By Kevin Hollinrake is MP for Thirsk and Malton and Chair of the All Party Parliamentary Group on Fair Business Banking.
Dirty money is the lifeblood of the most despicable sorts of crimes. It’s a stain on the UK economy and it hits every British person in the pocket.
The Government is alert to these issues. The Economic Crime Act, passed earlier this year, contained measures designed to go after the crooks and kleptocrats that have facilitated Vladimir Putin’s regime in Russia and who benefit from his wicked war in Ukraine.
In the Queen’s Speech this week ministers announced plans to go further, with a second Economic Crime Bill slated for this session of parliament.
I want that Bill to be as effective as possible in driving dirty money out of the UK. Which is why I’m pleased and proud to have worked on the Economic Crime Manifesto, which I launched today in my role as chair of the All-Party Parliamentary Group on Fair Business Banking alongside Dame Margaret Hodge, chair of the APPG on Anti-Corruption and Fair Tax.
MPs from across the spectrum have come on board and endorsed our recommendations because going after dirty money and tackling economic crime urgently and properly benefits everyone, except for the crooks.
Dirty money undermines national security, allows organised criminals to prosper, and damages Britain’s reputation as a trusted jurisdiction. All of this has a very real impact on the everyday lives of British people at a time when a cost of living crisis is emerging.
Economic crime causes untold harm in our society as legitimate businesses struggle, property prices rocket, and fraudsters scam working people.
The size and global reach of the UK’s financial, legal and accountancy sectors are unparalleled. But this creates heightened risks from illicit finance.
Britain’s dirty money problem runs to hundreds of billions of pounds – money that would be much better off in the exchequer paying to tackle the problems we face building back from the pandemic, or in the wallets and purses of people stressed in the face of rising prices.
Our role as a global leader in all the services the City offers means the UK is also uniquely placed to lead the way in combating this scourge.
When Russia illegally invaded Ukraine earlier this year, Britain was at the forefront of the international response, swiftly sanctioning over a thousand individuals and companies. But sanctions tackle the symptoms of this vast economic crime problem, not the causes.
Ukraine can be a historic turning point. We can be the ones ensuring the world’s worst crooks and kleptocrats find themselves with nowhere to hide or spend their ill-gotten gains.
Our manifesto is built around four key pillars: transparency, enforcement, accountability, and regulation.
We know the Economic Crime Bill will contain measures reforming Companies House, but we want the Government to put transparency at the core of those changes by giving regulators more powers, and by establishing for Companies House a sustainable funding model.
Funding is key to the enforcement aspect of the manifesto. A dedicated Economic Crime Fighting Fund would reinvest the proceeds of regulatory and criminal fines and assets into the agencies and mechanisms dedicated to rooting out and prosecuting economic crime.
An innovative suggestion in the accountability section of the manifesto is the establishment of an Office for Whistleblowers, to provide protection and compensation for those that speak out against or uncover economic crimes and other wrongdoing.
Proper regulation is needed around, for example, cryptocurrencies. The Government wants the UK to be at the forefront of this exciting innovation. But without some oversight and agreed rules crypto threatens to become a playground for fraudsters and crooks.
Just as the invasion of Ukraine has seen the Ministry of Defence review its capability and funding to face the new security environment, so we must upgrade Britain’s defences against economic crime to ensure the sustained success of our financial and professional services.
This doesn’t mean regulation for the sake of it; this means better and smarter rules that are consistently enforced. The UK can prosper by combining an attractive business environment with the highest standards of probity and transparency.
Britain has a track record at the cutting edge of innovative legislative reform in this field, such as the introduction in 2016 register of actual “beneficial” owners of companies. Concerns were raised that this register would damage the attractiveness of the UK as a place to do business but they proved unfounded, with no decrease in the numbers of companies registered.
Instead, public ownership registers have become a new global standard, driven by British leadership on the international stage. Time and again, this has shown itself to be a world leader in tackling global problems.
The Government’s ambition on tackling economic crime must match the scale of the threat. The reforms set out in the Economic Crime Manifesto will reinforce Global Britain’s reputation for integrity and the rules-based international order.
They will ensure our world leading financial and professional services are positioned on the right side of history, so that collectively we deliver on our ambition to be the ally that Ukraine needs and a positive force in the world.
Driving out dirty money is good for business, good for Britain, and good for the world.