Economic Crime and Corporate Transparency Bill (Third sitting)
Alison Thewliss ExcerptsThursday 27th October 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 October 2022 - (27 Oct 2022)
Seema Malhotra
Q
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
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 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.
Seema Malhotra
Q
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
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
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
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
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.
Seema Malhotra
Q
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
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
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
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.
Economic Crime and Corporate Transparency Bill
Alison Thewliss ExcerptsThursday 13th October 2022
(1 year, 6 months ago)
Commons ChamberRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Alison Thewliss (Glasgow Central) (SNP)
I am glad to follow the right hon. Member for East Hampshire (Damian Hinds), whom I believe was the Minister who said he was not happy with the progress that had been made on tackling economic crime thus far. None of us in this place are happy about the situation on economic crime.
SNP Members of course welcome this Bill, which is overdue. Many of its aspects could have been picked up in legislation years ago. Members of the anti-corruption coalition across the House have been clear in calling for more action from the UK Government on this, and all this delay has cost us very dearly; openDemocracy believes that economic crime across these islands costs us £290 billion a year—just think of the services we could all be enjoying if that money were not being plundered by those people engaging in economic crime. As with all things around dirty money, we have to ask: who benefits from this? Who benefits from action not having been taken for all these years? There is much to be done, and the panoply of agencies involved must be properly co-ordinated and resourced to tackle it.
This is a big Bill and there is a lot more that could be said. My not saying something in particular now does not discount my saying something about it later, when the Bill goes into Committee. I thank everybody who has sent briefings ahead of this Bill, because that has been incredibly useful.
The UK Government must go after not only those committing economic crimes, but those enabling it. Robust supervision and proper deterrents need to be in place for those responsible for economic crime. Directors and enablers of economic crime need to face proportionate sanctions, and effective anti-money laundering supervision needs to be carried out consistently across sectors. Legislation on economic crime needs to be futureproofed, as a failure to ensure that means that legislators are always playing catch-up with criminals. We see that particularly in the field of crypto.
As Companies House reform is a significant part of this Bill, I will start with a few red flags from the UK Government that I would like to deal with straight up. Having lots of companies on the Companies House register is not the win that Ministers often seem to think it is, mainly because a good chunk of the register is absolute guff. It is like a kid in the playground with an impressive looking pile of football stickers for swapsies; but instead of getting an easy trade for the Kevin van Veen of your dreams, you find that the kid has a pile of doublers, triplers, old stickers from previous seasons, stickers from rugby and cricket, a few with Stormtroopers on and some they have drawn themselves. Sorting out that pile of stickers is pretty easy, but sorting out the millions of companies on the Companies House register is a much tougher task. Even the Department for Business, Energy and Industrial Strategy impact assessment, which I would draw everybody’s attention to, hints at the difficulty in unpicking the duplicates from the system. It is riddled with error, never mind the impact of those using it for nefarious purposes.
Having looked myself up on the register, it appears that I am on it three times; three different Alison Thewlisses exist out there in the world—just imagine that! The register believes I am three separate people, rather than the same person having been a director at different points in my life. The Home Secretary, who, disappointingly, has disappeared out of this place before hearing from the third party in this House, is on the register in her own name and in her maiden name, with no link to suggests that we are talking about the same person. The BEIS Secretary is on it as the director of 11 companies with his surname hyphenated and a further three companies with it unhyphenated. I am unclear what the process is by which Companies House will set about tidying up this basic type of messiness within its register. It should not just be put on individuals to fix this; there needs to be some mechanism by which it is all corrected.
The new objectives being given to Companies House are welcome—they are a step up from its being a passive recipient of duff information—but it is unclear how exactly they will work. The querying power must be a wider, separate piece of work to pick through in detail the existing register and figure out what is actually valid, rather than relying on helpful citizens such as Oliver Bullough, Graham Barrow, Richard Smith and David Leask to report in their concerns, as they often do.
Peter Grant (Glenrothes) (SNP)
There is, of course, only one Alison Thewliss. She mentioned Graham Barrow as one of a number of exceptional individuals who do a lot to expose the kind of things going on at Companies House that it should really be doing. I do not know whether she has followed his Twitter account recently. On 10 October, he tweeted that Companies House had just accepted the registration of a business called “Legat Business Limited”, which has a single director, called “Andrei Perezhogin”. His nationality is “Russian”, his place of residence is “Russia”, and he describes his occupation as “Men”. He claims to have set up this company with £100 million of capital. Does she share my alarm that it appears that a Russian living in Russia can invest £100 million in a British company and—this is without the powers in this Bill—nobody at Companies House thinks anything of it?
Alison Thewliss
I absolutely agree and share my hon. Friend’s concerns. Graham Barrow does great work on Twitter and in other places to highlight such scenarios. Whether or not that person exists, whether or not that company is valid, and whether that money is even being invested anywhere, never mind in this company—this exposes the nature of the garbage in the Companies House register. The Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Dean Russell) should consider what he intends to do about that situation, because the register also contains abusive names and people being registered when they do not know they have been registered. How do such people go about correcting the register where companies have been registered in this way without their knowledge or consent? Home addresses are being used although the person who lives there has no knowledge that their address has been used until a whole wheen of paperwork from Companies House arrives at their door. These things are being regularly exposed; they should not come as news or as any surprise to Companies House or to Ministers in this place. In the interim between this Bill making progress through the House and its eventually coming into force, what will happen to stop these “companies”? They are among the thousands of companies registered every week at Companies House.
The power to query company names where people might be setting them up to impersonate another company or for criminal purposes stands in contrast with the continued objective to allow companies to turn around their registration in 24 hours. There is a substantial industry in creating fake but similar names, and then using those companies to rip off the public. Without a vast increase in staffing in Companies House to assess and sense-check all these applications coming in, it seems that many will continue to slip through the net, even after these reforms. I suggest to the Minister that perhaps it would be better to build in a slightly longer application period to allow proper verification to take place. It is unclear—I seek confirmation from the Minister—whether the verification that is being referred to will be though the existing UK Government verify scheme used for passports, driving licences and tax returns, or whether a separate verification scheme will used. Using the existing schemes seems to work reasonably well for passports, driving licences and tax returns, and I am not aware of any particular issues being flagged for those—if there are, I shall stand corrected.
