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PRESS RELEASE : Politically-motivated fire sale of Royal Mail to fill hole left by Osborne’s failed plan – Umunna [September 2013]

The press release issued by the Labour Party on 12 September 2013.

Chuka Umunna MP, Labour’s Shadow Business Secretary, commenting on the Government’s announcement of an Initial Public Offering to the London Stock Exchange on Royal Mail, said:

“Ministers are pushing ahead with this politically-motivated fire sale of Royal Mail to fill the hole left by George Osborne’s failed plan. This is taking place despite opposition from a huge coalition including the Conservative Bow Group, the Countryside Alliance, the National Federation of Subpostmasters, the cross party BIS Select Committee as well as Royal Mail employees themselves.

“The Government has not addressed the huge concerns which remain on the impact the Royal Mail sale will have on consumers, businesses and communities, but ministers are ploughing on regardless.”

16/10/2022
PRESS RELEASE : Right that Assad be judged by actions more than simply by words – Douglas Alexander [September 2013]

The press release issued by the Labour Party on 12 September 2013.

Douglas Alexander MP, Labour’s Shadow Foreign Secretary, responding to President al-Assad’s assurances that Syria’s chemical weapons will be placed under international control, said:

“No one should be in any doubt as to the murderous nature of the Assad regime and so it is right that Assad be judged by his actions more than simply by his words.

“The challenge confronting Secretary Kerry and Foreign Minister Lavrov today in Geneva is to agree a means to identify, verify, secure and ultimately remove from Assad’s possession those weapons – with the final goal of destroying them altogether.

“Their task over the coming days is to prove that a goal that is desirable, is also doable.”

16/10/2022
PRESS RELEASE : 2022 Enlargement package – European Commission assesses reforms in the Western Balkans and Türkiye and recommends candidate status for Bosnia and Herzegovina [October 2022]

The press release issued by the European Commission on 12 October 2022.

Today, the European Commission adopted its 2022 Enlargement Package, providing a detailed assessment of the state of play and the progress made by the Western Balkans and Türkiye on their respective paths towards the European Union, with a particular focus on implementing fundamental reforms, as well as clear guidance on the reform priorities ahead.

The Commission recommends that Bosnia and Herzegovina be granted candidate status by the Council, on the understanding that a number of steps are taken to reinforce democracy, functionality of state institutions, rule of law, the fight against corruption and organised crime, guarantee media freedom and migration management in the country. The Commission will continue supporting reform efforts and accelerate the integration of the Western Balkans as a whole.

EU High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission, Josep Borrell, said: “We are recommending today to the Council to grant candidate status to Bosnia and Herzegovina. We are infusing a positive dynamic into the process and hope for the region to take the chance and follow up on it by implementing key reforms. We are not only assessing the performance of partners, but of future member states. The assessments we make now are also about the kind of Union we want for the future. And it is clear that we believe in the European future of our partners. Russia’s brutal invasion of Ukraine brings into strong relief the importance of EU enlargement, which takes on a new geopolitical significance. It is a long term investment into peace, prosperity and stability for our continent.”

Presenting this year’s Package, consisting of Communication on EU enlargement policy and annual reports, Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, said: “The enlargement policy of the European Union is a geostrategic investment in our European continent’s peace, stability, security, and socio-economic growth. Our reports offer a factual and fair assessment and a clear guidance precisely to allow our partners to identify where they need to go faster in reforms to move ahead. There is no alternative, and it is in our common interest to accelerate the integration process, starting with the Western Balkans, where we have been investing for many years to bring them closer to the EU. The recommendation to grant candidate status is a historic moment for the citizens of Bosnia and Herzegovina. I urge the leaders of the country to make the most of this historic opportunity and swiftly proceed with the steps identified in our recommendation. This will restart the work on reforms and on the fulfilment of the 14 key priorities set in the Commission’s Opinion which remain key for the opening of accession negotiations.”

Western Balkans

In the case of Montenegro, the priority for further overall progress in negotiations remains the fulfilment of the rule of law interim benchmarks set under chapters 23 and 24. To reach this milestone, Montenegro needs to intensify its efforts to address the outstanding issues, including in the critical areas of freedom of expression and media freedom and fight against corruption and organised crime and credibility of the judiciary. This requires political stability and constructive engagement by all stakeholders, leading to the establishment of a stable government and broad political consensus in Parliament on key reforms.

Serbia should as a matter of priority establish a government, firmly committed to the EU strategic direction and reform path. Further work and political commitment are needed to continue and deepen reforms and address shortcomings, in particular in the key areas of the judiciary, fight against corruption and organised crime, media freedom, freedom of assembly and the domestic handling of war crimes. Serbia also needs to improve as a matter of priority its alignment with EU foreign and security policy which dropped significantly. It also needs to robustly tackle all forms of disinformation.

Albania and North Macedonia opened a new phase in their relations with the EU following the first intergovernmental conferences on accession negotiations on 19 July 2022. Albania and North Macedonia need to further intensify efforts in key areas of rule of law, the fight against corruption and the fight against organised crime. Albania also has to address property rights, minority issues and freedom of expression.

In June 2022, the European Council expressed its readiness to grant the status of candidate country to Bosnia and Herzegovina and invited the Commission to report on the implementation of the 14 key priorities, with special attention to those that constitute a substantial set of reforms. Despite political turmoil and the general elections of 2 October, the leaders of the political parties represented in the Parliamentary Assembly of Bosnia and Herzegovina in June 2022 committed to principles for ensuring a functional Bosnia and Herzegovina that advances on the European path. Fulfilling the 14 key priorities from the Commission’s Opinion on the country’s EU membership application will allow recommending opening EU accession negotiations.

