Yahoo Finance MP warns of financial corruption in UK escaping ‘toothless’ enforcers
The Pandora Papers leak shows that the UK is in danger of becoming a corrupt country because it is failing to take economic crime seriously enough, the former chair of the public accounts watchdog told MPs, as she called for more funding for financial crime enforcers.
Dame Margaret Hodge, a senior Labour MP, raised the issue in the Commons as part of a debate on the finance bill, highlighting the central role of London in facilitating economic crime.
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She said the Pandora Papers, leaked to the International Consortium of Investigative Journalists (ICIJ) and shared with media around the world including the Guardian, comprised “the largest cache of documents we have ever received” in relation to tax havens.
“The UK lies at the heart of everything revealed there,” she said. “Others have talked about secret property transactions that took place – £4bn identified in the Pandora Papers. There are more UK citizens cited in that tranche of leaks than from any other country. The relationship between the UK and our tax havens is central to the facilitation of economic crime, and again we see the weak and toothless enforcement agencies.”
Hodge called for a doubling or tripling of the planned £100m levy for fighting money laundering in order to tackle financial crime. She said it was “absolutely critical that we do start taking economic crime seriously in this country”.
She added: “If we don’t, we are in danger of allowing that to seep into our politics, seep into the public domain, and far from being a trusted jurisdiction we become a jurisdiction that is not very different from others to whom we all too often preach that they should tackle the corruption that is endemic in their administrations. We become one of them.”
She said the National Crime Agency’s estimate of £100bn laundered through the UK each year was probably an underestimate.
Earlier in the Commons, Hodge named some Conservative MPs and party associations who had been given money by companies backed by Viktor Fedotov, the Russian-born oil tycoon linked to an alleged corruption scandal.
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Anneliese Dodds, the Labour party chair, previously wrote to the Tories asking why almost one in 10 Conservative MPs had taken money from firms, including Aquind, linked to Fedotov.
Aquind is currently seeking permission from the government to build a £1.2bn cross-Channel electricity connection between France and the UK, which the business secretary, Kwasi Kwarteng, is due to rule on next year.
Fedotov’s company has made huge donations to the Conservative party and its politicians. He was revealed in the Pandora Papers to have secretly co-owned a company once accused of participating in a massive corruption scheme.
Lawyers for Fedotov and Aquind have previously strongly denied all accusations of fraud and said accusations of corruption aimed at his Russian firm were “completely false”. They said Fedotov did not personally donate to the Tories. They also said the Russian tycoon had “no influence” over donations made by Aquind, which he did not manage, and had “never had any interest in British politics”.
Kwarteng, who will make the decision based on official advice, has previously declined to comment on the Pandora Papers’ disclosures about Fedotov’s business activities in Russia.
