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General Committees

Debated on Tuesday 6 February 2024

Delegated Legislation Committee

Draft Water Industry (Special Administration) Regulations 2024 Draft Water Industry Act 1991 (Amendment) Order 2024

The Committee consisted of the following Members:

Chair: Martin Vickers

† Coffey, Dr Thérèse (Suffolk Coastal) (Con)

† Drummond, Mrs Flick (Meon Valley) (Con)

Duffield, Rosie (Canterbury) (Lab)

† Edwards, Ruth (Rushcliffe) (Con)

† Evennett, Sir David (Bexleyheath and Crayford) (Con)

† Everitt, Ben (Milton Keynes North) (Con)

† Hardy, Emma (Kingston upon Hull West and Hessle) (Lab)

† Harrison, Trudy (Copeland) (Con)

† Hobhouse, Wera (Bath) (LD)

† Lewis, Clive (Norwich South) (Lab)

† Loder, Chris (West Dorset) (Con)

† Longhi, Marco (Dudley North) (Con)

† Mahmood, Mr Khalid (Birmingham, Perry Barr) (Lab)

† Moore, Robbie (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)

† Simmonds, David (Ruislip, Northwood and Pinner) (Con)

† Slaughter, Andy (Hammersmith) (Lab)

† Western, Andrew (Stretford and Urmston) (Lab)

Chris Watson, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee

Tuesday 6 February 2024

[Martin Vickers in the Chair]

Draft Water Industry (Special Administration) Regulations 2024

With this it will be convenient to consider the draft Water Industry Act 1991 (Amendment) Order 2024.

It is a pleasure to serve under your chairmanship, Mr Vickers. The two statutory instruments are part of a package that updates the water industry special administration regime legislation. The package is made up of two commencement orders and three statutory instruments. The first commencement order was made on 11 January, and the two affirmative statutory instruments that we are debating today were laid in draft on 15 January. The second commencement order and the negative resolution statutory instrument will follow shortly after the affirmatives are debated.

The purpose of the statutory instruments is to enable the Government to facilitate a more effective water industry special administration regime. They apply both to England and to Wales, and Welsh ministerial consent has been secured where necessary. The Government already have powers in the Water Industry Act 1991 to apply to the High Court for a special administration order. However, updates are required as the current legislative regime is outdated and largely modelled on the Insolvency Act 1986, which has since been modernised. The most notable legislative updates were the Enterprise Act 2002, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (England and Wales) Rules 2016.

Updates to insolvency legislation are not automatically applied to the water industry special administration regime legislative framework. Instead, the Government must assess how to adapt the insolvency law changes to each industry-specific special administration regime, and legislation relating to those regimes is laid periodically. Recent examples are the Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 and the Energy Act 2023. It is vital that the Government are prepared for a range of scenarios, particularly regarding the continued provision of public services, which is why an updated the water industry special administration regime is so important.

The two main grounds on which a water company can enter special administration are unchanged by this legislation. Those grounds are: first, insolvency, when the company may be unable to pay its debts or its liabilities are greater than its assets; and secondly, performance, when the company has failed to carry out its statutory functions or licensed activities to such an extent that it is inappropriate for it to continue holding its appointment or licence. Under a special administration regime, customers’ water and waste water services will continue to be provided.

The draft Water Industry Act 1991 (Amendment) Order 2024 implements hive-down provisions by amending schedule 2 to the 1991 Act. Schedule 2 makes provision about transfer schemes upon the termination of an appointment or the transfer of a licence for a water industry company, and is amended by the order to include provisions about transfer schemes in cases where there is a transfer by hive-down. The amendment is necessary to ensure that the hive-down provisions commenced last month by the Flood and Water Management Act 2010 (Commencement No. 10) Order 2024 are fully operable. Hive-down is a common commercial restructuring practice to ringfence value and attract potential buyers. The amendment allows the administrator to hive down the regulated business to a subsidiary in order to protect its business and facilitate a sale process that may be more attractive to a potential buyer.

The draft Water Industry (Special Administration) Regulations 2024 will disapply and modify general insolvency provisions as they apply in relation to water companies, including licensed infrastructure providers and special administration orders made in respect of water companies under the 1991 Act. The regulations make general modifications to the 1986 Act and other enactments about insolvency provisions, alongside specific modifications to schedule B1 to the 1986 Act. The amendments adapt parts 26 and 26A of the Companies Act 2006 via specific modifications for the purpose of the water industry special administration regime, and amend section 26 of the 1991 Act and schedule 1 to the Water Industry (Specified Infrastructure Projects) (English Undertakers) Regulations 2013.

In addition, the regulations will give the Government the power to lay a negative statutory instrument in the coming weeks that will revoke the Water Industry (Special Administration) Rules 2009, replacing them with updated special administration rules for water companies based on the Insolvency (England and Wales) Rules 2016. Thus, the statutory instruments will upgrade the water industry special administration regime legislation to ensure that if a water company is ever required to go into special administration, a modern, efficient water industry special administration can be implemented.

It is a pleasure to serve under your chairmanship, Mr Vickers.

It is essential that customers enjoy the continuous provision of water services irrespective of how the company that manages their water supply performs, so we support the changes, which will give a degree more security to people’s water provision. Unfortunately, the challenges of the water sector are more fundamental than the changes would suggest. I fear that tinkering in this way shows that the Government are failing to grasp the scale of the issues that face water provision in this country and the state of the crisis at which we have arrived.

We know that sewage is spilling into our waterways and beauty spots at a wholly unacceptable rate. Water companies discharged untreated sewers more than 399,864 times in 2022, which amounted to 1,091 times a day. I am sure the Minister agrees that the consequences of that mismanagement are awful: damage to precious habitats and natural life, reduced access to nature for some of those who face the sternest barriers, and a palpable sense of the sector failing to keep its house in order. He will be aware that we have set out robust solutions to the crisis, including criminal responsibility for water bosses, the introduction of large, immediate fines and the mandatory automatic monitoring of outlets to ensure that every spillage is recorded.

I have no doubt that many of our constituents will struggle with the profound sense of unfairness that runs through this debate. Despite consistently poor environ-mental performance and racking up huge debts, the water industry continues to pay large dividends and bonuses to shareholders and bosses. It should not be profitable for companies to pollute and fail to meet environmental legislation and for water and sewage infrastructure to be unfit for purpose. It should also not be acceptable for the water industry to pass the cost of legal compliance on to customers—they have already been funded to deliver it.

