Economic Crime and Corporate Transparency Bill

Baroness Hodge of Barking Excerpts

Consideration of Lords message
Wednesday 13th September 2023 Commons Chamber

[Sir Robert Buckland]

I will take that qualification. I was seeking a short cut because time is brief. My hon. Friend is right to mention the agency point, but it is still a much narrower ambit of the offence than fraud in general. That is the point I would ask him to take away, because I am not persuaded. I think the amendments should remain within the body of the Bill as amended, and I will be voting accordingly.

[Dame Margaret Hodge (Barking) (Lab)]

Mr Deputy Speaker, I am conscious that we must vote in five minutes to remain in order, so I will simply say that economic crime is a national security issue and should not be a partisan issue in this House. I urge the Minister to set aside the party political views that he is expressing and to go with the consensus that has been built, not just in the House of Commons but in the House of Lords and in the non-governmental organisation sector outside.

[Mr David Davis (Haltemprice and Howden) (Con)]

The right hon. Lady is right. It is not just the parties but the different sides of the natural arguments over authority, libertarianism and civil rights that are not divided. I am a strong defender of the right to be presumed innocent, but there needs to be a rebalancing in this area, where the criminals we are up against are very sophisticated and will use smaller companies to get around this if they need to.

[Dame Margaret Hodge]

In the interest of trying to get to the vote on time I will close my speech, but I urge all Members to please support the amendments proposed by Conservatives in the House of Lords, which are eminently sensible, rational and pragmatic.

[Kit Malthouse (North West Hampshire) (Con)]

I am afraid that I am going to disappoint the right hon. Member for Barking (Dame Margaret Hodge) and speak very strongly against Lords amendments 151B and 151C, and I refer the House to my entry in the Register of Members' Financial Interests. I am surprised at Lord Garnier’s lack of any conception of what it is like to run a small business and the cumulative impact of Government regulation thereupon. The limits that are drawn here will draw in all manner of businesses, not least some eminent barristers who will fall foul of some of the numbers. Indeed, the average town-centre or city-centre pub will be covered by these regulations, such is their level of turnover and employees. It is worrying that I am perhaps the only small-business voice here and that there are not enough small-business people in the House to point out the problems with this issue.

As the Minister has said, hundreds of thousands of businesses will be drawn into the net. This is not necessarily about the compliance cost. The kind of regulation that comes with the prospect of a criminal offence has a chilling effect on small businesses. I speak as somebody who has owned one for nearly 30 years. When the Revenue, health and safety or trading standards show up with some new regulation, a whole industry cranks into place to terrify the owners of small businesses into some kind of compliance. Then along come the consultants, the accountants, the webinars and the newsletters telling us what we do and do not have to do. All of this distracts us from what we should be doing, which is trying to create employment and wealth and paying tax to the rest of the country.

The other issue is that this misunderstands the dynamic of businesses of this size. If a business of this size is going to engage in fraud, it is very possible—more than likely, actually—that the principal will be the instigator of that fraud. The idea that, alongside all the other offences, they should take steps to prevent themselves from perpetrating fraud seems ridiculous. Added to those general difficulties are the specific ones presented by the Heath Robinson-type calculation that every business will have to undertake every month: adding together how many employees there are and how many are employed in each month in year P, then taking away the number you first thought of and dividing it by the number of months. We are all going to have to do this every single month to work out whether we are above the threshold or not. Should we have the steps? Should we not have the steps? It all seems particularly nonsensical.

We know that a vast amount of this fraud takes place in larger companies, and they have the capacity and the wherewithal to deal with it. If my hon. Friends really think that senior barristers, whose turnover and assets will be more than the threshold, should be taking and showing procedural steps to avoid conducting fraud—do not forget that they are sole practitioners—then I am afraid we have gone through the looking glass of what Conservative Members think is appropriate.