Labour will set up a taskforce into “dirty money and ill-gotten gains” that have been laundered in the City of London, Lisa Nandy has announced.
The shadow foreign secretary told the Labour party conference this morning that the Taskforce on Illicit Finance will aim to make the UK “the most inhospitable place in the world” for dirty overseas money.
The City of London has long had a reputation as a haven for money laundering for foreign governments and organised crime.
Last year, a report from parliament’s Intelligence and Security Committee into Russia’s involvement in UK politics called for the government to crackdown on the so-called “London laundry”.
US businessman, and anti-corruption activist, Bill Browder has called the City of London “the money laundering centre of the world”.
“We will stand up to the oligarchs who subvert our democracy, avoid the taxes that fund our schools and hospitals and use the things that matter to us, the football clubs that stand at the centre of our communities, as playthings,” Nandy said.
“Today, we are launching a new Taskforce on Illicit Finance with the aim of making the UK the most inhospitable place in the world for dirty money and ill-gotten gains.
“Today, we recognise the fight against corruption as a key plank of defending our national interest.”
The National Economic Crime Centre estimates that around half of the dirty money laundered out of Russia happens in the UK.
Nandy’s quip about dirty money in football clubs is likely a nod to Chelsea owner and Russian oligarch Roman Abramovich.
Russian opposition politician, and key Putin critic, Alexei Navalny said the UK should apply financial sanctions onto Navalny for his ties to the Russian President.
The Intelligence and Security Committee report into Russia said the UK’s investor scheme had been abused by Russian oligarchs, providing “ideal mechanisms by which illicit finance could be recycled through”.
“The money was also invested in extending patronage and building influence across a wide sphere of the British establishment – PR firms, charities, political interests, academia and cultural institutions were all willing beneficiaries of Russian money, contributing to a ‘reputation laundering’ process,” it said.
In 2016, parliament’s Home Affairs Committee report estimated that around £100bn of illicit money was being laundered through the London property market each year.
Nandy told City A.M.: “For too long, the government has turned a blind eye to this dirty money and ignored the Russia Report.
“We need to recognise that talking tough on Russia while allowing corrupt elites to take advantage of the City is self-defeating. A Labour government will be ready on day one to make Britain a world leader in tackling illicit finance.”
Mayor of London Sadiq Khan threw his weight behind the bid, with a City Hall spokesperson saying: “London is a globally leading financial centre – not least because international institutions, investors and traders trust our world-class regulatory systems and agencies.
“We cannot afford to have London’s reputation tarnished and it is absolutely right that Labour is prepared to take action to root out and tackle money laundering, flushing the dirty money and actors out of the system.”