Corporate Transparency and Economic Crime

Kwasi Kwarteng Excerpts

Monday 28th February 2022 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

With your permission, Mr Speaker, I would like to make a statement on the reforms the Government will be bringing forward to improve transparency over the ownership of companies and property in the UK, and to strengthen the enforcement of financial sanctions. These are the key elements of our strategy to tackle dirty money from Russia and elsewhere.

The openness of our economy to investment from all parts of the world is one of our greatest strengths. However, we are determined that we want to attract the right kind of investment. As many Members will know, oligarchs and kleptocrats from Russia and elsewhere have used the veneer of legitimacy provided by UK registered companies and partnerships, and have used high-end property to help launder proceeds of corruption. At present, Companies House has very limited powers to prevent that abuse. In light of Russia’s outrageous actions in recent days, it is necessary that we put those criminals on notice and send a clear message that the UK will not tolerate their corruption here. To that end, I am announcing two immediate steps.

First, the Department for Business, Energy and Industrial Strategy is today publishing a White Paper on corporate transparency and register reform. The White Paper sets out a comprehensive package of reforms to Companies House. [Interruption.] Stop pre-empting. Just be patient. The agency will be transformed into a custodian of accurate and detailed information, ensuring that we can clamp down on those who seek to abuse UK corporate structures to launder money. Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity with Companies House, which will then be able to challenge dubious information and inform the security agencies. Company agents from overseas will no longer be able to create companies in the UK on behalf of foreign criminals or secretive oligarchs. The reforms will not only tackle illicit finance, but directly support the millions of legitimate enterprises which transact with Companies House every day. Alongside the White Paper, we will be legislating for other measures, including reform of limited partnerships law, new powers to seize crypto-assets, and reforms to help businesses share information on suspected money laundering.

Secondly, we will be introducing legislation to Parliament tomorrow to accelerate other measures that will make an immediate dissuasive effect on dirty money and its purveyors from Russia and elsewhere. The Bill we introduce tomorrow will create a register of overseas entities to crack down on foreign criminals using UK property to launder their money. The new register will require anonymous foreign owners to reveal their real identity to ensure that criminals can no longer hold property behind secretive chains of shell companies. By legislating now, we will send a clear warning to those who have used, or who are thinking about using, the UK property market to launder ill-gotten gains, particularly those linked to the Putin regime. Tomorrow’s Bill will reform unexplained wealth orders, removing key barriers to their use by law enforcement. It will also include amendments to financial sanctions legislation, helping to deter and prevent breaches of sanctions.

The new property register and the reforms to Companies House will once more see the UK take innovative and world-leading steps to tackle anonymous shell companies. We have been leading on this agenda since being the first major economy to put in place a public register of beneficial ownership for all domestic companies in 2016. Not only can we pay tribute to the heroic efforts of the people of the Ukraine—Ukraine—to defend their democracy and their freedom; these measures, in a small but significant way, will put pressure on kleptocrats and oligarchs who have abused our hospitality for their own nefarious purposes.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I thank the Secretary of State for early sight of his statement and for our call with the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully), this afternoon. The Labour party and the House are united in our support for Ukraine and we take very seriously our role in ensuring that Russia’s unprovoked and unjustifiable aggression fails.

Russia’s invasion of Ukraine has shaken the world, with huge concern across Parliament and the country about the invasion and the unfolding humanitarian crisis. It is clear, however, that it has taken the Russian invasion of Ukraine to shake the Conservative party into finally taking the action that is required. These steps are imperative, not just for financial transparency but for our national security, and the Government’s action on that to date falls far short of the leadership required. That is why we must urgently take the necessary steps to drag illicit finance out of the shadows and make it clear that the UK will no longer be a home to dirty money.

We therefore support the Government in introducing the emergency legislation in the light of the atrocities that we are seeing in Ukraine. The need for it is clear for all to see, but the Secretary of State will recognise that these steps have been needed for a long time. He will know that Labour and, indeed, some Government Members have been calling for years for the measures that the Government have announced. We were first promised this legislation in 2016, and this draft legislation has in fact been ready since 2018. Although we support the Government’s actions today, the Secretary of State needs to take responsibility for the time and progress lost through Government inaction. I hope we will see that lessons are learned for this Bill and future legislation, because time is of the essence.

