War in Ukraine: Illicit Finance

Alyn Smith Excerpts

Thursday 17th November 2022 Westminster Hall

[Alyn Smith (Stirling) (SNP)]

It is a pleasure to see you in your place, Mr Efford. I am glad to wind up for the SNP in this important debate. I commend the hon. Member for Isle of Wight (Bob Seely)—he is a leading expert in the House on these issues. As ever, he made a powerful contribution and I commend him on his efforts. I thank the Foreign Affairs Committee for this important piece of work. I am here partly on behalf of my good and hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald), who is presently engaged in a by-election in Glasgow.

If we boil down my speech to its essence, the SNP supports the report and wants to see it all implemented. I urge the Minister to show a bit more ambition and oomph than we have seen thus far in the official Government response to the report. I appreciate that there is collective responsibility, but I stress to the Minister that this is a cross-party report and these are cross-party recommendations. Where there are serious efforts to tackle this stuff, the SNP will play our part in that coalition. There is a real opportunity for the Government to make meaningful progress on these important matters, because we do have a problem. There has been a triptych of reports from the House: the “Moscow's Gold” report, which has been mentioned; the Intelligence and Security Committee of Parliament’s Russia report; and this report, which sits alongside both of those previous efforts.

The report broadens the point, which has been well made, that we are not just speaking about dirty Russian money. Dirty money is dirty money, wherever it comes from. Dirty money corrodes and hides in the shadows. The fewer shadows we have in our economic governance the better. I speak as a former financial services solicitor in the City, so I am familiar with the ways these rules can be gotten around. We are dealing with some of the most slippery, best-advised and richest people in society who are really good at getting round rules. We need to make sure that there are as few loopholes and grey areas as possible, because, as we have heard, the numbers are vast. The UK’s financial and professional services sectors have played a key role in bankrolling the Kremlin regime, and other regimes. That should really shame us all and give us all pause.

Illicit finance needs to be tackled. London is a major international finance centre, but it is also an international dirty finance centre, and I include Edinburgh in that and various other place in the UK, as well. This is a common effort that we need to work upon.

I do not propose to rehearse the points that have already been made, but I will pick out a few things on which I urge the UK Government to act. And I pledge SNP support in this House and the co-operation of the Scottish authorities as well, because much of this matter is reserved as opposed to devolved, and Holyrood cannot touch it.

On the golden visa review, others have called for the review to publish. Yes, the scheme has ended, but important lessons need to be learned and some individuals still give cause for concern. We need to better ventilate that issue and see that review come forward.

On the slightly misnamed Scottish limited partnerships, people should not let the name fool them; the Scottish Government and the Scottish Parliament cannot regulate these legal vehicles and we need to see much greater transparency about them. The fact that we can see vast tracts of the highlands, including parts of my constituency in Stirling, being owned by opaque trusts, whereby we are not sure who the ultimate beneficial owner is, is absurd. We need to get that system fixed.

I warmly endorse the comments that made about whistleblowers, but I also endorse the recommendations in the report. We need to see greater protection for whistleblowers who bring to light facts that are of public interest. I also warmly endorse the points about SLAPPs and judicial intimidation. If the hon. Member for Isle of Wight is looking for a SNP name for his Bill, count me in; I will happily swing in with those efforts.

Regarding overseas territories, at every point that we have discussed the sanctions regime on Russia after the invasion of Ukraine—I have been involved in all those discussions—I have made the point about ensuring that there is complementarity and that there are no gaps with the overseas territories. I have been assured that there is neither complacency nor such gaps, but I am still not convinced that that is entirely the case. We need a lot more due diligence to ensure that the overseas territories are joined up and in lockstep with what we are trying to achieve because, as I have already said, some of the best-advised and slipperiest people in the world are really good at finding loopholes where they exist, or indeed creating them where they can.

There is also the point about the professional enablers: the public relations professionals; the lawyers; the accountants; and the others who have facilitated malfeasance. We need to see the professional bodies step up as well, but we also need the Government to expect much better of them. As I say, I now speak as a former solicitor, but I am still aware that there are gaps that can be exploited.

We also need to better finance the organs of Government that deal with economic crime. Good work is under way, and a lot of good people are working on this issue, but they need more support and more resources.

In closing, Companies House’s role should be that of an active, muscular regulator with teeth. However, it is not that at the moment. That is not a criticism of anybody in Companies House, but it is not doing what it needs to be able to do. It needs more resources and more powers to do it.

I hope that I have struck a consensual note in my contribution. Not much can be gained from a party political bidding war about which party is dirtiest or which party is the most in hock to dirty money. There is a common effort that we need to work upon here; it is in the interests of all our citizens to get this problem fixed. If the Minister here today is going to give these plans a bit more oomph than we have seen to date, he will have the SNP’s support in doing so.