That legislative changes are necessary reflects the desperate and perilous situation that the sector has reached, with many companies on the precipice. Not only are water companies failing to deliver a clean and safe environment for water users, but many of them are struggling to function as effective businesses and keep their head above their mucky water. Regulators have raised serious concerns about the solvency of Thames Water, and the Government have even discussed temporary nationalisation measures. We also know that Thames Water, Southern Water and South East Water have been using up to 25% of customer bills to service the huge debts they have built up. It is not right that, again and again, customers are leveraged to cover the poor performance of those businesses.

The combination of the public health threat posed by the sewage scandal and the potential threat to taxpayers and customers posed by the instability of water companies demonstrates clearly that a radical rethink of how the water sector, regulators and Government work together is needed. The future of the sector must be based on sustainable finances and driven by a culture that values both customers and the environment. People must be kept safe and the best environmental outcomes must be achieved per pound spent.

As the Minister will be aware, a special administration order is intended to ensure that service is not interrupted when a water company becomes unviable. That means customers will continue to be provided with water services. Water companies also have a significant environmental duty, which may be interrupted if a company becomes insolvent. Do the new regulations also guarantee that any special administrator will continue to discharge a company’s environmental obligations, including investment commitments under the water industry national environ-ment programme, catchment plans and infrastructure upgrades?

Clarity around the criteria for the introduction of the special administrator is essential to all of this. Unless owners and shareholders believe that there is a genuine risk of them losing their licence, they have no real incentive to promote good corporate behaviour or environmental performance. Reading the 2019 Southern Water enforcement decision, one could be left wondering what it would possibly take for a licence to be removed. If multiple and deliberate breaches of environmental law and repeated deception of the regulator by the provision of falsified performance information is not enough, what fear can those in the sector really have? Ofwat must be much clearer on when owners lose the licence through special administration. Will the Minister commit to setting the bar for special administration in legislation?

As I have set out, we have grave concerns about the ability and motivation of water companies to meet environmental standards and take the crisis of sewage spilling seriously. The Water Industry Act 1991 states that a special administration order may be granted when a company is failing to fulfil its statutory functions. The regulations give the Government the opportunity to clarify that the imposition of a special administration can also be used as the ultimate sanction for water company pollution. That would send a powerful message to water companies and their bosses that the Government were intending to crack down on the issue and that environmental responsibility must be a central pillar of any business plan. Will the Minister confirm that the violation of environmental law constitutes a failure to fulfil a statutory duty under the terms of chapter 2 of the 1991 Act? Does the Minister commit to applying for a special administration order where a company shows consistent and flagrant breaches of its environmental duties?

The changes must go much further to solve the problems in the water sector. The Government must establish a clear, strategic regulatory framework that sets out the long-term vision for the water sector and how that will contribute towards achieving environmental targets and outcomes. More broadly, the Government must give stronger direction on the types of solutions needed and ensure that that is reflected in the regulatory framework to enable the greater uptake and use of catchment and nature-based solutions.

The Government must also recognise the role that years of cuts have played in creating the crisis. The sector is largely operating using a self-reporting model to evidence compliance with legislation. Self-reporting does not work. In 2022, only 48% of serious pollution incidents were self-reported, while many serious incidents were simply downgraded by water companies so as not to affect their environmental score. Ofwat and the Environment Agency must have the necessary resources to deliver a robust monitoring and enforcement regime.

The Opposition will support the changes, but I hope the Government understand the need for further consideration of the environmental responsibilities of water companies, in this legislation and in the future. I look forward to hearing the Minister’s response.

I remind Members to stick to the scope of the regulations. We are not here to debate the wider issues facing the water industry.

I hear what you say, Mr Vickers, but we are debating matters that touch on the wider issues in the water sector. The Liberal Democrats will also not oppose the statutory instrument, but I wish to express our wider concerns about the water sector and how it is regulated.

Water company regulation should have three aims. First, we need to protect the water needs of future generations; secondly, we should ensure that the costs of investment in achieving environmental standards are shared fairly; and thirdly, we must ensure accountability and good customer service. Water companies need greater regulation to stop them getting into an administration or insolvency position in the first place.

Government attempts to tackle consistent poor environmental performance from the water industry have not worked. They have failed to address the root cause of the underfunding and under-resourcing of the regulators. There must be a clearer regulatory framework, duties and purposes for regulators, increased funding and greater direction on solutions to protect customers and the environment. New regulations should also guarantee that any special administrator will continue to discharge a company’s environmental obligations, including investment commitments under the water industry national environment programme, catchment plans and infrastructure upgrades.

The proposals before us fail to talk sufficiently about the sewage crisis. There needs to be clarity on whether the Government will allow the special administrator to discharge environmental duties. Will the Minister confirm that the special administration order could be imposed as a sanction for sustained sewage pollution? We Liberal Democrats support a public benefit company model for water companies, so that they must consider explicitly economic and environmental policy objectives in particular. Water companies should also put a share of their profits into social tariffs. I have kept my remarks short. I support the statutory instruments, but whether they really tackle the wider crisis in the water sector is questionable.

I am grateful to the hon. Members for Kingston upon Hull West and Hessle and for Bath for their important contributions, although I must say it was good that they eventually came back on to the script, so to speak. The statutory instruments will enable the Government to facilitate a more effective and efficient water industry special administration regime, ensuring that they are prepared in all eventualities to ensure uninterrupted provision for vital public services.

Let me briefly address some of the questions and points raised by the hon. Member for Kingston upon Hull West and Hessle. Before I get into the detail, I should say that I was pleased to hear her reference self-monitoring, because that was brought in by the Labour party when it was in power, in a water industry Act. We have increased the amount of monitoring that we are doing from 7% in 2010 to the 100% that we saw rolled out in 2023.

I will get back to the point. We are taking clear and decisive action to improve water quality. Our plan for water is delivering more investment, stronger regulation and tougher enforcement for our water system, and we are clear that water companies must not profit from environmental damage. Through that plan, we will transform our management of water systems, deliver cleaner water for nature and people, and secure a plentiful water supply.

