Financial Services and Markets Bill [Lords]

Joe Powell Excerpts

Tuesday 10th November 2026 Commons Chamber

[Joe Powell (Kensington and Bayswater) (Lab)]

I am proud of our world-leading financial services sector and the many constituents I represent who work in it. I put on record my thanks to the Chancellor for announcing measures in the Budget that will continue to help Britain attract global talent to work in those services.

Our reputation for strong financial services that respect the rule of law depends on our ability to keep dirty money out of the City and out of our country. The Bill will make huge strides on that through clause 13, on which I will focus. No one should turn a blind eye to the source of funds for an investment, whether into a company, a property, art or even some of our national institutions. The former Foreign Secretary, my right hon. Friend the Member for Tottenham (Mr Lammy), was right to say that this Government’s ambition should be to change our reputation from the dirty money capital of the world to

“the anti-corruption capital of the world”.

One of the historical weaknesses has been the regulation of legal, accountancy and company service providers, which are sometimes referred to as enablers or potential enablers of money laundering. It should not be a badge of honour that dirty money in our country has spawned an entire genre of excellent books: “Kleptopia”, “Treasure Islands”, “Butler to the World”, “London Falling”—hon. Members can read my review in “The House” magazine—and many more.

In my Kensington and Bayswater constituency, we similarly do not celebrate the fact that we are home to numerous sanctioned luxury properties and thousands more whose ownership is unknown or opaque. I invite the Minister to join my next “Kensington Against Dirty Money” walking tour, which will show her the impact of dirty money entering our country—often through the vehicles of anonymous trusts registered in the British Virgin Islands and other overseas territories and Crown dependencies. That distorts our property market, hollows out our local communities and, in the worst cases, leaves properties frozen in limbo. That is not sustainable investment. It does not promote economic growth or shine a good light on our professional services.

I am therefore delighted that the Bill will significantly strengthen anti-money laundering measures. The Financial Conduct Authority will take on an expanded supervising role, rather than the more than 20 different professional bodies that currently oversee lawyers’ and accountants’ compliance with money laundering rules. The capacity of those bodies simply does not align with the complexity of modern anti-money laundering efforts, and the incentive for private professional bodies to compete for membership does not align with the most rigorous oversight. For a long time, anti-corruption campaigners have called for this consolidation. I pay tribute to those organisations. As the Bill progresses, the transition will need to be managed. There is a clear risk that, as responsibilities shift to the FCA in cohorts, some firms will be left behind. It would be helpful for the Government to provide a reform road map that makes it clear that existing anti-money laundering duties will apply.

Funding is obviously key—other Members will speak to the benefits of an economic crime-fighting fund, which the Minister already knows my views on well—but enforcement also means ensuring that the FCA has the right powers to inspect legally privileged material when that is necessary for anti-money laundering supervision. The Minister will no doubt be aware of the action taken by Carter-Ruck against the Solicitors Regulation Authority to challenge its statutory power to compel disclosure, which the SRA has now appealed to the Supreme Court. There is a risk that the FCA will therefore inherit a legally flawed responsibility for anti-money laundering. It is crucial to get that right, and I hope this Bill is the place to do it.

On property investment, I know that the Government are committed to looking at the issue of abuse of trust, and the anti-corruption champion’s report into asset ownership in Britain will be published soon. In my constituency, over 40% of the foreign-owned properties are registered in trust. My concern with our registry of overseas entities and the exemption given to trusts is that we might create a perverse incentive to use more opaque corporate structures to shield the true ownership. Indeed, those opaque structures are likely to be the product of conversations with the very professional services to which the Bill aims to bring more consistent money laundering supervision. I hope that in the spirit of joined-up government, the Minister will work with colleagues across Government to look at this abuse of trust. That would be another significant step forward.

The measures in the Bill support our leadership on the global stage. We have the financial action taskforce review next year, which I am sure will welcome the steps in the Bill, as well as the G20 presidency and our flagship illicit finance summit, which I am glad the Government have committed to host next year. I hope the Minister will see the illicit finance summit as an opportunity to work with like-minded countries on consistent international anti-money laundering supervision of professional services.

Finally, it is well past time for action on the overseas territories and Crown dependencies. The uncomfortable truth is that while some of the most notorious and brazen enablers of illicit finance and money laundering operate as part of the UK family, we will not be able to claim the leadership role that the Bill has the potential to support. Despite years of commitments and communiqués, the overseas territories are still one of the main global destinations for dirty money, and it is high time for that to change. The harms are severe, from sanctions evasion to serious organised crime, and they damage our financial services here and support kleptocrats and criminals who take advantage of them. With the Joint Ministerial Council happening this month, I hope we can continue to take action on that front. I hope that the Bill can help end that reputation as the butler to the world and instead create the modern, secure financial services regulation that we need.