The Guardian reported that Lord Agnew dramatically quit on Monday as a minister at the Treasury and Cabinet Office. In his resignation letter to Boris Johnson, Agnew revealed that a critical piece of legislation, the economic crime bill, had been rejected. He described the decision as “foolish.” The bill included measures to improve the UK Companies House including a public register of beneficial ownership, revealing the individuals behind companies. Stricter laws on fraud should end the “McMafia-style legislation” and target the unexplained wealth of kleptocrats.
Agnew highlighted the huge Covid-19 business support fraud schemes. The UK government decided to write off £4.3bn in loans thought to be fraudulent. Many of those loans were claimed by fraudulent shell companies registered in the UK.
It is a fact that cybercrime organizations use UK companies and the lax regulations of Companies House to conduct their illegal business. Unlike the U.S. and EU, Companies House does not require proof of beneficial ownership at incorporation. Stating offshore companies as owners is sufficient. Inconceivable, isn’t it? It almost looks as if the UK welcomes economic crime and dirty money in its post-Brexit era. It costs only £12 to set up a company in the UK. Margaret Hodge, a Labour MP pressing for stricter measures on financial crime, argued that cost to be increased to a “still cheap” £50, a move that would massively increase Companies House’s resources.
Companies House expert Graham Barrow wrote an angry tweet in response to the economic crime bill not happening, pointing out a statistic about UK companies owned by foreigners. Romanians, for example, have many more companies in the UK than at home.
Tom Keatinge, director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute, said that the weak governance and toothless powers of Companies House would enable fraud and economic crime around the world. The government’s failure to address this has been brutally exposed by the large-scale Covid loan frauds – money stolen from UK taxpayers due to indifference and negligence at the heart of the government.
Duncan Hames, director of policy at Transparency International UK, said criminals are exploiting the UK’s weaknesses and funnel dirty money into Britain. It clearly needs a reformed Companies House.
Margaret Hodge argued that the delay to the economic crime bill would be a “serious betrayal by this government.”
