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I should add my voice to those who have pointed out that this goes beyond the problem of corruption and the wasting of resources in individual cases. Systematic corruption undermines the market economy in general. A country where bribes are regularly asked for and given is one where, ultimately, economic confidence will collapse and international investment will become very
difficult. The problem requires international action in the developed world. The money for corruption comes from companies in the western world, but those companies lobby against legislative action. They say, "Jobs are at stake" or "If we don't do it, someone else will." That is precisely why we have the OECD convention and international co-ordination.
As we heard during the speech by the hon. Member for City of York, the problem is not that Britain is forging ahead and other countries are not doing anything, but quite the opposite. This country has come under pressure from the OECD to improve its performance. In 2008, the OECD said that
"current UK legislation makes it very difficult for prosecutors to bring an effective case against a company".
Other concerns have emerged in the light of the BAE cases.
Daniel Kawczynski: If those are the circumstances, how has BAE Systems been successfully fined hundreds of millions of pounds?
David Howarth: I do not want to go into the detail of that case, because it is now subject to the injunction that I mentioned. BAE has never admitted to corruption-to bribery-and only to technical offences under other legislation. The same is true in the United States. That is because the current legislation has deficiencies that the prosecutors say need correcting to improve the situation.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I think that the House is getting into danger. The case that is being referred to is still before the courts, so it must not form part of this debate.
David Howarth: Thank you, Mr. Deputy Speaker. I was trying to skirt around it as well as I could, but you are absolutely right: we cannot get any further into that without straying into an area where we should not go.
It is good that the Government have got this far with the Bill despite all the lobbying and pressure over the years, but it comes very late in the day. There is a risk, given how far we are into the Parliament, that it will not make it on to the statute book before the end of the Parliament. I hope that that is not its fate and that we are able to get it fully into law very quickly.
There are still some problems that we should discuss in Committee to try to find ways through them. One of those is to do with the role of the Attorney-General. The hon. Member for City of York is right that the Bill removes the consent power of the Attorney-General and transfers it to the directors of the Serious Fraud Office and the Director of Public Prosecutions. That is an advance, and a very good thing, for the reasons that he gave: there should not be political interference in such prosecutions. The OECD is on record as saying that it is worried about the lack of independence in our system. However, the problem remains at a slightly different level. Because the role of the Attorney-General was not reformed during the passage of the Constitutional Reform and Governance Bill, which had its Third Reading yesterday, the Attorney-General retains, despite what is in the Bribery Bill, a power of superintendence over the directors, and that power could be used in a politically motivated way. We still need to go further to protect the directors from that possibility.
The hon. and learned Member for Beaconsfield was worried about what would happen to accountability if we did go further, because if the roles were separated out entirely, the Government would be able only to issue public guidance to the prosecutors, and unable to influence individual cases. If an individual case were decided in a particular way-to prosecute or not to prosecute-the Attorney-General would be able to say in this House, "I've given guidance, but it's not up to me to decide how to apply it in a particular case." That is a problem, but to leave the situation as it is, as the hon. and learned Gentleman suggested, would not be a solution. He gave the impression that the Law Officers-the Attorney-General and the Solicitor-General-already have a proper degree of accountability in this House for that sort of decision, but that is not so.
The hon. Member for City of York mentioned the BAE case-the al-Yamamah case-where the previous director of the SFO took the decision not to continue with an investigation. We can see from the correspondence that was published as part of the court cases that the decision was taken under immense pressure from Ministers, from the Prime Minister downwards, but what technically happened was that the director himself eventually took the decision. When it came to the debates in this House and the other place, the Law Officers therefore said, "But we didn't do it. We take responsibility for the letters that we wrote, but it was not our decision in the end." Even in the existing system, that degree of accountability is not in place, so we cannot stay where we are.
The hon. and learned Gentleman rightly mentioned the missing clauses of the Bill about parliamentary privilege. I understand why the Government have placed that in the "too difficult" box, but there is a connection between what happens in this House under parliamentary privilege and the powers and responsibilities of the Law Officers. We have to get that sorted out completely at some stage.
Since we are all agreeing so much, I do not want to say much more, but I do wish to mention the problems that have been raised in relation to clause 13. The original exemption for the armed forces, law enforcement and the secret services was too wide, and I am grateful to the Government for the removal at least of the exemption for law enforcement. However, there are still some problems, one of which was identified in Justice questions by my hon. Friend the Member for Birmingham, Yardley (John Hemming). He pointed out the anomaly that, as clause 13 stands, it will be lawful for a secret service official, in particular, to bribe an official of the French Government but not one of the Scottish Government. That cannot be right.