The UK would have been in a much stronger position to act with speed and our national security would have been better protected if the register had already been up and running. That is why the Government must move quickly, because the dangers of a lack of transparency, particularly in the current climate, are all too plain to see. If the intention, as stated, is to impede Russian money, the register will need to be operational in the coming weeks to have any effect. I assure the Government of Labour’s full support in moving through the Bill’s stages quickly, and hope in turn that they will act quickly to make the register and other measures a reality.

I wish to press the Secretary of State on some key areas in which the Government must go further to make the measures as effective as they could be, and I do that in the spirit of cross-party support. I welcome his announcement that the economic crime transparency and enforcement Bill, or some aspects of it, will finally be introduced tomorrow and welcome the White Paper reforms to Companies House, but frankly, we have to ask whether a White Paper is all he is bringing forward on Companies House—[Interruption.] We have been promised more before, and the Prime Minister announced that more immediate steps would be taken. Will the Secretary of State confirm when other aspects of the economic crime Bill, such as the reform of Scottish limited partnerships and the power to seize crypto-assets, will come before the House?

Will the Secretary of State confirm that the register of overseas entities will be publicly available and that there will be criminal penalties for non-compliance? Will those criminal penalties apply to those who fail to update the register annually, as well as to those who provide false information? Will he confirm when the register will be up and running? Can he give an update on the Crown dependencies and overseas territories, and will he commit to enacting similar reforms and to the Government taking action if they do not take action?

The freedom of our press will be vital throughout this invasion. Will the Secretary of State confirm whether the Government intend to use Monday’s legislation to tackle strategic lawsuits against public participation, so that journalists are not silenced and can freely report on the financial activity of Russian oligarchs? Finally, will he update the House on the discussions that he is having with the devolved Administrations on these important measures? I look forward to his response.

[Kwasi Kwarteng]

I am grateful to the hon. Lady for her points. Clearly, on the time that this has taken, she will remember that in the 2017 to 2019 Parliament, a huge amount of our time was taken up by members of the Labour party and the Opposition parties frustrating Brexit. They absorbed a huge amount of parliamentary time and I am afraid that that was one of the reasons we could not expedite this sort of legislation.

There will be criminal liability for failure to update the register annually and for giving misleading or inaccurate information. We are working with the Crown dependencies to update their transparency; by next year, they will have to have much greater transparency requirements. The hon. Lady will be pleased to know that my Government colleagues and I speak to our counterparts in the devolved Administrations on a very regular basis.

[Dr Julian Lewis (New Forest East) (Con)]

I welcome the statement, as far as it goes. As a matter of principle, does my right hon. Friend agree that cleansing British public life of dirty Russian money is not quintessentially difficult?

[Kwasi Kwarteng]

As my right hon. Friend appreciates, this legislation is timely. We are grateful that it seems to have elicited huge support across the House, and we are pleased to be able to expedite it.

[Alison Thewliss (Glasgow Central) (SNP)]

I thank the Secretary of State for advance sight of his statement. I also thank the small Business Minister—the Under-Secretary of State, the hon. Member for Sutton and Cheam (Paul Scully)—for giving me and my hon. Friend the Member for Aberdeen South (Stephen Flynn) his time earlier, which was appreciated.

I put on record the concerns that many of my Glasgow Central constituents have expressed over the weekend for the people of Ukraine. They call on the Government to do more. Like me, they will welcome action on sanctions and on the flow of dirty money through the City of London, so I am glad that there will be reform of Companies House. It is long overdue, and SNP Members have not been holding it back; we have been calling for it constantly for years. The Government have had multiple chances to deal with it.

As an interim step to action on Companies House, will the Government use the Verify scheme to ensure that people cannot fill the register with absolute guff, as happens now? Will they give Companies House interim anti-money laundering responsibility until the new Bill comes into force? When it does, will it be retrospective? Will it go back to the register and root out all the nonsense, or will it start again from scratch?

