Economic Crime Bill: Ministers promise new ‘failure to prevent’ offence

While not containing any tax changes the Bill does include measures relevant to tax professionals, including:

• Reform of Companies House with more powers for the Registrar
• Regulation-making power to require general partners of UK-registered limited partnerships to provide accounting information to HMRC
• New exemptions from money laundering offences to reduce unnecessary reporting by businesses
• Enabling businesses in certain sectors (including large accountancy and law firms) to share information more effectively to prevent economic crime
• Giving legal regulators a duty to uphold the economic crime agenda

You can read about the report's committee stage here.

You can find the text of the Bill and other documents related to the Bill here. 

You can read our preview of report stage here. This contains all new clauses and amendments tabled for debate. All of these were selected except for amendments 112 and 113, and new clauses 28 and 29.

Day One – Tuesday 24 January 2023

Government opening speech

Business minister Kevin Hollinrake opened report stage debate with a fairly brief speech focused on the Government’s amendments to these parts of the Bill. He had to contend not just with the usual challenges but with much praise from opposition members for his record of speaking out on the issues affected by the Bill. Catherine West (Labour) said it was ‘fantastic’ to have a minister who cares deeply about the topic. Layla Moran (Lib Dem) said she was ‘delighted’ to see him at the dispatch box. Hollinrake noted he had “a significant reputation to live up to”.

After a general outlining of the Bill’s contents – he said it contained “the largest reform of the UK’s company registration framework in 170 years” – the minister thanked all those who had served on the public bill committee for the constructive, frank debate which had taken place there (you can read a summary of that here). He said the legislation had been much improved as a result.

The minister said the government amendments were intended to ensure that the measures in the Bill work as intended and in most cases reflected issues raised in committee. On Companies House reform he drew particular attention to:

• New clause 15 which would require the Government to publish an annual report on the implementation and operation of parts 1 to 3, which includes the reforms to Companies House;
• A power to expand the registrar’s data-sharing ability (amendment 13);
• New clause 8 which will mean that a director can be disqualified if they breach an obligation under part 1 of the Economic Crime (Transparency and Enforcement) Act 2022, ensuring a consistent approach to tackling non-compliance between that Act and the Companies Act 2006;
• Removing the power to exempt certain individuals from identity verification requirements, “having concluded [following discussion in committee] that it is not essential” (amendment 1 and 12 others).

On limited partnership reforms, the minister highlighted:

• New clause 13 which would “ensure that a limited partnership’s dissolution and deregistration is transparent and properly drawn to the attention of the public. There will be a legal requirement for these to be published on the Companies House website as well as in the Gazette”;
• Amendment 38, which means partners of limited partnerships will have to notify the registrar about a dissolution within 14 days of becoming aware;
• New clause 12, which clarifies the interactions of the limited partnership reforms with regulation of UK investment funds;
• Amendments 30, 31 and 32, which give the Northern Ireland Department for the Economy and Scottish Ministers powers to petition the courts to wind up a limited partnership registered in their jurisdictions, ensuring a cohesive approach across the devolved nations.

Labour opening speech

Shadow business minister Seema Malhotra led for Labour. She said that the decision to remove powers to exempt directors from identity verification requirements was “a huge concession by the Government to a central question asked by us in Committee”. “The extent of these powers risked riding a coach and horses through the defences against economic crime that we are seeking to build through the legislation. But even after those amendments, a number of Henry VIII powers are left unchecked.” She was sure that would be debated in the House of Lords.

Malhotra also welcomed other government amendments, including new clause 15, the amendment requiring the Government to produce a report on the operation of parts of the Bill. However, while a ‘significant step’ she thought this failed to set any expectation of what Parliament would expect to see in the report. That is why Labour had, with cross-party support, tabled new clause 16. This amendment would make the report clearer and stronger, she said.

Dame Margaret Hodge (Labour) made a similar point, saying that while the Government’s new clause 15 “simply reflects reporting on the process of implementation… new clause 16 [tries] to hold the whole of Companies House’s works to account and ensure that it delivers what we have in mind in being at the front end of fighting economic crime through the data that it collects.”

