The shadow chancellor, Anneliese Dodds, is calling for the government to introduce a long-promised register of foreign owners of UK properties, to prevent criminals using homes as “dodgy bank accounts”.
Reports of suspected money laundering have more than doubled since David Cameron used a speech in Singapore in 2015 to pledge that there would be “no place for dirty money in Britain”.
The then prime minister promised a register of overseas companies owning UK properties, to make the market more transparent and prevent money from corruption being parked in lavish houses in central London.
But the proposal is still awaiting implementation. A draft registration of overseas entities bill was published in 2018, but has not yet been introduced to parliament.
Dodds will use a speech to the Labour Housing Group on Saturday to highlight the party’s determination over the issue, and insist efforts to target money laundering should not be set aside because of the pandemic.
“We are at a fork in the road,” she is to say. “The Conservatives could choose to focus their energies so that people in this country have affordable, decent homes to live in. They could finally set up a register of overseas entities to flush out the criminals using our homes as dodgy bank accounts. In doing so, they could secure a quicker, fairer and more sustainable economic recovery from the crisis.
“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 hide illicit wealth. I urge the Conservatives to finally make the right call.”
The group campaigns for more affordable housing.
The chancellor, Rishi Sunak, has announced a 2% stamp duty surcharge on foreign property owners that will come into effect in April – but it is unclear when the register of foreign owners will be implemented.
Official figures show that reports of suspected money-laundering activities to the National Crime Agency have more than doubled since Cameron made his Singapore speech.
The NCA received 14,465 suspicious activity reports (SARs) relating to possible money laundering in 2015. In the year to March 2019 that had more than doubled to 34,151.
The ease with which foreign investors can launder money through the UK property market was highlighted in the report from parliament’s intelligence and security committee’s report on Russia this year that warned of a “London laundromat”.
“Successive governments have welcomed the oligarchs and their money with open arms, providing them with a means of recycling illicit finance through the London ‘laundromat’, and connections at the highest levels with access to UK companies and political figures,” the report claimed. “This has led to a growth industry of ‘enablers’ including lawyers, accountants, and estate agents who are – wittingly or unwittingly – de facto agents of the Russian state.”
At the time of the December 2019 Queen’s speech, which set out Boris Johnson’s legislative programme, the government promised to “continue to progress legislation to combat money laundering and achieve greater transparency in the UK property market”.
The campaign group Transparency International said at the time that the legislation would “strengthen our defences against illicit financial flows, as the UK seeks to attract overseas investment”, and called for it to be “tabled at the earliest possible opportunity”.
Transparency International research identified 421 UK properties collectively worth more than £5bn that were bought with suspicious wealth. The group then checked the land titles for these properties to identify 56 law firms involved in facilitating 132 of these transactions. In most cases they were the registered address of secretive companies used to hold the property.