Tories laissez-faire attitude to financial fraud publicised by Tory peer

 Lord Agnew's dramatic despatch-box resignation on Monday was driven specifically by his disgust at the lax control of government loans and grants related to the SARS-Cov-2 pandemic. However, it could have stood for the Johnson administration's failure to get to grips with financial fraud at all levels, as highlighted by a debate on Economic Crime held at the beginning of last month.

At the highest level, London is widely regarded as the money-laundering capital of the world. Russian money forms a large part of the hot money which finds a home here, but cash from all quarters flows into the City, including that from criminal and terrorist organisations closer to home, as DUP MP Jim Shannon has pointed out. Much is converted into UK property, because owners are able to conceal their true identity behind shell companies. At least one of the leading ratings agencies, Moody's, has shaded the UK's credit rating specifically because of the “weakening in the UK’s institutions and governance”.

Dame Margaret Hodge, who introduced the debate, painted the wider picture:

Economic crime is often the facilitator of other crimes—from people trafficking to drug smuggling, and from terrorism to corruption. It does not just enable other crimes; it impacts on our national security. Dirty Russian money laundered into the UK is spreading like a spider’s web through our society. It is used to buy influence and to control our football clubs, our vital infrastructure and, more recently, our politicians and our politics.

At the domestic level, people are still being swindled out of capital, often their entire life savings, by plausible web-sites. Search engines and social media sites could take action by de-listing them, but mostly do not, even when the fake sites are reported to them. Google, for instance, profits from giving priority listing at a price.

There was a unique insight into the difficulties facing those in the business world combatting fraud and other financial crime. Simon Fell used to be involved in that fight before he entered the Commons. It was like "Whac-a-mole", he said; no sooner had a criminal scheme been shut down than the perpetrator popped up another one elsewhere. It is too easy in the UK for this to happen.

What needs to be done:

• Companies House must have enforcement powers, and the staffing to make use of them;
• The role of limited liability partnerships in England and their equivalent in Scotland should be seriously examined;
• The law must compel the true identity of property owners to be made known;
• Banks must be held liable for the action of their employees, and chief executives held to account for the actions of their banks;
• There must be oversight of trusts, which at present are not transparent;
• Web users, especially younger people, need to be educated in the dangers of the Internet;
• Social media companies must check the bona fides of companies advertising on their platforms;
• Our standards and regulations must mirror those of the EU at the very least;
• The present £12 fee for registering a company to be at least quadrupled to deter lower-level crooks and to pay for improvements to the system.