Malhotra also spoke to new clause 22, which seeks to disqualify any individual convicted of a serious breach of the National Minimum Wage Act 1998, such as a deliberate refusal to pay the national minimum wage, from serving as a company director in future. “The Bill introduces a substantial amount of regulation about who can and cannot serve as a company director as a result of criminal or potentially criminal practices, so this feels like the right place for consideration of such a measure,” she reasoned.

New clause 24 calls for a creditor or liquidator to be able to apply to restore a company to the register administratively, Malhotra explained. This, she said, was designed to address the issue “that unscrupulous directors can misappropriate the strike-off process to avoid scrutiny and rack up debts or sell company assets ahead of the company dissolution, absconding with the proceeds.”

New clause 34 was summarized by the shadow minister as seeking transparency reporting on the involvement of foreign corporate service providers in the two main routes by which they may be authorised to conduct ID checks and to incorporate a company in the UK that is registered with Companies House. She said the existing wording in the Bill leaves a risk of a ‘backdoor route’ to the authorisation of foreign corporate service providers in a high-risk territory that falls outside money laundering regulations. The minister disagreed.

Malhotra also highlighted Labour’s amendment 104, which would insert a fifth objective into clause 1 of the Bill, requiring the companies registrar “to act proactively”. Labour’s amendments 105 and 106 specify that it should be a duty, not a power, for the registrar to allocate a unique identifier to a director, and that the registrar should ensure that the same unique identifier is used for that person in any other entries they have on the register under the same name or a different name.

Malhotra set out Labour’s intention, through amendment 108, to reduce the risk to the integrity of the register by tightening up the arrangements for the confirmation statement; and, through amendment 107, to require a limited partnership dissolution notice to be published on the registrar’s website and to remain published for a minimum of 20 years.

The shadow minister also offered her backing to cross-party new clause 20 on resourcing Companies House and the SNP’s new clause 36 and amendment 109 (see below).

Finally, the shadow minister also spoke to new clause 26, which was debated today but would be voted on the following day. This would ensure that an Order in Council requiring open registers of beneficial ownership in the British Overseas Territories comes into force no later than 30 June 2023. “Surely it should not have been beyond the wit of Ministers, even in this Government, to have sorted this out by now,” said Malhotra. 

Other speakers

Treasury Committee chair Harriett Baldwin praised new clause 20, a cross-party amendment which, she explained, “proposes a fee for new businesses of £100 rising with inflation, which would give Companies House more resources to undertake this important work and, importantly, keep its budget increasing along with inflation. I acknowledge that we do not want to set a fee at a level that could act as a deterrent to anyone starting up a small business, but the work that we did last year in the Committee suggested that the current levels of fees, benchmarked against international comparators, were very low. It was clear that we needed more resources to enable us to understand the identity of those who are establishing businesses in this country, so we pulled a number out of thin air.”

The minister intervened with a plea for flexibility, saying Companies House “needs to set out exactly what resources it needs to be able to perform its obligation to implement the objectives, from which we can decide how much money we need to raise. We will then look at the fees charged by Companies House.” So he would rather not specify £100 in the Bill.

SNP spokesperson Alison Thewliss praised the cross-party agreement on the Bill. She said 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.”

She described the Government’s new clause 8, on persistent breaches of companies legislation and the disqualification of company directors, as “very important, because we have seen numerous reports in the press of people who repeatedly breach the law.” Government new clause 15 was also important, “in ensuring that this House is accountable on the measures within the Bill”, though she agreed with Malhotra that Labour’s new clause 16 would go much further.

Endorsing cross-party new clause 17, on persons with significant control (PSC) status and verification, Thewliss said it was “incredibly important that there are cross-checks on identity and that we understand who those people are.” She also backed cross-party new clauses 19 (accounts of dissolved companies) and 20 (resourcing Companies House) and Labour’s new clause 22 (“Person convicted under the Minimum Wage Act not to be appointed as director”)

Thewliss said it was unfortunate that the consultation on the Office for Professional Body AML Supervision (OPBAS) is still ongoing, because that should form part of the Bill. “It has been widely acknowledged that OPBAS is not effective and is not working as the Government intended, but the Government do not yet know what they are going to do, how they will fix OPBAS, whether it will require further legislation in this House, whether it will involve stripping OPBAS of its AML supervision responsibilities and duties and, if it does, where those responsibilities will lie.”

