Chamber and committees

For the record, I point out that the Scottish Government is recommending refusal of the LCM.

It is right to agree to the motion and allow Westminster, at long last, to legislate on economic crime. However, the bill is only at the second reading stage in the House of Lords, and there are some 47 pages of amendments from the House of Commons alone. Therefore, today we are debating the motion before the content of the bill is clear, and it might well emerge deeply flawed.

It should not have been like that. As Oliver Bullough’s new book, “Butler to the World”, makes clear, the UK has been the hub of international organised crime for years. What is worse is that it is not the case that we simply did not have effective legislation; rather, multiple—in particular, Tory—Governments have deliberately blocked reform. For example, it is on the record that, despite the best efforts of some people, the UK Government refused to tackle the criminality that is associated with Scottish limited partnerships. In doing so, it was effectively colluding with economic crime and corruption.

Legislation must also address the issue of UK banks. How many members in Parliament are aware that, since 2010, UK regulators have imposed penalties, mostly on banks, of more than £739 million for anti-money-laundering failures? The National Crime Agency has stated that, annually, money laundering alone is likely to amount to hundreds of billions of pounds. I have put that fact on the record on a number of occasions in Parliament.

The cynic in me might suggest that the real reason why the Tories in London are at last clamping down on organised corruption is that they do not like the competition. However, we must also look to institutions in Scotland. As Oliver Bullough’s chapter on the Scottish laundromat reveals, one major Scottish law firm threatened a senior investigative journalist with withdrawal of advertising from his paper if a story about SLP criminality was published. Said law firm has fronted huge numbers of SLPs and the Law Society of Scotland has not done enough to discourage their use, as submissions to various consultations have made clear. I appreciate that regulation on that resides with the UK Government, but will the Scottish Government consider how use of SLPs in particular can be discouraged—perhaps by having further discussions with the Law Society?

What are a few of the bill’s weaknesses? Despite claiming to make business vehicles more transparent, they can declare—without challenge—that they do not have a beneficial owner. That makes disclosure completely optional. Another weakness is that there is to be no disclosure of the beneficiaries of trusts that hold property. In addition, there will be only small penalties for missed deadlines and even for false filings.

The most startling weakness of all relates to the requirement to register. I would have thought that secret property ownership by oligarchs and others would be considered to be a bad thing in all circumstances. However, the bill will allow the UK secretary of state to exempt individuals from having to register if exemption is thought to be for our own wellbeing. Perhaps that is a perk for pals of the secretary of state. I do not know.

Of course, we have been promised that another bill will be coming along shortly, as Michael Marra mentioned. Despite Westminster’s track record, we are supposed to believe that, unlike what happened with the Criminal Finances Bill in 2017, resources will be made available to agencies such as Companies House to implement the legislation.

I fully support today’s motion, but I will have to reserve judgment as to the Westminster bill’s success.

I am trying to explain that, from an accountability perspective, money that the UK Government provides to councils has to be bid for. We have already agreed that that process is inefficient, as some public expenditure is lost through days of inefficiency. It is not the same as money being set aside, with assistance on how councils should spend it from the Scottish Government, because that is done on a universal basis. I am just trying to confirm that my understanding is correct.

Yes.

Yes. I accept your point, because until we have the data, we cannot start to make that assessment. I do not know whether Emma Congreve has anything to add in response to my two questions.

Yes—I am trying to make that distinction. It is not like for like in quite the way that was set out.

I turn to my other question. I am interested in the point that you make at paragraph 13 of your submission. Can you give us a bit more flavour on disaggregating data in order to distinguish between employment activities that are in the public sector in Scotland but are not in the public sector in England? From the point of view of comparing apples with apples, that is very interesting, because the picture is quite opaque when we look at that per capita spend.

For what it is worth, I think that it is very good to have that. It is a positive, and I wanted to get the understanding of it on the record, so I thank you for that.

I have quick question on something that has come up a number of times in a variety of these sessions about the budget process. I fully accept what you are saying—I think that most people would agree that it is somewhat inefficient. Do you collect any data about that? When I say “inefficient”, I mean these late changes at the 11th hour, where you think you that have spend, you allocate it and then you need to move it from budget pots or whatever—there is a whole variety of things.

Do you have any sense of the additional cost of doing that in terms of hours accrued, because that is a hard figure? You must be collecting days spread throughout all the departments that are working on it. Do you have any sense of that—apart from loss of hair?

Good morning. I have a couple of questions for Professor Heald.

I have to say that your comments on accountability were music to my ears, as I have raised the issue a number of times with different committee witnesses, not least Mr Gove, who recently appeared before us on behalf of the UK Government. I asked him specifically how Audit Scotland would be liaised with to check on spend that had been provided by the UK Government. I have to say that he was less than certain in his response, which I think—I am paraphrasing—was, “However they want.” Therefore, I think that you have touched on a very important area.

That said, the other important area is how, in efficiency terms, we attribute a cost to the bidding war that you have alluded to. Do you have any sense of the cost to English local councils of, as you describe it,

“bidding for UK-controlled resources in the way that has become dysfunctional in England”?

Can you furnish us with any figures on that?

Thank you. There is a bit more detail that it would be useful to have about how things are working specifically. I am aware that there has been a lot of reworking of the determination of the loan book at UK Government level. It has been through a number of iterations, and there is some sleight of hand there in accounting terms, which I am aware of, too. That is probably a technical term that I should not have used.

In some respects that does not matter. What interests me is why we should care. In other words, what, specifically, has this got to do with the Scottish budget? Why are we having this technical change of £298.7 million appearing for us—given that it is a loan book—while we do not have student loans in Scotland? That is what I do not understand.