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5 key steps for the new government on tackling corruption

Written by Robert Barrington on Tuesday, 26 July 2016

The last month has felt strangely reminiscent of Lenin’s remark that “There are decades where nothing happens; and there are weeks where decades happen”.  For the anti-corruption movement, this has already been a significant year in the UK: in April, shortly after the Panama Papers revelations, the Home Office published a far-reaching Anti-Money Laundering (AML) Action Plan, including promises on Unexplained Wealth Orders; the UK galvanised the international community into signing up to over 600 anti-corruption commitments at a summit in May; and June saw the introduction of a public beneficial ownership register for companies registered in the UK.  But that all seems a long time ago. Now, we have a new Prime Minister, a change of government and as yet no clear direction on what will happen to the UK’s approach to tackling corruption at home or abroad.  Will efforts be scaled up or scaled back – and will any issues be a priority apart from the economy and Brexit?

As the UK enters a post-Brexit world, we see both risks and opportunities for the UK around tackling corruption.

The key risk is that at a time of economic uncertainty, critical standards and safeguards will be relaxed and existing commitments, such as the AML Action Plan, will be disregarded.  As we have seen in other countries, this might lead to the UK losing its reputation as a clean and stable market in which to do business, deterring inward investment.  It could damage the City’s negotiating position on important issues such as passporting rights, as well as causing a deterioration in the UK’s standing in the world.

By contrast, a renewed commitment to transparency, open government and anti-corruption measures could have the opposite effect.  It would strengthen the UK’s and the City’s reputations as fair and efficient markets and send a clear message to the world about what kind of country the UK wants to be.  Equally important, it would help to restore confidence in politics and public institutions among ordinary people in the UK.

The good news is that much of the anti-corruption action of recent months has been driven by the Home Office, and so one might reasonably assume that with the former Home Secretary as Prime Minister, it will be business as usual.  It’s also the case that many of the subjects that seem to resonate in a post-referendum political discourse are inextricably linked with corruption, accountability and institutional integrity.

With this in mind we have identified 5 priority areas for the new Prime Minister to address during her first hundred days:

1) Strategy – embed fighting corruption with a coherent and unified strategy.  Cabinet and Home Office officials have been working on a long-term strategy for combating corruption in the UK, to work in tandem with the National Anti-Corruption Plan. The aspiration should be to produce a world class strategy, clearly laying down a marker for what this government stands for in the UK and sending out a powerful message to the wider world about the importance the UK attaches to the rule of law, global security and a business-friendly corruption-free trading environment.

2) Coordination – safeguard coordination and accountability.  The Cabinet Offices’ Joint Anti-Corruption Unit (JACU) should be retained as a tool to coordinate cross-government activity.  There has been talk of abolishing it or moving it out of the Cabinet Office: both of these should be strongly resisted.  It is also important to ensure the functions of the Anti-Corruption Champion are maintained, and ideally enhanced, so that a senior government figure has oversight and responsibility for this agenda in government; strong emphasis should be placed on open government and open data.

 3) Corrupt capital flows – no backtracking on ending UK’s role as a safe haven for corrupt money.  At a time of economic uncertainty there will be the temptation to seek out foreign investment at any cost. As we have warned for a number of years, the UK is too often tempted to pursue a “no questions asked” attitude towards inward investment.  This is short-term thinking at the best of times, but right now it is a very high-risk approach that would damage the City and global standing of the UK in the long term.  It is vital that the strong commitments made in the AML Action Plan are upheld and implemented. This also includes the introduction of Unexplained Wealth Orders, a legal device to improve asset recovery and make it harder for the UK to be a safe haven for corrupt money.

4) Law enforcement – ensure the UK has the teeth to act on corruption.  Law enforcement agencies must be given the sufficient resources to be able to both deter and act upon corruption. There also needs to be an greatly means increased understanding and coordination between all of those on the frontline in fighting corruption, particularly the 66 different agencies that have responsibility for addressing corrupt practices.

5) Avoid retreating from existing commitments or watering down legislation – crucially, the UK must make sure it does not retreat from internationally-recognised commitments it has already made, or weaken positive instruments such as the Bribery Act.   There is an expectation among the UK’s international partners that the UK will deliver on its previous promises.  Although there will be pressure to ‘cut red tape’ and ‘create a favourable climate for investment’, the Government should avoid being tempted down a path which leads to lax anti-corruption standards.  That would bring long-term pain, with little or no short-term gain, and certainly damage Britain’s international interests.

There will be many eyes on the Prime Minister, both within the UK and beyond, to see whether a subject that had previously been prioritised will now be quietly dropped.  As she has intimated, inequality, injustice, economic stability, security and retaining Britain’s place in the world are key priorities for her government.  These can be reinforced or undermined by her government’s approach to tackling corruption.  A strong stance against corruption will reinforce the UK’s standing in the world, address domestic concerns about injustice and inequality, consolidate the UK’s reputation as a safe and stable place to do business, defend the long-term reputation of the City and show the UK is not stepping back from previous international commitments.  A clear and early statement from the new Prime Minister would demonstrate the Government’s intent.

Photo: Flickr / Number 10.

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Read 760 times Last modified on Tuesday, 26 July 2016 22:49
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Robert Barrington

Robert is TI-UK's Executive Director. You can view his full bio here, and tweet him @TIukED.

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