Summit on Illicit Finance
(3 days, 15 hours ago)
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Sir Roger Gale (in the Chair)
Good afternoon, ladies and gentlemen. We are on the horns of a dilemma, because we expect a vote fairly imminently, but there is another wind-up speech to follow, so we will get started. There are likely to be three votes on the Floor of the House, then a pause before a fourth vote on Third Reading, and then possibly—sheer joy!—something after that, but let us get cracking and see how we go.
Steff Aquarone (North Norfolk) (LD)
I beg to move,
That this House has considered the Illicit Finance Summit 2026.
It is a pleasure to serve under your chairship, Sir Roger. I am delighted to have secured this debate on the illicit finance summit 2026, although it might be more accurate to say that we are debating the illicit finance summit that is just about in 2026, or the illicit finance summit that will probably be in 2026 if we are not too busy. I am glad that this debate is an excellent opportunity to remind the Government that they are supposed to be hosting this summit and to break the radio silence of the past few months.
Hundreds of billions of pounds of illicit finance flow through the UK annually. This is a major drain on our economy and a driver of criminality across society. Illicit finance touches every one of us and, on a daily basis, makes our lives that little bit worse. For those who are fed up with a dying high street in their town, with an endless stream of neon-clad vape shops, illicit finance is making it worse. For those who are furious about dodgy donors ploughing money into political parties, illicit finance is making it worse. For those who are tired of hearing politicians tell them that there is no money to keep our basic services functioning, illicit finance is making it worse.
The phrase “illicit finance” might not come up much on the doorstep, but “fairness” does. When it comes to people and organisations paying taxes, it does not get much more unfair than a system that makes it trivially easy for wealth to be hidden offshore but, bafflingly, still within His Majesty’s jurisdiction. It is not just tax that we are missing; illicit finance is funding criminality around the world. That is why I find it particularly difficult that this Government have put the summit six months into the future and that they sneaked out the news on a quiet Friday after the House has risen. My first ask of the Minister today is that he commit to greater engagement and candour with Members relating to the summit from now on.
All that aside, we must now look ahead to the summit. If the Government are to delay it, they had better make sure that it is effective and delivers real change. So far, we have heard very little from them on specific aims and priorities. The Minister told the House that he was personally committed to tackling illicit finance, and I hope that in today’s debate he will get some welcome support in finding some areas to report on.
I am pleased to remind the Minister that this debate is attended by MPs across the parties with serious expertise and experience in this area. The Government can see that this is a truly cross-party effort. We are not here to score points or win votes; we are here in the belief that we can make Britain better and free it from the scourge of illicit finance once and for all. I might briefly note that I am looking carefully and there is one particular party that is not represented here, and its Members’ attendance may or may not have indicated their interest in getting dodgy money out of our country and our politics, but I will do my part in helping the Government with a few ideas as to what could constitute a successful summit—[Interruption.]
Sir Roger Gale (in the Chair)
Order. There is a Division on the Floor of the House. The sitting is suspended until 15 minutes after the start of what is likely to be the third Division in that group. Please do come back, because we think that there will be a pause between those Divisions and the vote on Third Reading.
Steff Aquarone
A quick recap: a gentle jibe at the Minister, a sharp poke at Reform and a commitment to doing my bit in helping the Government with a few ideas that might constitute a successful summit.
First, when many think of property in this country, they might think of the words of my predecessor as a Norfolk MP, Sir Edward Coke, about how an Englishman’s home is his castle. I am not sure whether Sir Edward foresaw so many being owned by a complex and secretive array of companies and trusts, lacking clarity about their ultimate beneficial owners.
Properties under secretive ownership are not only multimillion-pound mansions in Kensington; in fact, if many of us looked closer to home, we would be shocked by what we found. The Tax Policy Associates’ “Who secretly owns Britain?” map says that an unassuming cottage near the centre of the village of Cley next the Sea in my constituency is ultimately owned by a faceless company called Claystone Investments Ltd, registered in Switzerland. A Companies House search finds a similarly named company registered in the British Virgin Islands, which in turn gives its beneficial owner as a company registered in Panama. A search of the Panamanian company register gives no indication of who actually owns that cottage. That level of complexity and layers of ownership for a cottage in a quiet Norfolk village simply cannot be right.
This summit is a chance to call this out for being as ridiculous as it seems. The Government need to work with international partners to bring an end to anonymous property ownership. If an Englishman’s home truly is his castle, it cannot be a castle registered through multiple trusts, bouncing the legal rights halfway around the world and back again. If someone owns a property, they need to declare who they are and face the music, not hide behind shell companies and legalese.
It is also important that we get our own house in order on this. We have laws around beneficial ownership and property transparency, brought in under the last Government, with the help and hard work of my hon. Friend the Member for Oxford West and Abingdon (Layla Moran) and others. However, “Who secretly owns Britain?” indicates that rule-breaking is rife, and little seems to be being done to crack down on those flouting their obligations. I hope the Minister can assure us today that he is looking into the wealth of publicly available evidence of companies not doing what they are required to do, and will take action.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for this debate. He is absolutely right that we must aggressively pursue and prosecute the wealth managers, the lawyers and the accountants who mask dirty money through loopholes. Does he agree that, when it comes to corporate transparency, we must go as far as the Crown dependencies and the overseas territories, that we need to take an aggressive stance, and that the Minister and this Government need to follow that?
Steff Aquarone
I wholeheartedly agree. In fact, a past Government wrote to all those revealed by the Panama papers to ask them about their financial affairs. Might the Minister perhaps commit to doing the same for those shown not to be fully complying with beneficial ownership registration?
