Economic Crime — House of Commons, 2021-12-02
Topic: Mixed Topics
Margaret Eve Hodge (Labour, Centre-left): Again, I am pleased to see such unity across the Chamber today. I completely agree that if it is not made a criminal offence and there is no direct liability on the individuals concerned, it simply becomes a business cost and will not change the behaviour or conduct of those big corporations. I concur with the hon. Gentleman I was going to use the example, although I probably do not need to, of the Serious Fraud Office’s failure to successfully prosecute the Barclays bank case. As many observed at the time, that case showed that under our existing law the bank could not be held accountable for the actions of its employees, and the chief executive could not be held to account for the actions of the bank. Nobody could be held to account. These reforms would change that by introducing a vicarious liability condition and bringing in a "failure to prevent" clause. The Americans do it; they have much tougher laws that hit the corporations with criminal, civil and regulatory penalties, and they secure many more resources Our second ask is about starting the work to strengthen our enforcement by reforming Companies House. Creating a public register of beneficial ownership was an important move when David Cameron was our Prime Minister, and a huge step forward. In one year, the register was accessed more than 2 billion times, but the data, as we all know, is often inaccurate or incomplete. Global Witness did an analysis in 2018 that showed that 10,000 companies declare a foreign company—mostly linked to a secrecy jurisdiction—as the owner of the company, 335,000 companies had no beneficial owner and 9,000 companies were controlled by beneficial owners who each controlled more than 100 companies, so they were nominee beneficial owners It takes £12 to set up a company—it is ridiculous. That is why so many UK companies keep appearing in all the leaks we get of wrongdoing. Our lax enforcement leads to tragedies worldwide, and we need to do something about that. That is why these reforms could be funded by raising the fee. If we quadrupled the fee and charged 50 quid to start a company, we would raise a huge amount of money that we could put into reforming Companies House and ensuring that it had unique identifiers for the beneficial owners, and powers to investigate and interrogate My third proposal, which I will deal with very quickly, concerns the introduction of a property register. Buying a property through a shell company registered in the British Virgin Islands is the easiest way to launder money into the UK. There are very few good reasons for maintaining anonymity, but plenty of bad ones: not just money laundering, but avoiding stamp duty, inheritance tax and other taxes It is difficult to put a number on that, although many people have tried, but I will share one fact with the House. All London boroughs have had an increase in their electoral register over recent times; the only borough that has not is the Royal Borough of Kensington and Chelsea, the reason being that such a large number of properties there are bought through shell companies by foreign owners that there are fewer residents there today than there were 10 years ago.