More serious is the breadth of the immunity given to the secret services in clause 13. Like other hon. Members, I accept that there is a need for some protection, but it is important to remember that our secret services are charged with protecting not just national security but economic welfare. In that regard, it does not seem satisfactory to say, as the Secretary of State did, that it is all very complicated because there are overlaps between the various responsibilities. That does not work as an argument, because all that we need is for one of them to be protected. The problem with the existing draft of the
clause is that when the only function being exercised is the economic one, without any overlap, it is entirely possible that that will be sufficient to attract immunity. I would prefer to preclude that possibility, for precisely the reasons that the hon. Member for City of York mentioned. We need to preclude completely any possibility of the clause being used as cover for any sort of arms supply. I suppose that there is an outside possibility of the armed forces provision being used in that way as well.
I wish to mention a problem with clause 13 that I do not believe has been brought up so far. It has so far been discussed in the context of the giving of bribes by the secret services or the armed forces, and one can see the arguments for that. However, it will also protect them from the effect of clause 2, which is about receiving bribes. Clause 2 was not properly discussed in the other place, so we have not yet heard a proper explanation as to why it is necessary for there to be a general legal protection on receiving bribes and for what purpose it is a good idea for our armed forces to accept bribes. I ask the Government to consider that in Committee.
This is a good Bill, although it needs some more tightening. I am happy to say to the Government that we will support them in any amendments that tighten it, and in resisting any attempts to loosen it. I wish to end, as the hon. Member for City of York did, on money. Improving the law is a very good thing, but the law by itself is not the same as an effective policy. For that, it is necessary for the authorities that are charged with the responsibility of enforcing the law to have the resources that they require. This might be wrong, but I am informed that for the past 12 to 18 months, the Serious Fraud Office has received not one penny from the Treasury for its anti-corruption work, and is transferring money internally from its anti-fraud work to its anti-corruption work. That is not satisfactory, and I want an assurance from the Government that the SFO and all the relevant authorities have the Government's real backing, not just through the changes to the law in this excellent Bill but through providing the resources that they need to do their job.
2.36 pm
Daniel Kawczynski (Shrewsbury and Atcham) (Con): I apologise to you, Mr. Deputy Speaker, and to the House for not having been here at the start of the debate. I was held up with some constituents.
I start by applauding British exporters for the tremendous work that they do around the world. There are many men and women who have set themselves up in business and who help with our balance of payments deficit by finding new markets overseas and navigating difficult red tape and bureaucracy in doing so. I spent 10 years of my life exporting British goods abroad, and I enjoyed it greatly. Unfortunately, we are not exporting as much as we should be, and we have a huge trade deficit, as all Members are aware.
My favourite expression in politics is that business is the workhorse that pulls the social welfare cart, and I am always slightly concerned about more legislation interfering with people's ability to do their job. I say unequivocally at the outset that I am very much anti-bribery and applaud the cross-party consensus that bribery is wrong. It frustrated me greatly in my career exporting
to Africa, and I am pleased that we are taking action. However, I will be concerned if we are gold-plating the Bill and moving further and quicker than some of our European partners or other countries, to which I shall come a little later.
We are not a nation populated by people who bribe. I disagree very much with the hon. Member for Cambridge (David Howarth), who says that the only reason why we are legislating is that the OECD is twisting our arm. In my experience of exporting to Africa and the middle east, I always found my fellow British business people and other British companies to be arguably the least likely to bribe. It is inherent in the nature of the British character to play fair and play by the Queensbury rules. That may sound rather old-fashioned, but it is the truth. We tend to behave appropriately overseas in our financial transactions, and I cannot say that about all the other foreign people whom I have come across when I have been competing against them in Africa and the middle east.
In the course of my 10 years, I never even considered giving a bribe, and I never knew anybody else in my company who did. However, I did come across aspects of bribery by the French, Germans and Italians. I am being told that those countries have since tightened their regulations, but have they? Will the Minister say how much the courts and Ministers in those countries are actually implementing those new regulations? I hope she can enlighten me on that and that she is working closely with the European Union to ensure that basic standards are applied throughout the EU.
I reiterate that I simply do not want British firms to suffer as a result of the Bill. We have been told that we are not allowed to talk too much about BAE Systems, so I will not, except to say that as chairman of the all-party Saudi Arabia group, I am extremely concerned at how the media sometimes tend to blow up out of all proportion various delicate issues that are intrinsic to our country without referring to anything specific. I hope that the media act more responsibly when reporting matters such as bribery, because such reports do tremendous damage to our relations with countries such as Saudi Arabia.
I feel passionately about exports to the Gulf states. I have spoken on many occasions with King Abdullah of Saudi Arabia about how to increase our exports to that country. He has informed me that the £5 billion-worth that we currently export is negligible in comparison with our European competitors. He is desperate for Britain to diversify trade with his country away from purely military components, and to increase bilateral trade. I am therefore a little bit worried. I have come here today to seek an assurance from the Minister that the Bill will not hamper British businesses that try to export.
