Police Conduct and David Carrick

Alison Thewliss Excerpts

Tuesday 17th January 2023 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

I thank the Home Secretary for her statement and I put on record the SNP’s tribute to the victims in this case for their bravery in the face of ongoing trauma.

The charges that have been brought against David Carrick are incredibly disturbing—49 charges, including 24 counts of rape against 12 women over two decades, with accounts of domestic violence and coercive control. Through that, the Met has sought to protect its own, which is also incredibly disturbing and has led the former Victims’ Commissioner Dame Vera Baird to question the commitment to culture change at Scotland Yard.

It has been reported that the Met is checking back through 1,633 cases of alleged sexual offences involving 1,071 officers in the past decade. What retrospective action does the Home Secretary expect from that review? It should be a worry to all of us that those officers are still out there in their jobs, and that we may face what David Carrick reportedly told women when he flashed his warrant card: “I’m a police officer, you’re safe with me”—a chilling prospect. How does she intend to ensure that the review is thoroughly carried out? What updates can the House expect?

Lady Elish Angiolini has worked with Police Scotland to improve standards on this, and work is ongoing in Scotland too. How can women and people with vulnerabilities have the confidence that, if something happens to them while they are in London, the Met will respond in a proper way that respects their dignity?

[Suella Braverman]

The hon. Lady asks a series of good questions. To give more detail about the Met Commissioner’s commitments to strengthen the procedures, there is already a strengthening of the vetting of officers; an active review of historical cases is ongoing, where there may be a flag on the system for domestic incidents; and a data washing process is ongoing to ensure that the Met’s data is being very extensively checked against rigorously managed national databases. That is all being led by a new anti-corruption and abuse command unit, which is instilling an institutionally higher standard of managing and overseeing the important issue of vetting.

Windrush Lessons Learned Review: Implementation of Recommendations

Alison Thewliss Excerpts

Tuesday 10th January 2023 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

Whitehall sources have been quoted in The Guardian as saying:

“The Williams review is not set in stone”.

It would be a betrayal of that review and of those affected if there is to be no migrants commissioner, no reconciliation events and no extra powers for the independent chief inspector of borders and immigration. The Windrush compensation scheme has been painfully slow, with at least 23 people known to have died while their claims were being processed. So will the Minister confirm that none of the planned changes will affect the already ineffective compensation scheme and that the claims still outstanding will be concluded at the earliest opportunity? What confidence can those who do us the honour of coming to these islands for sanctuary, for work, for study and for love have in this Government when the UK Tory Government ignore the terrible injustices of Windrush, fail to learn the lessons and double down on attacking their fellow human beings?

[Miss Dines]

The hon. Lady should not believe everything she reads in the paper because there is no end date to Wendy Williams’ appointment, she continues to review and the Government take her views very seriously. I do not accept the premise of the “delay”. These issues are dealt with sensitively. It is important not to have a knee-jerk reaction and rush. Detailed, fundamental work needs to be done and Members must judge the “delay”—or the progress, as I would rather say—by the fact that there is a 59% success rate and so much money paid out. What is important is that the engagement, which has improved over the past three to six months, has meant a dramatic increase in the number of those taking up the scheme. There is always more to do and the Government will not say that they are doing everything right, but they are 100% committed and I do not accept that there is delay or a willingness to ditch, as is implied, the independent reviewer, whose work is so important.

Migration and Economic Development

Alison Thewliss Excerpts

Monday 19th December 2022 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

This is a dark day indeed with this judgment, particularly when the Home Secretary comes to the House to imply that having morals is fanciful. Enver Solomon of the Refugee Council has called the policy

“wrong in principle and unworkable in practice”,

and I am certain that this will go to appeal as charities and those involved in the issue have stated. SNP Members will never get behind this policy—not in our name—and I remind Members that slavery, apartheid and marital rape were all lawful at one time, but none of them were right.

The Court found that the Home Office had failed to consider properly the circumstances of the eight who challenged the policy. How exactly does the Home Secretary intend to approach such cases now, and what will happen to those eight individuals? What happens to those who have already been issued with notices of intent, and what confidence can they have in a system that previously did not properly consider the cases of eight people?

The Home Secretary claims that this will be a deterrent. The Tories also claimed that the hostile environment would be a deterrent and that the Nationality and Borders Act 2022 would be a deterrent. Now they claim the Rwanda policy will be a deterrent. None of them is working because they fail to recognise the desperate circumstances that drive people to come here in the first place. Safe and legal routes will work and prevent people from losing their lives in the channel.

The Home Secretary talked about the trade in human cargo. We all want to tackle the people smugglers who exploit people in the most vulnerable of circumstances. However, what else is the Rwanda policy but state-sponsored people trafficking? How many people are actually going to be removed to Rwanda? It is going to be a tiny proportion, so any deterrent effect that the Government claim is not going to be proper. What is the total cost of this unworkable scheme? How much money has been spent on it already? How much has gone on the legal case? How much of it would have been better spent dealing with the catastrophic backlog of cases that the Tories have created?

