It is paramount that public trust in the Metropolitan Police is restored. Although primary accountability lies with the Mayor of London, I know that the Home Secretary will continue to hold the commissioner and mayor to account to deliver the necessary improvements. I very much welcome the scrutiny and transparency that HMICFRS brings to police performance and fully support its decision to escalate the Met to its enhanced monitoring phase of “engage”. I am reassured that both the commissioner and mayor are engaging constructively with HMICFRS’s police performance oversight group process. It is imperative that it begins the process to restore the public’s confidence that they are getting the high quality of service that they deserve and have every right to expect. We have confidence in the commissioner’s leadership and his plans to turn around the Met and ensure that the force is delivering for all communities. It is also worth noting that the noble Baroness, Lady Casey, observed that Sir Mark and the deputy commissioner, Lynne Owens, deserve a chance to succeed and she believes that they will do so, as do I.

I move on to the subject of institutional racism, misogyny and other forms of unacceptable discrimination. Without question, discriminatory attitudes and behaviours have no place at all in policing and allegations of racism, misogyny and homophobia are deeply disturbing. We expect police leaders to take urgent action to root out discrimination. Allegations of wrongdoing are dealt with under a comprehensive framework, either by police forces or the Independent Office for Police Conduct. By law, forces must refer certain allegations to the IOPC, including criminal offences or behaviour liable to disciplinary proceedings that is aggravated by discrimination on the grounds of race, sex, religion or other protected characteristics.

The Home Secretary has been consistently clear that culture and standards in policing need to improve, as a matter of urgency. Examining the root causes of poor and toxic cultures will be a key focus of part 2 of the Angiolini inquiry when it begins later this spring. The College of Policing is also currently updating the Code of Ethics, which plays a key role in instilling the right principles and standards from the start of an officer’s career.

All speakers, I think, have referred to the dismissals process. There is no disputing that officers have to be held to the highest standards; that is obviously vital to public trust and confidence in policing. To ensure that the system is fair and effective at removing those not fit to serve, the Government are, as noble Lords will be aware, carrying out a review of the dismissals process. Among other areas, the review will consider the composition of misconduct panels, the role of legally qualified chairs and the consistency of decision-making in cases of sexual misconduct and offences related to violence against women and girls. The process of a review is correct. In another context, my noble friend Lord Hunt pointed out that the police should not mark their own homework. Although I understand the superficial desirability of allowing chief constables the right to make the sackings, this subject still deserves to be considered in the round to ensure that all the possible consequences of those powers are thought through. That is what the review is doing and we will report back when it concludes, which I think will be at the end of this month.

On the subject of vetting, the public deserve to have confidence that the right people are recruited into policing. In order to strengthen the vetting regime, the Government have asked the College of Policing to strengthen the statutory code of practice for police vetting, making the obligations that all forces must have due regard to stricter and clearer. The public consultation for the updated Vetting Code of Practice closed on 21 March and the college is now considering the responses, before providing it to the Home Secretary to arrange for it to be laid in Parliament. The Home Secretary has also asked the policing inspectorate to carry out a rapid review of police forces’ responses to its November 2022 report, which highlighted a number of areas where police vetting can be strengthened. Separately, the National Police Chiefs’ Council—the NPCC—has asked police forces to check their officers and staff against the police national database to help to identify anyone who is unfit to serve. The data-washing exercise is now complete and forces are manually analysing the information received to identify leads for follow-up. This exercise is expected to be completed by September.

A number of noble Lords referred to violence against women and girls, in particular the very worrying statistics around the appalling offence of rape. With the Committee’s indulgence, I will go into what we are doing on this in a little more detail. The noble Baroness, Lady Harris, referred to Operation Soteria, which is the programme being rolled out to improve responses in this area. I can give her the statistics that she was seeking. In the year since the Metropolitan Police has been involved in Operation Soteria—the year ending September 2022—the number of adult rape offences recorded increased by 15%. The number of charges for adult rape offences increased by 79%. That number is still not high enough, certainly not relative to the number of offences, but the trend is in the right direction. The number of investigations closed because the victim did not support further action fell by 8%. Those numbers should give some reassurance that this is working as intended. It is intended to drive long-lasting, sustainable change.

The national operating model, which is being developed through the programme, will be available to all forces in England and Wales from June 2023. However, that is not the only action that we are taking. We are also bringing in new powers to stop unnecessary and intrusive requests for victims’ phones—a vital change in the law that puts an end to the practice of digital strip-searches, as they are known. We are supporting police forces to ensure that no victim of rape is left without a phone for more than 24 hours and we are committed to legislating to ensure that police requests for third-party material are necessary and proportionate. It is early stages, of course, but the trends are heading in the right direction, albeit that I would certainly like to see them speeded up, as I am sure all noble Lords and all police officers would, too.

The noble Lord, Lord Ponsonby, made a very good suggestion about domestic abuse victims, which I will definitely take back. It falls within the MoJ’s remit, so with his permission I will make sure that my colleagues there are well aware of his suggestion.

The noble Lord, Lord Browne, and my noble friend Lord Cormack referenced violence against women and girls, which I will go into in some more detail. We are doing a lot to improve the policing response to crimes of VAWG, as it is known. We recently published a revised strategic policing requirement which includes VAWG as a national threat for policing to respond to. We supported the appointment of DCC Maggie Blyth as the first full-time National Police Chiefs’ Council VAWG lead to co-ordinate and improve the police response to it. The NPCC published its first performance report in March 2023 using data obtained from forces and will publish a strategic risk assessment shortly to outline where forces should prioritise their resources going forward.

We have also committed up to £3.3 million to fund the rollout of domestic abuse matters training to police forces that are yet to deliver it or do not have their own specific domestic abuse training. This also includes funding the development of a new training module targeted at officers investigating domestic offences to improve charge rates. That is very good progress. As always, there is more to do, but the Government are not idle in this area.

The noble Lord, Lord Browne, made some extremely good points about police leadership. The Government are clear that strong leadership at every level is essential. Cultures must be reset and standards raised, and the Government will continue pushing for the necessary improvements to be made. However, the drive for change also needs to come from within, and strong leadership at all ranks is essential. We have invested in a new national centre for police leadership, which is being developed by the College of Policing. For the first time, from June 2023 there will be national leadership standards and a professional development framework linked to these standards at every level in policing. This means that every police officer will have a clear set of consistent leadership standards expected of them at every rank, and will know what training is available to help them achieve those standards. That goes some way to answering the questions of the noble Baroness, Lady Harris. In addition, the College of Policing’s reformed processes for progression to chief officer will increase transparency and open up access to senior-level development. The first cohort to undertake the new executive leaders programme, which is mandatory for those who want to reach chief officer level, will begin in June 2023.

The Government believe in local policing accountable to local communities. That is why we introduced police and crime commissioners in 2012. PCCs and mayors with PCC functions have been elected by the public to hold chief constables and the force to account, ensuring that the public have a stronger voice in policing. PCCs are central to the work to restore trust and confidence in the police. To do so, they must continue to be strong and visible leaders in the fight against crime. Implementing the Government’s two-part review into PCCs will strengthen their role, ensuring that they are accountable to the public and have the tools and levers they need to carry out their role effectively. It will sharpen local accountability, making it easier for the public to hold their PCC to account for their record on reducing crime, and will turn the dial on their involvement in the criminal justice system, giving them a more defined role. Ultimately, PCCs and mayors with PCC functions are directly elected by the communities they serve and are held to account at the ballot box. I am afraid I do not recognise the cost figures that the noble Baroness, Lady Harris, advanced.

The Government and the public rightly expect the highest standards from our police officers. The ability of the police to perform their core functions—tackling crime and keeping the public safe—is dependent on their capacity to maintain the confidence of the public. As part of the “Inclusive Britain” strategy, the Government are committed to developing a new national framework with policing partners, including PCCs, for how the use of police powers, such as stop and search and use of force, can be scrutinised at a local level. This will help create tangible improvements in trust and confidence between the police and the communities they serve by improving public understanding of how and why police use their powers and to help account for any disparities. Alongside this, the Home Office has committed to seek to remove unnecessary barriers that prevent the use of body-worn video, which will be implemented in the framework. Work is well under way on the community scrutiny framework, which we aim to publish later this year.

Last week, we announced that our unprecedented officer recruitment campaign has met its target. We said that we would recruit an additional 20,000 officers and we have. This means that we now have 149,572 officers across England and Wales. We recruited an additional 20,951 during the three-year campaign, which is testament to the hard work of forces and the brave men and women who have signed up join police forces. We know that there is work to do to improve trust and confidence in policing, but it is worth noting that, during this recruitment campaign, almost 275,000 people applied to join the police, showing that it really is a job like no other. However, let me be clear: there was never a question that this uplift should come at the expense of public safety. We have provided more than £3 billion to police forces to support the recruitment process, including enhancing vetting capabilities. Recruitment standards have been maintained, and this rigour is demonstrated by the fact that, for every 10 applicants, only one officer is hired. That ratio has been consistent throughout the campaign. I say to the noble Lord, Lord Browne, that this is not a tacit admission of anything. It is a reflection, as I said yesterday, that demand in policing has changed.

The Government have been clear about the need to return to common-sense policing, where the focus is on getting the basics right. This means making our neighbourhoods safer, supporting victims and taking tougher action. That is what the public expect, and what the public deserve. It is about attending every residential burglary. It is about targeting crime hotspots, whether that be to tackle anti-social behaviour or serious violence, and it is about bringing to justice those who break our laws.

On the subject of anti-social behaviour, which the noble Baroness, Lady Harris, asked me about, I will not go into too much detail, but the Government are committed to tackling and preventing ASB. Since taking up office, the Prime Minister has made it very clear that the people’s priorities are his priorities—and this is one of them. He was behind the publication on 27 March of an ASB action plan, which sets out the Government’s commitment to tackling ASB across six key areas—I will not go into them now. There is also a task force that is chaired, I think, by my right honourable friends the Home Secretary and the Secretary of State for Levelling Up, whose department is also looking at this particular subject.

On Operation Conifer, I really have heard what my noble friends in particular have said on this matter. One thing that I feel I must say is that, even though the accusations laid against some of the people who were investigated turned out to be those of a fantasist, that fantasist was given political cover and there was political pressure involved here; we should not forget that fact. We should also defend the police’s right to investigate accusations of this type. There has been a seriously large number of historical allegations that have been proved, including some into some very public personalities. I will not name names, but we should remember that. In saying that, I am not in any way justifying how that operation was done, some of the things that were said or any other subjects that my noble friends have rightly brought back into the public domain yet again. I completely understand why they are asking for that independent inquiry. However, the Government’s position is that there have effectively been four independent scrutiny panels and so on, which have checked and tested the decision-making and approach of the investigation. Two reviews by Operation Hydrant in September 2016 and May 2017, to which my noble friend Lord Hunt referred, concluded that the investigation was proportionate, legitimate and in accordance with national guidance. There was a review in January 2017 by Her Majesty’s Inspectorate of Constabulary, as it then was, of whether the resources assigned to the investigation by the Home Office were being deployed in accordance with value-for-money principles. The IOPC has also considered specific allegations related to a former chief constable.

On the subject of the former chief constable, arrangements concerning the establishment of a misconduct hearing are a matter for PCCs, as I have said from the Dispatch Box before. The management of the hearing itself is the responsibility of the independent legally qualified chair. As I have also said, legally qualified chairs must commence a hearing within 100 days of an officer being provided a notice referring them to proceedings, but may extend this period where they consider it is in the interests of justice to do so. That is obviously the case in this particular instance. It is regrettable, but that is the case. Decisions made within a hearing are done so independently of PCCs and the Government. The Government take accountability of the police very seriously and have delivered a number of reforms to strengthen the police disciplinary system. This included additional independence through the introduction of independent LQCs in 2016. The Government are also undertaking an internal review of the process of police officer dismissals, which is looking at the existing model and composition of panels, including the impact of the role of LQCs.

In answer to the specific comments and questions about anonymity from my noble friend Lord Lexden, I say that there is no specific legislative provision for the anonymity of legally qualified chairs. Decisions concerning the publication of an LQC’s name are a matter for the relevant PCC. Those decisions are made independently of government. I do not know why his or her identity is not public in this case, and I am not going to speculate on that subject.

In closing, I thank my noble friend Lord Lexden for securing this debate and thank all those who have participated. Just to conclude with a couple of other remarks, I thank my noble friend Lord Cormack for his nostalgia trip to Dock Green, but I think that there are enough national bodies with responsibilities in the oversight area, including, of course, the College of Policing, the HMICFRS, the IOPC and the NPCC. I note the comments of the noble Lord, Lord Ponsonby, about him being stopped and searched when he was younger, and I wonder who he was hanging around with in those days.

The noble Lord, Lord Browne, raised an interesting subject about the practical and philosophical arrangement of policing in this country, which I think might be a debate that he should impress on the Government to come back to in future days. It would be fun to conduct that debate, although I am probably going well beyond my brief here.

As I have made clear, if the police are to perform their critical functions with maximum effectiveness, they must have the trust and confidence of the people they serve. That is why the Government are taking the action that I have highlighted to drive change and why we will continue challenging forces to raise standards across the board—and, rest assured, the Government will not rest.

Police Uplift Programme

Lord Sharpe of Epsom Excerpts

Tuesday 2nd May 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, I shall now repeat a Statement made in another place:

“With permission, Mr Speaker, I will make a Statement about the Government’s police uplift programme.

Today is a significant day for policing. We can officially announce that our unprecedented officer recruitment campaign has met its target. We said we would recruit an additional 20,000 officers, and we have. We have recruited 20,951 additional officers. This means that we now have a record 149,572 officers across England and Wales.

This is the culmination of a colossal amount of work from forces, the National Police Chiefs’ Council, the College of Policing, the Home Office and beyond. They have my heartfelt gratitude and admiration. I feel honoured and privileged to be holding the baton as we pass the finishing line. I am especially grateful to my right honourable friends the Members for Uxbridge and South Ruislip, Witham and North West Hampshire. Their vision and leadership were instrumental in helping us reach this point, and I know they will share my delight today. I pay tribute too to my right honourable friend the Home Secretary, who has energetically steered the campaign to its successful conclusion, and to my right honourable friend the Prime Minister for his continued support and encouragement.

This was not a simple task. There have been challenges along the way and people doubted our prospects of success, but by sticking to the course and believing unequivocally in the cause, we have done it. To every single new recruit who has joined up and helped us reach our goal, I say thank you. There is no greater or more noble example of public service, and they have chosen a career like no other. Not everyone will be as happy as we are today. Criminals must be cursing their luck, and so they should, because we are coming after them.

Not only are there more officers than ever before but the officer workforce is more diverse than it has ever been. There are now 53,083 female police officers in post, compared with 39,135 in 2010. There are 12,087 officers identifying as ethnic minorities, compared with 6,704 in 2010. There are more officers working in public protection, in local policing and in crime investigations. There are now 725 more officers working in regional organised crime units tackling serious and organised crime, as we promised.