The BEIS impact assessment dismisses the opportunity to verify the link between directors or persons of significant control and their companies. Again, this should be changed. Furthermore, we have a golden opportunity here to clamp down on opaque ownership structures and I cannot understand why the Government would not want to do so. The Bill must bring in provisions that prevent all companies from being controlled by opaque offshore entities, which do not need to disclose information on their owners or structures because of where they are based.
I still seek to understand from the Ministers why Companies House cannot be an anti-money laundering supervisor in its own right; this is a huge gap within the system. The Office for Professional Body Anti-Money Laundering Supervision has had mixed results in holding the AML supervisors under its wing to account; professional bodies have not done all they can to interrogate their members. That would perhaps fall into the area of a failure to prevent offence. Culpable directors, senior managers and other enablers of economic crime, including professional enablers, need to face sanctions, and rules on AML supervision need to be applied consistently. That is not currently happening.
The non-governmental organisation Spotlight on Corruption noted that there are 22 industry bodies that currently oversee AML compliance in the legal and accountancy sectors. In 2021, OPBAS found that just 15% of supervisors were effective in using predicable and proportionate supervisory action; 85% were not. It also found that just 19% had implemented an effective risk-based approach to supervision. This disjointed approach to tackling money laundering is just not working: it is allowing too many to sail through the net.
In the UK, an estimated £88 billion of dirty money is cleaned by criminals every year, compared with the lesser, but still significant, amounts of €54.5 billion in France and €51.53 billion in Germany. To tackle the issue, it is vital that support is offered to smaller firms, which are often targeted by those who wish to engage in money laundering, criminality and other illicit activities, to enable such companies to spot red flags in respect of potential clients.
It is beyond me why the UK Government allow the verification process for company registration to be carried out by company formation agents when they are the very bodies that have to a large extent created the problem that the Government are trying to solve. As the Home Office report “National risk assessment of money laundering and terrorist financing 2020” pointed out:
“Company formation and related professional services are…a key enabler or gatekeeper of TBML”—
trade-based money laundering. We should be reducing their power, not endorsing it.
Under the Bill, all third-party agents who set up a company on behalf of someone else will be required only to declare that the information they are providing on behalf of that person has been verified. I return to my verification question: what is the system for that? Without giving Companies House the ability to carry out independent checks to ascertain whether the “verified” third-party information is correct, it is just going to become a box-ticking exercise. The verification requirement in itself has no teeth and is unlikely to lead to any material change in how third-party agents carry out that key verification process.
Before I leave Companies House, I should say that I am deeply disappointed that the UK Government seem to show no willingness to increase the ridiculously low company registration fee: £10 or £12 is nothing in the scheme of things. In Germany the equivalent fee is €400, and in the Netherlands it is around €52; I am sure the Minister would regard neither country as anti-business. Having a low fee is not the benefit that Ministers seem to think it is. I am open-minded as to what the figure ought to be, but in its economic crime report the Treasury Committee agreed that £100 would be perfectly reasonable and give Companies House more resources to deal with the huge challenges it faces.
Improving relations between Companies House and the various law enforcement agencies is welcome. The Treasury Committee report on economic crime called the landscape “bewildering” and noted that both co-ordination and economic crime itself should be higher priorities for the Government. The scale of the issue is outlined in the BEIS impact assessment, with law enforcement referrals to Companies House rising from 1,400 per annum in 2015 to 9,300 in 2021. Given that we have heard how little economic crime is actually prosecuted, this feels like the tip of a very large iceberg.
With talk of future austerity and cuts, it is important that the UK Government invest in the enforcement agencies to investigate and prosecute economic crime. It is a specialist area and it requires well-paid specialist staff to tackle this scourge. The Scottish crime campus at Gartcosh is a great example of both efficiency and inter-agency working, but it can do this only if properly funded. A further round of Westminster austerity puts it all at risk.
I feel like I have been raising Scottish limited partnerships forever, and I have no hesitation about doing so again. Because SLPs hold legal personality and can possess property, they have become a very popular mechanism. The BEIS analysis was quite stark: between 2010 and 2016 they had a growth rate—one that the Government would love—of 459%. That alone should have set off alarm bells from Companies House to the Government Front Bench, but nothing terribly much happened for a long time. BEIS figures also state that as of 31 March 2021, SLPs made up 64% of all limited partnerships on the Companies House register. If we compare that with the fact that companies registered in Scotland make up just 5% of companies in the UK, we can see that something is badly out of whack.
SLP registrations have plateaued since the rules were tightened, but they have not gone away. They have also continued to be implicated in money laundering, arms running and sanctions busting, including in respect of the Russian aggression against Ukraine. They are set up with partners in secrecy jurisdictions, with companies named as persons of significant control, which is against the rules. Linking to an actual person with an actual address would be progress, as would limiting the number of times that an address or person could be a company director. To date, enforcement and fines for breaching the rules that the Government themselves set up have been few and far between. There is little point in having rules that are just not enforced.
As I have pointed out before in this place, there are also knock-on effects to our neighbours in Ireland. As there has been a slight tightening of the rules here, registrations of Irish limited partnerships have soared. What conversations has the Minister had with his counterparts in the Republic to ensure that we are not just shifting criminal activity from here to there? All possible co-operation must be undertaken to avoid criminals shifting their business over the sea.
I wish to ask about the links with other legislation that is currently going through this place. The Financial Services and Markets Bill has a significant section on the regulation of cryptocurrencies, which have become incredibly popular with organised crime incredibly quickly, as a means of shifting money as well as of scamming naive members of the public. It is unclear how the legislation before us interacts with that Bill and the halo effect that might be created by the regulation of certain cryptoassets but not others.
When the Treasury Committee took evidence on the Online Safety Bill—which has disappeared but will hopefully come back at some stage—we were concerned about crimes being carried out via the internet and social media platforms. Currently, the banks of those who are scammed have to pay up, but the social media companies themselves are not held accountable. For example, scams conducted over Instagram or Facebook Marketplace, scam messages sent over WhatsApp and unregulated financial advice given via platforms like TikTok are not currently covered. They should be given an awful lot more attention.
I was glad to hear from the Home Secretary that there have been some conversations with the Scottish Government about the implications of this legislation in Scotland, because Scots law is, of course, a devolved area. Registers of Scotland administers the register of persons holding a controlled interest in land, which was launched on 1 April and shows who controls the decisions of owners or tenants of land and property in Scotland. I would like a bit more information from the Government about the conversations they have had with Registers of Scotland and the interaction with the register of oversees entities. Scotland did not hang around waiting for the UK Government to make legislation on this issue; we got on with the job.
