Economic Crime and Corporate Transparency Bill

(Limited Text - Ministerial Extracts only)

Committee stage
Tuesday 9th May 2023 Grand Committee

Moved by

[Lord Goldsmith of Richmond Park]

91A: After Clause 187, insert the following new Clause—
“Sanctions enforcement: monetary penalties
(1) In section 143 of the Policing and Crime Act 2017 (interpretation), in subsection (4) (meaning of “financial sanctions legislation”), in paragraph (f)—(a) the words from “contains” to the end become sub-paragraph (i);(b) at the end of that sub-paragraph insert—“;(ii) makes supplemental provision (within the meaning of section 1(6) of that Act) in connection with any prohibition or requirement mentioned in sub-paragraph (i).”(2) The Sanctions and Anti-Money Laundering Act 2018 is amended as follows.(3) In section 17 (enforcement), in subsection (9), in paragraph (a), after “(2)” insert “or makes supplemental provision in connection with any such prohibition or requirement”.(4) After section 17 insert—“17A Enforcement: monetary penalties(1) The provision that may be made by virtue of section 17(2) (enforcement of prohibitions or requirements) includes provision authorising a prescribed person to impose a monetary penalty on another person if satisfied, to the prescribed standard of proof, that the other person has breached a prohibition, or failed to comply with a requirement, that is imposed by or under regulations.(2) Regulations authorising the Treasury to impose a monetary penalty in respect of a breach or failure for which the Treasury could impose a monetary penalty under Part 8 of the Policing and Crime Act 2017 may not be made unless the regulations also make provision of the kind mentioned in section 17(9) to disapply Part 8 of that Act in respect of that breach or failure.(3) Regulations authorising the imposition of a monetary penalty may make provision that, in determining for the purposes of the regulations whether a person has breached a prohibition, or failed to comply with a requirement, any requirement relating to the person’s knowledge or intention is to be ignored. (4) Regulations authorising the imposition of a monetary penalty must provide that—(a) a person is not liable to such a penalty in respect of conduct amounting to an offence if—(i) proceedings have been brought against the person for that offence in respect of that conduct and the proceedings are ongoing, or(ii) the person has been convicted of that offence in respect of that conduct, and(b) no proceedings may be brought against a person in respect of conduct amounting to an offence if the person has been given such a penalty under the regulations in respect of that conduct.(5) Where regulations authorising the imposition of a monetary penalty authorise a prescribed person to determine the amount of the penalty, the regulations must provide for a maximum penalty.(6) The maximum penalty may be a prescribed sum of any amount or may be calculated in accordance with the regulations.(7) In this section—“conduct” means an act or omission;“regulations” mean regulations under section 1.””Member’s explanatory statement
This clause makes it clear that Treasury can impose monetary penalties under the Policing and Crime Act 2017 for breaches of provisions that are supplemental to financial sanctions and that regulations made under section 1 of SAMLA 2018 can include provision conferring power to impose monetary penalties.

[The Minister of State, Foreign, Commonwealth and Development Office (Lord Goldsmith of Richmond Park) (Con)]

My Lords, I rise to move Amendment 91A in the name of my noble friend Lord Sharpe of Epsom.

The Government take the enforcement of their sanctions regimes seriously. Ensuring that we have a firm basis for enforcement action is especially important given the unprecedented sanctions measures that we have implemented in response to Putin’s illegal invasion of Ukraine last year.

There are various methods to enforce UK sanctions, one of which is the imposition of civil monetary penalties, also known as CMPs, which are fines levied by the Government for breaches of sanctions. CMPs do not require a criminal prosecution and involve far less cost to the justice system than criminal prosecutions. To date, the Office of Financial Sanctions Implementation, which is known as OFSI and is part of His Majesty’s Treasury, has levied nine CMPs totalling more than £20 million since it was set up in 2016. The UK Government’s ability to impose CMPs is likely to factor in the calculations of those seeking to breach sanctions for financial gain.

This amendment is part of the Government’s work to strengthen enforcement across our UK sanctions regimes. The new clause will amend the Sanctions and Anti-Money Laundering Act 2018—SAMLA—to provide express provision in relation to the imposition of CMPs. New Section 17A of SAMLA clarifies and reinforces the broad enforcement powers contained in Section 17 of SAMLA, that:

“Regulations may make provision … for the enforcement of any prohibitions or requirements imposed by regulations”.


The amendment also strengthens the basis for CMPs to be imposed by the Treasury under the Policing and Crime Act 2017 for offences that are supplemental to financial sanctions. Again, this is a clarificatory amendment. While criminal and civil enforcement options are already in place, this measure provides clarity on the Treasury’s power to impose a CMP for such offences. The amendment also provides for the Policing and Crime Act 2017 to be disapplied where the Treasury has the power under both sanctions regulations and the Policing and Crime Act to impose CMPs in respect of prohibitions or requirements.

Of course, putting these powers on a firmer footing is worth while only if we invest the necessary resources to make use of them. In the recent Integrated Review Refresh, the Prime Minister announced a new £50 million economic deterrence initiative which will improve our sanctions implementation and enforcement. This will maximise the impact of our trade, transport and financial sanctions, including by cracking down on sanctions evasion. It will also be used to prepare the Government for future scenarios where the UK may need to deter or respond to hostile acts.

I hope that noble Lords will support this amendment. I beg to move.

[Lord Alton of Liverpool (CB)]

My Lords, there has been a change of Minister since we discussed this matter last week when we had a curtain-raiser on Amendment 85, which I moved in Grand Committee. It is always good to see the noble Lord, Lord Goldsmith, in his place; indeed, he had to answer the debate initiated in this Room last week by the right reverend Prelate the Bishop of St Albans. He also had to answer the question about how sanctions can be used to deter autocrats and flag British values against the values of authoritarian regimes; we discussed that issue at some length. As one would expect, the noble Lord gave a competent and welcome reply.

I notice, however, that the Minister’s noble friend Lord Johnson is sitting alongside him—

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[Baroness Blake of Leeds (Lab)]

I will add some brief comments. I thank noble Lords for their contributions. I would like to understand whether this is adequate in terms of the opportunity that we now have. We know that if we miss this opportunity now, the risk is that it will not come round again for a long time. As we have heard, the situation is desperate and there have been enormous failings. I ask the Minister who will monitor the success of this and, assuming that the amendment is agreed, whether we will have an opportunity in future to understand whether it is having the desired impact.

The point has been well made: looking at other countries and other collections of companies around the globe that are grappling with this issue, are we missing a trick? Is there more that we could do at this stage? Context is everything. We have heard about the gaps that exist and the fact that too many people are getting away with not fully complying with the sanctions. We as a country need to take that very seriously. I would appreciate the Minister’s response to those questions, for clarification.

[Lord Goldsmith of Richmond Park (Con)]

I thank noble Lords for their contributions to this short exchange. I will start by addressing some of the points raised by the noble Lord, Lord Alton, who, as I have said many times—we seem to find ourselves in the same debates—is an indefatigable champion for human rights and has shone the light so often on abuses in China, Hong Kong and beyond. It is worth putting that on the record again. I am afraid that I cannot tell him what was raised in discussions between the Foreign Secretary, the Prime Minister and representatives of the CCPIT. I do not have that record, but I will try to uncover an answer for him in due course; I know that my colleagues will have taken a note of his question.

