Criminal Finances Bill

Debate between Baroness Williams of Trafford and Baroness Kramer

Committee: 2nd sitting (Hansard): House of Lords
Monday 3rd April 2017 Lords Chamber

[Baroness Kramer]

My Lords, perhaps I may add one phrase only to this debate. I want to speak to Amendment 170 and suggest to the Government that this is frankly a no-brainer. We cannot afford to have inappropriate directors continuing to run companies, particularly when their inappropriate or inadequate behaviour has been exposed in the kind of circumstances discussed under Amendment 170. It is really important that the courts have a full range of tools. We no longer live in a world where the old-school tie and friendships determine who the appropriate directors of companies are. They have to be held to professional and appropriate standards. This proposed new clause would enable that to happen and I frankly cannot see why it should present any difficulties to the Government.

[Baroness Williams of Trafford]

My Lords, I am pleased that the amendments in this group have allowed us to have an extended debate on the tax evasion offences in Part 3 of the Bill. I am pleased to say that the Government are supportive of the intentions of these amendments, although that is not to say that further legislation is necessarily required.

Amendment 164 seeks to require the Secretary of State to publish an annual report on the number of companies that have, under the Public Contracts Regulations 2015, been excluded from tendering for public contracts, or had existing contracts terminated after being charged under the new offences. I fully agree that contracting authorities should be able to exclude bidders that have been convicted under the new offence. The Public Contracts Regulations allow for this in appropriate cases. They grant contracting authorities discretion to refuse to award a public contract to an entity that has been involved in grave professional misconduct. Such misconduct may include committing the new offences of corporate failure to prevent the criminal facilitation of tax evasion. However, government does not collect information centrally on the number of organisations that have been excluded from public contracts under the 2015 regulations. This is because these decisions to exclude are taken by individual contracting authorities on a case-by-case basis, and this may include the new corporate offences.

Introducing a reporting requirement would create a burden on contracting authorities. Each contracting authority would have to make a return to central government, detailing the occasions that exclusion from a bidding process has occurred, and central government would then have to collate all these reports in order to compile national statistics to be published in the report. Such a reporting requirement would go against the Government’s drive to simplify the public procurement process and to cut red tape.

Current efforts are focused on ensuring that contracting authorities have the necessary information to know whether those bidding for contracts have relevant convictions so that contracting authorities can make more informed decisions on whether to exclude them. This includes the introduction of a robust conviction-checking process to prevent bidders with convictions for relevant offences—including the new offences—winning public contracts. This was announced at last year’s anti-corruption summit and is about to be piloted by the Crown Commercial Service.

Amendment 165 seeks to introduce a system of corporate probation orders. This would allow a court to require relevant bodies found guilty of the new corporate offences to amend their prevention procedures. I welcome the noble Lords’ amendment. It is absolutely right that relevant bodies convicted of the new offences, and thus found to have inadequate prevention procedures, should be required to implement changes to those procedures. In response, I draw noble Lords’ attention to Clause 48(2) of the Bill, which adds the corporate offences to the list of offences for which a serious crime prevention order can be imposed under the Serious Crime Act 2007. This enables a court passing sentence on a person, including a legal person such as a corporate body, to impose a serious crime prevention order to prevent, restrict or disrupt their involvement in serious crime by imposing prohibitions, restrictions or requirements on them. The terms of these orders may require the relevant body to allow a law enforcement agency to monitor how it provides services in the future.

Relevant bodies convicted of the new offences are criminals. They do not require special or different sentencing powers. They can be adequately sentenced under the existing criminal law, using a serious crime prevention order to enforce change to prevention procedures. Such an order can do anything that a corporate probation order would. Alternatively, similar provision can be included within the terms of a deferred prosecution agreement. I trust therefore that noble Lords will see that their commendable objective can already be achieved within existing law.

I thank the noble Baroness, Lady Bowles, for Amendment 170. I share concerns about ensuring that those who are unfit to be directors are identified and disqualified from holding such posts. The amendment seeks to amend the Company Directors Disqualification Act 1986 in order to allow a company director to be disqualified by the court when a relevant body is found to have committed one of the new corporate offences, or a similar failure to prevent an offence under the Bribery Act 2010.

At present, under the Company Directors Disqualification Act 1986, a company director can be disqualified on conviction by the sentencing court. Alternatively, the Secretary of State for Business, Energy and Industrial Strategy can apply to the High Court for an order that a company director be disqualified. In either case, the company director would be a party to the proceedings, and thus given the opportunity to present their defence.

