My Lords, I welcome the legislation on UWOs. I have a number of declarations of interest, and I own residential and commercial property in the UK. I do not think that I have any unexplained wealth, but I have some experience—admittedly, some 30 years ago—of working as a tax adviser. It was quite common in those days for the
Inland Revenue, as it was then, to demand explanations of what it thought was unexplained wealth from various taxpayers. That was quite common practice, so the concept of the state seeking an explanation of wealth is not new in practice.
We have a situation where, certainly in central London, a shocking number of multimillion pound properties lie dormant and are owned by overseas parties. To the extent that this goes some way to change that situation, it must be very welcome. It would also be quite welcome if the Government were to take a more holistic approach, perhaps using this Bill to address that problem as well as considering other solutions, outwith this legislation, including penal rates for dormant properties owned by overseas people. None the less, the UWOs are likely to make a significant change in helping our law enforcement agencies to investigate money laundering in the London property market and, in particular, recovering proceeds of crime.
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We also need to ensure that lawyers, estate agents and other professionals are complying with their obligations under the Money Laundering Regulations. The HMT consultation on the new regulations is a good opportunity to highlight the importance of this work, and I welcome the Treasury’s proposals for a new supervisory body which will improve the regulation offered by the non-statutory regulators.
On the amendments before us, I particularly welcome the attempt to capture property owned by trusts—I declare an interest as a non-beneficial trustee of property trusts—and I can see that the intention to reduce the level down to £50,000 must make sense where there would otherwise be aggregation. It is tempting to restrict this to real estate, but “property” could mean all sorts of other things, such as jewellery, diamonds, gold and so forth, where individual units of £50,000 can quickly accumulate to a much higher amount.
As a PEP, I was keen to support Amendment 10, in the name of the noble Lord, Lord Sharkey. I also had a chap from the Royal Bank of Scotland come round to see me and ask me what my first salary was in 1982—bizarrely, I remember that it was £4,900—and he spent a lot of time going through records that I had long forgotten about. I am not convinced that there is the protection that the noble Lord, Lord Faulks, specified earlier. One particular concern is that the provision talks about income, not capital. In any event, I am not sure why it should not be absolutely clear-cut that the Government’s intention is not to attack PEPs in this House or in the other place.