The noble Lord and the noble Lord, Lord Fox, are right to point to the scale of this amendment. A new package is not being introduced; that is not what this amendment is about. That is not to say that changes are not required or that no more can be done with the tools that have been assembled by the Government, not least through SAMLA, but this amendment is just a tidying-up exercise; it is about removing ambiguity. It will not answer the calls that we have heard from speakers in this debate, but it is not designed to. We have the tools that we need. As I mentioned, we now have SAMLA and the ability to tailor a specific sanctions regime using secondary legislation. The noble Lord, Lord Alton, is right that we should focus on using those tools to the maximum effect. There are plenty of places, organisations and people who perhaps ought to be on the sharp end of that sanctions regime. I cannot go into detail—I do not think that any Minister can or would—about any potential future sanctions, not least because doing so and highlighting them now would reduce their impact, but we are always looking to update the—

[Lord Alton of Liverpool (CB)]

I am grateful to the Minister. Will he look again at a proposal that a number of us have put before the House at various times for some degree of parliamentary oversight of the so-called Magnitsky sanctions? At the moment, they are opaque. Often, they seem very random and arbitrary: some are chosen and some are not. There may be good reasons for that. I recognise that we cannot sit in an open committee and discuss these things but, in camera, there is no reason at all why a Joint Committee of both Houses or one of our senior Select Committees, such as the House of Lords International Relations and Defence Committee, which is charged with looking at issues of genocide, for instance, should not be able to look at the details of sanctions and how and why they are imposed. I do not expect a straightforward reply from the Minister now, but will he give an assurance that he will look again at the way in which this regime is determined?

[Lord Goldsmith of Richmond Park (Con)]

The noble Lord makes an important point. I cannot answer it, because it is not an area over which I have any direct responsibility, as he can probably tell. However, it would be beneficial somehow to design a mechanism which would allow greater oversight. I do not know what that would look like, because there are risks associated with it. If the targets of any particular sanctions regime became aware in advance, we know what would happen. It is not an easy problem to solve, but in principle what the noble Lord has just said makes a lot of sense. If there is a way of doing so and injecting a bit more transparency—but not too much, for all the obvious reasons—I would certainly support that.

It is also worth saying that sanctions are just one tool that we have. For example, in relation to Hong Kong, as noble Lords know, we opened the doors of this country to a very large number from Hong Kong who were looking for safety and a home, where their fundamental rights would be respected. We created a bespoke immigration channel and suspended the UK- Hong Kong extradition treaty indefinitely. We extended the arms embargo that has applied to mainland China since 1989 to include Hong Kong—and so on. This is one tool in our arsenal; it is not the only tool.

I make one further point in relation to something raised by the noble Lord, Lord Alton, on the distinction between freezing and seizing. While I cannot provide him with a detailed answer—that is going to have to come from another Minister—I can tell him that the Government are sympathetic to proposals to use frozen funds to assist in the reconstruction of Ukraine following the bombardment that it has received from Vladimir Putin. The Government are actively looking at options continually to improve transparency around those assets that are held by—

[Baroness Kramer (LD)]

Just for clarification, the Minister said that there was an intention to use frozen funds for the reconstruction of Ukraine. I fully support that idea, but is it legal without a seizure?

[Lord Goldsmith of Richmond Park (Con)]

I have said that there are “proposals”. It is something that has been proposed, but I am not sure that I can use the word “intention”. If there is a way in which those frozen assets can be used to rebuild Ukraine, it is something that the UK Government will look very seriously at—but it is not something that the UK alone will be doing.

[Lord Fox (LD)]

To make the necessary legislation, the Government would need a Bill in which to do it, and this would seem to be the Bill that is tailor made to have those discussions. Could the Minister encourage colleagues to use this Bill as the medium by which the seizure process may be made legal?

[Lord Goldsmith of Richmond Park (Con)]

I thank the noble Lord, but I do not know what the legislative mechanism would look like to make that possible. I am afraid that it is something that I am going to have to—

[Baroness Altmann (Con)]

I thank my noble friend for giving way. I realise that he is in a somewhat difficult position, but I add my encouragement to him to discuss with colleagues the possible amendments that we have laid—

[Baroness Altmann (Con)]

Yes, Amendment 85 would allow seizure of assets with a view, one hopes, eventually to being able to use them to reconstruct Ukraine in this case, but for other purposes as well. It would be an ideal way to pave the way for this to happen.

[Lord Goldsmith of Richmond Park (Con)]

The noble Baroness makes a similar point. It is not for me to determine the legislative or other route for achieving the possibility of using those frozen assets. It is something that I know that the Government are looking at and are sympathetic to, but I cannot go into any further details, because it is not an area where I have any particular expertise or authority. But I know that the Government are looking closely at the possibilities of doing so and recognise that there is a huge value in doing so, if we can.

[Lord Alton of Liverpool (CB)]

My Lords, I shall not intervene again on this, but I am extremely grateful to the Minister. To return to the point that the Minister’s noble friend Lady Altmann has just made, to those who took part in the debate on Amendment 85 last week, which would do some of things that he has just described, it was suggested that we might have a chance to meet the noble Lord, Lord Sharpe, again before Report. It would be helpful if the Minister could at least in principle assure us that such a meeting will take place with those who participated in that debate last week. Other noble Lords and noble Baronesses, such as the noble Baroness, Lady Kramer, could be invited as well—those who are interested and are Members of the Committee—to see whether we can build on Amendment 85 to do some of the things that I was very pleased to hear the Minister just say that the Government are keen to do.

[Lord Goldsmith of Richmond Park (Con)]

As the noble Lord knows, I have not had an opportunity to consult my noble friend Lord Sharpe, but I am delighted to volunteer him for such a meeting—I am sure he will be very happy.

I will move on briefly to the question about who will monitor—I am so sorry; I cannot remember who made the point. The answer is that a government department is responsible for that, so if it is a financial sanction, HMT will be responsible for ensuring that it is working and successful, and if it is transport, it will be the Department for Transport, and so on.

This is a small but important change to ensure that we have a firm basis for enforcement action. It will provide greater clarity and reinforce those enforcement powers by making them explicit, removing ambiguity. The amendment should also demonstrate that the UK Government take their sanctions enforcement responsibilities seriously, and we will continue to intensify our enforcement of those sanctions. I hope that noble Lords will support it.

Amendment 91A agreed.

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[The Minister of State, Department for Business and Trade (The Earl of Minto) (Con)]

My Lords, I first draw attention to my interest as set out in the register, as a non-executive chairman of Not Another Bill Limited. Secondly, I want to thank noble Lords for their warm welcome to the hot seat, which is much appreciated.

I am pleased to be able to represent the Department for Business and Trade in my new role as Minister of State. I thank all noble Lords for their inputs into the debates so far and express my pleasure at being able to speak today on this amendment. I also thank my ministerial colleague and noble friend Lord Johnson of Lainston, who is indeed in Hong Kong, for his support in preparation for today’s debate.

Moving on to the Bill itself, I thank the noble Baroness, Lady Kramer, for raising the important matter of whistleblowing. As a former co-chair of the All-Party Parliamentary Group for Whistleblowing, she has continuously highlighted the important role that whistleblowing plays in shining a light on wrongdoing. The Government have a significant interest in ensuring that our whistleblowing framework is robust. An effective whistleblowing framework is a vital part of the UK’s ability to tackle corruption and all forms of economic crime and illicit finance. As these acts are by their very nature often covert, those working for an organisation can be a key source of intelligence for authorities.