Kosovo needs to intensify its efforts to strengthen democracy, public administration, the rule of law and to fight corruption. The Commission stands by its assessment of July 2018 that Kosovo has fulfilled all visa liberalisation benchmarks and the proposal, still pending in the Council, should be treated as a matter of urgency.

On the normalisation of relations, while both Serbia and Kosovo have remained engaged in the Dialogue, the EU expects both sides to engage more constructively in the negotiations on the legally-binding normalisation agreement in the coming period and show flexibility in order to make rapid and concrete progress.

Türkiye

In the area of democracy, the rule of law and fundamental rights, Türkiye needs to reverse the negative trend as a matter of priority with addressing the weakening of effective checks and balances in the political system. Dialogue on rule of law and fundamental rights remains an integral part of the EU-Türkiye relationship. The underlying facts leading to the assessment that Türkiye’s accession negotiations have effectively come to a standstill, still hold.

The European Council has repeatedly re-affirmed its strategic interest in a stable and secure environment in the Eastern Mediterranean and in the development of a cooperative and mutually beneficial relationship with Türkiye. However, the situation in the Eastern Mediterranean has again become tenser. Türkiye must respect the sovereignty and territorial integrity of all EU Member States.

Türkiye’s continued policy of not aligning with restrictive measures against Russia is of concern due to the free circulation of products, including dual use goods, within the EU-Turkey Customs Union. Türkiye also needs to take decisive steps to improve alignment with EU CFSP, including EU restrictive measures, and avoid actions that go against its stated objective to join the EU.

Türkiye remains a key partner for the European Union in essential areas of joint interest, such as migration, counterterrorism, economy, trade, energy, food security and transport. High-level dialogues and intensified engagement in these areas continued. Türkiye has facilitated dialogue between Russia and Ukraine and played a key role in the agreement on the export of grains, although it has also decided to increase trade and financial relations with Russia.

Next steps

It is now for the Council to consider today’s recommendations of the Commission and take decisions on the steps ahead.

16/10/2022
PRESS RELEASE : Seanadóir Niall Ó Donnghaile commends ‘valuable dialogue’ with unionist community at Seanad hearing [October 2022]

The press release issued by Sinn Fein on 14 October 2022.

Sinn Féin’s leader in the Seanad, Seanadóir Niall Ó Donnghaile, has commended participants at today’s Seanad Public Consultation Committee on the Constitutional Future of the Island of Ireland session for their respectful and diverse discussions.

The committee heard from members of the unionist community and those who do not identify as either unionist or nationalist in the north, about their views on the future of Ireland.

Speaking today, Seanadóir Ó Donnghaile said:

“Today’s Seanad hearing was a very useful opportunity to hear a range of diverse views on the future of this island. I want to thank all those who took the time to join the discussion and share their views.

“It is clear that there is appetite for respectful and inclusive dialogue on this issue, including among the unionist community, non-nationalists and those who identify as ‘other’. As someone who advocates for Irish Unity, I welcome the opportunity to engage with and hear from these perspectives.

“Today we heard a range of views which all shared one thing in common- a desire to ensure that everyone on this island can thrive and reach their full potential in a fair and just society.

“This was another highly valuable session of the Committee which demonstrates the strength of the Seanad’s processes in facilitating these talks. Today’s discussions should be built on in the time ahead and I look forward to these respectful conversations continuing.”

16/10/2022
Peter Lilley – 2022 Speech on the Growth Plan (Baron Lilley)

The speech made by Peter Lilley, Baron Lilley, in the House of Lords on 10 October 2022.

My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Durham; I will take his biblical injunctions to heart. I hope that he will take to heart my observation that there is no free market economist who believes in anything called “trickle-down economics”; that is a fantasy of his imagination.

My noble friend Lord Lamont reminded me that I should perhaps begin with a declaration of interest: as a former Treasury Minister I am a registered bean counter and member of the Treasury orthodoxy, which may be why I voted for Rishi Sunak in the leadership election. However, I passionately want the Prime Minister and Chancellor to succeed, not just because I believe in their central objective; I also wanted Tony Blair and Gordon Brown to succeed, because I want our country to succeed. I am therefore rather upset by the relish that some have shown for the brief adverse market reaction to the Budget. After all, it was brief, which suggests that it was as much about misunderstanding as about the substance. Sterling is back to the level against the euro that it was before the announcement. The dollar has been equally strong against both the pound and the euro—and many other currencies—which has nothing to do with the Budget statement.

Surely we can all agree that the Government’s priority is right. Growth is crucial. Growth, not redistribution, is the only sustainable way to increase living standards and finance improved services. If I may, I will use my four minutes to make a few reflections based on the experience of the 1980s.

First, the impact of the deregulatory measures that we introduced then was in fact greater than we anticipated. Britain moved from being the slowest-growing major economy in Europe to the fastest. But this improvement was slower in emerging than we hoped, and reflected the cumulative effect of a whole range of often small changes. It is therefore very unlikely that the benefits of changes that this Government rightly propose will be felt before the next election. But that is no reason for giving up. The electorate is collectively far more intelligent than many cynics assume. They re-elected the Thatcher Government twice before much of the benefits of their reforms had materialised, because they gave the Government credit for tackling what were manifestly important issues.