While it is right that today we pause and reflect on the success of the uplift programme, this is not the end. This is not just about hitting a number. It is about making a real and tangible difference to the lives of people we serve and the communities they live in. It is the latest step in our mission to crush crime and make our country safer. The public want to see bobbies on the beat; we have delivered. The public want courageous and upstanding public servants in whom they can have pride and, most importantly, whom they can trust. Now the public quite rightly expect forces to maximise the increased strength and resources available to them. They want to see criminals caught and locked up, and to feel safe and secure, whether in their homes, online or out and about. They want the police to focus on the issues that matter most to them.

We have made good progress already. Crime is going in the right direction, falling in England and Wales by 50% since 2010, excluding fraud and computer misuse, with burglary falling 56%, robbery by 57% and criminal damage by 65% over the same period. Figures also show reductions in homicide, serious violence and neighbourhood crime since December 2019. On homicide, reductions are being made, with the numbers 6% lower than in December 2019 as of September 2022. Now we need policing to work with partners to ensure that these reductions are maintained.

Crime is a broad and ever-evolving menace, which is why we are addressing it from all angles. We are acting to turn the tide on drugs misuse through our 10-year strategy, and our crackdown on county lines has yielded excellent results. We have stepped up efforts to tackle domestic abuse, violence against women and girls, and child sexual abuse. Our twin-track approach to tackling serious violence is bedding in and having a real impact. We are supporting law enforcement in the ongoing fight against serious and organised crime, terrorism, cybercrime and fraud. We have shown that when our constituents raise concerns about an issue, we listen and we act. That was demonstrated recently with the publication of our comprehensive plan to drive anti-social behaviour out of our communities and neighbourhoods.

We will keep up the momentum. We will challenge and support the police in equal measure. We expect police forces to maintain officer numbers at the levels delivered by the uplift and are pushing them to drive up standards and drive down crime. It is vital that forces seize this opportunity. As the Home Secretary has made clear, common-sense policing is the way forward. This is our mantra, and it should be a guiding principle for forces too.

For the Government’s part, we are holding up our side of the bargain. That includes measures I announced earlier this month to cut red tape that gets in the way of real police work. It includes the steps we are taking on ethics, integrity and conduct, as policing strives to secure and retain public trust, which has been shaken by recent reports and cases. Before I finish, I want to highlight that I will be holding a drop-in surgery here in the large ministerial room from 3 pm today for any colleagues who wish to discuss the uplift programme.

We said we would recruit 20,000 additional police officers; we have delivered. We said we would bear down relentlessly on crime; we have delivered. I am proud of what we have achieved, but there is more to come. To the decent, law-abiding majority, I say this: we have got your back. Your safety is our number one priority. My message to the criminals is this: we are coming for you, you will be caught and you will face justice.

More police, less crime, safer streets and common-sense policing: those are the pillars upon which our approach is built. Today, as we mark another hugely significant step forward in that mission, we reaffirm our commitment to do everything in our power to protect the public. I commend this Statement to the House.”

--- Later in debate ---

[Lord German (LD)]

My Lords, this is obviously a Statement that the Government are pleased to make but, unfortunately, the rhetoric does not lead to change, which is what the public will be looking for. A huge number of questions fall out of the programme and tell you something about the way in which policing takes place in this country.

What we are seeing, of course, is that record numbers of police are leaving the police force while new people come in. Does this record number of police leaving mean that we are basically trading inexperience for experience? In 2021-22, the last year for which figures are available, 8,117 police officers left the profession; that is a 20-year high. Can the Minister tell us whether that figure is reflected in the figures up to the end of March this year and whether, again, we are seeing that change? Clearly, what we need is an experienced profession.

The second thing that the uplift programme shows is the number of people in various age groups within the new police forces around the country. If you look carefully the figures for those aged 55 and over, you see that they represent only some 1.8% of the police force. Has that figure been shared, not in this financial year but in previous years? Is that an accelerating figure, with the number of older police officers declining? At present 38% of the force are aged 45 or over. Was that figure higher or lower in the past?

The other question that needs raising is how police officers are recruited. We have had a series of questions back and forth with the Minister about the way in which police officers are recruited and we know that some 50% of all recruited police officers do not have a face-to-face interview with another police officer. I know that the Minister has replied to my questions and said that this is being altered. I have read what the Government intend to do with the police college and to make that change work, but we certainly need to be reassured that the right people are getting into the police force and we are not seeing the sort of problems that we have seen in the very recent past.

If you want true community policing, what sense does it make to lose all the community support officers that we have had? Since 2015, 4,000 police support officer posts have been lost and since 2019, given that that is the bedrock date that the Minister wants to work from, 1,284 community police officer posts have been lost. The great advantage for those of us who remember the way in which those support officers worked around our communities is that they were seen on the streets; they were what you might call “bobbies on the beat”. They were an essential part of that. As the Minister knows, you do not put one policeman on the beat; you used to put a policeman with a PCSO. So it is two police officers now, because the number of PCSOs has dropped.

The real test of this measure is: will the quality and nature of the service that people get change? Some 275 car thefts per day in the past year went unsolved, and just 3.4% of car thefts resulted in a charge. Also, 574 burglaries went unsolved and only 6% resulted in a charge. The sort of result that people want to see is people being charged and found guilty of the crimes that are being committed against them. Clearly that has not happened. The test for the Government is how community policing is going to work in the future. A recent Savanta poll found that four in 10 UK adults have installed in the past year CCTV, stronger locks, alarm systems or camera doorbells, all of which demonstrates that people are worried about crime and about these crimes being detected, which they have not been as yet.

One thing absent from the Statement is any mention of cybersecurity. Those of us who have been privileged to hear what is happening in this Parliament will know of the battle against those who are trying to burst into the security of our nation. Can the Minister tell us what resource is going to go into the battle of the future against those who are causing cybercrime?

Finally, there is the issue of head count versus full-time equivalents. The Government in the published Statement say that there is little difference—some 1% or 2%. However, 1% or 2% of experienced people who are doing the work that we want to see done is a considerable number. What we are seeing here is a shell without the interior. The interior has to be made to work for the communities of this country and I am not certain that that is the progress which the Government have made.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank both noble Lords for their comments. Since I arrived in your Lordships’ House, every debate and Question has been a demand for more from the Government—money, resources and so on. We have finally delivered more, on time and on budget, and, if I am honest, I am a bit disappointed with the response. However, I will do my best to answer the questions that have been put to me.

To forestall any questions about fraud and the cybersecurity aspects that will be asked, I will alert noble Lords to the fact that the fraud strategy is going to be published this week. There will be more to be said on that, and as a consequence I am not able to go into detail about it.

Before I go into detailed answers to the questions, the data that I read out in the Statement was in fact a little out of date, because on Thursday last week the Crime Survey for England and Wales published its latest data, which takes us up to December 2022. That shows that all crime, excluding fraud and computer misuse, has fallen by 52% since March 2010, from 9.5 million incidents in the year ending March 2010 to 4.65 million in the year ending December 2022—a reduction of 4.978 million.

The latest data from the crime survey shows a 12% decrease in all CSEW crime since the year ending March 2020 and a 14% decrease in all crime since the year ending December 2019. There were 1.5 million incidents of neighbourhood crime estimated by the crime survey for the year ending December 2022, a fall of 26%, compared with the year ending March 2020. I could go on, but I think the data supports the fact that the police have been doing a good job and, hopefully, with this uplift in numbers, will continue to do so. I remind the House that there are now over 149,500—more than ever before. The Government are determined to cut crime and make our streets safer. Over the course of the police uplift programme, 46,505 new recruits have joined police forces. I will come back to that in a moment.

The noble Lord, Lord Coaker, asked about charge rates. I agree that the current data on charge rates is concerning. We expect police forces to get the basics right, to focus on common-sense policing and to work with partners across the criminal justice system to see more criminals charged and prosecuted. But that is a shared responsibility and the system needs to work better to catch criminals and help victims of crime.

With regard to online crime, as I said, the fraud strategy will be published this week. However, to put some numbers on that, we have already committed £400 million over the next three years to bolster law enforcement’s response to economic crime. The strategy will set out a co-ordinated response from government, law enforcement and the private sector to better protect the public and increase the disruption and prosecution of fraudsters.

The subject of vetting has quite rightly come up. The Government have been clear that all police forces must meet the high standards that the public expect, and that forces must root out those who are unfit for service at the very first opportunity. It is of the utmost importance that robust processes are in place to stop the wrong people joining the police in the first place, which is why we have invested in improving recruitment processes and supporting vetting as part of the £3 billion of funding provided to forces to recruit and maintain officers. New recruits will have been vetted in line with the College of Policing’s Vetting Code of Practice and relevant vetting APP, which were first established in 2017. The APP is due for an upgrade very shortly, as noble Lords will be aware.

On neighbourhood policing, there are now more officers working in public protection, local policing and crime investigations. Thousands of additional officers are already out on the streets, and the latest data available shows that overall 91% of police officers were in front-line roles. The uplift programme provides the opportunity to ensure that we have the officers that policing needs, both to respond to the increase in demand and to take a more proactive response to managing that demand, including crime prevention.

The noble Lord, Lord German, asked about the attrition rates. We have made it very clear to police forces that the large investment we have put into policing means that we expect officer numbers across England and Wales to be maintained throughout 2023-24. The police uplift programme was designed to provide a genuine uplift of 20,000 officers that accounts for attrition rates. Voluntary resignation rates in policing are at less than 3%, which is low compared to other sectors. Policing is obviously a career like no other, and the results of our latest survey of new recruits showed a positive onboarding experience overall: 82% of respondents are satisfied with the job, and 77% intend to continue as police officers for the rest of their working lives. Those numbers are very encouraging.

The noble Lord also asked me, perfectly reasonably, about face-to-face contact. In February, the College of Policing wrote to all chief constables with updated and reissued guidance on post-assessment in-force interviews. The college reiterated the importance of those interviews and that all forces should deliver them using college assessment standards to ensure the same quality nationally. The college expected forces to have implemented the updated guidance by the end of last month. Following the issuing of new guidance by the college on post-online assessment centre interviews, the latest data provided by the college shows that 38 forces are currently using a post-assessment interview and that four plan to do so with their next cohorts.

The noble Lord, Lord German, also mentioned CCTV—as if it somehow indicates against the quality of the data I have already shared with your Lordships’ House, and that there is more, shall I say, concern about crime in local areas. Of course, people are right to be concerned. However, perhaps it also demonstrates that this equipment and technology is cheaper and more readily available than ever before and, more to the point, that it can be installed on a Sunday afternoon by oneself.

The noble Lord, Lord Coaker, is quite right: the numbers have consequences for everyday lives, which is why I believe that your Lordships’ House should support them. I certainly do not believe that any of this is irrelevant.

[Lord Soames of Fletching (Con)]

My Lords, I welcome the tenor and content of the Statement my noble friend the Minister read out. However, does he agree with me that one of the principal problems our police forces have is the lack of quality in their leadership at middle-rank and senior-rank levels? Will he consider looking at the way the Armed Forces trains its officers to ensure that, when police officers take positions of senior command, they are prepared and wholly trained for such awesome responsibilities?

[Lord Sharpe of Epsom (Con)]

My noble friend makes some solid points. It is undeniable that some of the incidents which have been seen over the past few years, and which are coming to light now, are a consequence of a failure of leadership. I am pleased that the leadership of the country’s main police force is in very good hands, and I support Sir Mark Rowley of the Metropolitan Police in the work he has to do. My noble friend also makes some very good points about leadership more generally. I believe—and I will be asking about this more frequently—that the College of Policing is working on the reinstatement of a national police college to ensure rigorous, nationally consistent standards.

[Baroness Chakrabarti (Lab)]

My Lords, it is no fault of the Minister, but metaphors about passing batons and crossing finishing lines will be seen to be complacent and even insensitive by many victims of sexual and violent crime in particular. I share the concerns expressed repeatedly on all sides of your Lordships’ House that, when reversing drastic police cuts in a hurry, there will be issues with the quality of recruitment, vetting, training and discipline, as we have heard. So, rather than constantly batting this off to the College of Policing, will the Government take responsibility and propose a clear timeline for a legislative framework of standards across the nation for all those vital matters?

[Lord Sharpe of Epsom (Con)]

The noble Baroness will be aware that a number of ongoing reviews on matters such as dismissals are due to conclude very shortly. She makes some very good points about victims, and we are committed to delivering justice for victims and putting some of the vile offenders referred to behind bars for longer, but there is obviously still a long way to go. We have previously discussed at the Dispatch Box some of the factors the noble Baroness mentioned and, while I will not go into them in detail again, I note that programmes such as Operation Soteria are delivering meaningful results.

[Lord Vaux of Harrowden (CB)]

The noble Lord was quite right in saying that I was going to mention fraud. The Statement says that crime is falling, excluding fraud. Fraud remains a substantial growth industry and now accounts for over 40% of all crime against the individual. The noble Lord agreed last week that the current level of law enforcement resources aimed at it is insufficient. He skilfully shot my fox earlier by referring to the national fraud strategy that is to be issued this week, which is an improvement on “imminently” and “shortly”. How many of these 20,591 officers who have been recruited have specialist fraud skills?

[Lord Sharpe of Epsom (Con)]

The noble Lord asks a question which I cannot answer at the moment. I will endeavour to find out those statistics and I would hope that some of those questions about resourcing will be dealt with on publication of the strategy this week. As regards the overall uplift, as I said earlier, 91% of the new intake, as it were, are involved in frontline policing.

[Baroness Berridge (Con)]

My Lords, while the diversity statistics my noble friend outlined are encouraging, in terms of women and ethnic minorities they are still not proportionate to the population. Is not one of the issues that many police forces have, particularly the Met, retaining those staff? Can my noble friend outline how we are going to monitor—maybe with swifter inspections from His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services—whether they retain their female and ethnic minority staff and promote them at the same rate as their white officers?

[Lord Sharpe of Epsom (Con)]

My noble friend makes some very good points. Obviously, as she would expect me to say, these are matters for local police forces themselves. However, I absolutely take the point, and we should all be involved in making sure that retention and lack of attrition remains as it is.

[Lord Grocott (Lab)]

My Lords, I find it pretty astonishing that the Government should call for national rejoicing that they have finally got the level of policing up to the level of 13 years ago, under the last Labour Government. An apology for all the cuts that were made in the early years of this Government would be in order. As for comments in the Statement such as criminals now “must be cursing their luck” because the figures have gone up, the inevitable response is that immediately after 2010, criminals must have been rejoicing at the savage cuts made to policing—to dangerous levels—in many cities in this country.