I look forward to tabling amendments to try to improve this Bill, and I really hope that for once the Government will listen and be constructive on some of the issues we raise. We would not be in the situation we are in today had they done so during the debates on the Sanctions and Anti-Money Laundering Bill or umpty other bits of legislation over the years. We are all clear in this place that robust supervision and proper deterrents need to be in place for those responsible for economic crime.
We on the SNP Benches are looking forward to independence and setting up our own robust systems to register companies and to prevent economic crime. Nobody would choose the UK system as it stands, and it remains to be seen whether it can be adequately repaired.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Dean Russell)
Thank you, Madam Deputy Speaker. May I begin by sending my condolences to the family and friends of Sir Davis Amess, who is deeply missed in this place? In fact, the very last speech I gave on the Back Benches was in the Sir Davis Amess summer Adjournment debate. During the time I knew him, he was a dear friend, and I know he is deeply missed.
It is a pleasure to follow the hon. Member for Feltham and Heston (Seema Malhotra). She has been incredibly kind in her engagement over the past week, and having our meeting was incredibly helpful in understanding her views on the Bill. I want to thank colleagues—on both sides of the House, in fact—who have spoken in this important debate for their well considered and eloquent contributions on such an important issue, and for the broad support for the objectives of the Bill, for which I am grateful. I should mention that the agreement is about the fact that they like the Bill and think it is the right thing, but some Members spent the debate more on the stuff that is not in it, which is always useful. I used to think when sitting on the Back Benches listening to Opposition Members—this not a criticism—that the argument was often to go faster and further, which is a great pitch for a personal trainer, so there are careers for them in the future. However, in this particular instance I understand where those arguments are coming from, and I will attempt to address them.
I aim to respond to as many points made by hon. and right hon. Members as I can given the time available, but I first want to remind the House what this Bill will achieve, and what signal it sends across the UK and around the world. As set out by my right hon. Friend the Home Secretary, the Economic Crime and Corporate Transparency Bill will bear down on the kleptocrats, criminals and terrorists who abuse our open economy, and it will strengthen the UK’s reputation as a place where legitimate business can thrive while driving dirty money out of the UK.
This historic Bill contains a significant and coherent package of measures to help us crack down on economic crime and abuse of the UK’s corporate structures. As the House has noted today, that includes the most significant reform to the UK’s company registration framework in 170 years. There have been many Governments during that time, so it is good that this is happening now, and the importance and impact of these changes should not be underestimated.
This Bill will help tackle economic crime, including fraud and money laundering, by delivering greater protections for consumers and businesses. It will support our national security, by making it harder for kleptocrats, criminals and terrorists to abuse our open economy. It will support enterprise, by enabling Companies House to deliver a better service for over 4 million UK companies, supporting business transactions and lending decisions across our economy.
I am sure that everyone in the Chamber will agree that we must maintain the UK’s status as one of the world’s largest and most open economies, and that London must continue to be one of the world’s most attractive destinations for overseas investors—but crucially, investors of the right kind.
I thank the right hon. Member for Barking (Dame Margaret Hodge) and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for spearheading cross-party collaboration on these important issues through the all-party parliamentary groups that they chair, and for their learned contributions to today’s debate. I have listened to them talk about these issues in the Chamber many times before. Their wisdom is deep and is heard loudly. I look forward to working with them as the Bill progresses.
Before turning to the issues that hon. Members have raised, let me first share my sadness at the tragic deaths referred to by my hon. Friend the Member for Thirsk and Malton. They are tragic examples of why it is so important to crack down on organised crime groups and their business models. At its heart, this Bill is about real people, including children and families. We have to put these regulations in place to protect them because our citizens have to come first.
I will now respond as best I can to the comments and questions raised during the debate. I will start with verification by Companies House and by agents. I welcome the broad interest from across the House in the Companies House reforms, including on identity verification. I can confirm that the identity verification requirements will apply to all new and existing company directors, people with significant control and those delivering documents to the registrar.
The hon. Member for Glasgow Central (Alison Thewliss) and the right hon. Member for Walsall South (Valerie Vaz) asked about identity verification checks undertaken by authorised corporate service providers. I can confirm that these checks will achieve the same level of assurance of the stated identity as those undertaken through the direct verification route and in line with the cross-Government identity proofing framework. Agents will need to confirm they are supervised by a body that is subject to the UK’s anti-money laundering regime and register with Companies House before they are allowed to form companies or registerable partnerships, or to file on their behalf.
Under anti-money laundering regulations, all agents are required to retain records and the registrar can request further information on identity verification checks if necessary. The agent will be committing an offence if they fail to carry out ID checks, and new powers will enable the registrar to suspend and deauthorise an authorised corporate service provider.
I can also reassure the right hon. Member for Walsall South that the measures in the Bill will help the registrar remove fraudulent information, including the addresses of innocent people, without burdening those people with so much process. We heard concerns from across the House about the challenges of the registration of false businesses and the problem of not being able to do anything about that; the Bill will solve these issues. She asked about the process for identity verification. We set that out in the White Paper earlier this year and operational design work continues. I also note her concerns about the newly implemented register of overseas entities. It is early days for that register but I will look into the quality of the filings being made.
Alison Thewliss
I thank the Minister for his explanation. To be clear, is the verification scheme through the existing UK Government Verify, which is used for passports and driving licences, or will a separate new scheme be built?
Dean Russell
I thank the hon. Member for her question. I will gladly respond to her in writing so that she has the full details.
I turn to Companies House fees and funding. A number of hon. Members from across the House, including the hon. Members for Stretford and Urmston (Kate Green) and for Rhondda (Chris Bryant)—he is not in his place, and if he were I am sure that he would be intervening right now—asked if Companies House will be properly resourced for its new role. Investment in new capabilities at Companies House is currently under way. Companies House was allocated £63 million across the spending review period to implement its transformation programme. That will include improvement of systems to detect suspicious activity. The Government are reviewing funding arrangements in the context of the reforms and are committed to ensuring that Companies House is fully resourced to perform its new role and functions.
The hon. Member for Glasgow Central asked whether the Bill will raise Companies House fees. The Bill gives the Government more flexibility to do so, broadening the range of functions that can be funded through Companies House fees. In particular, it enables us to use fees to cover the cost of investigative and enforcement activities. However, to maintain flexibility, we will not be setting the level of fees through the Bill. That will continue to be set via regulations and subject to future parliamentary scrutiny and approval. We must get the balance right, because we do not want to put off entrepreneurs, solopreneurs and businesspeople who want to set up a new business. The threshold must therefore be thrashed out in the right way, but that will come.