My concern with this amendment, however, is two-fold. First, these reforms risk duplicating elements of the existing framework, leading to a confused landscape, and potentially at considerable cost. As I understand it, this position was explained by my noble friend, Lord Callanan, during Second Reading of the noble Baroness’s Protection for Whistleblowing Bill in December last year. So I will not go into detail here but, just to recap, the Government are concerned about how such an office would interact with the role of regulators. As has been mentioned, a new body could also come at a considerable cost, as it would require significant staffing resources, with diverse expertise across sectors, to enable it to carry out these functions effectively.

Secondly, it would be premature to make legislative change ahead of the review of the whistleblowing framework, which everybody has mentioned. The review, which the Government launched on 27 March this year, will examine the effectiveness of the whistleblowing framework in meeting its intended objectives—that is, to enable workers to come forward to speak up about wrongdoing and to protect those who do so against detriment and dismissal.

The noble Baronesses, Lady Kramer and Lady Altmann, asked whether the review will consider the merits of establishing an office for the whistleblower. The review will consider evidence related to the effectiveness of the whistleblowing framework in meeting its intended objectives. This is to enable workers to come forward to speak up about wrongdoing, and to protect those who do so against detriment and dismissal. As the right reverend Prelate explained, proper protection is needed against terrible misery and personal risk.

The review will consider a number of topics that are central to the whistleblowing framework. These include: how workers are defined for whistleblowing protections; the availability of information and guidance for whistleblowing purposes; and how employers and prescribed persons respond to whistleblowing disclosures, including best practice. The research for the review will conclude in autumn 2023. The full terms of reference for the review are published on GOV.UK.

There have been a number of very specific questions. I think that I have written down all those on data so, if it is all right with noble Lords, I shall respond swiftly in writing to some of the specific questions that were asked. There is no doubt that there is a lot of data behind this amendment; it is important that proper answers are provided.

[Lord Browne of Ladyton (Lab)]

I thank the Minister for giving way. On 2 December, I asked the noble Lord, Lord Callanan, whether he could provide the data on the performance of regulators and other prescribed persons in relation to whistleblowing, specifically asking the same question that I asked the Minister. He did not answer it then and he has not written to me. Does this data exist? I suspect that it does not.

[The Earl of Minto (Con)]

I do not know whether it exists; if it does, I shall find out and let the noble Lord know. I think it must exist, but we will have to see. The other important issue was the expense of going to a tribunal, which is a very serious issue. My understanding is that the review will certainly take that into consideration.

Not long after taking office, my ministerial colleague the parliamentary Under-Secretary of State, Kevin Hollinrake MP, committed during the Public Bill Committee in the other place to get this review moving. We have followed up on this commitment and continued to deliver on whistleblowing policy. On 17 October last year, the Government laid before Parliament the most recent update to the prescribed persons order. This came into force in December and is a significant improvement to the framework, adding six new bodies and all Members of the Scottish Parliament to the list of bodies and individuals that a worker can blow the whistle to. I hope that demonstrates to noble Lords that the Government are very serious about whistle- blowing.

I welcome the continued constructive engagement on this topic, and I know that Minister Hollinrake has valued the discussions to date with parliamentarians and organisations representing whistleblowers in preparing for this review. However, this amendment could create a confused landscape for whistleblowing, potentially at considerable cost. It would also pre-empt the ongoing review of the existing framework. I therefore respectfully ask the noble Baroness, Lady Kramer, to withdraw it.

[Baroness Kramer (LD)]

My Lords, I thank all noble Lords who have spoken in this superb debate. I thank the noble Baroness, Lady Altmann, and the right reverend Prelate the Bishop of St Albans for giving those personal examples. They bring home to people the experience that we are trying to deal with, so that people can relate to them and ask “Would I be brave enough? Would I let this happen to me and my family?” and understand why whistleblower protection is so important.

There were some specific questions. First, if ever I have seen a red herring, this question of cost must be it. In the United States, the Office of the Whistleblower has turned into a profit centre for the US Treasury, because the number of cases it can drive through and the consequences of remuneration, fines and compensation have meant that it not only covers its costs but can return substantial amounts to the Treasury. The Minister is most welcome to get the latest figures on those. I do not have them in front of me, but he will be able to access them very easily. So cost is not the issue.

We are often told that we will need an enormous, monstrous octopus of an office. That is not what we are talking about. We need a place where people can go and know that their disclosure is absolutely safe. As other noble Lords have said, including the noble Lord, Lord Cromwell, people want to know that there is genuine follow-up on the issue. He asked how the language of my amendment on investigation would work. It would work by acting through the regulators. I have had many a conversation with regulators and, interestingly, they are all desperate for something like the Office of the Whistleblower, because dealing with whistleblowing is completely outside their standard remit—how they structure themselves and hire their personnel. This creates that exchange with the Office of the Whistleblower as a director of the information to the regulator. That dynamic gives us the assurance that there will be action. The office can chivvy if action does not follow.

The noble Lord, Lord Cromwell, also asked how the office of the whistleblower would protect individuals from detriment. This is a very abbreviated amendment because it has to come within the scope of the Bill. My Private Member’s Bill deals with the issue in far greater detail, but the logic of it is basically that, when the office determines that a whistleblower has received detriment, it will be able to order the employer—although this applies to all whistleblowers, so it is a broader picture—to provide compensation. However, if that employer or company decided that the compensation was inappropriate, it could take the office of the whistle- blower to the First-tier Tribunal. But in that case, facing each other, you would have the institution of the office of the whistleblower and the institution of the employer or organisation on the other side. You would not have the David and Goliath situation of a poor, lonely whistleblower who has already spent all their savings and is borrowing money to continue their case facing an employer which can afford to pay for the best counsel in the country and continue to drag out the entire process on appeal after appeal. So it changes that dynamic.

I refer noble Lords back to my Private Member’s Bill. I have always said that I am not precious about exactly how all this is done, but the core principles of it need to be seized and taken. I am sad that the Minister again uses the term “workers”, because there are so many people who blow the whistle, including contractors, suppliers and customers, and they are all often subject to retaliation and blacklisting—and that matters.

I think that I have covered most of the questions that were asked, but I would be glad to continue this conversation off-piste rather than take up more time in Committee today. This is an absolutely fundamental issue. One opportunity in this Bill is to echo how it has been done in the United States, where the Office of the Whistleblower is set within a financial services regulator structure, and this amendment would enable that to happen—or there is the alternative to going to a much broader office of the whistleblower. When you talk to the regulators dealing with education, the National Health Service, nuclear waste or whatever else, they will all say, “For goodness sake, can you take this burden of dealing with whistleblowers off my shoulders? I really need a professional and focused organisation sucking in this information and making sure that I get what I need to act as a regulator”. I can assure the Minister that, while none of them says it publicly, he will find that, privately, the regulators are very much in support of this kind of arrangement. I beg leave to withdraw the amendment.

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[Lord Leigh of Hurley (Con)]

My Lords, I am prompted to rise by the words of the noble Lord, Lord Trevethin and Oaksey. I think he was referring to Amendment 106C, which we will come on to later this afternoon and which would extend the costs cap beyond UWOs. In the certainty that my noble friend the Minister will seek to ensure that Amendment 106C is agreed to, let me simply say that the amendment we are debating now, in the names of the noble Lord, Lord Faulks, and my noble and learned friend Lord Garnier, would be complementary and extremely helpful to Amendment 106C.