The SNP’s suggestion in new clause 35 is to make Companies House the AML supervisor in its own right. “[I]f Companies House is the front door for every company registered in the United Kingdom, it should be liable for anti-money laundering regulations,” said Thewliss. “If we are asking banks and other institutions to look at that, why not the Government agency responsible for the registration of every company on these islands?”

The SNP’s new clause 36 says that Companies House “should seek to ensure that registrations contain accurate, up-to-date information and that it comes back to update Parliament on its progress updating [the] register.” She said there was a lot of ‘absolute rubbish’ on the register – inaccuracies and names used fraudulently. Arguing for a unique identifier for company directors, Thewliss observed: “There are only three Alison Thewlisses on the register, but they are all me.” But would she have been able to find that out if she had a more common name?

The SNP’s amendment 111 would limit the number of directorships that people can have. “People may have multiple directorships, but is the director of 300 companies really able to do that job properly?” she asked.

She backed government amendments 30 and 32 which would give Scottish Ministers the power to present a petition to wind up Scottish limited partnerships, which, she said, have been comprehensively abused for several years now.

Former cabinet minister Andrea Leadsom (Conservative) said that in her time as Business Secretary she had had discussions with “the excellent team of civil servants who are looking at company law reform, corporate governance and the Insolvency Service” but “they were not invited to go and talk to Ministers terribly often. They were definitely a bit of a Cinderella out there in BEIS, and this incredibly important area needs much more focus.”

Leadsom spoke about the problem of phoenixing, which had been the subject of two amendments she had tabled, which had not been selected. She urged the minister to listen carefully to what MPs were saying and “to create some new duties”.

Dame Margaret Hodge (Labour) welcomed the Bill but felt that, in its current form, “it fails in too many ways.” “Omissions and loopholes mean that there is a real danger that we could be setting up a new Companies House that will fail,” she warned. Also, “the Bill is too cautious and unambitious in its scope. It fails seriously to tackle the challenge that we in Britain face because of the exponential growth of economic crime.” “Every year, economic crime costs this country somewhere in the region of £300 billion. That is a conservative estimate — in fact, I think it is a gross underestimate. That is 14.5% of GDP.”

Hodge focused her remarks on two sets of amendments that she and her colleagues on the all-party parliamentary groups on Responsible Tax and Anti-Corruption, and on Fair Business Banking, “are convinced are necessary to ensure that the reforms work and that the appropriate resources are in place to properly fund the reforms”. The first of these were amendments to create new duties on Companies House, rather than just giving it powers. The most critical of these was new clause 34 which is about corporate service providers. “If the Minister does not accept that, I predict that we will end up creating another database that is infected with falsehoods and errors, and will simply reinforce in people’s minds across the globe the growing acceptance that the UK is the best place to hide and launder dirty money.”

Responding to Hodge’s point on the need to sort out the supervision of company service providers, Nigel Mills (Conservative) observed that “[w]e have wrestled with a similar issue on tax agents, where it has become clear that people are filing tax returns on behalf of their clients when they are neither competent nor perhaps have the right ethics to hold that power. However, it becomes hard to sort that out once they are existing in the system and filing returns. Does the right hon. Member agree that it would be much better to get only the right people authorised in the first place and that, by doing that up front, we would not have to come back afterwards to try to kick off people who have a heavy investment in carrying on?” Hodge thought this a valid point.

Hodge’s second area of focus was the funding of Companies House. She said £12 was an ‘absurdly low’ amount to charge to set up a company. It costs £1,220 to get a visa for a skilled farm worker, she noted, while other countries charge far more to set up a company: £1,000 in the British Virgin Islands and between $570 and $1,400 in the US. Nigel Mills pointed out that annual fees should be looked at too.