Alison Thewliss
I understand the Minister’s point, but it seems incongruous that while Government Departments make people pay through the nose in the visa system, for example, where they pay way over and above production costs, Companies House is charging very little.
Dean Russell
I thank the hon. Member for her comments. The flexibility will be there, and that is something to be looked at. We are not setting the fee right now; that is the fair thing to do.
The hon. Member for Rhondda and the right hon. Member for Barking asked about the Government’s response on asset freezing and seizing. The Government wholeheartedly support the people of Ukraine—it was wonderful to hear about those in the Gallery today—as do hon. Members across the House. We understand the wish to take ill-gotten funds and use them to support Ukraine in rebuilding its country. The UK, along with other countries, is examining further options to seize assets from sanctioned oligarchs and grappling with an array of complex issues. The aim of His Majesty’s Government is to support the recovery and reconstruction of Ukraine.
This is a novel and exploratory area with extremely complex legal and operational considerations, and we are not aware that any other country has yet identified a definitive solution, despite commonality of policy intent, but I am keen to continue conversations and hear more from learned friends. The Government are continuing to work at pace to explore all options and will continue to engage with international partners, civil society and others on this topic.
I pay tribute to my right hon. Friend the Member for East Hampshire (Damian Hinds), who has worked hard on this issue over such a long period, for his involvement in the debate and for everything that he did to progress the reforms during his time as Security Minister. That is well recognised and much appreciated. I know that my right hon. Friend the current Security Minister would like to add his thanks to mine.
My right hon. Friend the Member for East Hampshire stressed that reforms to how payments are made are important to help identify and stop suspicious payments. I value his insights significantly. Many banks already delay and refuse payments when they suspect fraud. The Government, financial regulators and industry are working together to ensure that banks can intervene where necessary. The Government and the Financial Conduct Authority are engaging with the payments industry to understand what might support banks to take a more consistent risk-based approach to payments and prevent payment fraud. We will keep under review whether legislation is required to support a risk-based approach by banks.
I turn to whistleblowing, which came up many times and colleagues have asked me about in the past few weeks. I am grateful to my hon. Friends the Members for Weston-super-Mare (John Penrose) and for Cheadle (Mary Robinson) for their comments and concerns about the framework protecting whistleblowers, and for their ongoing constructive dialogue on this important issue. They are well known for their views on this point and do incredible work to lobby Government and others on it. An effective whistleblowing framework is an important aspect of the UK’s ability to tackle corruption and all forms of economic crime and illicit finance. In recent weeks, I have noted with interest views on the whistleblowing framework and the proposals for reforms put forward by Members of this House and whistleblowing interest groups. I look forward to continuing those conversations.
The Government remain committed to reviewing the whistleblowing framework and it is only right that we take the time to do a proper review before considering legislative change. My officials are working on the proposals for the scope and timing of such a review. That work is complex, however, and will proceed over a longer timeframe than the Bill. Therefore, the Bill does not include measures on whistleblowing. However, we remain committed to discussion with all interested parties and parliamentarians as we progress that work, and we greatly appreciate the ongoing engagement on this important topic.
Economic Crime: Law Enforcement
Alison Thewliss Excerpts(1 year, 10 months ago)
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Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to come to the House this afternoon. Even with all the chaos and politics outside, we have come together to have a very good debate and to share comprehensive ideas and solutions to the ongoing issue of economic crime.
I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) and the right hon. Member for Barking (Dame Margaret Hodge) for coming together to secure this debate. We often all agree whenever we have such debates, and it is for the Minister to respond to our comprehensive agreement and suggestions. I have often been in discussions on economic crime in which all the experts in the room have solutions but the Government are way behind in implementing them. I urge the Minister to work with his colleagues and others to bring those experts together so that we can get to some kind of solution. It feels like we have been talking about this throughout my time in Parliament, and there has been relatively little action.
Enforcement is crucial. The Government can have the best rules in the world, but if they do not follow through with enforcement, as they have not in many cases, there is almost no point in having those rules at all. If criminals realise that they are going to get away with it, the rules do not matter. I am sure the Minister will address what has been said about the Financial Action Task Force but, again, there is a gap between the rules and the enforcement; between what the FATF has said about the UK and the UK regime and the actual reality on the ground.
A number of Members highlighted that things move fast in this area. The hon. Members for Thirsk and Malton and for Strangford (Jim Shannon) both mentioned crypto-exchanges and cryptocurrencies, which is a fast-moving and fast-developing situation that means money can move away from people very quickly. Tracing that money then becomes incredibly difficult.
It strikes me that perhaps the Government need to get further into the expertise of this sector, because the criminals who do these scams and financial crimes are always several steps ahead of the Government on the technology, skills and expertise. It takes the Government and legislation an awfully long time to catch up with the fraudsters’ expertise.
The issues with Action Fraud—or inAction Fraud—have been set out very clearly by many people. It has been a problem for years, and I understand that the Scottish Government do not pay into Action Fraud because they do not see the value. They get nothing from it, so instead they look to our police force to deal with fraud. I will talk a wee bit about that, too.
We have a crime campus at Gartcosh just outside Glasgow. When Assistant Chief Constable Patrick Campbell gave evidence to the Treasury Committee as part of its economic crime inquiry in early 2021, he talked about the value of the crime campus. There are 27 enforcement bodies in one location, so people can speak to each other as they go about their business. They are made to communicate because of the useful way in which the campus is set up.
Patrick Campbell also talked about Scotland’s economic crime and financial investigation unit, detailing that 150,000 officers are tasked with serious organised crime and high-level fraud, and 17,000 people are gathering that information on the frontline and making sure that people know where to report these crimes. That contrasts with the fragmentation across the plethora of UK agencies, as the Treasury Committee’s report highlighted. Nobody has proper responsibility and proper oversight over economic crime in the whole UK, which really shows when it comes to enforcement.
Some very good suggestions have been made, and I would welcome more executive responsibility and liability for economic crime. A duty to prevent economic crime is crucial, and a good comparison was made to the Health and Safety Executive. Because nobody is responsible or accountable for economic crime, it is difficult to see anybody doing anything about it. I would extend that to social media companies—some of the evidence we took in the Treasury Committee reflected this—because they are where an awful lot of fraud happens these days.
