I remember many slogans that the Conservative party has used and I would not trust many of them. However, I would like to make some progress and talk about what the Government are doing, or failing to do, to tackle economic crime.
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We support the principle behind the economic crime levy that part 3 of the Bill seeks to introduce, although we and others have questioned whether it will be enough. More widely, however, it is impossible to take this Government seriously when it comes to economic crime. Ministers seem to change their mind over an economic crime Bill by the day and, as our new clause 4 makes clear, we are all still waiting for the Government to establish a register of beneficial owners of overseas entities that own UK property.
This new public register is desperately needed, has been greatly delayed and would bring transparency to the overseas ownership of UK property. It would help to stop the use of UK property for money laundering and would finally help to tackle the shocking reputation our country has earned for being the world’s laundromat for illicit finance. Plans to introduce a register were first announced by the Conservatives in 2016 and legislation was first published in 2018. We were promised that it would be operational by 2021. It is now 2022, so this is a promise clearly broken by the Conservatives. We have seen all manner of hand-wringing from Treasury Ministers over plans for the register during the passage of the Bill. At one point, they tried to imply that failing to establish the register was the Business Secretary’s fault, but most often they have fallen back on the dreaded phrase, “We will introduce legislation to Parliament as soon as parliamentary time allows”.
There is simply no urgency from Treasury Ministers to get the register in place and no urgency whatever from the Prime Minister. Yet, as Members on both sides of the House agree, we need to rid our economic system of money laundering, and that need has become more urgent than ever with the unfolding crisis over Ukraine. Economic sanctions against Russia will be hamstrung as long as those linked to Putin and his regime can hide their wealth. They are hiding that wealth here in the UK, having bought up some of our country’s most expensive property. Much of it will be found in Knightsbridge and Belgravia—in the same SW1 postcode as the House of Commons. Transparency International has identified £1.5 billion-worth of real estate in the capital owned by Russians accused of corruption, or with ties to the Kremlin. The ownership of these firms has been revealed only through court cases, document leaks and investigations by journalists, so it is likely that that figure only scratches the surface. The truth is that high-end property in the UK plays a central role in Russian money laundering, so the Government’s refusal to introduce the register of overseas owners of UK property undermines our economic security.
The UK Government have at least one hand, and not far off both hands, tied behind their back when it comes to pursuing the dirty money of Kremlin-connected oligarchs, because we simply do not know where that money is. We have the legislation to introduce a register to help solve this problem ready to go, but the Conservatives are refusing to implement it. Why is that? Well, The Times reported last week that the Tories have received £2 million
from donors with Russian links since the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) became Prime Minister in 2019. The Centre for American Progress think tank has said that
“uprooting Kremlin-linked oligarchs will be a challenge given the close ties between Russian money and the United Kingdom’s ruling Conservative party”.
There you have it: we know Russian oligarchs linked to Putin are hiding dirty money in high-end property here in our country. Much of it has been used to buy up mansions in Knightsbridge and Belgravia, a mile from where we are as I speak. It is right under our noses and I bet they are laughing at us. We know exactly what to do to stop them. So we ask: why have the Government not acted? At best, it is disinterest in an issue of national and economic security. At worst, it could be argued that it is Conservative party self-interest, given some of its funders and friends. If Conservative Members feel as angry and frustrated as we do, they should join us by voting today for new clause 27, which brings together members of different parties to keep up the pressure on the Government to introduce the promised register of overseas entities who own property here in the UK.
We have also tabled an amendment that relates to the residential property developer tax introduced by part 2 of the Bill. We support the principle behind that tax, which will be levied on the largest developers in the residential property sector. It should help to make sure that those responsible for putting dangerous materials on buildings will pay something towards the very significant costs of removing unsafe cladding. The tax will be levied at 4%, with an expectation of raising £2 billion over 10 years. Although we support the principle of the tax, we should be clear that it will in no way end the cladding scandal, nor will it even settle the question of who pays for the crucial remediation works.
When the Bill began its passage in November 2021, the Government were expecting leaseholders in buildings of between 11 and 18 metres to take on forced loans to pay for the costs of cladding remediation in their building. That prospect hung over leaseholders’ heads for almost a year until, finally, the Secretary of State for Levelling Up, Housing and Communities realised that the Government were wrong to do this. He announced last month that he now expects developers to pay for remediating mid-rise buildings of between 11 and 18 metres. We support any moves to protect leaseholders from these costs, and we have always made it clear that, among the many players involved in the cladding scandal who should be paying to fix it, leaseholders must absolutely not be one of them.
We would like to know more about the Treasury’s view on how the estimated £4 billion needed to remediate buildings of between 11 and 18 metres will be raised. The Housing Secretary has said that he hopes the £4 billion cost will be met by a voluntary fund to which he will persuade developers to contribute. We would like to know the Treasury’s view on what will happen if developers do not come to the table and hand over that £4 billion.
We want to make sure that leaseholders are protected and that the money does not end up coming out of existing affordable homes funding. Last week, my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), the shadow Housing Minister, asked for reassurance on that point. He asked the
Housing Secretary to guarantee that funding already allocated for new social and affordable housing will not be diverted to the building safety crisis should he fail to extract sufficient money from developers. There was no such commitment forthcoming from the Housing Secretary.
It is for that reason that we tabled new clause 26 to press Ministers on what other options they might consider. I would be grateful if the Minister could confirm whether there are any circumstances, if the Housing Secretary is unable to persuade developers to hand over £4 billion voluntarily, in which the level of the residential property developer tax could be reconsidered to help to meet some of the shortfall.
Finally, I would like to address amendments tabled by other Members. My hon. Friend the Member for Easington (Grahame Morris) tabled new clause 2, which would require the Government to review and report to the House on the impact of clause 25 on the training and employment of UK seafarers. I thank him and his colleagues from the National Union of Rail, Maritime and Transport Workers for meeting me recently to explain why they believe the tonnage tax should be amended to strengthen the existing requirements to train UK seafarers.
When clause 25 was debated in Committee, the Minister did not mention the training commitment in the tonnage tax. I would therefore like to add my voice to that of other hon. Members in asking the Government today to set out their plans for the training and employment of UK seafarers.
I also commend my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) for tabling new clause 7, which would require the Government to publish a proper impact assessment of this Bill. The economy is not an abstract concept, and the Government’s decisions on how it runs will affect people’s lives, and different communities in different ways. The people we represent, in communities across the country, deserve a Government who will be up front and transparent about the impact their economic decisions will have, so we would welcome a proper impact assessment.
Across the country, people are worried about the future. Energy bills are soaring and inflation is at its highest in decades, yet the Tories propose to raise national insurance by £274 for a typical full-time worker. That shows just how out of touch the Chancellor is, and it adds insult to injury that he is doing it in the same breath as cutting taxes for banks by £1 billion a year.
The tax rise threatens the financial security of families across the country, and our country’s economic security is being left exposed by this Government. Their shocking failure, apparently driven by self-interest, to put in place a public register of overseas owners of UK property leaves us unable to use the full force of economic sanctions against Putin and his allies. This Government will not protect people from the cost of living crisis, and they will not protect our country from Russian dirty money; the only thing they want to protect is the Prime Minister’s job. I know Tory Back Benchers have not yet summoned the courage to change their leader, but I urge them to do the right thing, at least today, and join us in voting to change this Bill.