Secondly, in the 1980s we tackled many, although not all, of the big regulatory problems, such as scrapping exchange controls, ending the vestiges of a prices and incomes policy which gave the Government control of every single price, wage and dividend in the country, and privatising large swathes of nationalised industries. But that does not mean there is nothing left to do. We could not then tackle the issues covered by the EU’s laws and regulations. Now, thanks to Brexit, we can, so this Government are right to turn their attention to these.

Thirdly, one area we did not tackle, which was at least partly within the scope of domestic law, was planning. There, in my experience, speeding up decision-making, so you know whether you can or cannot do something, is as important as liberalising it, and may be less contentious.

Fourthly, we tend to forget one significant feature that the UK had in the 1980s, which was the development of North Sea oil, which simultaneously strengthened the balance of payments and generated huge tax revenues. The Government are absolutely right to license more North Sea acreage, but the only energy sources which can come on stream speedily are onshore gas and onshore wind. We must face up to the anti-growth coalition, which agitated against shale gas with arguments which, frankly, make anti-vaxxers look positively scientific. More than a million wells have been fracked in the United States without a single building falling down as a result of the micro-seismic events which follow, and without anyone being poisoned by contaminated aquifers, and gas produced domestically emits far less CO2 than importing LNG. If anyone needs to apologise for our present shortage of secure, affordable energy, it is those who objected to nuclear because it would not come on stream until 2021, to quote Nick Clegg, and who supported frankly scaremongering arguments to stop us exploiting such shale reserves as we have.

16/10/2022
Paul Butler – 2022 Speech on the Growth Plan (Lord Bishop of Durham)

The speech made by Paul Butler, the Lord Bishop of Durham, in the House of Lords on 10 October 2022.

My Lords, I congratulate my friend of more than 40 years, the right reverend Prelate the Bishop of Birmingham, on his valedictory speech. I thank him for his contributions to this House, particularly as our convenor, and pray God’s blessing for his future endeavours. I also congratulate the noble Baroness, Lady Gohir, on her excellent maiden speech.

In Luke, chapter 16, Jesus tells of a rich man who

“lived in luxury every day”,

while a beggar named Lazarus lay longing to eat what fell from his table. Sat at the rich man’s gate, Lazarus was in plain sight, yet he was invisible to the rich man—a man blind to suffering and the needs of Lazarus.

The Trussell Trust has revealed devastating statistics regarding those in poverty. In recent months, its food banks have provided 50% more parcels. Of those on universal credit, 2 million have skipped meals to meet other essential costs. These statistics continue to rise; poverty is in plain sight. Yet a policy of trickle-down economics renders those in poverty invisible. Like Lazarus waiting to eat what fell from the rich man’s table, this policy does not address urgent needs. These people cannot wait for the benefits of this economic policy to trickle down; this is especially the case for children and young people. We all get only one childhood, which shapes the rest of our lives. Children do not have time to wait for the “pie” to grow; they need meaningful investment now. God does not “trickle down” his love for us; he pours it out extravagantly. Jesus’s priority was to lift up the poor, not wait for some small advance to trickle down.

I agree, therefore, that the rule book needs rewriting to recognise in plain sight the value of parents giving their full time to raise children and to honour carers for selfless service to the disabled and elderly—an economics that says the well-being of people and of creation matter most. It is urgent that economic policy prioritises the poor and vulnerable. Growth certainly matters, but growth must have the most vulnerable in sight. It must not be a growth of greed but of supply, sufficiency and contentment. Social security should be increased in line with inflation. A failure to do so will have devastating consequences for families across the UK—families already struggling due to policies such as the two-child limit and the benefit cap. In the north-east, two in five children live below the poverty line, making the gap between the north-east and the UK average child poverty rate greater than ever. The Government’s lack of commitment to increasing social security will further plunge children into poverty, while making levelling up an increasingly distant fantasy. What does this say about the value that this country places on caring for children?

I acknowledge the reversal of the 45p tax cut, but for those on the lowest incomes it is, frankly, irrelevant. As Jesus proclaimed:

“You cannot serve both God and money.”

We must ask ourselves who we serve when developing economic policy. Is it for the benefit of a select few, or is it those who are poor and most vulnerable, those whom God expects us to protect and care for first and foremost?

16/10/2022
Kwasi Kwarteng – 2010 Maiden Speech in the House of Commons

The maiden speech made by Kwasi Kwarteng, the Conservative MP for Spelthorne, on 8 June 2010.

It is a great honour to be called to deliver my maiden speech. First of all, I want to give a hearty thanks to David Wilshire who, amidst difficulties and press distortions, managed to keep up his work as a fine constituency MP. Very often, people would open the door to me and say, “Ah, so you’re the new David Wilshire,” and I would reply, “Well, sort of, but I want to continue his traditions of service and commitment to the constituency.”

People always ask me, “Where is Spelthorne?” A friend of mine said he did not realise it was a constituency; instead he thought someone called David Spelthorne was the MP for Wilshire. It is, however, a well-known constituency, and Spelthorne is a very old name, too. It comes from an old English word of which we have a remnant in the word “spelling”. It means speaking, and the “thorne” part of the word “Spelthorne’” referred to a thorn tree on Ashford common where people used to gather and speak. That is where the name comes from, and it also appears in the Domesday Book as the southern hundred of the old county of Middlesex.

