Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations 2021
Baroness Wheatcroft Excerpts(4 years, 11 months ago)
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Baroness Wheatcroft (CB) [V]
My Lords, I thank the Minister for introducing this statutory instrument in his usual straightforward manner. I support it and, for once, I cannot quibble with its need for a hasty introduction within the 21-day limit. In the fight against money laundering and the financing of terrorism no time should be wasted. The need to add new countries to the list surely takes precedence over the need for a 21-day period before the legislation can come into force.
The Government have decided that they no longer want to be bound by the European Commission’s list of states which require extra money laundering precautions. They have opted instead to adhere to the Financial Action Task Force list although, in practice, this amounts to a very little change.
The need for vigilance is clear. The threat of terrorism is omnipresent. The Islamic State in Iraq and the Levant—ISIS—continues to pose a threat, as it has access to resources which enable it to carry out or inspire terrorist attacks. Al-Qaeda and its various affiliates still pose a threat, and there are countless hostile forces, both organised and rogue, which can do harm to civilised nations. The proceeds of money laundering are their cash in hand. Money laundering is certainly not a victimless crime. It needs to be hounded out and this legislation is part of the process.
The Financial Action Task Force has set itself up as the global money laundering and terrorist financing watchdog. More than 200 countries and jurisdictions are signed up to its policies. However, I wonder whether its methods are any longer entirely reliable in giving us the list we require. For instance, Russia does not feature on the list of countries which should be subject to increased vigilance. I wonder why. We are told by FATF that Russia has an in-depth understanding of its money laundering and terrorist financing risks and that it has policies and laws to address these risks. That might be enough for the FATF, but can the Minister tell us whether it is enough for the British Government? Do they feel comfortable with the FATF list about where particular vulnerabilities lie? It seems to me—and to others—that Russia has a framework aimed at preserving what it wants to preserve and not at protecting the rest of the world from money laundering.
Richard Gordon, the director of the Financial Integrity Institute at Case Western Reserve University, points out that what the FATF endeavours to measure is not results but the processes that are in place to detect and deal with money laundering. None of the measures takes account of political concentration or a lack of independence of the judiciary. They would not serve to protect external countries from a threat posed by money laundering to fund terrorism.
Terrorism comes in many shapes. Russia is known to like to interfere with electoral processes, both in the US—where sanctions are now being imposed on it because of that—and in the UK, where its interference in our elections and our referendums is now clear. That interference is funded by money laundering. Does the Minister think that the FATF list should be the one on which we place such reliance, or should we go further with our new-found independence and construct our own list?
Taskforce on Innovation, Growth and Regulatory Reform
Baroness Wheatcroft Excerpts(5 years ago)
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Lord True (Con)
My Lords, I did not say that the results were not going to be published, but that it would be a matter for the Prime Minister whether they will be. That will happen after the report is presented, at the end of April. On the specific issues concerned, as I have said before, I will draw my noble friend’s points to the attention to those responsible. I am sure that within the terms of reference it would be open to them to look at some of the issues she describes.
Baroness Wheatcroft (CB) [V]
On 31 January, Sir Iain Duncan Smith wrote in the Daily Telegraph that
“Despite what the naysayers have said, their worst predictions have not come to pass—goods continue to flow”.
In fact, the ONS reports that exports to the EU were down 40% in January, in part due to the increased regulation brought about by Brexit. Does the Minister believe that Sir Iain Duncan Smith will bring a suitably realistic approach to chairing the task force, rather than the sort of blue-sky thinking in that Telegraph article?
Lord True (Con)
My Lords, my right honourable friend Sir Iain Duncan Smith has an extraordinarily distinguished record in government in working on behalf of underprivileged people and the poor. I am sure that he will bring a very open mind to this task.
Budget Statement
Baroness Wheatcroft Excerpts(5 years ago)
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Baroness Wheatcroft (CB) [V]
My Lords, I congratulate those making their maiden speeches today. In particular I am delighted to welcome the noble Baroness, Lady Foster, to the House. We first met at sea—appropriately, given her transport interests—and I am sure her knowledge will benefit the House.
This was a very limited Budget for a country faced with the double whammy of Covid and Brexit. I agree with the noble Baroness, Lady Bottomley, that this was a missed opportunity to deal with the issue of properly funding social care. Having witnessed the tragedy that killed so many in our care homes, surely the people of the UK would have been ready and willing to confront what must be done to ensure adequate funding of social care.
The Chancellor had to offer continuing help to those whose jobs had been hit by Covid, and I welcome the steps he has taken in that direction. However, there is more that he could and should have done. Others have talked about the perilous state of our music industry and musicians; some believe that the industry could be reduced by half unless steps are taken to ease freedom of movement for the sector. I have two specific asks, which I hope the Minister might address in his closing remarks. Here I declare my interest as chairman of the Association of Leading Visitor Attractions.
