Economic Crime and Corporate Transparency Bill

Clive Efford Excerpts
Alison Thewliss Portrait Alison Thewliss (Glasgow Central) (SNP)
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I am glad to rise on this auspicious day to discuss this auspicious Bill. Today is auspicious not just because we have this Bill back in the House today, but because it is my mum’s 70th birthday. I am sure all Members from across the House would like to wish her many happy returns. [Hon. Members: “Hear, hear!”] Thank you.

The Bill presents a significant opportunity for the Government, and for all of us, in tackling economic crime across these islands. We have tabled many different amendments during the Bill’s various stages, including yet more today, but we very much encourage the Government to look at these amendments in good faith. As Ministers and anybody looking at the amendment paper will see, they are very much cross-party amendments. There is a lot more we agree with in the amendments to this Bill than I have seen in respect of just about any other Bill that has come before this House. The Government would do well to reflect on quite how cross-party the amendments are—there is very little to choose between us.

I pay tribute to the right hon. Member for Barking (Dame Margaret Hodge) for the important work she has done in her all-party group, which has been significant in bringing so much cross-party agreement together on the direction of travel here. I hope very much that the Minister will be listening to her, as we all will be, when she speaks later, because the amount of work that has gone into considering what would make the Bill stronger is significant; it is not a light job that has been done there. The Bill would be strengthened all the more if these amendments were accepted.

Clive Efford Portrait Clive Efford (Eltham) (Lab)
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I pay tribute to the Minister for the work he has done on this issue when he was one of us on the Back Benches. When the hon. Lady was speaking about the cross-party nature of the amendments, I could not help but think that if the situation were slightly different, the Minister’s name would be on those amendments.

Alison Thewliss Portrait Alison Thewliss
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Yes. I have remarked in Committee, as the Minister will well remember, on the number of occasions when he agrees with himself, but not as a Minister. It is a curious situation and I will return to that when we get to the part of the Bill with which he is most associated.

As the Minister said, and as we all acknowledge, there is a lot here that we can agree on. It is unfortunate that more of the amendments have not been taken on board, because gaps remain in the Bill. We are all concerned that there will not be another opportunity to look at these issues again in this detail; unfortunately, parliamentary time does not work like that, so getting it right this time is important. We could get it right today or tomorrow, or if the Lords come forward with some useful amendments—as little as I like to give credit to the unelected peers along the hall, if amendments are tabled there, I would encourage the Government to accept them and make sure that they are acknowledged.

SNP Members have tabled a number of amendments, where we seek to create a unique identifier for directors; to put a limit on the number of directorships an individual can hold; to prevent directors in breach of their duties from taking public funds; and to prevent the practice of phoenixing, which causes so much harm to many of our constituents. It is not often talked about in the same bracket as economic crime generally, but phoenixing causes huge distress. My hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) will certainly return to this point in his remarks later.

Government new clause 8, on persistent breaches of companies legislation and the disqualification of company directors, is very important, because we have seen numerous reports in the press of people who repeatedly breach the law. There are huge issues of enforcement, and I intend to address those too. The Bill should include consequences for people who breach the rules.

I wonder what the House and the Minister think about a compliance case raised earlier today by Tortoise. It mentioned Balshore Investments Ltd Gibraltar, which in 2017 listed itself at Companies House as a person of significant control of a different company, Crowd2Fund. Its name was then removed in 2020, and that removal was backdated to 2016. In 2022 two directors, named on the register as Nadjat Al Zahawi and Hareth Nadhim Al Zahawi, were named as PSCs of Crowd2Fund.

Graham Barrow has told Tortoise that the retrospective changing of directors means that Balshore’s filings

“leave a huge gap of six years when, despite Balshore owning 40 per cent of Crowd2Fund, no declaration of the underlying owners of Balshore has been made, as required by UK law”.

This is a very interesting and topical case. I wonder what the consequences might be for, and what might befall, those who fail to comply with company law in this way under the new legislation.

Government new clause 15 is important in ensuring that this House is accountable on the measures within the Bill. I think that is fine as far as it goes, but Labour’s new clause 16 would go much further. It is important that the Minister looks at these measures and asks, “What does the House need to know?” Yes, there will be reports, but there is a good deal more detail in new clause 16, and I think it is important to look at that and think, “Actually, this is what the House might find useful and interesting to look at as regards the effectiveness of the Bill.”

Economic Crime and Corporate Transparency Bill Debate

Full Debate: Read Full Debate
Department: Home Office

Economic Crime and Corporate Transparency Bill

Clive Efford Excerpts
Liam Byrne Portrait Liam Byrne
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The hon. Lady is absolutely right. Here we are, licensing a warlord to draw down funds and move them into the NatWest bank account of a London law firm to prosecute a case that undermines the sanctions we imposed on that warlord in the first place.

Let us briefly go through the timeline of the case because it is so important and illustrative of just how broken the system has become.