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, I thank noble Lords for proposing their amendments. I thank the noble Lord, Lord Coaker, for moving Amendment 93 on behalf of the noble Lord, Lord Hunt of Kings Heath. I also thank the noble Lord, Lord Faulks, for Amendment 95, which was spoken to by my noble friend Lord Young. Both amendments relate to reports connected with unexplained wealth orders, henceforth known as UWOs.

I turn first to Amendment 93, which would require the Government to lay annual reports on UWOs where the property has been obtained through economic crime and taken from vulnerable adults. Economic crimes not only result in financial gain for criminals but leave a trail of suffering. They inflict financial and personal loss, including on the most vulnerable members of our society, which this amendment importantly recognises.

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[Lord Fox (LD)]

The Minister set out some interesting statistics. It is clear that UWOs have been accountable for a very small proportion of the total amount of money recovered. The Minister referred to them as a powerful tool. Is he satisfied that UWOs are reaching their potential, in which case we would conclude that they are relatively insignificant compared to the other tools in the hands of enforcement, or are UWOs failing to meet their potential and not as powerful as they could be? Clearly, they are not generating very much money compared to all the other tools available to the enforcement agencies.

[Lord Sharpe of Epsom (Con)]

I am not sure that the question is entirely valid with regard to generating money. The fact is that, since their introduction in 2017, four of these have been issued in relation to assets with a combined value of £143 million. In October 2020, property worth an estimated £10 million was recovered, following the use of a UWO, as I have already said. As for whether the scheme is succeeding or failing, it is not for me to say. I am unable to do so, because I do not have access to the operational decision-making that goes into issuing them, and so on. These are operational matters.

[Lord Fox (LD)]

I accept that it is not for the Minister to say; who does say whether they are succeeding or failing?

[Lord Sharpe of Epsom (Con)]

I have already said that we will publish a number of reports on this on 1 September, so I would hope for some more clarity then, but I shall endeavour to find out more information and report back to the noble Lord.

[Lord Leigh of Hurley (Con)]

I share the disappointment expressed by other noble Lords. When UWOs first came out, I was very pleased to see them. They are a classic accountancy tool to establish what is going on in respect of an individual who may have accumulated wealth in an unexplained way. It is incredibly disappointing to learn that so few have been issued with, frankly, teeny sums of money, given the nature of the world that we are discussing. Can my noble friend take back our concerns to his colleagues and, in particular, ask whether targets could be set for the coming year on the number of UWOs that might be issued and the amount of funds that they might realise?

[Lord Sharpe of Epsom (Con)]

I am certainly happy to take my noble friend’s concerns back but, as regards targets, that would invite me to stray into operational matters, which I will not do.

[Lord Coaker (Lab)]

I thank the Minister for his reply, although I also share that disappointment. I should have thought that the focus of the noble Lord, Lord Young, speaking on behalf of the noble Lord, Lord Faulks, and the noble and learned Lord, Lord Garnier—as I am speaking on behalf of my noble friend Lord Hunt—was to ask the Government to bring a report, even if that is not the appropriate way of doing it, and say to them that the operation of UWOs is simply not working as they expected. It is perfectly reasonable for a Minister of the Crown, while of course not interfering with the operational independence of the police or any other law enforcement agency, to look at the legislation and see whether it is working as the Government expected. Clearly, it is not, so it would be a perfectly reasonable response to say that nine applications, four cases and the odd bit since is simply not what anybody would have thought acceptable or thought would happen.

This happens with legislation; even if we had the Government of our dreams, laws would be passed that did not function or operate in the way we would want—but that is the purpose of Committees such as this. This is where, to be frank, Ministers listen to what is said and respond that they will take the matter back and that it is unacceptable, rather than come off saying that it is one tool in the box of government in dealing with the issue.

The Minister had a pop at me. I was only using the facts that are available in a government document called Fact Sheet: Unexplained Wealth Order Reforms. If the facts I am giving the Minister are wrong then, frankly, the Government should have updated the facts, because this is what all of us use in these debates. I have not made it up—I have read the Government’s material. The Minister then turns around and says that the noble Lord, Lord Coaker, has not got it right, because the up-to-date figures are X, Y and Z against POCA. It might have been helpful to have the key facts.

Again, I read out,

“the Proceeds of Crime Act 2002 is a complex and technical Act and reform requires careful consideration and consultation”.

Then the Minister had a go at me and laid out four Acts of Parliament that have been done since. Why were they not included in the key facts? It would have been helpful to everyone to understand the way in which it had been reformed to see whether it is now working and functioning as the Government want it to. I do not have five floors of civil servants providing me with a brief that says there are four pieces of legislation which have updated and improved it. The serious point is that, when I and other members of the Committee depend on the government document setting out the key facts in relation to what we are discussing, it should be up to date. That is the only point I want to make.

I do not know whether the figure that I was going to use is out of date. A number of members of the Committee made the point to the Minister that, if it is hundreds of millions that have been recovered over a number of year, that is peanuts. The reason I say it is peanuts—the Minister will correct me if I have got this wrong—is that Fact Sheet: Unexplained Wealth Order Reforms says under the heading “Key Facts”

“Serious and organised crimes … for example”—


and lays out various things—

“are estimated to cost the UK economy £37 billion per year”.

That is not my figure. The key facts document published by His Majesty’s Government says it is £37 billion a year. I should have thought that the response to what are clearly probing amendments about reports would be, “It is £37 billion a year, we are getting a few hundred million there, we are getting £100 million there, £50 million there”. Why are we not making more of a dent into what we all, including the Minister, regard as simply and utterly unacceptable? The Minister will think it is unacceptable that we have that.

Of course, I shall not move the amendments, but I hope the Minister will take back the bureaucratic point about ensuring that the key facts documents that we use in our deliberations are updated. I hope that he will also talk about the point that unexplained wealth orders were brought in as a way for the Government to address the problem, which the noble Lord, Lord Young, and others mentioned, that huge sums of money surround individuals who have no legal way of explaining how on earth they got them.

I shall raise one other point, because it drove me mad when I was a Member of Parliament and before that a local councillor. On estate after estate, on housing area after housing area, it drove people who went to work mad to look down the road and see somebody who did not go to work driving a Ferrari, or something like that. At an individual level, that is exactly what all of us feel more generally about what is happening nationally and internationally, where people are playing the system. The vast majority of law-abiding business men and women and businesses conform to the law, pay their taxes and do their best—but £37 billion a year is lost to fraud. In answer to the noble Lords, Lord Fox and Lord Young, and me, the Minister talked about getting £10 million here and £100 million there. I am pleased that we got that, but it is peanuts compared to the amount of money that we are talking about. I hope the Minister can take that back—

[Lord Sharpe of Epsom (Con)]

As the noble Lord has drawn on the key facts document, it is important for me to provide a bit of clarification. It was published on 4 March 2022 for the previous Bill, not this Bill. Those numbers were correct at the time of publication. On UWOs, they have been applied for—I have said how many times—and two of the applications have been made since the Government reformed the UWO regime last week, which I should have said while I was answering noble Lords. Perhaps that provides a bit more clarity. On the key facts, the three floors of civil servants are in the clear.

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[Lord Leigh of Hurley (Con)]

My Lords, I rise briefly to urge the Minister to not allow the concept of a tier 1 investor visa scheme to be rubbished. This country has benefited enormously from foreign direct investment. I have seen a large number of UK small and medium-sized businesses benefiting from individuals coming to and living in the UK and putting money into and running the businesses, and those businesses flourishing thereafter. It is an important part of what we offer overseas investors, if done correctly.