[Suella Braverman]

I am afraid that the hon. Lady’s ideological zeal is blinding and preventing her from taking a rational approach. I am proud of the fact that we have welcomed 450,000 people through safe and legal routes to this country since 2015. I do not think that anyone can claim that we are not forward-leaning on all of this. She and her party need to be honest about their position with the British people: they stand for open borders and uncontrolled migration.

Oral Answers to Questions

Alison Thewliss Excerpts

Monday 19th December 2022 Commons Chamber

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

My casework in Glasgow Central speaks to the fundamentally broken asylum system, and a failing immigration system more widely, as other types of applications are regularly delayed and people are left waiting for years. The barrister Colin Yeo suggests that, to get the asylum backlog down to 20,000, the Home Office would need to make 8,000 decisions a month. In the year to September, only 16,400 decisions were made in total, so precisely how will the Minister meet his target?

[Robert Jenrick]

Last week, my right hon. Friend the Prime Minister set out our plan to re-engineer the process and hire more decision makers. It is about not just people and resource, but ensuring that the process is faster and less bureaucratic, and that the guidance is cut and simplified. If the hon. Lady wants to help us with the issue, perhaps she will get on to her colleagues in the Scottish Government, because today in Scotland, in contrast with the rest of the United Kingdom, only one city—Glasgow—is doing its fair share and taking asylum seekers. In the whole of Scotland, only a dozen hotels outside of Glasgow are taking asylum seekers, which is not fair and equitable. She might sound pious, but her words and rhetoric are not matched by action from the Scottish Government.

[Alison Thewliss]

Local authorities in Scotland are reticent to take more because they know that the UK Government are not funding asylum seeker provision properly, and that pressed budgets due to another round of austerity are coming down the road, as the Minister knows just fine. Can he confirm that the Home Office is recruiting asylum decision makers from people in customer service and sales positions at McDonald’s and Aldi who have no prior experience of the asylum system, who are consulting Lonely Planet guides for knowledge of applicant countries, and who have described being

“left to fend for themselves”

after two days to conduct complex interviews and make life or death decisions? Is that really an adequate way to conduct sensitive decision making?

[Robert Jenrick]

I do not recognise anything that the hon. Lady just said. The problem with the current system is that it is too complicated and too bureaucratic. We want to simplify that, speed up those decisions and make sure that the teams are more productive. To come back to her first point, the Scottish Government are refusing to take any of the asylum seekers who are arriving in the UK on small boats, which is not right. There is a widening gulf between the actions of the Scottish Government and their rhetoric, which I ask her to consider.

Manston Update

Alison Thewliss Excerpts

Monday 28th November 2022 Commons Chamber

[Robert Jenrick]

The hon. Lady raises an important point. No doubt it is correct that there will be wide variances across the country, and I will raise that point with the Dame Jenny Harries and the UK Health Security Agency, if I may, and one of us will write back to her with our national strategy.

[Alison Thewliss (Glasgow Central) (SNP)]

It obviously should have come as no surprise to the Government that these conditions would break out because the all-party parliamentary group on immigration detention, which I chair, found similar circumstances at Napier barracks, including scabies outbreaks in that accommodation. Can the Minister tell me in a bit more detail what exactly is being done to ensure that the widest possible screening is done, rather than sending people off into the world with conditions such as scabies and no treatment? At Napier, people were forced to share cream between them and did not have proper washing facilities for their clothes and bedding.

[Robert Jenrick]

As I said in answer to earlier questions, there are thorough screening procedures, both immediately on arrival in Dover and then later at Manston. There is an extensive medical facility at Manston, where anyone presenting with symptoms of diphtheria or any other condition can get access to medical care. That is designed to ensure that they have good care, but also to put as little pressure on the local NHS in Kent as possible. It is frequent that individuals go to local GP surgeries or emergency departments in hospitals, and we make sure that they have access to the NHS, as any member of British society would do.

Hotel Asylum Accommodation: Local Authority Consultation

Alison Thewliss Excerpts

Wednesday 23rd November 2022 Commons Chamber

[Robert Jenrick]

We want to get to a point where there are multi-agency meetings prior to a final decision on a hotel or other sort of accommodation. That would involve full engagement with the local police force so that we could test, for example, far-right activity or public disorder. In my short tenure at the Department, I have seen a number of cases in which we have chosen not to proceed with accommodation on that basis, because it is very concerning when residents, or indeed migrants, are put in that situation. More broadly, when migrants arrive at Dover, we take biometrics, have counter-terrorism police officers there and do everything we can to screen them, prior to their moving on to other accommodation.

[Alison Thewliss (Glasgow Central) (SNP)]

The independent commission of inquiry into asylum provision in Scotland, which was set up by Refugees for Justice and is chaired expertly by Baroness Helena Kennedy, laid bare the deficiencies in the Home Office’s approach to accommodating vulnerable people, which resulted in the Park Inn incident in my constituency and a suspected suicide in other accommodation in the city. At my surgeries week in, week out, I see families and people with vulnerabilities who have been sent to shoddy, poor, substandard accommodation by the Home Office while contractors rake in the profits. Will the Minister tell me how long it will be before people in my constituency can expect to be treated with dignity and respect by the Home Office?

