UK ‘laundromat’ for dirty Russian money must end and tighter sanctions enforced against oligarchs in Ukraine war response – Dame Angela Eagle

I AM a member of the Treasury Committee that has been exploring economic crime and money laundering. A couple of weeks ago we published our latest report, and we await the Government’s response.

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It was frustrating to take evidence in the knowledge that in 2019 our predecessor committee had come up with detailed recommendations on dealing with the issues of money laundering, economic crime and fraud that were then becoming a problem, only for us to have seen the levels of all those crimes rise rapidly from 2019 and onwards into the pandemic, costing this country billions of pounds.

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Others have pointed out how we allow London to be described as a laundromat for dirty Russian money, which is what the Intelligence and Security Committee’s Russia report told us was the case when it was published in 2020, after a significant delay that was down to the Prime Minister’s not allowing it to be published.

It is frustrating to be two years further on from that report and to see no effective response to many of the things it said. If the Minister had come to the Dispatch Box and said, as a result of this debate “We’ve seen the Russia report; we’ve been a bit tardy but we’re now going to put its recommendations into effect”, I would have been reassured.

I have asked the Prime Minister whether, in the light of Putin’s actions in Ukraine, he would do that, but he did not answer in the affirmative. We are, then, in a situation in which London can be described as a laundromat for dirty Russian money.

We all welcome our City’s importance as a financial centre, but it is now being compromised by a baffling lack of urgency in dealing with economic crime. Our security is being threatened by international criminal gangs, kleptocrats and terrorist financing, yet the Government seem to have become fixated on describing complex processes rather than acting to stop their outcome, which is rising levels of economic crime and fraud, affecting many of our constituents when they are scammed out of hard-earned money.

We urgently need greater transparency, tougher regulation and tougher enforcement. We need to introduce an open register of beneficial ownership of companies. The Prime Minister repeats that that is what the Government are doing, but there is no sign of it.

David Cameron promised one in 2015 to get him through a G20. The legislation exists in draft but there is still no progress. The Prime Minister reiterated that we were going to have an open register of beneficial ownership of companies to get him through the G7 in 2020, but there is still no sign of it.

Why? We have enough time. The Prime Minister has had offers from the Opposition to facilitate the passage of legislation quickly to get it on the statute book, but the will does not seem to be there.

We need an economic crime Bill. Lord Agnew, who was responsible for fighting fraud in the Treasury, resigned at the Dispatch Box in the House of Lords in frustration because he could not perceive any urgency or determination to tackle fraud in the pandemic support schemes.

He was so aghast that he felt he had to resign to “smash some crockery”, as he put it.

We need reform of the corporate liability law to crack down on money laundering and facilitation of this kind of crime in the banks. We need to deal with the urgent reform of Companies House. People can still create a company at Companies House, say that the owner of it is Vladimir Putin or Mickey Mouse, and nobody will tell them not to do it. They can then use that to defraud various people and launder their cash. This is a joke and there is still no urgency in dealing with it.

We need to deal with the fragmentation of law enforcement if we are to deal with economic crime. No one part of the law seems to have any kind of coherent responsibility for enforcing it.

Why are the Government dragging their feet? Why are they so ineffectual? Why is there no measurement of the outcome? Why do we have this kind of benign neglect as the forces of darkness gather, as they focus on laundering their dirty money through the City of London? Our democracy is at stake and we expect this Government, finally, to get off their backside and do something about it.

Bridlington-born Dame Angela Eagle is a senior Labour MP. She is a member of the Treasury Select Committee.

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