My hon. Friend is absolutely right. Of course, he was a Minister in the Ministry of Justice when the Bribery Act was brought into force at the end of the 2005 Parliament, and he has direct experience of this issue. He is absolutely right that the Bribery Act has been of huge value. In fact, under the regime of deferred prosecution agreements that the Government brought in in the early part of the last decade, of the 11 DPAs that have been made by the Serious Fraud Office with corporates, nine were for “failure to prevent offences”—failure to prevent bribery—and just three were for the offence of fraud. That accounts for 90% of the £1.7 billion in revenue that the SFO has brought in through DPAs. It is clear that that has been an important step change in the way we deal with wrongdoing or indeed the threat of wrongdoing.
For people who think this is some sort of academic exercise, I draw their attention to the LIBOR scandal and the forex rate rigging scenario. There was no bringing to account of anyone involved—there was impunity. That is not good for the rule of law or the economic wellbeing of this country.If we want people to invest in the United Kingdom—we do and we have excelled in direct foreign investment over generations—then they need to have the confidence that if there is a problem, there is redress of grievance, accountability and a way of recouping the loss or making sure their investment is safe. That is what I believe the new clauses go to.
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 follow the recommendation in the report by the House of Lords’ Fraud Act 2006 and Digital Fraud Committee, chaired by my noble Friend Baroness Morgan of Cotes, 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. It is important that when we seek to draft legislation, we are as mindful as possible of not widening it to an extent that could in many ways create further unfairness. We have an obligation to ensure that balance is maintained.
I have set out three separate offences in the provisions: fraud, money laundering and false accounting. I think fraud and false accounting are probably self-explanatory, but the Government might have a bit of a question about money laundering. They might be thinking about the 2017 money laundering regulations, and regulation 92 in particular, where there is already a corporate offence where, with the consent or connivance of an officer of the company, an offence is committed or an offence is attributable to neglect on their part. What I would say gently to the Minister is that I do not think that cuts it. It still leaves significant evidential and prosecutorial challenges. The Financial Conduct Authority has, I think, used it vanishingly rarely. Therefore, I urge him very strongly to look carefully—I hope he will accept
the thrust of my argument, even if he cannot accept the detail of my new clauses today—at bringing forward provision that covers money laundering as well as fraud. That would be my strong exhortation to him today.