I am glad to hear about the register of overseas entities in the Bill, but I would like to know how it will differ from the draft Registration of Overseas Entities Bill. I sat on the Joint Committee on the draft Bill; our report came out in May 2019. How will the new Bill differ? Will it pick up on issues around definitions of legal entities, the use of trusts and the loopholes that they create? Will it take action on Scottish limited partnerships, which have legal personality and can hold property? Tackling them in the Bill is crucial.

Will we look at the cost to land registries of working on the Bill? In Scotland, the register of persons holding a controlled interest in land will come into force on 1 April 2022 and will include overseas entities, so the Scottish Government are moving on the issue in just over a month’s time. What conversations has the Secretary of State had with the Scottish Government on how the Scottish register will interact with the UK register?

Will the Government go after the enablers—the estate agents, the lawyers and the accountants who have facilitated so much of the kleptocracy in this country? They have to be held to account, too. I am glad to see that unexplained wealth orders, which have not been working properly—I understand that there have only been nine since their inception—are being fixed. I look forward with interest to that happening.

Finally, what will the Government do about enforcement? They can have the finest laws in the land, but if there is no action and no investment in enforcement, there is little point in having them at all.

[Kwasi Kwarteng]

I am grateful for the hon. Lady’s remarks. As far as the enablers are concerned, we have legislation already on the statute book. As my right hon. Friend the Foreign Secretary said in her statement, we are looking at other measures to tighten the regime.

We work with DA Ministers constantly. The Under-Secretary of State, my hon. Friend the Member for Sutton and Cheam (Paul Scully), has engaged ably and directly with DA Ministers, and we look forward to doing so.

This set of measures is only the beginning of the much tighter regime that we want to bring in. [Interruption.] People are chuntering from a sedentary position, but I would like to point out that these matters, particularly those regarding cryptocurrencies and cyber-crime, are complicated. We are trying to expedite legislation on those fronts as quickly as possible.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

My right hon. Friend has brought excellent news to the House this afternoon, but will he at least acknowledge that the right hon. Member for Barking (Dame Margaret Hodge), my hon. Friend the Member for Amber Valley (Nigel Mills), my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and I have been asking the Government to do these things for the last four years and more? Will he now look at the other measures that we have advocated to clamp down on dirty money and money laundering? He is absolutely right about Companies House, but will he now ensure that it has real monkey glands for investigating, and is not just a library? That will require money and officials with great expertise, but sunlight, as ever, is the best disinfectant.

[Kwasi Kwarteng]

I welcome my right hon. Friend’s remarks. I pay tribute to him, and to Members on both sides of the House, for the excellent work that they have done in ensuring that the measures have been introduced in a timely way. I look forward to working with him to ensure that we have a good regime. Let me also point out that we have £63 million in the spending review to deal precisely with the funding of Companies House.

[Dame Margaret Hodge (Barking) (Lab)]

The Secretary of State is sensing some frustration, and I will tell him why. The public register of beneficial ownership of properties that are foreign-owned was promised when David Cameron was Prime Minister in 2015. That had nothing to do with Brexit; it could have been introduced in that year. Then we come to Companies House. I am dismayed that all we are getting is a White Paper. We had an extensive consultation, completed a year ago, which built plenty of consensus around the reforms that were necessary. We do not need a White Paper; we need legislation, because that is what will stop this situation.

I am not sure that the Minister understands the issue of the enablers. There is hardly any ability for any of our enforcement agencies to get at those who not only collude with the process of dirty money coming into Britain, but facilitate it—lawyers, banks, accountants and others. If we do not stop them doing that, dirty money will continue to come in.

My final point to the Secretary of State is about the unexplained wealth orders. We greeted them with great expectations, but they have let us down. I would urge him to put a cost cap on litigation so that when we fail in an unexplained wealth order, the various recipients of dirty money do not get away with £2 million-worth in legal costs, as they did in one case.

[Kwasi Kwarteng]

I am sure that my answer will not satisfy the right hon. Lady, but I am pleased that we are introducing this legislation, and I look forward to working with her and colleagues on both sides of the House in ensuring that it is right. As for the cap on unexplained wealth orders, I think it will be the subject of plenty of discussion imminently, when we introduce the legislation.