Speaking of getting our own house in order, naturally, I must turn to the overseas territories. When looking into opaque property ownership in my own area, I was sadly unsurprised to see that the British Virgin Islands were partly culpable for obscuring true beneficiaries. It is all well and good running a big international summit and talking a big game on transparency and fair taxation, but when we are allowing hundreds of billions in illicit finance to keep rolling through countries that fly our flag, rely on our defence and are citizens of our King, it looks as though we are not taking this issue seriously.
The overseas territories and Crown dependencies are part of our British family, but part of being a family is calling them out when they are doing wrong. So many are taking positive steps towards financial transparency, and their work will allow us to fight corruption and illicit finance more effectively, but there remain bad actors who are letting the side down. Their progress has been achingly slow, with deadlines missed, promises broken and beneficial ownership registers half delivered. The Government’s own anti-corruption champion recently said:
“I think we’re coming to the end of the road trying to do this through agreement”.
Such registers need to be free and publicly accessible. Restricting registers, or those behind payrolls with claims of legitimate interest, prevents journalists or non-governmental organisations—or even the interested public—from seeing who is truly behind these companies. We know that, in corruption and tax abuse, sunlight is the best disinfectant. For those malign actors who want to use existing secrecy to hide their ill-gotten gains, we have to smash that ability by ensuring that this information is freely available, just as is expected of anyone setting up or holding significant control in a company in this country.
I hope that the Minister can build on what Baroness Hodge has said and give a clear signal to us of the next steps that he is expecting to take if he has also, finally, run out of patience with these regimes. I can tell him and the House that most people ran out of patience long ago—hard-working, honest people who pay their way in what feels like an ever increasing tax burden. All the while, criminals, billionaires and dictators are seeing their dirty money flowing and growing, letting them live a life of luxury while we cobble together any penny that the Treasury can find to keep our public services afloat.
For those of us who are supporting the brave Ukrainians in their fight against Putin and his illegal war, we should be sickened that hundreds of private yacht transactions went on in overseas territories since the war began. Putin’s cronies, awash with blood money, are sunning themselves while Ukrainian people fight for their very future as a nation. While the Iranian regime represses protests and attacks our allies in the Gulf, the new Ayatollah has a multimillion pound mansion by Kensington Palace Gardens, just a short tube ride from here, which is one of the many ways he can launder wealth plundered from the people of Iran.
Illicit finance is a poison and cancer spreading through our country, infecting everything it touches. We have to get serious on this, and fast.
Jess Brown-Fuller (Chichester) (LD)
For most people, illicit finance is most prevalent on our high streets, when they see illegal vape shops or barbershops that do not have any trade but seem to be doing quite well. Does my hon. Friend agree that illicit finance is not necessarily always in big mansions, and can often feel very close to home?
Steff Aquarone
I completely agree. This issue goes two ways: fighting crime overseas and tackling illegal activity in this country are both hindered by illicit finance.
The message from Government that those benefiting from their dirty money can have another six months of fun before we hold our summit is disappointing. I hope the Minister can take steps to correct that today by setting out an ambitious, far-reaching and impactful programme of work leading up to this summit, which will culminate in international agreement.
Adam Dance (Yeovil) (LD)
Does my hon. Friend agree that we need the international summit to crack down on fraudsters and scammers abroad? I have a constituent with disabilities who lost £70,000 to a romance fraud, with no checks having been done by the bank. Does the summit not also need to look at that issue?
Steff Aquarone
While there are certainly corporate victims of international illicit finance, it also affects us as taxpayers and as individuals. I totally agree with my hon. Friend, and I thank him for raising that case.
Turning a blind eye and washing our hands of responsibility has gone on too long. Britain has been a world leader in so much, so let us step up to the plate and lead the world once again in tackling this scourge, cleaning up our financial system, making the crooks and corporations pay their fair share and delivering justice and a fairer system once and for all.
Several hon. Members rose—
Sir Roger Gale (in the Chair)
Order. I am looking around the room and at the time. I will not set a fixed time limit, but if hon. Members keep their speeches to under five minutes, everybody on the list who wishes to speak will get in.
Phil Brickell (Bolton West) (Lab)
It is a pleasure to serve under your chairship, Sir Roger. I start by congratulating the hon. Member for North Norfolk (Steff Aquarone) on securing this vital debate, and on his comments about opaque property ownership. I said that this is a vital debate, but let us remind ourselves of the figures: £325 billion flows through the UK in illicit finance every year, which is more than 10% of this country’s GDP, and that figure rises to £780 billion annually when the Crown dependencies and overseas territories are included, according to the Finance Innovation Lab.
In the short amount of time available, let me say this: when the summit comes, it will be a measure of our convening power with global south countries as we look to build to chairing the G20 in 2027. It will be an opportunity to harness the private sector’s technical expertise as a leading financial services hub. It will be a chance for our law enforcement agencies to share their knowledge, whether the National Crime Agency, the Serious Fraud Office or the City of London police, who I had the pleasure of visiting in their Guildhall offices only last week. On crypto, it will be an opportunity to encourage like-minded partners to roll out sanctions packages similar to the one that the Foreign Office recently launched for the A7 in Kyrgyzstan. I must commend the Minister for his leadership on that.
Illicit finance touches more or less every facet of our lives and is a national security issue. Some £10 billion is laundered through the UK each year, by people traffickers, drug gangs and organised crime groups, and £6 billion of trade with Russia has been facilitated by UK overseas territories companies since 2022, including through sanctioned goods. It is also an economic issue, though. Let us remember that £325 billion is linked to corruption cases involving UK-connected services and that, each year, £33.4 billion is lost by the UK and almost $500 billion is lost globally to tax abuse.