Middlesex had a long and illustrious history, which my predecessor was very keen to stress-much to the annoyance of my Surrey colleagues. Middlesex did have an existence, however, and it had a reputation in this House, because in the old days it had proper elections. Charles James Fox was elected, and thousands of people were involved, whereas in nearby rotten boroughs there might be only half a dozen people. Famously, John Wilkes was elected in Middlesex, and was a distinguished Member of this House. He was described as the “ugliest man in England” but, like many politicians, he was not afraid of boasting and celebrating his own talents and he said that he had such charm that he could “talk away his face” in “half an hour”. Hon. Members can imagine my surprise at the fact that we were given only seven minutes to speak in the House today.

In the limited time available to me, I wish to make some points about the subject of today’s debate. Spelthorne is a seat in the south-east that relies almost exclusively on infrastructure and economic expansion, and in that context self-starting business men are very important. A gentleman from Shepperton, in my constituency, who has been in the breakage business for 30 years said to me, “Kwasi, it is very difficult. I am getting strangled by red tape and bureaucracy.” A Government quango, whose name I shall not mention, had been bombarding him with forms that he had to fill in, so he had been spending all his time filling in forms and none of his time attending to the business. My thought was that it was precisely those small business people who will drive us out of recession and into recovery.

I have to say-even though this is a maiden speech, I will be controversial-that to hear Labour Members in many of these debates is to be in never-never land; they have not once accepted any blame for what happened and they seem to think that we can just sail on as before. In many of their eloquent speeches it appears that they have forgotten that wealth creation is the most important element in getting us out of this recession. I heard the right hon. Member for Oldham West and Royton (Mr Meacher), who I believe has been in the House for 40 years, say that he was going to tax those in The Sunday Times rich list. Of course, one of the results of their being rich is that they can leave the country in about half an hour, so if he were to go down that route, a lot of them would leave and he would not bring in any more money to the Exchequer.

One of the right hon. Gentleman’s remarks reminded me of the story of the man who, when leaving a gentlemen’s club-it might have been the Carlton Club-in 1970 gave the footman sixpence. The footman looked at him and said, “That is only sixpence”, to which he replied, “Ah, it is sixpence to you, but it is a pound to me.” That was because income tax was at 95 or 97%. We cannot go down the road that the right hon. Gentleman suggests, and the Conservatives have stressed again and again that the only way to get out of this difficulty is to try to let business grow.

I was surprised to hear the hon. Member for Edinburgh South (Ian Murray) refer to the Scottish enlightenment. He will recall that one of its most prominent figures was Adam Smith, rather than the previous Prime Minister, who did not take an enlightened Scottish approach. Adam Smith made it very clear in “The Wealth of Nations”, a book that many hon. Members will know, how societies grow rich and how they can become very poor. I am sorry to say that the past 13 years have been an exercise that Adam Smith and the university of Edinburgh would probably have awarded a flat D grade for performance-perhaps he would have awarded a B grade for effort, who knows?

I am pleased at this juncture to refer to the compelling speech made by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), in which she mentioned George Stephenson. There was some controversy as to whether he came from Newcastle upon Tyne Central or from Chesterfield, but I shall not comment on that as that is a matter for Labour Members. What she did say was that he made a fortune through industry, enterprise and innovation, and those are exactly the kind of things that this coalition Government will look to promote in the months and years ahead.

To sum up, I should say that the truest words said in this debate were uttered by someone making a maiden speech, my hon. Friend the Member for Loughborough (Nicky Morgan), who said that the private sector is the “backbone of our economy”. In my few weeks in the House, I have not heard any truer words uttered in it. That is something that we have to be absolutely focused on, in terms of getting out of the recession. I hate to say this, but I find it staggering that Labour Members have not had the good grace to come to the House to apologise and to show some recognition of the very real problems that we face and the solutions that we need to get out of this situation. I thank the House for giving me such a good and warm reception to my maiden speech.

15/10/2022
Seema Malhotra – 2022 Speech on Economic Crime and Corporate Transparency Bill

The speech made by Seema Malhotra, the Labour MP for Feltham and Heston, in the House of Commons on 13 October 2022.

It is indeed a pleasure to speak on Second Reading of this important Bill. But before I begin my remarks, let me just mention that, in the Public Gallery today, there are two young dancers from Ukraine, Yeva and Zakhar, who, yesterday, came second in the International Ballroom Dancing Championships. I am sure that we all want to pass on our congratulations to them.

I welcome the Minister to his new role. I very much look forward to working with him in the same spirit as I did with his predecessors. Today, he will have heard Members across the House express their concerns about the time that it has taken to introduce this legislation. Urgency is required not just to bring forward a Bill, but to bring forward the Bill that we need to close the gap between what we are doing now and what needs to happen to tackle the scale of economic crime that exists.

As we heard today, action on economic crime was first promised in 2016 and then again in 2018 and 2019. Even in March, the Government blocked Labour’s amendments, which would have introduced reforms to Companies House and left Russian oligarchs with nowhere to hide. It matters that we have had these delays, because, in six years, we have seen a significant increase in economic crime, much of which could have been prevented had the Government acted earlier.

I thank all the Members who have contributed today from all parts of the House, many of whom have been ahead of the Government in calling for action. I also thank the Minister and his team for our meeting earlier this week. It is also good to have heard about the work going on with the devolved Administrations, because we do indeed need to hear voices from across the nations.

