High Street Shops: Illicit Activity

Katie Lam Excerpts

Wednesday 17th June 2026 Westminster Hall

[Katie Lam (Weald of Kent) (Con)]

It is a pleasure to serve with you in the Chair, Mr Dowd. I congratulate the hon. Member for Halesowen (Alex Ballinger) on securing this important debate.

For far too many people and in far too many places, the high street has become a visible sign of where the British state has lost control. People suspect that the cash-only takeaways, barber’s shops and vape shops that they see springing up on their high streets are symptomatic of a deeper rot. As the hon. Gentleman and many others set out, in many cases they are right. All too often, such high street shops are linked to organised crime, including through the sale of illicit or counterfeit goods, money laundering, immigration crime and people smuggling.

Last month, the BBC uncovered that people smugglers are directing migrants to pay for illegal channel crossings using a network of high street businesses, including mobile phone shops. In 2024 alone, trading standards seized more than 1 million illegal vapes and 19 million illegal cigarettes. As the hon. Member for Huddersfield (Harpreet Uppal) mentioned, the National Crime Agency estimates that £1 billion of crime-linked cash is laundered through high street businesses every year. It is clearly difficult to produce reliable estimates of things such as money laundering, so the real figure may be even higher. The money laundered by such businesses often fuels human trafficking or the drug trade.

The problem is only getting worse. According to one survey, 99% of trading standards professionals have seen an increase in the number of cash-intensive businesses opening on their local high streets in recent years. Cash-intensive businesses often provide the best fronts for money laundering and the trade in illicit and counterfeit goods.

While businesses that do the right thing are struggling with ever more regulation and ever higher taxes, businesses with links to organised crime are thriving. To combat the rise in illicit activity on our high streets, we must understand the criminal networks that sustain that activity and the link in many cases between those networks and immigration.

Let us imagine, for example, an organised crime gang involved in the drugs trade. When that gang sells drugs to people, payment will most often be made in cash, because cash is harder to trace. However, if that business wants to bring its cash into the normal financial system, it will need to launder the money so as not to provoke suspicion. If a person suddenly deposits tens of thousands of pounds with no clear income source, a bank will register that as suspicious, but not so if the money is deposited by a high street business.

The gang might therefore set up a high street shop—something cash-intensive and with low overhead costs, such as a vape shop. The shop records its transactions but adds to those real purchases a series of phantom cash sales used to disguise the illicit cash raised by the sale of drugs. The deposit appears legitimate and can be backed up with paperwork. Once that cash is deposited, it can be paid out as profit to those involved in running the organisation, for example as a fake invoice to an overseas supplier that is paid out to a shell company registered abroad.

The criminal gangs involved in the drug trade operate across borders both financially and physically. They will have overseas suppliers who provide them with the drugs that they sell. These supply networks are often sustained by links between people of the same nationality, ethnicity or even extended family. Often, these drug gangs are also involved in other kinds of cross-border smuggling—of counterfeit goods, illegal tobacco and, indeed, people.

[Jim Shannon]

I thank the hon. Lady for bringing this to the attention of the Chamber today. One of the issues, which I know the Minister is well across, is the cross-border trade between Northern Ireland and the Republic of Ireland. We are the only part of the United Kingdom that has a land border. A better working relationship with the Garda Síochána is critical. Can the Minister confirm that the Garda Síochána, the Police Service of Northern Ireland and the police forces here on the mainland can work together to better defeat paramilitary and organised crime groups?

[Katie Lam]

The hon. Member is right that the common travel area presents particular challenges. It is crucial to maintain the sorts of relationships he is talking about in a way that keeps the public safe in Northern Ireland and the whole country.

If high street shops are already laundering money on behalf of these gangs, they might also sell the things that the gang illegally imports. They might serve as points of contact for people who are looking to smuggle people into Britain illegally, as was highlighted by the BBC’s most recent investigation.

Those shops might also help criminal gangs to bring people into this country by sponsoring their visas. As my hon. Friend the Member for Harborough, Oadby and Wigston (Neil O’Brien) has previously highlighted, many cash-intensive high street businesses sponsor an absurd number of visas. On paper, these people work for a legitimate high street business, but in practice many of them will be using that apparently legitimate employment as cover for their work as part of a criminal gang. Others may be working, or forced to work, for dramatically less than the minimum wage, which both exploits them and distorts the labour market. That happens everywhere in the country. In the stunning town of Tenterden in my constituency, Indian restaurant Badsha was recently found to have been employing illegal migrants for a fourth time, racking up £120,000 in fines and not paying a single penny.

I would appreciate it if the Minister set out how the Home Office thinks about and plans to tackle the links between illicit activity on the high street, organised crime, immigration and people smuggling, and how the Department’s plans for tackling illicit activity on the high street take account of those links. Does it keep a record of how many businesses raided under high street organised crime operations were also registered visa sponsors? Does it keep a record of the visa status and visa type of those employed by these businesses?

What proportion of high street businesses employing people illegally are repeat offenders like the one in my constituency? Will the Minister share what proportion of Operation Machinize targets in cases related to counterfeit goods, illegal tobacco or vapes, money laundering or the sale of drugs were also involved in illegal working, visa fraud or organised immigration crime and people smuggling?