[Several hon. Members rose—]

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I welcome the statement. While I fully support efforts to have the means to investigate criminality and sanctions-busting schemes at Companies House—and I hope that that will be properly funded, because it will be expensive to carry out—I also hope that the process of registration will not be burdened to the extent that we lose competitive advantage and throw the baby out with the bathwater.

[Kwasi Kwarteng]

I think my hon. Friend is right. There is always a balance to be struck in legislation of this sort, but I think that, as he takes the temperature of the House, there is a real feeling that we need to expedite it. I feel confident that it strikes the right balance between fairness and transparency, and will not be overburdening people with bureaucracy.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

This is at best a half measure. Companies House has 11,000 shell companies where there is no person of significant control registered, yet there have been only 112 prosecutions, which is just 1%. We have 12 different agencies in charge of economic crime, there is no Minister with clear responsibility, and the National Crime Agency says that its budget needs to be doubled. Irony of ironies, journalist Tom Burgis is being taken to court this Wednesday for daring to reveal the truth about the corrupt company ENRC; our courts are being used as arenas to shut down journalists. We need a far bigger, bolder plan from the Minister.

[Kwasi Kwarteng]

What the right hon. Member says about Companies House reform is not accurate at all. This set of measures will be the biggest reform to Companies House in 200 years. It is something significant. It has not been done in 200 years and it is something which we are very proud to have expedited—[Laughter.] I would have thought there would be a bit more recognition of the fact that this is vitally important legislation that is going to be brought in in a timely way.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

The Secretary of State is right to draw a distinction between that which needs to be done immediately to deal with the appalling behaviour of Putin and his cronies and the long-term reforms that are really important to the business structures of the United Kingdom, for our competitiveness and for company law as a whole, which should rightly not be rushed. In relation to the more urgent and pressing matters, will he undertake to work closely not just with the City but with the large amount of expertise we have in financial and legal services? For example, the Financial Markets Law Committee and others have a great deal of expertise, particularly around such issues as crypto-currency, and we need to harness that. The City and the financial sector want good regulation, because it is in Britain’s interests to have a clean and effective set-up and we should not be misled by those who suggest otherwise.

[Kwasi Kwarteng]

My hon. Friend is right. This idea that the City of London does not want regulation is a travesty and a disgrace. It is a slur on the reputation of our financial services. He is also right to say that there is a distinction to be drawn between what needs to be done immediately and can be done expeditiously, and other matters that need a great deal of thought and consultation, on which I am happy to engage with him and other colleagues.

[Andy McDonald (Middlesbrough) (Lab)]

The introduction of this corporate transparency work is welcome but way overdue; it is a shame that it took the invasion of Ukraine to bring it forward. While he is at it, will the Minister please encourage the chair of his party to conduct a review of the money that has come from oligarchs to Tory MPs and demand to know what was expected of them? Are they going to give that money back?

[Kwasi Kwarteng]

I would like to make a point about donations to political parties. We all know that we do not have state-funded parties. Any citizen can fund and give donations to political parties. I also want to say gently that not every single person of Russian origin is an oligarch. People come here—many of them have British citizenship—and they give freely of their funds.

[Mark Pawsey (Rugby) (Con)]

It is good that the measures will be with us tomorrow, but my constituents who have gone through the process of buying a property will find it hard to appreciate how, over many years, we have allowed the acquisition of UK property to hide wealth that has often been illegally obtained. Can my right hon. Friend reassure them that these new measures will bring this kind of activity swiftly to an end?

[Kwasi Kwarteng]

Absolutely. That is the point of this raft of measures. We want to shine the light of transparency on these transactions and to minimise the likelihood of people using our property and our goodwill to hide their ill-gotten gains.

[Layla Moran (Oxford West and Abingdon) (LD)]

As the MP whose name is on the Registration of Overseas Entities Bill, which is already tabled, may I express my delight that the Government are taking this up and more? Could I draw the Secretary of State’s eye to the amendment to the National Insurance Contributions Bill that was passed in the other place on the ownership of freeports? There is real concern that we may be dealing with one part but leaving a door open somewhere else. Will he assure us either that he will accept the amendment or that the matter will be covered in the Bill?