The Minister still has not answered a couple of specific questions that were put to him. First, we are told that these 20,000 new recruits have been recruited since 2019. How many people have left the police service during that precise period, and is that allowed for in describing the number of police officers available today? Secondly, this mass recruitment is obviously to be welcomed, but can he tell us how many of these new recruits actually leave the police service before they have completed their probationary period? It is no use having the police officers unless they give a substantial period of service after they have been trained.

[Lord Sharpe of Epsom (Con)]

My Lords, in fact there are more policemen than under the last Labour Government: 3,542 more, to be precise. The fact is that demand for policing has changed since 2010, which is why in 2019 the Government made this commitment to increase the number of police officers by 20,000, to help the police respond. I am afraid that I cannot say how many of this new intake will complete their probationary period, as, obviously, some will still be in their probationary period. I will endeavour to find out the statistics and come back to the noble Lord. On the number who left, I have already gone into the statistics in some detail on the number who were recruited, as well as the attrition statistics.

[The Lord Bishop of Gloucester]

My Lords, it is very good to hear the Minister speak about police uplift. I am certainly not asking for more and more but I am asking for more join-up. I am really concerned about the “we are coming for you” rhetoric being part of the solution, and the sense that if we simply arrest more people and send more people to prison, we will reduce reoffending. There was nothing in the data about the high rate of reoffending. Unless we look at what is going on in our prisons, at how we rehabilitate people and address some of the systemic issues relating to why people offend in the first place, we will not be doing that join-up across the criminal justice system. I am really concerned about the rhetoric whereby, if you arrest more people and lock them up for longer, our streets will be safer; the data simply does not reflect that. Will the Minister say more about the join-up across the whole of the criminal justice system?

[Lord Sharpe of Epsom (Con)]

The right reverend Prelate has made some very good points. The public would expect charge, arrest and prevention rates to increase from the current levels. However, without work on reoffending and the criminal justice system in the round, as the right reverend Prelate suggests, I think that things will fail to improve as much as we would all like. I cannot give her any precise details but, when it comes to the drug strategy, work is being done between the Ministry of Justice, the criminal justice system more generally and the Home Office on reoffending and referring people to preventive programmes at an earlier stage. That should yield some results.

[Lord Bellingham (Con)]

Will the Minister join me in paying tribute to Paul Sanford, who was appointed Norfolk chief constable in 2021? He made it among his priorities to clamp down on the county lines and low-level antisocial behaviour, and he has succeeded in both areas. However, is the Minister aware that rural counties such as Norfolk, Suffolk and Lincolnshire are facing quite profound problems with the police funding formula? As a consequence, Paul Sanford’s predecessor had to scrap the police community support officer programme. What can the Minister say about those counties that have suffered relative to other counties in funding and their desire to reinstate that programme in future?

[Lord Sharpe of Epsom (Con)]

I thank my noble friend for his question and I am happy to join him in congratulating the chief constable whom he has mentioned. As for the funding formula, I do not have the precise details in front of me. However, as I said in the Statement, the demand has changed over the past 10 years. If the funding has changed, that will be a reflection of the change in demand.

[Viscount Stansgate (Lab)]

My Lords, the Minister’s Statement refers to the importance of public trust. As the House will know, in the case of the Metropolitan Police, that is understandably very low—indeed, the Metropolitan Police is itself on probation. To follow up his answer to my noble friend a moment ago about probation, do the Government keep figures on the current number of police officers in the Metropolitan Police who are on probation? Do the Government have an estimate of those who are expected to pass through their probation to become finally qualified police officers?

[Lord Sharpe of Epsom (Con)]

I am glad that the noble Viscount has raised the subject of the Metropolitan Police. It is a little disappointing that it is one of the only forces—in fact, the only force—that did not meet its targets in police uplift, with only an additional 3,468 officers recruited, whereas the target was for 4,557, and the funding was there to do that. As for the probationary statistics that the noble Viscount asked for, as I said in answer to an earlier question, I am afraid that I do not have them to hand, but I shall endeavour to find them and communicate them to the noble Viscount.

[Lord Dholakia (LD)]

My Lords, the composition of police forces should reflect the community that they represent. Why has recruitment of those from ethnic-minority and diverse communities been so low in the Metropolitan Police?

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

That I cannot answer but, as I said, in the national picture, the fact is that we have more officers identifying as ethnic minorities than ever before.

[Baroness Blower (Lab)]

My Lords, as the Minister said, it is not just about hitting a target; it is also about public trust. How concerned is he about the media reports around police recruitment of unsuitable so-called rogue candidates being given jobs, precisely to meet government targets? The police inspectorate has said explicitly that hundreds of people have joined the police in the past three years who simply should not have. If the Minister recognises this, what is he going to do to address it?

[Lord Sharpe of Epsom (Con)]

I hope that I have gone into reasonable detail about the standards of vetting that are required and expected. I also point out that there were 10 applicants for every job, which implies—or should imply, at least—that there is a reasonable pool from which to choose and, I hope, get the right people. That is of course not a guarantee that there will not be a few bad apples in this particular barrel, but I sincerely hope that there are not—but perhaps I might be surprised if there are not as well.

[Baroness Lawrence of Clarendon (Lab)]

My Lords, even with the police uplift programme, since 2010 there are 9,000 fewer police officers, and 6,000 fewer on the beat in real terms. Does the Minister think that this programme is sufficient, given that 90% of crimes go unsolved every year, or are the Government considering further action?

[Lord Sharpe of Epsom (Con)]

My Lords, the noble Baroness asks me to comment on operational policing matters. I have talked a bit about neighbourhood policing activities; I have also, on a number of occasions, said that 91% of policemen are involved in front-line activities. These are really issues that should be debated between police and crime commissioners and chief constables, depending on the area.

[Baroness McIntosh of Pickering (Con)]

My Lords, as my noble friend Lord Bellingham said, rural crime takes on a life of its own. North Yorkshire was the first police force, I understand, to create a rural task force. Will the Home Office give a specific target for rural crime to ensure that the funding for such task forces is secured going forward?

[Lord Sharpe of Epsom (Con)]

My noble friend will be aware that, as I said in answer to the previous question, these are operational matters for chief constables and police and crime commissioners—and, of course, in the case of police and crime commissioners, the people who elect them.

[Lord Watts (Lab)]

My Lords, this will not wash. The people outside know that crime is going up; they know that there are not the police numbers on the street. How will the Government make sure that these criminals get longer sentences when there are no places in prison for them?

[Lord Sharpe of Epsom (Con)]

My Lords, the noble Lord is wrong: crime is going down and there are more police officers than ever before. That is according to the Crime Survey for England and Wales, which the Office for National Statistics recognises as the most reliable source of those statistics. As for inviting me to comment on sentencing practices and so on, which obviously stray into the responsibilities of other government departments, I am not going to do that.

[Baroness Wilcox of Newport (Lab)]

My Lords, the Minister has given us a great deal of data this afternoon. However, the proportion of front-line officers is lower today than in any year since 2011, while the proportion of officers in organisational support is higher today than in any year since 2011. Have the Government considered the merits of committing to a target for putting more police and PCSOs on the streets in our nations and regions?

[Lord Sharpe of Epsom (Con)]

I say to the noble Baroness that, again, that is an invitation to comment on operational policing matters, which depend very much on local circumstances. However, 91% of all police are currently in front-line roles and, as I have already said, the nature of that—the demand, if you like—has changed over the last decade and it would not be wise for me to speculate as to how that demand has changed in various local areas.

[Lord Watson of Wyre Forest (Lab)]

My Lords, just last week we heard that the Met Police may be failing to identify serial killers, in the wake of the appalling case of Stephen Port. The report identified five key failings: lack of training; poor supervision; unacceptable record-keeping; confusing policies; and inadequate intelligence procedures. How are the Government urgently supporting the Met to fix this?

[Lord Sharpe of Epsom (Con)]

The Government’s support for Sir Mark Rowley has been very clear indeed, and I am happy to wish him very well in his endeavours over the coming months. He has a very large set of responsibilities on his shoulders and, as far as I can see, he is discharging them well. The noble Lord asked me about operational policing in London. He will be aware that the responsibility for that, as the police and crime commissioner, is with the Mayor of London.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, 41% of crime is fraud, so why does the Minister keep using figures that do not include fraud?

[Lord Sharpe of Epsom (Con)]

The fraud strategy will be published this week.

[Lord Weir of Ballyholme (DUP)]

My Lords, while the Government make a virtue of the fact that police numbers in England have started to turn marginally upwards, in Northern Ireland we have reached a point at which the security threat is the highest it has been for many years from terrorist and dissident organisations, and yet the number of police officers in Northern Ireland is perhaps the lowest it has been in many decades, if not the entire history of the state. What representations have Ministers been making to their colleagues in the Northern Ireland Office to ensure that the citizens of Northern Ireland are given an equal level of protection from crime and terrorist actions?

[Lord Sharpe of Epsom (Con)]

The picture that the noble Lord paints is obviously concerning. I will say that this is not a marginal uplift but a substantial uplift. As regards specific circumstances in Northern Ireland, I am afraid I cannot answer his question on the numbers, but I will investigate and come back to him.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I think there is general agreement that trust has declined since 2010. We need to restore that as best we can. Knowing the Minister, I was rather surprised by his throwaway line in response to some of the questions about trust. When he said that there will be “a few bad apples”, I found that rather complacent. The police inspectorate has said that, of the people being recruited into the police force, some hundreds have come in within the past three years who should not be there. We know the plan that has been set in place to try to avoid a repetition of this in the future, but what is happening to try to root out the 300 or so that are around?

[Lord Sharpe of Epsom (Con)]

I am sorry if I sounded complacent to the noble Lord. It was really just a reflection on the statistics of this, as with any normal distribution—the noble Lord will know how normal distributions of population cohorts and so on work out. That is all that that comment was meant to reflect. As regards the numbers of police that have been recruited, I have commented extensively on the vetting processes. The dismissals review, which I referred to earlier, is concluding this month. I hope that we will have a lot more to say very soon on how that process will be strengthened.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I am sorry: the Minister has not answered my question about the fraud strategy. The Government have been consistently excluding fraud from the reporting of crimes —why?

[Lord Sharpe of Epsom (Con)]

My Lords, the noble Lord is quite right. I am sorry if I seemed to evade the question. The simple fact of the matter is that I cannot comment on the strategy because I have not seen it, it is due to be published this week, and it will address all the various questions that the noble Lord has asked me—in other words, I do not know.

[Baroness Taylor of Stevenage (Lab)]

My Lords, as we have heard from my noble friend Lady Lawrence, even with the police uplift programme, there is still a shortage of over 9,000 police officers. As well as the decimation of neighbourhood policing that that has caused, many of the officers lost in earlier rounds of cuts will have been among the most experienced and highly trained; for example, officers trained in specialist intelligence, firearms and dealing with sexual offences. This has put immense pressure on those left behind to hold the fort and may explain, for example, why only 1% of rape offences reach a conviction. What assessment have the Government carried out of the impact of this loss of experience, and how long will it take to build back up so that the specialist officer posts can be filled?

[Lord Sharpe of Epsom (Con)]

The noble Baroness is right to talk about specialist skills and experience. I do not recognise the 9,000 number: as I have said repeatedly this afternoon, we have record numbers of police. I am afraid I cannot answer, as with the question that the noble Lord, Lord German, asked, about age distribution and so on. I can say that certain specific programmes, such the one I referenced earlier, Operation Soteria, are delivering very strong results. The necessary people are being trained in the right way in dealing with some of the things that are of significant public concern.

Economic Crime and Corporate Transparency

Lord Sharpe of Epsom Excerpts

Committee stage
Thursday 27th April 2023 Grand Committee

Moved by

[Lord Sharpe of Epsom]

84A: After Clause 180, insert the following new Clause—
“Failure to prevent fraudFailure to prevent fraud
(1) A relevant body which is a large organisation is guilty of an offence if, in a financial year of the body (“the year of the fraud offence”), a person who is associated with the body (“the associate”) commits a fraud offence intending to benefit (whether directly or indirectly)—(a) the relevant body, or(b) any person to whom, or to whose subsidiary, the associate provides services on behalf of the relevant body.(2) But the relevant body is not guilty of an offence under subsection (1)(b) if the body itself was, or was intended to be, a victim of the fraud offence.(3) It is a defence for the relevant body to prove that, at the time the fraud offence was committed—(a) the body had in place such prevention procedures as it was reasonable in all the circumstances to expect the body to have in place, or(b) it was not reasonable in all the circumstances to expect the body to have any prevention procedures in place.(4) In subsection (3) “prevention procedures” means procedures designed to prevent persons associated with the body from committing fraud offences as mentioned in subsection (1).(5) A “fraud offence” is an act which constitutes—(a) an offence listed in Schedule (Failure to prevent fraud: fraud offences) (a “listed offence”), or(b) aiding, abetting, counselling or procuring the commission of a listed offence.(6) For the purposes of this section a person is associated with a relevant body if—(a) the person is an employee, agent or subsidiary of the relevant body, or(b) the person otherwise performs services for or on behalf of the body. (7) Whether or not a particular person performs services for or on behalf of a relevant body is to be determined by reference to all the relevant circumstances and not merely by reference to the nature of the relationship between that person and the body. (8) Where a relevant body is liable to be proceeded against for an offence under subsection (1) in a particular part of the United Kingdom, proceedings against the body for the offence may be taken in any place in the United Kingdom.(9) Where by virtue of subsection (8) proceedings against a relevant body for an offence are to be taken in Scotland—(a) the body may be prosecuted, tried and punished in a sheriff court district determined by the Lord Advocate, as if the offence had been committed in that district, and(b) the offence is, for all purposes incidental to or consequential on the trial or punishment, deemed to have been committed in that district.(10) A relevant body guilty of an offence under this section is liable—(a) on conviction on indictment, to a fine;(b) on summary conviction in England and Wales, to a fine;(c) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.(11) In this section—“relevant body” means a body corporate or a partnership (wherever incorporated or formed);“sheriff court district” is to be read in accordance with the Criminal Procedure (Scotland) Act 1995 (see section 307(1) of that Act).(12) In this section “financial year”—(a) in relation to a UK company, has the meaning given by the Companies Act 2006 (see section 390 of that Act);(b) in relation to a relevant body that is not a UK company means—(i) any period in respect of which a profit and loss account of the relevant body is required to be made up (by its constitution or by the law under which it is established), whether that period is a year or not, or(ii) if the body is not required by its constitution or the law under which it is established to draw up a profit and loss account, a calendar year.”Member’s explanatory statement
This clause together with new clauses (Fraud offences: supplementary) to (Failure to prevent fraud: miscellaneous), Lord Sharpe of Epsom’s amendments at page 173 lines 21, 33, 36 and 37 and page 315 line 20 and new Schedule (Failure to prevent fraud: fraud offences) provide for a new offence of failure to prevent fraud.

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, in moving government Amendment 84A, I will also speak to other government amendments in this group, which create a failure to prevent fraud offence. I first thank the many noble Lords in Committee today for their continued engagement on these amendments and corporate criminal liability more generally. These conversations have been robust but constructive, and I am sure that we will have a lively debate today.

