Motion A
Moved by
That this House do not insist on its Amendment 2, to which the
Commons have disagreed for their Reason 2A.
2A: Because it affects a charge on the public revenue, and the
Commons do not offer any further Reason, trusting that this
Reason may be deemed sufficient.
(Con)
My Lords, I welcome this small but important Bill that has
returned to this House—I hope for the final time. I again thank
the noble Lord, , and the noble Baroness, Lady
Kramer, who have previously contributed to an engaging debate on
these important issues.
Two amendments have returned for our consideration today. Both
relate to amendments previously narrowly passed in this House.
They have returned to the House after being carefully considered
by the other place and having been convincingly rejected, with
financial privilege cited as the reason. I will summarise
both.
The first amendment that the Commons have rejected would have
added an additional condition to Clause 2 of the Bill whereby the
freeport NICs relief would be available only if the freeport
governance body maintained a public record of beneficial
ownership of businesses operating in the freeport tax site. The
House of Commons has considered the issue and decided that the
amendment made in your Lordships’ House is subject to the
financial privilege of the House of Commons and should not be
accepted. However, I will mention what the Government are doing
to ensure that firm and co-ordinated action is taken to crack
down on economic crime, as I know that this House has kept the
issue very much at the forefront of its mind, given the unfolding
events in eastern Europe, and contributed vastly to furthering
this particular debate.
4.15pm
For the record, following the commitments announced by the Prime
Minister in February, the Government have brought forward the
Economic Crime (Transparency and Enforcement) Bill to crack down
further on illicit money and corrupt elites in the UK, and I look
forward to following the discussions on that Bill very shortly.
The Bill will introduce a register of overseas entities’
beneficial ownership of UK property to tackle foreign criminals
using UK property to launder money; reform our unexplained wealth
orders regime to remove key barriers faced by law enforcement and
to help target more corrupt elites; and strengthen the Treasury’s
ability to take action against financial sanctions breaches.
We have also published details of further upcoming legislation,
including fundamental reform of Companies House, enhanced
information-sharing powers and new powers to seize crypto assets,
which are designed to clamp down on money laundering and illicit
finance. The Prime Minister also confirmed that we will set up a
new dedicated kleptocracy cell in the National Crime Agency to
target sanctions evasion and corrupt Russian assets hidden in the
UK, which means that oligarchs in London will have nowhere to
hide. These measures are good news for the UK, enhancing our
already strong reputation as an honest and trusted place to do
business.
The Government have also taken steps to ensure that freeports are
secure from money laundering, fraud and other illicit activities.
First, to ensure that goods within the freeport customs site
remain under customs control and the sites are robustly secured,
both the freeport operators and businesses operating in the
customs site will need to be authorised by HMRC and Border Force.
Compliance checks on goods within the freeport will be carried
out by HMRC and Border Force.
Secondly, to ensure sufficient security of the sites and prevent
illicit activities, freeports will have to adhere to the OECD
code of conduct for clean free trade zones and must maintain the
current obligations on freeports set out in the UK’s Money
Laundering, Terrorist Financing and Transfer of Funds
(Information on the Payer) Regulations 2017.
Thirdly, the Government also require each freeport governance
body to undertake reasonable efforts to verify the beneficial
owner of businesses operating within the freeport tax site and to
make the information available to HMRC, law enforcement agencies
and other relevant public bodies. This is a condition of freeport
status and is a proportionate approach; it means that the local
area and law enforcement can take effective measures to ensure
the security and propriety of operations within the freeport.
Moving on, the second amendment that the Commons overturned would
have provided the Treasury with an additional power to amend the
period in which an employer can apply a zero rate of secondary
class 1 NICs to a veteran’s employment. The House of Commons has
considered the issue and decided that this amendment is subject
to the financial privilege of the House of Commons and should not
be accepted. There are existing levers within the Bill, such as
increasing the upper secondary threshold and extending the
overall period of the relief. The proposed additional powers are
therefore not necessary. In addition, the Government consulted
widely on this measure and have received positive feedback from
stakeholders, as the House will know.