Illicit finance also distorts our property market, as we have already heard. Some £11 billion of suspicious wealth has been identified in UK property, and £1.5 billion of that was linked to individuals accused of financial crime or with connections to the Kremlin. It is also a transparency issue: £190 billion-worth of property has no clearly identified beneficial owner. We heard of the Norfolk cottage, but we all have properties in our constituencies up and down the country that are affected by this issue. There are 236,500 properties across England and Wales that are held through opaque trusts, and there have been £6 billion-worth of suspicious property purchases made via overseas territories shell companies, of which more than 90% went through the British Virgin Islands. That speaks to the scale of the issue at hand.
Illicit finance damages our global reputation, too. Unless we tackle the issue both here in the UK and in the Crown dependencies and overseas territories, we will not address it in the full manner that it deserves to be addressed by all of us in this Chamber in order to do the right thing by my constituents. Let us recall the figures I mentioned at the start: each year, £788 billion flows through UK-linked systems, £10 billion is laundered and £33.4 billion is lost in UK tax revenue. The Minister knows those statistics and has heard me mention them time and again, but I am repeating them to drive home just how important this summit is, both to our country and around the globe, and to reiterate how crucial it is that we get the appropriate buy-in across Departments at the very top of Government.
Therefore, set against the backdrop of a new anti-money laundering and asset recovery strategy, a new economic crime plan being published later in the year and the Crown dependencies implementing greater transparency around their company registers in the coming month, I have two asks for the Minister. What can he say to reassure me that the rescheduled illicit finance summit will be the genuine cross-Government priority it deserves to be, and that this Government will drive global leadership on the all-encompassing issue of illicit finance? Secondly, somewhat at a tangent, after some concerning reporting by Bloomberg about the potential return of golden visas, can the Minister reassure me that his Department will work with the Department for Business and Trade and the Home Office to ensure that this Government never introduce a loophole that allows oligarchs and kleptocrats to buy their way into the UK?
Sir Andrew Mitchell (Sutton Coldfield) (Con)
Thank you very much, Sir Roger, for the opportunity to contribute to this debate. It is a pleasure to follow the hon. Member for Bolton West (Phil Brickell)—I agree with every word of his speech—and to congratulate the hon. Member for North Norfolk (Steff Aquarone), who introduced this debate, on what he had to say.
There is a feeling of all-party agreement on this issue, which is perhaps not surprising, because we will soon be celebrating the 10th anniversary of the decision made by Parliament that, unless open registers of beneficial ownership are accepted and implemented by the overseas territories, the British Government will enforce them, as is their right. It has taken nearly 10 years; I think that it was 2018 when I and others led a rebellion against our own Government to get this in, and the Government conceded. It was the right thing to do, and it is all taking far too long. The reason we have not made progress is partly a mixture of inertia, crowded agendas and vested interests, but the Government need to confront it at this summit with all possible vigour. The Minister was kind enough to call me to explain why the summit had been delayed. I completely accept his argument, but we must use the delay period to make sure that it is all the more effective.
The hon. Member for Bolton West mentioned the figure of nearly £800 billion, which shows that in Britain, when it comes to dirty money, we have a real dog in the fight. Remember what this money is: money from cyber-crime, the drugs trade and the sex trade, and money stolen from Africa and Africans. We say to the overseas territories and Crown dependencies, which are in exactly the same boat, that if they want to have the British flag, our laws and our sovereign, they must also accept our values.
The list of offenders so kindly produced by the all-party parliamentary group on anti-corruption and responsible tax’s beneficial ownership tracker is very clear: Montserrat, St Helena and in particular Gibraltar are to be congratulated on what they have done; the Cayman Islands have made some progress but are certainly not there yet; Bermuda, Anguilla and the Turks and Caicos Islands are marked as “poor”; and there at the bottom—“critically poor”—is the chief, but not the only offender, the British Virgin Islands.
These issues must be dealt with. On Guernsey and Jersey, and to a lesser extent on the Isle of Man, we need specific, time-bound commitments by the time of the British G20 summit so that we can hold our heads up. The scale of dirty money going through London, the overseas territories and the Crown dependencies is absolutely appalling, and we need to clean up our act.
Finally, I endorse the asks from the APPG: the ending of anonymous ownership of UK property, which has already been raised and is extremely important; the recovery and return of stolen assets, particularly those from Africa, which I have mentioned to the House many times in the past; and the bearing down on professional enablers. We need to ensure that such bureaucratic change as we might then introduce does not harm honest practitioners. There is work to be done on that, but in principle we should do everything we can to stop professional enablers from behaving badly in this area.
Joe Powell (Kensington and Bayswater) (Lab)
I join others in congratulating the hon. Member for North Norfolk (Steff Aquarone) on securing this debate and on restricting himself to only two mentions of mansions in Kensington in his introduction.
This should be one of the progressive causes of our time. Others have covered the harms: from the links to the drugs trade and other serious organised crime, to the housing crisis and to conflict in Ukraine, Sudan and other parts of the world. I am delighted that the Government have recognised the problem and have taken action to date, including their commitment to host this summit on illicit finance.
I disagree with the hon. Member for North Norfolk; I think it was the right decision to delay the summit. Primarily, that is because it gives us time to produce a package of progress that we can show to the world, build alliances around key themes and link this summit to the UK Government’s other international leadership positions, including the G20 presidency in 2027, the presidency of the financial action taskforce from 2026 to 2028, and the chair of the Open Government Partnership. Those are all forums where we can take illicit finance and corruption initiatives and multilateralise them through other international organisations.
