Steve Barclay
MP for North East Cambridgeshire · Conservative · United Kingdom
“I speak to my brief exchange earlier with the Minister. As the previous speaker, the hon. Member for Harpenden and Berkhamsted, said, the draft regulations are fairly benign and very welcome to help people who are struggling with their bills.”
“The issue is not the lack of will; the issue is the alignment between procurement, regulation and clinical leadership, particularly in the colleges, as well as the ability to scale innovation—it is not about having more ministerial pilots.”
“Just to localise it to my own constituency, the Cambridgeshire and Peterborough ICB alone paid out £14 million in redundancies last year. It merged with a number of other ICBs to form the Central East ICB, yet we know hear from the Government that it should align with metro mayors, which means going back to exactly what it was before: the…”
“My right hon. Friend is absolutely right: the Government are spending millions of pounds and there is no plan. The measure was announced without working that out, it came as a surprise to many within the system, and it has had a chilling effect on many decisions. That is not isolated.”
“I rise to speak to clause 1 on the abolition of NHS England and clause 6 on promoting innovation. What characterises the first of those is an announcement without any clear plan. That is what has driven the cost and confusion that a number of Members across the House have spoken about.”
“All this is around 18 months on from the actual announcement. The confusion seems to extend to the Government themselves, because they seem unable to answer pretty straightforward written parliamentary questions. Given the time limit, I will give just a few examples.”
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“Sir Alan, I will just point out that Opposition Members have used up pretty much half the sitting so far, before there has been any question from Government Members.”
“Before he steps down from the House very shortly, I join colleagues in paying tribute to the work of my neighbour, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), not only for his work in clearing up the mess that we inherited with the RPA but his wider work on behalf of farmers. My hon. Friend mentioned the 15 digital centres that are going to provide assistance. Will he update the House on what additional resource allocation will be put in place to help with the bureaucracy and the difficult conversations that farmers may have with helplines?”
“I find the shadow Minister’s response to my hon. Friend quite staggering. She made the same point about new clause 28, which I have tabled. Is it seriously the Opposition’s case that 31 days is sufficient time to investigate multimillion-pound suspicious activity reports such as that in the case of OPL 245?”
“Is a further reason why we need transparency that there is very little transparency around the beneficial ownership of multimillion pound property in London? For example, a respected non-governmental organisation estimates that 45% of London property valued at above £2 million is owned offshore where the beneficial owner is opaque. If those who have profited through torture and corruption are able to own London property, it is even more important to be transparent about whether they are travelling here.”
“If the Government accept my proposal, I hope that they will change the law at the earliest opportunity to create a more level playing field by giving more time for these complex, multi-jurisdictional cases to be investigated.”
“In investigating that case that had developed over many years involving complex financial arrangements over different jurisdictions, law enforcement has just 31 days to build a case that would block the transfer of $1 billion that is going to a corrupt official and his henchmen. New clause 28 simply seeks to give law enforcement agencies more time to build their case. I shall not press it to a vote, but I hope that the Minister will tell us whether the Government believe that the current arrangements provide sufficient time, or whether they accept the substance of the new clause, which is that the current arrangements are insufficient and that they load the dice against law enforcement, meaning that corrupt assets can be transferred from the UK to criminals.”
“To put that in context, the proceeds of crime unit investigated only 110 cases from the 316,000 suspicious activity reports filed with it, so clearly the system is not working. I thought I would give just one case to bring this to life. The Nigerian case OPL 245 has a bit of a jargony name, but it involves $1 billion paid by a British oil company for some offshore land in Nigeria with oil assets. To put this in context, $1 billion was paid for this land for drilling—they do drill offshore, I should point out for the benefit of any Members who might be confused as to how they obtain the oil—yet 14 years earlier this land was granted to a company owned by the then Nigerian oil Minister. In essence the land was granted by the Nigerian oil Minister to a company that he owned and for which $1 billion was then paid 14 years later.”
