National Crime Agency: Fraud and Economic Crime

Lord Sikka Excerpts

Monday 11th September 2023 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My noble friend asks a good question. It is one that I am unable to answer; I cannot speculate as to whether it would have had that much operational impact on the National Crime Agency. I go back to the point I made earlier: the NCA is well resourced and its budget has increased year on year since 2019. I do not believe that it should have had any impact, but my noble friend is entitled to his point of view.

[Lord Sikka (Lab)]

My Lords, can the Minister say something about why and how the Government protect those who engage in economic crime and fraud? Let me refer to an example. The Bank of Credit and Commerce International was closed in July 1991 after the biggest banking fraud of the 20th century. To this day, there has been no independent investigation. Through litigation against the Treasury, I obtained one document, codenamed the Sandstorm report, which shows that the Government are protecting al-Qaeda, arms and drug smugglers, murderers and others who committed fraud through that bank. I invite the Minister to place a copy of the Sandstorm report in the Library of the House and, if he will not, to explain what is so secret that it cannot be made public.

[Lord Sharpe of Epsom (Con)]

I will not place a copy of that report in the Library. I am afraid that I am not qualified to speak on events from 32 years ago.

Banks: Forged Customer Signatures

Lord Sikka Excerpts

Monday 16th January 2023 Lords Chamber

Asked by

[Lord Sikka]

To ask His Majesty’s Government, further to the reply by Lord Sharpe of Epsom on 30 June 2022 (HL Deb cols 755–6) relating to allegations of banks forging customer signatures, what steps they have taken (1) to investigate and to prosecute banks for forging customer signatures, and (2) to compensate the victims.

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

My Lords, the National Economic Crime Centre has concluded its assessment into the materials submitted to it in relation to allegations of signatory fraud by banks and will communicate its findings to relevant parties imminently.

[Lord Sikka (Lab)]

I note that the Minister has not given any definite date for that. As usual, the Government are soft on corporate crime in the City, and thousands of innocent people have lost their homes, jobs, pensions and savings. Is it not time that we had a public inquiry into the Government’s support for the City in these crimes?

[Lord Sharpe of Epsom (Con)]

The noble Lord makes a number of fairly grave and unfounded allegations. The relevant experts in the NECC have been assessing the extensive material provided; he knows how extensive it was. The NECC has extended its review as new material has been supplied, but, recognising the complexity of fraud cases, I hope that all noble Lords will understand the length of time that this has taken. As I say, the NECC is in the process of notifying the complainants at the moment.

Corruption in the United Kingdom

Lord Sikka Excerpts

Thursday 13th October 2022 Grand Committee

[Lord Sikka (Lab)]

My Lords, I thank the noble Baroness, Lady Jones of Moulsecoomb, for securing this debate, and I fully agree with everything she said.

The UK is drowning in political, financial, legal and other forms of corruption. Evidence is all around us. Open any newspaper any day and what do we find? We find mis-selling of financial products on an industrial scale, rigging of interest and foreign exchange rates, pension abuses, tax dodges, money laundering and cooking the books. I have been doing accounting since 1968—that is a long time—and I cannot make head or tail of the accounts of large companies any more. They are incredibility opaque, yet the Government do absolutely nothing, and that opacity provides the cover to shift profits, dodge taxes and launder money. Whenever you ask questions in the Chamber, you get a standard kind of answer read from a sheet. Nobody really deals with the issues. We have phone hacking, diesel emissions, raw sewage dumping, insider trading and auditors such as KPMG admitting that they falsified audit files. Companies are filing fictitious accounts. A large number of small companies are doing that, yet nothing seems to happen.

The UK does not even have a central enforcer of company law. There is cognitive capture—not just capture, but cognitive capture—and regulators are pretty much useless. I shall give the Committee some examples. Between 2017 and 2021 there have been just two successful convictions for insider trading in the UK. NatWest is the only bank ever convicted of money laundering, and only because it admitted it. Despite strong condemnations in the courts, no big accounting firm has been investigated, fined or prosecuted for selling unlawful tax avoidance schemes. I keep asking Ministers to please name one firm. They always dodge the issues. The Bribery Act 2010 introduced the offence of failure to prevent bribery. The Crown Prosecution Service has secured just one conviction. The SFO has secured two. That was after the companies themselves pleaded guilty because of what came out of the US. Separately, Standard Bank, Rolls-Royce and seven other companies were let off with a deferred prosecution agreement—in other words, carry on as usual.