The hon. Member for Kingston upon Hull West and Hessle made reference to storm overflows, so let me clarify the amount of investment going into them. Our plan for water sets stringent targets on companies to improve storm overflows, which will drive the largest infrastructure programme in water company history, with £60 billion of capital investment over 25 years. We are clear that the volume of sewage being discharged into our waters is utterly unacceptable. However, storm overflows cannot just be switched off, as some have suggested; they are an automatic feature designed to stop sewage backing up into our properties.

We introduced the statutory instruments to update the existing regulations set in place under the 1991 Act so that, should we get to a scenario in which we need to utilise the special administration regime, we are in a position to do so. I will clarify that since privatisation the private water sector model has unlocked about £215 billion of investment; I raise that point because the hon. Member for Kingston upon Hull West and Hessle referenced nationalisation. Since privatisation that has been equivalent to about £6 billion being invested annually, which is almost double the pre-privatisation level.

I will carry on for now.

The hon. Lady quite rightly asked how customers may be impacted should a special administration regime be put in place. We will always act to protect customers as a priority, and any intervention that would put pressure on the public purse would be considered seriously and as a last resort. Dividends are an important part of the investor return and should provide an adequate return that reflects company performance. If a company did not pay its dividends, it would struggle to access the finances to fund investment, impacting on the service for future customers.

In each year since privatisation in 1989, investment has been greater than the dividends paid, but a sustained level of investment in the water industry will continue only if the shareholders of companies can expect a fair return. Companies must pay for new investment up front, so need to secure a large amount of funding to pay for that. To avoid customer bills increasing drastically to pay for that, companies may secure money by raising debt or equity, or through shares in the company or investors.

The hon. Lady also asked whether a company in special administration will have to adhere to the same standards as the rest of the sector. The answer simply is yes. The special administrator will manage the affairs, business and property of the company according to the same statutory obligations as any other water company.

To build on that, the hon. Lady also asked for clarity on whether a water company could be placed in special administration. In general, special administration can be applied for on insolvency grounds, when the company might be unable to pay its debts or when liabilities are greater than its assets—as I said in my opening remarks—or in instances where water companies are in serious breach of their principal statutory duties or an enforcement order.

The Minister mentioned the failure to fulfil statutory duties, but will he confirm whether a violation of environmental law constitutes a failure to fulfil statutory duties?

Every water company is specifically regulated by the Environment Agency, as well as Ofwat. The Environment Agency will have powers if water companies are owned and operating under the regime they operate under now, or should they enter special administration.

On the hon. Lady’s point about Ofwat, it is clear from Ofwat’s performance report that there has been marked decline in performance over the past year. That has been driven by company-specific factors, but also by the effects of extreme weather, including the unusually hot and dry summer we had. The Environment Agency and Ofwat have powers of enforcement, and those powers will not change under a special administration regime.

I have addressed the points that were made, so I commend the draft statutory instruments to the Committee.

Question put and agreed to.

Draft Water industry Act 1991 (Amendment) Order 2024


That the Committee has considered the draft Water Industry Act 1991 (Amendment) Order 2024.—(Robbie Moore.)

Committee rose.

Draft Gender Recognition (Approved Countries and Territories and Saving Provision) Order 2023

The Committee consisted of the following Members:

Chair: Mrs Sheryll Murray

† Abrahams, Debbie (Oldham East and Saddleworth) (Lab)

† Andrew, Stuart (Minister for Equalities)

† Carter, Andy (Warrington South) (Con)

† Dodds, Anneliese (Oxford East) (Lab/Co-op)

† Ellwood, Mr Tobias (Bournemouth East) (Con)

† Fletcher, Mark (Bolsover) (Con)

† Hobhouse, Wera (Bath) (LD)

† Hudson, Dr Neil (Penrith and The Border) (Con)

† Johnson, Gareth (Dartford) (Con)

† Jones, Andrew (Harrogate and Knaresborough) (Con)

† Leadbeater, Kim (Batley and Spen) (Lab)

† Oswald, Kirsten (East Renfrewshire) (SNP)

† Scully, Paul (Sutton and Cheam) (Con)

† Stafford, Alexander (Rother Valley) (Con)

† Strathern, Alistair (Mid Bedfordshire) (Lab)

† Sunderland, James (Bracknell) (Con)

† West, Catherine (Hornsey and Wood Green) (Lab)

Ian Bradshaw, Committee Clerk

† attended the Committee

Third Delegated Legislation Committee

Tuesday 6 February 2024

[Mrs Sheryll Murray in the Chair]

Draft Gender Recognition (Approved Countries and Territories and Saving Provision) Order 2023

Before I call the Minister, I remind the Committee that the debate should be restricted to the scope of the instrument and not stray into wider issues of policy.

I beg to move,

That the Cttee has considered the draft Gender Recognition (Approved Countries and Territories and Saving Provision) Order 2023.

This statutory instrument updates the list of countries and territories from which citizens are eligible to use the fast-track recognition process to obtain a gender recognition certificate. I am grateful to the House for finding parliamentary time to debate this secondary legislation and to you, Mrs Murray, for chairing this sitting today.

We laid the statutory instrument before the House on 6 December. This is the first time, subject to parliamentary approval, that the approved overseas countries and territories list has been updated since July 2011. I know the statement given by the Minister for Women and Equalities on 6 December generated a wide debate. It touched on the importance of communicating these changes clearly. It is important that everybody understands why we are updating this international gender recognition process, and that includes our colleagues internationally. Today’s sitting is focused on the details of the SI and our need to make this important update.

We are making these changes because the Government believe that it should not be possible for a person who would not satisfy the criteria to obtain legal gender recognition under UK legislation through the standard route to use the overseas recognition route to obtain a UK GRC. That would damage the integrity and credibility of the process under the Gender Recognition Act 2004.

There have been many changes in the international approach to gender recognition since the list was last updated in 2011. We have provided details of overseas countries and territories to be removed from and added to the list laid on 6 December, which is available to view on We have undertaken thorough checks in collaboration with the Foreign, Commonwealth and Development Office to verify our understanding of each overseas system in question, and then measure that against the UK’s standard route to obtaining gender recognition. My officials and I have engaged extensively with posts, including those in the USA, Canada and Australia. I am confident that the international community understands the extent of the changes and the impacts of them on their citizens.

