Economic Crime

Debate between Margaret Hodge and Lee Rowley

Thursday 2nd December 2021 Commons Chamber

[Lee Rowley]

I am grateful to my hon. Friend for highlighting that important point. Whistleblowing is a vital part of an ecosystem that works and has appropriate checks and balances. He correctly highlights the need to ensure that our frameworks are appropriate for that, and I know that Ministers responsible for that area of policy are listening to this debate and will take his points on board.

Let me take a moment or two to talk about context. Context is important because, even in a good-natured and constructive debate such as this, it is important to acknowledge some of the work that has been done, while also recognising that Members are keen for us to move further and quicker. In 2015, the Government legislated to ban bearer shares and create a public register of beneficial owners of UK companies, and that register has been a template for countries across the world. Indeed, a number of years on, we still get requests from other parts of the world about it. Since 2016 the Government have made significant changes to the way they tackle money laundering, particularly through new powers in the Criminal Finances Act 2017, which include unexplained wealth orders, new seizure and forfeiture powers for bank accounts, and new protections for the sharing of information.

[Dame Margaret Hodge]

We welcomed moves such as the introduction of unexplained wealth orders, but that is the point we are making: they came in with a great bang, we had one successful one, there was then a failure, and since then there has been almost silence and the power has not been used. There is also a fear of failure, which is related to the fear of having to carry the costs of that failure. The Government could legislate on that, as the Americans have done, so that people cannot claim those massive £2 million or £3 million costs if they succeed in the courts. There is also a lack of resources within the enforcement agencies properly to prepare for such cases. After the case that we lost, investigative journalists showed clearly that falsehoods were told in the courts that led to the failure of that provision. Unexplained wealth orders are a great idea, but they are not being used.

[Lee Rowley]

I am grateful to the right hon. Lady, who is an expert in this area. I hope we all agree that having such legislation in place is a step forward, and that the opportunity and ability to use it is a positive thing. As she has outlined, such measures have been used in some instances, but there have also been challenges. I hope that that use will continue to be made in appropriate areas, and I will certainly pass back her comments to the Ministers who are reviewing this issue.

In 2018, the UK’s anti-money laundering regime was reviewed by the Financial Action Task Force, and the UK received the best rating of any country assessed in that round of evaluations. None the less, there is an acceptance that more needs to be done, and as a number of Members have said, a number of months ago we published the economic crime plan. Progress was updated on top of that, with 52 actions to tackle economic crime, and the Government are on track to deliver 49 of those.



There have been achievements as well, including the commencement of reforms to the suspicious activity reporting regime, with £172 million frozen or removed from potential criminals in a recent reporting year, and the creation of the National Economic Crime Centre, which a number of Members referenced. Its work in the fusion cell in April 2020 highlighted potential criminality, potential challenges and potential investment fraudsters. We are also legislating in the current Finance Bill for the economic crime levy. I hope all hon. Members have seen the action to secure a unified position in the G7 on international anti-corruption efforts, including an agreement to implement and strengthen beneficial ownership registers.