Writer, MP, Chair of the Cross-Party Parliamentary Group on Anti-Corruption and Responsible Taxation
Britain has long been a “laundromat” of corrupt wealth.The ongoing Ukrainian tragedy highlights how we are allowing dirty money spread. But it shouldn’t have a terrible war.
These deep-rooted issues became clear when I chaired the Parliamentary Public Accounts Committee. Hearings with tech giants have shown that multinational corporations use complex financial structures to avoid taxes.Then a massive leak, from Panama Papers arrive pandora paper, revealing that the same structure is used by criminals to launder money.New estimates show economic crime is taking a huge toll on our economy £290 billion a year.
Russian oligarchs are not the only players.Thieves, drug dealers, human smugglers, arms dealers and other criminals from around the world “clean” illegal cash Also in the UK. Our defenses are overrun.
Decades of lax regulation, woefully weak policing and an unacceptable lack of transparency from Tory and Labour governments have made it happen.UK-UK relations offshore tax haven and an army Promoter – accountants, lawyers, bankers, consultants – helping us become the jurisdiction of choice.
The economic crime bill announced in the Queen’s Speech offers us a unique opportunity to drive out dirty money. Not only is clean finance morally right, it’s also good for business. We will never enjoy continued prosperity behind corrupt wealth.
There are many fixes that are needed: greater transparency about who owns companies, trusts, land and assets; more consistent enforcement by law enforcement agencies; strong protections for the press, judges, whistleblowers and civil society to hold lawbreakers accountable ; Effective supervision of professionals conducting money laundering checks. But real reform cannot end there.
Financial fraud is now polluting our public sphere. Politically there are always unacceptable behaviors, but every now and then, they are punished. More recently, this has moved from the fringes to the mainstream. “Partygate” did cause public outrage, but other serious wrongdoing that threatens our democracy is acceptable. We are losing our moral compass.
Donate dirty money to buy political influence. Soft power purchased through institutions such as football clubs. Citizenship purchased through Golden Visa. Peers earned by donation. Public appointments become political appointments. The government often treats taxpayer money as its own, awarding contracts to close friends.
The checks and balances of our democracy are being systematically weakened. Under the shock of Covid, protections fail and wrongdoing peaks. Take the VIP Fast Track for government awarded contracts. Or the vile lobbying represented by Owen Patterson.and abuse of “revolving doors” such as Lex Greenhill Incident. Politics has become too transactional – this is especially dangerous in the UK, where access and influence are cheap.
We can start blocking this slide, as I a report The Institute for Policy Studies at King’s College London has documented the growth of economic crime in the UK, linking this wrongdoing to a decline in our political standards. The atmosphere in which tax avoidance is considered “cool” and the flow of money is barely regulated has created a culture that allows bad behavior to run rampant. When financial wrongdoing runs rampant, it affects the public sphere; turning a blind eye to the dirty money in our economy translates into the corrupting effects of our democracy.
It doesn’t have to be like this. A comprehensive reform plan could restore integrity and put Britain back on a path of trustworthiness. The choice is ours.