Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of placing Russia on a domestic money laundering watchlist.
Answered by Tulip Siddiq - Economic Secretary (HM Treasury)
The UK’s list of high-risk third countries aligns with those countries identified by the Financial Action Task Force (FATF) as having strategic deficiencies in their anti-money laundering and counter terrorist financing regimes, which ensures that the identification of high-risk third countries is underpinned by the FATF’s consistent, technical methodology, and robust assessment processes.
Russia is not included in either the FATF’s or UK’s list of high-risk third countries. However, regulated businesses should in practice already be taking enhanced due diligence measures in relation to Russia because the UK Money Laundering Regulations require enhanced scrutiny in situations that present a high risk of money laundering or terrorist financing, and the UK’s National Risk Assessment of Money Laundering and Terrorist Financing 2020 specifically highlights the significant volume of illicit finance emanating from Russia.
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if her Department will provide guidance for businesses on the money laundering risks of transactions (a) directly and (b) indirectly linked to Russia.
Answered by Tulip Siddiq - Economic Secretary (HM Treasury)
The Treasury and the Home Office hold joint responsibility for publishing a periodic national risk assessment which sets out the money laundering and terrorist financing risks in the UK. The national risk assessment provides guidance to regulated firms by informing them of risks and the jurisdictions that these risks may come from.
The UK National Risk Assessment of Money Laundering and Terrorist Financing 2020 provided an outline of those jurisdictions assessed to be particularly relevant to the cross-border money laundering faced by the UK. This included an assessment of the money laundering risks linked to Russia.
The next UK National Risk Assessment is now underway, underpinned by a rigorous process in collaboration with law enforcement and other key stakeholders.
The UK has also issued red alerts to the financial sector and other regulated sectors on specific areas of high risk relating to Russia to inform and direct their scrutiny.
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department is taking steps to strengthen anti-money laundering regulations.
Answered by Tulip Siddiq - Economic Secretary (HM Treasury)
We are committed to ensuring the UK’s anti-money laundering and counter terrorist financing regime is both effective and proportionate. To that end, a consultation on improving the effectiveness of the Money Laundering Regulations closed in June 2024 and collected feedback on a range of potential changes to the Regulations. HM Treasury is currently analysing this feedback and the Government will publish a response in due course.
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to oral contribution of 3 December 2024 by the Chief Secretary to the Treasury, if she will make an overall estimate of the impact of the UK’s exit from the EU.
Answered by Darren Jones - Chief Secretary to the Treasury
No. The Government is focussed on resetting the relationship with the EU, which will support economic growth, the central mission of the Government.
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer,what recent assessment her Department has made of the impact of leaving the EU on public finances.
Answered by Darren Jones - Chief Secretary to the Treasury
I refer the Hon. member to my answer to his question on this issue during the Topical Questions section of HMT orals today.
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to Section 2.28 of the OBR’s Economic and Fiscal Outlook, what assessment she has made of the potential impact of a 15% decrease in the UK economy on public finances.
Answered by Darren Jones - Chief Secretary to the Treasury
The growth mission is the central mission of the government. Through the growth mission, the government is restoring economic stability, increasing investment, and reforming the economy to drive up prosperity and living standards across the UK.
The government sets its fiscal policy on the basis of the official OBR forecast, which is a central case. The OBR confirms the government is on track to meet its fiscal rules.
To clarify, section 2.28 of the OBR's latest Economic and Fiscal Outlook refers to a pre-existing judgement that has been captured in their forecasts for many years.
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of leaving the European (a) Customs Union and (b) Single Market on growth.
Answered by Tulip Siddiq - Economic Secretary (HM Treasury)
The UK economy has experienced significant disruption in recent years due to a range of factors including Covid-19, supply chain disruption and the invasion of Ukraine by Russia. It remains challenging to separate out the effects of leaving the Customs Union and Single Market from wider global trends affecting the UK economy.
It is for the Office for Budget Responsibility (OBR) to provide independent and authoritative analysis and forecasting for the UK public finances. The OBR has estimated that productivity will be 4% lower in the long run than it would have been had the UK not withdrawn from the EU, and that imports and exports will eventually both be 15 per cent lower than had we stayed in the EU. The OBR estimated in March 2024 that 40% of this impact has already materialised.
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the impact of the UK's exit from the EU on public finances.
Answered by Tulip Siddiq - Economic Secretary (HM Treasury)
The Government has no overall estimate of the impact of the UK’s exit from the EU on public finances.
As part of the Withdrawal Agreement with the EU, the UK agreed the Financial Settlement, which is a methodology for settling pre-existing UK financial obligations to the EU. The European Union Finances Statement 2023 (available in the library of the House and on Gov.uk) sets out HMT Treasury’s estimates of the size of these obligations. As at December 2023, the UK is estimated to have paid £23.8bn (€27.4bn) in net liabilities to date as part of the EU financial settlement. Estimated UK outstanding net liabilities as of December 2023 were £6.4bn (€7.4bn).
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to (a) tackle Money Laundering and (b) promote ethical financing in the Crown Dependencies and the UK’s Overseas Territories.
Answered by John Glen
The UK’s Crown Dependencies and Overseas Territories are self-governing jurisdictions with their own democratically-elected governments responsible for most areas of their domestic policy, including fiscal matters. They co-operate with the UK in matters relating to taxation, fighting financial crime and countering terrorist finance.
The Crown Dependencies and Overseas Territories have committed to meeting the global standards for anti-money laundering and counter terrorist financing set by the Financial Action Task Force (FATF). They are evaluated by the FATF in their own rights as self-governing jurisdictions.
The Crown Dependencies and Overseas Territories with financial centres share beneficial ownership information with the UK’s law enforcement agencies and are committed to global tax transparency standards such as the OECD Common Reporting Standard, an agreement to automatically exchange financial account information with other jurisdictions.
Asked by: Stephen Gethins (Scottish National Party - Arbroath and Broughty Ferry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential risk of the misuse of financial investment treaties to launder money in the Crown Dependencies and the UK’s Overseas Territories.
Answered by John Glen
The government assesses a range of money laundering and terrorist financing risks to the UK through the joint Treasury and Home Office National Risk Assessment (NRA). This includes considering risks in other jurisdictions that may facilitate money laundering or terrorist financing activity in the UK. The last NRA was published in October 2017 and can be found here: https://www.gov.uk/government/publications/national-risk-assessment-of-money-laundering-and-terrorist-financing-2017. The next NRA will be published by July 2020.