Theatres and music festivals are major contributors to the UK economy but have been among the hardest hit victims of Covid. They are desperate to get back to work but, if they are to incur the heavy costs involved in preparing for a production or festival, they need insurance. The insurance market will not provide that at anything like an affordable rate without government underwriting it. The Government have already provided that for film and television; please could they do the same for theatres and festivals?
I also make a plea on behalf of visitor attractions. For the second time, the sector will not be open over Easter even though non-essentials shops will. Here is my second ask, which I am sure the country would welcome. Could we have a special bank holiday in September? All being well, it would be a celebration of a hugely successful vaccination campaign, but it would also allow indoor attractions to benefit from bank holiday trade.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
The noble Lord, Lord Duncan of Springbank, has been unable to join the call so I call the noble Baroness, Lady Kramer.
Space Industry
Baroness Wheatcroft Excerpts(5 years ago)
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Baroness Wheatcroft (CB) [V]
I welcome today’s maiden speakers and thank the noble Lord, Lord Willetts, for the way in which he introduced this debate. I was interested to hear his positive comments on OneWeb, which were particularly striking in contrast to the remarks others have made on that issue. Following the latest fundraising for OneWeb, can the Minister tell us where the country’s holding in that company now stands? It had been 42.2% and I wonder whether it has been significantly diluted. Could he also tell the Committee how much money was spent on trying to develop our own GPS system, a scheme that has now been abandoned?
More positively, astronauts such as Chris Hadfield are now talking about colonising the moon. NASA is setting up a lunar village, or has plans to. Can the Minister say whether the government’s space strategy will be similarly forward looking? Can he also tell us how we are regulating commercial activity in space?
Essential Services: Large-scale Technology
Baroness Wheatcroft Excerpts(5 years, 2 months ago)
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Baroness Wheatcroft (CB) [V]
My Lords, one of the biggest risks of reliance on large-scale technology is the eradication of so many traditional jobs. Would the Minister consider offering retraining to many of the people currently paid to do nothing on the excellent furlough scheme whose jobs are unlikely to have a long-term future?
Lord True (Con)
My Lords, the training challenge and broader apprenticeship challenge is ongoing, immense and growing, and I agree with the importance which the noble Baroness attaches to it. The Government are helping to promote cyber skills among young people to fill the shortages in that capacity.
EU-UK Trade and Cooperation Agreement
Baroness Wheatcroft Excerpts(5 years, 2 months ago)
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Baroness Wheatcroft (CB) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Alderdice, as I agree with everything he said. The Minister said that any deal was a compromise but, while the UK Government laud their success in the negotiations and the Prime Minister declared that we have succeeded in
“having our cake and eating it”,
that is not the case. The EU interpretation of the deal is naturally very different. It points out that
“the Trade and Cooperation Agreement does not cover any decisions relating to equivalences for”,
among other things,
“the UK data protection regime, or the assessment of the UK’s sanitary and phytosanitary regime for the purpose of listing it as a third country allowed to export food products to the EU. Indeed, these are unilateral decisions of the EU and are not subject to negotiation.”
The impacts of that are already being felt. While there has been government triumphalism over the issue of fishing, our shellfish industry faces decimation. Much of its produce was exported to the EU, but now there are huge new obstacles, both bureaucratic and financial. Could the Minister comment on that?
This agreement is better than nothing, but it is dividing the country. There is now a border in the North Sea. The Government consistently try to deny this, but there is now an effective border between Great Britain and Northern Ireland. We have seen how this has affected Sainsbury’s. The Kennel Club, no less, is also deeply concerned about the new obstacles facing those in Northern Ireland who wish to compete in dog shows in Great Britain. The horseracing industry in Ireland is very concerned about how it will face bureaucratic challenges and more expense. These charges can make life prohibitive. This is a tiny example of the deleterious impact of this deal. Far from having our cake and eating it, we will be going increasingly hungry.
Spending Review 2020
Baroness Wheatcroft Excerpts(5 years, 3 months ago)
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Baroness Wheatcroft (Non-Afl) [V]
My Lords, the spending review laid great stress on the need to preserve jobs. The Chancellor accepted that retail, hospitality and leisure have been some of the hardest-hit sectors during the pandemic, yet the review confirms that the Government are persisting in doing away with tax-free tourist shopping. The Office for Budget Responsibility says that the Government’s costings on this move are based on a “highly uncertain estimate” of how international tourists will react to the change. However, industry forecasts say that it will cost at least 40,000 jobs as tourists head to centres such as Milan and Paris to spend their money.
I must declare my interest as chairman of the Association of Leading Visitor Attractions. Our members —museums, art galleries, gardens and so on—across the country are desperate to see this measure, which will destroy jobs and reduce government revenues overall, reversed. Will the Minister re-examine this perverse decision?
Secondly, the spending review announced the laudable aims of fostering more building of social housing and the creation of a national infrastructure bank—something that we have long needed. In a report on a consultation also published last week, the Government said that the bank will be able to provide advice to local authorities on local projects. The consultation on future lending, carried out by the part of the Treasury known as the Public Works Loan Board, states that the PWLB will no longer lend to local authorities to invest in commercial property simply for yield, but the Treasury lent billions to local authorities to do just that. Those deals are now going badly wrong, as many predicted they would, so can the Minister tell the House whether he will support those local authorities which now face financial catastrophe as a result of loans fuelled by Treasury lending?