[Robert Jenrick]

I have been clear from the beginning of my tenure that I want to ensure that we always provide decent, but not luxurious, accommodation to all asylum seekers. I will say, however, that the Scottish Government have a poor record in that regard. They have consistently failed to find hotels in Scotland and to disperse individuals. The fact that Scotland is the only part of the United Kingdom housing Homes for Ukraine individuals in cruise ships shows the Scottish Government’s failure to find better accommodation.

Economic Crime and Corporate Transparency Bill (Fifteenth sitting)

Alison Thewliss Excerpts

Committee stage
Tuesday 22nd November 2022 Public Bill Committees

[Stephen Kinnock]

But is it not simply the case that we are not putting enough resources into the enforcement of laws and the policing of such markets? That is fundamental to achieving the regulatory aim of that side of the equation.

Crypto-expert Aidan Larkin recently told me how the US Government’s money laundering and asset recovery section brings in around $800 million a year in crypto-recovery alone, while the UK brings in close to nothing, because the UK Government fail to employ the handful of experts required simply to study the blockchains via things such as bitcoin analytics and to follow the illicit finance—“to follow the money”, as the saying goes. I cannot pretend to be an expert on the technical aspects of that, but it feels like a missed opportunity to go after illegal activity. We have surely reached a point in time when that could be self-funding, if we did it properly.

I am simply not convinced that the system for regulating cryptoassets is working as well as intended. Indeed, it is pretty telling that in response to written questions 86505 and 86504, which I tabled last week, the Minister admitted that none of the 200-plus crypto businesses operating without commission had been subject to any criminal or civil penalties.

As I mentioned, since January 2020 there has been a requirement for new businesses carrying on cryptoasset activity in the UK to register with the FCA. The requirement was extended to existing businesses the following year. The implementation of the register, however, has been beset by problems, not least of which is the fact that a very large number of the firms required to register have not done so. The FCA seems to have been unable to do much about that.

Only a couple of weeks ago, the Financial Times reported that only 16% of applications for registration have been approved by the FCA. The FCA has said that a large number of firms that failed to meet the conditions for registration have withdrawn their applications and that many of those appear to have carried on doing business without the requisite permission. Indeed, the FCA maintains a list of unauthorised cryptoasset businesses operating in the UK. As of last week, 245 firms were on that list. Will the Minister explain what is being done to prevent those 245 firms that operate outside the money laundering rules from scamming members of the public, facilitating money laundering or assisting the evasion of economic sanctions?

The Government have been aware for some time of problems involving the use of cryptoassets to defraud members of the public. In October 2018, the Government’s own Cryptoassets Taskforce published a report that identified advertising that misleads people deliberately, by overstating the potential gains from investing in such assets and downplaying the risks involved, as a significant problem for the Government to address. Only now, after four years, are new rules being introduced to expand the FCA’s remit to include consumer protection in relation to misleading financial promotions.

Despite that, however, a clear gap remains between the scale of criminal activity in the sector and the ability of the FCA and police forces to respond. In recent evidence provided to the Treasury Committee, Ian Taylor of the crypto trade body, CryptoUK, said that the recent collapse of high-profile crypto exchanges such as FTX could have been prevented had a stronger regulatory system been in place. Multiple witnesses testified to the Committee that, without additional staff with the right expertise, the FCA was unlikely to be able to regulate the crypto sector effectively.

Let me turn to the substance of the clause and schedule 6. It is clearly necessary for the law to be brought up to date to reflect the use of digital assets for criminal purposes. The clause and schedule amend the Proceeds of Crime Act 2002, to extend to intangible assets the same confiscation powers that are already used to recover physical assets like cash. That is an important first step, but in many ways the Bill leaves open more questions than it answers.

For instance, the Bill provides new powers to seize cryptoasset-related items, but the definition of those items is incredibly vague, encompassing any item of property that may provide access to some kind of information that could be relevant to an effort to seize a cryptoasset. Given the broad scope of the powers, alongside the related provisions on the destruction of confiscated property, we need more information from the Minister about how the powers are likely to be used in practice.

[Alison Thewliss (Glasgow Central) (SNP)]

I agree very much with what has been said from the Labour Front Bench. I ask the Minister about the interaction between this Bill and all the other Bills that are considering crypto at the moment, including the Online Safety Bill, which addresses some aspects of people being exposed online to financial crime. The Treasury Committee report on economic crime pushed quite strongly on having an aspect on economic crime in the Online Safety Bill, because it is important that people are not scammed online. To me and to many others, crypto seems very much a place where people do get scammed and lose all their money.

I draw the Committee’s attention to an interview by Henry Mance in the Financial Times yesterday with Stephen Diehl, who is very cynical about the crypto industry and its ability to rip people off. We have to be incredibly careful about the areas we are getting into; we are legislating for something that is moving very quickly. Given the number of Government amendment that will be made to the schedules in this part of the Bill, we need to think carefully about what we are putting in and whether it is suitable for seizing assets and for protecting people against crypto-related fraud more widely.

My other point is about expertise. I have talked an awful lot about the Government having expertise in various areas on the enforcement side, because if there is no expertise in enforcement, the laws that we are considering will just not be enforced. In our evidence session, Andy Gould said:

“We have been investigating cryptocurrency since 2015 or 2016. One of my sergeants has just been offered 200 grand to go to the private sector. We cannot compete with that. That is probably the biggest risk that we face within this area at the moment.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 24, Q37.]