In 2018, the Government launched the National Economic Crime Centre to tackle what they call high-level fraud and money laundering. There is yet to be even a single prosecution. It is no good the Minister in response referring me to a plethora of laws. What we need is action, and that action is missing. The key reason for corrupt practices is to secure profits and high executive pay. The Government have absolutely no mechanism for ensuring that executives do not benefit from ill-gotten pay packets.

The state continues to fail to tackle corruption because it has a close relationship with big business. I am reminded of a quote by Adam Smith in his 1776 book, in which he says that

“the English legislature has been peculiarly attentive to the interests of commerce and manufactures”.

Some 250 years later, little has changed. This Government actually shield organisations which in writing say that they have been engaged in criminal conduct.

For example, in the US in 2012, HSBC admitted in writing that it had been engaged in criminal conduct. It paid a $1.9 billion fine for money laundering. It is a UK-registered, supervised bank, but it faced absolutely no investigation of any kind. Without making any Statement to Parliament, it later emerged that the Chancellor, George Osborne, the Governor of the Bank of England and the head of the Financial Services Authority secretly wrote to the US authorities asking them to go easy on HSBC. It was too big to jail and too big to fail—so carry on. And HSBC has carried on.

In how many other countries do Ministers cover up criminal conduct? It is certainly happening here. If we do not investigate these malpractices, there is zero chance of developing any effective laws, regulations or other mechanisms.

The Financial Conduct Authority and the National Crime Agency know that banks have been forging customers’ signatures to repossess their homes and businesses. I have had a dialogue with the Minister before; more than 10,000 pages of evidence have been submitted. Three years later—nothing. No action whatever. Even worse, the City of London Police fraud investigation unit is now funded by Lloyds Bank, which is no stranger to banking fraud. You cannot make this up.

A former Thames Valley police and crime commissioner said:

“I am convinced the cover-up goes right up to Cabinet level. And to the top of the City.”


That is the indictment—but nothing happens.

Secrecy is a key ingredient in corrupt practices and the UK leads the way. The financial secrecy index published by the Tax Justice Network ranks the UK as the 13th most secretive nation out of 141 countries. As I said, I cannot make head nor tail of company accounts any more. The rules are made by the corporate elites, auditors do not care—they sign and disappear—and there is virtually no accounting accountability or transparency in company accounts.

The Government’s obsession with deregulation has resulted in many small companies filing false accounts at Companies House. I have tabled many Questions drawing attention to that. Too many of these small companies are now fronts for money laundering. I have looked at the Economic Crime and Corporate Transparency Bill and it does not curb any of these things.

As the noble Baroness, Lady Jones, said, our political system is not up to the job of curbing corruption. It is available for hire to the highest bidder. Knighthoods and peerages are for sale. As Mohamed Amersi, who funded Boris Johnson’s campaign, said:

“You get access, you get invitations, you get privileged relationships, if you are part of the set-up”—


and obviously lucrative contracts then follow.

Too many legislators, in both Houses, are on the payroll of corporations, including those that are engaged in illicit financial flows. The inevitable outcome is inadequate scrutiny, laws and legislation. People can see that the system is corrupt and really needs reform, but I cannot see this Government reforming it—so hopefully they will make way for a Labour Government to do so.

--- Later in debate ---

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

My Lords, I thank the noble Baroness, Lady Jones of Moulsecoomb, for securing this important debate, and I am grateful to all noble Lords for their contributions. I will do my very best to answer the points that have been raised. Noble Lords will appreciate that some of them are broadly philosophical, and perhaps I will come back to those in due course, and some I cannot answer. On the points made by the noble Lord, Lord Sikka, I am not qualified to opine on the accountancy rules; that does not fall under the Home Office, as he will be well aware. It is a Treasury matter, and I will be certain that it sees the contents of his speech and will try to get him a response.

