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...Request free trial
The Secretary of State for Business, Energy and Industrial
Strategy ()
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.
5.14pm
(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 (), 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.
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.
(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?
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.
(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
()—for giving me and my hon.
Friend the Member for Aberdeen South () 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.
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 (), 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.
(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 ( ), my hon. Friend the Member
for Amber Valley (), my hon. Friend the Member for
Thirsk and Malton () 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.
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.
(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 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.
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 Deputy Speaker ( )
Order. I was very generous with , for obvious reasons, but I
shall be less generous now in respect of the length of questions.
You are all warned.
(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.
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.
(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.
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.
(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.
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.
(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?
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.
(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?
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.
(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?
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.
(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.
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.
(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.
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.
(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?
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.
(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—
It was a slip.
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?
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.
(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?
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.
(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?
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.
(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?
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.
(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?
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.
(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 () 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.”?
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.
(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.
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.
(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?
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.
(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?
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.
(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.
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.
(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?
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.
(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?
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.
(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?
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.
(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?
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.
(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?
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.
(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?
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.
(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?
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.
(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?
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 ( )
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.
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