If the money is not there in policing to retain the expertise to prosecute crypto crimes and to make sure that the legislation works in practice, rather than just on paper, the Government will be very much behind the curve.

I add my hesitation on the messages the Government are giving out on regulating and encouraging and on cracking down on a sector that has the potential, as we have seen with the collapse last week, of losing an awful lot of people their money and of making some people an awful lot of money out of those who have lost it.

[Tom Tugendhat]

If I may, I will just give a quick explanation of what crypto is because there seems to be some misunderstanding. Crypto is both a technology and a financial instrument. The financial instrument element is only part of it. Allowing for crypto technology is basically allowing for mathematics. Passing laws against crypto is like passing laws against mathematics—we can try, but it is not going to work.

What the now Prime Minister was talking about was encouraging the mathematics, the algorithms and the technology to develop in this country to create the kind of industry and the kind of infrastructure that would allow the technological use of algorithms for the transfer, sometimes of wealth, sometimes of knowledge, sometimes of contractual obligations. That is what blockchain fundamentally is.

On top of the blockchain, there are various forms of currency. There are bitcoins, which are proof of work, and then there is ethereum, which is proof of stake. These are different kinds of technologies and different ways in which cryptoassets use the blockchains and the technology that has underwritten them.

Having regulation for the currency is not the same as having regulation for the underlying mathematics. We would not say that we have regulation for the economist in the same way that we have regulation for the bank—they are different things. The Government are doing the right thing. We recognise that there is technology, and supporting it; we recognise that there are financial instruments, and are looking to work with others to make sure that those financial instruments are regulated in a sensible way. Now, that is difficult: I will be honest. It is difficult because the technology and its use are changing remarkably. The hon. Member for Aberavon spoke about FTX. As he may know, other companies such as Celsius and Gemini have stopped trading in various different ways, as well. It is not just about one instrument. It is certainly arguable that FTX got into difficulties for reasons other than lack of regulation.

The hon. Member’s point about advertising is extremely valid. There is a real challenge. That is different—it does not quite relate to this element of the Bill. We are seeing increasing amounts of financial advertising online in different ways. I do not know how many members of the Committee have Instagram accounts, but the number of Instagram messages I get advertising foreign exchange trading is frankly bizarre.

--- Later in debate ---

[Stephen Kinnock]

Clause 154 would lift the current statutory cap on the penalties that may be imposed by the Solicitors Regulation Authority, as delegated by the Law Society, for breaches of the law on economic crime. I am sure that Members on both sides will welcome the change if, as the Government argue in their impact assessment, it increases the deterrent effect of the financial penalties that may be levied for disciplinary matters. Although the Government provide limited evidence to support that claim, it is at least a reasonably logical conclusion.

However, the proposals raise a number of questions, principally around the degree to which clauses 154 and 155 reflect the input received from the sector in response to consultation earlier this year. Specifically, a number of serious concerns were expressed by the Solicitors Disciplinary Tribunal when the SRA consulted on planned increases to its powers to impose fines.

The tribunal argued that the SRA’s powers should be limited to imposing relatively low penalties for minor technical or administrative errors. It argued that increasing the maximum level of fines that the SRA could impose would erode transparency by preventing cases of serious misconduct from coming before a public hearing, which could also remove the scope for a detailed, publicly accessible explanation of any penalties, as is generally provided by the tribunal’s decisions under the current system. In summarising its concern, the tribunal argued that the diminution in the transparency of decision making and detailed reason would be in neither the public’s nor the profession’s interest.

It should be noted that those objections were raised, not in response to the proposed changes set out in this Bill, but in the context of the increase in the maximum level of financial penalties that the SRA may impose from £2,000 to £25,000, which came into effect in July. That change in itself begs a number of questions. In particular, can the Minister explain how many and what proportion of the fines imposed by the SRA since July have been at the £25,000 maximum? Could it not be argued that the Government have not provided enough time for the effectiveness of recent changes to be adequately assessed?

Can the Minister also set out the Government’s reasoning in lifting the cap on the SRA’s fining powers, with specific regard to the objections raised by the Solicitors Disciplinary Tribunal, and other stakeholders, around the transparency of the process?

Clause 155 would amend the Legal Services Act 2007 to set an additional objective for regulators in the legal sector to prevent economic crime. Given the objections that have been raised in the sector relating to clause 154, I would be grateful if the Minister provided further details of any consultation between his Department and providers of legal services, as well as the Legal Services Board, on this proposal.

Finally, it would be helpful if the Minister explained the rationale for the decision to set out, in this Bill, an explicit objective to prevent economic crime for providers of legal services, but not for other sectors covered by the money laundering regulations. The impact assessment sheds limited light on the Government’s thinking in this area, so any additional detail that the Minister could provide today would be welcome.

[Alison Thewliss]

My understanding is that the Law Society of Scotland has no particular objections to the amendments.

[Tom Tugendhat]

The hon. Member is asking about various of the different fining elements. Clearly, the fines discussion is a matter for the individual cases, and would be determined on a case-by-case basis, but I think that removing the cap, which, in modern terms, is actually relatively low—certainly, when compared with financial abuses and other forms of regulation—is entirely reasonable.