“At present, when a suspicious activity report is filed the law enforcement agencies—the National Crime Agency has now taken on this responsibility —have just seven days to say whether they give consent to those multimillion pound transfers going ahead. That is just seven days on a case that might well have been built over many years, often involving jurisdictions where information is difficult to obtain, and if law enforcement decides it does not wish to give consent to these transactions, which the financial institutions themselves have said look suspicious, they have just 31 days to build the case to the satisfaction of the courts. If they fail to do so, they risk the penalty of costs against them, which sets a strong disincentive to law enforcement to take those cases forward.”
“I rise to speak to new clause 28, tabled in my name, which is much more modest than the new clause tabled by my hon. Friend the Member for Esher and Walton (Mr Raab). It is simply about giving law enforcement more time in respect of multimillion pound money laundering cases. At present around 316,000 suspicious activity reports are filed each year with law enforcement agencies. Those are cases where the banks, the lawyers or the accountants have serious concerns around money laundering. According to the Home Office’s own figures, between £23 billion and £57 billion are being channelled through the UK economy each year, so we know the scale of money laundering is significant.”
“The concern is often expressed that the senior military were speaking with one voice, under pressure from the then Government. Will the hon. Gentleman clarify which senior military generals spoke against the previous Government’s policy and were promoted under that Government?”
“The Government’s taskforce on tackling radicalism and extremism, chaired by the Prime Minister, recommended in 2013 a new banning order for groups that fall short of being legally termed “terrorist” but which undermine democracy, and a new civil power to target those who radicalise others. Will the Home Secretary confirm whether those measures are excluded from the Counter-Terrorism and Security Bill and whether that is because they have been blocked by the Liberal Democrats? If so, given the comments of the shadow Home Secretary and the right hon. Member for Blackburn (Mr Straw), and in the light of recent events in Paris, is there scope to revisit the recommendations made by the Prime Minister’s taskforce, as that would be most welcome?”
“Let us take the Rugby Football Union, for example. Tickets are sold at a discount to promote the game of rugby, so it is not the operation of the free market as my hon. Friend and I would traditionally refer to it. Tickets are sold to promote the game and are resold in breach of the terms and conditions. It is Government policy to ask the RFU to take enforcement action, but it cannot do that without transparency about which tickets are being resold.”
“Will the right hon. Lady clarify whether the Opposition would support in Committee or on Report measures relating to the disclosure of beneficial ownership of UK property owned by offshore companies, which is one of the ways that assets are held, and unexplained wealth orders, along the lines of those used in Guernsey, to allow law enforcement officers more time than they currently have? Those two measures are excluded from the Bill.”
“Does my hon. Friend share my concern about the fact that resource allocation is very opaque? The Treasury produced a report for the Cabinet Secretary in the last quarter of last year suggesting that 90% of spending on extremism happens domestically and only 10% internationally. On the very important threat that he is articulating, does he think that Parliament has sufficient transparency at the moment in relation to where the money is going, and to what extent is it being spent on adapting to new threats as opposed to dealing with traditional ones?”
“It is silent about the time scale on the overseas territories, other than pushing it back to the end of 2016. Finally, the Minister wrote a very good book—I am sure it is still available in all good bookshops—calling for much tougher sanctions against those in banks guilty of regulatory breaches. Why, when he proposed criminal sanctions in his book, does the plan stay silent on the fact that the biggest fine in the past decade, on a money laundering reporting officer, was £17,500? Was my hon. Friend’s plan not an opportunity to preach about what he wrote?”
“The Minister mentioned resourcing, so will he confirm how many people have agreed to transfer to the new unit, given that the police do not have TUPE powers and that it has been suggested that only two of the 35 had agreed to that transfer? Will the Minister address the fact that the plan refers to a review of the regime on suspicious activity reports, when the issue is what happens when SARs are reported? Out of the 316,000 reported, only 110 were subject to investigation by the proceeds of crime unit. Why does the plan appear silent on that issue? Will he also address issues such as beneficial ownership? The Prime Minister has given welcome leadership on beneficial ownership, but the plan seems to ignore the fact that about 45% of London property over £2 million is owned by offshore companies.”
