Press Release: Huge Cross-Party Backlash as Government Ditches Economic Crime Bill
Joint statement with the APPG on Fair Business Banking - see full press release here.
26th January 2022
Demand across the House of Commons for the economic crime bill has reached fever pitch as fraud hit record levels during the pandemic. Lord Agnew revealed in his resignation letter that plans for an economic crime bill have been dropped from the Queen’s Speech due in May, despite legislation being ready and waiting since 2018.
This revelation prompted an Urgent Question from Kevin Hollinrake MP that attracted widespread support from across the House. MPs were unanimous in their concern that the bill would not be presented during the next Parliamentary session. Minister for Small Businesses Paul Scully MP responded saying he will not speculate about the Queen’s speech but confirmed that Government remains committed to tackling economic crime. A response to the consultation on Companies House reform is due ‘soon’ and a registry of overseas entity bill, which has undergone pre-legislative scrutiny, will be introduced in the broader reforms to Companies House ‘when parliamentary time allows’, however no timescales or reassurance was given.
As the most frequent crime committed in the UK, fraud is now rampant and damaging lives. This is evidenced by the £4.3 billion pounds in business support loans that were fraudulently received. Money laundering alone costs our economy £100 billion a year, according to the National Crime Agency. Spotlight on Corruption found this week that the government spends the equivalent of just 0.042% of GDP or £852 million per year on fighting economic crime, even though economic crime costs the UK economy £290 billion every year, equal to 14.5% of GDP, highlighting how law enforcement agencies are desperately under-resourced and ill-equipped to tackle this devastating crime.
Illicit finance funds terrorism, organised crime and other malicious actors, as well as damages our national security and enables corruption overseas. The UK cannot afford to continue enabling the criminal use of Companies House, our housing market or our financial sector.
The All-Party Parliamentary Group (APPG) on Anti-Corruption & Responsible Tax and the APPG on Fair Business Banking are supportive of the 2019 Government’s Economic Crime Plan proposed reforms, which includes introducing a register of overseas entities that own UK property and reforms to Companies House. In addition, making failure to prevent economic crime a criminal offence is currently under consultation with the Law Commission.
Dame Margaret Hodge MP, Chair of the APPG on Anti-Corruption & Responsible Tax commented ‘Casting aside new legislation to tackle the threat of economic crime is a serious betrayal by this Government. Successive governments have promised action to combat fraud and dirty money. Just last month the Prime Minister pledged that the property register was forthcoming. They cannot kick the can down the road any longer without economic crime causing further damage.’
Kevin Hollinrake MP, Chair of the APPG on Fair Business Banking commented ‘Further delays to this hugely important bill would be a very significant strategic error. The legislation has been promised in manifesto after manifesto and with good reason as the measures within it will crack down on fraud, corruption, organised crime, terrorism and the impoverishment of nations by corrupt politicians and kleptocrats. I call on the government to reconsider.’