The Solicitors Regulation Authority does not, in any way, have any power to strike off a suspended solicitor, so the SDT remains an extremely important part of the disciplinary process. There are various different aspects at play here, but the proposals make good sense and are reasonable. I will happily write to the hon. Member on the issue he raised separately and come back to him about it later.

--- Later in debate ---

[Kevin Hollinrake]

It is a pleasure to speak with you in the Chair, Mr Paisley. I will speak briefly to amendment 43 and new clause 22, which are minor technical changes necessary due to the European Communities Act 1972 having been repealed. They give the Secretary of State the power to apply company or limited partnership law by regulations to Scottish qualifying partnerships, as well as to impose new requirements of Scottish qualifying partnerships not included in company or limited partnership law, such as identity verification. It allows the Government to retain the measures introduced by the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 in relation to SQPs and to amend them in the future. Provisions about the registration of Scottish qualifying partnerships exist in the 2017 regulations, made using powers under now repealed section 2(2) of the European Communities Act 1972.

That has two consequences. First, there is no existing power to amend the regulations, other than by an Act of Parliament. Secondly, if not replaced under section 1 of the proposed retained EU law Bill, the 2017 regulations will be revoked at the end of 2023. This power will allow us to keep the existing requirements on Scottish qualifying partnerships and to add new ones. Without the amendment and new clause, it will not be possible to extend key measures introduced via the Bill, such as identity verification, to Scottish qualifying partnerships, thereby creating a dangerous loophole. I hope that my explanation has provided further clarity.

It is clear that regulations made under the Bill may make consequential, supplementary, incidental, transitional or saving provisions and regulations under specified clauses must be subject to the affirmative resolution procedure. I am sure we can write to the hon. Lady to set out exactly what those situations are.

[Alison Thewliss]

I am glad to see any loopholes getting closed, even if the amendment is sneaking in at the end of the Bill. It is good to see it. As I have said at many points in Committee, enforcement needs to be laid down on all these things, because at the moment all things to do with Scottish partnerships are not being enforced. People are not being fined for not complying with the regulations. I hope that it will result in some tightening up and some fines being issued—and, if required, in some people being jailed for not complying with the regulations as set out.

[Tom Tugendhat]

My hon. Friend the Under-Secretary has spoken to a lot of the issues, so I will just list clauses covered by the affirmative resolutions briefly—the others will be negative. That will include regulations under clauses 33, 35, 140(1), 141 and schedule 6, on powers to amend certain definitions relating to cryptoassets, clause 142 and schedule 7, on powers to amend certain definitions relating to cryptoassets and then clauses 143, 148, 149, 153 and 158. I am happy to write to the hon. Lady so that she has those details.

Amendment 43 agreed to.

Clause 159, as amended, ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned.—(Scott Mann.)

Western Jet Foil and Manston Asylum Processing Centres

Alison Thewliss Excerpts

Monday 31st October 2022 Commons Chamber

[Suella Braverman]

My hon. Friend is spot on. We have to tell the truth to the British people. These people are not all refugees fleeing war and persecution, having suffered human rights violations. They are coming here often at their own will, and often having paid tens of thousands of pounds to procure a dangerous and lethal journey illegally across the channel, because they know that our laws are not fit for purpose and they can get away with a spurious claim.

[Alison Thewliss (Glasgow Central) (SNP)]

It has been widely reported that children are being detained at the Manston site. Can the Home Secretary confirm—her Minister could not confirm it last week—how many children are on site right now?

[Suella Braverman]

We do not routinely detain children or unaccompanied asylum-seeking children at Manston, but a number of unaccompanied asylum-seeking children were accommodated, not detained, for a brief period this summer while accommodation was identified. Of course, people were evacuated to Manston yesterday, including children.

Economic Crime and Corporate Transparency Bill (Third sitting)

Alison Thewliss Excerpts

Committee stage
Thursday 27th October 2022 Public Bill Committees

[Seema Malhotra]

Q This is just a quick follow-up for clarification. The Bill arguably makes shareholder information less transparent, because it takes away the opportunity to put information relating to shareholders on the central register.

Duncan Hames: A lot of information was collected on shareholders when this register was developed six years ago, and in many cases companies have been able to say, “There have been no changes.” That means there is a risk that information on shareholders has become quite dated, and finding what information there is involves tracking down PDF format documents that were uploaded a long time ago. There is an opportunity, whether in legislation or in practice at Companies House, to make sure that shareholder information does not become much less usable for investigation and due diligence.

On the third thing you asked me about, we think it is very important that Companies House has the powers and uses them to check the information, where it thinks necessary, that has been used to verify information by trust and company service providers, and not simply take that on trust where it has concerns or suspicions.

[Alison Thewliss (Glasgow Central) (SNP)]

Q I want to ask Duncan about Scottish limited partnerships and limited partnerships more generally. The Bill does not really crack down on the opaqueness of ownership. Could you explain a wee bit more to the Committee why that is a particular issue?