Let me pay tribute to some of the contributions that we have heard today. The right hon. Member for East Hampshire (Damian Hinds) made the important connection between fraud and cyber-crime. He also mentioned the local nature of crime and its links with economic crime nationally. This is not just a debate about a grand scale matter. There is a very deep connection with the lives that we lead in our everyday economies. There is also a need for global action, and it is up to the UK to take the opportunity to lead that action.

The hon. Member for Glasgow Central (Alison Thewliss), with whom it is always an honour to debate from the Front Bench, made some very powerful comments including around false registration, the methods of verification and the need for resources. I commend her work on tackling the issue of Scottish limited partnerships. I also commend the hon. Member for Cheadle (Mary Robinson) on her work on the APPG for whistleblowing; I hope that as we go through Committee we will see more action taken in this Bill to tackle the challenges faced by whistleblowers, who do us a service.

My right hon. Friend the Member for Barking (Dame Margaret Hodge) spoke eloquently, as always, but what stood out for me was her articulation of the scale of the challenge and the fact that there is still just not enough determination or ambition. She was absolutely right to say that warm words need to give way to action—I will come back to some of her other comments.

I will also come back to the speech by the hon. Member for Thirsk and Malton (Kevin Hollinrake), but his comments about legislation with implementation stuck with me. He is right, because we cannot afford to sit on our laurels after passing this Bill, saying we are proud of it, if it does not achieve the change that is necessary and vital. I will also come back to his campaigning on the failure to prevent; his arguments have been heard across the House.

My right hon. Friend the Member for Walsall South (Valerie Vaz) articulated the problem of homes being used fraudulently for the registration of companies when people are not living there, and the lack of redress—an issue also raised by other hon. Members across the House. I want to highlight what that means for the vulnerability of elderly people: we know they are more likely to be victims of scams, but the ability to identify them, often on the electoral register, as people who might be living alone is another source of vulnerability for them and may lead to their being targeted and becoming victims of economic crime.

The hon. Member for Weston-super-Mare (John Penrose), who I also come across in many debates on this and other related topics, is right that the Bill was due, and past due—I think those were his words. I am sure that we will come back in Committee to the arguments he has made about the urgency of proper beneficial ownership transparency and many other points he has raised. I look forward to working with him on those matters.

The hon. Member for Oxford West and Abingdon (Layla Moran), who is not in her place, was right to say that we should get this done in economic crime Bill 2, because we do not want to be back for economic crime Bill 3. This is our chance. She made the point that it is worth taking a little longer to get this Bill through both Houses of Parliament to make sure that it is fit for purpose, and I support that.

My hon. Friend the Member for Hammersmith (Andy Slaughter), speaking from his own deep experience on issues of policing and enforcement, made the point extremely well about the need to ensure that we have the resources, motivation and morale for both policing and enforcement. We cannot have a revolving door. We must have the resources within our public sector to tackle these issues effectively. The hon. Members for Glenrothes (Peter Grant) and for Rutherglen and Hamilton West (Margaret Ferrier) and my hon. Friend the Member for Stretford and Urmston (Kate Green) also made similar and very effective comments in the debate.

I would like to give one final set of thanks, because it is right to pay particular tribute to my right hon. Friend the Member for Barking and the hon. Member for Thirsk and Malton for their leadership in the work of the APPGs on anti-corruption and responsible tax and on fair business banking. Their work serves this House and our nation extremely well on these difficult and complex issues.

I also recognise and thank for their steadfast advocacy the civil society groups that work tirelessly for action on economic crime, including Transparency International, Spotlight on Corruption, the Royal United Services Institute, Open Ownership and the Fair Tax Foundation. That is not an exhaustive list, and many others are worthy of our thanks for bringing insight and clarity to a complex area, which demands that we act in the interests of our national and international security and prosperity.

This Bill is an historic opportunity to put a stop to the UK’s shameful role as a hub of illicit finance and a facilitator of economic crime. This debate is testament to the support of the House for the Government’s going further in tackling money laundering and the illicit use of cryptocurrencies to enable crime.

I am sure the Minister has heard the arguments put forward today, and the motivations for doing so are so clear. Dirty money is a national security threat. It is the lifeblood of corruption, crime and war. Organised crime gangs profiteer from drug smuggling, people trafficking, arms dealing, fraud and environmental destruction. Parliament’s Intelligence and Security Committee has criticised Russian influence in the UK and frankly, as long as Putin and his friends have a safe haven in London, we do a disservice to the brave people of Ukraine, who are fighting with their lives to defend their country and our shared values of democracy and freedom.

Dirty money also causes massive financial damage. In 2020, the National Crime Agency found that money laundering causes at least £100 billion of economic damage to the UK. We have heard other estimates today. Spotlight on Corruption estimates that fraud, now the most commonly experienced crime in the UK, costs us £190 billion annually, hitting businesses and tax receipts and damaging public services. As my right hon. Friend the Member for Barking said, we will never secure sustained growth on the back of dirty money. Every one of us is a victim of economic crime.

Dirty money is damaging the UK’s reputation. The prevalence of economic crime jeopardises our status as a business destination of choice. The United States has designated us as “high risk” for money laundering, alongside Cyprus. That is embarrassing, frankly. Britain must not lose its status as a trusted jurisdiction. The warning signs are there and we need to act urgently.