“I thank the Minister for his statement. The plan is welcome and includes a number of welcome measures, such as action 47, which changes the legal test that applies to restraint orders. Will the Minister confirm that there are a number of notable omissions? For example, the plan does not address the introduction of unexplained wealth orders. Does he accept that 38 days to prove that a complex international transaction is corrupt is a pernicious time limit? Does the Minister accept that the plan is silent on limited liability partnerships used as shell companies? Does it address the lack of judicial powers identified in the recent judgment from Lady Justice Gloster?”
“May I return the Secretary of State to the issue raised by the hon. Member for Blaenau Gwent (Nick Smith)? As she will know, the Government of the 14 overseas territories were in London last week, and published action plans last year. The British Virgin Islands and the Cayman Islands, for instance, have delayed any action in relation to their own action plans for more than 300 days. When will we see any implementation of the commitments that they have made?”
“On a point of order, Madam Deputy Speaker. I understand from the Table Office that it has had notice that the Government intend to publish tomorrow their much-delayed anti-corruption plan, which was due in June, and that the plan has been shared with third parties outside the House, but not with Members. Given the Christmas recess and the fact that Members might be leaving this evening, could you give any direction as to why Members are receiving the document after those outside the House?”
“We had a Financial Services Authority report in 2011 that showed problems relating to the money laundering of banks, and two weeks ago we had an FCA report showing again that small banks were failing on money laundering. If we go back to the 1990s, 23 banks were complicit in money laundering, yet no action was taken. It might surprise the House to know that over the last decade, only two fines appear to have been imposed against individuals for money laundering, the highest of which was for £17,500. How confident is the FCA that, particularly given the number of foreign banks in the UK, we have the right approach to money laundering even today?”
“Do the Government know whether the 300,000 or so suspicious activity reports filed by banks include any transfers of funds to people complicit in those attacks? We do not have the mechanism for filtering them effectively. Is that an issue of concern to the Government, particularly in the light of the discussion about Facebook? We need to shift away from this catch-all defensive policy to one based on targeting high-value corruption cases, and we need to work more in partnership with financial institutions, and combine that with a greater fear factor in respect of money laundering. Does the Minister share my concern that the current consultation relating to the Financial Conduct Authority seems to be repeating past errors?”
“The industry pays out millions of pounds for document checks on one’s granny in respect of low-value transactions, while serious cases receive little scrutiny. Of the 316,527 serious activity reports filed by banks last year, just 110 were looked at by the proceeds of crime unit. The banks do not want to exit profitable clients and see them go to other firms, so we have this defensive filing of suspicious activity reports, 95% of which are not acted on by law enforcement agencies—they just sit on file for intelligence. It is not cost-effective. Last Thursday, on the BBC’s “Question Time”, the Chief Whip—the Whip might want to sharpen her pencil—said that Facebook had been aware of intelligence relating to a terrorist attack but had not passed it on.”
“Where there is a financial institution with a complex, multi-jurisdictional case, perhaps spanning many years, law enforcement agencies have just 38 days to build a case to the satisfaction of the courts to block a payment. That is clearly insufficient. We could learn lessons from Guernsey and its approach in the Indonesian logging case. We need a mechanism of unexplained wealth orders to allow law enforcement agencies to stop the clock and allow time to investigate. Does the Minister accept that 38 days is wholly inadequate when it comes to building a complex legal case on payments? On the relationship with industry, the suspicious activity report procedure is based on regulatory compliance, rather than investigation.”
“If so, what are the constraints on using external consultants in respect of such investigations in the future? For policy reasons, the Government have decided not to pay for law enforcement out of money recovered from corruption investigations, but given that we have fewer than 100 investigators—in the Serious Fraud Office, the proceeds of crime unit and the City of London unit—would that not make sense? It would allow us to conduct more investigations, which would be in the interests of the countries being defrauded. Will the Serious Crime Bill deal with the evidential test? It appears to be set too high and so acts as a cost disincentive to the bringing of cases, which is compounded by the time scales.”