I went to an event in this place with TSB Bank, which sent me some more information about the levels of fraud on social media platforms. It reported that between January and March, 70% of that fraud came through Meta companies—24% on Facebook and 46% on Instagram—with 4% on Snapchat and 23% on other social media platforms. Why is Meta not being held to account for the fraud on those platforms? It is not Facebook, Instagram or Snapchat that have to pay up for such fraud, but the banks. That fraud is not the banks’ fault. They are not facilitating it; the social media companies are.
Kevin Hollinrake
The hon. Lady makes an important point. The point about the failure to prevent offence is, of course, that it does not just apply to the banks; it could also apply to the companies she talks about, which are facilitating the scamsters who facilitate the crime. It could also apply to the senior executives in the organisations she refers to.
Alison Thewliss
I absolutely agree. The hon. Gentleman made a point about the fraud coming through on his WhatsApp. There is a real problem there; such fraud is taking place on those platforms. If they did not exist, perhaps the fraud would happen in a different way, in a different place. However, social media companies ought to be taking real responsibility. TSB said that one of the highest value incidents within the period I have mentioned was a £3,000 fraud carried out against somebody on a social media platform, with the average amount of fraud being £415. That is a lot of money for people to lose. Many people on social media might not be on particularly high incomes, but they might buy and sell across marketplaces. We see fraud where someone advertises a games console, and when people pay the money over, it never arrives, because it was literally just a picture of a games console. Some people then try to pass that on to somebody else, and more people get scammed. This is a real issue. TSB ran a sample across a week and found that 67% of those purchase scams were happening on Meta. The Government need to do an awful lot more to understand the levels of such fraud, how it is happening and how we should go about chasing it down. There is an awful lot more that can be done in that regard.
I come to the issues that the right hon. Member for Barking (Dame Margaret Hodge) so excellently and comprehensively set out about kleptocrats, Londongrad and the dirty money washing through the City of London and other places. The Government should be seeking out the experts on that, getting them to come in and exploring these things with them. I am referring to experts such as Oliver Bullough and other journalists who have done so much to expose this. Why is this still happening? Why is it still being allowed? What opportunities are there in the economic crime Bill to nail this down and do more than the Government have done so far? Although the first economic crime Bill was a welcome reaction, it was pretty small scale, and an awful lot more needs to be done.
As I often say, more needs to be done on Scottish limited partnerships, which have been used so well to facilitate such fraud. It has spread, as it does—if we push down the bubble in the wallpaper, it will come up somewhere else—to Irish limited partnerships. What discussions have the Government had with the Irish Government about what our failure to tackle this has done to their limited partnership system? What progress and what dates can the Minister give in respect of the register of overseas entities? We have talked about that for years, and nothing has yet happened. The Scottish equivalent has been set up and is operating, and the UK Government are behind.
Let us consider the impact on the wider economic system, on sanctions and on Russia. I understand that Bill Browder said this week that the UK is the world’s biggest destination for dirty money from Russia, and that
“there has not been a single Russian economic crimes prosecution in the UK”.
Why is that? What are the Government doing to ensure that nobody can get off scot-free?
I wish to talk briefly about Companies House, because I always do, and I will continue to do so until it gets fixed. Companies House is utter guff, and the register is full of complete nonsense. Will the Minister meet Graham Barrow, an expert in this area, to talk about the timescales and the process for reforming Companies House? Graham Barrow pointed out that on Tuesday this week, 4,063 new companies were registered at Companies House. That is not a sign of a booming legitimate economy, but a sign that something is very wrong with Companies House. For example, Wendy Siegelman, a journalist in the States, pointed out that a company was registered in Edinburgh in December 2020 under the name of President Donald John Trump. When she flagged that up with Companies House, the response was:
“The person was no longer President of the USA at that time.”
That is entirely missing the point; I do not think that Donald Trump is living and registering companies in Edinburgh—I think he is somewhere else in the world, doing other things just now. Companies House should be taking these issues a lot more seriously.
More seriously for the Government, Martin Williams of openDemocracy has mentioned that fraudsters have been exploiting Companies House to set up companies in the names of officials at the Ministry of Justice and Her Majesty’s Revenue and Customs. This identity fraud being perpetrated through Companies House should be of great concern to the Government, not only because it is government officials being affected, but because you, I or anybody else, Madam Deputy Speaker, could be affected by a company being registered in our name. We would then become somehow liable for it, despite perhaps never knowing anything about it. Companies House reforms are well overdue. It must be an anti-money laundering supervisor in its own right, and it must ask for verification of not only our companies, but individuals.
I could talk for longer on this—I could talk until the cows come home or we lose a Prime Minister, whichever comes sooner—but I will leave it at that. There is an awful lot to be done on this, and the Government need to listen to the experts. The Government need to get them in, get them around the table and figure out how to fix this properly, once and for all—or give Scotland the powers to do so, and we will do so ourselves.
Kevin Foster
We would accept there is a need to go further and certainly, following today’s debate, we look forward to the debates we will have on the forthcoming Bill. From what we have heard today, I think Members across the House will have thoughts, opinions and valuable contributions to make on how we can strengthen our regime, in both its legal construction and its direct impact.
We recognised in the 2021 spending review the need to invest in this area. The economic crime levy, combined with public contributions, is now an overall package of £400 million to tackle economic crime over the next three years. In the wake of Russia’s invasion of Ukraine, the National Crime Agency established a new combating kleptocracy cell specifically to combat corrupt elites, their dirty money and those who enable them to abuse our financial system. We also recognise that we need to further empower law enforcement through the forthcoming economic crime and corporate transparency Bill, which will be designed to tackle economic crime and protect our national security while supporting enterprise. The Bill will include much-needed reforms to Companies House and limited partnerships, with additional powers to seize suspect crypto assets more quickly.
Alison Thewliss
I welcome all reforms of Companies House, but will the Minister put it on a proper footing and make Companies House an anti-money laundering supervisor in its own right, so that it does not have to rely on third parties to fulfil that function?
Kevin Foster
We will set out the details in the Bill and we look forward to the debates on it, but certainly we are clear that the registrar of companies should become more of an active gatekeeper for company creation and a custodian of reliable data, including powers to check, remove or decline information submitted to it. In her contribution, the hon. Lady rightly gave the example of someone setting up a company in the name of “Donald Trump”. Clearly that was not a legitimate company being established—[Interruption.] Some hon. Members may have missed that particular example.