Duncan Hames: Limited liability partnerships have been a company entity available for the last 20 years or so, and 200,000 have been formed. We noticed that they kept appearing in revelations about major money laundering scandals. In the Danske Bank scandal, for example, the investigations found that UK limited liability partnerships were the vehicle of choice for the non-resident clients of its Estonian branch basically to hide their identity from those conducting compliance checks.

There are 1,600 LLPs that have appeared in these various scandals, but there are thousands upon thousands of UK limited liability partnerships that share the same offshore corporate partners. A pair of corporate partners registered in Belize are the controlling corporate partners of over 2,000 UK limited liability partnerships.

What is bizarre is that MPs have thankfully legislated to end secretive ownership of UK property, but we do not have the same requirements for overseas entities that control UK limited partnerships. As a result, we still have a veneer of UK respectability presented over what is essentially a secretive corporate network.

[Alison Thewliss]

Q Helena, in terms of tightening up Companies House registration, is there more that needs to go into the Bill to prevent abuse of the system?

Helena Wood: There are some fundamental flaws. Although this is a significant step forward from where we are, as we all recognise, there are some flaws in the model that has been designed. When the consultation was put out three and a half years ago, we advised against outsourcing ID verification checks to the trust and company service provider sector.

Our evidence for saying that was that there was an assumption in the model being developed that these sectors were largely compliant with money laundering regulations, but we know from the various scandals that Duncan has pointed to and the great investigative work by Duncan and others that that is not the case. I have referred publicly to some of that sector as a bunch of cowboys, and I would gladly go on the record to say that today. That comes from poor levels of compliance, which is the result of poor Anti-Money Laundering Council provision in the sector.

If we are to go ahead with this model where we outsource those checks to a sector that hitherto has not been known for its compliance with the standards, we need to do something outside the context of this Bill to really hammer that home. I particularly point to HMRC as the supervisor of the standalone TCSP sector. We really need to hammer down on compliance in that sector to raise standards overall so that HMRC can properly take on the role, although I restate that we initially advised against it taking on that role, given the current state of compliance in the sector.

[The Chair]

I call Eddie Barnes—[Interruption.] Sorry, I mean Eddie Hughes.

--- Later in debate ---

[Seema Malhotra]

Q First, thank you for coming to give evidence today; it is much appreciated. We have had some discussion on information-sharing; I think you overheard that. If there is anything that you wanted to add, rather than repeating what we may have heard, that would be useful.

I want to ask you a bit more about the lack of transparency when it comes to shareholders. How much do you see that as an issue? Can you suggest any specific measures to increase shareholder transparency?

Chris Taggart: I will maybe talk about the information sharing after. First, shareholding data is not even data. It is just a name; it is just some letters put together. We have opened the gates by allowing it to be just a transient historical record—you know, somebody owns shares in a company. They make a report. They put down a name; we assume that they put down their own name, but of course they can put down any name. But the shares are transferred the next day—maybe into a trust, maybe to somebody else—and there is no record.

At the moment, I think we have that with shareholding, particularly given the international context of cross-jurisdictional context networks and so on. Shareholding actually matters. If someone who runs a chip shop in south Wales or is a mechanic in Estonia, or wherever, owns the shares, they own the shares. That matters. We are not recognising this.

I absolutely welcome the Bill and think it is a huge improvement on where we are, but I think the shareholding is a particularly strong example of how there is essentially still the same problem, which is that Companies House is a historical record of information submitted by people, and the bad actors will always lie. We need to change things, so that it is much more difficult and risky for the bad actors to lie. I think that is the fundamental criticism of the Bill, which, by the way, I think is entirely welcome. It is an incredibly thoughtful and well-drafted Bill, but it is fundamentally coming from a different era. The Bill is a better horse and cart, and the criminals are driving around in fast cars.

Elspeth Berry: On the shareholder transparency point, I noticed that the identity verification is not being applied to shareholders and I think it could be, possibly subject to some de minimis requirements. If they come in as PSCs, which is possible, that also brings us to the problems with the PSC legislation, because the thresholds are, depending on which view you take, either woeful in terms of not catching enough people or should just not be there at all.

The third thing is that, for reasons I do not fully understand, I see that the central register of members is going. Some things now have to be central and some things cannot be central, and shareholders will not be central. I would also point out that the unique identifiers are not being applied to shareholders, although, in any event, they are apparently they not going to be made public. I am not a journalist, but I rely on the work of some fantastic investigative journalists and organisations to dig through that stuff and find out, “Well, that shareholder is appearing here as a partner, there as a director and there as another shareholder,” but that cannot be done.

[Alison Thewliss]

Q First, I want to follow up on that point about unique identifiers and how those would help. I have looked myself up in the Companies House register, and I appear as three separate people. Can you tell us what the benefits of having a unique identifier would be?

Elspeth Berry: The idea is that the John Smiths, the J. Smiths and the Mr Smiths can be linked. Where it is a common name—or an overseas name, where a person like me who was looking at this would not know it was a common name and might assume, “Well, that must be the same person,” when actually it is not, because it is such a common name—it is important to find links. I can see that it is important for Companies House as one of their red flags, and they are going to be able to operate this system, but only partly, because it will not apply to shareholders or partners. But outsiders—people who do fantastic work that Companies House can’t, doesn’t or won’t—are going to find it difficult, or at least as difficult as it is now, to do the work of trawling though everything.

