Economic Crime (Transparency and Enforcement) Bill

Lord Thomas of Cwmgiedd Excerpts

Committee stage
Monday 14th March 2022 Lords Chamber

[Viscount Waverley (CB)]

My Lords, given the hour, I will be concise and crack on in support of the need for sufficient human and financial resources being made available, given the global implications.

Despite high-level government commitments on fighting economic crime, the Government have hitherto failed to invest sufficient resources to ensure that enforcement is effective. Reinforcing the case is paramount. We should double key law enforcement annual budgets from £852 million to £1.7 billion. A £2.7 billion increase in funding for national and local agencies to tackle serious and organised crime and to improve the system’s capabilities across digital, forensics, covert surveillance and financial investigations, to match the increasing technological sophistication of the serious and organised crime groups operating in the UK, is necessary, with budgets to invest in structures, skills, capabilities and technologies across the system.

We should double the budget for sanctions enforcement. In the past three years, the NCA has conducted only three criminal investigations into sanctions breaches, with no resulting prosecutions. It has just 40 employees.

We should create a central economic crime-fighting fund out of the money generated by law enforcement’s economic crime activity. If the proceeds had been reinvested into the agencies, on top of their core budgets, overall enforcement spending could have been provisionally increased by an additional £748 million a year—an increase of approximately 93% on current funding levels. This would allow investment in state-of-the-art IT infrastructure and data analysis capabilities. This central fund would replace the system for redistributing the proceeds of asset recovery—the asset recovery incentivisation scheme—which is broken.

Working with the judiciary to ensure better judicial management of cases to strike out abusive litigation tactics is key, in addition to working with industry to develop an enforceable model litigant code for lawyers, to prevent the use of stalling and spurious tactics that waste court time and drain public resources, and allowing law enforcement bodies to raise salaries within their budgets, so that they can be more competitive in the salaries they provide to attract the best and brightest.

I will bring my remarks to a close. We must allow law enforcement to spend more on legal fees to get the best legal advice; prosecuting and investigating bodies cannot compete. We need specialist economic crime judges; enforcement bodies face a UK court system with few judges specialised in economic crime or confiscation. Finally, we must raise Companies House fees to £100. Current fees of just £12 for an incorporated company are too low, allowing considerable abuse of the system. Companies House needs to become a key digital data hub to help law enforcement and provide a service for the whole of the UK about suspicious corporate behaviour, rather than its current state as a passive receiver of false or inaccurate information.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I rise briefly to support the amendment from the noble Lord, Lord Agnew. Over the years, one has seen concentrations move as to what parts of the criminal justice or investigation system matter. It is important to appreciate that this will be expensive, but we must have a system that, as regards the resources we give to justice, is open and transparent. There is no way this can be done without a proper annual report. Too often have I heard, “Oh, we can have an efficiency here or an efficiency there; we’ll do a little bit less of that or find incentives somewhere else”. No, that is not good enough for the task that faces us, and our nation, in ensuring the reputation of the City of London. I therefore warmly support the view that we should have a proper economic and financial analysis of the tools needed.

[Lord Fox (LD)]

We are in danger of reaching the end of this in unanimous agreement, so I shall introduce a little rancour in responding to the amendment from the noble Baroness, Lady Neville-Rolfe. When she read the Hansard report of the Second Reading, she will have seen a strand going through a number of speeches that said the purpose of the Bill must be permanent rather than a “here today, gone tomorrow” sort of purpose—a fashion. Her notion of sunset clauses hits counter to that. She is right that regulation has to be fit for purpose and that there should be reviews, and I welcome her joining the chorus for reviews that has been going throughout both the Second Reading and the Committee stage. I think the first opportunity for a review of the performance of ECB 1 and the regulations that make it work will probably be when we get to ECB 2. Thereafter, an annual review is a good idea.

We have heard from many noble Lords about progress on the subject of strategic litigation. I hope the Minister is able to confirm that this small amount of momentum will be able to pick up over the next few months as we go forward, perhaps focusing on my noble friend’s Private Member’s Bill.

A few moments ago the noble Lord, Lord Faulks, asked the noble Baroness, Lady Williams, whether UWOs were going to be a minority sport or something pursued in number. She has left, leaving the noble Lord, Lord Ahmad, to explain how it will be paid for. Unless there is money to pay for it, it will remain a minority sport. The noble Lord, Lord Agnew, and the noble Viscount, Lord Waverley, clearly encapsulated the point that none of this can happen unless the investigating and prosecuting forces are both skilled and resourced to deliver it. That is why I was pleased to co-sign Amendment 95 from the noble Lord, Lord Agnew. I look forward to hearing from the Minister how much money will be forthcoming and when.