Some of the changes are on identity verification. In my normal role talking about immigration, we do quite a range of work on ensuring that people can validate who they are and what their status is, and we want to bring a lot of that practice into the area of company formation to remove some of the worst examples we have heard about today. I accept that many people will see that as overdue, but it needs to be done and it is something we intend to legislate on and bring forward as a key change to our enforcement structure, to ensure there are fewer opportunities to abuse the system of company registration here in the UK.
Comments have been made about the resources of the National Crime Agency. We have increased its budget year on year since 2019. Taking all NCA funding into account, its budget has increased by 32% since 2019.
In response to concerns on corporate criminal liability laws, which a number of colleagues picked up on in the debate, we have sought to establish whether there is a case for change. I think it was my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) who referred to the Law Commission and the review we asked it to undertake. As he rightly says, it sets out several options for reform; he outlined his view that he would like to see us accept them, and we are assessing them. Certainly, that is something we specifically asked the Law Commission to do because we believe it is an area that needs careful consideration.
Oral Answers to Questions
Alison Thewliss Excerpts(1 year, 10 months ago)
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Kit Malthouse
My hon. Friend is right on the national Grip funding roll-out, which originated from a visit I made to Southend two years ago, where I was so impressed by the data-driven hotspot work that we managed to get the money out of the Treasury to spread it further. I certainly look forward to seeing the results of Operation Union. If it is equally successful, I do not see why we would not roll that out too.
Alison Thewliss (Glasgow Central) (SNP)
Kevin Foster
I am happy to take the details of that individual case from the hon. Member. We are aware of an issue with the MPs’ hotline this morning; the hub and email are unaffected. Home Office Digital, Data and Technology is currently working on a solution and we expect the issue to be resolved shortly.
Migration and Economic Development Partnership with Rwanda
Alison Thewliss Excerpts(1 year, 10 months ago)
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Priti Patel
The voice of Redcar speaks with great conviction and determination, as ever when he makes representations. He will have heard my comments with regard to the British Bill of Rights; that work is under way right now, and it will be for the Deputy Prime Minister to announce in due course.
Alison Thewliss (Glasgow Central) (SNP)
My constituent Azizullah is among the 80 families in my constituency who have relatives who are still stuck in Afghanistan. He has been in regular contact with me since Afghanistan fell; he sent me a message yesterday to say that the Taliban are abusing his brother, trying to find his father and threatening their execution. If the Home Secretary were in my constituent’s family’s shoes, would she stay in Afghanistan and wait to be executed? Or does she advise them to try to get to safety in Glasgow any way they can, because there is no safe and legal route for Azizullah’s family and the other 80 in my constituency?
Priti Patel
Of course, there has been a scheme specifically for people from Afghanistan to come over.
Priti Patel
The hon. Lady is very welcome to share details with the Refugees Minister.
Priti Patel
Then I am happy to get a response for her. If she would send me the details, I will absolutely pick that up.
HM Passport Office Backlog
Alison Thewliss Excerpts(1 year, 11 months ago)
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Alison Thewliss
I have a constituent who had three attempted deliveries from TNT, but he was not informed and did not receive the passport, which was returned to Peterborough. As far as I know, he is still waiting to receive that passport. What should he do?
Kevin Foster
First, the constituent made the right choice by contacting his Member of Parliament, who I know will raise his case diligently. We will certainly be interested to hear the example. Our evidence is that the vast majority of passports are delivered successfully and appropriately, but, where something has gone wrong, we are concerned to hear about it. If the hon. Member provides me with the details afterwards, I will be more than happy to follow up.
Alison Thewliss (Glasgow Central) (SNP)
Thank you, Madam Deputy Speaker.
This passport chaos is, to borrow the phrase used recently by one Minister, “absolutely godawful”. The scale of the delay really is quite worrying. Ministers may not know the extent of the problem, or perhaps they just want to keep it to themselves rather than admit to the scale of the crisis. I have a lot of sympathy for Passport Office staff, many of whom are based at Milton Street in my constituency. I know they are doing the best they can in the circumstances; it is Ministers and lack of investment in the service that are letting them down.
Nothing the Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster), said gives any comfort to the people who are queuing in a panic outside the Passport Office in my constituency, or waiting by their letterbox day after day for passports that have yet to arrive. One constituent, Scott, experienced significant delays: he made his application on 25 January and his passport was finally delivered on 9 April—to the wrong address. He has yet to receive a response to his complaint about this. It is a serious data breach if passports are indeed being delivered to the wrong person, as other Members have highlighted.
These delays and lack of response are not uncommon. Even I, as a constituency MP, am still waiting for responses to cases that I or my office raised in April, so I do not have an awful lot of confidence in the system. As I mentioned in an intervention, my constituent, Henry, has some issues with TNT, which failed to deliver his passport on three occasions; it got sent back to Peterborough. As of Sunday, he was still waiting for his passport. It is hugely frustrating to know that he could have had his passport had TNT not messed up the delivery.
My constituent Jennifer contacted me on 28 May and said:
“I am writing to you as I have a real dilemma trying to get my daughter her first adult passport. I have been trying for days to get a fast-track appointment, but no chance. I have literally sat for days refreshing the website on the off chance that I will get an appointment, even setting my alarm for midnight to try—no chance. I have a flight to Poland on 4 July. My daughter is going to see her dad whom she has not seen in three years. This is devastating for her.”
I contacted Jennifer today and she emailed me to say that the passport application has been approved, but that there is still no sign of the actual passport. She says that she has called several times. She has been put on hold, been passed about and been cut off. It is an absolute shambles. I have yet to have a response to the complaints that my office has put in on this case and on many others. Those complaints are still coming in.
I spoke to taxi driver Martin on Monday morning on my way to the Chamber. He will lose thousands of pounds if the passport for his child does not arrive within the next week or so. I urge the Minister to consider the fact that Scottish schools break up for the summer holidays next week, so there is a real and pressing case to prioritise passport applications for people in Scotland and in other parts of the UK who may go off on holiday a little earlier. Many of those families have already rebooked because of covid. They have had lots of delays, and any further delay could mean families losing thousands and thousands of pounds.
My constituent, Lisa, has documented in great detail the lack of response that she has had from the Home Office and the stress that it has caused. Her son’s first passport arrived on 10 June, but she had applied for passports for her whole family on 1 March. The other members of the family got their passports, but there was nothing for her son. The family could hardly go on holiday, leaving one member of the family behind. That is just not practical—I am sure that Ministers would not want them to so in any event.
