Anneliese Dodds has called on the Conservatives to make good on their promise to crackdown on money laundering through the UK property market and stop criminals using homes as “dodgy bank accounts”.
Addressing an online conference by Labour Housing Group today, the Shadow Chancellor said the financialisation of housing has meant homes are used as a “means of avoiding tax or laundering the proceeds of crime”.
Dodds explained: “More than £90bn is estimated to be laundered through the UK every year, inflating the price of houses for everybody, leaving luxury homes sitting empty while families on low incomes are crammed into tiny flats.”
The Shadow Chancellor told the virtual meeting that the scale of this problem has been “starkly revealed in recent months” with the publication of the Russia report into interference in the UK and with the leaking of the FinCEN files.
The National Crime Agency received 14,465 suspicious activity reports (SARs) linked to possible money laundering in 2015. Dodds highlighted that, in the year ending March 2019, that had more than doubled to 34,151.
She also reminded participants that in 2015 the Prime Minister had declared there was “no place for dirty money in Britain” and promised to introduce a register of overseas companies owning UK properties to increase transparency in the market.
But successive Tory Prime Ministers since then have failed to put the plans into practice. A draft of the registration of overseas entities bill was published in 2018, but the legislation has not been introduced to parliament.
Dodds added: “I’m calling on the government to bring that bill forward before the end of the year and crack down on these practices once and for all.
“We’re at a fork in the road. The Conservatives could focus their energies on ensuring that people in this country have affordable, decent homes to live in.
“They could finally set up that register of overseas entities to flush out the criminals using our homes as dodgy bank accounts…
“Or, they could choose to leave things as they are. Too few houses available to be homes with prices driven up by those who use property to hid illicit wealth. I urge the Conservatives to finally make the right call.”
Dodds also highlighted during her speech the findings published by Transparency International last year, in which the organisation identify 421 UK properties, worth over £5bn, that have been bought with suspicious money.
The Tory government recently announced a 2% stamp duty surcharge on foreign property owners, which will come into force in April next year. There has been no indication from the current Chancellor that the register will be implemented.
The Russia report published earlier this year by parliament’s intelligence and security committee focused to some extent on property ownership in the UK, describing the capital as a “London laundromat”.