I make no apologies for saying that British businesses are charged a great deal of money for using British embassies. British companies that want to use the British embassy in Riyadh are charged-I believe-more than £3,000, yet many of their competitors do not have to pay that to use their country's embassies. There are not enough resources such as commercial attachés in our embassies to help our businesses to export. I spoke just this week with the Leader of the Opposition about the importance of a future Conservative Government, should we be elected, having a trade delegate-a representative of the Prime Minister-to the middle east.
The hon. Member for City of York (Hugh Bayley) said that he very much hopes that China will join the OECD, and that countries such as China and other developing nations will be bound by the new regulations and aspirations on bribery and the conduct of businesses and Governments. I hope the Minister and the Government discuss with China the possibility of it joining the OECD and do everything possible to encourage and help it to do so, because it is imperative that the Chinese behaviour in Africa is stopped.
I will never forget meeting the dictator of Sudan, President Omar al-Bashir, to talk to him about human rights abuses in Darfur and Sudan. Everywhere we went, there were all sorts of Chinese constructions. China was pouring massive amounts of money into Sudan to monopolise the market. While we are acting responsibly as a nation and refusing to trade with Sudan as long as those human rights atrocities are carried out, China basically monopolises the market to secure Sudanese oil, making it almost impossible for British businesses to secure business in the country. That is important.
Lastly, I reiterate what I said at the beginning of my speech on Government snooping. A lot of business people in my constituency say, "Look, the only reason we're still here in Shropshire is that we feel passionately about our county. We're thinking with our hearts rather than our minds, but if we were thinking with our minds, we would've shut up shop a long time ago and set up business in China, India or some other place where we do not face such huge levels of red tape, bureaucracy, interference and form filling." I hope the Bill is not yet another example of more Government red tape and interference. There must be sufficient evidence before the appropriate body interferes and initiates cases against businesses.
I hope the Government are cognisant that British business is already desperately struggling to compete internationally in this very competitive globalised world. I do not want the Bill to hamstring them even more.
2.45 pm
Mr. Jonathan Djanogly (Huntingdon) (Con): I add my respects to those of previous speakers on the death of Michael Foot, who was the dominant Labour personality when I first became involved in politics.
The quality of contributions to the debate has been high, and I congratulate the hon. Members for City of York (Hugh Bayley) and for Cambridge (David Howarth), and my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), on theirs. We are also thankful for the very productive format of allowing interventions that was offered by the Lord Chancellor in his initial remarks.
As my hon. and learned Friend the Member for Beaconsfield (Mr. Grieve) said, the Conservatives welcome this Bill and have been urging its introduction for many years. It was good to hear that all parties welcome it. It makes a refreshing change to speak on legislation that will not only reduce the number of the laws on the statute book, but update statute and case law, much of which is based on 19th century practice and in need of urgent upgrade.
International corruption is not acceptable in the modern age. We acknowledge, as the hon. Members for City of York and for Cambridge did, that it is now generally
held that the UK has fallen behind the curve in dealing with bribery, and that our Transparency International corruption perception index is at all-time low. Conservatives believe that that needs urgently to be addressed.
Without doubt, the outstanding feature of the Bill has been the delay in its arrival. I believe that as far back as June 1998, the Government first published a paper on the consolidation and amendment of the Prevention of Corruption Acts. Although a draft Bill was first published by the Law Commission in March 1998, only now, more than a decade later-in the last throes of this Labour Government-are we finally seeing some action. Let us face it: things have been touch and go, as they will remain until the Bill is enacted.
The Law Commission submitted a reworked version of the draft Bill in March 2009, which has more or less been adopted. The commission deserves much praise for its work. The Bill was then scrutinised by the Joint Committee on Consolidation Bills, on which I was happy to serve under Lord Colville. The Committee was most unhappy that it was as time-constrained as it was. With adequate time, I have no doubt that we would have been better able to investigate the wider applications of the Bill as well as the law.
However, as I said, the Conservatives welcome the Bill. In particular, we are pleased that its implementation will finally make the UK compliant with the 1997 OECD anti-bribery convention. Accordingly, notwith- standing our unhappiness with the process, we shall support it on Second Reading. I like to think that reaching Second Reading has had something to do with the fact that we have called for the Bill for years. However, I suspect, as the hon. Member for Cambridge did, that the Bill's progress has more to do with the US Department of Justice and the OECD putting significant pressure on the Government for Britain to comply with its international obligations.
The debates in the other place were thorough and informed. I am indebted to Lord Henley, and other noble Friends and Lords, whose experience has made an invaluable contribution. However, we will wish to raise in Committee a number of important issues that have arisen in today's debate and debates in the other place.
One issue is that in a wide range of circumstances, the application and enforcement of the Bill will depend on the discretion of prosecutors. That was raised again and again in the other place and today. It needs to be recognised that that is a key concern of those looking for certainty, especially those in business. The position of business, and support for our exporters, was admirably advocated by my hon. Friend the Member for Shrewsbury and Atcham.
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