In conclusion, the Commons rejected both amendments on the basis
of financial privilege. I hope that this House will accept the
will of the elected House for the reason of finance privilege and
pass this important Bill. I beg to move.
(LD)
My Lords, I will be brief because we have a heavy agenda today,
and we are going to be talking about the Economic Crime Bill,
which is not unrelated to the issue I want to raise, which is
that of freeports. The amendment this House introduced would have
made that register of beneficial ownership of businesses in
freeports public. There may have been a mistaken impression
sometimes—I am sure the Minister did not intend this—that that
information would be available to people, either through the
properties register or through the revised Companies House
register. But that is not the case except in the very rare
circumstances where the business in the freeport would be a
headquarters for the entity and therefore its legal address, or
where the entity had sought to purchase property. Those are
mistakes that no criminal organisation or kleptocrat would make.
They would take advantage of the lack of disclosure that
otherwise frames freeports.
I found the reasons the House of Commons gave quite
extraordinary. It said this amendment was rejected:
“Because it affects a charge on the public revenue.”
If there is to be a register of beneficial ownership of
businesses in a freeport, uploading that to a public website
rather than the internal site essentially has no cost difference.
So, public revenue cannot possibly be the reason that this is an
issue. So, where could public revenue come in? It is because the
additional transparency that allows civil groups, activists,
journalists and others to look at what is happening in the
freeports would, in effect, deny to criminals, money launderers,
kleptocrats and others of similar ilk the ability to claim
exemptions in national insurance contributions. In other words,
it would have reduced the demand on the public purse; it would
have reduced the demand for public spending. Yet that seems to be
the reason being given for overturning this particular
arrangement. So I would just be curious to know, if the Minister
speaks again—but we can deal with this in relation to other
cases—why denying to criminals and money launderers various tax
exemptions and reductions in national insurance payments is
considered to be an issue of public revenue and therefore a
reason for not including this particular measure. I am
exceedingly confused.
On other matters, I supported the issues raised by the noble
Lord, , and I am sure he will speak to
them. But I do regret that both these measures have been
overturned.
(Lab)
My Lords, we need to move quickly to today’s main business, so I
will be brief. During Prime Minister’s Questions on 9 February,
the Conservative MP asked
“whether veterans will always be at the heart of this
Government’s strategy and whether everything will be done to see
that they always get what they need.”
The Prime Minister responded that
“we ensure that veterans receive particular support and
encouragement in employment, and we encourage employers to take
on veterans as well.”—[Official Report, Commons, 9/2/22; col.
940.]
The Minister knows that we welcome the new NICs relief for
employers of veterans. Our amendment did not compel the
Government to do anything. It merely gave Ministers the option of
extending the 12-month relief, if that would have had a
beneficial impact on veterans’ employment and retention. I
struggle to understand why both the Prime Minister and Mr
Anderson voted against that proposition, given their stated
support for veterans. However, in a phrase I have heard
throughout my career, we are where we are. Your Lordships’ House
has fulfilled its role and, having done so, should now let this
Bill pass.
(Con)
My Lords, I have some very brief return remarks to thank the
noble Baroness and the noble Lord for their remarks. Of course, I
listened carefully to the disappointment expressed by them both
in terms of the outcome. However, perhaps I can give a little
chink of light: I think we can look forward to continuing to
debate some of the themes raised, perhaps more appropriately, as
I mentioned earlier, during the course of the economic crime
Bill. But with that, I beg to move.
Motion A agreed.
Motion B
Moved by
That this House do not insist on its Amendment 4, to which the
Commons have disagreed for their Reason 4A.
4A: Because it affects a charge on the public revenue, and the
Commons do not offer any further Reason, trusting that this
Reason may be deemed sufficient.
(Con)
My Lords, I have already spoken to Motion B, and I beg to
move.
Motion B agreed.