[Alison Thewliss]

Q Do you think it would be necessary for Companies House to set about the work of going backwards through the register? There are companies being registered every single day. The legislation comes into force and things going forward will be registered, but how much work does Companies House now need to do to go backwards through the register and get rid of all the guff information in there?

Chris Taggart: Perhaps not as much as you would think. Companies House currently has a thing called the personal ID, which is sort of inferred. It is not that somebody has confirmed they are this person, that they are the same as that person and that it has been identity-verified. By looking at the home address and other information that has been supplied and that they have, Companies House create a personal ID. We actually pull in information from the API and from various dumps. In some of those dumps, that information exists, but not in the normal stuff. So that information is there.

I would just back up what Elspeth said: not only is it essential, but I see no benefit otherwise. If you are a business trying to understand whether you want to do business with another company—this is not just about crime; this is about creating a great business environment—you can go to a director page on OpenCorporates and see other people with the same name. Okay, that is useful, but do you really want to be trawling through that and making a judgment call? It is almost like sending investigators off to try to understand whether they are the same. If this person has three other companies that all went bust owing money, you do not want to do business with them. I see no public benefit at all to keeping this identifier private and a secret.

Elspeth Berry: In terms of historic information, I think that has changed over time and gone in a bad direction. As I understand it, Companies House is now restoring some of the historic information, and it is important that that is available.

I would also raise the issue that there are provisions here for limited partnerships to be deregistered or dissolved. I think the provisions themselves do not do what it was hoped they would do. We also need to know how those are going to appear on the register, because that has been a problem with—shall I say—shady limited partnerships appearing and disappearing.

[Alison Thewliss]

Q Is there an amendment you would make to make that clearer?

Elspeth Berry: In terms of the historic record? I would think 20 years; I understand that has been done for a lot of company information. If we are now going to have a registry power to dissolve and/or deregister, it is a little problematic. All of that needs to be clear. We know that there has been a pattern of limited partnerships appearing and disappearing, perhaps ceasing to trade and perhaps coming back. We know that that is a pattern, which we want to see, and if 20 years has been the standard at various times for companies, why not for everybody?

[James Daly]

Q I want to pick up on the question about Companies House. On Tuesday, Companies House described themselves as a passive organisation at this moment in time; potentially, they are now turning into—I do not know if this the correct word—an investigative or certainly proactive organisation. All that we have heard so far, which I fully accept, is that it has to be resourced. How do you think this change of culture and investigation will work with some of the problems that you talked about?

Chris Taggart: That is a good question. Certainly, we have been dealing with Companies House on quite a close level since we were founded 10 years ago. I have huge respect for them; they do really good work incredibly efficiently and so on. The challenge is that they are good people, but the people we are trying to stop are not good people, and they think in a different way.

What Companies House think they are doing is creating companies—when people think of companies, they think of a factory, a shop, a company providing services or manufacturing things, and so on—but what they actually do is create legal entities; they create things that have a distinct legal personality and limited liability. The criminals know that, they are using it and they are using networks of these things. More than that, we are talking about a situation where you start to think about things from a traditional company point of view—what we all used to think of as companies—but, actually, the legal reality is one of legal entities, so you need to start thinking about this in an entirely digital way, an entirely data way and an entirely legal way.

I will give you an example. Where a company has got assets—it has got things—there is a downside to it being struck off. If you are overseas and you create a UK company, and the company is struck off, as long as the money has come in and out before that, that is fine—you have done the job for the company. We need to have a change of mindset, and that change of culture will be as important as the powers that Companies House actually have.

--- Later in debate ---

[Seema Malhotra]

Q Thank you, Mr Barrow, for giving evidence today. To pick up on your point about becoming obsessed, I think that is an understatement of the contribution you are now making, which seems to be identifying so much more than Companies House is doing itself and documenting the flaws in the current system. Why do you think that is the case? You have played a very important role in documenting some of the most blatant abuses of the Companies House registration systems. How concerned should we be about the large number of companies you have identified that are incorporated in offshore jurisdictions with weaker money laundering laws than we have?

Graham Barrow: Thank you. Let me pick up on both of those questions. I think the reason why I have been successful is because I have a mandate to go wherever I want to and do whatever I want to. I also ought to congratulate Companies House because a lot of what I now know is through the release of its advanced search function, which has transformed our ability to understand networks of suspicious companies.

I really want to emphasise this idea of the network. No criminal ever set up one company. It is just not how it works. They work in networks of companies. At £12 a go, it is probably the cheapest way of organising a criminal network. Of necessity, they leave company DNA behind them. I guess I have a capacity for identifying that DNA and extracting it from the background noise at Companies House.

Your question about offshore entities is really interesting. I came into this five years ago very much thinking about what you have just been talking about—limited partnerships and limited liability partnerships. They feature prominently in a lot of the reporting. I think part of the reason for that is that they are, by and large, a very small subsection of the entirety of what is incorporated in Companies House. Therefore, the focus has been on some of that DNA that is exhibited by LLPs and LPs.

