Press release 11th May 2021

Queen's Speech a missed opportunity to strengthen UK's defences against dirty money

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May 11, 2021 – The Government’s overdue checks on those forming companies in the UK are needed more than plans to prioritise mandatory voter ID.

Legislation that would require mandatory voter ID at polling stations was announced in today’s Queen’s Speech.

Not included in the Government’s legislative agenda were plans for a major overhaul of Companies House, which were previously announced in September 2020. Currently, the lack of checks on those forming companies makes the UK’s system vulnerable to exploitation by criminals and the corrupt.

Transparency International UK’s research has found at least 929 UK shell companies used in 89 corruption and money laundering cases, amounting to around £137 billion globally in potential economic damage. The actual number of UK companies used in serious financial crime could be much higher - in the thousands or tens of thousands.

Conversely, of all the allegations of voter impersonation investigated by the police since 2017, only three led to a conviction.

 

Duncan Hames, Director of Policy at Transparency International UK, said:

“The Government have shaky grounds to prioritise voter ID legislation ahead of introducing even basic identity checks for those setting up companies in Britain. Our research has found nearly 1,000 UK shell companies responsible for helping facilitate billions of pounds in economic crime, yet there appears to be scant evidence there is a problem with fraud at polling stations. If Britain is to be known as a safe and reputable place to do business, the Government needs to make our economy more resilient to dirty money, and strengthen systems for corporate transparency. It has reforms ready to put to Parliament to address these real economic security threats, and should do so without delay.”

 

The Registration of Overseas Entities Bill was included in the last Queen’s Speech before the COVID pandemic struck, and is still on hold after being left out of today’s announcement. This legislation would close a loophole which currently allows criminals and the corrupt to hide their ownership of UK property by purchasing it via an anonymous company in a secrecy jurisdiction such as the British Virgin Islands. 

The Government also announced its intention to 'simplify procurement in the public sector'.

Transparency International UK recently published a comprehensive review of public procurement during the COVID-19 pandemic. The report identified 73 COVID-related contracts worth more than £3.7 billion that raise one or more red flags for possible corruption. The procurement bill may enable the Government to address some of the issues identified in the report.