Economic Crime

Debate between Fleur Anderson and Baroness Hodge of Barking

Thursday 2nd December 2021 Commons Chamber

[Dame Margaret Hodge]

I completely concur with the sentiments expressed so powerfully by the hon. Member.

We are now, sadly, one of the jurisdictions of choice for money launderers, criminals and kleptocrats. We do not just tolerate, but—unwittingly, perhaps—facilitate economic crime. Our Moody’s credit rating has fallen a notch, specifically because of the

“weakening in the UK’s institutions and governance”.

Fraud, an important element in economic crime, now affects one in 15 adults, and it too often destroys the lives of innocent victims who are just normal, trusting citizens.

[Fleur Anderson (Putney) (Lab)]

I have a constituent who had a dormant company that was taken over by criminals and used to defraud others, but Companies House says that it cannot do anything about it. LinkedIn is colluding, with a whole lot of false company information, which helps to undermine the situation. Does my right hon. Friend agree that Companies House should be able to do more, and that it is damaging its own reputation?

[Dame Margaret Hodge]

One of the specific areas on which we make a recommendation in our motion before the House is the reform of Companies House. The situation of my hon. Friend’s constituent is just the sort of situation in which Companies House ought to be able at least to verify and possibly to pursue the wrongdoers.

Economic crime is often the facilitator of other crimes—from people trafficking to drug smuggling, and from terrorism to corruption. It does not just enable other crimes; it impacts on our national security. Dirty Russian money laundered into the UK is spreading like a spider’s web through our society. It is used to buy influence and to control our football clubs, our vital infrastructure and, more recently, our politicians and our politics. Today, we want not just to lay out the problem, but to put forward three pragmatic reforms that the Government could adopt—not tomorrow, but today. These are three oven-ready policies that together could have a significant impact in both preventing economic crime and punishing its wicked perpetrators.

We have become the destination of choice for a number of reasons. First, we have a very weak regulatory regime after decades of deregulation. Introducing reforms to our corporate liability regime would start to address the inadequacies in the regulations we have inherited. Even where we do have clear laws—this is my second point—our enforcement agencies are both inadequately resourced and risk averse in their policing of our system. Lack of money and fear of failure drive their decisions, and unlike America, we let criminals get away with it. Reform of Companies House would constitute the start of creating a tougher enforcement regime. Thirdly, we still allow a lack of transparency to flourish, giving wonderful cover to ne’er-do-wells and making it difficult to follow the money. If we cannot follow the money, dirty money triumphs.