The overseas route to obtaining a GRC sees low volumes of application. Of the 370 total applications in the last quarter, only 4% used the overseas route for their application. Of the 7,043 applications received since 2009-10, 94% were standard applications and 5% were overseas applications. The impact on transgender people in this country and abroad will be minimal. This update brings the overseas route back in line with the standard route, allowing for more equality in application requirements.

It is extremely important to ensure parity with those who have taken the UK standard route to obtaining a GRC. It would not be fair for the overseas route to be based on less rigorous requirements and consequently for the GRC to be more easily acquired. I hope that the Committee will join me in acknowledging the need for this important update and approve this SI today.

It is a pleasure to serve on the Committee with you in the chair, Mrs Murray. I am grateful to the Minister for setting out the draft order for the Committee. I welcome this further opportunity, after initial discussion in December, to debate the important mechanism in the Gender Recognition Act, which Labour passed in 2004. As the Minister for Women and Equalities, the right hon. Member for Saffron Walden (Kemi Badenoch) admitted when laying the order before the House in December, it is “long overdue”.

The list of approved overseas countries and territories for people from other countries who apply for gender recognition in the UK has not been updated since 2011, as the Minister for Equalities recognised today. The explanatory notes for the Gender Recognition (Approved Countries and Territories) Order 2011 state:

“The Ministry of Justice keeps changes to international gender recognition systems under continual review and expects it will be necessary to explore updating the list of approved countries and territories within the next 5 years.”

Let me repeat that: five years. Yet here we are, 13 years later, and the Government seem to have suddenly decided that action is urgently required. It is worth drawing Members’ attention to the fact that no timetable for future revision is promised in the explanatory notes to the new order. After the Government missed their last target by eight years, it seems that the Minister for Women and Equalities wants to remove any risk of breaking a promise in the future, or perhaps she does not think the list should ever be changed again. It would be useful to hear the view of the Minister for Equalities while he is present.

We need to interrogate the reasons for laying this order now, nearly a decade and a half after the list was last reviewed. In December, the Minister for Women and Equalities told the House that it was because

“some countries and territories on the list have made changes to their systems and would not now be considered to have similarly rigorous systems as the UK’s.”

According to her, those changes are needed because

“it would not be fair for the overseas route to be based on less rigorous evidential requirements”

and that

“Inadvertently allowing self-ID for obtaining GRCs is not Government policy.”—[Official Report, 6 December 2023; Vol. 742, c. 359.]

However, some of the countries that will be removed from the list changed their system of gender recognition many years ago. Denmark introduced self-ID in 2014, Portugal in 2016 and New Zealand as long ago as 2012.

I ask the Minister this: if inadvertently allowing self-ID for obtaining GRCs is, in his colleague’s words, “not Government policy”, why has it taken the Government 13 years to enforce that position? If it is “not fair” for the overseas route to be subject to less rigorous evidential requirements, why have the Government tolerated that so-called unfairness for so long? Do the Government believe it is fair that a trans person with a GRC from Denmark who arrived here at any time in the last 10 years could automatically have received a UK GRC, while one who arrives here in future could not? Why does Germany—a country that has, I believe, introduced a self-ID regime for changing birth certificates—remain on the approved list, while other countries with self-ID regimes for GRCs are coming off it? The Minister for Women and Equalities was unable to answer that question in the House. In fact, she seemed to suggest that Germany had been taken off the list. That was not the case; it remained on the list. Perhaps the Minister can explain to us in this Committee the response of the Minister for Women and Equalities to that question.

How are we in this position without, according to the Minister’s definition, undermining the integrity of the UK process? Where is the consistency? I suggest that, unfortunately, the timing of these new changes has little to do with rigour or fairness in the UK system of gender recognition and everything to do with partisan politics. The Minister is absolutely right to state that the debate on the Floor of the House covered a range of issues. I think that that decision to cover a range of issues was the Government’s. These matters are significant, albeit, as the Minister rightly said, for a small number of people. We should focus on those people and on understanding the impact on them rather than turning this into some kind of broader ideological debate.

I will leave the Committee to draw its own conclusions about the timing of this move and about why the Government saw fit to introduce the order at the last minute in December, with so little notice that that Members were unaware of which countries had been added to the list, even during the statement made by the Minister for Women and Equalities. On that note, I think it would be helpful if the Minister stated whether there was no formal warning that the SI was being laid at the time of that debate. Will he ask the Minister for Women and Equalities to correct her comments to the House on the day of that statement? She maintained that the SI was laid

“well before the statement to the House”

and that

“we have done our bit”.—[Official Report, 6 December 2023; Vol. 742, c. 376.]

Will there be confirmation that that is inaccurate? The SI was not formally laid until after the statement, and it was not published by the Vote Office until straight after the statement: not before, but after. Will there be an apology to the staff of the House for the chaotic way in which this process has been gone about—again, a process for which the Government had 13 years to prepare, but still appears, sadly, to have been a complete shambles?

The order will make significant changes to the overseas list. It adds 14 countries and territories and removes 23, including several EU countries, Australian states, Canadian provinces and US states. The order newly recognises China, Iran, Belarus and Cuba—regimes that have, let us say, mixed records on LGBT+ rights—while de-recognising many of the UK’s closest friends and allies. The Minister for Women and Equalities said in December that this mechanism is not a tool for diplomacy, which is correct. However, it is not a tool for grandstanding or political point scoring either. The mechanism is for those who already have gender recognition in their home country and want to be able to access the mutual recognition route to obtain the same recognition here. That is why it is important to understand the criteria the Government have used to reach this decision.

The Government say that the SI is about protecting the integrity of the system. Can the Minister tell us how many nationals from the countries coming off the list have been granted UK GRCs? He mentioned some statistics, but how has that changed over time, particularly with regard to countries that have adopted self-identification? As I mentioned, several have done so, but the Government have not changed the list since those changes. If the Government believe there is a threat to the integrity of the system, surely they need to be able to spell out that information to us this morning.

The Government have said, and the Minister has just repeated, that they have conducted research in collaboration with the Foreign, Commonwealth and Development Office to verify their understanding of each overseas system in question and measure that against the UK standard route to obtaining gender recognition. However, weeks after the order was first laid, we still have not seen any of that research. Members are again being asked to make a decision on the basis of limited information. That is not how such decisions should be made. The notes to the SI are clear that systems vary widely, and there are no exact matches with the UK GRC system. Will the Minister commit to publishing that research urgently so that Members can actually understand the recognition criteria? That information is vital.