Clive Efford Portrait Clive Efford (Eltham) (Lab)
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I commend my right hon. Friend for the work he has done consistently over a long period on this issue. It is important to highlight the scale of the problem in London. Is it not true that there are more SLAPP cases being taken in the London courts than there are in Europe and America put together? Does that not illustrate the scale of the problem and the urgency with which we need to deal with it?

Liam Byrne Portrait Liam Byrne
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My hon. Friend is absolutely right. I said earlier that London is now the preferred strike point for oligarchs in intimidating journalists. When the Foreign Policy Centre, whose work I must commend, surveyed investigative journalists, it found that three quarters of them had suffered some kind of legal attack to silence them. The UK legal system accounted for more of those legal actions than the United States and Europe put together. That is how bad this has now become. That is how rotten our system has now become. That is why it is so outrageous that the head of the Wagner Group was given the licences. Let us be clear about this guy. This is someone who has been running mercenary operations in Sudan, Mozambique, Syria, Central African Republic, Libya and Mali—and, of course, his forces have now been redeployed to the theatres in Ukraine.

It was in August 2020 that Eliot Higgins and Bellingcat began running a series of stories that exposed the barbarities of the Wagner Group in Africa, including offences such as the murder of CNN journalists. It took the British Government and the Foreign Office until 31 December 2020 to put sanctions on Prigozhin, even though, by the way, he had been sanctioned much earlier in the Unites States for the quiet sin of running troll farms intervening in the American presidential campaign. None the less, we got around to it at the back end of 2020. In the citation for sanctions, the Foreign, Commonwealth and Development Office wrote that Prigozhin was providing

“a deniable military capability for the Russian state”.

That feels quite a big sin to me, running a deniable military capability for the Russian state. That sounds like a pretty good reason for sanctions. That sounds like a pretty good reason for not offering carve-outs to sanctions to undermine them in British courts.

When Mr Prigozhin found out about the sanctions he was not very happy, so he sought to undermine them by suing Bellingcat, or Eliot Higgins in an English court. He had a choice and in fact a debate: “Do we do it in a Russian court, a Dutch court or an English court?” The conclusion was to go for Eliot Higgins in an English court. To prosecute the case, he had to fly the lawyers out to St Petersburg, so the Treasury licensed £4,788.04 to help make that happen: over £3,500 for business class flights, £320 for accommodation at the Grand Hotel Europe Belmond, £150 for subsistence—that’ll buy a pretty good dinner—£200 for PCR testing and £400 for express visas. That is what servants of the Crown, under the supervision of Ministers of the Crown, signed off.

The discussions went a bit like this. “What are the objectives here, Mr Prigozhin? Well, we think that, rather than seeking damages, what we really need is to get Mr Higgins for defamation because that is how we undermine all those irritating articles” that led to the sanctions against Mr Prigozhin. Literally, we enabled the enablers. We enabled the cash flow of a Russian warlord to prosecute an English journalist in an English court. And that is why we have to act. No one in this House today thinks that this is okay. The Minister for Security does not think that it is okay. All of us here think it has to stop, but if it is to stop, we have to take aim at the original sin: the fact that it is courts in this country that are being used by oligarchs around the world to silence journalists.

Our new clause, which has drawn cross-party support today, is very simple. It would not stop all strategic legal actions against public participants, but it would stop anybody attempting to silence journalists who are trying to reveal economic crimes. It is within scope; I am grateful to the Clerks for their work helping to refine it and make it good. I know that the Minister will say, as he said in Committee, that this is not the right Bill for it, or that it would not solve all the problems, but that is an argument for making the perfect the enemy of the good.

We have heard the Lord Chancellor talking about his ambition to change the law, but we have also heard that he seeks to do so through the Bill of Rights. The dogs in the street know that the Bill of Rights Bill is dead. It is not coming back to this House any time soon, yet today—this week, next week, next month—journalists and indeed ex-Members of this House are in court, having to pay legal bills because we allow oligarchs to abuse our courts. Let us at least make progress now.

I say to the Minister: please do not be the Minister for mañana. Please be the Minister who did not make the perfect the enemy of the good. Please be the Minister who seeks to do what he can with what we have, where we are, today. We could use this Bill to make progress. Why do we not seize that opportunity with both hands?

I am very grateful for the concerted campaign by Members across this House. I will end by saluting the courage, fortitude and determination of so many good journalists in this country. Oliver Bullough, who wrote the brilliant books “Moneyland” and “Butler to the World”, makes an excellent argument in his openDemocracy article today. He says that journalists going into the business of tackling economic crime have an uphill struggle as it is, with a lot of barriers in their way. They have a pretty difficult job, and the knowledge that the British Government are on the side of the bad guys does not make that job any easier. It is time that we put the force of the state and the force of the Crown behind the good guys for once—and that means agreeing to our new clause today.