Criminal Finances Bill

Debate between Baroness Williams of Trafford and Baroness Kramer

Committee: 1st sitting (Hansard): House of Lords
Tuesday 28th March 2017 Lords Chamber

[Baroness Williams of Trafford]

The Government are never complacent in any area of law they introduce; I would never say that everything is perfect.

[Baroness Kramer]

My Lords, obviously I am going to withdraw the amendment, but I want first to make a couple of points. I am not going to give up on this issue. Let me point out that a moment ago the Minister talked about an office for money laundering to be set up within the FCA. As far as I am concerned, that is an ideal pattern to follow. The notion that this proposal would create an extraordinary and hefty bureaucracy is not credible because, frankly, the entire bureaucracy would probably be paid for by one whistleblower revealing one scandal on the scale that we have seen in recent years. I reject the idea that this is onerous. There are plenty of templates to follow that would allow us to do this sensibly.

On the financial incentive, I do not believe for a moment that whistleblowers do it for the money. The money is a recognition that they have destroyed their future. There may be some protection within the company they work for which ensures that they are not dismissed, but neither I nor anyone else can be persuaded that people do not look at whistleblowers and decide that they are not quite right for this promotion, that project or opportunity. If they try to change companies they go with what is almost a black spot on their hand, marking them out as someone it is perhaps better not to take a risk on. That is a reality which the Government have never faced up to.

When dealing with detriment, I would recommend the Minister and others who are interested to connect with the charity Whistleblower.co.uk, which would be delighted to provide them with a great deal of detail. I hesitate to mention individuals without their specific permission, but all the protections have turned out to be completely useless for them. People’s lives have been wrecked. Frankly, even the regulator would agree that despite all the systems that are in place, people’s lives have been wrecked, and there has only been some tinkering at the edges. Nothing has happened to bring about fundamental change. All this comes together in the poor statistics that I set out when moving the amendment. Very few people are coming forward and blowing the whistle on substantive issues that can affect our absolutely massive financial services sector. This allows the industry to be rather complacent, and that is exceedingly dangerous.

I hope that the Minister will recognise that while I will withdraw the amendment, we are nowhere near coming to the end of this issue.

Gender Pay Gap

Debate between Baroness Williams of Trafford and Baroness Kramer

Tuesday 20th December 2016 Lords Chamber

[Baroness Williams of Trafford]

My Lords, the Government, starting with the previous Prime Minister, are most certainly committed to the very ends that the noble Baroness seeks. Not only are women contributing to tax, but they also bring the huge benefit of increasing GDP in this country.

[Baroness Kramer (LD)]

My Lords, recent reports by Deloitte and the British Computer Society have underscored that where women are educated in STEM subjects and then pursue careers in that field, the gender pay gap is at its narrowest. Does the Minister agree that there are still huge cultural, social and other barriers that discourage many women from pursuing those opportunities and avenues? Would the Government be willing to put some resources behind trying to break down those barriers in an effective way, because leadership is surely required in this area?

[Baroness Williams of Trafford]

My daughter has just graduated in a STEM subject and is now working with one of the big four accountancy firms. That firm is going to great lengths to improve the diversity of its workforce. Some companies are much better than others at encouraging diversity, but I look forward to the day when diversity is the norm and those who do not engage in this agenda stand out by their lack of doing so.

Local Authorities: Fossil Fuel Holdings

Debate between Baroness Williams of Trafford and Baroness Kramer

Wednesday 24th February 2016 Lords Chamber

[Baroness Williams of Trafford]

My Lords, at the risk of repeating myself—I have said this several times over the last couple of days—if a local authority invests in a company whose share price is dropping significantly, it might be wise, in order to maximise the return for its investors, to invest in another company whose share price is increasing. That is a decision for it to make about its pension funds.

[Baroness Kramer (LD)]

My Lords, is the Minister aware that many pension funds regard it as their responsibility to have the best long-term returns, and therefore see sustainability of investments as absolutely key? She seems to be recommending that they go with short-term behaviour in the marketplace—behaviour that the Chancellor is frantically trying to change and which responsible pension funds have long since rejected, which is why many have ethical standards in their investment decisions.

[Baroness Williams of Trafford]

My Lords, local authorities should make decisions based on long-term and short-term investments in their portfolio and should keep an eye on both to ensure the best performance of those pension funds.