I understand the Government’s argument that those who have undergone arduous or even brutal processes or practices to obtain legal gender recognition in countries such as Iran or Kazakhstan should not face additional barriers to obtaining that recognition here. As I said, the purpose of the mechanism in the GRA was to reduce burdens in obtaining a UK GRC, not to create them. Does not the Minister understand that removing some of our closest friends and allies, including our Five Eyes security allies, from the list, while adding regimes such as China, Belarus and Iran, legitimises the human rights record of the latter group? Does he not see how that suggests that the Government might be on the side of authoritarians rather than democracies?

The Minister referred to his conversations with representatives from other countries. Can he tell the Committee whether there was any pushback on these provisions, or whether there was an overwhelming welcome? It is helpful and important for the Committee to understand that, particularly when it comes to our allies.

Does my hon. Friend agree that this has more to do with an election year than with facts and a genuine examination of what is best for the people concerned?

I am grateful to my hon. Friend for that point. The question is why this change is being introduced after 13 years, given that there were changes to a number of other countries’ recognition systems many years ago—perhaps Members are not aware of that—and the Government did not update the list then. Instead, they chose to do so just before Christmas. If this is such a significant issue, why has there been no Government action until now?

I have tried to interrogate this issue with a series of written parliamentary questions asking what discussions the Government have had with representatives of every country and territory being removed from the list. I regret to say that I received exactly the same answer to every question:

“The Minister for Women and Equalities has been in conversations with the Foreign, Commonwealth and Development Office…and is monitoring the international reaction to this legislation. Diplomatic posts have been consulted on and notified of the changes,”

and the Government are confident that

“our international counterparts are well informed about”

the changes. That is not the same as a direct conversation between the Minister for Women and Equalities and her foreign counterparts. Can we get confirmation of that today, please? Since this order was laid, have we received any representations from those territories and countries? It is important that the Committee understands that.

Let me be absolutely clear: Labour supports the mechanism for updating the overseas list and the principle of reciprocity and mutual recognition for GRCs for UK nationals living in other countries. That is why we enshrined those provisions in the 2004 Act, and why we have supported changes to the list in the past. We support the principle of reciprocity and mutual recognition not only for GRCs for UK nationals in other countries, but for equal marriage, adoption and pension rights. Does de-recognising so many of our closest friends and allies in relation to this matter potentially put those rights at risk? Will the Minister please indicate to the Committee whether there is any danger of that? Has he received any representations about those matters from other countries? Is he confident that these changes are compliant with the UK’s obligations under the European convention on human rights and other diplomatic treaties?

I want to press the Minister to answer some of the questions I put to the Minister for Women and Equalities in December, but to which I did not receive a satisfactory response. The GRA requires the Government to consult the Scottish Government and the Department of Finance in Northern Ireland before these changes, and the order confirms that that happened. Will the Minister please tell us what response was received from those bodies?

Last January, when first announcing plans to revise the list, the Government also promised to carry out an equality impact assessment to inform any changes. It appears, however, that a full impact assessment has not been produced, unless I am mistaken. I would appreciate it if the Minister confirmed that in his response. Why do the Government not foresee that these changes will have any, or any significant, impact on the private, voluntary and public sectors? If there is no anticipated impact on those sectors, why does the Minister believe the integrity of the UK system is under threat unless these changes are made? There seems to be a contradiction, so perhaps he can elucidate that for the Committee.

I am grateful to you, Mrs Murray, for affording me the time to ask these questions. I am sorry that there have been so many, but that reflects the fact that the process has been so incoherent and chaotic. I have reservations about the motives for making these changes now, as opposed to previously, and the process by which they are being made—[Interruption.]

Order. The shadow Minister is speaking. Can we please give her some respect and listen to what she has to say?

This is an unwelcome break from precedent, because past changes to the list, including under a Conservative-led Government, were not introduced with the divisive rhetoric we heard in the Chamber.

As I said, the Labour party remains committed to the provisions for updating the overseas list we wrote into law, as well as to the principle of reciprocity and mutual recognition for GRCs for UK nationals living in other countries. We do not want to undermine those important provisions or to add to the confusion and division that has been created by the process. However, I want to be clear: were Labour given the chance to serve, we would not use such a sensitive and complicated issue as part of a broader political argument. I hope that, the next time the House comes together to discuss changes to the list, we do so in an atmosphere that is more in tune, frankly, with the Minister’s opening remarks, which I appreciated, than with some of what we saw in the Chamber just before Christmas. I also hope that we come furnished with clear Government criteria for any changes, confident that our allies had been fully consulted, and with a commitment from Ministers to transparency about the future impact of any changes, particularly on UK nationals in relation to those other reciprocal rights.

Before I call Kirsten Oswald, I remind Members who would like to speak to stand so that I can see who wants to contribute.

I am grateful to have the opportunity to contribute, Mrs Murray. I appreciate what you said about the scope of the instrument.

I start by reflecting on what the Minister said. Like the hon. Member for Oxford East, I appreciated the tone in which he delivered his opening remarks. He spoke about the need to make this important update, but we may differ on some of the detail.

The draft statutory instrument states:

“the Secretary of State has consulted the Scottish Ministers and the Department of Finance in Northern Ireland.”

With regard to Scotland, it is appropriate to point out the significant cross-party work done in this area, and the importance of this place respecting the democratic rights of the elected Scottish Parliament.

Looking at the detail, I think the direction of travel is disappointing. We are not looking forward in a positive way—that could be open to the Government—to simplifying things and improving lives. There are significant questions, a number of which have already been put, about the seemingly urgent need to examine the list after such a long time and with no particular date for future reference.

The Minister said that the impact on transgender people is minimal; he also said that it would not be right to make the process easier. I would be keen to hear a bit more from him on why he made those statements. I am not sure that either is true; the situation is certainly not as black and white as that.

I will not rehearse all the challenges in logic in the draft instrument, but the point about someone from Denmark who is currently recognised not being recognised in future is well made. This is confused and confusing for us; how much more so will it be for people who are directly impacted and potentially very concerned about it? It is disappointing that we are having this bit of the conversation again and failing to look at the needs of the people who are directly impacted, who already face such significant challenges.

