I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and the right hon. Member for Barking (Dame Margaret Hodge) on securing the debate, and on the reports produced by their all-party parliamentary groups on fair business banking and on anti-corruption and responsible tax. Much of the debate so far has focused on what might be termed high-level
and high-profile international and economic crime. I understand that, and I will touch on it briefly, but then I want to move on.
In relation to those very high-level matters, we definitely need to do more to tighten the rules on money laundering. I agree that the Bill that became the Economic Crime (Transparency and Enforcement) Act 2022 was much improved in the course of its passage, and we should certainly seek to tighten and improve the provisions of the second Bill when it comes before the House.
We also need to do more about corporate criminal responsibility and liability. The issue referred to by my hon. Friend the Member for Thirsk and Malton relates to what, in law, is called the identification test. It concerns the mens rea, or guilty knowledge, of the “controlling mind and will” of a company, and the requirement to identify that controlling mind and will—a term which, in practice, has tended to mean only a very small cadre of senior managers, which makes it impossible to make the company liable for acts carried out by anyone who is other than part of that controlling mind and will, the very tight-knit group at the top who may be carrying out fraudulent acts for or on behalf of the corporate entity. The system is different in other jurisdictions, including the United States, and reform in that regard would be helpful and sensible. As the right hon. Member for Barking pointed out, it has proved easier in practice to prosecute small companies than to prosecute large ones, because the management structures of the large companies are often more diffuse, and under the current law it is therefore harder to identify those who constitute the controlling mind and will.
An extension of the duty to prevent offences would also be wise, and the Law Commission has recommended it in relation to fraud, but I think we should be open to going further. My one caveat, which I think the Law Commission flags up in its options paper which it published month, is that there is not always an exact analogy between health and safety at work offences and fraud offences. To convict for fraud, there has to be the additional element of dishonesty, either knowledge or “connivance”—a term that it often used—and, of course, dishonesty is not always a requisite element of the offences under the Health and Safety at Work etc. Act 1974. A distinction may need to be drawn, and I think we have not gone as far as we could have. I am not saying that we cannot look at this, but I think it is important to bear that distinction in mind.