Let me start by reiterating the Government’s commitment to reform of corporate criminal liability— CCL—and to tackling fraud. That is why, in 2017, the Ministry of Justice issued a call for evidence; then, in November 2020, the Government commissioned the Law Commission to explore further this area. The Law Commission report was published in June last year. The Government have been reviewing the report and its extensive consultation and working with relevant stakeholders, including prosecuting agencies, to explore options for reform. My ministerial colleagues and I are of course also grateful for the extremely helpful insight and input from various noble Lords in this House and Members in the other place.

The tabling of these amendments to introduce a new failure to prevent fraud offence is a major and tangible demonstration of action. This offence will crack down on fraudulent practices by corporations. It is one part of the Government’s wider fraud strategy, due for publication shortly. Under the new offence, a large organisation will be liable to prosecution where fraud was committed by an employee, for the organisation’s benefit, and the organisation did not have reasonable fraud prevention procedures in place. The new offence will help to protect victims and cut crime by driving a culture change towards improved fraud prevention procedures in organisations and by holding organisations to account through prosecutions if they profit from the fraudulent actions of their employees. We are giving law enforcement and prosecutors the powers they have asked for to tackle organisations that defraud consumers, other businesses, investors and the taxpayer.

The offence has been designed to drive change and facilitate prosecutions without duplicating existing regulation or placing unnecessary burden on legitimate business. It will therefore apply only to large organisations, to avoid disproportionate burdens on small and medium-sized enterprises. A strong UK economy must be an environment that supports people to open and grow businesses. Of course, we encourage small organisations to take steps to prevent fraud and learn from the guidance that the Government publish. There are also existing powers to prosecute them and their employees if they commit fraud, but we need to keep the burden on business in check. The new offence covers fraud and false accounting, while keeping money laundering responsibilities contained under the existing regulatory regime. This ensures that the offence is targeted, focused on offences most likely to be committed by corporations and where prevention can have the most impact, and not duplicative of existing regimes.

The amendments include a statutory duty to publish guidance to set out what would be considered reasonable fraud prevention procedures, making the expectations on business clear. There have been cross-party calls for this measure, both in this House and the other place. I look forward to debating the detail today, but I trust that your Lordships will overall welcome and support these amendments, to ensure that we tackle fraud in corporate bodies. I beg to move.

Amendment 84AA

Moved by

--- Later in debate ---

[Lord Coaker (Lab)]

I said everyone on the Committee —with the possible exception of the noble Lord. I was talking about how people feel about the Bill as drafted, with the carve-out for small and medium-sized enterprises. The noble Lord was referring to something that might include not the small but the medium, and that is a matter for debate, but the general view of the Committee was that the Government’s current carve-out is not acceptable. Where you put the threshold—whether you apply to a little sweet shop at the end of the road with a turnover of a few thousand pounds the same regulation you apply to a multinational company—could be sorted out in regulations, and if we saw them, we could suggest that they take into account the small sweet shop to which the noble Lord referred.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank all noble Lords—too numerous to mention—who have participated in this debate, and I shall try to address all the points put to me, but I apologise if I do not name everybody individually.

I feel I should declare an interest: I have owned and been a director of small businesses, not all of them successful—like my noble friend, Lord Leigh—and to my noble and learned friend Lord Garnier, I declare an interest as a tall man.

I will start with the amendments linked specifically to failure to prevent offences. I welcome the broad support today for the government amendments, which would, I emphasise, cover all sectors, and that includes telecoms companies. I hope that they deliver most of what the other amendments intend. However, I have noted that concerns remain. Obviously, I listened to the debate very carefully, including on the scope and reach of the new offence.

Before I turn specifically to the amendments, I reassure my noble friend Lady Morgan that the fraud strategy really is imminent. She is absolutely right: I am really keen to see it. I say to my noble friend Lord Leigh that his point about accounting principles was very interesting, but the design of the definition of large companies comes from the Companies Act 2006.

I note the wider offence lists put forward in Amendments 96, 97, 98 and 99, tabled in the names of my noble and learned friend, Lord Garnier, my noble friend Lord Agnew, the noble Lord, Lord Faulks, and the noble Baroness, Lady Bennett of Manor Castle. In particular, noble Lords seek to ensure that money laundering is covered by the new failure to prevent offence. The Government have consulted with law enforcement and prosecutors, and we are satisfied that all the priority offences have been included.

We have carefully examined the wider offence list and determined that they are not appropriate to include because they would duplicate existing regimes, cause repetition with other existing offences, are too broad or relate to preparatory offences. It is also worth noting that the Law Commission report published in June 2022 agrees with this. It highlighted that Part 2 of Schedule 17 to the Crime and Courts Act 2013, as Amendment 98 suggests, while a good starting point for considerations, would be too broad.

I turn to the proposed failure to prevent money laundering offence, as in Amendment 99, tabled by my noble and learned friend Lord Garnier. The UK already has a strong anti-money laundering regime which requires regulated sectors to implement a comprehensive set of measures to prevent money laundering. Corporations and individuals can face serious civil and criminal penalties if they fail to do so.

A failure to prevent money laundering offence would duplicate the systems, controls and penalties of the existing regime. Furthermore, it would extend anti-money laundering obligations to organisations with very low risk, which would be disproportionate. Any necessary anti-money laundering measures can be implemented through the existing regime. The Law Commission agreed with this point, noting that any offences to cover breaches of money laundering would create additional positive duties on organisations which would overlap with the duties under the anti-money laundering regime.

The Government’s review of the UK’s anti-money laundering regime, published in June 2022, concluded that existing regulatory requirements allow for businesses to take a risk-based approach to their obligations, meaning their compliance activities can be targeted at areas of highest risk of money laundering and terrorist financing. The review also committed the Government to further analysis and public consultation to identify the best path for reform of the anti-money laundering supervisory regime. Further improvements to the UK’s anti-money laundering framework are therefore best targeted by strengthening and improving the existing regime, rather than by the creation of a new parallel regime. The Government have already committed to undertake further consultation on the anti-money laundering supervisory regime and continue to review the anti-money laundering framework.

Amendment 99 in the name of my noble and learned friend Lord Garnier also proposes a failure to prevent sanctions evasion offence. The UK can already impose a range of criminal and civil penalties against corporations and individuals for breaches of UK sanctions. Powers were strengthened last year when we moved civil penalties for financial sanctions on to a strict liability basis. Introducing a failure to prevent offence would duplicate the existing regime. On the scope of the offences, government Amendment 84B contains a power in secondary legislation to update the list when required.

I turn to Amendments 84AA, 84CA, 84CB and 84CC, on the threshold for the new offence, tabled by the noble Lord, Lord Fox. I thank him for talking me through his concerns last week and I note that most other noble Lords have supported its intention. I will endeavour to set out the Government’s position on this. Our analysis shows that small businesses would be disproportionately affected by the costs of complying with a failure to prevent fraud offence. The total cost to small and medium-sized enterprises would amount to billions of pounds in year one and hundreds of millions in each subsequent year. This would significantly increase the cost of the measure, which is £98.5 million per annum with the threshold included. An affirmative power—

[Lord Vaux of Harrowden (CB)]

If the Government have done some analysis on that, could they share it with us? That would be very helpful.

[Lord Sharpe of Epsom (Con)]

I am happy to investigate whether that is possible. If it is, I will do so.

An affirmative power to add a threshold in future, as proposed by the noble Lord’s amendments, would have limited impact on this burden, with the highest costs already borne should the offence apply to smaller organisations in year one. It is also important that we consider the cumulative compliance cost for SMEs across multiple government regulations, rather than seeing these fraud measures in isolation. Excluding SMEs from the new offence does not mean they can get away with fraud; powers already exist to prosecute small companies, their owners and their employees for criminal acts. It is currently easier to hold these companies to account than larger organisations with complex structures.

The Government’s proposed failure to prevent fraud offence will strengthen powers to tackle fraud by large organisations, ensuring that companies with the biggest customer bases which risk causing the most harm take extra steps to prevent fraud.

We will keep the threshold under review and can amend it through secondary legislation, if required. I know that some noble Lords argue that this power should be used the other way. However, given the potentially chilling impact on small businesses, I hope that noble Lords will agree that it is better to understand the impact on large companies once the measures are implemented, as my noble friend Lord Leigh has highlighted—as well as any trickle-down effect on smaller companies—before applying it more widely. The regulation-making power in the Government’s Amendment 84C enables this approach. The Government therefore firmly consider that the proposed failure to prevent fraud offence strikes an appropriate balance between the crime prevention benefits and the burden placed on business.

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[Lord Browne of Ladyton (Lab)]

I apologise to the Minister; I should have intervened slightly earlier. If the Minister has data on the likely cost of the extension of the provisions in the Government’s amendment to small and medium-sized enterprises, I think that all Members of the Committee would like to see it, including how it could be disaggregated. To make a proportionate decision, surely it would need to be accompanied by the Government’s estimate of the loss to small and medium-sized enterprises caused by fraud. Given the scale of fraud in this country, it must be significant. Personally, I would like to have the opportunity to compare what this is likely to cost against what fraud already costs small and medium-sized enterprises.

[Lord Sharpe of Epsom (Con)]

The noble Lord makes a good point. As I have said, I will endeavour to find some more figures and share them more broadly. I do not know whether it will take into account the precise analysis that the noble Lord seeks, but the fraud strategy is imminent and it would be strange to publish a strategy without saying what the strategy is there to address. Once again, I am piling all my faith into the fraud strategy—possibly misplaced faith, who knows?

[Lord Agnew of Oulton (Con)]

Can my noble friend confirm the figure the noble Lord, Lord Macdonald, put forward: that about 99% of businesses will be excluded? That was the figure that I found, but I would like to hear that from the Minister, as well as whether he thinks that is proportionate in the carve-out.

[Lord Sharpe of Epsom (Con)]

I am afraid that I cannot confirm that. I do not know, but I will find out.

I will go back to Amendment 100 and talk about the identification doctrine. As noble Lords are aware, prosecuting corporates for serious crimes is challenging, largely as a result of the identification doctrine. This principle dictates that the acts and minds of the individuals who represent the directing mind and will are treated as the acts and minds of the corporate itself. In practice, it can be difficult to determine the “directing mind and will” of a corporation. Large and sometimes opaque governance structures make it challenging to identify a senior manager in charge of specific operations. This means that the current law applies unfairly to smaller business. As set out at Second Reading, the Government are fully committed to addressing this problem and to bringing forward legislative reform to achieve it. However, as noble Lords are aware through the amendments that they have tabled, whereas the identification doctrine currently applies to all crimes, the scope of this Bill can permit reform only for economic crime offences. I am as frustrated about that as other noble Lords.

While this amendment would improve the law for economic crimes, it would not remedy the current issues faced by prosecutors for all other sectors of criminal law. However—and I take a partial deep breath here for my noble and learned friend Lord Garnier—given our shared overall ambitions for reform, I would welcome further conversations ahead of Report on this subject. My officials are working through the list of offences with practitioners to determine whether the offences can be reformed without impacting the wider criminal law. My noble and learned friend will also be aware that we are committed to introducing reforms that can be effectively used by prosecuting agencies over a broad range of business. I am sure that he will also agree that is vital that any unintended consequences or risks be identified and understood. I hope that noble Lords are satisfied that the Government are absolutely committed to reform in this area, but that we want to ensure that any reform can be effectively utilised.

Turning to Amendment 101—

[Lord Macdonald of River Glaven (CB)]

Before the Minister moves to another area, the figure I gave that SMEs account for 99.9% of all companies and business organisations in the UK comes from government statistics—namely, business population estimates for 2022.

[Lord Sharpe of Epsom (Con)]

I thank the noble Lord for that information; I will come back on that.

[Lord Fox (LD)]

Will the Minister go and count them again?

[Lord Sharpe of Epsom (Con)]

Absolutely; I shall get my abacus out. I turn to Amendment 101 on senior managers’ liability for failing to prevent economic crime, also tabled by my noble and learned friend Lord Garnier.

I agree that it is important that individuals, particularly the most senior ones, do not go unpunished for their involvement in committing economic crimes. Prosecutors already have a range of powers at their disposal to pursue decision-makers who enable or commit criminal offences in a corporate setting. This includes the power to prosecute individuals for substantive offending. For example, last year an individual was jailed for 12 years following a Serious Fraud Office investigation into a £226 million fraud.

Additional powers also exist which enable senior managers and directors to be prosecuted where they consent or connive in fraud, theft, money laundering or bribery. A director or manager who is convicted on the basis of their consent, connivance or neglect can be dealt with accordingly by the courts, including being sentenced to imprisonment. Also, under the Serious Crime Act 2007, a person, including a senior manager, is liable for encouraging or assisting the commission of a criminal offence. That includes fraud, false accounting or money laundering—the offences captured by the amendment tabled by my noble and learned friend Lord Garnier. The individual found to be encouraging or assisting the commission of the offence can be prosecuted in the same way as if they commit the offence itself.

This amendment seeks to extend liability for senior managers on a lower basis for culpability than is normally provided for. It would allow a senior manager who takes a decision to be imprisoned for taking that decision, even if the offence is the action of a rogue employee. That would place a disproportionate burden on corporations and their senior management, which is likely to deter legitimate business from seeing the UK as a fair and safe place to conduct business. This amendment is therefore not appropriate.

The noble Lord, Lord Coaker, asked about extraterritoriality. Our approach is focused on cutting crime in the UK and protecting UK victims. As he noted, the powers have sufficient extraterritorial extent to do this, even if the perpetrators or the organisation is based outside the UK. Other countries can take steps to prosecute fraud under their own law. As for the precise mechanics of how it would work, it would be on a case-by-case basis, so it is pointless to speculate.

The noble Lord also asked for more detail about guidance. As he knows, we intend to publish guidance setting out reasonable prevention procedures before the offence of failure to prevent fraud comes into force. It will give organisations clarity about what they need to do. It is important that we engage and consult the right stakeholders in this process and that we engage further with the organisations this will impact. Once the Bill has received Royal Assent, we will start engaging with law enforcement, prosecutors, relevant government departments, public sector organisations, trade associations for businesses, other organisations in scope and other experts to draft the guidance.

We anticipate that the guidance will follow similar themes to those seen in many regulatory regimes—albeit that in this case they are not requirements—and to guidance for existing failure to prevent offences. This includes regular risk assessments to establish the level and type of fraud risks to be addressed; establishing fraud controls and due diligence processes designed to prevent fraud or spot it in the early stages before the offence is carried out; leadership and training to ensure that employees implement controls and create a culture within the organisation that does not accept fraudulent practices as a route to boosting performance and profits; and monitoring and review to ensure that procedures remain effective. I am happy to hold further discussions on this subject at the noble Lord’s convenience.

