DRAFT MONEY LAUNDERING AND TERRORIST FINANCING (AMENDMENT) REGULATIONS 2022

Angela Eagle Excerpts

Monday 7th February 2022 General Committees

[Dame Angela Eagle (Wallasey) (Lab)]

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

I know that the Minister is at the centre of the Government’s efforts to deal with economic fraud and money laundering. I hope that, if he has not read it yet, he will take a close look at the report on economic crime that the Treasury Committee issued last week. It includes many recommendations, which I will not go into now because that would be out of order.

Economic crime, money laundering and the kind of activity that this statutory instrument has been designed to bear down on are complex and require a lot of determined action from many different angles, and I hope the regulations are just a small part of that. Perhaps the Minister could reaffirm that the statutory instrument is just a small part of the Government’s efforts to tackle the sad fact that we, with a very large financial centre in the UK, are now regarded as a centre of money laundering. The “London laundromat” is a phrase that came out of the Intelligence and Security Committee’s report. It is not one that I have made up and it has not been conjured out of thin air. It is used because of the real threats that our open financial system has been put under by those who, as the Minister said in his opening remarks, wish to cause problems for our open and fair economy. If those threats are allowed to progress and fester, they will have bad effects on social and economic wellbeing in this country. We are all on the same side in that we want to minimise the chances of that happening.

Does the statutory instrument go far enough? There are some doubts about it, although it is good to see it here. I hope that the Minister will say in his response to the debate whether we will get an economic crime Bill to deal with some of the rest of the problem. When Lord Agnew resigned so dramatically from the Dispatch Box in the Lords a couple of weeks ago, he appeared to do so, at least in part, because he had learned that there was not going to be an economic crime Bill. The Minister and all Opposition Members know very well that we need some major changes in the law to accompany such statutory instruments if we are to begin to close some of the loopholes that are used by those who wish our society ill, those who aggrandise themselves, terrorists, organised criminals and those who wish to hide the sources of money that they have stolen from elsewhere in the world and launder it through companies, trusts and property in this country.

Is the Minister worried that the fact that we will have a regime that is more lax than that being developed in the European Union might paradoxically make us more of a target for more of this sort of money? The fact that the statutory instrument has been changed in certain ways might make us more attractive when it is compared with similar instruments that are being promulgated in the European Union. I am worried about that.

Will the Minister say a little bit about transparency? As both Opposition Front Benchers mentioned, organisations have said that the statutory instrument as drafted does not leave sufficient scope for private sector and civil society actors to investigate suspected money laundering. They effectively have to prove it before they are given sight of the trusts. That is a much tougher area than we are expecting to be the case as the European Union moves to put its own directives into being. Of course, the European law is the law from which these regulations have sprung, albeit we are now outside the European Union.

Can the Minister say something about the trust registration service? There have been delays, which he mentioned were something to do with IT problems. Is he convinced and confident that the IT problems in the trust registration service have been properly dealt with, so that when this system comes into being it will be robust in future? Can he say a few words about law enforcement, because the Treasury Committee’s report last week commented particularly on the fragmented nature of the fight against organised crime and money laundering? The way it goes across so many different Departments, is very fragmented and is not the main source of action for many of the enforcement authorities. It seems to fall between the stools of many different Departments with very few enforcement authorities being primarily responsible for doing that work. Can the Minister reassure me that he has sorted that issue out and he is convinced that the enforcement of the new regulation will be robust enough to ensure that we can crack down on some of these nefarious money laundering activities?

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[Dame Angela Eagle]

I thank the hon. Gentleman for giving way on that point. It was absolutely remarkable that when we took evidence from the Minister, and from his Home Office colleague who was responsible for trying to crack on money laundering, how dissatisfied both of them were with the current state of affairs. I wish him well in attempting to get his business managers to realise what everybody else realises, which is that this should be an absolute priority.

[John Glen]

I welcome the hon. Lady’s intervention on this subject. I am happy to recognise her characterisation of the diffused responsibilities in the report. There are observations and questions about many interactions. That is something for the Government to reflect on, as we will do in our response.

The hon. Member for Glenrothes referred to parliamentary time. Fixing some of these things will take a bit more than a few hours, but the point he is making is that there is a will to do this, and I recognise that.

This is a modest set of changes to deal with an administrative problem with one part of this Government’s response to a challenge. We are one of the most open jurisdictions for financial services. We employ 2.3 million people in financial services and 7.4% of jobs in the UK are in financial services. We have got to get that balance right, but I recognise the challenges outstanding. On a broader canvas, at a later point, I will address those points. I hope that the Committee has found this debate informative and will support the regulations. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Money Laundering and Terrorist Financing (Amendment) Regulations 2022.