Baroness Bennett of Manor Castle (GP)

My Lords, I rise as the only female speaker in this debate, noting that, should we see a restructuring of your Lordships’ House in future, we might create some space for some female Members with interests in this area. I thank the Minister for a clear introduction to the Bill. It is not my intention in this speech to debate the legal detail or indeed to oppose the Bill, but I shall reflect on how the Government and other noble Lords have suggested the Bill will be used and its potential impact. I guess you could sum up this speech as one that sends a strong note of caution. I agree with the noble Lord, Lord Holmes of Richmond, that it is up to us how we deploy the powers in the Bill. That means it is a matter of choice. Like the noble Lord, Lord Vaizey, I noted the broader international political context in which we debate today, although my perspective is rather different to his. I note that Susie Dent, the lexicographer, declared that the word for today is “recrudescence”, which means the recurrence of an undesirable condition. That is an appropriate term for the context we speak in today. It is also relevant to some of the points I wish to make, which fall into three main areas: the relationship between the kind of goods we are talking about here and corruption and fraud; the situation in the UK economy, where we have too much finance already; and the environmental impacts of cryptocurrencies, other digital resources and the things we are talking about here. Since we are in Committee, I am reminded of a quote from the noble Lord, Lord Evans. He was then the chair of the Committee on Standards in Public Life, although speaking in a private capacity in a debate on corruption secured by my noble friend Lady Jones of Moulsecoomb. Referring to the most recent decade or two, he said that “we have clearly, as a matter of policy, turned a blind eye to the perpetrators of corruption overseas using London for business or leisure purposes”.—[Official Report, 13/10/22; col. GC 156.] If we look around the world at what cryptocurrency is associated with, we see that it opens up entirely new and lucrative avenues for scammers, terrorists, plutocrats, oligarchs and dictators. They have been using it. There is the well-known case of Sam Bankman-Fried from the exchange FTX in the US. Indeed, the most recent figures from the FBI, from September, show that, in the US alone, consumers have lost more than $5.6 billion through cryptocurrency-related fraud—a 45% jump from 2022. I note that, here in the UK, our officials—after a difficult, complex and no doubt expensive investigation—seized £3 billion-worth of bitcoin in April. The Chinese apparent owners of that bitcoin are now seeking to get it back. Think about the costs: they are very much starting to add up here. I have to contrast that with the Government’s press release dated 11 September, which says that Britain wants to “maintains its pole position in the emerging global crypto race” and “maintain its position as a global leader in cryptoassets”. We are already a leader in global corruption and fraud. How much do we want to magnify that leadership? Following on from the comments of the noble Lord, Lord Vaizey, I note that this is very much an equalities issue, too. I am sure that many noble Lords have seen the no doubt expensive and high-profile advertising campaigns for cryptocurrencies. They clearly target young, minoritised communities that are suspicious —with good reason—of the traditional financial sector, with its association with colonialism and slavery, but are at risk of being exploited by a new Wild West of finance. I come to my second point, which is about having too much finance. I shall quote a study; I have quoted it before, in your Lordships’ House, but it is worth going back to it. Back in 2018, the Sheffield Political Economy Research Institute concluded that the UK had lost £4.5 trillion over two decades because of its oversized financial sector. We are taking scarce human resources—people with PhDs in maths and physics—and letting them go into sectors of corruption that crash and cost us all a great deal of money. The SPERI researchers concluded that, in the 30 years following Margaret Thatcher’s deregulation of the City, financial workers were overpaid by around £280 billion compared to people from similar financial educational backgrounds in other jobs, and financial services reaped £400 billion in excess profits. Noble Lords may think, “Well, that is not in my political frame”. I point them to yesterday’s article from Martin Wolf in the Financial Times, headlined “More muddling through won’t deliver the growth Britain craves”. In it, Wolf says that “pre-crisis GDP and GDP growth were either exaggerated, or unsustainable, or both”. He suggests that a big source of that unsustainability is “that the pre-2008 global financial bubble, from which the UK, home to a leading financial hub, benefited, also distorted GDP. It not only exaggerated the sustainable size of the financial sector, but also exaggerated the sustainable size of a whole host of ancillary activities”. Let us think carefully about future bubbles. My third point picks up a point made by the noble Lord, Lord Holmes of Richmond, about the environmental impact of the digital sector, which has been of increasing concern in the past year. Last year, United Nations scientists evaluated the environmental impacts of just one—although probably the biggest—cryptocurrency: bitcoin. They looked at the activity of 76 bitcoin-mining nations from 2020 to 2021; the study was published in the journal Earth’s Future. If bitcoin were a country, its energy consumption would have ranked 27th in the world, consuming 173.42 terawatt hours of electricity; that is about the equivalent of Pakistan’s consumption, with its population of 230 million people. Energy footprint is just one aspect of this. The water footprint over a similar time was enough to have filled 660,000 Olympic-sized swimming pools, which would meet the current domestic water needs of more than 300 million people in rural sub-Saharan Africa. The land-mining footprint of bitcoin activities was 1.4 times larger than the area of Los Angeles. We are talking about growing this and seeing how far we can make it go. What can the planet bear? Those are my three main points but I have a couple of final questions, or comments, to put to the Minister. There has been some discussion about non-fungible tokens. Thinking about the way in which, through Brexit, a loss of government funding et cetera, our artists have been scrabbling around and struggling for financial income, securing non-fungible tokens might be a good thing in the art world. That would be something small to celebrate. In his introduction, the Minister talked about virtual carbon credits being covered by the Bill. We know that carbon offsetting has been an area of massive fraud and corruption—an absolute failure of governance. Might the Minister, either in summing up or in a letter to me, be able to reflect on how the Government will deploy the Bill to ensure that that is not the situation? I shall come to a slightly more abstract area of consideration, then a concrete one. Taking the abstract first, digital spaces are now where many of us meet, gather, communicate, conduct politics and conduct democracy. They are in some ways a new kind of Commons, if we think about the Commons as a public space where people gather on the street. Again, I shall understand if the Minister would prefer to write, but I ask him to reflect on how this might affect the public use of digital spaces or digital knowledge. I finish with this concrete question: how does the Bill interact with the decision taken at the COP 16 biodiversity talks to introduce a multilateral mechanism, including a global fund, in order to share the benefits from the use of digital sequence information on genetic resources—known as DSI—more fairly and accurately? It aims to share the benefits with the global South, indigenous people and local communities, and is known as the Cali fund. How will the Bill interact with it?