[Lord Sandhurst (Con)]

I was waiting to hear the tenor of my noble friend’s response. He opened by saying that a relevant body includes a telecoms company. That is not my point. A telecoms company is obviously likely to be a relevant body. My complaint is that those within scope include only associated persons and not the fraudster who actually makes money indirectly or directly by paying charges to the telecoms company. That target is missed altogether by this Bill and the Online Safety Bill. Is it the intention that telecoms companies will continue to have no responsibility at all for spoof calls and so on?

[Lord Sharpe of Epsom (Con)]

We will come on to this in more detail on a later group. Perhaps we should leave the detail of this debate until the third group, which we will get to at some point.

[Lord Vaux of Harrowden (CB)]

The Minister referred earlier to questions about groups of companies and the fact that an employee of a subsidiary would still be an associate of a holding company. That does not address the question that I was asking. Are the thresholds in Amendment 84C on an individual entity basis or a consolidated basis? There is a big difference between the two. A group could happily have a small subsidiary and say, “An employee of that did it, so we are off the hook”.

[Lord Sharpe of Epsom (Con)]

I appreciate the point that the noble Lord was making and apologise for not addressing it more directly. I will refrain from answering that now and will write. I think I know how it is done, but I am not an accountant and I do not want to say something that he will pick apart. If he will indulge me, I will write on that subject with greater clarity to make sure that I am not making a mistake.

I thank all noble Lords for their participation in this debate and for their patience as I have taken them through a fairly long speech on the Government’s positions on these issues. We agree that reform is needed and, as we have made clear, the Government’s amendments represent a major step in delivering it. I hope that further explanation has reassured noble Lords on why we have presented the amendments with the scope and reach that they contain, and that the Government are committed to reform of the identification doctrine. I therefore very much hope that noble Lords will support the government amendments and not seek to move their own.

[Lord Leigh of Hurley (Con)]

I appreciate that my noble friend is at the Home Office, but none the less can he give us a commitment that the Government will look again at the definitions used in the Government’s clause for SMEs? I appreciate that they come from the Companies Act 2006, which themselves were cut and pasted from EU regs, but now that we are out of the EU we are free to choose definitions that suit our circumstances and our institutes’ accounting standards.

[Lord Sharpe of Epsom (Con)]

Yes, I am happy to give that reassurance.

[Lord Fox (LD)]

My Lords, I think I was right at the very beginning not to speak for long on this set of amendments. Your Lordships filled in for me very adequately and expertly.

The Minister came back with a couple of points that I want to refer to. He explained that aspects of the amendments from the noble and learned Lord, Lord Garnier, were not necessary because there would be duplication. It would be helpful for us to understand that duplication. Perhaps between now and Report he could provide a list of all the prosecutions that have happened with the existing legislation, proving that the new legislation would not be necessary, so that we can understand that his point is correct.

He also talked about the chilling effect on small companies. This legislation is designed to chill fraud. Taking up the challenge set by the noble Lord, Lord Leigh, about his perfectly innocent sweet shop, legislation that excludes that sweet shop will also exclude all the other small companies that are perpetrating fraud. The skill is in the proportionate application of this legislation. To pick up the point made by the noble Lord, Lord Coaker, it is also about the proportionate advice that is being given. Not all companies are getting the same level of advice on how they should approach this legislation. There is no one-size-fits-all approach, as my noble friend Lady Bowles said.

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Moved by

[Lord Sharpe of Epsom]

84B: After Clause 180, insert the following new Clause—
“Fraud offences: supplementary
(1) The Secretary of State may by regulations amend Schedule (Failure to prevent fraud: fraud offences) by—(a) removing an offence from the list in the Schedule, or(b) adding an offence to that list.(2) The power in subsection (1) is exercisable by the Scottish Ministers (and not by the Secretary of State) so far as it may be used to make provision that would be within the legislative competence of the Scottish Parliament if contained in an Act of that Parliament.(3) The power in subsection (1) is exercisable by the Department of Justice in Northern Ireland (and not by the Secretary of State) so far as it may be used to make provision that—(a) would be within the legislative competence of the Northern Ireland Assembly if contained in an Act of that Assembly, and(b) would not, if contained in a Bill for an Act of the Northern Ireland Assembly, result in the Bill requiring the consent of the Secretary of State.(4) An offence added under subsection (1)(b) must be—(a) an offence of dishonesty,(b) an offence that is otherwise of a similar character to those listed (on the passing of this Act) in paragraphs 1 to 6 of Schedule (Failure to prevent fraud: fraud offences), or(c) a relevant money laundering offence.(5) The Secretary of State may from time to time by regulations restate Schedule (Failure to prevent fraud: fraud offences) as amended by virtue of subsections (1) to (3) (without changing the effect of the Schedule).(6) For the purposes of section (Failure to prevent fraud) (1), where a fraud offence is found to have been committed over a period of 2 or more days, or at some time during a period of 2 or more days, and that period of days straddles the beginning of a financial year of the relevant body in question, the fraud offence must be taken to have been committed on the last of those days.(7) In this section “relevant money laundering offence” means an offence under any of the following sections of the Proceeds of Crime Act 2002—(a) section 327 (concealing etc);(b) section 328 (arrangements);(c) section 329 (acquisition, use and possession).” Member’s explanatory statement
See the explanatory statement for new clause (Failure to prevent fraud).

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Moved by

[Lord Sharpe of Epsom]

84C: After Clause 180, insert the following new Clause—
“Section (Failure to prevent fraud): large organisations
For the purposes of section (Failure to prevent fraud) (1) a relevant body is a “large organisation” only if the body satisfied two or more of the following conditions in the financial year of the body (“year P”) that precedes the year of the fraud offence—

Turnover Balance sheet total Number of employees

More than £36 million More than £18 million More than 250.

(2) For a period that is a relevant body’s financial year but not in fact a year, the figure for turnover must be proportionately adjusted.(3) In subsection (1) the “number of employees” means the average number of persons employed by the relevant body in year P, determined as follows—(a) find for each month in year P the number of persons employed under contracts of service by the relevant body in that month (whether throughout the month or not),(b) add together the monthly totals, and(c) divide by the number of months in year P.(4) In this section—“balance sheet total”, in relation to a relevant body and a financial year—(a) means the aggregate of the amounts shown as assets in its balance sheet at the end of the financial year, or(b) where the body has no balance sheet for the financial year, has a corresponding meaning;“turnover”—(a) in relation to a UK company, has the same meaning as in Part 15 of the Companies Act 2006 (see section 474 of that Act);(b) in relation to any other relevant body, has a corresponding meaning;“year of the fraud offence” is to be interpreted in accordance with section (Failure to prevent fraud) (1).(5) The Secretary of State may by regulations modify this section (other than this subsection and subsections (6) and (7)) for the purpose of altering the meaning of “large organisation” in section (Failure to prevent fraud) (1).(6) The Secretary of State may (whether or not the power in subsection (5) has been exercised) by regulations—(a) omit the words “which is a large organisation” in section (Failure to prevent fraud) (1), and(b) make any modifications of this section (other than this subsection) that the Secretary of State thinks appropriate in consequence of provision made under paragraph (a).(7) Regulations under subsection (5) or (6) may make consequential amendments of section (Failure to prevent fraud: minor definitions).”Member’s explanatory statement
See the explanatory statement for new clause (Failure to prevent fraud).

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[Lord Sharpe of Epsom (Con)]

I beg to move.

Amendments 84CA to 84CC (to Amendment 84C) not moved.

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Moved by

[Lord Sharpe of Epsom]

84D: After Clause 180, insert the following new Clause—
“Offences under section (Failure to prevent fraud) committed by partnerships
(1) Proceedings for an offence under section (Failure to prevent fraud) alleged to have been committed by a partnership must be brought in the name of the partnership (and not in that of any of the partners).(2) For the purposes of such proceedings—(a) rules of court relating to the service of documents have effect as if the partnership were a body corporate, and(b) the following provisions apply as they apply in relation to a body corporate—(i) section 33 of the Criminal Justice Act 1925 and Schedule 3 to the Magistrates’ Courts Act 1980;(ii) section 18 of the Criminal Justice Act (Northern Ireland) 1945 (c. 15 (N.I.)) and Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26));(iii) sections 34(2), 66(6AA) and 72D(2) of the Criminal Procedure (Scotland) Act 1995.(3) A fine imposed on the partnership on its conviction for an offence under section (Failure to prevent fraud) is to be paid out of the partnership assets.”Member’s explanatory statement
This amendment supplements new clause (Failure to prevent fraud).

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[Baroness Altmann (Con)]

I too add my support, as a further person in the sanctioned party. I congratulate the noble Lord, Lord Alton, on moving this amendment and on his excellent speech. I also congratulate him on all the work he does in some most important areas.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Alton of Liverpool, for his amendment and for his kind words. I echo the words of my noble friend Lady Altmann about his work in so many areas. I also thank the others who have spoken in this brief debate—the noble Baroness, Lady Bennett, the noble Lords, Lord Fox and Lord Coaker, and my noble friend Lord Leigh.

I reassure the noble Lord that the Government are sympathetic to using frozen funds to assist with Ukrainian reconstruction. Currently, government authorities have the powers to utilise various enforcement tools to investigate breaches of sanctions and, in criminal cases, to confiscate relevant assets. As has been noted, that has resulted in over £18 billion of Russian assets being frozen in the United Kingdom.

The Government are also considering lawful routes to making Russian assets available for Ukrainian reconstruction. We must ensure that any solution is legal, safe and robust, and we will continue to work with G7 partners to make progress.

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[Lord Faulks (Non-Afl)]

Before the noble Lord sits down, during the passage of the first economic crime Bill, when the question of sanctions was discussed, much reference was made to the very lengthy Explanatory Notes which accompanied that Bill—the longest I have ever seen—particularly as regards the human rights implications of depriving people of their assets in the sort of way that the noble Lord, Lord Alton, envisages in his amendment, in particular A1P1 of the European convention and various other rights. Is it part of the Government’s position that the sort of suggestions made in this amendment are in fact stymied or may be frustrated by the provisions of the European convention and the Human Rights Act?

[Lord Sharpe of Epsom (Con)]

The noble Lord has strayed into an area with which I am not familiar. I shall have to write to him.

[Lord Alton of Liverpool (CB)]

My Lords, I think that the whole Committee would be interested to see the reply that the noble Lord receives from the Minister on that point.

I thank all noble Lords who participated in this short debate, including the noble Baroness, Lady Bennett, and the noble Lords, Lord Faulks and Lord Coaker, and thank the noble Lord, Lord Leigh, and the noble Baroness, Lady Altmann, for their brief but helpful interventions. I thank her especially for her personal remarks.

On Tuesday, some noble Lords will have seen sitting with me in the strangers’ area at the back of our proceedings a young man called Sebastian Lai. His father, Jimmy Lai, is incarcerated in a prison in Hong Kong. He had confiscated from him Apple Daily. He was a journalist, media owner and the leading voice for the pro-democracy movement in Hong Kong. Imagine how that family feel as their father, a British citizen, languishes in a jail in Hong Kong—likely, at the age of 75, to die there—knowing that some of those responsible for what has happened to him and who have brought about his incarceration in what is, and I use the word deliberately, a complete corruption of the once illustrious legal system in Hong Kong, have properties, portfolios and massive assets in the United Kingdom. It is high time that we took this issue even more seriously than we have hitherto.

I was not saying this for purely rhetorical reasons earlier—I mean it when I say that I know that the Minister is passionate about people such as Jimmy Lai and the terrible things that have happened in Hong Kong. I was pleased that he did not rule out the possibility that we might be able to overcome some of the issues, particularly around proportionality, which he raised and which we discussed yesterday—and maybe the need for other safeguards, perhaps to deal with the issue that the noble Lord just raised. I hope that, therefore, he will agree to a meeting with some of the legal team that I have met from Spotlight on Corruption, RUSI and the others to which I referred earlier. Sanctions must not just be about virtue signalling—they have to be real and have the teeth to which we have referred in today’s debate.

I am grateful that the noble Lord has not ruled out doing more, but I hope that what more we do will be truly effective and that we will pause and consider further action between now and Report. Perhaps a meeting could even be arranged in the margins of this Committee, where we can discuss this together, for those who are genuinely interested in finding a solution. Perhaps we could invite some of the Members from another place who are so interested in this issue, too. I know that the Committee has a lot of other business to attend to. On that basis, I beg leave to withdraw the amendment.

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Moved by

[Lord Sharpe of Epsom]

86A: Schedule 9, page 315, line 20, at end insert—
“20A_ An offence under section (Failure to prevent fraud) of this Act (failure to prevent fraud).” Member’s explanatory statement
This amendment is supplementary to new clause (Failure to prevent fraud). It adds the new offence of failure to prevent fraud to the list of offences that constitute “economic crime” for the purposes of clauses 175 to 178.

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Moved by

[Lord Sharpe of Epsom]

86B: After Schedule 9, insert the following new Schedule—
     “SCHEDULE 10FAILURE TO PREVENT FRAUD: FRAUD OFFENCESCommon law offences
1_ Cheating the public revenue.2_ In Scotland, the following offences at common law—(a) fraud;(b) uttering;(c) embezzlement.Statutory offences
3_ An offence under any of the following provisions of the Theft Act 1968—(a) section 17 (false accounting);(b) section 19 (false statements by company directors etc).4_ An offence under any of the following provisions of the Theft Act (Northern Ireland) 1969—(a) section 17 (false accounting);(b) section 18 (false statements by company directors etc).5_ An offence under section 993 of the Companies Act 2006 (fraudulent trading).6_ An offence under any of the following provisions of the Fraud Act 2006—(a) section 1 (fraud);(b) section 9 (participating in fraudulent business carried on by sole trader);(c) section 11 (obtaining services dishonestly).”Member’s explanatory statement
This new Schedule sets out the list of “fraud offences” for the purposes of new clause (Failure to prevent fraud).

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[Lord Coaker (Lab)]

My Lords, given the time of day, I shall make a brief comment. I agree with Amendments 91 and 94. On Amendment 94, spoken to by the noble Baroness, Lady Morgan, I ask the Minister directly: why would he not ensure that this Economic Crime and Transparency Bill currently before Parliament did exactly what Amendment 94 suggests? It just does not seem logical. If the Minister and the Government do not do it, this will have been a missed opportunity, and we will come back to this issue and ask why we did not do it now. The amendment is reasonable and makes perfect sense and no doubt the Minister agrees with it, but it needs the Government to say, “We’re going to do it”. If it is flawed then the government lawyers can sort it out, but it is a perfectly reasonable amendment and, in my view, the Government should have no difficulty in accepting it. With that brief comment, I will sit down.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Baroness, Lady Bowles of Berkhamsted, and my noble friend Lady Morgan of Cotes for their amendments on failure to prevent economic crime, and all noble Lords who have spoken in this debate.