Simon Fell (Conservative), who has succeeded Kevin Hollinrake as chair of the APPG for Fair Business Banking, focused his remarks on three new clauses and three amendments in his name. New clause 17 requires the registrar to cross-check statements attesting to the identity of the person of significant control against company records in order to verify the status of beneficial owners. New clause 18 requires any person holding 5% or more of the shares in a public company to disclose their shares, and creates a duty for the registrar to check that a person does indeed hold 5% or more by cross-checking company records on the basis of a risk- based approach. New clause 19 creates an obligation for the registrar to examine the accounts of dissolved companies with a view to establishing whether economic crime has been committed, using a risk-based approach.

Continuing, Fell explained that amendment 101 will ensure that corporate service providers are not authorised to carry out ID verification until the consultation on anti-money laundering supervision promised by the Government is completed and implemented. Amendment 102 would establish the risk-based approach used by the registrar to decide when to carry out certain duties, such as the “person with significant control” checks. Amendment 103 builds on amendment 101 by creating an obligation on the registrar to check whether the identity checks carried out by authorised corporate service providers are accurate and valid, based on a risk-based approach.

Liam Byrne (Labour) said the minister was ‘very lucky’. “Very few people in this House can have campaigned on an issue for so long, then been handed their dream job by the Prime Minister and then secured parliamentary time for sweeping legislative reform that puts more power into their hands and those of the agencies for which they are responsible. If that was not good enough, the Minister then has a chorus line of Members of Parliament tipping up to the House to offer not to cut his budget but to increase it, to provide him with the resources he needs to fulfil the ambitions of this job.”

But, said Byrne, the minister has now signed up “to fight this inferno… asking to be armed only with water pistols”. “That is an approach that is doomed to failure. Even at this late stage, we urge the Minister to change course, because policing on a shoestring is policing that is hamstrung.”

Jonathan Djanogly (Conservative) praised “a first-rate piece of legislation”. He picked out clause 63, which provides for authorisation of corporate service providers, as “novel and a significant move from existing company law. However, given the potential for mischief happening with companies being incorporated for illegal reasons, it must be the right way to go.” The principle behind amendment 103, which would force the registrar to carry out risk assessments to establish whether the verification of the ID by the provider “is likely to give rise to a risk of economic crime”, seems sound, he thought.

Gavin Newlands (SNP) spoke to new clauses 37 and 38 in his name. New clause 37 “would stop those who have burned through multiple limited companies, leaving a trail of destruction in their wake with little or no recourse for the authorities. It would deal with the worst of those culprits by specifying those who are “subject to winding up procedures under the Insolvency Act 1986 on more than three occasions in the preceding five years”, so we have gone for the particular egregious end of phoenixing.” New clause 38 would “prevent those who have failed to discharge their duties from receiving public money or support for any company for which they are listed as a director.”

Government closing speech

Winding up the debate, the minister, Kevin Hollinrake, offered the Government’s response to various of the new clauses and amendments proposed by the opposition and backbenchers.

He explained that the Government new clause 15 “is not just about process; it will ensure that Parliament is provided with reassurance on the further work that will be required after Royal Assent, such as the laying of secondary legislation or the development of IT.” He said that Labour’s new clause 16 would duplicate new clause 15. Seema Malhotra disagreed, saying the new clauses were ‘very complimentary’.

The minister sought to reassure MPs that it is the Government’s policy to issue unique identifiers to all individuals who will be required to verify their identity, including new and existing directors of companies. “These unique identifiers will mean that Companies House can link an individual’s verified identity across multiple data points, roles and company associations, to enable users of the register to search for an individual and find all relevant records.”

On cross-party amendment 101, the minister said the registrar will establish a robust scrutiny process with AML supervisors for onboarding ACSPs. “If necessary, she can suspend or de-authorise an ACSP to exclude it from forming companies. The vast majority of accountants, lawyers and other agents who make filings on behalf of companies operate to high standards. It would be disproportionate to block them all from making such filings while the Treasury works through the reform of the supervisory regime—something that we all clearly want it to get right.”