The Government are fully committed to protecting our institutions and systems from those who wish to undermine or abuse them. Like the noble Lord, Lord Evans, I do not believe that this country is systemically corrupt, but corruption poses a significant threat to all democracies, and to our economy and security. The Government are steadfast in their determination to ensure that the UK has the strongest possible defences and upholds the highest possible standards.

Before I talk about some of the things that the Government will do, it is worth defining corruption in response to the point made by the right reverend Prelate. The debate has raised a number of topics which demonstrates how broad a topic corruption can be, so it is important that we understand what we mean by corruption and define its scope. Corruption is the abuse of entrusted power for private benefit that usually breaches laws, regulations, standards of integrity and/or standards of professional behaviour. Corruption need not be economic in nature and can still exist even if everyone has acted within the law. Therefore, it is imperative that we also consider actions that go beyond economic crime legislation and capture the broader elements of corruption.

Corruption is harmful in many ways. It threatens national security, global stability and development; it can amount to a hidden tax stifling the growth we need to get our economy moving; and it can undermine trust in our democratic institutions—a point that I think all noble Lords made. As the former president of the World Bank, Robert Zoellick, said so eloquently,

“corruption is a cancer that steals from the poor, eats away at governance and moral fibre and destroys trust”.

Corruption is far from a victimless crime. While the impact of corruption is often hidden, we must never forget that it undermines the efficiency of public services, weakens the security of ordinary citizens and hurts the bottom line of businesses. More broadly, as the noble Lord, Lord Coaker, just noted, it undermines trust.

All noble Lords have asked what the Government plan to do. I will go into some detail, but I have only a limited amount of time, so I commit to write to noble Lords if I cannot cover all their specific points.

Economic crime is undoubtedly a multidimensional and multifaceted issue. There is a strong correlation between corruption and economic crime, and we are taking strong action in that regard. The Economic Crime (Transparency and Enforcement) Act 2022 was introduced in March, containing key measures to help crack down on dirty money, including from Russia and other foreign elites abusing our open economy, and provide greater powers to identify and investigate the illicit wealth of criminals. These powers have been put to immediate use.

The Combating Kleptocracy Cell in the NCA was set up after the invasion of Ukraine and recognises a significant increase in the NCA’s operational capability. I have seen those people in action and am in awe of their efforts. About £400 million has been allocated to tackle economic crime over the next three years.

The Government are following up on this expedited legislation with the Economic Crime and Corporate Transparency Bill, currently going through its Second Reading in the other place. I hope that will deal with the point made by the noble Baroness, Lady Kramer, about Companies House enforcement; among a suite of measures, the Bill includes reforms to Companies House that will bear down on the use of thousands of UK companies and other corporate structures as vehicles for economic crime, including fraud, international money laundering, illicit Russian finance, corruption, terrorist financing and illegal arms movement.

On strategy, the UK has long been seen as a world leader in dealing with corruption, from the UK-led anti-corruption summit in 2016, to the current anti-corruption strategy, which has served as a model for many other countries. Noble Lords may have seen our annual updates to Parliament on the progress we have made against this strategy. As they show, we have taken a number of important steps during the strategy period.

However, we know that the threat does not stand still, and we cannot be complacent. That is why the Government are developing a new anti-corruption strategy to succeed the existing strategy, which expires at the end of this year. The Security Minister will lead on that work as we look to build on the progress to date and make the UK even more resilient against the threat posed by corruption.

That resilience includes the overseas territories and Crown dependencies. They are separate, self-governing jurisdictions, but I am pleased that they have committed to upholding international standards and to having publicly accessible registers of who ultimately owns companies in place by the end of 2023. Gibraltar has already introduced such a register. I should note that this exceeds the standards required by the Financial Action Task Force.

The subject of standards in public life came up in a couple of contributions. The recent DHSC court case against the Government on Covid contracts ruled in our favour on all grounds. It showed the exceptional circumstances that Ministers and civil servants worked under during the pandemic to deliver impartial decisions to reach the best outcomes for the nation.