Before now, we have had very few tools that could establish the role of limited companies. To give that some context, since 1 January 2000, about 10 million companies have been incorporated at Companies House, of which about 5 million are still active. The loss rate is very high; it is consistently 50%. Nine and a half million of those companies are limited companies. That is an exceptionally difficult body of data to trawl through to establish suspicious activity.

I think one of the reasons why perhaps some of the stories I now re-tell on social media are novel is simply because we have never been able to extract those signals from the Companies House data before. For whatever reason, I appear to have a brain wired in a particular way that allows me to do that, and I have a very good relationship with Companies House. We share information quite regularly.

[Alison Thewliss]

Q Thank you, Graham, for coming to give evidence and for all the work you have been doing on the Companies House register. You have exposed quite a lot of companies that are essentially fake. They do not really exist—they are not real companies. Some of them are set up to imitate existing companies. Can you tell us a bit more about the extent of that and the scale of the work that the Companies House register will have to undergo to have a register that has integrity?

Graham Barrow: Where do I start? The scale is enormous. Even today, I have been looking—I have a company that tracks new company registrations. I can tell you that 20 or 30 companies have been set up in Leeds and in Birmingham today that have used real peoples’ names and addresses, some of them for the fifth, sixth or seventh time. One gentleman is 92 years old and has just had his name used for a second time. It is an absolute scandal what is going on. I would say that at least 1,000 people every week have their names used as directors on companies without their knowledge or permission. You are talking about potentially 50,000 people a year. It is on an unimaginable and wholly unreported scale.

[Alison Thewliss]

Q Presumably very little of that gets picked up by way of an offence. It is an offence to make a false filing to Companies House.

Graham Barrow: No, and there are a whole range of reasons why, one of which is that you would need to identify the problem in the first place in order to understand that it is an offence. How do you deal with thousands of weekly company registrations that are clearly breaching the false declaration rules? It would overwhelm you. I think one of the conversations we probably need to have is that you are not going to address the problem instantly.

One of the things that will happen when this legislation is enacted—and I am massively supportive of it—is that company registrations will fall off a cliff to begin with. At this point, I do not think people realise just how many registrations currently would just not go ahead because it is not worth meeting, or they will not meet, those requirements. Will it have an economic impact? Absolutely not, because none of them were ever set up to do anything commercially relevant in the first place. I would not worry about it, but I do worry that the reaction to potentially a 30% or 40% drop in company registrations may force people to start rethinking the tenets of this, but they should not. I do not think you will see any economic consequences.

[Alison Thewliss]

Q Are there additional measures in the Bill that you think would be useful to shut that door on new companies?

Graham Barrow: I think there have been a couple of opportunities missed. You have been talking about PSCs, but what I have not heard yet is the fact that there is no minimum age to be a PSC. That is an issue, because you can be a shareholder and PSC at the age of zero. I do not know how you going enforce the identification verification for somebody who has absolutely no documentation. I do not see that addressed in the Bill. That is my first point. Secondly, I see nothing in the Bill to address statements of capital. I think that is problematic. At the moment the record is held by a gentleman from Equatorial Guinea who registered a company with £670 trillion of capital. That is a pretty neat trick, because that is 10 times the global GDP.

The other one that worries me, and this is something that I would like to talk about, is burner companies. That is a phrase that I have come up with; it means companies that start out with no long-term use whatsoever. There are elements within the Bill that allow grace days for conforming with requirements. If you are a burner company, it is fantastic because you have no intention of conforming. All you need, effectively, is to get that registration document to do whatever it is you want to do with it—and there are a range of things that you might what to do with it—and then you have no further use for it. Allowing grace days for conformance is potentially problematic. Those are my top three. I am not going go down the route of allowing CSPs—that has been done to death. It is obvious that it is a difficulty because you have no history of assertive regulation outside of the FCA and banks. We are aware that has not worked desperately well by the level of fines that are being administered. I think there is a bit of a hit-and-hope model, which in the end is unlikely to translate into any sort of useful outcome.

[The Chair]

I have asked for the volume to be increased, because I know that some Members are struggling to hear.

Graham Barrow: I will move my microphone closer.

Cross-Channel Migrants: Manston Facility

Alison Thewliss Excerpts

Thursday 27th October 2022 Commons Chamber

[Robert Jenrick]

My hon. Friend raises an extremely important point, which gets to the nub of the question. These individuals are leaving a safe country, and they are leaving France, of all safe countries. We must do more to deter them from making the dangerous crossing. I will be going to France to meet my opposite number and other elected officials, both in Pas de Calais and in the French Government. An opportunity is afforded to us by the arrival of the new Prime Minister to improve relationships and see what further action we might be able to take together.

[Alison Thewliss (Glasgow Central) (SNP)]

As chair of the all-party group on immigration detention, I have heard many stories over the years of inadequate facilities for people who have come from very desperate circumstances, but the circumstances at Manston really do cause great concern. Can the Minister tell me how many children are currently housed at the facility, and what he is doing to ensure that there are no children or families held there, because it seems entirely inappropriate for anybody, least of all children?

[Robert Jenrick]

A small number of children are held at the facility. As I said in answer to an earlier question, we do prioritise families, so that families are, as swiftly as possible, allowed to leave the facility and taken to more suitable hotel accommodation. The same approach applies to vulnerable adults.