[Kwasi Kwarteng]

I am delighted to accept the hon. Lady’s warm words on the Bill. I am delighted that she is supporting it enthusiastically, and I am happy to engage with her on the passage of the Bill and to examine the amendment she has referred to.

[Robert Jenrick (Newark) (Con)]

I warmly welcome the creation of a register of overseas entities. Could my right hon. Friend give us a sense of how long it will take for an effective register to be created? Post legislation, it will presumably take months to establish the register, bearing in mind there are 95,000 foreign-owned properties in England according to the Land Registry and the Government propose to give those owners 18 months to register their ownership.

Secondly, further to the point made by my hon. Friend the Member for Huntingdon (Mr Djanogly), although I strongly support reform of Companies House, today a small businessperson in this country can pay £12 to register their company in less than 24 hours. Whatever we do must be as burden-free as possible to help small businesspeople and entrepreneurs to thrive.

[Kwasi Kwarteng]

My right hon. Friend is absolutely right. He says it may take a few months to get the register up and running, and I am trying to make the process as quick and effective as possible. He also mentions that we must not have a disproportionate effect, that we must not overburden small business people and people who want to incorporate and set up businesses, and we will not be doing that. I would be happy to work with him, as he did brilliant work in government, to make sure the Government get this right.

[Sammy Wilson (East Antrim) (DUP)]

It is a pity that it has taken a war in Ukraine to bring forward these measures. Irrespective of that, I have some concerns. First, the statement made no mention of what resources will be available to check whatever information is registered. Secondly, there is no indication of what will be done against those who facilitate money laundering in the first place—the whole professional industry engaged in that. Lastly, change is needed in the legal system to stop long, costly and complicated legal battles in court.

What discussions has the Secretary of State had on this with the Northern Ireland Executive? We do not have Russian oligarchs, but we have plenty of home-grown people who launder money from criminal activities using their past terrorist connections. That needs to be dealt with, too.

[Kwasi Kwarteng]

As I noted, observed and made very clear, we have a spending review settlement of £63 million for Companies House, which is a considerable uplift on previous budgets. There is a commitment to make sure we have the resources to police this new regime.

We speak to colleagues in the devolved Administrations all the time, and I am even happy to discuss these issues with the right hon. Gentleman, should he be so minded.

[Richard Fuller (North East Bedfordshire) (Con)]

I welcome my right hon. Friend’s statement, because clamping down on illicit international flows of capital is a good thing. Another good thing is open, legitimate global capital markets, where the City of London excels, supporting entrepreneurs in our country. Can my right hon. Friend assure me that, in bringing forward his legislation and the White Paper, he will pay due regard to the positive aspects of international capital, as well as clamping down on the illegal ones?

[Kwasi Kwarteng]

Absolutely. I am not embarrassed at all in agreeing with my hon. Friend that London is a hub of international capital, which is one of the great strengths and glories of our economy. I will do all I can, as I am sure he will appreciate, to make sure we protect that precious heritage.

[Chris Bryant (Rhondda) (Lab)]

I am sure it was a slip, but the Secretary of State said “the Ukraine.” Four Ministers have said “the Ukraine” in the past few days—

[Kwasi Kwarteng]

It was a slip.

[Chris Bryant]

I fully accept that it was a slip. We will move on. “Ukraine” is the country. It is an important point, because Ukrainians hate it being called “the Ukraine.”

The point I was going to make is that we would have been in a 10-times better place in dealing with Putin’s invasion of Ukraine if all this had already been in place, which is why some of us had been calling for it for many, many years. The Secretary of State says he has expedited something. Well, I do not know what it would have looked like if he had slowed it down because, honestly, apart from anything else, we have world-beating lawyers, accountants and others who facilitate the hiding of all these assets. Do we not need to put on them the onus of having to report their dealings with Putin’s cronies, and should it not be a criminal offence if they do not do so?