The Government are also working on their response to the recommendations made by the Committee on Standards in Public Life and in the Boardman reports. The Government have already issued new guidance on the declaration and management of outside interests in the Civil Service, and in July updated the House on progress made in responding to those reports, including outlining which recommendations have already been adopted. I will happily update the House on progress once more has been made.

On fraud and procurement, some issues overlap with standards in public life; I will go into more detail on those. Fraud is undoubtedly a significant and growing threat. Victims of fraud can suffer both serious financial and emotional harm, and we know that the money fraudsters make can fund other serious and organised crimes.

Public procurement is an important area of focus. Through the Procurement Bill currently going through Parliament, we aim to deliver a step change in transparency, with notices mandated for direct awards and publication requirements extended from planning to termination, including contract performance. This will embed transparency throughout the commercial life cycle so that the spending of taxpayers’ money can be properly scrutinised. Not only will this allow better detection of fraud and corruption; it will also enable better value for money and efficiency.

I will digress briefly on PPE, raised by the noble Baroness, Lady Jones. Contrary to allegations of potential conflict of interest in the awarding of contracts, the National Audit Office made clear that it

“found that the ministers had properly declared their interests, and we found no evidence of their involvement in procurement decisions or contract management”.

Our priority throughout the pandemic was saving lives. More than 19 billion items of PPE were delivered to front-line staff to keep them safe. The normal tendering process takes a minimum of 30 days; this was obviously not practical under those circumstances. It was essential that we were able to act quickly in an emergency. Under rules that existed years before Covid, contracting authorities are allowed to award contracts directly when there is a situation of

“extreme urgency brought about by an unforeseeable event”.

Obviously, Covid was that.

The higher-priority lane was one way of helping us to identify credible opportunities for PPE procurement so that front-line workers received the protection they needed. Ministers were not involved in the decision to establish the high-priority lane, nor were they offered a decision on whether this should be created. This was an internal process within the PPE cell, led entirely by officials. I could go on but I think that covers the principal questions asked.

I hope noble Lords will forgive me for leaning forward. Unfortunately, my brief is slightly between my glasses and non-glasses range so I have no choice but to do so.

Tackling fraud more broadly requires a unified and co-ordinated response from government, law enforcement and the private sector to better protect the public and businesses, reduce the impact of fraud on victims and increase the disruption and prosecution of fraudsters. That is why we will publish a new strategy to address the threat of fraud against citizens. Whatever form it takes, fraud is a despicable crime that we must confront with all the energy and expertise we can summon.

Corruption not only undermines trust in our democratic institutions, as all noble Lords have noted; it also creates vulnerabilities that our adversaries can exploit. We must remain alive to those risks, which can undermine development, stifle economic growth and threaten global stability. We must also ensure that we keep the protection of our national security at the forefront of our efforts while maintaining the highest possible standards in public life.

The National Security Bill, currently before Parliament, completely overhauls our espionage laws and creates new measures to enable our law enforcement and intelligence agencies to deter, detect and disrupt the full range of modern-day state threats. The new foreign influence registration scheme, which has been added to the Bill, aims to strengthen the resilience of the UK political system against covert foreign influence and provide greater assurance around the activities of specified foreign powers or entities.

Many noble Lords referred to the role of businesses. Business has a huge role to play, of course, particularly as we seek to strike new trading relationships across the world. We are asking businesses to compete in new markets and be innovative in their approach. This is especially vital in times of global economic hardship but corruption can be a hidden tax on companies, denying them a level playing field. This must be countered.

[Lord Sikka (Lab)]

Forgive me for this intervention; I will be quick. How does the Minister reconcile what he has said with the statement made by Chris Philp, who is, I believe, the Treasury Minister? He said that the Government will ensure that

“no business under 500 employees is subject to business regulation”

and that this will be extended to businesses with up to 1,000 employees in due course. How can that be reconciled with any of these anti-fraud and anti-corruption strategies?