“I understand that in the two years that the NCA has had the intelligence unit, not been a single investigation has resulted from that intelligence. We need to tackle the concerns about resourcing. Will the Minister update the House on the challenges of buying in resource, if that is seen as a short-term fix? The case of Malawi and “cashgate” is a good example. DFID paid for a British firm, Baker Tilly, to provide expert consultancy advice. The scandal is known as “cashgate”, but we have not recovered any cash. Has there been any enforcement? We gave £106 million—a significant amount—in aid to Malawi last year. How much has been spent on the investigation? Is it true that these consultants had no powers to require banks to disclose financial transactions or request intelligence from foreign Governments?”
“On resourcing, will the Minister clarify whether colleagues in the Department for International Development have asked for reassurance on key financial investigators moving to the NCA, particularly from the proceeds of crime unit and the City of London anti-corruption units? Is it the case that, to date, only two of the 35 key investigators have agreed to move across? Such expertise takes time to grow. If we are to have a new plan, there is clearly a risk if the experts are not there to implement it. I understand that, in a letter to the Home Secretary on 20 November, the Bond group of non-governmental organisations also highlighted this issue. Given that police officers do not TUPE across and terms and conditions are less favourable, is the Minister confident that the staff will move across?”
“The first is resourcing: how to get investigating corruption right and how we give life to the Government’s plan and address some of the challenges they face on the transfer of key personnel to the National Crime Agency. Secondly, how do we improve the policy in terms of industry, so that we move from a quantity approach, particularly on suspicious activity reports, to one based more on quality and targeted at the more serious multi-million pound cases rather than low-value transactions? Thirdly, I want to highlight a number of loopholes in the legislative framework, given that there will be the Second Reading of the Serious Crime Bill in the next week or two.”
“In 2013, the then regulator, the Financial Services Authority, estimated that the level of money being laundered through London and the UK was between £23 billion and £57 billion. Indeed, the Home Secretary used the £23 billion figure when she gave a speech to the Royal United Services Institute, which suggests that the Government accept the scale of the challenge. To put those figures into global context, the African Union estimates the cost of corruption in Africa to be $148 billion and the World Bank estimates that up to $1 trillion is paid in bribes. We know this is a serious issue, and that is why it is timely that Parliament should address it. I want to highlight three broad themes.”
“Tonight’s debate on the Government’s approach to tackling corruption is timely for a number of reasons. It builds on the progress and leadership given by the Prime Minister at the G8 and G20. It comes as we anticipate the long-awaited Government report into corruption, which has been delayed for a year but is due out, we understand, later this month. It comes as London is hosting a conference of 14 overseas territories discussing their approach to corruption, and it comes just a day after changes applying to extraction companies on disclosing payments came into legal force. The debate is not just timely; it is relevant to London specifically. London is home to more than 250 foreign banks, the most of any financial centre. It is the largest currency trading centre in the world, processing 18% of cross-border transactions.”
“Other Governments have given leadership, notably the United States Congress, but there has been a serious lack of action from the UK Government in relation to the proceeds of the tax fraud that was linked to Magnitsky’s torture and death. What reassurance can the Minister give that there will be a change of gear, and that amendments will be tabled to the Serious Crime Bill to give effect to it?”
“Let me end by referring to the troubling case of Sergei Magnitsky, about which concern has been raised with the Government by Members in all parts of the House, and on which there appears to have been a woeful lack of progress so far. The Minister will be well aware that the 25-year-old Russian lawyer was tortured to death in a Russian jail. I know that detailed forensic information has been given to the UK Government about British nationals who were complicit in the money laundering linked to his death, and that information has been provided by Hermitage Capital Management, but the UK authorities appear to have taken no action, despite a Back-Bench debate initiated by my hon. Friend the Member for Esher and Walton (Mr Raab), and supported by the hon. Member for Rhondda (Chris Bryant) and many others.”