I hope that my comments during our debate earlier today will have provided some reassurance on the Government’s ambitions to take action in this area, including the introduction of a new offence of failure to prevent fraud. These amendments obviously cover some of the same ground so I will seek not to repeat myself too much on issues such as the scope and threshold of the Government’s amendments but to focus more on what I understand to be the wider thrust of Amendments 91 and 94.

Before I get on to that, I reassure the noble Lord, Lord Vaux, that the fraud strategy is a couple of hours closer. I remind noble Lords that there is an all-Peers drop-in session on 9 May to discuss the three Bills that are currently under way through Parliament: this Bill, the Online Safety Bill and the Financial Services and Markets Bill. That will bring some of the discussions together, as suggested by my noble friend Lady Morgan. I refute the allegation that the Government are not doing very much. Those three Bills themselves prove that we are indeed intent on fixing many or all of the problems that have been identified—the Government of course take these problems seriously.

I turn to the amendments in this group. The Government’s offence does not extend to services that facilitate fraud—that is, companies whose services are misused by third parties to carry out fraud. Examples include social media and telecoms companies whose services are used to promote fraudulent schemes, as has been pointed out, and banks and crypto exchanges, which fraudsters use to process the payments. If these companies or their employees commit fraud, they will be in scope, but not where their services are misused by others.

The Government agree that companies that facilitate fraud, even if they are not complicit in the offending, must do more to prevent and detect it. In doing so, they can protect their customers and the wider public from fraud, which, as has been discussed at length, causes significant damage to wider society and individuals —we must not forget them. However, we intend for this to be achieved by seeing through existing plans for regulatory and voluntary activity, rather than by creating a new offence which risks duplicating those existing approaches.

Amendment 91, tabled by the noble Baroness, Lady Bowles of Berkhamsted, proposes a regulatory duty to prevent economic crime, enforced by regulators. In relation to organisations that commit fraud, we can achieve a similar effect that incentivises organisations to put fraud controls in place through the Government’s approach: an offence enforced by law enforcement. Our approach allows all sectors to be in scope, not just regulated bodies, and is less resource-intensive for business and the public sector than establishing new regulatory approaches. In relation to the facilitation of fraud, I reassure the noble Baroness, Lady Bowles, that action is already under way to tackle this. I will address some of the sectors mentioned in today’s debate and Amendment 91, which I hope will provide some further reassurance.

The Online Safety Bill will require all in-scope tech companies, including social media companies, to take action to tackle fraud where it is facilitated through user-generated content or via search results. They must put in place systems and processes to prevent users encountering fraudulent content through their platforms and to swiftly remove any such content available through their platform. Without wishing to single out any particular company for attention, I reassure my noble friend Lady Morgan that Airbnb, which she referenced, would of course be in scope.

Additionally, there will be a duty on the largest social media and search engines requiring them to prevent fraudulent adverts appearing on their services. The Bill gives Ofcom, as regulator, robust enforcement powers, allowing it to impose significant financial penalties on services that do not fulfil its duties. Ofcom will publish codes of practice to set out further details on what platforms must do to meet their duties under the Online Safety Bill.

The “failure to prevent” offence operates in a similar way to the Online Safety Bill, by setting out reasonable steps to be taken, with the ability to fine companies that fail to fulfil their duties. Expanding the “failure to prevent fraud” offence in the ECCT Bill to cover facilitation of fraud would create duplication for tech companies, which would have to follow two parallel regimes in relation to facilitation of fraud, potentially creating confusion for businesses.

Noble Lords also raised the role of telecoms companies, including the content of messages passed over their networks. The telecoms industry is already extensively regulated by Ofcom, which is active in encouraging the industry to tackle scam calls and texts, including through regulation and guidance. This includes new measures that will take effect shortly to tackle the spoofing or disguising of UK telephone numbers from overseas. As it should be, the telecoms industry has been an active partner in the fight against scams, with broadband and mobile providers signing up to the Home Office’s Telecommunications Fraud Sector Charter and committing to work with the Government to reduce the use of their networks by criminals.

However, it is important to recognise that telecoms operators are not able to view the content of messages passing over their networks. While they employ sophisticated algorithms to identify and block hundreds of millions of fraudulent or scam messages and calls, the rapid evolution of threats creates challenges to pre-emptive action. This means that a facilitation offence could potentially have a disproportionate effect on the industry and the operation of telecommunications in the UK.

Amendment 91 also references the Financial Conduct Authority. The FCA is working closely with banks and other financial institutions to reduce the role they play in facilitating fraud and to identify further controls that can be put in place to protect the public from scams. In addition, the Payment Systems Regulator is introducing new requirements for financial institutions to reimburse fraud victims, which will create strong incentives to improve fraud controls, as noted by the noble Lord, Lord Vaux.

In respect of the Solicitors Regulation Authority, noble Lords will be aware from Tuesday’s debate that Clause 183 of the Bill already inserts a regulatory objective in the Legal Services Act 2007, focusing on promoting the prevention and detection of economic crime. This measure affirms the duties of the regulators, the Legal Services Board and the regulated communities to uphold the economic crime agenda.

The noble Lord, Lord Vaux, also referenced the Institute of Chartered Accountants in England and Wales. Amendment 91 also references that organisation and other relevant regulators of accountants. As I said, I am aware that several noble Lords have declared their association with that organisation.

As noble Lords will be aware, ICAEW is a professional and supervisory body for chartered accountants. Its work in areas regulated by law—for example, audit, anti-money laundering, local audit, investment business, insolvency and probate—is monitored by oversight bodies such as the Insolvency Service, the FCA, the Office for Professional Body Anti-Money Laundering Supervision, the Civil Aviation Authority and the Legal Services Board. ICAEW has been proactive in the industry fight against fraud, leading the sector in negotiating and delivering the Accountancy Fraud Sector Charter, published in 2021, and is an active member of the counter-fraud community, contributing to all levels of governance across the threat landscape. It is a co-signatory to the Economic Crime Plan and associated actions.

As I set out in our earlier debate, the offence introduced via the Government’s amendments covers fraud and false accounting, while keeping money-laundering responsibilities contained under the existing regulatory regime. That ensures that the offence is targeted, focused on offences most likely to be committed by corporations and where prevention can have the most impact and not duplicative of existing regimes.

I note the wider offence lists put forward under the noble Baroness’s amendment, but—as we debated at length earlier today—we are satisfied through discussions with law enforcement and prosecutors that all the priority offences have been included. There is a power in secondary legislation to update the list when required. We have also touched on the issue of the threshold in the government amendment that means it applies—at least initially—only to large organisations. As I set out earlier, this is to avoid disproportionate burdens on small and medium-sized enterprises and ensure our economy encourages people to open and grow businesses. Of course, we encourage small organisations to take steps to prevent fraud and there are, as I mentioned in an earlier group, existing powers to prosecute small organisations and their employees if they commit fraud, but we need to keep the total regulatory burden in check.

There have been cross-party calls for the Government’s failure to prevent fraud offence both in this House and in the other place, as well as across civil society. The Government have listened and introduced amendments. In addition to the legislative measures proposed, the Government continue to work closely with regulators and wider sectors to tackle fraud and set out the actions expected of industry. I am afraid that the Government therefore view these amendments as duplicative of measures already being taken forward—

[Lord Vaux of Harrowden (CB)]

I am a little confused, because we seem to be talking now about the previous amendments, where an associate of the body commits fraud with the intention to benefit the body, which is a very different thing to the amendments we are looking at at the moment. The situations we have been talking about—the scams, and so on—would not, as I think we established fairly clearly in debate on the first group, be covered by that. Will the Minister please address the issue of scams and what these amendments are trying to address, rather than the rather different offence that was created by the first group of amendments?

[Lord Sharpe of Epsom (Con)]

My Lords, I think I have already addressed that a little earlier when I was talking about the various codes that we are asking telecoms companies to sign up to via Ofcom. I am wrapping up now, so I am bringing it all together—or attempting to.

The Government therefore view these amendments as duplicative of measures already being taken forward and not achieving their intentions. I of course commit to read page 22, in answer to my noble friend, but I ask the noble Baroness, Lady Bowles, and my noble friend Lady Morgan not to press their amendments.

[Baroness Morgan of Cotes (Con)]

I thank my noble friend very much for what he said; I will read it very carefully. I wanted to wait for the end of his speech, but he mentioned a meeting that is being held on 9 May to bring together at least three pieces of legislation and, who knows, we might even have had the fraud strategy by that point and be able to talk about that. I suggest that he looks at that meeting the other way round and, as I suggested, go through the different types of fraud—they will not be exhaustive—and work out what the Government think the relevant legislation is tackling. Then we will be able to see what the gaps are. I think one of the gaps is exactly what the noble Lord, Lord Vaux, just said, which is where services are being used to perpetuate fraud that are definitely not caught by the Government’s proposed amendment. That would enable us to have a much better informed debate before and at Report about whether we will really use the opportunity of this Bill. I invite my mobile friend to say that he will ask officials to work that way round: looking at the frauds and then seeing what the Government have already proposed to tackle them.

[Lord Sharpe of Epsom]

My noble friend will be aware that this will be a cross-departmental meeting, and I have not seen the proposed agenda, but I will certainly take her comments back. I meant to say that the noble Lord, Lord Vaux, made reference to the technical meeting he had on the Online Safety Bill, and I obviously extend the offer of a similar meeting, if anyone else would like it.

Corruption

Lord Sharpe of Epsom Excerpts

Wednesday 26th April 2023 Lords Chamber

[Lord Hain]

To ask His Majesty’s Government what assessment they have made of the United Kingdom’s record in combating corruption.

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, the Government are committed to the fight against corruption. Corruption and illicit finance undermine national security and global stability. They impede global prosperity and erode trust in institutions while harming their victims. Since 2010, the Government have led international efforts to combat corruption through the delivery of the United Kingdom Anti-corruption Strategy 2017-2022, and we will continue to build on this with the new anti- corruption strategy that is currently under development.

[Lord Hain (Lab)]

My Lords, in that case, why has the UK slumped to its lowest ever score in Transparency International’s latest global corruption index, falling sharply to number 73—a 10-place tumble from eighth to 18th over the last 10 years in its global rankings? Is it because of a collapse in government standards, or the recent scandalous government reversal of their previous admirable decision to suspend Bain & Company from UK Government contracts after Bain was found by a judicial commission to have been up to its neck in state corruption in South Africa? Are corruption and money laundering not now a real UK problem, and should not Ministers be utterly ashamed?

[Lord Sharpe of Epsom (Con)]

My Lords, I cannot improve on the words of the Prime Minister when he was asked about this subject. He pointed out that there has been

“widespread recognition and support for the UK’s approach to transparency and tackling corruption. … the most recent report from the Financial Action Task Force commended the UK for the steps it had taken”,—[Official Report, Commons, 1/2/23; col. 334.]

and those steps are significant. Obviously, a number of Bills going through your Lordships’ House and the other place at the moment deal with some of these issues. As for the specific question about Bain, I note that Bain has agreed to a period of rigorous monitoring for a minimum of two years during which its continuing compliance will be assessed. The UK arm of Bain has agreed that it will engage further with the Cabinet Office to provide evidence that its governance, organisation and internal processes are now working. I could go on, but I think that is enough.

[Lord Wallace of Saltaire (LD)]

My Lords, would it not be evidence of the seriousness of the Government in combating corruption if the agencies concerned with it were adequately staffed? Is not one of the fundamental problems of the Government’s approach to corruption and economic crime that the NCA and other agencies concerned with it are inadequately staffed to deal with this?

[Lord Sharpe of Epsom (Con)]

My Lords, the noble Lord will be aware that this subject has come up in discussion during the passage of the Economic Crime and Corporate Transparency Bill. The agencies are adequately resourced. The funding for the SFO is rising —gradually, but it is rising—and I know that people are being recruited into these operations.

[Lord Marlesford (Con)]

My Lords, can I remind my noble friend that there are in Hansard two Written Answers which list over 50 Home Office officials between 2005 and 2018 who were convicted of misconduct in a public office? Many of them were sent to prison—several for very long terms. Is this not a most disturbing figure?

[Lord Sharpe of Epsom (Con)]

It is a most disturbing figure. Public sector integrity is certainly a feature of the Transparency International downgrade of the UK, but that is being dealt with, as noble Lords will be aware.

[Baroness Chakrabarti (Lab)]

My Lords, it has been well over a year, as many of us remember, since the noble Lord, Lord Agnew, resigned in this House from that Dispatch Box. Noble Lords will remember that he did it over a government decision to write off £4.3 billion in fraudulent Covid loans. He went on to accuse the Government

“of arrogance, indolence and ignorance”—[Official Report, 24/1/22; col. 21.]

in dealing with fraud. What has improved since then?

[Lord Sharpe of Epsom (Con)]

My Lords, the noble Baroness will be aware that the publication of the new fraud strategy is imminent. As I referred to in my earlier Answer, the second iteration of the anti-corruption strategy is also being worked through at this moment. There will be a lot more to say on that in the very near future.

[Lord Vaux of Harrowden (CB)]

My Lords, may I push the Minister on resources, as 41% of all crime against the individual is fraud and 1% of law enforcement resources are applied to it? Is that really sufficient?

[Lord Sharpe of Epsom (Con)]

When put in numbers like that, no. However, as I have just said, the fraud strategy is due to be published next week. That is a multiagency approach to tackling fraud. It will be outlined in considerable detail.

[Lord Coaker (Lab)]

My Lords, can the Minister answer the question put by my noble friend Lord Hain? Why has the UK slumped to its lowest ever score in Transparency International’s global corruption index? How has that happened and what are the Government going to do about it?

[Lord Sharpe of Epsom (Con)]

I think I have already said what the Government are going to do about it. In terms of analysis, the data indicated that the drop is likely due to two factors. The first is heightened criticism on issues of public sector integrity, which I have already dealt with. The second is criticism of the public procurement processes during Covid. As the noble Lord will be aware, the Procurement Bill currently on Report is dealing with many of those issues. I could go on at significant length about PPE and so on if he wishes.

[Lord Pickles (Con)]

My Lords, one of the key parts of the Government’s anti-corruption policy was the register of beneficial ownership. Could my noble friend give us an update on how it is being brought in? It seems that it is still possible to hide true ownership behind companies and third parties.

[Lord Sharpe of Epsom (Con)]

I am unable to answer that question. I will have to write to my noble friend.

[Lord Allan of Hallam (LD)]

Further to the question from the noble Lord, Lord Pickles, a key element in fighting corruption is transparency around offshore companies which own property in the UK. Could the Minister supply to the House two figures? What is the number of offshore companies which own property in the UK, and what is the number of those which have failed to register their ownership details with Companies House, as they should have done by the end of January 2023?

[Lord Sharpe of Epsom (Con)]

Again, I am afraid I am going to have to write on this.

Public Order Bill

Lord Sharpe of Epsom Excerpts

Consideration of Commons amendments
Wednesday 26th April 2023 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

That this House do not insist on its Amendments 6H and 6J to which the Commons have disagreed for their Reason 6K.

