My Lords, it is a pleasure to follow the noble Lord, Lord Macdonald. I think it is the first time I have ever had to do so; it is quite a daunting prospect having heard such an important speech. We on these Benches welcome the belated realisation by this Government that the City of London and other parts of the economy in this country need to be cleaned up. Just as the noble Baroness, Lady Williams, asked, we certainly aim to support this Bill practically.
This has been a strong debate. Some of your Lordships—the noble Lords, Lord Faulks and Lord Rooker, and the noble Viscount, Lord Waverley, to name but three—have, with justification, been able to say that this issue has been on their agendas for some time. Others, such as the right reverend Prelate the
Bishop of Leeds, have highlighted the purpose of and focus on ethics that we should also dwell on. There was a sense of frustration in all the speeches that it has taken the terrible events in Ukraine—the onslaught on civilians—to cause this Government finally to act. They are acting, and we should take advantage of that, but it is awful that it has taken that to get to this point.
In welcoming this Bill, we are not blind to its shortcomings. Your Lordships have been wise to set out whole areas of action that need to be resolved before we can start the process of cleaning out the dirty money in the United Kingdom’s economy. I will not seek to paraphrase everything that was said but we heard about SLAPPs and the use of lawfare from the noble Lords, Lord Thomas and Lord Cromwell, and the noble Viscount, Lord Colville. We heard about company shells from the noble and learned Lord, Lord Garnier, and about trusts, freeports and whistleblowers from my noble friend Lady Kramer. The need to be more deeply retrospective was introduced by the noble Viscount, Lord Waverley, and the noble Baroness, Lady Bennett, as well as the issue of speeding up disclosure from Crown dependencies and overseas territories. Those are just some of the issues put by your Lordships before this House.
Virtually none of those substantive issues appear in Part 1 of this Bill. It seems that most of them might turn up in Part 2 but we heard the curriculum that the noble Baroness, Lady Williams, is putting forward for that part: limited partnerships, crypto assets, money laundering and Companies House. To digress on Companies House, the noble Lord, Lord Eatwell, very much paraphrased the issue: this is not just about resources. The cultural change required to make that organisation in any sense capable of doing any of the things that this legislation asks of it is huge. By the way, it is not just Russians; if Companies House had been doing what it should have, literally billions of pounds would not have been defrauded from taxpayers during the Covid crisis. A small fraction of that money could have been used as seed to produce a Companies House that is fit for purpose. Now we have lost that money but we still need to do the job.
Coming back to the Bill, all the issues that have been set out need to be tackled in its second part. I am looking for the Minister to acknowledge that, although the four issues set out by his colleague, the noble Baroness, Lady Williams, are important, a number of really important issues need to be added to that list. If it becomes an even bigger and more complicated Bill, I guarantee that those on these Benches will work hard to make sure that we can get that legislation through as quickly as possible. As the noble Lord, Lord Vaux, and the noble and learned Lord, Lord Garnier, said, we also need a process that reviews how Part 1 is getting along because it is clear that the speed with which this legislation is being implemented—and, indeed, the fact that it was written for one purpose and is being delivered for another—will inevitably mean that there are things not right with it.
We will work to help ensure that when the final Act—this part of the process—emerges, the Government will get the tools they say they need. When they get those tools, there will be no excuses for not following
up on the people we have heard described to your Lordships this afternoon. As we have also heard, to do that will take well-resourced, highly qualified and motivated people to investigate and prosecute. The noble Lords, Lord Macdonald, Lord Carlile and Lord Empey, to name but three, set out the issue here. Unless the agencies tasked with cleaning up the kleptocrats have the resources and the support, the Bill does not amount to a hill of beans.