We heard about the chaotic way in which a lot of this business is conducted, which does no good to those impacted or to us. That confusion extends to the logic underlying the list of countries that are recognised or not recognised which, again, will impact on individuals. I am keen to hear more about that and about the underlying data on which the decisions have been based—it is far from clear.

This is all disappointing and unhelpfully cloaked in very challenging bombast from those on the Government Front Bench. I hope we do not see that today; instead, I hope the Minister will tell us more about the detail, the logic and the need to support people who are directly impacted, and about where the data underlying his assessment of the equality impact lies in all of that.

Thank you, Mrs Murray, for calling me to speak. I apologise for not being aware of the rules for such a Committee; this is the first time I have served on one, and I was not aware that I had to say in advance that I was going to speak, so thank you for letting me say a few words.

The vast majority of people across the UK agree that we need to make sure everyone’s rights and dignity are respected, and that includes legal recognition of their gender. From what I have just heard, it is difficult not to think that this measure is a political gesture. I am the last person who would want to put the rights or the safety of women at risk, but it is interesting that the women—on the Opposition Benches mostly—in whose name these policies are often designed are far less concerned about the way that this political debate has been held in the last few months or years. I believe that both sides need to be heard, and both groups are very vulnerable, so we need to make sure that we get the balance right.

The proposal in this order is that people from countries that have moved towards forms of self-ID for transgender individuals will be made to produce medical documentation when applying for a gender recognition certificate in the UK. In essence, those changes appear designed to make life for transgender people coming to the UK more difficult, especially if they come from countries that are most politically aligned with us. Surely, the Government have a good basis for doing that, and I would welcome an explanation as to what evidence the proposed changes are based on, apart from the fact that other countries have changed their rules.

No single-sex spaces or protected spaces currently require the presentation of a gender recognition certificate. Instead, trained staff undertake a dynamic risk assessment as to whether it is appropriate to grant admission to someone. I would be interested to hear from the Government who they believe these changes benefit and whether any assessment has been made of their potential harm.

For almost 20 years, we have had a system that allows transgender people to have their gender recognised in law. The Conservative Government themselves concluded in 2018 that the current process is “too bureaucratic” and “intrusive”. What has changed since then?

We are now in the odd position where the Government are declaring that countries that have chosen to allow forms of self-ID are “not vigorous enough”, even though the Conservative Government supported the reforms in 2018. We Liberal Democrats still believe that the current gender recognition process is too bureaucratic and intrusive. The Government must have changed their minds since 2018, but other countries have not, and nor have the Liberal Democrats.

I would like to understand what the Government’s thinking is when they say that our system is too bureaucratic, but people from countries that have introduced something less bureaucratic are now excluded from coming into this country unless they produce more evidence. I would be very interested to hear the argument.

I thank all hon. Members who have participated in the debate. I am grateful for the discussion and for the views that have been shared, and I hope we can move forward.

I will try to answer some of the questions that hon. Members have raised with me. First, I should put on record that these are sensitive issues, and I want to conduct any debate on them in the manner that is incumbent on us all.

I understand the point about this measure being long overdue. In fairness, we spent a lot of time on the GRA consultation, and we thought it was important to focus first on a number of recommendations in it, such as reducing the fees and digitising the process. However, I do accept that this is something that should be done more regularly, and I am personally ensuring that we look at it.

The hon. Member for Oxford East asked why Germany is on the list. The reason is that there is currently a draft Bill on self-ID in Germany; it has not yet been introduced. The current system does require surgery, so it is equitable to us. We will obviously keep that in mind for the future.

On the issue of regimes, may I say right at the beginning that we have been very careful that we are saying that the systems in other countries need to be at least as rigorous as ours? That is not an endorsement of any of the processes or requirements in some of those regimes, and it in no way legitimises some of the processes that may happen in some countries.

Regarding responses from other countries, any and all of the concerns were heard very clearly, and they were considered in the usual way. I should point out that we were not required to do that consultation, but we did it because we felt that it was important to have that engagement.

The hon. Lady mentioned the timing of the laying of the SI. We sent it to the Vote Office ahead of the oral statement, but I am looking into the exact timings. If things were not done in the appropriate way, I apologise, and we will make sure that we learn from that. A full equality impact assessment was completed, not a regulatory impact assessment, as it is anticipated that there will be no impact on businesses.

The hon. Member for East Renfrewshire mentioned less rigorous processes. The reason we are having to make this change is that it would not be fair for people coming from another country, where the process is less vigorous than ours, to be able to get a GRA certificate, when people in this country are going through the agreed process that we have. It is about making sure that there is parity.

I agree with the hon. Member for Bath that both sides need to be heard. Sometimes, the extremes on both sides shout at each other, and a lot of us in the middle want to have a much more considered debate.

This is not about having a bureaucratic system but a system that is rigorous, because these are big decisions that people are making, and we want to ensure that they have all of the compassion, advice, counselling and support that they need. It is right that we do that, and it is right that we expect people from other countries who want to use the overseas route to have gone through that same process.

I hope colleagues will accept that I have tried to answer as many of their questions as possible, and I hope they will join me in supporting these recommendations, which I now commend to the Committee.

Question put and agreed to.


That the Cttee has considered the draft Gender Recognition (Approved Countries and Territories and Saving Provision) Order 2023.

Committee rose.

Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2024

The Committee consisted of the following Members:

Chair: Sir Robert Syms

† Afolami, Bim (Economic Secretary to the Treasury)

† Aldous, Peter (Waveney) (Con)

Barker, Paula (Liverpool, Wavertree) (Lab)

Colburn, Elliot (Carshalton and Wallington) (Con)

† Cox, Sir Geoffrey (Torridge and West Devon) (Con)

† Djanogly, Mr Jonathan (Huntingdon) (Con)

† Doughty, Stephen (Cardiff South and Penarth) (Lab/Co-op)

† Dunne, Philip (Ludlow) (Con)

† Largan, Robert (High Peak) (Con)

† McDonald, Stuart C. (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)

† Mayhew, Jerome (Broadland) (Con)

† Mohindra, Mr Gagan (South West Hertfordshire) (Con)

† Mumby-Croft, Holly (Scunthorpe) (Con)

† Owen, Sarah (Luton North) (Lab)

† Rimmer, Ms Marie (St Helens South and Whiston) (Lab)

† Tami, Mark (Alyn and Deeside) (Lab)

† Timms, Sir Stephen (East Ham) (Lab)

Stella-Maria Gabriel, Committee Clerk

† attended the Committee

Second Delegated Legislation Committee

Tuesday 6 February 2024

[Sir Robert Syms in the Chair]

Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2024

I beg to move,

That the Committee has considered the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2024 (S.I., 2024, NO. 69).

