New Clause 27 - Money laundering offences: electronic money institutions, payment institutions and deposit-taking bodies

Part of Financial Services Bill – in the House of Commons at 5:45 pm on 13th January 2021.

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Photo of Angela Eagle Angela Eagle Labour, Wallasey 5:45 pm, 13th January 2021

I wish to focus on two areas: equivalence with the European Union for our financial services sector and financial crime. I also support the efforts to provide more protection against abuses in the consumer credit market and the mortgage market.

As a result of the Government’s decision to pursue a very hard Brexit and the ending of the transition period, UK financial service companies have now lost their passporting rights to EU countries. The Government’s trade and co-operation agreement with the EU in effect sidestepped financial services, putting at risk many jobs in the sector and much tax revenue for the Exchequer. The deal means that there is an agreement for goods, in which the EU has a trade surplus with the UK, but nothing for services, in which the UK has a huge trade surplus with the EU. There is a feeble non-binding declaration to establish a framework for co-operation on financial regulation, but there is no sign of any rush from the EU to grant the UK equivalence so that the loss of passporting rights can be overcome and continued market access to our financial services sector can be achieved. Perhaps the fact that €6 billion of share trading formerly done in London migrated to Paris and Amsterdam on the first day of post-Brexit trading is encouraging Brussels to drag its feet and hope that much more will follow. Over time, I fear that this Government’s lack of interest in protecting equivalence for financial services is more likely to lose us jobs and revenue than inaugurate the big bang 2.0 that the Chancellor was fantasising about in the Commons earlier this week.

Financial and economic crime is a huge problem, and one that the Government have been far too slow to address. Their own estimates suggest that one in five people in the UK falls victim to fraud every year. There is £6 billion of organised fraud against business, and this is getting worse. The extent of economic crime in the UK, including money laundering, fraud and corruption, led the Intelligence and Security Committee in its report on Russia to note that London is now considered a “laundromat” for corrupt money. As the scale of global corrupt wealth enmeshed in the UK property market becomes visible, we need an urgent step change in the Government’s response, especially on transparency of overseas property ownership, and a tightening up of the company formation process in the UK. More needs to be done, and urgently, to crack down on this behaviour.