[Kwasi Kwarteng]

I fully accept the hon. Gentleman’s point and I wish to put on record the fact that I corrected myself immediately—having said “the Ukraine”, I changed it to “Ukraine”. He makes a perfectly legitimate point about that little bit of grammar and the definite article, which is very important. On the speed with which we have brought forward this legislation, I wish to pay tribute to him and to Conservative colleagues, some of whom are no longer in their place, as they have led huge amounts of work and cross-party engagement. I am delighted that now we can expedite bringing this Bill forward.

[Alicia Kearns (Rutland and Melton) (Con)]

I very much welcome these efforts to rid ill-gotten roubles from our system, but in future packages will my right hon. Friend extend transparency efforts into the private education sector and education corporations? Our sanctions regime should stop sanctioned oligarchs from being able to pay future school fees, because they are sanctioned, but many of them pay school fees through shell companies, cash and cut-outs. So will he make sure that our amazing educational establishments do not continue to receive money from ill-gotten gains?

[Kwasi Kwarteng]

This issue has been raised already, particularly by my right hon. Friend the Education Secretary, who is absolutely focused on making sure that our education system is not abused in the way that our legislation on property and companies is.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

The shadow Chief Secretary to the Treasury and I, in my role as shadow Economic Secretary to the Treasury, requested a meeting with Companies House to discuss its role in tackling illicit finance. It initially agreed to the meeting, only to cancel it at the last minute. In the email it wrote to us, it said that it had spoken to its sponsor Department, the Department for Business, Energy and Industrial Strategy, about the meeting and that BEIS was of the view that the issues that we wanted to discuss are best raised with the responsible Minister. Is it the Government’s policy to block Companies House from meeting shadow Treasury Ministers? Or does the Secretary of State agree that it is in the national interest for all of us to work together, across the political spectrum, to tackle dirty money and illicit finance?

[Kwasi Kwarteng]

I have been very clear that it is the responsibility of every Member of this House to engage with these issues. I have not been informed about that interdiction by my Department and I would love to hear more about it. However, as I have said, every Member of this House has an obligation to engage directly with those tackling these kinds of abuses.

[Anthony Browne (South Cambridgeshire) (Con)]

This House is united in agreeing that we need to get rid of dirty money from the so-called London laundromat, and I very much welcome these proposals on reforming Companies House, which is a big step in that direction. As a recent Treasury Committee report showed, the economic crime landscape is littered with agencies that are too weak to clamp down on money laundering and fraud. Will the Secretary of State confirm that Companies House will have not just the right resources—other Members have mentioned that—but sufficient powers to really clamp down on the oligarchs, who will no doubt be determined to try to block this?

[Kwasi Kwarteng]

My hon. Friend will appreciate that the legislation proposed will set up a range of criminal offences. As is always the case with criminal offences, we will absolutely make sure that the people who are enforcing those penalties are properly resourced. I am very keen to work with him to make sure that we get this right.

[Janet Daby (Lewisham East) (Lab)]

The Secretary of State has taken a similar question to this one, but it is very specific. Will he ask his party chair to conduct a review into the political donations made to the Conservative party and the links that these donors may have to the Kremlin?

[Kwasi Kwarteng]

I have answered this question before and I say, once again, that not everybody of Russian heritage giving money to any political party is an oligarch. I appreciate that the hon. Lady is not saying this explicitly, but the implication is that they are, and I reject the premise of the question.

[John Penrose (Weston-super-Mare) (Con)]

I warmly welcome these measures, particular the register of overseas entities. As has been widely said, some of us have been waiting for that for a very long time and it is hugely welcome, not just in here, but right the way through civil society outside this place. We cannot sanction an oligarch unless we know where he or she has stashed their money, and this register will make a big difference. May I push the Secretary of State a little further on his response to the question put by my right hon. Friend the Member for Newark (Robert Jenrick) about how long it will take once this new legislation is in place to clean up all the rubbish that is currently on the register, in order to make sure that we have something that is both clean and useful, and we do not have a case of “garbage in, garbage out.”?

[Kwasi Kwarteng]

My hon. Friend makes a very good case. There are two aspects to this. Clearly, there is the immediate signalling aspect, which will affect people’s decisions in the here and now. There is also the task of getting the register up and running, which may take a few months. I am open to working with him to make sure that we do that as quickly as possible.

