June 29, 2022

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Dirty money contaminates the UK’s public sphere

2 min read

The writer, an MP, chairs the All Party Parliamentary Group on Anti-Corruption and Responsible Tax

For too long the UK has been a “laundromat” for corrupt wealth. The ongoing Ukraine tragedy highlights our complicity in allowing dirty money to spread. But it should not have taken a horrific war.

These deep-rooted problems became clear to me when I chaired parliament’s public accounts committee. Hearings with tech giants demonstrated multinationals using complex financial structures to avoid tax. Then a plethora of leaks, from the Panama Papers to the Pandora Papers, revealed the same structures were used by wrongdoers to launder money. Latest estimates suggest that economic crime costs our economy a massive £290bn annually.

Russian oligarchs are not the only players. Kleptocrats from across the globe, drug traffickers, people smugglers, arms dealers and other criminals “clean” illicit cash in the UK too. And our defences are overrun.

Decades of lax regulation under both Conservative and Labour governments, pathetically feeble policing and an unacceptable lack of transparency have allowed it. The UK’s relationship with offshore tax havens and an army of enablers — accountants, lawyers, bankers, advisers — have helped make us the jurisdiction of choice.

The economic crime bill announced in the Queen’s Speech gives us a unique opportunity to drive out dirty money. Clean finance isn’t just morally right, it’s good for business. We will never enjoy sustained prosperity on the back of corrupt wealth.

There’s a host of necessary fixes: greater transparency of who owns companies, trusts, land and assets; tougher agencies for consistent enforcement of laws; robust protections for the press, judges, whistleblowers and civil society to hold wrongdoers to account; effective regulation for the professionals that conduct money laundering checks. But real reform cannot end there.

Financial malpractice is now contaminating our public sphere. There has…

2022-05-14 13:00:08

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