It is incredibly distressing for families to go through this stress, not knowing whether a passport will arrive, not knowing whether they should cancel their holiday on the off chance that it does not arrive or whether they should wait in the hope that it arrives just in time. There is really no reassurance for the waiting families.
My constituent Wafa was in touch with me. A glitch in the system at the Home Office meant that his application was not processed. My constituent, despite many attempts to get in touch to resolve this issue, has only just got an appointment with the Home Office to get his passport application under way. There is no recognition from the Passport Office that this delay was its fault. It was the fault not of my constituent but of a glitch in the system that my constituent attempted on many occasions to resolve. They do not yet know whether they will get their passport in time to travel. That is just not fair.
All of this backlog is not exclusive to the Passport Office part of the Home Office. I see significant delays in other areas of the Home Office, week in, week out. I have the case of a husband who is not able to be here for the birth of his first child, because his paperwork has been delayed by the Home Office. It is a relatively simple visa case, but my constituent may not be able to be present for the birth of their first child. If the Home Office does not get its finger out, the mother will give birth on her own without the support of her husband.
There is a lot of talk from the Government about the cost of the immigration system and the cost of keeping people in inexpensive hotels and temporary accommodation. That is entirely due to the Home Office’s own incompetence and delays. The costs are significant and people are left waiting indefinitely with only an impersonal standard response from Ministers, if, indeed, they get a response at all.
What is the response to all of this? It is a yet more expensive plan—a white elephant—of sending people to Rwanda through state-sponsored deportations and state-sponsored trafficking.
This is nothing that my constituents in Scotland have voted for. When we have a passport system of our own—I hope that that day will come very soon—we will look at Westminster and say, “Good grief, we cannot do any worse than this mob.”
Several hon. Members rose—
Asylum Seekers: Removal to Rwanda
Alison Thewliss Excerpts(1 year, 11 months ago)
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Alison Thewliss (Glasgow Central) (SNP)
If the Minister finds it so offensive that my colleague calls the Tory Rwanda scheme “state-sponsored trafficking”, what else would he call the act of shipping vulnerable people across the world against their will?
Tom Pursglove
I certainly would not call it “state-sponsored trafficking”.
Asylum Reception Centre: Linton-on-Ouse
Alison Thewliss Excerpts(1 year, 11 months ago)
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Kevin Hollinrake
My hon. Friend is absolutely right, and that position is not yet clear. It has been made more apparent recently that there will be that kind of funding, but we have no plan in place. The police, fire and crime commissioner, Zoë Metcalfe, has been very helpful and engaged in the whole process, as have Hambleton District Council, Mark Robson, the leader of the council, and Mal Taylor, the local councillor. Apparently, there will be a double-manned police car in that village 24/7, which is good to hear, and there will also potentially be CCTV in the village, which does not currently exist. Those potential mitigations would help, but it is not clear that those plans will be in place on 31 May when service users move in. I have also not seen a clear plan anywhere.
On the funding of the centre, I understand that money will be made available from Home Office funds, but again that is not clear, which is why we are saying that the plans should be paused until we understand what is needed and how it will be deployed properly.
I have been called all kinds of things on Twitter since I objected to this facility, such as racist, which is complete nonsense. Thirsk and Malton has been welcoming of asylum seekers from all different parts of the world. We have some Syrian families in Malton and we have Ukrainian families all across the constituency, so it is complete nonsense. Nor is it a question of nimbyism. As I said, I would object to such a facility and support other hon. Members—I am delighted to see so much support in the Chamber—wherever it was going to be if that was the wrong location, as this is. We can tell it is the wrong location because Home Office guidance on dispersal is clear that there should be one asylum seeker per 200 head of population. This is on a completely different scale. The only comparable facility that we operate in the UK is at Napier in Folkestone, where there are now 320 service users against a population of 47,000. In this case, there will be 1,500 against a population of 600. Clearly, that is a trebling of the population.
Alison Thewliss (Glasgow Central) (SNP)
I very much support the debate that the hon. Gentleman has brought forward. As chair of the all-party parliamentary group on immigration detention, I have visited the Napier site and found that it was entirely inadequate for the needs of the asylum seekers based there, that it had put a burden on local health services, and that facilities had not really been put in place to deal with that number of people—and that was 300, not the 1,500 suggested for the site at Linton-on-Ouse. Does he share my concern that, without engaging with the local community, it would be difficult to get support for any size of facility on people’s doorstep?
Kevin Hollinrake
Yes, I think the hon. Member is absolutely right, and she does great work on the all-party group on immigration detention, which is heavily engaged with me on these matters. Whatever we do with these facilities, we have to plan them properly. That did not happen at Napier, hence the trouble. This is a better-planned site, there is no doubt about it—some of the issues of dormitory accommodation and other things have been solved, and the accommodation itself has been planned better—but it is much worse for accessing amenities and public services for the service users, which leads to all other kinds of problems.
As I say, we are where we find ourselves, but I do not think it is right that we can effectively use this village, which is clearly not the right the place for this facility. Everybody can see that. I am really interested to hear whether the Minister will defend this choice, because I have not heard a Minister or an official do that yet. There is lots of finger pointing going on.
Kevin Foster
We can look at what will be provided on the site. For example, it is fully catered, so there will be three meals a day for those accommodated there. We will provide a number of basic services and facilities for recreation and entertainment and, on top of that—this is perhaps one thing we were to come on to—we will provide the ability to progress cases while on site, such as doing the pre-interview questionnaire and conducting the substantive asylum interview so that people’s cases can be processed more efficiently. We believe that that will deliver a better outcome overall. We are working on healthcare and other areas as well. Again, it is about the balance between having numbers in one location where we can provide a number of services versus more dispersed accommodation where we do not supply specific services and people may be more reliant on those in the community.
Kevin Foster
I will take one more intervention, but, given the time, I do want to respond to some of the other points made.
Alison Thewliss
I appreciate the Minister giving way. Will he explain exactly how people will get legal support on site in a village in the middle of nowhere? Would he not be better to go back to the alternatives-to-detention pilot projects, the recommendations of which the Government have accepted and which have been found to be a cheaper and better option for all involved?