Finally, dirty money undermines the rule of law and democratic institutions. It corrupts political and legal systems. Oligarchs are clogging up Britain’s already overburdened legal system with vexatious lawsuits to muzzle legitimate critics and whistleblowers. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) made that point extremely well. Democracy, free speech and the rule of law are under threat.

We welcome the Bill. Our argument is not about what is in it, but what is not in it. There are aspects of the Bill that we will want to strengthen and to work with the Government on doing so. Let me lay out some of the areas on which we want to see further action, some of which have also been touched on today. Money launderers use complex financial structures such as shell companies and offshore tax havens to provide the secrecy that allows them to move, hide and spend their money. We must lift the cloak of anonymity that protects criminals and the corrupt.

We are pleased that the Bill begins to tackle the abuse of limited partnerships, including Scottish limited partnerships, by strengthening transparency requirements and enabling them to be deregistered. New research by Transparency International has revealed that more than one in ten limited liability partnerships ever incorporated—over 21,000—have characteristics identical to those used in serious financial crimes, such as bribery, embezzlement of public funds and sanctions evasion. We will review the detail of changes in Committee. Given the mass use of LLPs and other UK legal structures in large-scale money laundering, those networks are ideal platforms for a variety of clients looking to move dirty money.

On Companies House, the Bill is a huge step forward in improving the integrity of our register. That is important as we move from Companies House being a register to being more of a regulator. For far too long, fraudsters have obscured their identities behind shell companies, relying on a lack of verification of the information they submit. It is right that the Bill will make failure to comply with new ID regulations a criminal offence. The identity verification introduced by the Bill can finally begin to close that door, but it needs to be strong and we need further details about how the new powers will be used to close down those fraudulent companies already registered with Companies House.

Experts such as Graham Barrow suggest that there have been a huge number of bogus incorporations over the past decade alone, which will take significant effort and time to retrospectively verify. The Government have yet to clarify the period in which registered companies will be required to meet their new commitments, which, similarly to the Economic Crime (Transparency and Enforcement) Act 2022, will create a window in which those who have engaged in fraudulent activities can dissolve their entities or transfer interests. We do not want to see that happen. Has the Minister considered whether such verification should also be required to strike off and dissolve a company? That would help to prevent entities from dissolving and restructuring to avoid scrutiny under the new regime.

I urge the Minister to consider a mechanism by which parties affected by fraudulent entries—we have heard examples today—can apply to Companies House to have an entity or director struck off. They should not have to wait for Companies House to use its querying power, given the time that it takes. Public accountability is vital, so what plans does the Minister have for reports to Parliament on Companies House activity, which will bring public confidence?

Trust and company service providers are defined as being “of the highest risk” for money laundering by the National Crime Agency. A recent Treasury review found that HMRC, which is responsible for supervising TCSPs, continues to suffer from

“a lack of appropriate AML policies, control and procedures”.

The AML supervisory regime, including of TCSPs, is under review, but the further consultation promised by the Treasury in June is yet to be published. Until this broken supervision is fixed, how can we rely on such third-party agents to effectively act as the gatekeepers of our financial system? Under the Bill as introduced, they can be authorised to carry out ID verification as an alternative to Companies House. Crooks and kleptocrats already rely on these enabling professionals to build and maintain whole systems of shell companies. New measures in the Bill requiring third-party agents who form companies on behalf of someone else to register with Companies House and be registered in the UK with an anti-money laundering supervisor are long overdue. However, unscrupulous TCSPs will simply add ID verification and, potentially, falsification to their menu of law-busting schemes. That must not become a loophole in the legislation.

Could the Minister outline how the legislation will have sufficient teeth to prevent rogue actors from setting up shell companies for money laundering? The detail of verification checks is yet to be defined, but as drafted, third-party agents will simply be able to state that they have verified information on behalf of clients. Will the registrar have sufficient powers to review the documentation of “know your customer” checks if there are concerns?

There are concerns from stakeholders, such as Transparency International, that the Bill does not commit to verifying shareholder data, which could reduce the level of trust in the accuracy of that data. Concerns have also been raised about information sharing. While the measures in the Bill are a step forward, information-sharing measures appear to be reactive, rather than to proactively spot problem areas. This is a complex issue, and I am sure that there will be detailed discussion of it in Committee.

Extending current asset recovery provisions into the realm of cryptoassets is a welcome step forward, with cryptoassets increasingly used to launder the profits of crime and to support terrorism. On seizing and recovering cryptoassets, we will want to work with the Government to ensure that powers in the Bill extend to introducing sanctions on crypto-marketplaces that enable criminal activity. However, we are concerned, as the UK Anti-Corruption Coalition is, that to be effective, any new provisions regarding crypto money laundering and asset seizure need to be executed by a fully trained workforce. What is the Government’s economic crime people and skills strategy, and how is it changing in the light of the new threats we face?

Finally, I want to come back to a point raised by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) and others. We very much believe that there is a missed opportunity in this Bill, which is extending corporate criminal liability for economic crimes. The powers that exist under the Bribery Act 2010 and in relation to tax evasion could and should be extended to other economic crimes. The Secretary of State for Wales said this week that he considers a new failure to prevent offence for fraud “likely”. The Home Secretary said that the Government are looking at this, so why do they not just get on with it, and bring forward proposals or work with us on amendments to the legislation? I certainly believe, on the basis of the debate today, that there is support for such a move across the House, and we will continue to push for it.