[Lord Sharpe of Epsom (Con)]

I apologise to the noble Lord; I will have to ask the relevant Minister what he meant by that. I have not read that particular statement, so I cannot help him.

As I was saying, this must be countered. We are seeking strong relationships with our new trading partners to reduce these risks, and our businesses operating abroad know that they must comply with the high standards set in the Bribery Act 2010—a piece of legislation noble Lords have previously found to be a “global gold standard” in their post-legislative scrutiny. We are actively enforcing the Bribery Act. Operational successes in recent foreign bribery cases over 2021 included the Serious Fraud Office’s conviction of Petrofac Ltd—resulting in over £77 million in fines, confiscation orders and costs—and a deferred prosecution agreement with Amec Foster Wheeler Energy Ltd, resulting in £103 million in penalties and costs that also included compensation to Nigeria. On the subject of DPAs—deferred prosecution agreements—and in answer to the noble Lord, Lord Evans, they have raised over £1.6 billion.

I am being told that I am out of time. I apologise to those I have not managed to answer, particularly the noble Lord, Lord Sikka, with his very specific query; I will get back to him on that. I am grateful to all those who have participated in this debate, and I agree: these issues strike at the heart of our democracy, security and economy. As I have made clear, the Government are absolutely determined to root out and tackle corruption however and whenever it appears.

Black Dog Crisis Management Company

Lord Sikka Excerpts

Monday 11th October 2021 Lords Chamber

[Baroness Williams of Trafford (Con)]

If the noble Baroness wants to give a donation to the Conservative Party, I am sure that it would be welcome. Government procurement is open and transparent and there are very strict rules around it.

[Lord Sikka (Lab)]

My Lords, I have two questions. First, what skills deficiencies in the Home Office’s 16 directors and 277 senior managers persuaded the Secretary of State to award contracts to Black Dog Crisis Management, a company with £100 share capital and only one employee, who previously worked at the Cabinet Office? Secondly, when will these contracts be published in full?

[Baroness Williams of Trafford (Con)]

My Lords, I understand that all direct awards are listed in the contracts finder area of GOV.UK. On skills, as I said, this was a particularly novel incident and that is why the STA, which is very restricted in its use, was used in this case.

Police, Crime, Sentencing and Courts Bill

Lord Sikka Excerpts

2nd reading
Tuesday 14th September 2021 Lords Chamber

[Lord Sikka (Lab)]

My Lords, I join others in welcoming the noble Lord, Lord Sandhurst, to the House and I look forward to engaging with him in the weeks and years to come. I have considerable concerns about large parts of the Bill which seem to be designed to attack hard-won human rights. I am also particularly concerned that the Bill is empowering Ministers to make laws without any parliamentary approval. That seems to happen only in dictatorships; maybe that is where we are heading.

The Bill would criminalise Gypsy, Roma and Traveller communities without explaining why the Government have failed to provide adequate sites for them. The Government also have in their sights trade unions, workers and peace marchers, who could all be criminalised because their protests are deemed to be noisy and disruptive. Companies can cause disruption by moving production and the Government say that is good and fine, but if workers protest about loss of jobs or homes and cuts to their wages, that is considered to be disruptive, and the full might of the state is unleashed upon them. Did someone ever say that the laws passed by Parliament are even-handed? If so, I would love to see the evidence.

This Bill also creates distrust between people and the police by requiring police commissioners to interpret the new noise triggers embedded in the Bill. People protest because Parliament and Governments are not responsive to their concerns. Whether they are civil rights, feminist, environmental, LGBT or anti-war demonstrators, people are asking to be included in the fabric of society. They ask for dignity and rights and draw attention to the destructive practices of corporations and abuses of power by the state. Rather than building an inclusive society, this Bill would criminalise people of conscience and deprive them of jobs, mortgages, credit cards, travel visas and other things that many of us take for granted.

This week, the good people of Liverpool protested about an arms fair to be held in the city in October. It is not criminal, apparently, for companies to market weapons of mass destruction near schools, homes and hospitals, but under this Bill it would be criminal for protestors to object to such a deadly trade being conducted in their neighbourhood. Obviously, the Government are concerned that corporations should not be deprived of their profits, but people can be deprived of their lives and there would be restraints on demonstrating about it.