“Will the Home Office be making any representations to the Department for Business, Innovation and Skills on the subject? Thirdly, will the Government make it a condition that the countries to which we give aid comply with the United Nations convention against corruption? In particular, will they provide global leadership in requiring the publication of asset declarations on politically exposed persons? The UN has pressed for that, and I do not understand why we are giving aid to countries without expecting them to comply with the convention. Fourthly, will the United Kingdom introduce administrative orders, such as those introduced by Switzerland and Canada, so that we can rapidly freeze assets in post-revolutionary circumstances?”
“That simple measure could be applied over the next 12 months, and could bring a huge amount of transparency to the top end of the property market, where we know that money is being laundered. Let me now ask some questions about legislation. First, will the Minister update the House on the position of the British overseas territories and Crown dependencies, given the lack of transparency surrounding their plans? Consultations in the British Virgin Islands closed 300 days ago but nothing has been reported, and the same applies to the Cayman Islands. Secondly, it is feared that industry guidance might fetter the effectiveness of new United Kingdom law relating to the transparency of payments to Governments for the extraction industry. A QC’s opinion recently raised concern in that regard.”
“It is a well-known fact that beneficial ownership is very opaque, especially in the case of shell companies. Estate agents currently have no duties in relation to buyers, and even their duties in relation to the sellers who are their clients usually extend only to the offshore companies with which they are acting, or their lawyers. Would the Minister consider a requirement for beneficial ownership of property worth over £2 million to be disclosed to the Land Registry? She might even want to consider the imposition of a fine on offshore property-owning companies that did not wish to comply with the disclosure requirement—along the lines of those that were introduced as a result of recent banking regulatory changes—with the proceeds going to good causes.”
“Of course, non-governmental organisations could act as a friend of the courts in theory, but cost pressures invariably make that very difficult, while the likes of the Proceeds of Crime Act 2002 cannot be used to intervene unless there is a victim. If in this case the Nigerian Government are not of the view that they have been defrauded, very little can be done. We need to look at the way our courts operate in that regard. Property is another area. It has been suggested that 45% of London properties valued at over £2 million are currently owned by offshore companies. The Prime Minister has taken some positive measures relating to the register of beneficial ownership, but the Minister must realise that that is null and void when it comes to those properties owned by offshore companies.”
“That is where the companies in beneficial ownership sat, having been set up in six days by a lawyer convicted in the French courts of money laundering. Yet Lady Justice Gloster could essentially adjudicate only over the spoils of that corruption. She had no power to do otherwise, because neither of the parties to the case claimed that the funds were corrupt. To what extent would the new plan put forward by the Government allow the judiciary greater powers where, in its judgment, a case that is being disputed is corrupt? That applies particularly in the arbitration courts, given the lack of transparency often seen in those proceedings.”
“To what extent does the Minister believe that the current regime would ensure that at a group level executives would be liable individually for fines if similar mistakes were made today? The High Court recently heard the Nigerian OPL 245 case, which was dealt with by Lady Justice Gloster. It reveals a current impediment that applies to the judiciary, which I would like to draw to the Minister’s attention. In her ruling, Lady Justice Gloster said: “I find as a fact that, from its incorporation and at all material times, Chief Etete had a sufficient beneficial interest in Malabu”. She refers to the well-known case of Malabu, a $1 billion oil fraud. One can only look at that judgment, which says that if Etete had the beneficial ownership, he must have had it from the point of origin when he was the oil Minister of Nigeria.”
“The hon. Gentleman makes an interesting point about how we learn from other jurisdictions in other territories. Italy is another example, with its experience of dealing with the mafia. The hon. Gentleman speaks from experience of the challenges within Northern Ireland where there is a great deal of expertise, from which we can learn. On the fear factor for individuals, the Parliamentary Commission on Banking Standards put forward very good proposals, allowing a reversal of the burden of proof, but it is still the case that money laundering reporting officers are often not seen enough within the organisation and, not being at executive level, they often do not control the budget. That risks repeating past mistakes. Let us look at HSBC and the problems it got into in Mexico.”