There is much to welcome in this Bill, with long overdue powers for Companies House and law enforcement agencies, but those powers will make a real difference only if the Government provide the resources to use them—legislation with implementation, as the hon. Member for Thirsk and Malton said. We know that the Government committed £63 million in the 2021 spending review to Companies House, which was allocated for the transformation effort that, rightly, must take place. That is £63 million as against the billions that I have described economic crime as costing the UK each year.

The Government have included a new power to set Companies House incorporation fees. We know that the £12 cost of registration is the sixth lowest in the world, so what are the plans to resource those efforts? Does the Minister plan to increase the costs of incorporation to help pay for the effective operation of the new regime as part of the sustainable resourcing model, or to seek an increase in the economic crime levy, and what is the alternative? It would be helpful to understand that as the Bill goes on its passage through the House.

With the Bill’s complexity, it would not be possible to touch on all the issues involved, but I am grateful to have had the opportunity to wind up for the Opposition. We have the power in this country to lead change, and for the sake of our citizens, our children and the international community we must do so now.

15/10/2022
Margaret Ferrier – 2022 Speech on Economic Crime and Corporate Transparency Bill

The speech made by Margaret Ferrier, the Independent MP for Rutherglen and Hamilton West, in the House of Commons on 13 October 2022.

I shall be brief. I welcome the Minister to his place and I welcome the Bill. I am glad to see Ministers deliver on the commitment to use the building blocks laid by fast-tracked legislation earlier this year. While the war in Ukraine continues, we have to utilise what we can to hit the Russian state where it hurts financially.

Although Russian aggression may have been the catalyst for economic crime prevention measures, the benefits of a better-regulated system are far more wide-reaching. According to the Cabinet Office, fraud accounts for 40% of all crime committed in the UK. Tackling that is crucial, and a monumental task. However, as we have heard, the legislation is not the powerhouse it needs to be. There are some very big limitations and gaps to be plugged. For the Bill to be effective there cannot be any gaps or loopholes. We must close them before the Bill finishes its passage, and get it right the first time.

I have concern about the resourcing and funding that will be available to public bodies such as Companies House to undertake their new responsibilities. The Government have been clear that they are keen to cut back departmental spending and reduce civil service numbers. How do those priorities align with pouring what will be very necessary resource into the organisations responsible for operationalising the Bill’s measures?

Companies House will have to make a significant pivot to its new regulatory role, and that will require investment if it is to be effective in the long term. Some of the funding could, and should, be raised through increasing the registration costs for new companies. The Government have taken the power to do so through secondary legislation but have not yet committed to using that power. As we have heard, increases would not need to be astronomically high: industry has suggested an increase from £12 to £50 and the Treasury Committee has suggested £100. Those costs would still mean that the UK is one of the cheapest places in the world to set up a company.

What steps will the Government take to ensure the registrar’s proactive querying power is effective in targeting a significant number of the companies that have submitted fraudulent information to the register? Are Ministers also looking at further reform to the strike-off process? That will inevitably require further resourcing but is a crucial gap in the Bill that needs some more attention. If companies continue to be struck from the register automatically, there are no checks to assess whether any fraud has occurred. That means that the directors of automatically struck-off companies can go on to commit further frauds—indeed, many do just that. Will the Minister commit to putting such companies through an insolvency process to ensure that returns to creditors can be made?

The Bill will deliver significant changes for limited partnerships, which are at high risk of being “shell companies” that are used for fraudulent activity and crime. In its current form, the Bill does not adequately prevent limited partnerships, limited liability partnerships or Scottish limited partnerships from having corporate partners and members in secretive offshore jurisdictions. While such companies are controlled by offshore entities, we will continue to struggle to identify their real owners and verify that the information held by Companies House is accurate. Because limited partnerships operate differently and do not require directors, they could allow sanctioned individuals to continue to launder money through the UK. The Government must introduce measures to tackle that issue.

The last issue I wish to look at is communication and information sharing. I will give Ministers some leniency here—it is not easy to create an effective information-sharing gateway while protecting sensitive data—but information sharing will be key to the success of a new regime.

Regulated sector entities should be able to share information more easily—the new measures will be used reactively and miss the potential for proactivity in spotting fraudulent activity earlier. Regulated organisations need more clarity about the intent of the legislation and how it can be operationalised to its fullest potential.

The finance sector, for example, sees benefits in sharing information between firms on the same basis that they currently share information with the National Crime Agency. Although the legislative framework may exist for that, civil liability is a very real risk, particularly where firms are dealing with sophisticated, experienced and monied criminal individuals. We have already seen the risks of aggressive litigation in this area through the legal challenges mounted against the National Crime Agency when pursuing unexplained wealth orders.

I hope that Ministers will be looking closely at where the gaps are here. This is a piece of legislation that must be done right and must be watertight if it is to be effective. Rather than bringing forward multiple Bills over the next few years as issues are identified and further gaps need filling, I hope the Government will use the Bill as a legislative vehicle to reform the system and prevent these instances of money laundering and economic crime as soon as possible.

15/10/2022
Kate Green – 2022 Speech on Economic Crime and Corporate Transparency Bill

The speech made by Kate Green, the Labour MP for Stretford and Urmston, in the House of Commons on 13 October 2022.