So many of our rights are derived from protests. In 1968 the Ford sewing machinists organised strikes and protests to demand equality. They drew attention to legalised discrimination, which paved the way for the Equal Pay Act 1970. Under this Bill, they would all be criminalised. I remember demonstrating against racial discrimination. I made plenty of noise and caused disruption too, so presumably I would also have been criminalised and would not be standing here. Maybe this is the aim of the Bill.

The CND marches created social awareness of the destructive power of nuclear weapons and a climate for international treaties and bans, yet this Bill could criminalise similar protests. It would return us to the era of the Tolpuddle martyrs, when people protesting about wage cuts and workers’ rights were criminalised, prosecuted, silenced and exiled. The power of the state would be, once again, unleased against the likes of the Jarrow marches, seeking jobs and an end to persecution by the state.

As a result of protests, we have a better and more inclusive society. This Bill would reduce the possibilities for emancipatory change. In my final words about the consequences of such a Bill, I quote from President John Kennedy:

“Those who make peaceful revolution impossible will make violent revolution inevitable.”


Is that what the Government are trying to achieve?

Daniel Morgan Independent Panel Report

Lord Sikka Excerpts

Tuesday 22nd June 2021 Lords Chamber

[Baroness Williams of Trafford (Con)]

I thank my noble friend. As I said to the noble Baroness, Lady Ludford, on the definition of freemasonry, the Code of Ethics published by the College of Policing makes it clear that the police must remain impartial and that membership of groups or societies must not cause a conflict of interest or impact an officer’s ability to discharge their duties effectively. As I said earlier, the panel is clear that it found no evidence that freemasonry had any effect on the investigations.

[Lord Sikka (Lab) [V]]

My Lords, a statutory duty of candour is a necessary first step in checking institutionalised corruption through the sunlight of transparency, candour and frankness. That point was made strongly by the 2013 Francis report, the 2015 Harris review, the 2015 Report of the Morecambe Bay Investigation and the 2017 Jones report on the Hillsborough tragedy, which specifically called for the establishment of a duty of candour for police officers. Can the Minister explain why the Government have ignored such calls? Secondly, if the Government are sincere about creating such a duty, they can easily and speedily adopt the Public Authority (Accountability) Bill, which was tabled in March 2017 by former MP Andy Burnham. There we are—we have ready-made legislation. What prevents the Government adopting it?

[Baroness Williams of Trafford (Con)]

The noble Lord may not have been here for an earlier question, but I said that the Home Secretary is very keen to speak to the families before publishing our response on this duty.

Covert Human Intelligence Sources (Criminal Conduct) Bill

Lord Sikka Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Thursday 3rd December 2020 Lords Chamber

The amendment seeks to limit the definition of criminal conduct in that way. I think it is a matter of tightening it up and getting rid of material in the Bill that should not be there. I beg to move.

[Lord Sikka (Lab) [V]]

My Lords, it is a great pleasure to speak in this debate. My concern is about authorising corporations to commit criminal acts and the consequences for the individuals who have been somehow enrolled to commit criminal acts and subsequently discarded. Through this amendment, I seek to address those issues.

The Bill permits the relevant authorities to enrol and authorise state and non-state actors to commit criminal acts. None of the relevant authorities listed in the Bill is hermetically sealed; they are not self-contained. They use corporations—private organisations—to further their aims. They interact with others, and there is evidence to suggest that over the years corporations have been authorised to commit what some would say were criminal acts, while others might perhaps say those acts were dangerous. Corporations have become an arm of the state, and all Governments in recent years have had an appetite for outsourcing things. I can see nothing in the Bill that would prevent a Government from outsourcing the commission of criminal acts.

