Economic Crime and Corporate Transparency Bill

Debate between Baroness Hodge of Barking and Kit Malthouse

Consideration of Lords message
Wednesday 13th September 2023 Commons Chamber

[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.

Economic Crime and Corporate Transparency Bill

Debate between Baroness Hodge of Barking and Kit Malthouse

Report stage
Wednesday 25th January 2023 Commons Chamber

[Dame Margaret Hodge]

I thank the Minister. I am having a senior moment.

The SFO had clearly prepared the case badly, but there was a discovery point that got the litigation thrown out of court, and a huge sum was claimed in costs. The cost to the public purse is enormous.

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

I understand the right hon. Lady’s point about the cost to the police and other authorities of failed investigations but, in my experience, much of the problem stems from the division of the spoils in those cases that succeed in securing the proceeds of crime. As she will know, the money is divided between the Treasury, the Home Office and the police.

When I was at City Hall, we tried to cut a better deal in which the police would effectively recover the full cost of a prosecution, and any profit would then be split, so that pursuing such prosecutions would be costless to the police. Tim Godwin was then deputy commissioner of the Metropolitan police, and his view was that the police would then have a strong case to invest even more in this line of investigation, and they would therefore have more success and there would be more money to go around for everyone. It is not necessarily the case that legislation will solve the problem. It is more to do with the deal between the police and the Government.

[Dame Margaret Hodge]

Indeed, and we considered an amendment in yesterday’s debate to address that specific issue, so that any funds arising from a confiscation order, or other such order, could be enjoyed by the enforcement agencies themselves, which would provide an additional incentive. We discussed last week’s Danske Bank settlement of criminal issues in the United States, from which the enforcement agencies received $2 billion. Just imagine the amount of enforcement activity that could be funded from that fee. We are timid in that regard, so I completely concur with the right hon. Gentleman on that.

The other argument in relation to cost caps is that the fear of facing huge costs if one fails in a case provides a disincentive to the enforcement agents to pursue as vigorously as one would like economic crime prosecutions. The Minister has said to me previously that there is no evidence to back that up, but I just do not buy that. A proper analysis of how people in the NCA, the Serious Fraud Office and other agencies think before they decide to pursue a prosecution would very quickly reveal that there is a disincentive. It is for those two reasons that we considered cost caps. The US is our model. Each party bears its own costs, which is much more effective. We heard figures yesterday—I will not repeat them because I have to get on—that the US gets much more money in and it does not cost as much to its enforcement agencies.

Those are the things that I wanted to cover. I hope that, in summing up, the Minister will please give us some concessions. I urge him to reflect on the degree of unanimity across the House and on the very senior figures on his own Back Benches who have chosen to work, in particular, with members of the two all-party groups to reach consensus. We do argue these things out. We come to a view after an extensive debate on a subject; it is never an open and shut case. Back Benchers are in a better position at present than those on the Front Bench, so I ask the Minister to listen to us because we may just be right and it would be good if there was a concession on something.

Metropolitan Police: Stephen Port Murders Inquest

Debate between Baroness Hodge of Barking and Kit Malthouse

Monday 13th December 2021 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab)]

(Urgent Question:) To ask the Secretary of State for the Home Department, if she will make a statement on the Metropolitan Police and the inquest into the deaths of Anthony Walgate, Gabriel Kovari, Daniel Whitworth, and Jack Taylor.

[The Minister for Crime and Policing (Kit Malthouse)]

I am sure the thoughts of the whole House are with the families and friends of Anthony Walgate, Gabriel Kovari, Daniel Whitworth, and Jack Taylor. The stories we have all read, of their lives and terrible deaths, have moved and horrified the country.

The Government and the people we serve expect the highest standards from the police as they carry out their vital work protecting the public and investigating serious crimes. The conclusions of the inquest have shown that those standards were not met, and that investigative failures probably contributed to the deaths of three of the young men. The Metropolitan police has accepted as much. There are now serious questions for it to answer. It is profoundly important that the force takes responsibility for past failings and makes sure they are not repeated.

The primarily accountability body for the Met is the Mayor of London and the London Assembly, but the Metropolitan Police Service has assured us it is putting in place significant improvements, including: more and better trained investigators; new structures so that intelligence teams, specialists and officers on the ground can work more closely to identify and link crimes much earlier; and work to develop a greater understanding of the drug GHB and its use as a weapon in sexual assaults. It is also essential that the police build trust with all London’s communities and that includes LGBT+ community. I know that the Commissioner and her team are committed to doing so, at a time when the trust the public have in them has been seriously shaken by recent events.