I am a little disappointed that the noble Lord, Lord Fox, seemed to imply—and probably stated it; I may have missed it—that the reason that this information has not been published is that the Home Secretary is worried about disclosure of people who may have made donations to the Conservative Party. I do not think that is in the spirit of the debate; I do not think it is correct. The noble Lord laughs, but it is particularly surprising from the Lib Dems, which took money from Michael Brown, to make allegations like that, and it is a shame because I think there is great consensus in the Committee about the purpose and merits of the Bill.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank all noble Lords, who have made some extremely thought-provoking points in this debate. I will do my best to address them all.

Scrutinising the activity of government is obviously a key function of Parliament, and of course the Government are entirely supportive of it. I reassure the noble Lord, Lord Browne, that this particular part of the government machinery is always grateful for any help that is offered and will receive it in that spirit. However, the amendments in this group are unnecessary, as they are duplicative of existing reporting arrangements and scrutiny structures.

On investor visas, I take my noble friend Lord Leigh’s points. If done in the right way, they are potentially an important engine of economic growth—that should be acknowledged. Of course, we should not forget that they were introduced by a Labour Government and maintained during the coalition years. However, on Amendment 102, tabled by the noble Lord, Lord Wallace of Saltaire, and moved by the noble Lord, Lord Fox, I am aware that there are concerns about how the now-closed tier 1 investor route operated—in particular, that it was used by those relying on funds that had been illegitimately acquired and those who may have posed a wider risk to the UK’s national security.

It was because of those concerns that the Government committed in the first place to the review of the visas issued under the route between 2008 and 2015. As has been acknowledged, the Home Secretary made a Written Ministerial Statement on 12 January setting out the findings of that review. This included that the review had identified a minority of individuals connected to the tier 1 investor visa route who were potentially at high risk of having obtained wealth through corruption or other illicit financial activity or being engaged in serious and organised crime. The Statement of 12 January represents the Government’s substantive response to the commitment to undertake a review and publish its findings, including its findings in respect of economic crime.

Obviously, there was a delay; we are aware that considerable time elapsed between the commissioning of the review and the setting out of those findings. However, delay is regrettable but not unreasonable when issues of national security are at stake. Let me expand on that a little, if I may. It would have been preferable had the review been able to include more information about specific individuals but we have had to act sensibly and responsibly with regard to the UK’s national security; this includes striking the right balance between setting out the review’s broad findings and observing the constraints on disclosing sensitive details, which must be withheld, at the request of our operational partners, to protect our border and the vital work of our law enforcement agencies.

The noble Lord, Lord Fox, raised the subject of party-political donations. Without getting into a slanging match on this subject, I think it is worth restating that UK electoral law already sets out a stringent regime of spending and donation controls that prioritise transparency and safeguard the integrity of our elections. All political parties recognise that third-party campaigners and candidates must record their election spending and report it to either the Electoral Commission or their local returning officer. This information is all publicly available. The measures in the Elections Act 2022 also updated the political finance regulatory framework by increasing transparency and fairness and strengthening the controls against ineligible foreign spending on electoral campaigning. That is a fairly comprehensive transparency regime concerning the funding of political parties.

The House has considered similar amendments to other legislation, most recently during the passage of the National Security Bill. As before, the Government’s view is that this amendment is not necessary. The Government have set out the key findings of the review of the operation of this route and have acted to close it. I therefore ask the noble Lord, Lord Fox, to withdraw the amendment.

[Baroness Bennett of Manor Castle (GP)]

My Lords, the Minister suggested that it was the inability to identify individuals that meant that some aspects of the report could not be released. I think that everyone understands the retraction of names where necessary, but surely that would not prevent the release of absolute figures rather than a summary of the figures.

[Lord Sharpe of Epsom (Con)]

As I said, it was also to do with the disclosure of sensitive details related to operational partners—the sorts of things that protect our border and the work of law enforcement agencies.

I thank the noble Lord, Lord Fox, for tabling Amendment 104, to which I will now speak. The impact of fraud and economic crime affects the whole of our society. The cost of fraud to the UK runs into the billions and is assessed by the National Crime Agency to be the most common crime type in England and Wales. We take this threat type seriously and have delivered a strengthened approach to reduce its impact. Obviously, as I referenced, the fraud strategy is one part of that; I will come back to it in a moment. The NCA currently leads the national response to serious and organised crime, including economic crime. As predicted, the NCA’s director-general is accountable to the Home Secretary and, through the Home Secretary, to Parliament.

The agency already publishes an annual plan and an annual report. The annual plan sets out how it intends to exercise its functions in co-ordinating the operational response to serious and organised crime, having regard to the Home Secretary’s strategic priorities and the director-general’s operational priorities. The annual report details its performance over the previous financial year, including efforts to tackle economic crime. The NCA also reports annually on the impact of suspicious activity reports in tackling economic crime and, as I set out earlier in response to Amendments 93 and 95 in the previous group, in respect of UWOs. Given this current reporting and the potential for duplication, the Government do not believe that this amendment is required at this time, so I ask the noble Lord, Lord Fox, not to press it.

I thank the noble Lord, Lord Coaker, for his Amendment 106B. Before I get into the amendment itself, let me say that I take the noble Lord’s points about the diversity of response to the sorts of crime that are being discussed. Of course, that partly reflects the diversity of the crimes being investigated, as he will be aware. The fact is that this is a fast-moving, rapidly evolving space; there is no doubt that the operational response to it reflects that particular set of circumstances.

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[Lord Coaker (Lab)]

Does that committee do an annual report? How often does it meet?

[Lord Sharpe of Epsom (Con)]

I do not know. I will find out and write to the noble Lord. For now, I hope he will accept that it is not the role of the Government to set up parliamentary committees and so will not seek to press his amendment.

I turn now to Amendment 106EB concerning the Serious Fraud Office. Once again, I thank the noble Lord, Lord Coaker, for tabling this amendment, which would require the Government to lay in Parliament an annual report on the Serious Fraud Office. The effectiveness of the agencies tasked with fighting economic crime, including the SFO, is of critical importance and of interest to both Houses. That is why the SFO annual report and accounts—these set out much of the information in which the noble Lord is interested—are routinely laid in Parliament.

The law officers of England and Wales superintend the SFO. They oversee the performance of the SFO, including steps that they can take to improve that performance. Through the superintendence process, the law officers identified the need to expand the SFO’s pre-investigation powers, a change that appears in Clause 185 of this Bill. The law officers take steps to ensure transparency, including participating in Attorney-General’s Questions in the other place; publishing summaries of minutes from SFO ministerial strategic boards online; and addressing issues promptly through Written Ministerial Statements.

This is complemented by the work of HM Crown Prosecution Service Inspectorate, which inspects the SFO and publishes its findings alongside a set of recommendations. HMCPSI recently published an inspection of the SFO’s case progression—that is, the organisation’s ability to deliver its cases efficiently and effectively. Given our previous discussions, the tone of the debate and the views expressed, I understand that the intention of this amendment is to probe the Government on the resourcing of the SFO.