There is a big opportunity here. Before being elected, I spent a decade working on illicit finance and corruption. I supported the last summit on anti-corruption that we led as a country in 2016, which was hosted by Lord Cameron of Chipping Norton. That summit helped to put beneficial ownership transparency on the map as a tool to remove secrecy from the anonymous companies that, on many occasions, facilitate money laundering. There is an unheralded British success here: 104 jurisdictions now have a live register, although I accept that there are varying degrees of openness. There is, of course, the glaring exception of most of the British overseas territories and Crown dependencies.
The lessons of the summit can be applied to December’s summit. First, as others have mentioned, there is the need for political leadership, from the Prime Minister down, to bring international counterparts to the UK and to link the summit to other international forums in which we are involved. Secondly, there should be strong cross-Government co-ordination, with regular ministerial meetings. Thirdly, there should be clear and specific policy commitments that other countries can join, rather than vague initiatives that will fizzle out immediately. Fourthly, we must be open to working with civil society, which can support the bringing of countries to the table and add ideas, enthusiasm and accountability to the summit. Fifthly, we must prepare our own package of reforms so that we open the summit with a strong policy offer.
We have an outsize responsibility in this area because we are the epicentre of global finance. My hon. Friend the Member for Bolton West (Phil Brickell) has covered the stats, and I know that the Minister cares deeply about this issue. I have three brief policy proposals on which we can make progress before the summit.
The first proposal is about property, which the Government are right to make a summit priority. The goal should be a global alliance for full transparency in property ownership, so that dirty money cannot be stashed in London or in other property markets around this country and the world. In my constituency of Kensington and Bayswater, 40% of the foreign-owned property is still held in anonymous trusts. That means that approximately 4,000 properties in my constituency have hidden ownership, despite the introduction of a register of overseas-owned properties after the full-scale invasion of Ukraine.
There is a major loophole that is incentivising more opaque ownership structures, which have only been thrown open through leaks and investigations such as the Panama and Paradise papers investigations. Dan Neidle, a tax lawyer, found that the ultimate owners of 45,000 properties in this country—properties collectively worth £190 billion—are still hidden from view. It is time to report back on the consultation opened two years ago on trust-owned property and to take bold action. Of course, beyond property there is a need to continue Britain’s leadership on beneficial ownership, the overseas territories and Crown dependencies, as the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) has outlined. That is absolutely the right place to start with our leadership in the global jigsaw. Gibraltar has done this work with no economic harm whatever and we need to extend it.
Finally, on professional enablers, I am really glad that the Financial Services and Markets Bill was in the King’s Speech. That will extend the Financial Conduct Authority’s supervision to accountants, lawyers and other financial bodies, and introduce proper anti-money laundering supervision to them.
There must be no more anonymously owned properties, which allow dirty money to be stashed with impunity; no more tax haven secrecy, which facilitates billions in criminal and corrupt cash; and no more hiding places for professional enablers, who turn a blind eye to dirty money. Those ideas should be the basis for a summit that can show our leadership on the global stage.
Dr Ellie Chowns (North Herefordshire) (Green)
It is a pleasure to serve under your chairship, Sir Roger. I thank the hon. Member for North Norfolk (Steff Aquarone) for securing this important debate.
I welcome the Government’s commitment to hold a summit on tackling illicit financial flows, but it is essential that more political priority is given to this issue and that the UK shows more leadership in this space. If the summit is to be a success, we need to put our own house in order and play a critical role in helping to clean up the global financial system. We must also clean up the influence of dirty money, which infests our politics and the fabric of our country.
The UK plays a core part in this issue, particularly due to the role of the overseas territories and Crown dependencies in facilitating these flows. As we have already heard, if we include the overseas territories and Crown dependencies, it is calculated that £788 billion of illicit finance from financial crime, money laundering, corruption, illegal trade and tax abuse flows through the UK and its territories every single year. That is a huge problem.
I was particularly struck by the calculation from Tax Justice UK that the UK and its overseas territories and Crown dependencies are responsible for about a quarter of revenues worldwide lost due to tax abuse. That is extraordinary. We represent less than 1% of the global population. Our economy, depending on how it is measured—purchasing power parity or not—is between 2% and 3% of the global economy, yet we are facilitating 25% of global tax abuse. That is absolutely unacceptable. I welcome the commitment from Members across the Chamber today to tackling that. I very much hope that we will hear strong words, followed by strong action, from the Government today and in the summit.
It is crucial that we have full transparency over property ownership and beneficial ownership. It is crucial that registers are fully accessible to everybody and are not just, as has been suggested by some territories, accessible only to certain people at certain times—pre-qualified, with notifications being sent to owners that people are looking into their affairs. Transparency is a fundamental principle, and it is essential to prevent the abuses that we know the system of secrecy actively enables. I very much hope to see strong action from the Government on that at the upcoming summit.
It is also crucial that the summit recognises that tax abuse includes both tax evasion and tax avoidance. The UK economy loses tens of billions of pounds each year, as the hon. Member for Kensington and Bayswater (Joe Powell) mentioned.
Joe Powell
I appreciate the cross-party spirit in which this debate has been held, but it would be helpful if the Green party leader would pay his own council tax as a demonstration of leading by example.