Kevin Foster
Again, it is worth pointing out that people are not detained on the site. Transport will be provided to York, and they will also have access to legal aid and migrant help services. Again, a place where, for example, we can progress asylum interviews—a place with video conferencing technology and other things available—will lead to better outcomes for people than being in a hotel, which for many is the alternative.
I am conscious of the time and want to respond to some of the points made by my hon. Friend the Member for Thirsk and Malton. We have said that we will start small, with only about 60 people accommodated at the site in the first instance. That will be followed by a phased approach, with numbers gradually increasing to ensure that services are appropriate and that the site operates as we expect. To reassure my hon. Friend, the final decision to place service users on the site will only be taken once the services are in place and we are clear it is safe and legal to do so. As touched on, all asylum seekers will receive a thorough induction, including site and local information. The site is fully catered and there will be a number of recreational facilities. I am sure colleagues will appreciate that it is not a holiday camp, but there are facilities that allow people to occupy and entertain themselves.
I have heard the very strong representations made about the impact on people living in the local area. I will provide some further detail on local services. Only single adult males with low health vulnerabilities and the lowest level of additional needs will be accommodated at the site. That is specifically to ensure that local health services are not unduly impacted by the creation of the new centre. Those being accommodated will already have undergone a robust screening process consisting of mandatory checks, which include the capture of biographic and, crucially, biometric data. That information is then cross-referenced against a number of systems to verify a person’s identity. Furthermore, Serco will have a comprehensive security model for the site, which will be scaled up as occupancy increases, ensuring a presence on the site. I am sure colleagues will appreciate why I will not go into the full details of security arrangements on the Floor of the House, but there will be a presence. In addition, we have set up multi-agency forums, which include the police, to develop approaches for responding to any potential incidents.
My hon. Friend touched on engagement. He has certainly engaged regularly on this issue with me, my right hon. Friend the Home Secretary and senior Home Office officials. Earlier today, he was again making very clear his thoughts on particular things. At every meeting he has been very clear that his view is that it should not go ahead and that he wants to raise his concerns. We now have regular meetings with key partners, including from the local authority, police and fire, who can raise operational points relating to the site. Having met the leader of my hon. Friend’s local council, I know that it supports his objections, while engaging on the operational side. It is very clear that it will do so while not compromising on its overall view of the proposal.
We recognise the need for an open dialogue with the local community. We are putting in place a programme of communications to keep people in and around Linton-on-Ouse informed, alongside meetings for local people to attend. We recognise the strength of feeling in the local community on this issue. There is a strong determination within the Home Office to ensure that everything possible is done to answer people’s questions and lessen their concerns, while recognising the objections being made, including by my hon. Friend who represents them in this place.
My hon. Friend raised a couple of specific points. One was in relation to the families-in-service accommodation within the wire of RAF Linton-on-Ouse. As he touched on, they have been offered the chance to move from the site. They are on the site. My understanding is that they would have liked to have been aware that being on the base itself would not be permanent accommodation, given the fact that the RAF has ceased using it for flying operations. Clearly, the presence there was due to be run down, but provisions have been made to ensure that they are there.
We today received a letter from the Vale of York clinical commissioning group setting out its approach to primary care services for the asylum seeker population at Linton-on-Ouse. Again, to reassure my hon. Friend and the House, it is our intention that we would not look to house those with significant health needs at Linton-on-Ouse. If people developed those needs or vulnerabilities while on the site, they would be considered for being housed elsewhere, recognising that this type of facility should not put undue pressure on particular parts of local health services, including—my hon. Friend has been very clear on this point—mental health services. It should not just be seen as a matter of physical health.
I recognise the points made by my hon. Friend. He has been a very strong advocate for his constituents. This is not a decision the Government have taken lightly, but the need for action to reform our asylum system is abundantly clear and part of that includes accommodation centres. The Government will not shy away from taking the necessary steps to fix our broken asylum system and to ensure we have an accommodation system that is no longer reliant on hotels as the default option.
Question put and agreed to.
Foreign National Offender Removal Flights
Alison Thewliss Excerpts(1 year, 11 months ago)
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Tom Pursglove
It is fair to say that the status quo is thoroughly depressing. I know that, behind people in Corby and east Northamptonshire, Kettering people are very sound and they are right to raise this issue. [Interruption.] And of course people in Wellingborough, too. They are right to demand action. They are right to be impatient for the change we have promised. We will continue to work hard and constructively to deliver the reforms we are making. The issue about people returning in breach of a deportation order is one that I am conscious of. The changes we are making through the Act, particularly around illegal entry, should help us to clamp down on that.
Alison Thewliss (Glasgow Central) (SNP)
I know from both my own case work and my work as chair of the all-party parliamentary group on immigration detention that the Home Office decision-making process is often flawed and that mistakes are often made. Can the Minister provide an updated figure on the number of cases where somebody has been removed from this country in error and how much compensation the Government have had to pay out to those people as a result?
Tom Pursglove
We are driving comprehensive reform of the whole asylum and migration system through the new plan for immigration. The hon. Lady asks for specific statistics, which I do not have to hand today. I will gladly take away her question and write to her. If I can provide more specific information, I will.
HM Passport Office Backlogs
Alison Thewliss Excerpts(2 years ago)
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Kevin Foster
I can confirm that we have increased staff numbers by 500 since April 2021, and we are in the process of recruiting another 700. As of 1 April, there were more than 4,000 staff in passport production roles. We are also offering incentivised overtime as well, for those who are prepared to work at weekends. We are increasing the resources and the staffing, and again I pay tribute to the staff working at the Newport passport office, who are doing a tremendous job under a lot of pressure.
Alison Thewliss (Glasgow Central) (SNP)
I have a Passport Office in my constituency, and while I am sure they are all working hard, I am distressed to hear from my constituents about how they believe they have been let down and lied to by staff who they have been dealing with. Can I ask the Minister a very specific question? My constituent Sean was the victim of an unprovoked assault with a knife last year, and he has just discovered that his passport has a puncture hole and blood stains on it. Can the Minister give some advice on whether Sean needs to apply for a new passport before his holiday in a fortnight’s time, or will the one that he has suffice?
Kevin Foster
It might be worth discussing the specifics afterwards, depending on how badly damaged the passport is, but I suspect we need to look at dealing with that compassionately, as it is compelling, particularly where he wants to go on holiday with a passport that will immediately remind him of what happened. If we get the details afterwards, I know the team would be happy to help, particularly assuming that it is a straightforward adult renewal, which it sounds like it would be.