6K: Because it is not necessary to amend the stop and search powers contained in Clause 11.

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, I thank all noble Lords for their engagement throughout the passage of this Bill. As I have already said, the Bill has undoubtedly received the scrutiny that the British people would want and expect, and it is only right to acknowledge that, through the scrutiny of this Chamber, important compromises have been made along the way.

I do not wish to detain noble Lords for longer than necessary. We have debated the contents of this Bill scrupulously and there remains just one disagreement. It is still the Government’s position that we do not support the changes proposed by your Lordships to Clause 11 on the power to stop and search without suspicion. This has been reiterated by the other place, which voted to disagree with your Lordships’ Motions 6H and 6J. Our position has been, and remains, that these changes are unnecessary.

As I mentioned in the previous debate, I remind noble Lords that a legal framework already exists for all stop and search powers. Section 3.8 of PACE Code A requires an officer conducting a search to give the following information to the person being searched: that they are being detained for the purposes of a search; the officer’s name and the name of the police station to which the officer is attached; the legal search power that is being exercised; the grounds for the search; and that they are entitled to a copy of the record of the search and can ask for this within three months from the date of the search. I have already committed, as has the Policing Minister in the other place, to amending PACE Code A to further improve transparency of the use of all stop and search powers. We will make it a requirement to communicate the extent of the area authorised for the suspicionless stop and search, the duration of an order and the reasons for the order where it is operationally practical to do so.

There is a good reason for these changes to be made to PACE Code A and not to the Public Order Bill, which is consistency. We want these changes to apply across the board to all stop and search powers, not just those being debated today. Placing them in the Bill would create one rule for stop and search for protests and another for stop and search for other purposes. This would inherently complicate officers’ training, increasing the chance that these powers are misused. I am sure that all noble Lords agree that this is something we must minimise.

I would also like to reassure all noble Lords that amending PACE Code A does not deny these changes to the principle of stop and search-appropriate scrutiny. Changes to the code require a full consultation with external stakeholders, such as the APCC, MOPAC, the NPCC, the Bar Council, the Law Society and others on the proposed changes and must be brought back to the House for us to consult upon before they are enacted into law.

Finally, on the requirement for a charter, it remains our view that this would be unnecessarily burdensome. The legislation already makes it clear when these powers can be used, and this is bolstered further by the additional requirements for the use of stop and search contained within PACE Code A. This will provide the right balance between tackling these disruptive protesters and protecting the rights of each citizen when these powers are used, so I call on all noble Lords not to insist on their amendments and to pass the Bill as presented. I beg to move.

[Lord Paddick (LD)]

My Lords, the Minister said that there is only one disagreement remaining. He was, of course, referring formally to what the House as a whole disagrees about; but we on these Benches have opposed police stop and search in relation to protest from day one, as any stop and search power will have a chilling effect on those wishing to exercise their rights to freedom of expression and freedom of assembly. These are fundamental human rights that are even more important to those who feel excluded from the parliamentary process, such as black and other minority-ethnic people. These groups are less likely to be registered to vote, less likely to have the correct form of voter ID even if they are registered to vote, and more likely to be stopped and searched by the police. Black people, for example, are between seven and 17 times more likely to be stopped and searched by the police than white people, depending on whether the power used is with or without suspicion. That is despite the legal safe- guards the Minister referred to.

The Commissioner of the Metropolitan Police, in response to the Baroness Casey Review, accepts the fundamental need to reset relationships between the police and the public, especially on the back of the findings of racism, misogyny and homophobia. Sir Mark Rowley acknowledges the past tendency of the police to impose tactics, rather than collaborate with, listen to and engage with communities. That is exactly what the noble Baroness, Lady Casey of Blackstock, said needed to happen, and the wording of the Lords amendment that we should insist on today is taken exactly from the Baroness Casey Review.

On the one hand, we have the Commissioner of Police for the Metropolis and the noble Baroness, Lady Casey of Blackstock, both pulling in one direction, wanting stop and search to be based on collaboration, listening and engaging. On the other hand, we have this Government pulling in the other direction, rejecting the Lords amendment that would require police forces to draw up a charter on the use of stop and search, in consultation with local communities. This House should insist on the implementation of the recommendations of the Baroness Casey Review and not reject them.

I understand that some noble Lords have been concerned about the precise wording of the amendment. But as the commissioner has found to his cost, not accepting the exact wording of the Baroness Casey Review can result in diverting attention away from actually getting on and doing things instead of debating the meaning of words. However, with other important votes to come this afternoon, and without the support of the Labour Opposition, we appear to have reached the end of the road.

--- Later in debate ---

[Baroness Jones of Moulsecoomb (GP)]

Just for the record, I am absolutely furious about the Bill. I think the Government have panicked. It is unworthy of any Government who think freedom of speech is important. Shame on you all.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank almost all noble Lords for their contributions to another fruitful debate. As I have already said, there is no doubt that the Bill received the scrutiny it deserves. I will not go on at great length, but noble Lords have raised the subject of the Casey review. To remind the House I point out that the review said that, as a minimum, Met officers should be required to give their name, their shoulder number, the grounds for the stop and search and a receipt confirming the details of the stop. As I outlined in my opening remarks, it is fairly clear that our amendments to Section 3.8 of PACE Code A go beyond that. I accept the point the noble Lord made about the face of the Bill, but PACE codes are statutory.

The noble Lord, Lord Coaker, asked about the data that we will collect. I refer to a previous debate and reiterate what was said then:

“The Home Office already publishes an annual statistics bulletin which analyses the data from forces across England and Wales. We will also amend PACE Code A to place data collection within the legislative framework. This will include a breakdown of both suspicion-led and suspicionless searches, cross-referenced with protected characteristics such as age, sex and ethnicity”.—[Official Report, 28/3/23; col.131.]


The British public are rightly sick of the disruption that has been caused by a very selfish minority and expect the Government to act. That is what this Bill does, and it is time for it to become law.

Motion A agreed.

Code of Practice on the Recording and Retention of Personal Data in relation to Non-Crime Hate Incidents

Lord Sharpe of Epsom Excerpts

Wednesday 26th April 2023 Grand Committee

Moved by

[Lord Murray of Blidworth]

That the Grand Committee do consider the Code of Practice on the Recording and Retention of Personal Data in relation to Non-Crime Hate Incidents.

Relevant document: 35th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

[The Parliamentary Under-Secretary of State, Home Office (Lord Murray of Blidworth) (Con)]

My Lords, I begin by acknowledging that non-crime hate incidents have attracted a significant amount of controversy, particularly in this place, due to concerns relating to free speech. I am grateful to all those who expressed their views on this topic during the passage of the Police, Crime, Sentencing and Courts Act 2022. The Government fully understand the strength of feeling on this matter, both within this House and among the public more widely, which is precisely why we laid this code before Parliament on 13 March.

Let me first explain that the collection of non-crime hate incident information is a key legacy of the Macpherson inquiry into the murder of Stephen Lawrence. This information pertains to incidents which are not crimes and provides the police with the means to understand tensions within communities or cases involving particular individuals before they can escalate into serious harm. In this respect, this data is vital for helping the police build intelligence to understand where they must target resources to prevent serious crimes or harms which may later occur. 

This Government are absolutely clear that vulnerable individuals and communities must continue to be protected. However, non-crime hate incidents must never be used to inhibit lawful debate, and we must also be very careful about what information is kept on an individual’s record. This balance has unfortunately not always been struck, and this issue is precisely what the code is designed to address.

Free speech is a cornerstone of our democracy. This code addresses concerns that those who express views which some consider offensive but are not against the law are at risk of becoming the subject of a non- crime hate incident report, and that this may result in their personal data being stored on a policing record. It addresses those concerns by introducing new safeguards to ensure that personal data may be included in a non-crime hate incident record only if the event is clearly motivated by intentional hostility and where there is a real risk of escalation causing significant harm or a criminal offence.

To be recorded as a non-crime hate incident or NCHI, the police must judge that any perception of hostility is valid; the complaint must not be irrational, trivial or malicious. This will ensure that the police record NCHIs only when it is absolutely necessary and proportionate to do so, and not simply because someone is offended. The code also provides detailed guidance on freedom of expression. Clear case studies to illustrate how this fundamental right should be considered in practice by the police are also set out.

We are confident that the content of the code fully reflects the Court of Appeal’s judgment in the case of Harry Miller v College of Policing, which was handed down in December 2021. The court found that the recording of these incidents is lawful but must be subject to more robust safeguards to ensure that such recording is proportionate and protects free speech. As I have mentioned, this is exactly what the code provides. I particularly thank the National Police Chiefs’ Council, the College of Policing and senior police officers, who have engaged with Home Office officials throughout the drafting process to ensure that this code will work from an operational standpoint.

The College of Policing is also currently updating operational guidance for police on the recording of such incidents to ensure this guidance aligns with the new code. The college will also roll out the requisite training for police officers to ensure that the principles within the code are fully understood and embedded within everyday policing practice. This will ensure that the code is applied consistently by forces across England and Wales.

To reiterate, by taking these steps, we are protecting the vital changes that have been implemented by policing since the Stephen Lawrence inquiry. We continue to recognise the need to record intelligence that enables the police to intervene to prevent serious harms and future crimes, and we are determined to support the police in protecting the public. However, we have listened to the concerns raised in relation to the fact that this recording has at times gone too far, and we have acted on them. This code will better protect people’s fundamental right to freedom of expression, as well as their personal data, while still ensuring that vulnerable individuals and communities continue to be safeguarded. By bringing forward the code, we have also ensured that the process is subject to much-needed democratic scrutiny. With that, I commend the draft code to the Committee and beg to move.

Hate Crime

Lord Sharpe of Epsom Excerpts

Monday 24th April 2023 Lords Chamber

[Baroness Gohir]

To ask His Majesty’s Government what assessment they have made of the incidence of each of the five monitored strands of hate crime in respect of the sex of the (1) victims, and (2) perpetrators; and why annual hate crime data are not routinely disaggregated by sex when published.

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, police-recorded hate crime data, published annually on GOV.UK by independent Home Office statisticians, are not routinely disaggregated by sex of victim or perpetrator. On 1 April, police forces started to identify and record any crimes of violence against the person, as well as sexual offences, that are deemed to be motivated by hostility towards the victim’s sex.

[Baroness Gohir (CB)]

I thank the noble Lord for his response. Will historical data be made available on the government website? Looking at the last 10 years of hate crime data, it has increased every single year. Between 2021 and 2022, it increased by 26%. What action are the Government taking to reduce hate crimes for all groups affected?

[Lord Sharpe of Epsom (Con)]

On the noble Baroness’s latter point, she is right: in the year ending March 2022, there was a 26% increase compared to the previous year. Although the latest data does indicate that increase, the most recent Crime Survey for England and Wales figures, which were published in 2020, indicate a downward trend in overall hate crime incidents over the past decade. It is felt that the biggest driver for the increase in police-reported crime is likely to be general improvements in the recording of the crime. The police are also better at identifying whether a crime is a hate crime, along with increased victim willingness to come forward. As regards the publication of the data that we are collecting as of 1 April, I cannot say for sure yet. It is for 2023/24. It is voluntary at the moment, but it will be part of the annual data requirement. The Home Office statisticians will make an independent judgment as to whether it is fit for publication or not.

[Lord Browne of Ladyton (Lab)]

My Lords, hate crimes have developed incrementally. First, they were targeted at racially motivated offences, before broadening into the five strands to which the noble Baroness’s Question alludes. So this should remind us that their current state is a snapshot in time. We must always review these things to extend further protections where they are necessary; that is how we got to where we presently are. So surely the routine disaggregation of annual data by sex would enable us to review whether there is a necessity of extended protections offered by hate crime laws to women and girls, in a way that is better informed than it apparently is at present?

[Lord Sharpe of Epsom (Con)]

The noble Lord raises a good point. Of course, the Law Commission did look into this—a subject to which I am sure I will return. But the recording for hate crimes in terms of the sex of the perpetrator is actually very complex. The Ministry of Justice holds court criminal data; the sex of perpetrators is published for all crimes prosecuted that are specified in legislation, including hate crime offences such as racially and religiously aggravated assault, as the noble Lord has suggested. But where a sentence uplift is used because there is evidence of a hate element in the offence, it will be recorded under the offence legislation, not the uplift. Therefore, the sex of the perpetrator, while published, is not always linked to hate crime. Consequently, the data is not a complete representation of all hate crime and will not provide an accurate picture of the sex of the perpetrators.

[Lord Singh of Wimbledon (CB)]

My Lords, would the Minister agree that the whole point of collecting statistics on so-called hate crime is to use them to determine remedial action? But we already know the causes and the action required. So-called hate crime is unacceptable behaviour, not only against the five listed strands, but also against the very tall, the very short, the thin, the fat, people with red hair—anyone seen to be different from a questionable norm. We do not need statistics to lay down norms of acceptable behaviour in schools, the police and wider society.

[Lord Sharpe of Epsom (Con)]

I entirely agree with the points that the noble Lord has made. I am not sure that was a question, but I entirely agree.

[Lord Hannan of Kingsclere (Con)]

My Lords, the hate crimes legislation seems to me to violate one of the general principles of common law, in that it defines crime subjectively: it defines crime as anything perceived to be a crime by the victim or by anyone else. Does my noble friend the Minister believe that the increase in reporting correlates exactly with an increase in actual crime? If it does, then what evidence is there that this legislation has been of value in combating discrimination and prejudice?

[Lord Sharpe of Epsom (Con)]

My noble friend asks an interesting question. I referred earlier to the Law Commission, which we asked to undertake a wide-ranging review into hate crime legislation. On the specific question, the Law Commission found that adding sex and gender to hate crime legislation could have made it more difficult to prosecute the most serious crimes that harm women and girls, including rape and domestic abuse. It would also treat sex unequally to other characteristics in scope of relevant hate crime laws, such as race or religion. So, while I cannot necessarily specifically answer my noble friend’s point, I would say that it is an incredibly complex area that needs very careful thought.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, the Question from the noble Baroness, Lady Gohir, asked why hate crime statistics are not disaggregated by sex. But the question could equally be asked about why the data is not disaggregated by the age of the victim and the perpetrator. I well remember, when I sat on the pre-legislative scrutiny committee for the Domestic Abuse Bill, we had a lot of lobbying about violent acts against older people by younger people. Does the Minister agree that reporting the interaction of these characteristics, both sex and age, would allow resources to be better allocated for the victims and to prevent these types of crimes?

[Lord Sharpe of Epsom (Con)]

Again, the noble Lord raises an interesting point. He will be aware that age is not one of the five protected characteristics—as I get older, I am beginning to think that that is a mistake. I cannot answer his question in greater detail than that at the moment but I will certainly take it back to the department.

