Simon Fell is Co-Chair of the APPG on Fair Business Banking and MP for Barrow and Furness. Mary Robinson is Chair of the APPG for Whistleblowing and MP for Cheadle.
The new Economic Crime Bill is currently making its way through the House of Lords. It builds on well-meaning but incomplete legislation from last year. It includes new powers for Companies House, our corporate register, to crack down on dubious fake companies. However, there is broad agreement from industry, civil society, and parliamentarians of all stripes that, unamended, the Bill is a wasted opportunity to really take the bull by the horns.
Luckily, the Government is in a happy position on this Bill. So far, there has been very little in the way of tribal politics involved. Amendments are coming in from its own benches and criticism is almost universally constructive. Ministers should feel unconstrained by the rigmarole of petty party politics. Quite rightly, our economic security and prosperity shouldn’t be political football.
Take fraud, for example, now the most common crime in the UK. Incidences of fraud exploded during the pandemic – from scam adverts on social media to investment fraud, pension scams, and cryptocurrency cons. The proceeds of all these crimes end up as illicit finance, stashed in the darkest corners of our economy.
And we’re not just talking about small-time scammers convincing pensioners to hand over their savings. Cautious estimates put the cost of fraud to the UK economy at £190 billion per year. That’s in the ballpark of what we spend on the NHS. The private sector is hit hardest, losing around £140 billion.
What needs to be done to tackle these fraudsters and the countless international crooks and kleptocrats who are taking advantage of many of the same loopholes? For decades now, these villains have been exploiting our lax laws, not to stimulate the UK economy or create jobs, but to clean up and stash their dirty money. This not only distorts our property markets but also undermines the international community’s confidence in the UK as a safe, clean, and fair place to do business.
The Government has already supported our calls to introduce game-changing new corporate offences for failing to prevent economic crime. Such measures would not only provide a warning to bad bosses who fail, willfully or otherwise, to take proactive measures against economic crimes like fraud, but would give our enforcement agencies the tools they need to hold guilty corporations to account. The devil will be in the detail, of course, and we look forward to working with the Government to ensure that any new legislation is absolutely watertight.
This aside, we would urge Ministers to take another look at constructive and practical amendments raised by us and countless colleagues of all parties in both Houses of Parliament. We need to go further to toughen up Companies House, which, despite new powers, will still struggle to police the true ownership of UK companies and know with any certainty whether a given company is being used as a vehicle to launder dirty money or commit fraud.
We’d also like to see our enforcement agencies, who currently do not have the resources they require to deal with the tidal wave of economic crime they are facing, properly backed up. We want to raise the cost of company incorporation from a measly £12 to a fee comparable with other major economies. Then we could channel the cash raised, alongside fees raised from prosecutions and fines, straight back into a ringfenced economic crime fighting fund. This would prevent the burden from being placed on an already over-squeezed taxpayer.
These enforcement agencies are often aided by journalists and whistleblowers who lift the lid on otherwise undetectable malfeasance. These people need to be protected, both by bringing an end to the use of ‘lawfare’ by oligarchs and crooks to muzzle legitimate criticism and by setting up an Office for Whistleblowers for those who call time on economic crime, including the theft of public cash. HMRC received close to 14,000 tip-offs regarding abuse of the covid furlough scheme alone.
How can it be right that, despite some 43 per cent of economic crimes being exposed by whistleblowers, the Bill in its current form doesn’t contain a single mention of them? These are people who speak out despite the risk to their livelihoods and reputations – or much worse where organised crime groups are involved.
The raison d’etre of an Office for Whistleblowers would be to protect those who raise the alarm from harm as a result of their disclosures, and to ensure that any information received is acted on, whether by further investigation or escalation to the appropriate agency. The US has enjoyed huge success with its own beefed-up Office of the Whistleblower, and we should take a leaf out of their book.
Finally, all this ties into the effective execution of our sanctions regime against Putin’s pals in the Kremlin, who are financing his vicious war in Ukraine and propping up his regime. While some measures already proposed should make it easier to actually track down all the assets we wish to freeze, more work needs to be done to repurpose those assets for the reconstruction of Ukraine. If the war ended tomorrow, frozen assets could be returned to sanctioned oligarchs. We simply can’t allow this to happen.
You just don’t achieve the scale and political diversity of support that we have for our proposed changes if you are not talking common sense: better protection for individuals and businesses from scammers, an end to our inadvertent role in helping drug traffickers and people smugglers launder the proceeds of their crimes and showing leadership in the fight against Putin’s barbaric regime. We have to take advantage of this historic opportunity to achieve these goals.