“The measures that the Government have taken on beneficial ownership are hugely positive, but does the Minister accept that if almost half of all property in London worth more than £2 million is owned offshore, the measures will not provide transparency on beneficial ownership? Does she agree that property is a particular opportunity for the Government to extend their reach?”
“T3. My right hon. Friend has a strong commitment to teacher training. Will he join me in supporting a Fens teaching and learning centre based in Wisbech that will support not just north Cambridgeshire but also west Norfolk and south Lincolnshire, and help with retention, recruitment and talent management?”
“And the Petitioners remain, etc. [P001401]”
“The petition states: The petition of residents of the North East Cambridgeshire constituency declares that the Petitioners believe that healthcare should be more localised in North East Cambridgeshire; further that residents of North East Cambridgeshire face long travel times and costs when requiring procedures which should be delivered locally; further that the Petitioners believe that treating patients locally brings significant benefits; and further that there is a community campaign entitled “Treat Me Local” calling for healthcare to be more localised in North East Cambridgeshire which has been signed by 1,389 individuals. The Petitioners therefore request that the House of Commons urges the Government to ensure that the ten pledges of the Treat Me Local campaign in North East Cambridgeshire are fulfilled within twelve months.”
“May I draw the Minister’s attention to the fact that written parliamentary question 213850 on the number of lorries screened by body scanning machines and sniffer dogs when they enter the UK has not been answered? The Government have confirmed that currently just five vehicle scanning machines cover all our ports, including 51 points of entry. Will the Minister clarify why five is an adequate number?”
“Foreign nationals who are major funders of terrorism are on the UK sanctions list, but the House of Commons Library has confirmed that they are not automatically on the UK travel ban list. Is the Prime Minister aware of any individual on the UK sanctions list having travelled to the UK during this Parliament?”
“The Minister has not spelled out any dates. The matter has gone through the Joint Committee, it has been debated and there have been various hearings. New clause 11 says that the Secretary of State “may issue guidance”. What we are not getting is any sense of the operational requirements on a company such as Tesco, which was benefiting from slave labour in the fishing industry in Thailand. What would companies be required to do operationally under this guidance?”
“The hon. Lady is making powerful points about what teeth the guidance will have. Does she think that there are lessons to be drawn from when this House debated the Financial Services and Markets Act 2000, when it was believed that the behaviour of the banks would be influenced by reputational damage, a belief that was found to be false in the light of their future conduct? There seems to be a reliance on the idea that guidance in itself will have a deterrent effect on major corporations, but that has to be backed up with some teeth.”
“I am sure the Minister is aware that one of the common tactics used by banks when subject to regulatory action is to get rid of middle management, settle with the regulator at the earliest opportunity and profit from the 30% discount as a way of mitigating the fact that they have been caught out by enforcement breaches without actually changing their culture. Is there not a risk of the same thing happening with these injunctions?”
“Is the hon. Lady as surprised as I am that, as far as I am aware, only one person has ever gone to jail for breach of a Gangmasters Licensing Authority offence? Does that speak to the high hurdles to which she alludes?”
“We should also require an asset declaration that could be used to demonstrate an aggravating factor, should assets that had not been declared be discovered following further investigation. There is a suggestion from the Home Office that some of these issues will be addressed in the Serious Crime Bill, but it is clear that it will not address many of the matters that have been raised in the Joint Committee and by Members here today, so I hope that the Minister will look again at the extent to which the measures in this Bill that relate to the financial proceeds of crime can be strengthened so that we can tackle the root cause of the problem—namely, the funds.”
“We also need to place a higher duty on financial advisers. At the moment—I say this having worked for such an institution—it is very easy to hide behind a suspicious activity report. In essence, that report is a defensive mechanism, and more than 350,000 are filed with the Serious Organised Crime Agency each year. At the point of an arrest following an investigation by financial investigators, a higher duty should be placed on financial institutions, should they then choose to move the assets in question. We should freeze any assets over and above those that are required for reasonable living and business costs, so that money can less easily be moved offshore.”