The noble Lord, Lord Faulks, made a very interesting point; he may have noticed that I wrote my note on the wrong page when I referred to it earlier. I am coming back to it now; it is an interesting idea and I will definitely take it back. There is a process in place to recruit a new director-general of the SFO. I would imagine that acute matters, human resources and future resources are a part of the remit for that person but the noble Lord certainly makes an interesting point. To go back to a conversation during a debate that the Lord, Lord Browne, and I had last week, my personal point of view is that it is about time we all sat down and started to think about recruitment in law enforcement more generally.

[Lord Agnew of Oulton (Con)]

Given that my noble friend the Minister is going to take the comments made by the noble Lord, Lord Faulks, on recruitment back, I encourage him to look at the report by Andrew Cayley KC, Chief Inspector of the Crown Prosecution Service, who has also done a report recently. Some of the problems in the SFO are case workers not being paid enough, churn and so on, which led to the collapse of the case against G4S. There is big piece of work there that we could be doing stuff with.

[Lord Coaker (Lab)]

What is the Government’s view on whether the SFO is working?

[Lord Sharpe of Epsom (Con)]

Those are good questions; I will come on to them.

Funding and resourcing is a subject that is covered in the fraud strategy. I will not go over the details. At the most recent spending review, the SFO received an uplift to its core budget that is supporting its operations. In addition, the SFO continues to have access to reserve funding to fund specific high-cost cases if needed. This enables the SFO to obtain additional funding for any case that exceeds 4% of the core vote funding for the year.

My noble friend Lord Agnew and the noble Lord, Lord Coaker, referred to the G4S case. Obviously, it is always disappointing when a case has to be brought to an end before it is concluded but, like other agencies, the SFO is right to end an investigation or prosecution when it is no longer in the public interest. The SFO has acknowledged that there were disclosure challenges in the case that was closed earlier this year, R v Morris, Preston and Jardine. The SFO has made good progress on implementing the disclosure changes recommended by Sir David Calvert-Smith and Brian Altman KC in their independent reviews, published last year. The Crown Prosecution Service Inspectorate, the agency that inspects the SFO, has been asked to expedite a planned review of SFO disclosure, which will provide further independent assurance of the SFO’s processes.

Further to that, in Economic Crime Plan 2, which was published on 30 March, the Government set out their intention to explore reforms to the disclosure system to ensure that it supports a fair criminal justice system because cases that are lost on procedural grounds are, as noble Lords have noted, a loss to victims, taxpayers and, of course, society.

The noble Lord, Lord Coaker, just asked me whether the Government have faith in the Serious Fraud Office. The answer is yes.

[Lord Coaker (Lab)]

Is it working?

[Lord Sharpe of Epsom (Con)]

I would say that it is the same thing; perhaps we can debate that as well.

The Serious Fraud Office investigates and prosecutes the most complex cases of fraud, bribery and corruption. That is a very challenging remit. It has delivered some outstanding outcomes. For example, last year, it secured the conviction of Glencore for bribery and corruption in five countries, with the company ordered to pay £280 million—the highest ever ordered in a corporate criminal conviction in the UK—as well as eight convictions for five cases of fraud and bribery worth more than £500 million. It consistently recovers some of the largest amounts of proceeds of crime, despite being a fraction of the size of many other national agencies.

It is also important to note the SFO’s role in fighting economic crime globally. In the last financial year, the SFO took steps to assist overseas jurisdictions in their investigations by working on more than 60 incoming money-laundering requests. I think that the statistics answer the question—yes, we have faith, and yes, it is working. I hope that my explanations have provided some reassurance. I therefore ask the noble Lord not to press his amendment.

I turn to the final amendment in this group, Amendment 106EA, again tabled by the noble Lord, Lord Coaker. I come to this amendment last as it seeks to bring into one amendment much of what the other amendments in this group also attempt. I will not repeat myself too much here, especially considering how long I have gone on so far. The amendment would require the Government to issue a report on the performance of agencies and departments in tackling economic crime. However, I can assure noble Lords that this is already being done. As I have mentioned, the Government, regulators and law enforcement already regularly give evidence to parliamentary committees. The National Crime Agency is required under the Crime and Courts Act to publish an annual report and lay it before Parliament, further adding to the available scrutiny of operational bodies. The Government already conduct a range of threat and risk assessments to develop our understanding of economic crime. The NCA’s national strategic assessment assesses the economic crime threats facing the UK on an annual basis. As required under the money-laundering regulations, the UK also conducts periodic national risk assessments of money laundering and terrorist financing, which provide an overview of the risks and likelihood of an activity occurring. We have already discussed in detail the establishment of a fund to tackle economic crime so I will not repeat that debate again.

Regarding the amendment’s calls for a strategy on tackling economic crime, this March, the Government published Economic Crime Plan 2. Through 43 actions, it sets out how the public and private sectors will work together to transform the UK’s response to economic crime. Obviously, the fraud strategy is a part of that overarching economic crime strategy.

As regards the quality of the data in the fraud strategy, which was referenced by the noble Lord, Lord Browne, I have just had a quick flick through and it is more recent than six years. I should also reassure the noble Lord that one of the commitments in the fraud strategy is to improve the quality and collection of data, so this can be regarded as a baseline.

There are numerous ways in which the Government report on their performance with regard to tackling economic crime. This amendment is duplicative of them and therefore unnecessary. I ask the noble Lord to withdraw his amendment.

[Lord Fox (LD)]

My Lords, we are indebted to the noble Lord, Lord Coaker, for his amendments because they have inspired an interesting debate. The Minister has made a spirited defence of the Government’s position on this issue, but the very fact that these questions are being asked—and by a lot of people, not just the people in this Room—indicates that there is a lot of work for the Government to do in order to placate, explain or perhaps improve what is going on out there. The key element, which was highlighted earlier, is the alphabet soup of different agencies all interlinking in what is going on. The Minister has made a big effort in trying to calm nerves but I do not think that those nerves are calmed. Although the amendments will undoubtedly be not be moved, there is work to do; hopefully, the Minister has got that message from the nature of this debate.

I refer back to Amendment 102. Clearly, it ruffled some feathers. I note that in 2022 it was the Conservative Government who saw fit to withdraw this scheme because they felt that there were serious issues. We know that of the 6,000 such issues, a minority were problematic, but we still do not know exactly how many. I want to address the point made by the noble Lord, Lord Leigh that there is some use to encourage inward investment. This scheme clearly went off the rails, but by publishing the report properly, we would know how to encourage it without causing the issues that the Government clearly felt were sufficient to close the scheme. I am comfortable that I was not overstating the problem. The problem was there and the Government identified it, but now we have an issue in that we do not know the full scope of the problem.

In his response on party finance, the Minister referred to national security. The fact that there are issues is well covered. The Minister should know—I am sure that he does—that amendments to the National Security Bill that sought to enhance the scrutiny of the source of political donations have been thrown out by the Commons, so some of the things that the Minister said are not strictly there. There is still an issue between this House and the Commons when it comes to the National Security Bill and party funding, and it remains ongoing. I think that was the issue that my noble friend was anxious to state.

On the subject of the report and the reference to party funding, I remind noble Lords that I said that it makes it difficult not to conclude that there are embarrassing issues to hide because the report was not published. If there is no problem, as I am sure noble Lords believe, there is no reason not to publish the report. It is the non-publishing of the report that causes suspicion. That is the point that I was trying to make.

With that, I beg leave to withdraw Amendment 102.

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[Lord Ponsonby of Shulbrede (Lab)]

My Lords, this has been a very interesting debate; it is the first debate in which we have spoken on a more international level. As we heard in our earlier debates, a large proportion of the quantity of money involved in fraud—well over 90%; probably 99%—has an international element; that is at the core of so much of the fraud with which we are dealing.