It is a pleasure to speak in this debate, which has faced in two extreme directions at once. On the one hand, Members have rightly talked about the potential of the Bill to address issues of serious organised crime and national security. On the other hand, we have heard again and again of constituents’ experiences of crimes that are low level in the scheme of things but are significant abuses, frauds and criminal behaviour, facilitated by the weakness of our company law. Like others, I will concentrate on provisions in part 1 of the Bill, and my interest stems from experience in my constituency of conduct by unscrupulous directors and owners who misuse registration and dissolution processes to avoid their obligations to their creditors and others.

I am pleased that the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Dean Russell), has sat through the debate, and I am grateful to his colleague Lord Callanan and his officials for meeting me earlier this year to discuss my concerns. However, as we have heard repeatedly this afternoon, the Bill, while welcome as far as it goes, is a disappointment in terms of its reach and effect. Unless Companies House actually enforces the law and has the resources to do so, the Bill will simply fail to deter directors determined on misconduct from fraudulent and wrongful behaviour.

I turn first to provisions in relation to verification of identity and people with significant control. Clause 76 gives the registrar power to reject documents for inconsistencies, and clause 80 gives her the power to request additional information if inconsistencies are identified. As the Bill progresses, I hope we will get more clarity from Ministers on how inconsistencies in PSC statements will be identified by the registrar and how decisions will be taken regarding criminal proceedings. What processes will be followed? What information will be considered by the registrar? What resources will be available to enable her to carry out her task?

By way of exemplifying my concerns, of a group of eight companies controlled by Mr Jason Alexander and operating in my constituency, only two appear to comply with PSC registration requirements. BEIS and Companies House have been aware of this situation since at least 2019, yet he continues to operate the companies with impunity. How can the new provisions in the Bill have credibility when there has been such a history of lax enforcement?

A particular issue arises where companies are owned and controlled via a network of trusts, for which there is of course no public register, and these trusts are used to obscure the identity of the true owners. In a letter to me in May, Lord Callanan told me that if a trust has any ownership or control over a company, the company must “consider” whether that trust would have met any of the control conditions if it were an individual. He confirmed that if it does meet such conditions, the trustees of the trust may be persons with significant control. A request for companies merely to “consider” the position does not seem to be a very stringent requirement, and the Bill does nothing to prevent shares from being held in trusts in order to obscure ownership and control.

I hope there will be an opportunity in Committee to ensure that the registrar follows up on non-registrable relevant legal entities and to require that those who control trusts are identified. In addition, I cannot see how the Bill will stop phoenixing. Again, I hope there will be opportunities in Committee to consider how the Bill can be strengthened to make it easier for the victims of phoenixing to seek redress.

I turn now to the strike-off, dissolution and restoration of companies. The Government are well aware of concerns about compulsory strike-off. In their response to their consultation in 2018, they stated that

“where a company is insolvent, dissolution should not be used as an alternative to insolvency proceedings.”

But compulsory strike-off continues to be used in that manner; 94% of strike-offs are due to a failure to file required information, and R3, the insolvency practitioners’ group, says that it is that estimated 50% of those companies are insolvent. The compulsory strike-off process, in which the registrar contacts a company and if she hears nothing, can strike it off, suits directors who can use the simple device of ignoring the registrar’s requests in order to take advantage of compulsory strike-off to avoid their obligations to creditors and others, and to avoid late-filing penalties—this is income forgone to the taxpayer. Even so, the process of strike-off is dilatory. Aura Business Centres Limited, another of Mr Alexander’s companies, was finally dissolved by compulsory strike-off early this year, having never once filed accounts in the five-plus years since it was incorporated, and despite Companies House and the Insolvency Service being alerted to this in August 2019.

All that stands in stark contrast to the more onerous expectations placed on those who wish to object to strike-off. When a constituent of mine sought to object to compulsory strike-off in a recent case, she was told:

“We are unable to register your objection without documentary evidence to support your complaint.

Please provide evidence such as invoices, court documents, general correspondence or emails between you and the company, to show that you are actively pursuing them for an outstanding debt.

All evidence should be recent and dated within the last 6 months and must show the full company name, including the word ‘Limited’, or equivalent.”

So a much more demanding burden is placed on an individual who has suffered wrong and seeks redress than the do-nothing approach that can be taken by a company that wishes to use strike-off as a means to avoid its obligations.

R3 has suggested tightening up the compulsory strike-off process by automatically placing a company that fails to comply with its obligations into liquidation, with the process overseen by the Government’s official receiver. That would allow for earlier investigation into the conduct of directors and for the earlier recovery of misappropriated company assets for the benefit of all the company’s creditors. Directors could be made liable for the costs of liquidation, which would be an additional deterrent to misconduct.

Finally, concerns also exist about the process of restoring companies to the register. Currently, that can require a costly court order, creating a clear asymmetry between those who wish to avoid their obligations and those such as creditors, or insolvency practitioners, who need to put things right. R3 has proposed a system of administrative restoration in all cases, which could be triggered by a company director or a creditor once suitable requirements have been met, such as producing evidence of an unpaid debt or a commitment to petition for the winding-up of the restored company.

The fee for doing so could be similar to the cost of dissolving a company. I really hope that the Minister will now carefully consider the provisions on compulsory strike-off and administrative restoration that are missing from the Bill.

I conclude where I began. The Bill is fine as far as it goes, but its modest provisions will not act as a deterrent to misconduct if the registrar lacks the will, powers and resources to enforce them. I welcome the intentions behind the Bill but hope that, as it continues its parliamentary passage, we will be able to make improvements to it to give them full effect.

15/10/2022