Countering Russian Aggression and Tackling Illicit Finance

Margaret Hodge Excerpts

Wednesday 23rd February 2022 Commons Chamber

[Mr Lammy]

My hon. Friend is so right. These properties are pricing out young people and challenging working people. Often, the lights are off and no one knows who owns them. If that is not an urgent issue, I do not know what is. I was staggered when the Prime Minister said that it did not merit action until the next Session.

[Dame Margaret Hodge (Barking) (Lab)]

It is not just about urgent action. Does my right hon. Friend agree that it is outrageous that legislation on publishing the beneficial ownership of UK properties owned by entities abroad was promised by the Government in 2016, there was consultation on a draft Bill—I think a Bill is sitting in Government, ready to go—and it was promised again in the 2019 manifesto and at G7 meetings but has yet to appear? Is that not an utter scandal?

[Mr Lammy]

My right hon. Friend is right. In six years, there has been promise after promise—we have had more promises from the Dispatch Box today—and we are still waiting. It is not worthy of our great democracy. The public deserve better.

--- Later in debate ---

[Mr Lammy]

My hon. Friend is absolutely right. We note, do we not, individuals who are the target of sanctions in Europe and who have been the target of sanctions in the United States since 2018? And we wait and we wait and we wait. And we wonder why this Government are so slow to act.

Today, we call on the whole House to come together to end the tidal flow of dirty Russian money flooding into our country by: ending our openness to fraud and money laundering with an economic crime Bill that should be brought forward this month; fixing our inadequate regulation of political donations by reversing the Conservative’s Elections Bill that is setting us back; strengthening our lax mechanisms of corporate governance; enabling our national agencies to clamp down on economic crime; and blocking the threat of foreign interference in our politics. We need transparency with an overseas entities Bill and the reform of Companies House to shut down the shell companies that obscure the origins of wealth and hide corruption, and reveal who owns land from abroad. Finally, this House must come together and recognise the urgency of implementing the Russia report, which was published in July 2020—nearly two years ago.

[Dame Margaret Hodge]

I am grateful to my right hon. Friend for giving way and I welcome the commitments he has made on the sort of action a Labour Government would immediately put in place. There is one area he has not covered, which I think is of great importance: the role played by the financial services sector and the enablers here in London in supporting money laundering and illicit finance. Whether lawyers, accountants, the banks or other advisers, they are often complicit in this activity. Does he agree that the economic crime Bill also needs clauses that tackle the role of enablers in enabling illicit finance?

[Mr Lammy]

My right hon. Friend is exactly right. Over two thirds of our economy is the service sector. The consultants, lawyers and accountants are absolutely a part of the process of dirty money and the laundromat. We must act to deal with them. [Interruption.] Of course not all of them, but there are facilitators and we expect to see the appropriate clauses in the economic crime Bill.

Defeating Putinism starts with leadership that represents our values. If we are to be taken seriously on the world stage when we talk about democracy, we cannot be watering it down at home with unfair reforms such as voter ID and loose rules about overseas donations. If we are to be credible champions of international law, our leaders must practise the laws they set at home. The best way to defend the rule of law is to follow it.

--- Later in debate ---

[Amanda Milling]

I am grateful to the hon. Gentleman for his intervention. I will talk about what we want to crack down on, but, as he will recognise, such things need to be legally robust.

To go back to the examples that I was giving before that intervention, the UK is a world leader in corporate transparency. It is the first country in the G20 to implement a central public register of company beneficial owners, showing who ultimately owns and controls UK companies. However, we are determined to go further to crack down on dirty money and financial exploitation, and we are enhancing the already strong regulation, supervision and legislative powers that are at our disposal.

[Dame Margaret Hodge]

More in sorrow than in anger, I raise the issue of Russian money and its role within the Conservative party. Fedotov, Temerko, Chernukhin, Mikheev, Knaster and New Century Media are all Russians or Russian companies who have close links to the Conservative party and have given money to Conservative MPs, Conservative constituencies or the Conservative central office. The figure I have is greater than the one that Labour Front Benchers have been using; I think it has been at least £3.6 million over the past decade.

I urge the Minister—I really do say this more in sorrow than in anger—to go back to her colleagues, sort this out and get that money out. I would not give it back to Russia; I would give it to organisations such as Transparency International, which does a fantastic job helping us to fight corruption. Until the Conservative party does so, it will have no credibility at all in the argument on fighting corruption.

[Amanda Milling]

Let me be clear. The Conservative party does not accept foreign donations—after all, they are illegal. All donations to the party are received in good faith, after appropriate due diligence, from permissible sources. Donations are properly and transparently declared to the Electoral Commission and published by it, and they comply fully with the law.