Dr Chowns
I am disappointed that the hon. Member is taking the opportunity to score a cheap political point when we have been working cross-party on these issues. On that specific issue, the leader of the Green party has apologised and made clear efforts to pay any tax that he may be found to owe. As has become clear, this a complex issue that affects potentially tens of thousands of people in the UK, and we would welcome clarification on it. But that is a cheap political point to attempt to score in a debate about abuses of the tax system that are resulting in hundreds of billions of pounds of lost revenue to countries around the world.
I would like to pick up on a specific issue that I know the Government intend to address in the three priorities they have set out for the summit: the illicit gold trade. I have previously spoken in the main Chamber about the deeply concerning role of the illicit gold trade in funding and facilitating the horrors that we see in the conflict in Sudan, so it seems crucial that the UK Government do everything possible to clean up that particular mechanism for funding abuses globally.
The huge, significant role played by the UK in supporting and enabling illicit financial flows not only harms us in the UK, with the presence of illicit businesses in our high streets and villages, as the hon. Member for North Norfolk spoke about, or, as the illegal Russian invasion of Ukraine highlighted, affect us through dirty Russian money embedded in our economy; it also has huge ramifications around the world. The UK’s role in facilitating flows of illicit finance actively supports the impoverishment of already impoverished countries and Governments. We have a responsibility to clean up our act in this country both because it will benefit us and improve revenues to the public Exchequer for reinvestment in public services and because we have a fundamental moral duty to ensure that we do not facilitate flows of dirty money globally.
Rebecca Long Bailey (Salford) (Lab)
It is, as always, a pleasure, Sir Roger. I thank the hon. Member for North Norfolk (Steff Aquarone) for bringing this important debate to Westminster Hall and for his excellent speech. I agreed with all the speeches made by colleagues today, and I do not get to say that very often. We have had some fantastic contributions.
For too long, the UK has been seen not only as a victim of illicit finance, but a destination for it. Dirty money has flowed through property markets, financial institutions and networks of shell companies. We have seen widespread tax avoidance while ordinary working people continue to do the right thing and pay their taxes every month. People look at that imbalance and ask an important question: why is it that those who play by the rules are expected to shoulder the burden while others are able to hide wealth behind secrecy and weak enforcement? Every pound lost is a pound that cannot be invested in our NHS, schools, social care system and local communities. It is money that cannot be used to recruit nurses, support teachers, improve public transport or rebuild the local services that people rely on every day.
Illicit finance does not simply deprive us of important public revenue; it actively reshapes our economy in very damaging ways. Nowhere is that more visible than in the housing market. Vast quantities of suspect wealth have flowed into UK property. We have already heard about million-pound mansions in Kensington, but it extends as far as entire new apartment blocks being bought by foreign investors in shell companies, with no notion of who they are and why they are investing here in the UK. It is a vehicle within which wealth can be stored and concealed rather than places for people to live. The result is higher prices, reduced affordability and a market that too often rewards speculation over social need.
That is why transparency—an important word that has come up today—must be at the heart of our response as a Government and this upcoming summit. No individual should be able to own property in the United Kingdom without their ultimate beneficial ownership being disclosed, verified and recorded on a public register. If ownership cannot be established transparently, that asset should not be capable of being bought, sold or transferred within the UK market.
I agree with colleagues’ comments on the overseas territories and Crown dependencies. I do not want to reiterate their arguments, but our Government must establish a fully public and independently verified register of beneficial ownership covering all UK land and property, including assets held through trusts and nominee arrangements.
Companies House must be transformed from a passive registrar into an active gatekeeper with the powers and resources necessary to verify company directors, beneficial owners and corporate filings before companies can operate within our economy. The Land Registry, Companies House and the National Crime Agency should be given stronger powers to investigate opaque ownership structures and pursue wrongdoing wherever it occurs.
We know, however, that rules are not enough; enforcement matters too. Agencies tasked with tackling economic crime remain significantly outmatched by and under-resourced for the scale of the challenge they face. Long-term investment is desperately needed in specialist law enforcement and regulatory bodies. Such investment could be funded in part, perhaps, through stronger economic crime levies on major financial institutions, asset recovery and financial penalties. We should also expand the use of unexplained wealth orders and remove the legal cost barriers that have too often discouraged their use.
We must also confront those who enable financial wrongdoing. The vast majority of lawyers—I was one—accountants and financial professionals act responsibly but, if individuals facilitate illicit activity, there must be meaningful consequences. Equally, we need stronger legislation against SLAPP—strategic lawsuits against public participation—to protect journalists, researchers and campaigners who, in the public interest, expose corruption and financial misconduct. Illicit finance does not respect national borders, so the UK must lead international efforts to improve transparency, tackle offshore secrecy and strengthen co-operation between Governments, regulators and law enforcement agencies.
This issue is ultimately about the kind of country that we want to be. Do we accept an economy where secrecy, wealth and influence can buy special treatment, or do we believe that everyone should contribute fairly to the society from which they benefit? I know that everybody in this room sees society in the same way that I do, because most people understand that very simple principle. When everyone pays their fair share, we can properly fund the public services that bind us together and invest in the future of our communities.
Edward Morello (West Dorset) (LD)
It is an honour to serve with you in the Chair, Sir Roger. I join right hon. and hon. Members in thanking my hon. Friend the Member for North Norfolk (Steff Aquarone) for securing this vital and timely debate, as well as for his broader work on illicit finance. I also thank the APPG for its work.