There is a fair bit of research into some of these companies. I want to draw attention to an article, dated 20 December 2018, that is easily accessible on the openDemocracy website. I shall quote part of it:

“G4S, one of the UK’s biggest private military companies, provides pivotal ‘operational support’ to Britain’s military in Afghanistan and such incidents bring back into focus the extent that private military and security companies are present – and sometimes directly involved – in combat … Britain has led this privatisation of modern warfare. It leads the world in providing armed contractors to ‘hot spots’, be it combating terrorism in the Middle East or fighting pirates off the Horn of Africa. Some of their biggest clients are governments; since 2004, the British state has spent approximately £50 million annually on mercenary companies.”


I would add that lots of details are very rarely provided by government officials to Parliament or the public. Over the years, I have tried to look at some of these companies, but it is almost impossible to track them. They are formed and then very quickly dissolved. It is very difficult to track their operations. The article that I have referred to goes on to say:

“Despite the size of this mercenary industry, the entire sector is marked by secrecy. Men trained in the arts of subterfuge and counter-intelligence dominate this sphere, and the result is an industry that operates from the shadows.”


How will the CHIS Bill make this industry accountable? There is clear evidence that these companies have been used for the commission of criminal acts.

One example of this is that in 2007, employees of Aegis Defence Services, based in London, posted footage on the web showing its guards firing their weapons at what was reported at the time as “civilians”. The company said the shootings were legal within the rules of protocol. That company has also been criticised for allegedly employing former child soldiers from Sierra Leone as mercenaries in Iraq. This is a company that is headquartered in London.

As far as I am aware, there is no central database of private military and security companies operating from the UK, and I do not think that there is even any legal requirement for them to register with a governing body. Yet these companies, both in the past and possibly even now, are authorised to commit criminal acts. There is nothing in the Bill to prevent a relevant authority from authorising such companies to conduct these acts.

My concern is that we must not authorise private profit-maximising corporations to commit criminal acts. You could argue that, the more terror they unleash and the more criminal acts they commit, somehow the higher their profits will be; their executives and shareholders will be that much richer. This is simply unacceptable. Their victims receive virtually no compensation or justice, and Governments have simply pretended that they know nothing about the criminal acts being committed in their name. The murk surrounding them was touched upon in the 1996 report of Lord Justice Scott’s inquiry into the arms to Iraq affair, but there was very little clarity.

Corporations provide not only mercenaries and related services; they also operate much of the local infrastructure, including the operation of prisons. Their employees may be persuaded to go undercover into a prison to learn about drug dealing and much more. Presumably, they would need to be authorised to do so by the Home Office to commit such acts. These undercover agents can, intentionally or unintentionally, injure others. In those circumstances, who exactly is to be held accountable? Is it the corporation which has been authorised to commit the criminal act, or is it the relevant authority? As far as I am aware, the Investigatory Powers Commissioner does not have access to the documents and the personnel of these corporations.

There is also the unedifying scenario of a relevant authority authorising a corporation to commit criminal acts, which in turn holds training sessions for its employees, training them to commit murder, torture and other heinous acts. What would happen to those individuals who refuse to obey the instructions of their employers? Would they be able to say that they cannot go along with that? Would they be able to access an employment tribunal to secure redress? I cannot see anything about that in the Bill.

At the moment, people can refuse to commit criminal acts but if the Bill becomes law certain criminal acts would be normalised, though they would need to be authorised. That presents an enormous danger, and we have not sufficiently discussed the implications of corporations being licensed or authorised to commit these acts. Over the years, government departments have not come clean at all about how they have interacted with such corporations.

Today, and in previous debates, many noble Lords have drawn attention to the fact that children and vulnerable people may be enrolled to commit criminal acts. They can be used by the relevant authority and then discarded, perhaps being paid a small sum. However, many of these individuals will have flashbacks for years. They will have nightmares and suffer mental health problems; where exactly will they be able to turn for help? On the other hand, if these individuals are employees of the relevant authority, the employer will owe them a duty of care. They will then have recourse against the employer—namely, the relevant authority—so that they can be supported and compensated. Again, that is an issue.

