Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Solicitor General (Robert Buckland)
It is a great pleasure to serve under your chairmanship, Mrs Main. I pay warm tribute to the hon. Members for Cardiff Central (Jo Stevens) and for Ogmore (Huw Irranca-Davies) for bringing this important debate to the Chamber and for having not only the courtesy but the sense of co-operation to approach me before it so that I could clearly understand the cases that would be raised. I hope, in the light of that, to offer an appropriate response. My response has to be calibrated bearing in mind the nature of the office I hold and the importance of having an independent prosecutorial service, and I know that Members on both sides of the House understand that.
I also pay tribute to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) and welcome her to her post as shadow Attorney General. I was delighted to hear her remarks. Although no doubt we will disagree about some issues, I am sure we will be able to work constructively together in the finest traditions of the Law Officers and shadow Law Officers, and their unique role within Government.
The issues that have been raised—it is almost axiomatic, but it is important to say it—are important. They are wide-ranging and the presence of the hon. Member for West Bromwich West (Mr Bailey) has been helpful, because, as he reminded us, he was the Chair of the Business, Innovation and Skills Committee that took oral evidence in March. I am grateful to him for coming to the debate. He will appreciate that issues of regulation are for other arms of Government, but one function of debates such as this is for the House to hear the bigger picture, so that all arms of Government are fully aware of Members’ concerns.
The hon. Member for Cardiff Central asked for a general review. As she will know, there have been a number of reports and reviews on specific aspects of this type of alleged misconduct. We heard reference to the Tomlinson report, which, in itself, gave rise to what is termed the skilled persons report under section 166 of the Financial Services and Markets Act 2000. That report is due to be produced at the end of the year. It relates to another bank, but the type of alleged activity is highly germane to the issues that we have been discussing.
I hope that hon. Members will forgive me for confining myself to the debate’s terms of reference. What I aim to do, first, is to offer strong reassurance to hon. Members about the importance with which the SFO regards all allegations and the threshold test that it must apply.
I listened to the shadow Attorney General’s remarks with great interest. I disagree with her about the very nature of what is a demand-led service and the importance of having blockbuster funding to allow for the flexibility that the SFO needs, in terms of hiring or engaging staff, and larger numbers of staff at different times, particularly to deal with finite inquiries. There is also the impracticability of maintaining very large staffing numbers at all times because of the inevitable pressures that will exist upon its budgets, whatever the economic weather. With respect, the point that the hon. Lady was missing was the terms of reference within which the SFO was set up, and it is important to remind the House about those, because they are highly germane to the test that has to be applied to all allegations of fraud.
Those of us with a long memory will remember the Roskill report of 1986. It was groundbreaking because it made important recommendations about the investigation of serious fraud that gave rise to the Criminal Justice Act 1987. The Roskill model, which was the embedding of investigators and prosecutors together in one group, gave rise to the Act and setting up the Serious Fraud Office.
The sort of cases that the SFO deals with are what I, and I think all of us, would regard as the very high-profile, big-risk cases involving huge sums of money, large numbers of victims or new types of fraud, whether the manipulation of LIBOR rates, or allegations involving major companies such as GlaxoSmithKline, Barclays, Tesco and Rolls-Royce. This is a particular type of serious fraud for which the threshold has to be high and, in fact, it is set out in the Act. We therefore have to recognise that, sadly, not all cases of alleged fraud are going to fall to the SFO to investigate. As I said, it can only formally commence investigation if the criteria and circumstances set out in legislation are met.
The police have the primary responsibility for investigating crime here, and Action Fraud has been established as the national reporting centre to which reports of alleged fraud should be referred in the first instance. The SFO’s role is limited to the investigation and prosecution of cases of serious and complex fraud. However, I can assure the House that when referrals are made to it, a member of the SFO assesses every single one. That task is not to be underestimated. The vast majority of referrals to the SFO are not about matters that it can properly investigate, but it takes every single referral seriously, and it will give each one due consideration and pass on details to other agencies that may be more suited to dealing with it or placing particular cases. It also retains the material that it has been given, using that for intelligence purposes to help inform other agencies and, indeed, sometimes in its own work to identify those top-tier cases that are appropriate for it to investigate.
Huw Irranca-Davies
I thank the Minister for the helpful way in which he is laying out his points. He mentioned the threshold test. If evidence was to be gained that this went beyond two individual cases and that there were far more, would it pass the threshold test? If that is the case, rather than relying on the CPS or on individual prosecutions, would it be, in the light of the questions asked by my hon. Friend the Member for Cardiff Central, appropriate—or, in fact, necessary—for the SFO to make inquiries of Lloyds, RICS, and Alder King in relation to how many examples of conflict of interest and potential financial gains along the way this could affect? If we are talking about thousands of people—my apologies for the length of this intervention, Mrs Main—I suspect we are in SFO territory.
The Solicitor General
I hope that the hon. Gentleman can be forgiven for the length of his intervention, because he asked a very pertinent question. Although I cannot prejudge the precise parameters of what might happen in the future, circumstances may well change, and the SFO, keeping matters under review as it does, would then have to be guided by that change in circumstances. In other words, we cannot rule that possibility out. It would be wrong of me to do that.
Dealing, then, with the specific allegations, I have to acknowledge that it would be unusual for me to comment in detail about allegations either leading towards an individual or made by an individual or a company, but I am aware of course that Mr Shabir and Mr Richards have raised their allegations with a wide range of people and organisations, and I do not underestimate their importance. The two gentlemen clearly have had a very difficult time. The consequences of what has happened are extremely serious for them. That said, I have to stress that these remain allegations. It is not for me to comment on their merits or whether they are well founded. I have to acknowledge the effect of allegations that are made, and that is an important point when discussing them in a public forum such as this. Those are the constraints within which I think I should operate.
Although Mr Shabir and Mr Richards have presented their cases together, they are making slightly different allegations. It is right to say, as has been said in the debate, that the SFO has met the gentlemen on more than one occasion; the allegations have been considered in great detail; and there has been close liaison with other law enforcement agencies and regulatory bodies to gather any relevant material that they may hold. However, the SFO has explained to both gentlemen that their cases, individually, would not meet the threshold and would not be investigated, because as stand-alone allegations, they do not come into that top tier. That has been made clear. We have already—I am grateful to the hon. Member for Ogmore—started to outline and discuss what might or could happen to change that position, but that is the status quo.
I have said that it is important to recognise that the SFO does not investigate every case of alleged fraud—that is not its purpose—and I know that despite referrals to other organisations, no proceedings have yet been brought. However, the material provided by Mr Richards and Mr Shabir is being kept or has been kept under active consideration by the Serious Fraud Office, and this matter is kept under review as new information may arise. It is not a closed file, but obviously at this stage the threshold has not been reached.
This is exactly what the SFO should be doing. It is seeking to make intelligent and intelligence links to identify cases of serious or complex fraud. To seek to investigate every case would defeat its purpose and overwhelm its resource, and frankly it would have no statutory footing on which to do so. I argue strongly that the current director has demonstrated that he is prepared to take on difficult and high-profile cases. The seriousness of the investigations to which I have referred will, I hope, demonstrate to hon. Members the sort of case that the SFO should be taking on. In other words, the office has a specific role that Parliament has given it. If the SFO can put all these allegations together with other intelligence to establish a case of serious or complex fraud, it will do so, and that is why it has decided to keep this significant matter under review.