I congratulate the noble Lord, Lord Oates, on the way in which he introduced this group. I found his introduction rich and compelling. He set out things very fully. The other noble Lords who have spoken have talked about the aspirational nature of this amendment. I do not think that that is a criticism. It is good to hear about the other countries that are already taking a lead in trying to get the IACC set up.

From the Labour Party’s point of view, I have looked at what David Lammy has said on this matter. He has spoken about working internationally—I know that my noble friend Lord Hain led the work on that when he was a Foreign Office Minister—and promised that an incoming Labour Government would fight against dirty money in the UK by creating a transatlantic anti-corruption council alongside the US, EU and other allies. That is a different model from the one proposed in these amendments.

I do not want to stand here as an opposition spokesman saying that we are against what the noble Lord, Lord Oates, and the noble Baroness, Lady Bennett, are proposing but there are other potential models for bearing down on corruption. I listened with some interest to what the noble Lord, Lord Faulks, said about the practicalities of doing this and using legislation such as this to do everything we can on a domestic level, and internationally where we already have direct interest, to bear down on this huge level of corruption. Nevertheless, I thank the noble Lord for introducing this amendment.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Hain, and the noble Baroness, Lady Bennett, for their amendments in this group. I also thank all noble Lords for speaking in this debate.

I turn first to Amendment 103, which was tabled by the noble Lord, Lord Hain, but spoken to by the noble Lord, Lord Oates. If I may, I associate myself with the remarks of the noble Lord, Lord Ponsonby: the noble Lord, Lord Oates, made an incredibly powerful and eloquent case in moving this amendment 103, which also spoken to by the noble Baronesses, Lady Bennett and Lady Wheatcroft. Ensuring that those who are responsible for the most egregious acts of corruption are held to account is obviously vital. There should be no tolerance towards those who steal from the public to satisfy personal greed. The Government wholeheartedly endorse the premise that this amendment seeks to advance. The international community can and must do more to deter and punish acts of corruption.

The Government are taking robust action to ensure that the UK leads by example. That is why, in March, we published the second public-private economic crime plan, to which I referred in our debate on the previous group of amendments, which outlines ambitious actions to prevent the UK’s open economy being exploited by criminals and corrupt actors. The Government are also developing a new UK anti-corruption strategy to build on the progress made by the previous strategy and outline a refreshed approach to tackling corruption and illicit finance both in the UK and internationally.

The recently published fraud strategy also sets out the Government’s commitment to raise the priority of fraud on the international stage. We will drive forward global action through developing stronger relationships with international partners, culminating in a global fraud summit chaired by the Home Secretary and held in the UK next year. The summit will bring together leaders from Governments, law enforcement and the private sector to announce the ambition to deliver a comprehensive and co-ordinated approach to tackling fraud over the next five years.

The Government have consistently invested in efforts to bring those responsible for corruption to justice. The international corruption unit in the National Crime Agency is a specialist capability that investigates corruption cases with UK links.

[Baroness Bennett of Manor Castle (GP)]

On the summit, the problem with ideas such as that put forward by the noble Lord, Lord Ponsonby, about a transatlantic council or similar, is that it would be focused on global north countries. Can the Minister assure me that there will be full representation of global south countries at the summit he just outlined and that the UK will provide resources to ensure that some of the least developed countries, which are some of the biggest victims of this, are also able to participate in that summit?

[Lord Sharpe of Epsom (Con)]

I cannot provide that reassurance; I do not know who will be involved, but I will endeavour to find out and will write.

I shall return to where I was in my speech. In addition, the UK leads and hosts the International Anti-Corruption Coordination Centre—the IACCC—which brings together specialist law enforcement officers from multiple agencies around the world to tackle allegations of corruption. The IACCC has helped to secure convictions in high-profile money laundering cases, including in Malaysia and Angola. In 2022 alone, the IACCC identified more than £380 million of stolen and hidden assets.

I forgot to mention part of my previous paragraph. Since 2006, 30 people and companies have been convicted of corruption offences and more than £1.1 billion of stolen assets have been frozen, confiscated or returned to developing countries. That is in relation to the international corruption unit in the NCA.

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[Lord Browne of Ladyton (Lab)]

I am conscious that I did not contribute to the debate on this, but is it too late to get the word “anti-corruption” into the communique for the pending G7, which takes place between 17 and 23 May in Hiroshima? That word is nowhere in the Foreign Ministers’ communique on 19 April after they met, I think, in Japan. The communique covers almost everything in which one can imagine we would be interested in involving those countries that share our values, but that is not there.

[Lord Sharpe of Epsom (Con)]

The noble Lord will not be surprised to know that I do not know, but I will ask.

The Government will endeavour to update your Lordships’ House on their plans for progressing international action on corruption in due course. I hope the noble Lord, Lord Hain, and the noble Lord, Lord Oates, on his behalf are reassured by the Government’s commitment to combatting corruption. We look forward to further discussions on this subject and to setting out our plans in further detail at an appropriate time. I therefore ask the noble Lord to withdraw his amendment.

Turning to Amendment 106A, tabled by the noble Baroness, Lady Bennett, the Government care deeply about tackling tax evasion and avoidance. My ministerial colleagues continue to work closely with the various sub-committees that sit within the UN’s Economic and Social Council. However, standard-setting powers on tax currently sit within the Organisation for Economic Co-operation and Development’s inclusive framework and global forum, and the UK believes that this is the mechanism best placed to deliver consensus-based reforms aimed at tax avoidance and evasion.

The inclusive framework and the global forum have wide and diverse memberships of more than 140 and 160 countries respectively. Furthermore, the OECD holds strong technical expertise in matters of international tax avoidance and evasion, and a potential UN convention on global tax evasion as envisaged by this amendment would duplicate and be likely to hinder the OECD’s work. This would delay the co-ordinated global response and effort to address tax evasion and avoidance and combat harmful tax practices, as well as creating divergence in international tax standards.

Having said that, the UK will engage constructively with the upcoming report by the UN Secretary-General. We want to find ways to improve international co-operation, as I have said, but to do that we want to ensure that this captures the full range of existing mechanisms for international tax co-operation and considers creatively how they could be improved better to meet developing countries’ needs. We have submitted evidence to the UN Secretary-General demonstrating these points.

Having said all that, obviously I ask the noble Baroness not to move her amendment.

[Lord Oates (LD)]

My Lords, I thank all noble Lords who have spoken in this debate; I particularly thank the noble Baronesses, Lady Wheatcroft and Lady Bennett, for their support. I am sympathetic to the amendment tabled by the noble Baroness, Lady Bennett. I am grateful to the Minister and the noble Lord, Lord Ponsonby, for their thoughtful responses. I am disappointed by the Minister’s conclusion, obviously, but I hope that, as he suggested, we can continue those discussions going forward.

I want to reassure the noble Lord, Lord Faulks, that my purpose was not to come as a critic of the Government. Indeed, I highlighted commitments made by the Government in the Integrated Review Refresh and I commend the Minister for Development and Africa on his real focus. He understands how important this is. Overseas development assistance is nothing compared to getting this right.