[Alyn Smith (Stirling) (SNP)]

The SNP and the Scottish Government have been pressing for these measures for years. We are glad to see progress, but this is really overdue and it does not go far enough, so if the Secretary of State is holding out the bag for praise, it really is a bit out of bounds. I have two specific questions. To what extent do the Government intend to co-ordinate not just with the devolved Administrations and the home nations, but with the overseas territories, in taking this ethos forward? I note the commitment to properly funding Companies House, but can he undertake to keep the House informed of the discussions about budgets and funding the enforcement mechanisms of this properly, because if we are going to do this, it needs to be done right.

[Kwasi Kwarteng]

Dare I say it, but I have been a Member of this House for long enough not to bring a bag for praise—or whatever the phrase the hon. Gentleman used. I was not expecting that. What I do want to engage with him on is the fact that we are speaking to counterparts in the devolved Administrations because there must be a greater degree of co-ordination. We are also working with the overseas territories. We are expecting them to have much greater transparency, and we will be making that representation to them.

[Mr Peter Bone (Wellingborough) (Con)]

I refer the House to my entry in the Register of Members’ Financial Interests—I am a fellow of the Institute of Chartered Accountants in England and Wales. Further to what many Members have said, there is no point in our having a register if what is on it is untrue. Could we have a requirement for an auditor to verify the truth of a certificate, and if it turns out that it is untrue, that auditor is subject to criminal prosecution?

[Kwasi Kwarteng]

I am conscious that my hon. Friend would not want me to burden people who are legitimately setting up companies. He will also appreciate that the legislation will create new criminal offences, and I am confident that this will significantly tighten the regime that we have today.

[Kerry McCarthy (Bristol East) (Lab)]

The Minister said in his statement that the new register will require anonymous foreign owners to reveal their real identity, to ensure that criminals cannot hold property behind secretive chains of shell companies. Will it also deal with the issue of beneficial ownership sometimes just being put in the name of another individual so that, on the face of it, it looks like they are the person who is entitled to beneficial ownership, but really they are not?

[Kwasi Kwarteng]

The hon. Lady is absolutely right to say that we want to have greater transparency. The example in the statement was merely that; it was an example of how people can hide ownership of assets. We want greater transparency generally.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I very much welcome my right hon. Friend’s statement, particularly the bit about overseas entities. There are a couple of things that he might consider for his White Paper. Some 43% of all financial crime is identified by whistleblowers, so proper whistleblowing protection is absolutely critical to identifying this stuff. The other thing is failure to prevent economic crime. If we want our banks and wealth managers to clamp down on this stuff and to do the right thing, they need to face criminal charges if they do not.

[Kwasi Kwarteng]

I pay tribute to my hon. Friend, who has been speaking about these affairs with a great deal of knowledge and passion for many years, and I have engaged with him on these subjects. He will also appreciate that what we are doing in bringing forward this legislation does not capture the entire economic crime package. There are other measures that we will be looking to bring in very soon.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

There have been desperate calls from Ukraine that Russian and Belarusian crypto-assets be frozen and that blocks be put on users from Russia who may seek to mitigate the impact of sanctions through this means. Will the Secretary of State meet the all-party parliamentary group for crypto and digital assets, which I chair, because we want to work responsibly with the Government to make progress on this important matter?

[Kwasi Kwarteng]

The hon. Lady raises a key issue. It is of great relevance to me and my Department, and also of relevance to the Department for Digital, Culture, Media and Sport. I would like to say very briefly that the UK has led on this. The fact that Russian financial institutions are being denied access to SWIFT has been very much a success of our diplomacy, but I am very happy to talk to her about further measures.

[Duncan Baker (North Norfolk) (Con)]

I am pleased to have so much in common with my hon. Friend the Member for Wellingborough (Mr Bone), as I too am a former chartered accountant. The reforms to Companies House could not come soon enough—just getting a fictitious audit report removed proves incredibly difficult these days, so this legislation is much needed. However, if we are to empower Companies House to root out the corrupt filings, it must have the resource because, as we have heard, it is by no means a small issue. Can my right hon. Friend assure me that we will have not just the powers, but the resource, the tools and the capability to carry out those actions?