The illicit finance summit 2026 presents a significant opportunity for the United Kingdom to demonstrate leadership in tackling corruption, money laundering and the flow of dirty money around the world. The Government’s decision to delay the summit from June to December has understandably raised concerns and is certainly disappointing. However, we now have a second chance to get it right. The additional time should not be wasted, because illicit finance is not a victimless crime. It funds organised crime, human trafficking, corruption, sanctions evasion and hostile state activity such as Putin’s illegal war in Ukraine. It undermines confidence in democratic institutions and deprives countries, particularly developing nations, of resources needed for schools, hospitals and economic growth. As has been widely stated in this debate, recent analysis estimates that up to £788 billion in illicit finance flows through the UK, its overseas territories and Crown dependencies each year. That should concern every Member of the House.
As a Member of the Foreign Affairs Committee I have heard repeatedly that the challenge is now not necessarily the lack of legislation, so the priority must be implementation, enforcement and closure of the remaining loopholes that allow illicit finance to continue to flow through the global financial system. Enforcement remains a particular concern. Despite progress in freezing criminal assets, they are not being recovered at a sufficiently high rate. Current estimates suggest that only £1 in every £4 of frozen criminal assets is ultimately recovered. That is money that should be returned to the public purse, used to compensate victims and reinvested in the fight against organised crime and corruption. The summit must therefore focus on not only identifying illicit wealth, but ensuring that enforcement agencies have the powers, the resources and—importantly—the international co-operation necessary to recover it.
As several hon. Members have highlighted, beneficial ownership transparency is an area where progress is required. The Liberal Democrats support the Government’s ambition to improve transparency across the UK overseas territories and Crown dependencies. We welcome the progress already made in places such as Gibraltar, Montserrat and St Helena. However, more needs to be done. That should not be approached confrontationally. The overseas territories and Crown dependencies are valued partners. Many have taken meaningful steps forward. The role of the UK should be to engage constructively, to provide support where needed and to work together to ensure that meaningful access to beneficial ownership and corporate information is in line with international standards. That means achieving transparency that meets, at a minimum, standards comparable to those required under the EU framework. It is also important that we recognise the economic realities faced by some of those jurisdictions. Financial services play a significant role in their economies. If we want proper, lasting reform we must help to support economic diversification and resilience so that transparency and prosperity go hand in hand.
The UK will assume the G20 presidency immediately after the summit takes place. We will also take on the presidency of the Financial Action Task Force, the world’s leading anti-money laundering body. We therefore have a unique opportunity to shape the international agenda. The summit must deliver concrete commitments that include stronger international information sharing, improved asset-recovery arrangements, enhanced co-operation on cryptocurrency regulation, and greater transparency on property ownership. International co-operation will be essential if we are to tackle criminal networks that operate across borders, move assets between jurisdictions and exploit gaps between national regulatory systems.
The summit must also address the growing threat posed by cryptocurrency and other digital assets. We have already seen evidence of cryptoassets being used to evade sanctions and move money across borders beyond the reach of traditional financial controls. Criminal networks and hostile actors adapt quickly; regulators and Governments must do the same. That is another area where international co-operation is indispensable, allowing Governments, regulators and financial institutions to share intelligence rapidly and respond to emerging threats before they become entrenched. The success of the summit will be measured by whether it creates momentum that continues through the UK’s G20 presidency, our leadership of the FATF and beyond.
We must also reflect the priorities of the countries most affected by illicit finance. Too often developing countries lose billions through corruption, tax abuse and illicit financial flows, while also having the fewest resources to tackle those issues. Ultimately, this matter is about more than financial regulation; it is about national security, economic fairness and defending democracy and public trust. It is about ensuring that the United Kingdom remains a leader on the world stage.
The delay of the summit was disappointing, but the Liberal Democrats believe it has created an opportunity and a rare second chance. I hope the Government will use the months ahead wisely.
Wendy Morton (Aldridge-Brownhills) (Con)
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for North Norfolk (Steff Aquarone) on securing a debate on an issue of significant importance to the UK’s national security and economic integrity.
There is clearly broad agreement across the House that illicit finance fuels corruption, organised crime, hostile state activity and conflict around the world. Dirty money undermines the rule of law, weakens democratic institutions and threatens our security at home and abroad.
The last Conservative Government took important steps to strengthen transparency, tackle economic crime and improve international co-operation, as my right hon. Friend and neighbour the Member for Sutton Coldfield (Sir Andrew Mitchell) said. Under David Cameron’s leadership as both Prime Minister and latterly as Foreign Secretary, the UK was at the forefront of the global anti-corruption agenda, convening the first of its kind anti-corruption summit in 2016, and driving greater international focus on beneficial ownership, transparency and the recovery of stolen assets.
I am proud that when in government my party strengthened sanctions enforcement following Russia’s illegal invasion of Ukraine. We introduced the Economic Crime and Corporate Transparency Act 2023 and sought to close loopholes that allowed illicit finance to flow through international financial systems. Against that backdrop, I welcome the Government’s commitment to host the illicit finance summit later this year. The Government have said that the summit will focus on global enforcement, asset recovery, illicit gold trading, property-based money laundering and the misuse of cryptoassets. Those are important priorities and areas where international co-operation is absolutely essential.
However, the success of any summit will ultimately be judged not simply by what is happening, but by the practical outcomes that it delivers. I have a number of the questions for the Minister. On Russia, what specific proposals will the Government bring forward to strengthen sanctions enforcement and close the remaining loopholes that enable sanction circumvention? What assessment has been made of the effectiveness of current enforcement mechanisms and what further action is being considered to target the networks and the intermediaries that continue to facilitate the movement of illicit Russian funds?