It is, of course, right that the police handling of cases such as these is subject to independent scrutiny. Her Majesty’s inspectorate of constabulary and fire and rescue services has been asked by the deputy Mayor of London and the commissioner to conduct an inspection into the standard of the Metropolitan Police Service’s investigations, and the Independent Office for Police Conduct is now assessing whether to reopen, either in full or in part, the investigation into the way that the Metropolitan Police Service handled the inquiries into the deaths of these young men.

The police perform an enormously important function in our society. It is a job that, on the whole, they do with skill, courage and professionalism. Only last Thursday, I attended the police bravery awards and heard stories of selfless heroism, but when things go wrong, it is profoundly important that lessons are learned and applied. We will continue to hold the Metropolitan police service and the Mayor’s Office for Policing and Crime to account in making sure that the failures highlighted by these truly awful cases are addressed.

--- Later in debate ---

[Dame Margaret Hodge]

I am grateful to you, Mr Speaker. I have to say to the Minister that this happened in London, but it might and could have happened anywhere in the country, and therefore, it is a matter for him. The premature deaths of four young, gay men, who were robbed of their lives, is an unspeakable tragedy, especially because six years after it happened, it has now finally been publicly conceded that the deaths of three of them—Gabriel Kovari, Daniel Whitworth and Jack Taylor —could have been avoided if the police had properly investigated the killing of the first victim, Anthony Walgate.

The litany of police errors is simply horrific, including the refusal to check the murderer’s laptop because it was too expensive; the failure to engage appropriately with the partners and families; the failure to check the authenticity of a fake suicide note; the failure to check CCTV; and the incomprehensible failure to link the deaths when three of the bodies were found in or close to St Margaret’s churchyard in my constituency.

Does the Minister agree with the friends, partners and families that the Metropolitan police service is prejudiced and institutionally homophobic? Does he at the very least agree that, given the facts of the cases, homophobia must have been a factor that influenced the actions and inactions of the police? In these circumstances, will he please order a full public inquiry to examine whether there is institutional homophobia in the police service? Does he agree that such an inquiry is vital if the police are to gain the trust of the LGBTQ+ community? Does he further agree that the inquiry is also vital to ensure that such a tragedy never happens again?

Seventeen police officers were investigated by the IOPC in 2015. None was sacked and five have since been promoted. Is the Independent Office for Police Conduct fit for purpose? What action has the Minister taken to ensure that all police officers treat gay partners in the same way as they would any other partner, with appropriate respect and a proper duty of care? Action by the Home Office, the Metropolitan police and the Mayor is essential if the homophobia in our police service is to be properly and thoroughly investigated and addressed.

[Kit Malthouse]

I agree with the right hon. Lady that this was an unspeakable tragedy, which has moved all of us in its dreadfulness. I cannot imagine what those families have gone through, not least in living through the deaths of their loved ones, but also with the investigation and this dreadful but necessary process of an inquest and investigation thereafter.

Although there have obviously been shortcomings in this investigation, which the Met has admitted and on which it has expressed a profound desire to improve, it is not my experience that the Metropolitan police is institutionally homophobic. Obviously, however, the commissioner and the Mayor have commissioned Baroness Casey to look at the culture of the Metropolitan police in all its aspects following the awful killing of Sarah Everard. I understand that her work will include examining whether prejudice such as the right hon. Lady outlined exists in the force. It is definitely the case, as I think is recognised by City Hall and Metropolitan police leadership, that there is a job of work to be done to rebuild trust between that organisation and the people it serves in all their great tapestry in the capital that I had the honour to serve for eight years.

On the Independent Office for Police Conduct, as I said, it is considering whether to reopen, in full or in part, the investigations that it undertook in the light of any new evidence that may be presented as part of the inquest. As the right hon. Lady will know, there were recently reforms to the IOPC when it replaced the Independent Police Complaints Commission and there was a change in regulations last year to try to improve its performance. I have confidence in it as an organisation to try to get to the bottom of these often difficult and complicated issues. As I say, however, until we see whether it is going to reopen the investigations, I cannot comment on that further.

My reading of the apologies from senior Met officers is that they are very heartfelt—from Helen Ball, whom I know well and who is an officer of great commitment, and from Stuart Cundy, who leads on homicide for the National Police Chiefs’ Council across the country—and they recognise that there were serious failures in this case. I know that they are all committed to facing those failures and improving in future.