My Lords, in line with our commitment to make the UK a hostile place for illicit finance, the UK remains committed to establishing a new register of beneficial owners of overseas entities that own or buy property in the UK. The register requires primary legislation and the Government will legislate when parliamentary time allows. Her Majesty’s Land Registry does not hold information on the nationality of individuals as property owners and currently has no plans to introduce this.
I thank the Minister for that Answer. We are talking about £170 billion-worth of property. The Government are supposed to support the idea of legislation to deal with what David Cameron called dirty money, and a Home Office and Treasury report last December raised the government assessment of the money-laundering risk for property ownership from medium to high. The report said:
“Corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise their corruption proceeds.”
If the Government support legislation, why do they not get on with it?
We do support legislation, as I have told the noble Baroness before in this House. Finding time to legislate in recent years has been challenging. My department has been working on complementary forms for Companies House such that when we implement ROBO, and we will, it will be more effective because of the broader powers that Companies House will have.
My Lords, a public register of property ownership was promised by the noble Lord’s party in 2016 and consulted upon in 2017. A Bill was promised in 2018, again in the Queen’s Speech in 2019 and at the G7 in 2021. There is still no Bill. Can the Minister please be a little more specific than “when parliamentary time allows”?
I apologise to the noble Baroness, but I cannot. The Government’s legislative agenda is not fixed yet. There are a number of different measures that different departments want to put forward and there has to be a weeding-out process, as all noble Lords who have been involved in government will know.
My Lords, does the Minister not recognise the total contradiction between a commitment to take back control and reassert UK sovereignty and encouraging foreign investment, but to be owned anonymously by powerful and dubious men from authoritarian countries, in substantial chunks of London and the countryside around it?
I realise the Liberal Democrats are obsessed with the EU, but this has nothing to do with it. The two events are totally separate. We could implement ROBO whether or not we were members of the EU. We are intending to implement the register of beneficial ownership when parliamentary time allows.
My Lords, the pre-eminence of London rests on having light but effective regulation, a dependable common law system and uncorrupt judges, not on a cult or illicit money. Of course, there are other pressures on the legislative timetable, but will my noble friend the Minister at least undertake to try to find space in this Session as part of the anti-corruption measures to which we are committed internationally?
I totally agree with my noble friend. Just last week in the spending review we committed to new investments of £63 million for Companies House reform and £42 million for tackling money laundering and fraud. This is alongside the economic crime anti-money laundering levy which will provide an additional £100 million funding per year from 2023-24. We are committed to cracking down on money laundering and we will implement this legislation when time allows.
My Lords, the UK published a draft Order in Council under the Sanctions and Anti-Money Laundering Act 2018 that required British Overseas Territories to establish a public register of companies’ beneficial owners by 2021. Can the Minister confirm reports that this will not now be required until 2023? If so, can he explain why it has been postponed?
The UK’s overseas territories and Crown dependencies have all now committed to introduce publicly accessible registers of who ultimately owns companies registered there by 2023, as the noble Baroness has said. They regularly share information with UK law enforcement and tax authorities.
My Lords, the committee looking at the draft Bill recommended that there be improved means for members of the public, journalists and NGOs who have information about beneficial owners who are not properly registered to flag up concerns with the Land Registry and Companies House. What, if any progress, has been made towards that?
When the register is implemented there will be considerable incentives to comply and penalties for not complying. I am sure that Companies House and the Land Registry would be very interested to hear any reports of anybody not abiding by the regulations.
Unless I am mishearing, the Minister and his department are chomping at the bit to bring forward this legislation, so what advice could he give to those of us who would like to help him persuade the Government Whips that this is an important priority?
My Lords, many hard-working UK voters are fed up with the way in which the property market—particularly in London—is used to apparently hide ill-gotten gains, and with the seeming complicity of the UK Government. Do the Government accept that one way of ending this is to add some weight to getting this legislation into this House as soon as possible?
As my noble friend will know, I agree with him. We want to legislate on this as quickly as possible. The UK is one of the world’s largest and most open economies, and the UK and London are among the world’s most attractive destinations for legitimate businesses and overseas investors. That is a good thing, but it exposes the UK to the risk of money laundering. That is why we are being about tackling illicit financial flows through the Economic Crime Plan and why we will proceed with this legislation.
Has the Minister heard of Roberto Saviano? He is the Italian expert on the Mafia who has to live constantly under police protection. His professional view is that the UK is the most corrupt country in the world, mainly due to the so-called neutral city enablers servicing rich criminals. The Minister’s answers go some way to explaining why that view prevails.
I am sorry that the noble Lord takes that view. However, we had some interesting revelations in the recent Pandora papers. There is a certain lady who is the wife of one of the ex-leaders of the Labour Party who chose to buy property through a British Virgin Islands registered company—perfectly legally, but she managed to save a substantial amount of tax. So, if I were a Labour Peer, I would be careful where I went with this.
I assume that the noble Baroness, Lady Donaghy, is referring to the registration of overseas entities Bill, which establishes a framework for the register of companies to establish a register of overseas entities. All overseas entities that own or wish to acquire property in the UK will be required to have registered before they can register their title or dispose of the property. This places a practical bar against dealing with UK property to any company not having complied with the registration requirements. Existing owners have 18 months in which to register.
My noble friend is correct about our intention for the registration of overseas entities, and an 18-month transitional regime is planned once the register has been implemented. This will give overseas entities time to either dispose of their holdings or identify and register their beneficial owners. The regime will disincentivise anyone seeking to do business with a non-compliant overseas entity.
My Lords, Companies House does not make any checks on the authenticity of company directors. Does the Minister know how many persons of significant control have used fake names and addresses, and therefore control property in the UK under the same fake identities? If not, why not?
Of course there are always some people who present fake identities, and Companies House will take action where that is identified. We are reforming Companies House, as the noble Lord knows. I mentioned the amount of money that we are putting into that. We want to try to tighten up the regime and make sure that people are registered legitimately. London and the UK are open to doing business and we take pride in being an open and accessible economy, but there is no place for illicit money flows, and we will take action to prevent it.