Newcastle North MP, Catherine McKinnell, has urged the Prime Minister to extend corporate criminal liability to deal with other forms of economic crime, and not just tax evasion.

Speaking during yesterday’s Commons statement on the ‘Panama Papers’ revelations, David Cameron confirmed the Government’s intention of introducing a new criminal offence – or corporate criminal liability – for firms that fail to prevent their representatives from facilitating tax evasion.

Catherine, who is co-founder and co-chair of the All-Party Parliamentary Group on Anti-Corruption, has long campaigned for the law on corporate liability to be completely reviewed – backing suggestions that a new offence of failing to prevent crimes such as corruption and fraud could be modelled on Labour’s 2010 Bribery Act, which made it an offence to fail to prevent bribery and placed the burden on companies to prove they have put in place adequate procedures to prevent it.

At present under UK law, in order to hold a company criminally liable, prosecutors must identify an individual sufficiently senior – usually at board level – as the ‘controlling mind’ of that company with knowledge of the offence. In an increasingly globalised world where multinational organisations – and their complicated management structures – are the norm, this sets an extremely high bar for prosecutors to cross.

This contrasts with the situation in the US where a company can be held vicariously liable in criminal law for the actions of its employees undertaken in the course of their employment.

Proposals to introduce corporate criminal liability for economic offences in the UK were quietly dropped by the Government in September 2015, on the grounds that ‘there is little evidence of economic crime going unpunished.’

Questioning the Prime Minister during yesterday’s statement, Catherine asked:

‘The Prime Minister acknowledged in his statement that under current legislation it is difficult to prosecute companies that assist with tax evasion, and I and many others would add fraud and corruption to that list.

‘The Government promised in their manifesto to extend the new corporate offence to deal with economic crime, not just tax evasion. Will the Prime Minister commit today to urgently review the current position, and to extend the offence of [failing to prevent] tax evasion to incorporate fraud and corruption?’

The Prime Minister responded:

‘The hon. Lady makes an interesting suggestion that I will consider carefully. We have announced our proposal, and identified an opportunity in the Gracious [Queen’s] Speech to include that measure in a future Bill. At that time, we can consider an extension and a tidying up of the offences so that they can be used in the same way, and I will look carefully at what she suggests.’

Speaking after yesterday’s statement, Catherine said:

‘It’s quite clear the UK’s current laws on corporate criminal liability are completely out of step with the complex way that businesses now operate across the globe, and set the bar far too high for successful prosecutions of corporate economic crime.

‘Following his Government’s decision to shelve proposed changes in this area just last year, I’m pleased the Prime Minister has now committed to look at this issue again.

‘But warm words are not enough. We need clear, decisive action on corporate economic crime – and the Government must urgently deliver this.’