Failure to Prevent an Economic Criminal Offence

Part of Criminal Finances Bill – in the House of Commons at 5:00 pm on 21st February 2017.

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Photo of Ben Wallace Ben Wallace Minister of State (Home Office) (Security) 5:00 pm, 21st February 2017

Well, apart from asking the hon. Member for Kirkcaldy and Cowdenbeath how he has enjoyed his hour on the Committee, which he has gone off to attend, I think we should look at this in chronological order. The review is taking place now. Whatever it produces will, of course, be responded to. If it is responded to in legislation, that will succeed whatever is being discussed in that Committee now.

I come now to the issue of tax evasion and the Opposition’s new clause 11, which returns us to the question of corporate transparency in overseas territories. I should stress that the new offences in part 3 of the Bill already apply in those jurisdictions. First, the domestic tax evasion offence applies to any entity based anywhere in the world that fails to prevent a person acting for it, or on its behalf, from criminally facilitating the evasion of UK taxes. The overseas offence applies to any entity that carries out at least part of their business in the United Kingdom. The only circumstances in which a company is outside of the scope of these offences is where there is no connection to the UK: no UK tax loss, no criminal facilitation from within the UK, and no corporation carrying out any business. In those situations, it is for the country suffering the tax loss, and not for the UK, to respond. The corporate offences are by no means a one-size-fits-all solution for every country. However, I am pleased to report that Government officials have spoken to revenue authorities, regulators and businesses from across the world about the new corporate offences, and there has been significant interest in them.

New clause 13 would require the Secretary of State to produce sentencing guidelines that would stipulate a maximum financial penalty no greater than the tax evaded. As hon. Members may be aware, it is the role of Sentencing Council, under the presidency of the Lord Chief Justice, to produce sentencing guidelines. The council has already published a definitive guide of fraud, bribery, and money laundering offences, including a section on corporate offenders. Therefore, while I agree that there is merit in a sentencing guideline for the new corporate offences, it would not be for the Government to produce it. This could undermine the independence of the judiciary.

I have sought to cover as many of the concerns that have been raised as possible. I am grateful to the House for its patience and for enabling discussion of so many significant topics. I trust that right hon. and hon. Members are suitably reassured that we have reflected on all the amendments in this group and will agree that legislation is not necessary or appropriate for the reasons I have set out. I remain open to discussing these matters or any others with colleagues, and I am sure that we will return to some of them in the House of Lords. At this stage, I hope that I have addressed hon. Members’ concerns and invite them not to press their amendments.