It is in that context that I raise concerns that the Government, in recent weeks, have quietly issued a licence allowing imports of Russian oil refined in third countries. Can the Minister explain what rationale justifies that decision when the Ukraine sanctions commissioner has directly told us that the Government’s actions
“may still generate additional revenues for Russia’s war machine”?
On Iran, illicit finance remains central to the regime’s ability to fund destabilising activities across the middle east. What discussions will take place at the summit on disrupting Iranian financial networks and strengthening international co-operation against sanctions evasion by the Iranian regime and its proxies?
The Government have rightly highlighted the importance of international partnerships. The Minister will know that the overseas territories play a vital role in supporting our economic interests and the global financial system. Can he update the House on the discussions that are taking place with the overseas territories’ Governments ahead of the summit?
Can the Minister also explain how the recent restructuring in the FCDO affects the UK’s ability to tackle illicit finance internationally? What assessment has been made of whether the FCDO currently has the resources necessary to meet the ambitions his Government have set out for the summit? Finally, what legacy does he expect this summit to leave behind? I raise that question because the 2016 anti-corruption summit and the work that followed helped to establish a framework for international action that endured well beyond the event itself. It is important that this summit has a legacy, too.
The Opposition support robust action against illicit finance and efforts to strengthen sanction enforcement, to combat corruption and protect the integrity of the international financial system. We want the UK to remain a global leader in this field, so I look forward to hearing from the Minister how his Government intend to translate the ambitions of the summit into meaningful and lasting action.
The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
I thank the hon. Member for North Norfolk (Steff Aquarone) for securing the debate, and all the right hon. and hon. Members who have contributed. It has been a thoughtful and important discussion on an issue that goes to the heart of our national security, our prosperity and our values.
I can reassure the House that this Government are determined to tackle dirty money both at home and internationally, and that it remains a key priority. Hosting the illicit finance summit in 2026 is a central part of that commitment, which we will deliver on. We need to do that because illicit finance, as many Members have pointed out, fuels organised crime, corruption and conflict, enables kleptocrats to hide stolen wealth, undermines economic growth and weakens democratic institutions here and abroad.
Crucially, as was rightly pointed out by a number of Members, it directly affects people here in the UK, from fraud and scams to criminality on our streets, as shown so excellently by the examples given by right hon. and hon. Members in relation to their constituents. Indeed, as a global financial centre, we also have a responsibility to lead international efforts in this field to tackle this threat.
I appreciate the cross-party nature of today’s debate. Of course, one party is not here. What a surprise—Reform is absent yet again. I will let hon. Members draw their own conclusions from that.
The summit will be a major opportunity to drive international action. The aim is to bring together countries, international organisations, civil society, private sector experts, researchers and others to tackle dirty money around the world. I was asked a number of times about the objectives of the summit, which are very clear—to expose the scale and harm of illicit finance, to forge new partnerships, to share intelligence, to strengthen enforcement and, crucially, to secure concrete commitments for the future that close the gaps exploited by criminals and others who seek to undermine our society’s economies.
We will strengthen global enforcement against illicit finance through new partnerships on, for example, information sharing and asset recovery, which also came up. The summit will also help us to agree actions to tackle channels for dirty money, including money laundering in the property sector, which was rightly raised, the misuse of cryptoassets and, as was rightly referenced in relation to Sudan and other locations, trade in illicit gold.
There is no great conspiracy around the change in the date. As the shadow Minister, the right hon. Member for Aldridge-Brownhills (Wendy Morton), and other colleagues know, there is often complexity when it comes to the diaries of Ministers and others whose attendance we want to secure at these summits. It will take place in December, and we will announce the exact date in due course.
It is crucial that we have a successful summit and have the right people there, and that we can demonstrate our own leadership on a number of key topics. I appreciate the welcome from many hon. Members who understand that it is better to have a summit that is successful and that has the right people than one that is, perhaps, not all it could be. That is why we took the decision; it was not taken lightly. I will keep the House updated on the preparations in due course.
I was asked a number of times what the Government are doing on this domestically, which is obviously crucial. This is not just an agenda for the Foreign, Commonwealth and Development Office; it is also for my ministerial colleagues in the Home Office, the Treasury, the Department for Business and Trade and many other agencies, as well as our law enforcement agencies. The economic crime Acts protect our open economy and strengthen the UK’s reputation as a place where legitimate business can thrive. We have built on the Acts to enable further progress. In October, the Chancellor announced that the Financial Conduct Authority will take supervision of anti-money laundering and counterterrorist financing in professional services firms—another theme of the debate. That will replace a system that previously involved 22 different private sector bodies. It is better that that is brought together and focused to simplify the system and strengthen our defences. The Chancellor announced an increase to the economic crime levy rates—this was also referred to by hon. Members—which will raise an additional £110 million a year to boost law enforcement staffing and technology, and support public-private data sharing and financial intelligence to target criminal activity.
There is, of course, much more to do, and I accept that challenge. We set out further ambitions in the UK’s anti-corruption strategy, which was published in December. That important document included an additional £15 million to expand the domestic corruption unit and improve investigation—the shadow Minister asked about the resourcing across Government and agencies for that. This does not mean that we cannot do more; we will always seek to bring more effort to bear on this. It is important that this is a cross-Government and cross-Agency effort, and that it is not just one Department. We are also working on a new anti-money laundering and asset recovery strategy to strengthen our response.