[Baroness Burt of Solihull (LD)]

My Lords, we await the Second Reading of the Protection from Sex-based Harassment in Public Bill, a Private Member’s Bill that, if it passes, will create an offence of causing intentional alarm and distress to a person in public because of their sex or presumed sex. Can the Minister tell the House when this Bill will be introduced and whether such an offence will be recorded as a hate crime?

[Lord Sharpe of Epsom (Con)]

I am afraid I am not sure when the Bill will be introduced. I am aware that the Government support that Bill, which was introduced by Greg Clark. I do not have the answer as to how the crimes will be recorded, but I will find out.

[Lord Dobbs (Con)]

My Lords, Saturday was the occasion of Stephen Lawrence Day. I pay tribute to the noble Baroness, Lady Lawrence, who is in her place, for all the dedicated work she has done to build on the memory of her son. What a pity that it should have coincided with the outbursts of Diane Abbott, which left me cold in our modern world. We have hate legislation. Does my noble friend really think that that legislation is effective? Is it really reducing the amount of hate in society, or is it encouraging us to concentrate on the wicked things that are going on rather than allowing us the opportunity to celebrate and build on all the many good things that are going on in terms of race relations in this country, of which the Stephen Lawrence Day Foundation is one?

[Lord Sharpe of Epsom (Con)]

I associate myself with my noble friend’s remarks about the noble Baroness, Lady Lawrence, and the work she has done in that area. As regards whether hate crime legislation increases, improves or takes away from the current situation, there are plenty of reasons why hate is present in society—you can start with Twitter and move on. I am not sure that the legislation makes an enormous difference to that, but it is something that will remain front and centre of public debate for many years.

Licensing Act 2003 (Coronation Licensing Hours) Order 2023

Lord Sharpe of Epsom Excerpts

Monday 24th April 2023 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

That the draft Order laid before the House on 6 March be approved. Considered in Grand Committee on 19 April.

Motion agreed.

Chinese Police Stations in the UK

Lord Sharpe of Epsom Excerpts

Thursday 20th April 2023 Lords Chamber

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, yesterday in the Times newspaper there was a report into a Chinese businessman with links to an alleged Chinese secret police station in Croydon. This report raises serious questions about national security. This businessman, who has attended Chinese Communist Party political conferences, has also attended organised Conservative Party fundraising dinners and other events involving former Conservative Prime Ministers. Although we have raised this issue here before, after police stations were reportedly uncovered in Hendon, Glasgow and Croydon, we have received no update. Meanwhile, operations in New York and the Netherlands have taken action against Chinese police operations, and the Canadian and German Governments have expressed concern about operations in their countries.

Here, we have to contend with the additional dimension that one individual who has been linked to an operation here has links with the Conservative Party and has met Ministers. We know that the director-general of MI5 has warned that Chinese authorities are attempting to exert influence over our political system. Can the Minister tell us the extent of the contact this individual has had with Ministers? What action are the Government taking to look into this role within the Conservative Party and the involvement he has had with the Government? Have any other individuals connected with these operations been identified, and are their similar concerns about them seeking to influence British politics?

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, I share the noble Lord’s concern about this threat to our democracy, but as the Security Minister said in a previous Statement on this matter in November last year, investigations are still ongoing and it would be inappropriate for me to comment any further on operational matters, as to do so could obviously jeopardise future prosecutions.

However, I take this opportunity to reassure the House of the Government’s resolve to protect every community in this country from transnational repression. As regards the internal party aspects of this, it is my understanding—and if I am wrong, I will obviously come back to correct myself—that this individual was prominent in a particular Chinese organisation within the Cities of London and Westminster. Beyond that, I do not think he had any involvement or contact with Ministers, and, as all noble Lords around the House know, prominent politicians are featured in photographs with very many people, most of whom they will not know.

[Lord Wallace of Saltaire (LD)]

My Lords, I recognise that it is difficult to comment on this immediate case. Therefore, I raise some slightly wider questions. China is not the only authoritarian state which attempts to catch up with and influence its nationals here. We all recall the occasion when a member of the royal family of one of the Gulf states was taken off the streets in Cambridge and taken back to the Gulf states. Can the Minister assure us that other states and their behaviour in Britain—including some with whom we are relatively closely allied, such as the Gulf states—are also in scope and that the Government are concerned about that?

Secondly, universities have a particularly sensitive role here—I speak as a former academic. Last year, one vice-chancellor told me that his biggest single problem in maintaining free speech in his university was keeping the peace between his Hong Kong students and his Chinese mainland students. I put that down as a marker for further discussion. The Defending Democracy Taskforce was mentioned several times in discussion in the other place yesterday. I tried to find out exactly what it is covering, how far it is intended to have some cross-party representation and what its plans are. It is very difficult to find out whether it really exists, how often it meets, what it is doing and what its strategy is. At a later stage, could the Minister’s department communicate to some of us what the Defending Democracy Taskforce’s intentions are?

[Lord Sharpe of Epsom (Con)]

The noble Lord raises a couple of very good points. Obviously, any attempt to coerce, intimidate or illegally repatriate any individual will not be tolerated; it does not matter where they are from. The Higher Education (Freedom of Speech) Bill and the National Security Bill both contain provisions to ensure that universities have the tools they need to deal with interference and threats to academic freedom. The noble Lord is quite right to draw the House’s attention to the Defending Democracy Taskforce, which my right honourable friend the Security Minister introduced in the other House in November last year. He has been asked for updates; I have not seen him since those were asked for, but I will make sure that the representations from this House, as well as the other place, are understood. I can also commit that higher education falls within the remit and scope of the Defending Democracy Taskforce, so there will be more to be said on that matter. Noble Lords will also appreciate that there are a number of other areas, including, as I said, the National Security Bill, where we will tighten up our ability to respond to some of these issues.

[Lord Deben (Con)]

Does my noble friend accept that in a democracy, it is very important that Ministers and Members of Parliament are available to the public as a whole, and it would be a great sadness if this kind of allegation, proven or unproven, becomes a way to ensure that people are unable to reach to the heart of government, as they ought? I hope the Government will continue to state that those who are malefactors should of course be prosecuted with great urgency; but it is very important that those who merely wish to get people in government to understand what is happening in the world—frankly, it is not always obvious that the Government know that—should have access.

[Lord Sharpe of Epsom (Con)]

I agree with my noble friend. As I said earlier, it is very difficult for any prominent politician of any party, within or outside government, to know precisely who is appearing in a selfie with them. We should be very cognisant of that fact. I also agree that if subsequent bad behaviour, illegal behaviour, is discovered, whatever it may be, the full force of the law should be brought to bear.

[Lord Anderson of Swansea (Lab)]

My Lords, I concede that the investigation is at an early stage, but is it the Government’s working assumption that this phenomenon is not confined to Croydon and there are other such so-called police stations around the country—looking particularly, I would guess, at Chinese students in the UK?

[Lord Sharpe of Epsom (Con)]

My Lords, again, it is difficult for me to comment on ongoing matters, but the noble Lord on the Opposition Front Bench mentioned a couple of other police stations that have been aired in the public domain in the past, so yes, it is fair to say that there is more than just one.

[Lord Hannan of Kingsclere (Con)]

My Lords the advance of autocracy in China since 2012 has been vertiginous. We have seen the creation of a panopticon state where face recognition and location technology are fused to follow and monitor every citizen, and where big online platforms such as Alibaba, Weibo and Tencent both proselytise for the regime and spy on its behalf. Although we often talk of it as Orwellian, I think a better metaphor would come from Huxley, in the sense that even when Chinese students in western universities are put in a place where they do not have censors and firewalls to worry about, they still tend not to look at “dangerous” websites. Will my noble friend confirm that one thing we can do to promote democracy in China is to support the China where democracy and freedom have advanced, especially since the 1990s, namely, Taiwan: a China on the doorstep of red China which shares its language and culture but rejects its totalitarianism?

[Lord Sharpe of Epsom (Con)]

My noble friend asks a very good question. The UK’s long-standing policy on Taiwan has not changed: we have no diplomatic relations with Taiwan but a strong unofficial relationship which is based, as my noble friend said, on deep and growing ties in a wide range of areas and is certainly underpinned by shared democratic values.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, can the Minister give more details about the situation in Glasgow? Scottish universities are taking in students from China to raise income because there are no fees from Scottish students, and some strange people from China may be getting in under the guise of being students. The Scottish Government have a very strange contract with a Chinese company that is causing grave concern among the public in Scotland. The Scottish Government have been trying to take a greater role in foreign affairs, without the kind of support that the Home Office and Foreign Office have from our intelligence agencies. Can the Minister give an undertaking that the UK Government will talk to the appropriate Scottish Ministers about this issue and make sure that they are dealing with it efficiently and safely?

[Lord Sharpe of Epsom (Con)]

The noble Lord will appreciate, as I said before, that I am unable to comment on ongoing operational matters and investigations. I listened carefully to what he said, and rather than make that commitment regarding the devolved Administration myself, I will certainly ensure that my noble friend Lord Offord is aware of his concerns and suggest that he looks into them.

Machetes: Consultation

Lord Sharpe of Epsom Excerpts

Wednesday 19th April 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, I thank both noble Lords for their contributions. Before I answer the specific questions that have been asked of me, I would like to go back to the statistics, as the noble Lord, Lord Coaker, brought the subject up.

I will preface my remarks on statistics by saying that it is a very dry subject. It is uncomfortable, frankly, talking about statistics, because behind every single one there is a life lost, a life ruined, families ruined and all the rest of it. So I want to make it very clear that, while trends are improving—I am afraid I will contradict some of the noble Lord’s statistics—none the less I recognise that lives have been ruined, and that is very much the case behind all these statistics.

The latest police recorded crime figures, published by the ONS in January for the year ending September 2022, show that knife-enabled crime recorded by the police in that year remained 8% lower than the pre-coronavirus pandemic levels for the year ending March 2020. Levels of knife-enabled crime fell to 45,595 offences in the year ending September 2021 because of government restrictions on social contact. Levels increased by 11% in the year ending September 2022 but were still below pre-coronavirus levels.

Police-recorded possession of an article with a blade or point offences were higher in the year ending September 2022 than the year ending March 2020. There was a 17% increase compared with the year ending September 2021. That was partly influenced by increases in targeted police action to tackle knife crime.

Of all recorded homicides in the year ending September 2022, the proportion of homicides where a knife or sharp instrument was the method of killing was 39%. That was similar to the year ending March 2020 and a slight decrease compared with the year ending September 2021. The current homicide level is 8% below the pre-pandemic level. The latest ONS crime statistics showed a 2% rise in homicide in the year ending September 2022.

My right honourable friend the Minister for Policing in the other place pointed out that perhaps some of the most pertinent data relates to provisional admissions to NHS hospitals in England and Wales for the year to September 2022. It shows that admissions for assault by a sharp object for under-25s were 11% lower than the year to September 2021. The number of admissions was 20% lower in the year ending September 2022. The latest provisional data shows that admissions for assault with a sharp object for all ages are 5% lower.

As I say, I appreciate that these are very dry statistics. My right honourable friend in the other place also reported that the Crime Survey for England and Wales pointed out that violent crime reduced by 38% from 2010 up to September 2022. So I would suggest that it is not quite the picture that was painted. That is not to say that there is not more to do; that is the point of this consultation.

I agree with both noble Lords that obviously something needs to be done about these types of knives. The police tell us that they are increasingly seeing machetes on the streets, in particular the types of machetes that we intend to ban. Obviously, when particularly large knives and machetes are used, this creates great distress and alarm, not only for the victim but for the wider community. The people wielding these weapons aim to terrorise their victims and onlookers and clearly that cannot go on.

We are taking action on several fronts. Banning these machetes and knives will remove the types of weapons which appeal to the criminals. At the same time, we are increasing the maximum penalty for the offence of importing, selling and manufacturing these items. We want to send a very clear message that the industry should behave more responsibly.

Of course, it is important to balance concerns about public safety with the right for individuals to own and use the tools that they need for their jobs and pastimes. The vast majority of people who own and use knives and machetes do so responsibly, so we believe that the ban should be targeted at those types of machetes and large knives which appear to have been designed to look intimidating and which, frankly, have no practical purpose. We will remove types of weapons which will appeal to criminals.

That is the background to the consultation, which, as noble Lords know, will be of relatively brief duration. It will last for seven weeks until 6 June.

On the other actions that the Government have taken, it is unfair to say that nothing has been done despite various former Home Secretaries’ statements. I will go through a list of some of the things that are yielding very positive results. For example, we have talked previously in this House about violence reduction units and Grip; £170 million has been invested in violence reduction units since 2019, and it estimated that they have prevented 136,000 offences taking place in the 20 pilot areas. Noble Lords will be aware, I hope, that serious violence reduction orders are being piloted as of yesterday. The pilot for KCPOs—knife crime prevention orders—concluded at the end of March. The data is being evaluated by the Metropolitan Police and, I believe, University College London, and we expect to hear more fairly soon.

Both noble Lords raised the subject of police numbers. The official announcement on the police uplift programme will be made next week and I am not going to pre-empt it. What I can say, and my right honourable friend in the other place also mentioned this, is that, for example, the Metropolitan Police currently has 35,000 members and that is the largest number on record that it has ever had.

While we are on the subject of the Metropolitan Police, I appreciate the points that the noble Baroness raised about neighbourhood policing. They are perfectly pertinent. Of course, it remains an operational matter and something that should be determined between chief constables and their elected police and crime commissioners. My right honourable friend in the other place has had conversations with the commissioner, Sir Mark Rowley, about this, and he has said that he intends to place emphasis on neighbourhood policing. Again, my right honourable friend in the other place spent some time with a sergeant in Brixton, in Lambeth, and he confirmed that the number of neighbourhood policing units across the three wards he looked after had gone up already. I hope that that trend continues across other forces, because clearly it makes a major difference.

As regards the retail of such things, as noble Lords have pointed out, currently there is a voluntary agreement with major retailers on the responsible sale of knives, and that has been in place since 2016. I will not go into more detail on that because it is reasonably well understood. I am reassured that the Online Safety Bill that was discussed in this House earlier today deals with some of the online issues. Again, I appreciate that, as it stands, some of these things are readily available online. But it is an offence to sell a prohibited article. That applies particularly to the age-verification and under-18s situation. I appreciate it is probably very difficult for retailers to reassure themselves about these matters, but it needs to happen.

With regard to other aspects of the Government’s work, a significant amount of money is going into the youth endowment fund. Stop and search, a subject of some contention in your Lordships’ House, has removed 90,000 knives since 2019. The Met reports that it is removing some 350 to 400 knives a month. We are starting the offensive weapons homicide reviews. I agree that there are loopholes and they need to be closed. That is the point of this consultation. We need to act reasonably swiftly, although in a proportionate way, to remove these things. That is why the consultation is taking place as it is and is only seven weeks in duration, and I hope that I will be able to return to your Lordships’ House reasonably soon with some very good news on this subject.

House adjourned 8.12 pm.