On Labour’s amendment 104, Hollinrake disagreed with adding a fifth objective for the registrar. “The Bill already places a legal duty on the registrar to seek to promote the objectives, which inherently demands proactivity. Tentative use of her powers would result in the registrar being in danger of failing to satisfy the duty.”

On the accuracy of existing data, he thanked Alison Thewliss for new clause 36 which "would have the registrar ensure the accuracy and veracity of all register information prior to the commencement of the Bill’s reforms. Clearly, that constitutes many millions of pieces of information... If we were to do what she asks and the registrar were to fulfil the requirements of the new clause, it is unlikely that the beneficial reforms of the Bill would ever be realised, because of the duty it would place on the registrar."

Liam Byrne and others were wrong to say that the Bill does not provide extra resources to Companies House to implement the measures, said the minister, because clause 90 sets out exactly what areas will be taken into account when fees are set. “The Bill gives the Government more flexibility to increase the fees and charges by broadening the range of functions that can be funded through those fees,” he explained. “Companies House levies a range of fees, not just the up-front charge on incorporation, and I confirm that we are exploring a range of options about how fees will evolve.”

Regarding Labour’s new clause 22, the minister said that the national minimum wage enforcement team at HMRC, “whose resources have been doubled over the last six years, as have the penalties for non-compliance, already refers appropriate cases to the Insolvency Service, which, as part of its normal remit, considers director disqualifications where appropriate. Indeed, three people were disqualified in 2021 for such transgressions.”

Regarding cross-party new clause 18, which would require a person who controls more than 5% of the shares in a public company to disclose that information to the registrar, the minister said “we must balance transparency concerns and the benefits of having additional information against imposing undue burdens on businesses”.

Regarding new clause 37 and amendment 112 on phoenixing, proposed by the SNP, the minister said he felt there were provisions that will be implemented through this Bill that will provide safeguards against such behaviour.

Votes

There were three votes at the end of the first day of report stage debate.

Labour new clause 22 was defeated 296-232. This would have disqualified any individual convicted of an offence for a serious breach of the National Minimum Wage Act 1998, such as a deliberate refusal to pay National Minimum Wage, from serving as a company director.

Labour’s new clause 34 was defeated 291-234. This would have created an obligation for the Secretary of State to publish a report into the number of Authorised Corporate Service Providers with a head office based outside the UK and the number of foreign corporate service providers authorised by the regulations set out in new section 1098I(1) of the Companies Act 2006.

SNP new clause 26 was defeated 290-233. This sought to ensure that existing company registrations contain accurate, up to date information, and to impose a requirement for the Registrar to update Parliament on the progress of updating the register.

Day Two – Wednesday 25 January

Government opening speech

The lead minister on the second day of report stage debate was Security Minister Tom Tugendhat. He briefly summarised the amendments tabled relating to parts 4 and 5 of the Bill. Acknowledging that the number of amendments was “perhaps slightly greater in number than we would have liked” he said that the vast majority (amendments 51 and 57 to 100) were minor technical or consequential amendments to ensure that the detail of the cryptoasset measures will work effectively and can be used as soon as possible. “That reflects the technical detail of the subject area and the need to make the changes work for each of the jurisdictions of England and Wales, Scotland and Northern Ireland that are covered by the Proceeds of Crime Act 2002,” he explained.

On the more substantive government amendments he highlighted:

• New clause 14, which allows the Solicitors Regulation Authority to proactively request information from its regulated community for the purpose of monitoring compliance with the economic crime regime, including offences related to money laundering, terrorist financing and sanctions;
• Government amendments 44 to 47 which seek to clarify the cases in which the information order power can be used, and how they should be used;
• Government amendments 48 and 49 which – in response to opposition concern during committee - expand the scope of the indirect information sharing clauses to include insolvency practitioners, auditors and tax advisers.

Labour opening speech

Stephen Kinnock led for Labour on the second day of report stage. He said the Bill was a long overdue ‘step in the right direction’ but that it was ‘profoundly disappointing’ that, “in Committee, there was little in the way of movement from the Government”.

