In light of the last comment from the noble Lord, Lord Hodgson of Astley Abbotts, one can only hope that the points he made will not leave the Minister stumped. I hope it gets better.
I thank the noble Lord and the noble Lord, Lord Faulks, for tabling these amendments, since they enable me to raise a concern that I expressed in Committee about the Government’s intention to create a new Office for Professional Body Anti-Money Laundering Supervision through a statutory instrument, without any apparent reference to such a body in the Bill that we are currently discussing—which is why the noble and learned Baroness, Lady Butler-Sloss, had to raise her question. Nobody has a clue what the Government intend because they have not chosen to put anything
in the Bill to enable us to have a discussion about it. It was only in a government document issued around the time of the Bill that the Government declared their intention to set up this body.
A briefing that no doubt we have all received from the Solicitors Regulation Authority refers to the amendment from the noble Lord, Lord Hodgson of Astley Abbotts, as “proposing” the creation of an Office for Professional Body Anti-Money Laundering Supervision—which could, perhaps wrongly, be interpreted as meaning that the Solicitors Regulation Authority was unaware that that is what the Government were already proposing, albeit keeping rather quiet about it as far as proper parliamentary scrutiny is concerned.
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As the Minister will know, following Committee I wrote to her asking if the Government could indicate other cases where a new body with powers had been set up purely through a statutory instrument and without any reference to the new body in primary legislation. That was quite genuine, because I did not know the answer to the question that I had asked. I was half expecting to receive a reply setting out examples of where my party in government had done precisely that. I have now received a reply from the Government. It is a gem—without, I stress, misleading anybody—in how to try to say that you are not doing something that you clearly are.
It starts off by thanking me for my letter regarding legislation,
“for the new Office for Professional Body Anti Money-Laundering Supervision (OPBAS)”.
It goes on to say that the Government are committed,
“to helping and ensuring professional body Anti-Money Laundering (AML) supervisors comply with their obligations under the Money Laundering Regulations”.
The letter goes on to say:
“As part of this, the Financial Conduct Authority … will create a new team, OPBAS, who will support this objective by overseeing professional body AML supervisors”.
So in the course of the same one-page letter, the Government’s proposal has changed from being a new Office for Professional Body Anti-Money Laundering Supervision, in respect of which the Government have previously told us they are in consultation over the detail of its new powers and role, to being nothing more than the creation of a new team within the FCA. In so doing, they seek to give the impression that this is little more than an internal office reorganisation, when it is clearly far more than that.
In Committee, the Government referred to,
“their proposals for the new office for professional body anti-money-laundering supervision”,
and said that,
“it would not be right for the Government simply to legislate without proper public consultation on the detail of this proposal”.
The Government also referred in Committee to the intended regulations as being ones,
“that will underpin the office”.
The Government referred to the new office working,
“with professional bodies to help, and ensure, compliance with the regulations”.—[Official Report, 28/3/17; cols. 532-533.]
This is not, in reality, little more than an internal reorganisation setting up a new team within the FCA.
On the issue of previous examples of setting up a new body with powers by statutory instrument without any reference to it in primary legislation, the Government’s reply states that,
“in line with the precedent set by previous regulations to grant similar powers to the FCA, such as the Money Laundering Regulations and the Payment Services Regulations, it will be subject to the negative procedure”.
Apart from the fact that the claimed precedent for what the Government are now doing does not stand up, since the regulations referred to were not setting up a new body or office with powers, we now find that the intention is that the statutory instrument setting up the new body and defining its powers and role will be through the negative procedure and not even require the affirmative procedure. That really is seeking to diminish the role of Parliament and parliamentary scrutiny and challenge. If a future Government think that they can take this as a precedent for minimising the role of Parliament, if changes including deletions or additions are made to legislation in the light of negotiations on leaving the EU, I am sure that there will be the strongest of challenges to such action.
I have reiterated the concerns that we expressed in Committee about the Government’s whole approach to the specific issue, with the lack of proper parliamentary scrutiny, but I accept that it is now too late in reality to do anything about it.
Another key point made in Committee was on the need for the independence of anti-money laundering supervisors and on addressing the issue of the same body having both a representative and regulatory function, with the potential, if not the reality, for conflicts of interest. I simply ask: is that an issue that the Government are seeking to address by removing any perception there could be of such conflicts of interest? I will listen with interest to the Government’s response to the amendments we are discussing—albeit I accept that I have come from a very different direction from that of the noble Lord, Lord Hodgson of Astley Abbotts.