We also have to focus on international co-operation. It is not within the abilities of one country alone to tackle this; it is huge, and the sums referred to by right hon. and hon. Members were staggering. We are using a range of measures on everything from sanctions to exposures of different networks that are moving money around, particularly in new technological ways; for example, by using crypto. As an example of that, colleagues will be aware that in October 2025 and March 2026 we sanctioned the Prince Group and its enablers. It is responsible for a huge network of scam centres in south-east Asia that exploit trafficked workers to defraud victims on a global scale, including on the streets here in the United Kingdom and undoubtedly in every one of our constituencies. Our sanctions froze £127 million-worth of UK property and triggered a wave of investigations and arrests across the region. We also launched the world’s first dedicated sanctions regime targeting irregular migration. And we did not stop there: at the Berlin process summit, we targeted a number of entities including criminal gangs that are driving people smuggling across the western Balkans.
We are also working through bodies such as the International Anti-Corruption Coordination Centre, which has identified and frozen billions of pounds of stolen assets globally. We are looking at every way in which evasion is going on and new networks are being used, which includes the evasion of Russian sanctions by those exploiting cryptoassets and complex financial routes. Members will have seen our announcements in recent weeks on that as well as the closing down of crypto exchanges and other means by which illicit finance is being used to fuel the war in Ukraine. That is on top of the National Crime Agency’s Operation Destabilise, which exposed and disrupted high-harm Russian money laundering networks supporting serious and organised crime around the world. That led to 84 arrests—many are already serving prison sentences—and we seized over £20 million in cash and cryptocurrency. That is tangible progress that is being made, which is important to reflect on. I pay tribute to all the law enforcement officers and experts who were involved in that.
Members have rightly raised points about the overseas territories and Crown dependencies. I have spoken about that issue on many occasions in this House, and Members will have heard what the Justice Minister and, indeed, the anti-corruption champion, my hon. Friend the Member for Rother Valley (Jake Richards), said in relation to the Crown dependencies. As I am also Minister for overseas territories, I am glad that there was recognition of the progress made in Gibraltar, Saint Helena, Montserrat. We have legitimate interest to access registers in the Cayman Islands, the Turks and Caicos Islands and the British Virgin Islands; progress has also been made in Anguilla. However, I recognise the serious concerns that colleagues have raised about whether some of the measures go far enough. I am in regular dialogue with the elected Governments in the overseas territories, and I have made clear the progress that we expect to make and our disappointment at some of the backsliding we have seen.
One location that came up in many right hon. and hon. Members’ speeches is the British Virgin Islands. I want to reassure colleagues that I have raised those concerns directly with the Premier and other agencies in the British Virgin Islands in recent weeks. All options remain on the table if we do not see the sort of progress that we need, because, as been rightly pointed out, this is an issue not only about financial transparency and global economic stability, but about the national security of this country and the global British family. When it comes to the threats posed by Russia, Iran and many other malevolent actors—let alone serious and organised crime—we have to adhere to the highest standards. I have conveyed that to the Premier and the authorities in BVI in the strongest terms and I will update the House in due course.
I have said a lot about the action in relation to Russia, which the shadow Minister asked me about, but she also asked about Iran. We have a range of measures in this regard: ramping up disruptions of UK-connected Iranian networks, increasing enforcement actions against Iranian organised crime and sanctions-circumvention networks and indeed dissolving companies registered in the UK for facilitating financing to the Islamic Revolutionary Guard Corps.
The shadow Minister also asked about the related sanctions issue. To be very clear, we are not watering down existing sanctions; we are introducing new sanctions in relation to refined oil and liquefied natural gas, but naturally with a phased-in strategy to ensure that we can wind down existing contracts and others. I can assure hon. Members that that is under regular review, and that we certainly do not want to see Putin or his regime gain any kind of bonanza from this.
We have been clear from the start that we are doing a huge amount to tackle the issue of asset recovery. In fact, in 2024-25, asset recovery from proceeds of crime was up by 31%, with £284.5 million recovered. We continue to be very ambitious in those strategies.
We are also doing a huge amount, as I said, on the enablers—that was touched on by a number of people—and that new approach by the FCA will ensure that we have the powers to take a coherent, effective and impactful approach to supervision.
In the remaining time—I am trying to work out how long I have, Sir Roger; I will keep going until you shout “Order”—the hon. Member for North Norfolk quite rightly asked what we are doing with people who fail to comply. Let me be clear on that: verification of directors and persons with significant control is mandatory. Individuals who fail to comply in this country may face financial penalties, disqualification or, indeed, criminal sanctions.
We are also clear that overseas entities on the UK register of overseas entities and register of persons with significant control must comply with our beneficial ownership requirements. We are taking every step possible. Of course, it is for enforcement agencies to follow up on these things, but we are very clear on this, and Companies House is actively identifying non-compliance and working with partners across Government and law enforcement to ensure that entities meet their obligations.
If I have not replied to any specific points, I am very happy to write to hon. Members afterwards, but, in conclusion, I want to reassure Members that this remains a major priority. This summit will happen, and it will have tangible, important announcements to make about our commitment here at home and about what we are doing overseas. We will make sure that that has a legacy that impacts into the future, particularly as we enter an important year regarding the G20. I thank everybody for their contributions.
Steff Aquarone
I thank the Minister for his responses, and all Members and hon. Members for their contributions. I will just reiterate what I said earlier: this is not a popular cause on the doorstep, but it is the right thing to do. I feel like I have become a recent member of a noble, long-standing cause, which I welcome, and for which I am grateful. I reiterate my offer to the Minister to support his initiatives. Lastly, I will just say, let us consider the brief, summarised conclusions of Margaret Hodge: it might be time to drop the carrot and start to use the stick.
Question put and agreed to.
Resolved,
That this House has considered the Illicit Finance Summit 2026.