Kinnock noted government new clause 14 which seeks to expand access to information relevant to economic crime enforcement efforts, but focuses only on the Law Society and “any other approved regulators specified by the Lord Chancellor”. He said that local authorities need these powers too. “Tackling economic crime is a huge challenge for councils due to the lack of licence they have to act on their own intelligence about crime in their local areas.”

Supporting cross-party new clauses 4, 5 and 6 on corporate criminal liability, Kinnock said there is “a well-established and proud tradition of groundbreaking UK law on holding company executives to account for misdeeds committed in their names, or in the names of corporations they are responsible for”. This included the Bribery Act 2010 and the Criminal Finances Act 2017, which had introduced new corporate criminal offences related to failures to prevent the facilitation of tax evasion both in the UK and overseas. “Extending those “failure to prevent” offences to a wider range of economic crimes is the logical and natural next step,” he said, though he added that new laws “will be only as useful as the willingness and ability of this or any future Government to enforce them”.

John Penrose (Conservative) intervened to say that he thought the proposed new duties to prevent “might be more effective and game changing than he is describing, because not only should they reduce the burden of criminality, which is reducing our economic performance and our productivity as a nation, but they could be quite deregulatory. They sweep away a raft of largely ineffective and deeply costly measures, and replace them with something that is simpler and easier to comply with, but more effective at the same time.”

While broadly supportive of reporting requirements of the kind envisaged by some of the new clauses, Kinnock felt that they sometimes “amount to asking Ministers to mark their own homework”. He continued: “We should not have to rely on the willingness of future Ministers and Secretaries of State to provide an impartial, balanced view of their own record. For that reason, the Opposition’s new clause 33 calls for the establishment of a joint parliamentary committee on economic crime. The Intelligence and Security Committee provides a useful model, with its special powers to review sensitive or otherwise confidential material, and that is worth the serious consideration of Ministers.”

The shadow minister felt that ‘the most gaping hole in the Bill’ might be “the total omission of any measures to provide support and redress for victims of economic crime.” The Opposition’s new clause 27 represents the first of many steps that the Government ought to take as a matter of urgency to fill that gap, he said. It would “direct the Secretary of State to publish a strategy for using the proceeds of crime to compensate victims, and to do so within 90 days of the Bill receiving Royal Assent.” It is, said Kinnock, “based on a fund that is generated through fines and through accountability for those committing the crimes”.

Other speeches

Sir Robert Buckland (Conservative), a former Lord Chancellor and Justice Secretary, spoke to new clauses 4, 5 and 6, in his name, though with cross-party supporters. He explained: “We have been careful in the test we wish to apply to the “failure to prevent” offences that form the subject of new clauses 4 and 6. It was tempting… to apply the wider test contained within the Criminal Finances Act 2017 relating to failing to prevent tax evasion. That would not require an intention by the corporate or the individual to confer a benefit on the company or a benefit on a person to whom the suspect — the defendant — is providing services on behalf of the company. I have sought not to go that far, but to replicate the Bribery Act test, which is the intention to confer a benefit”.

Buckland suggested that the ‘directing mind and will principle’ needs to be revisited. That is what he has sought to do with new clause 5, which reforms the “identification doctrine”, so that a body corporate commits an economic crime offence where the offence is committed with the consent, connivance or neglect of a senior manager or senior managers. “I do not seek, through new clause 5, to suggest that there need be a choice for the Government, so that if the Government reform the identification principle the need for “failure to prevent” offences falls away,” he said. “The two should go hand in hand.”

Former Attorney General Sir Geoffrey Cox expressed sympathy for the amendments tabled by Buckland, though he wondered why new clause 5 includes the “neglect of a senior manager.” “It seems conceptually a rather odd proposition that a fraud could be committed by neglect,” suggested Cox. Buckland said the word appeared in money laundering regulations.