Corporations should not be authorised under any circumstances to commit criminal acts. In the UK, we do not even have a regulator to enforce company law, never mind anything else the corporations might do—there is no central enforcer of company law in this country. Another benefit of restricting the commission of criminal acts to persons employed by the relevant authority is that that would protect very young children: children under a certain age cannot be employed at all. This will provide extra protection for those individuals. If the vulnerable people are used, the relevant authority has to be accountable for their action.

It is with this kind of issues in mind that I have proposed Amendment 53, which suggests that only individuals directly employed by a relevant authority can be authorised to commit criminal acts. We do not have the power to fully look into what corporations do, and, as I said earlier, there is not even a central regulator.

[Baroness Chakrabarti (Lab) [V]]

I can be brief. My noble friends pose two very important questions that become even more unnerving when run together. I look forward to what the Minister says about, first, the exact detail of this conduct in relation to CCAs—it is vague language; can it be sharpened?—and, secondly, the ability under the legislation as drafted for corporations, rather than individuals, to be licensed to commit criminal conduct or to run CHIS and criminal conduct themselves. If she thinks that the Bill is too broad compared to government policy, will she consider ruling out on the face of the legislation that kind of sub-delegation or outsourcing to corporations?

Covert Human Intelligence Sources (Criminal Conduct) Bill

Lord Sikka Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Wednesday 11th November 2020 Lords Chamber

[Lord Sikka (Lab) [V]]

My Lords, I welcome the noble and learned Lord, Lord Stewart, and the noble Lords, Lord McLoughlin and Lord Walney, to the House. I look forward to meeting them face to face in the not too distant future and working with them.

I have a number of questions. First, the Minister and the Government have told us that we can rely on the Human Rights Act as a way of curbing any excesses of the CHIS Bill, but the difficulty is that the Government have already committed to repealing and revising that Act. We do not know what will be taken out or left in. Surely it would be more prudent for the Government to introduce the revised human rights legislation first and bring the CHIS Bill later? But that is not what they are doing.

Subsection (5)(c) of new Clause 29B, as proposed by Clause 1(5), permits authorised criminal acts

“in the interests of the economic well-being of the United Kingdom.”

As the noble Lord, Lord Hendy, indicated, the Bill does not say what that actually means. How do we know what is in the long-term economic interest of the United Kingdom? Was deregulation of the financial sector really in the economic interest of the UK? Is anybody calling for deregulation now because it clashes with the government ideology of the day, perhaps? Are they really to be infiltrated by undercover agents and the organisation subverted? It is hard to know.

Some in authority will have argued—they certainly did in their day—that the general march against unemployment and poverty, the miners’ strike, the Dagenham women’s quest for equal pay or the Grunwick workers’ quest for better pay and working conditions were somehow a threat to the economic well-being of the UK. However, with hindsight, we know that they enabled many people to live a fulfilling life. They brought in an era of possible gender equality, at least over pay. Much of our social awareness is due to social organisations such as environmental activists, Greenpeace, Friends of the Earth, anti-apartheid movements and Extinction Rebellion, which may well operate in the margins of the law from time to time. However, these organisations can easily be classified by the Government as damaging the economic interests of society and thereby perhaps become subject to infiltration by undercover agents.

Prime Minister Margaret Thatcher referred to the African National Congress as a “typical terrorist organisation”; by definition, she labelled Nelson Mandela a terrorist. Whether the Government sent in any undercover agents to undermine the ANC, we do not know. Nevertheless, the idea that somehow you are going to safeguard national security and economic interests poses particular problems, because the issues tend to be seen through the lenses of the ideology of the Government of the day.

The Bill defines “relevant authorities” but omits an important fact: all the relevant authorities have been outsourcing some of their activities to private corporations. That means that other corporations would also be authorised to commit criminal acts. Where does that leave us in terms of corporate responsibility and the responsibility of corporations under international law to uphold human rights? Who will oversee these corporations? In this country, we do not even have a central regulator to oversee the enforcement of the Companies Act. What happens to the employees of these organisations if they say that they cannot go along with instructions from their employers? What happens to those conscientious objectors? The Bill provides absolutely no guide whatever.

For those reasons, it is impossible for me to support the Bill. I look forward to a number of amendments and a further debate.