Simon Fell is Co-Chair of the APPG on Fair Business Banking and MP for Barrow and Furness. Mary Robinson is Chair of the APPG for Whistleblowing and MP for Cheadle.
The new Economic Crime Bill is currently making its way through the House of Lords. It builds on well-meaning but incomplete legislation from last year. It includes new powers for Companies House, our corporate register, to crack down on dubious fake companies. However, there is broad agreement from industry, civil society, and parliamentarians of all stripes that, unamended, the Bill is a wasted opportunity to really take the bull by the horns.
Luckily, the Government is in a happy position on this Bill. So far, there has been very little in the way of tribal politics involved. Amendments are coming in from its own benches and criticism is almost universally constructive. Ministers should feel unconstrained by the rigmarole of petty party politics. Quite rightly, our economic security and prosperity shouldn’t be political football.
Take fraud, for example, now the most common crime in the UK. Incidences of fraud exploded during the pandemic – from scam adverts on social media to investment fraud, pension scams, and cryptocurrency cons. The proceeds of all these crimes end up as illicit finance, stashed in the darkest corners of our economy.
And we’re not just talking about small-time scammers convincing pensioners to hand over their savings. Cautious estimates put the cost of fraud to the UK economy at £190 billion per year. That’s in the ballpark of what we spend on the NHS. The private sector is hit hardest, losing around £140 billion.
What needs to be done to tackle these fraudsters and the countless international crooks and kleptocrats who are taking advantage of many of the same loopholes? For decades now, these villains have been exploiting our lax laws, not to stimulate the UK economy or create jobs, but to clean up and stash their dirty money. This not only distorts our property markets but also undermines the international community’s confidence in the UK as a safe, clean, and fair place to do business.
The Government has already supported our calls to introduce game-changing new corporate offences for failing to prevent economic crime. Such measures would not only provide a warning to bad bosses who fail, willfully or otherwise, to take proactive measures against economic crimes like fraud, but would give our enforcement agencies the tools they need to hold guilty corporations to account. The devil will be in the detail, of course, and we look forward to working with the Government to ensure that any new legislation is absolutely watertight.
This aside, we would urge Ministers to take another look at constructive and practical amendments raised by us and countless colleagues of all parties in both Houses of Parliament. We need to go further to toughen up Companies House, which, despite new powers, will still struggle to police the true ownership of UK companies and know with any certainty whether a given company is being used as a vehicle to launder dirty money or commit fraud.
We’d also like to see our enforcement agencies, who currently do not have the resources they require to deal with the tidal wave of economic crime they are facing, properly backed up. We want to raise the cost of company incorporation from a measly £12 to a fee comparable with other major economies. Then we could channel the cash raised, alongside fees raised from prosecutions and fines, straight back into a ringfenced economic crime fighting fund. This would prevent the burden from being placed on an already over-squeezed taxpayer.
These enforcement agencies are often aided by journalists and whistleblowers who lift the lid on otherwise undetectable malfeasance. These people need to be protected, both by bringing an end to the use of ‘lawfare’ by oligarchs and crooks to muzzle legitimate criticism and by setting up an Office for Whistleblowers for those who call time on economic crime, including the theft of public cash. HMRC received close to 14,000 tip-offs regarding abuse of the covid furlough scheme alone.
How can it be right that, despite some 43 per cent of economic crimes being exposed by whistleblowers, the Bill in its current form doesn’t contain a single mention of them? These are people who speak out despite the risk to their livelihoods and reputations – or much worse where organised crime groups are involved.
The raison d’etre of an Office for Whistleblowers would be to protect those who raise the alarm from harm as a result of their disclosures, and to ensure that any information received is acted on, whether by further investigation or escalation to the appropriate agency. The US has enjoyed huge success with its own beefed-up Office of the Whistleblower, and we should take a leaf out of their book.
Finally, all this ties into the effective execution of our sanctions regime against Putin’s pals in the Kremlin, who are financing his vicious war in Ukraine and propping up his regime. While some measures already proposed should make it easier to actually track down all the assets we wish to freeze, more work needs to be done to repurpose those assets for the reconstruction of Ukraine. If the war ended tomorrow, frozen assets could be returned to sanctioned oligarchs. We simply can’t allow this to happen.
You just don’t achieve the scale and political diversity of support that we have for our proposed changes if you are not talking common sense: better protection for individuals and businesses from scammers, an end to our inadvertent role in helping drug traffickers and people smugglers launder the proceeds of their crimes and showing leadership in the fight against Putin’s barbaric regime. We have to take advantage of this historic opportunity to achieve these goals.