For the SNP, Alison Thewliss also praised the ‘failure to prevent’ new clause, and new clause 7, which deals with whistleblowing. She called the latter “an excellent new clause which would enhance the Bill and offer protection to the very people who flag up these economic crimes”. She also spoke positively of Labour’s new clause on having a parliamentary committee to deal with economic crime, saying that, “at the moment, this is spread too far across too many Committees and there is no accountability to one place in the House on all the aspects of economic crime”.

David Davis (Conservative) spoke to new clauses 1 and 2, which he had backed alongside Liam Byrne and others. “The new clauses, in effect, make SLAPPs [Strategic Lawsuits Against Public Participation] near impossible where they are used to protect economic crime. The provisions are far too narrow, by the way, but that is what the Bill demands.”

Margaret Hodge (Labour) said she “strongly support many of the new clauses being moved by Back Benchers across the Chamber today. If I can just say something about politics, this heartens me and shows that there are ways in which we can work together to pursue the national interest across the political divide.” She picked out the proposals on whistleblowing (Mary Robinson’s new clause), on abuse of the legal system by oligarchs and others (as referred to by David Davis and tabled by Liam Byrne) and on reform of criminal liability (Robert Buckland’s new clauses).

New clause 21, a cross-party proposal of which Hodge was the lead signatory, would extend the cap on adverse costs introduced by the first Economic Crime Act (Transparency and Enforcement) 2022 for Unexplained Wealth Orders, to all civil recovery orders. She said this was “part of the way in which we could better fund the enforcement agencies in their fight against economic crime while also preventing economic criminals from exploiting our legal system”.

Mary Robinson (Conservative) spoke to cross-party new clause 7, of which she was the lead signatory. This would require the Secretary of State to set up an office for whistleblowers within 12 months of the Bill receiving Royal Assent. She explained that: “The office for whistleblowers would be an independent body, which reports to Parliament and would have three main duties: to protect whistleblowers from detriment resulting from their disclosures; to ensure that these disclosures are investigated; and to escalate information and evidence of wrongdoing that is outside its remit to the appropriate authority, including regulators or, if appropriate, the police.”

“Having spoken to many dozens of whistleblowers over the years, I know that someone who reports wrongdoing can risk jeopardising their reputation, their career, their mental health, their wellbeing and that of their family,” said Robinson. “It is not a decision made lightly. Whistle-blowers who expose economic crime must balance the risk to themselves in the name of doing what is right. That should not be the case.”

Lib Dem spokesperson Layla Moran spoke to her party’s new clauses 3, 30, 31 and 39. New clause 3 addresses the issue of ‘golden visas’. “Tier 1 investor visas were the “blind eye turned” route straight into the UK that was used and abused by so many of Putin’s cronies, not to mention kleptocrats from other regimes,” said Moran. “Recognising that, the then Conservative Home Secretary instituted and launched a review, and the promise was that the findings would be published.” Five years on, a ministerial statement two weeks ago announced the publication of just a ‘summary’ of the recommendations which, said Moran, “told us nothing that we did not already know.” “The whole thing stinks,” she said. “Sunlight is the best disinfectant. After years of the Government saying that they would do this, for them to back-pedal stinks of a cover-up.” The new clause would require the full review to be published.

New clause 30 would require a review of regulatory measures to prevent the circulation in the UK economy of assets of Iranian officials which have been obtained through economic crime. Moran said she had tabled it “to show how important it is to focus not on a single country, but anywhere there are human rights abuses.” New clause 31 would establish an economic crime fighting fund. New clause 39 would place a specific duty on the Director General of the National Crime Agency to prepare an annual report on the NCA’s resourcing and performance relating to economic crime.

Jonathan Djanogly (Conservative) proposed new clause 23 which would create an obligation for the Secretary of State to report to Parliament on the merits of further regulatory measures for preventing the circulation in the economy of the proceeds of economic crime controlled by individuals or entities subject to sanctions. He said the new clause “speaks to the wider lack of a much-needed national conversation about such proceeds, where they are held, why they are in the UK and, crucially, what the potential benefits of clamping down on them could be. It would, I suggest, be to the clear benefit of the taxpayer, but also crucially to those elsewhere in need of financial reparations such as in Ukraine, if the proceeds could be seized, repurposed and put to work.”