I am not sure that I share his views on the International Criminal Court and other international criminal tribunals. One of the great proponents of this international anti-corruption court is retired Justice Richard Goldstone. He was the chairman of the international criminal tribunal on the former Yugoslavia, which convicted a number of key figures including Ratko Mladić and Radovan Karadžić. It does have impact. We should be aware that, even for the non-signatories of the ICC, it has consequences. It has consequences for President Putin that he has been indicted, such as consequences on whether he can travel to BRIC countries that are signatories to that court.

On the charge of being aspirational, I plead entirely guilty. You cannot get real change in the world unless you are aspirational. Of course, as I said in my opening speech, this amendment is not a panacea; it is one tool. One of the most important things, as the noble Lord, Lord Faulks, said in his remarks, are the enforcement powers that we have in the UK, which, in my view, we are not using as much as we should be. I hope that, through this Bill and other means, we will do much more on enforcement.

As we have heard in the previous debate and amendments, this is really about the mechanisms to enforce lots of things; it is not about the laws. There are loads of laws on this stuff generally; it is about enforcement mechanisms. The international court would be another enforcement mechanism but, of course, we need enforcement mechanisms at home.

With that, I thank everybody who has taken part in the debate and I beg leave to withdraw the amendment.

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[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I support this amendment. As the noble Lord, Lord Agnew, said when he introduced it, cost exposure for prosecuting authorities can pose a real hurdle to their pursuing those prosecutions. As he also said, the Rubicon has been crossed in allowing cost capping, which the Government did in March 2022. This amendment has real legs—if I can use that phrase—and I hope the noble Lord presses the matter further, perhaps at later stages of the Bill.

I too was at the briefing with Bill Browder. I am currently reading his second book, having read his first, and it is compelling reading. He is a very brave man. I also agree with the comments made by the noble Baroness, Lady Bowles. I think she said: the precedent and the need are there, and the solution is here. I agree with those sentiments.

Finally, I thank the noble Lord, Lord Trevethin and Oaksey, who set out, interestingly, that some judges in the civil courts have developed their own law on this matter regarding the enforcement agencies not necessarily having to bear all their costs. He gave an interesting example of a further precedent, if you like. I too will be interested to hear the Minister’s response to that. The matter will be considered very carefully with regard to the later stages of the Bill.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lord Agnew for tabling this amendment and all noble Lords for the points they have raised in this debate. Again, I reassure the Committee that the Government take economic crime very seriously and are taking the necessary steps to ensure that enforcement agencies can tackle illicit financial activities while upholding the fundamental principles that govern our entire civil justice system.

In civil legal proceedings the loser generally pays the legal costs of the winning party, as has been acknowledged. The “loser pays” principle is a fundamental pillar on which the whole basis of civil litigation operates. It helps to ensure that only stronger cases are brought and that the winning party is able to recover reasonable costs of vindicating their case, save for in exceptional circumstances, to ensure access to justice for individuals with very limited resources. While important, civil recovery proceedings brought by enforcement agencies are not so exceptional as to warrant undermining the “loser pays” principle.

Several noble Lords have raised with me, and during this debate, the changes made to the unexplained wealth order regime by the Economic Crime (Transparency and Enforcement) Act 2022. These amended provisions in the Proceeds of Crime Act—POCA—introduce “costs protection” for enforcement agencies in cases of UWOs, unless they act unreasonably. This aimed to remove barriers to the use of UWO powers by relevant law enforcement teams. This was done on the basis that they were exceptional and likely to be low in volume in comparison to other types of civil recovery and, furthermore, that the relevant cost rules would be positioned as a novel and unique proposal, thereby maintaining the overall integrity of the “loser pays” principle in all other civil recovery proceedings. In the last five years, agencies with civil recovery powers—the Crown Prosecution Service, the National Crime Agency, the Serious Fraud Office, the Financial Conduct Authority and HM Revenue and Customs—have not paid any adverse costs for civil recovery proceedings.

There is also no guarantee that the introduction of further costs protection would lead to enforcement agencies pursuing more cases, as they report that each case must be assessed on its own merits considering numerous factors independent of costs liability, including gathering sufficient evidence to pursue a case and internal resourcing capability.

It is also worth bearing in mind that the Civil Procedure Rules, which guide the courts in procedural matters—I think this goes some way to answering the points raised by the noble Lord, Lord Oates—

[Baroness Bowles of Berkhamsted (LD)]

As I interpret what the Minister has said, if the regulator is taking the costs risk into account, that means it will take into account the question: am I up against a really wealthy opponent? Therefore, we will not have equal justice. You are saying that if the person from whom you are trying to recover the asset is particularly wealthy, they will be able to string out the process and do more appeals. That increases your costs risk and, therefore, the wealthy will not be pursued as much as the less wealthy. That is a very bad precedent and another reason why the amendment in the name of the noble Lord, Lord Agnew, is surely needed.

[Lord Sharpe of Epsom (Con)]

The noble Baroness makes an interesting point. I was talking about unexplained wealth orders in respect of the Economic Crime (Transparency and Enforcement) Act 2022. To go over that again, it aimed to remove barriers to the use of UWO powers by relevant law enforcement teams, but it was done on the basis that these were exceptional and likely to be very low in volume in comparison to other types of civil recovery. I do not think that is inconsistent with the argument about this amendment.

Going back to the procedural rules, which guide the courts in procedural matters, these enable judges to use their discretion to limit legal costs in certain circumstances. In appropriate cases, they may be used by agencies when pursuing asset recovery cases and are therefore a more suitable way of limiting costs liability in the few circumstances where this may be needed rather than through wholesale reform of the loser pays principle in civil recovery.

The amendment would overturn the very basis on which the entirety of civil costs and funding is built. It would negatively affect every other category of civil litigation, all for minimal, if any, financial savings in a very limited number of cases—

[Lord Agnew of Oulton (Con)]

Could my noble friend explain why this overturns precedence, while the Act last year on unexplained wealth orders does not? That is why I am so confused.

[Lord Sharpe of Epsom (Con)]

My Lords, I think I have already explained it, but I will endeavour to do so in greater detail in writing, if that is acceptable.

In a very limited number of cases, law enforcement would be involved. If parties in civil litigation do not fear having to pay adverse costs, it risks encouraging spurious and unmeritorious claims. On this basis—and I will write—I ask my noble friend to withdraw his amendment.

[Lord Agnew of Oulton (Con)]

I thank my noble friend the Minister for his explanation. I am afraid that I do not accept it, but I understand the convention that I need to withdraw my amendment. However, I will need to bring this back on Report; it is fundamental to our attempts to get a grip of economic crime in the system. I ask the Minister to reflect not only on my comments but those of other Peers who have supported the amendment and, indeed, the noble Lord, Lord Trevethin and Oaksey, who has come up with yet another example that I was not familiar with.

I was clear in my amendment that there is absolute protection against overreach by government agencies that are seen to act unscrupulously, so I do not accept that there is a risk. We know that we are not going to fund these agencies properly. Common sense tells us that they have to do a very careful risk analysis of any case they take on. If they think they have less than an 80% chance of winning it, they will not do it. I know that from my own experience as a Minister. Time and time again, early on in my career as the Academies Minister when I was trying to root out fraud there, I was told that the risks were too high and that we did not have the budget if we lost the case. It is not complicated.

I urge my noble friend the Minister to reconsider. My noble friend Lord Leigh was right—when we heard from Bill Browder a few weeks ago, he was adamant that, if there is one thing this Bill should do, it is to bring in this costs cap so that we can weaponise the agencies to go after economic crime. I beg leave to withdraw my amendment.