‘Labour must show Britain is no longer open for dirty money’

At least £325 billion of illicit finance flows through the UK every single year.

Pause on that figure for a moment. It’s the equivalent of more than 10% of UK GDP. If you include the UK’s Overseas Territories and Crown Dependencies – including Jersey, the British Virgin Islands and Cayman Islands – the total rises to an astonishing £788 billion annually.

These numbers come from new research from the Finance Innovation Lab, and represent the first comprehensive attempt to measure the true scale of dirty money linked to the UK economy. The findings should serve as a wake-up call for all of us in politics.

Because this is about far more than just an eye-wateringly large number. Behind every pound of illicit finance lies real harm: corruption, money laundering on our high streets, organised crime, tax dodging and the looting of public wealth from some of the poorest countries in the world.

READ MORE: ‘Business, unions and civil society agree: it’s time for mandatory due diligence’

For too long, our financial system has provided a safe harbour for hidden wealth and dirty money. Previous governments talked tough, but enforcement remained underpowered, loopholes remained open, and secrecy remained embedded within parts of the UK-linked offshore network.

That cannot continue.

And this is not simply a moral issue. It is an economic one too.

The same report highlights estimates that at least £26 billion a year is lost through tax dodging. That is money that could help fund our public services, rebuild crumbling infrastructure and support investment in communities that have been neglected for years.

Every pound hidden from the taxman is a pound lost to schools, hospitals and policing.

Labour was elected on a promise to restore integrity and competence to government. That must include restoring integrity to our financial system.

The government’s Countering Illicit Finance Summit will be an opportunity to show real global leadership. But credibility starts at home. We cannot lecture others about corruption while parts of the British financial system continue to facilitate secrecy and financial abuse.

That means giving enforcement agencies like the National Crime Agency and Serious Fraud Office the resources they need to do their jobs properly. It means finally delivering meaningful transparency over the real owners of shell companies in UK-linked jurisdictions. And it means recognising the growing risks posed by poorly regulated crypto markets that can become vehicles for laundering criminal wealth.

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None of this is anti-business. Quite the opposite. Britain succeeds when we are known as a clean, stable and trusted place to invest – not as a laundromat for kleptocrats and criminal networks.

This government has made big strides over the last couple of years. The new Anti-Corruption Strategy is ambitious and the recently announced anti-money laundering supervisory reform will be the biggest shake-up of the system for decades. But a lot of this work runs the risk of being ‘whack-a-mole’ against the so-called enablers. These are the rogue accountants, lawyers and the like, who use every trick in the book to keep one step ahead of law enforcement – often aided by the veil of corporate secrecy still provided by certain of our very own Overseas Territories. 

People want fairness. They want accountability. And they want to know that the rules are enforced.

After years in which Britain became part of the problem, we now have a chance to become part of the solution. We should seize it.

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