Liam Byrne (Labour) put forward new clauses 1 and 2, in his name but with wide cross-party support. “What is crucial to ensuring the corporate transparency we need to police economic crime is information. Much of that information comes from whistleblowers and, crucially, from courageous journalists who are prepared to take tremendous risks and go to tremendous lengths to pursue the truth, publish the truth and hold the guilty to account.”

New clause 1 would make it a defence when disclosing or publishing information to show that the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime. New clause 2 would enable a court to strike out any statement of case which can be reasonably understood as having the purpose of concealing, or preventing disclosure or publication of, any information likely to be relevant to the investigation of an economic crime.

Byrne explained that the purpose of new clause 1 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.

Marie Rimmer (Lab) backed Byrne, saying new clauses 1 and 2 are “crucial to getting a grip on the London laundromat”. She also supported new clause 7, saying that, “If the Government want to remove the veil of secrecy surrounding economic crime, protecting whistleblowers simply must be part of the strategy.”

Government closing speech

Winding up the debate for the Government, Tom Tugendhat praised Robert Buckland for tabling new clause 6 “and for the way in which he has approached the area of corporate criminal liability, in which he and I agree that reform is required.” He said it was vital “that any reform can be used by law enforcement agencies, does not duplicate what already exists and avoids placing unnecessary burdens on legitimate businesses”. However, he said he could assure him “that the Government intend to address the need for a “failure to prevent” offence in the other place [the House of Lords], and I would welcome further discussion with him about the most effective way in which that can be done.”

Intervening, Margaret Hodge welcomed the assurance that an amendment would be introduced, but asked for an assurance that it will cover both corporations and individual directors. The minister responded cryptically, saying that Hodge “knows very well that I would find it impossible not to listen to her” but he would “say no more at this stage”.

The minister also responded warmly to Mary Robinson, saying she was “absolutely right: what the country needs is an office for whistleblowers, and what we need to do is ensure that we have the updates to the legislation that she so correctly highlighted.” However, he added, “the establishment of such an office would… be a significant undertaking. It would have major financial applications owing to its size, it would require significant staffing, and, as matters stand, it might duplicate the role of regulators without the same level of sector expertise.” Robinson had met with another minister earlier in the week and a review will be set out soon, he said. Robinson indicated that conversations had been constructive and she would not be pressing her new clause to a vote.

Votes

There were three votes at the end of report stage.

New Clause 3, the Lib Dem proposal to require the Government to publish in full the findings of the Home Office review of the Tier 1 (Investor) visa scheme which relate to economic crime, was defeated 290-220.

New Clause 26, Labour’s proposal to ensure that an Order in Council requiring open registers of beneficial ownership in the British Overseas Territories comes into force no later than 30 June 2023, was defeated 289-222.

New Clause 27, Labour’s proposal to require the Government to publish a strategy on the potential establishment of a fund to provide compensation to victims of economic crime, was defeated 289-221.

All government amendments and new clauses were passed without a vote. Other opposition and backbench amendments and new clauses were not pressed to a vote.

Third Reading

Security minister Tom Tugendhat opened a brief third reading debate for the Government. He took an intervention from Sir Robert Neill, chair of the Justice Committee, who said that reform of the identification principle (as mentioned by Robert Buckland earlier), was a major bar to corporate prosecutions and should be included in the promised reform of corporate criminal responsibility. Tugendhat said the Government were indeed looking at taking this forward.

Stephen Kinnock, for Labour, repeated that the Bill is ‘a step in the right direction’ so Labour would be supporting it on Third Reading, but he lamented that “it still does not go far enough on SLAPPs, golden visas, information sharing, corporate transparency, corporate criminal liability, compensating victims or, indeed, structures for enforcement”.

Alison Thewliss, for the SNP, asked ministers to reflect on how others will see the Bill and make amendments to it in the Lords “to make it befitting of the commitment that we all have to seeing economic crime removed”.

The Bill was not opposed at third reading. It now passes to the House of Lords.