It is a pleasure to serve under your chairmanship, Sir Robert. The Government recognise the threat that economic crime poses to the United Kingdom and are committed to combating money laundering and terrorist financing. Our commitment is recognised around the world. Illicit finance undermines the integrity and stability of our financial sector and can reduce opportunities for economic growth and legitimate business in our great country. The Government are bearing down on kleptocrats, criminals and terrorists who abuse the UK’s financial services sector. The Economic Crime and Corporate Transparency Act 2023 built on the Economic Crime (Transparency and Enforcement) Act 2022 to ensure that the UK has robust, effective defences against illicit finance.

At the centre of the UK’s legislative framework for tackling money laundering and terrorist financing are the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which set out various measures that businesses must take to protect the UK from illicit financial flows, such as conducting enhanced checks on business relationships and transactions with high-risk third countries. The 2023 Act changed how high-risk third countries may be defined under the 2017 regulations, and this statutory instrument implements that change. It removes the separate list of countries from schedule 3ZA and replaces it with an ambulatory reference to those countries listed by the Financial Action Task Force, which is the global standard setter for anti-money laundering and counter-terrorist financing. In practical terms, that means that countries listed by the Financial Action Task Force will automatically be in scope of obligations under these regulations.

By taking this approach, which was passed in the 2023 Act, we will ensure that the UK remains at the forefront of global standards on anti-money laundering and counter-terrorist financing. Where countries have made significant progress to improve their defences against illicit finance, it is equally important that we recognise that and promptly remove such countries from the scope of high-risk countries in UK legislation.

Ahead of this update, the UK and Financial Action Task Force lists were already aligned. Indeed, the Government have always updated the UK list, since its creation in 2021, to reflect changes to the Financial Action Task Force list. The SI does not add or remove any countries from scope or change the obligations of regulated businesses. It delivers on Government policy in a streamlined way, ensuring automatic alignment with the Financial Action Task Force list without the need for frequent, routine secondary legislation coming to Committee Rooms such as this, enjoyable though the process is.

The SI also ensures that firms will be notified in a timely manner of updates to the lists and their obligations, thereby keeping them up to date as risks change. I reassure the Committee that if at any time the Government sees it fit to deviate from the Financial Action Task Force list, we retain the authority and autonomy to do so. In such cases, a statutory instrument will be brought before Parliament for consideration in the normal way. The measures in respect of high-risk countries are an important mechanism to mitigate the risks posed by illicit financial flows from overseas. We will continue to use them and the other tools available to respond to wider and emerging threats from other jurisdictions, including by applying financial sanctions as necessary.

The instrument will enable the 2017 regulations to continue to work as effectively as possible to protect our financial system. It is crucial in protecting British business and the financial system from money launderers and terrorists financers, so I hope colleagues will join me in supporting it.

It is a pleasure to serve under your chairpersonship, Sir Robert. I thank the Minister for setting out the regulations to the Committee.

Given the interconnected and increasingly precarious global context that we face, and the prevalence of financial impropriety as a key geopolitical dynamic, it is critical that the legislation that underpins our response to both money laundering and terrorist financing is fit for purpose. Labour has been consistent in its support for measures taken by the Government to tackle global streams of illicit finance and to respond boldly to states and other actors that seek to circumvent the rules and structures that are in place to ensure global transparency and good governance. We will not seek to divide the Committee today and we support the measures to be adopted in the statutory instrument.

We recognise the significance of the UK’s high-risk third countries list in countering money laundering, terror financing and other forms of illicit finance, and we recognise the necessity of timely and practical updates to that list and a streamlined decision-making process. We also recognise the Financial Action Task Force’s legitimacy as an authority when it comes to the effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system, and, of course, the underpinning of many of the illicit activities the Minister referred to.

Providing businesses with the means to respond in real time to international findings and to highlight which jurisdictions are deemed to be high risk enables businesses to protect themselves, their employees and their customers more effectively from exposure. The regulations are therefore a common-sense step and we will support them. To elongate and delay the process could in some cases increase the risk of exposure and put businesses and affiliates in undue risk.

Will the Minister clarify in a little more detail how the change is being communicated to businesses and all those affected in order to explain how the measure works? We regularly deal with matters relating to sanctions in this place. The Treasury has a critical role in enabling companies to comply with measures such as this, yet unfortunately, when it comes to the sanctions we have debated, companies sometimes unwittingly find themselves in breach, and then voluntarily report themselves. It is critical that the Treasury communicates effectively and provides the appropriate guidance, and it is critical that we work in partnership with all those affected by measures such as these to ensure that they can comply in good time and in full.

There is a series of ongoing issues that are, unfortunately, raised regularly and, given the nature of this measure, I want to draw the Minister’s attention to a deeply concerning report in the Financial Times relating to the UK’s fight against illicit finance. It was reported at the weekend that Iran had allegedly used UK banks to covertly move money around the world as part of a sanctions-evasion scheme backed by Iranian intelligence services. The report alleged that banks

“provided accounts to British front companies secretly owned by a sanctioned Iranian petrochemicals company”,

which the United States

“accuses of raising hundreds of millions of dollars for the Iranian Revolutionary Guards Quds Force and of working with Russian intelligence agencies to raise money for Iranian proxy militias.”

Labour has regularly called for the proscription of the Islamic Revolutionary Guards Corps as a terrorist organisation, and we have raised again and again with the Government the need to work in lockstep with allies to cut off funding to hostile regimes, including Russia and Iran, that pose systemic challenges to the UK’s national security. The recent reports are deeply concerning, and I hope the Minister can set out what the Treasury and the Government as a whole are doing to respond. What conversations are being had with the financial institutions mentioned in the reports, and how will measures such as this ensure that we do not have a situation in which funds are allegedly getting into the hands of Iran or Russia, or indeed any of the other hostile states that threaten us and our allies?