Customs Safety, Security and Economic Operators Registration and Identification (Amendment etc.) (EU Exit) Regulations 2020
Baroness Wheatcroft Excerpts(5 years, 4 months ago)
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Baroness Wheatcroft (Non-Afl) [V]
My Lords, I thank the Minister for presenting these regulations in such a straightforward manner. In principle, I welcome them. A six-month delay in imposing new and costly obligations on business at this time is clearly a sensible step. I hope that it will help delay Kent turning from the garden of England into the toilet of England, as some fear it will be, as lorries queue up outside the ports. Does the Minister expect those delays to be imminent on the other side of the channel because these agreements are not reciprocal but are being waived only by the UK? We cannot expect the EU to reciprocate.
It seems utterly mad to propose imposing new burdens on our businesses at this stage. It is welcome that HMRC is prepared to spell out that these regulations will be costly and troublesome to business when they come into practice. Already our country has lost a fortune because of Covid. The automobile industry alone reckons that Covid has cost it £27.5 billion so far in lost sales and production. There is no doubt that Brexit will add to those costs when we finally come to the end of the transition period.
Therefore, rather than waiving these regulations for six months, will the Minister consider extending the transition period across the board? That would be a sensible move for the UK and the EU. It might allow time to rethink the way in which businesses are classified. I understand the need for traders to have a registration and identification number but, despite the imminence of our final departure from the EU, many still have not secured one.
Perhaps they struggle with the requirement first to classify their operations in line with the Government’s official classifications. There are numerous, different and, in some cases, somewhat obscure categories. Manufacturing of consumer electronics is a sensibly broad and easy to understand category but do we really need businesses to shoehorn themselves into such narrow classifications as “producing oleaginous fruits” or “manufacturing of knitted or crocheted hosiery”? Those categories seem unnecessarily narrow. Will the Minister undertake to consider simplifying classifications to help those applying for EORIs?
Public Procurement (Amendment etc.) (EU Exit) Regulations 2020
Baroness Wheatcroft Excerpts(5 years, 4 months ago)
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Baroness Wheatcroft (Non-Afl) [V]
My Lords, as others have done, I thank the Minister for introducing these essential regulations—clearly, we have to fill the gap that we are creating somehow.
It was good news on 7 October when the World Trade Organization agreed to the UK’s accession to the government procurement agreement when we can legislate effectively to join that agreement. The agreement covers contracts worth £1.3 trillion, so it is clearly important that we should have access to those contracts on a level playing field basis.
The noble Baroness, Lady McIntosh of Pickering, asked whether our Government are encouraging our businesses to apply for the appropriate contracts as they come up under the GPA. I would be glad to hear from the Minister exactly what the Government do on that front. Clearly, it is important that we export to the biggest possible market.
But I am concerned about that level playing field basis—and the noble Lord, Lord, Lord Hain, mentioned his concerns about this. Last year, the Prime Minister said that he would like to “fundamentally change” the public procurement rules to “back British business”. A Green Paper is expected shortly. Perhaps the Minister could tell us exactly when we might see it. Could he also tell us whether it is right to be concerned, as the noble Lord, Lord Hain, is, that we may well jeopardise our access to GPA contracts if, as the Green Paper will suggest, we move very strongly towards favouring British business?
Others have referred to the dubious nature of some of the contracts that have already been issued for PPE. I understand that the Government had to move quickly, but I do not understand why, as the Good Law Project has exposed, there had to be special procurement channels set up for “VIPs”. The Cabinet Office was directly feeding its contacts into the procurement process. Speed is one thing, but handing contracts to favoured friends is very different. Could the Minister tell us whether “VIP” channels exist in other procurement areas, not just PPE?
The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)
I call the noble Lord, Lord Bhatia. Are you there, Lord Bhatia? We will move on to the noble Lord, Lord Wallace of Saltaire.
Future of Financial Services
Baroness Wheatcroft Excerpts(5 years, 4 months ago)
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Baroness Wheatcroft (Non-Afl)
My Lords, I declare my interests as listed in the register. The Treasury papers say that it will give audit equivalence to the EEA states and approve as adequate their competent authorities. It is important that investors should be able to have confidence in audits provided by EEA auditors for overseas operations of UK businesses. However, does this also mean that EEA auditors will be able to continue practising in the UK after the end of the transition period, while UK auditors will be excluded from EEA markets? If this is the case, can the Minister say what the cost will be of this lack of reciprocity?
Lord Agnew of Oulton (Con)
I am not able to give specific answers to the noble Baroness, Lady Wheatcroft, on those subjects at the moment. They will, no doubt, be included in the ongoing negotiations. If we receive clarity on that in the next few weeks, I will happily write to her.