[Kwasi Kwarteng]

My hon. Friend will be pleased to learn that, as a consequence of the comprehensive spending review, my right hon. Friend the Chancellor of the Exchequer has increased the amount in anticipation of the reforms that we are bringing in. I am happy to work with my hon. Friend in future to ensure that we get this absolutely right.

[James Murray (Ealing North) (Lab/Co-op)]

As hon. Members across the House have made clear, the register to make public the overseas owners of property here in the UK is years overdue; it has been a crucial missing part of ridding our system of dirty money. Now that the Government have finally accepted it as a priority, there can be no further excuse for delay. Every day we waste now gives those backing and benefiting from Putin longer to hide their dirty money elsewhere. Will the Secretary of State follow our suggestion and commit to requiring all those owners of foreign property in the UK who need to disclose their details on the new register to do so by 31 March this year at the latest?

[Kwasi Kwarteng]

As I have said to the House, we are introducing legislation and, in the customary way, there will be plenty of scope for right hon. and hon. Members to move amendments and to tweak the legislation in any way they see fit.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

The Secretary of State has been challenged several times this afternoon about the need for effective enforcement of any new legislation. What additional resources and support will be given to our law enforcement agencies to ensure that the legislation can be properly enforced?

[Kwasi Kwarteng]

My right hon. Friend the Minister for Security will address some of those issues in his Department. There is legislation currently under consideration that will give more powers to enforcement agencies. As far as my Department is concerned, we have campaigned successfully for more resources for Companies House so that it can become a much more effective watchdog than it currently is.

[Stephen Flynn (Aberdeen South) (SNP)]

There is something particularly brazen about a Secretary of State whose Government have overseen this very city being referred to as a laundromat saying in his statement that his Government are at the forefront of this agenda. Nothing could be further from the truth. I have a simple question for him on this topic: what financial penalties await those who seek to frustrate the register?

[Kwasi Kwarteng]

As I have said a couple of times, we did lead the way on SWIFT. I think that has been very effective in terms of the response of the German Government and my understanding is that they have shifted. I make no apology for defending London as a hub of capital, but we need to root out kleptocrats and dirty money.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It is outrageous that the Government are only just introducing measures to deal with the £100 billion a year of illicit finance that this country, and especially the City, is awash with. Can the Secretary of State say how many of the 30 or so outstanding actions from the Government’s own 2019 to 2022 economic crime plan will be achieved by the actions he has identified today?

[Kwasi Kwarteng]

We are making very good progress on all those cases, but I bring to the hon. Lady’s attention the fact that the reform of Companies House that we are mooting is the first time in 200 years that it has been reformed in this way. I also highlight that we have led the way in the debate on SWIFT and on transparency in the international arena. Ministers from around the world are engaging with us directly on the effective measures we are bringing about.

[Wera Hobhouse (Bath) (LD)]

Can the Secretary of State confirm that any new legislation will make the beneficial ownership of all assets in the UK openly available for view and scrutiny, in a similar way to the Land Registry?

[Kwasi Kwarteng]

As I have said, we are bringing in a Bill and there will be plenty of scope to examine it and make amendments. I look forward to the hon. Lady’s engagement on that.

[Andy Slaughter (Hammersmith) (Lab)]

What the Secretary of State is proposing on a property register sounds very weak and very slow. There are billions in dirty money circulating on the London property market behind shell companies. By the time he has identified corrupt owners, the properties will probably have already been transferred. He also says nothing about seizing assets and imposing criminal penalties. Why is he not freezing assets and transfers now, pending disclosure?

[Kwasi Kwarteng]

The hon. Gentleman is experienced enough a parliamentarian to know that the idea of freezing assets is outside the scope of this legislation—indeed, it is outside the scope of my Department. The Government are looking at a range of other measures that may well reflect the concerns he has described.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the Business Secretary for coming to the House, making his statement and answering questions from hon. Members for about three quarters of an hour.