Finally, while I agree with what the Minister said about streamlining processes and ensuring that they can operate in an effective way, the explanatory memorandum references a “burden on parliamentary time”; I hope that does not signal a broader intent on the part of the Government to avoid debates, scrutiny and accountability in Committees such as this. The debates that we have in this place provide an opportunity for the Opposition not only to show where there is unity in the House in taking measures such as these, but to ask important questions about both ongoing matters and the detail of regulations. I hope the Minister can assure us that the Government will not seek to truncate parliamentary scrutiny of such measures, which are often technical in nature but have significant implications for both our national security and the stability and functioning of our financial services and the economy.

I am largely on the same page as the Minister and the shadow Minister, but I will make a couple of points.

As we heard from the Minister, Government policy is generally to follow the regularly updated lists published by the Financial Action Task Force, so the SI saves us from having further DL Committees every few months when those lists are updated. It is a faster, streamlined process and there is some sense in that, but it possibly creates a slight gap in accountability. There is less opportunity for Members of this House to question Ministers on why they are following the task force lists without any additions or amendments. Our first suggestion for the Minister is that he undertake to write to Opposition spokespersons each time the list is updated or amended, to explain the Government’s reasoning as to why they are, or are not, sticking with the task force lists unamended or otherwise.

Following on from that, I welcome the Minister’s clarification that the Government will not hesitate to add additional countries or depart from the task force lists if absolutely necessary, but there is a question mark as to why they are not already doing that. As has been pointed out in regular Delegated Legislation Committees related to due diligence checks, there are some surprising omissions from the lists as it stands. For example, I do not understand why Sudan is not on the list requiring extra due diligence, whereas Gibraltar is. Sudan has two highly corrupt factions basically engaged in a civil war to take control of the country, and the Wagner Group is very much in play there as well. Will the Minister explain why Sudan is not on the list? That question gets to the heart of the point about accountability and our ability to ask questions about why the lists are in the form they are in.

We will not divide on the statutory instrument—we think there is merit on the general direction of travel that the Government propose—but we do raise those simple questions as to whether this is the best way of doing things.

It is a pleasure to serve under your chairmanship, Sir Robert. Will the Minister cast some light on something to help me to understand? Does the statutory instrument have any impact at all on the overseas territories? If not, how are we going to monitor them and restrict their activities, because most money laundering goes through the overseas territories?

I thank the Committee for its broad support. Let me answer the questions that Members have put to me.

The first question was about how one practically manages the process of including countries or not. Broadly speaking, the Financial Action Task Force is the centrepiece for how most countries—all the G7 countries and many others—deal with illicit finance. We do it in such a collaborative way globally because, frankly, in the modern world we can tackle illicit finance only by working in strong, close partnership with other countries. It is quite important that we have a degree of alignment on how we do that, but we of course retain the right as a sovereign nation, as everybody in the House would agree, to individually put countries on the list if we choose to. The instrument is a common-sense measure that will make it easier and faster to do that, rather than our having to wait for gaps in parliamentary time. Recesses and various other things come up that could mean there is a critical gap and illicit finance could get through defences. That is why we are doing this.

In response to the point made by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East about writing to the House, we will deposit a notice in the Library when we have done so, so that the House is kept fully informed.

On how the change is being communicated to businesses, the Treasury has active and frequent discussions with the private sector on this and many other matters, so Members should rest assured that businesses and financial institutions are kept closely up to date with what is going on. That is in addition to the publication of an advisory notice, which will be made when any countries are or are not put on the list.

I will have to write to the hon. Member for Cardiff South and Penarth on his point about the situation in Iran. I do not want to inadvertently mislead the House in any regard—I want to be very precise in my answer—so I will write to the hon. Gentleman about his questions in that regard.

On the Crown dependencies and overseas territories, we are committed to working with the overseas territories to tackle illicit finance, and we have long engaged with them on ways in which to do that. We continue to engage with the British Virgin Islands for its ongoing mutual evaluation, and we have supported it with its evaluation process. The BVI’s mutual evaluation report will be published after the quality and consistency checks required by the Financial Action Task Force. I cannot comment any further in relation to the BVI, but more broadly we are closely working with the overseas territories and Crown dependencies to ensure that they satisfy all the things that the Financial Action Task Force requires.

In another capacity, I serve as the shadow Minister for the overseas territories. Will the Minister say a little about whether he will publish a list of how exactly the measures apply to all of the overseas territories, where compliance is and what governance mechanisms are in place? OTs and Crown dependencies obviously have different mechanisms for applying UK law; are they doing this by themselves or are we doing it for them? Will the Minister explain that in a bit more detail, perhaps in writing?

I am happy to follow that up, but I know that the Crown dependencies and overseas territories are subject to the same rules as any country in relation to the Financial Action Task Force, which is the centrepiece of the whole way in which we tackle this issue, so dealing with them is no different from dealing with any of the countries that are so listed—indeed, I have talked about the BVI. I am happy to follow up in more detail as the hon. Gentleman requires.

In conclusion, the Government are taking focused action to tackle economic crime. We know that the House is united on tackling illicit finance and we strongly support that. I have listened carefully to Members’ contributions, and it is the Government’s view that this statutory instrument will ensure that UK legislation remains up to date and best delivers on policy commitments. The new definition of high-risk third countries means that the UK automatically reflects changes to Financial Action Task Force lists, putting us entirely in lockstep with the international community on this issue while retaining the ability, if we so choose at any time, to put a country on or off our list.

I appreciate the Minister’s generosity in giving way before he sits down. One issue that we have regularly raised regarding our sanctions regimes is the failure to actually prosecute or take forward implementation actions. I do not expect the Minister have the answer in front of him right now, but perhaps he could also outline in writing to the House—to myself and the Library—how many enforcement actions have been brought under the regime to date, and what the implementation mechanism will be for this measure. It is all very well to have the legislation and regulations in place, but unless we provide a deterrent effect against those who would seek to evade such measures, we are not going to be implementing the full picture.

I am happy to follow up with the absolute number—again, I do not want to get that wrong in Committee. The Financial Action Task Force takes the approach of working with countries to help to improve their systems. It is not an overtly punitive or aggressive approach; it is an approach that says, “How do we help to support you to make your systems less vulnerable to illicit finance and financial crime?” Of course, when we are dealing with private sector entities that seek to evade rules, they fall under the criminal sanction, as one would expect. I am happy to write to the hon. Gentleman about the precise number that he asks for; I would not want to get it incorrect. With that, I commend the regulations to the Committee.

Question put and agreed to.

Committee rose.