To date, this is an area the Government have been defunding. For example, the National Crime Agency—the principal body leading this fight, as we have heard—has seen its overall budget fall in real terms. The last inspection by Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services in July 2021 pulled no punches and highlighted how resource limited the NCA is. Further, the inspection also noted the difficulty in recruiting staff for investigating roles. There are remuneration and status issues around why that is not happening. It gets worse: within the NCA, the body specially configured to investigate kleptocrats is the international corruption unit. As we know, the ICU’s role is to investigate money laundering resulting from corruption by high-ranking overseas officials, bribery involving UK-based companies or nationals that has an international element, and cross-border bribery where there is a link to the UK. I am afraid the ICU seems to have fared even worse. Can the Minister confirm that it has had its budget slashed by 13.5% this year?
Meanwhile, over the past couple of weeks the Government have said they will set up a new kleptocracy cell within the NCA to target sanctions evasion and corrupt Russian assets hidden in the UK. The press release said that oligarchs in London will have “nowhere to hide”—there is a joke in there, but I decided not to use it. How exactly will the new NCA kleptocracy unit mesh with the existing ICU? For that matter, how will the kleptocracy unit relate to the complex web of underfunded joint committees and task forces that litter this area of investigation? The agencies we have are underfunded and there is a confusing web of different organisations and crossing accountabilities. Together, this adds up to the enforcement agencies being massively outgunned by the oligarchs, as we see and have heard from your Lordships. Is it any wonder that so few unexplained wealth orders have been issued?
The Government do not have to wait for the passage of the Bill. They could say now that they are going to reverse their defunding of the international corruption unit and announce now a funding boost for the NCA. We do not need a new unit or a new invention. We need the organisations that we have to be properly funded, targeted and supported to deliver the outcomes that I think your Lordships all hope for.
Next Monday we will have the opportunity to address the Bill before us in some detail. One thing is clear: the Government should embrace the issue of enablers more firmly. As we have heard, these are the lawyers, estate agents and accountants helping the kleptocrats. This theme, among others, was picked up in the Chatham House paper entitled The UK’s Kleptocracy Problem. It noted:
“Financial and professional services firms have long made the UK a comfortable home for dirty money.”
That is Chatham House, not some campaigning organisation that people might feel free to dismiss.
This Bill needs to explicitly target those professional services that knowingly create the comfort that has been enjoyed by Russian kleptocrats, and indeed by other thieves from around the world. They need to feel the heat. This is an issue that we will come back to on Monday, following up the excellent speech by my noble friend Lord Clement-Jones and the amendment that I know he has tabled.
Then there is the self-created loophole that was referred to by the right reverend Prelate the Bishop of Leeds: Clause 18. This allows all aspects of the register to be ignored if the Secretary of State decides that it is in the interests of national wealth to hide an oligarch’s assets. How big does the factory have to be for the theft to be ignored? How many jobs can a kleptocrat wash their soul with in this country? That is the nature of that clause—it hits right at the heart of what the right reverend Prelate had to say. It is, frankly, a continuation of what happens now; in other words, “The money is all right, so we won’t look at where it has come from.” My noble friend Lady Kramer was very strong on that issue. If we are to allow this line to continue in the Bill, it would essentially mean selling our moral soul in a different way—and it would put it into statute. We will have to address this issue when we get there.
There are issues that, following the debate in the Commons, we are looking forward to seeing how the Government will address. One is whistleblowers and another is freezing assets. We are looking forward to the Minister responding on that today or tabling some amendments before close of play tomorrow so that we can see where the Government are headed.
Finally, I know that the noble Lord, Lord Callanan, is an experienced Minister who knows how to read a room. If he is reading this Room, he knows that six months will not wash with your Lordships; that is very clear from almost every speaker, for lots of practical reasons. Money is already moving; the kleptocrats are cutting and running. To give them another six months’ head start essentially makes most of this pointless. I am sure that noble Lords on the adjacent Bench will be bringing forward an amendment, which we will certainly support when it comes before your Lordships’ House.
As the noble Lord, Lord Carlile, put it, in participating on this Bill in the way that we are—speeding it through Parliament—we are putting a lot of trust in the Government. We hope that trust is justified. We look forward to further constructive discussions on this Bill on Monday.
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