The media hardly noticed a shocking revelation about the ‘scale of money laundering’ in the UK

City of London - money laundering in the UK
Mohamed Elmaazi

The Home Office made a startling admission regarding the amount of money laundering in the UK recently. But the mainstream press appears to have missed it.

On 29 January, minister Ben Wallace said that the National Crime Agency (NCA):

estimates that there is a realistic possibility that the scale of money laundering impacting on the UK annually is at least in the tens of billions of pounds.

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But historian Mark Curtis didn’t miss it:

Continue reading below...

Deliberate policy?

Andrew Feinstein, CEO of Corruption Watch UK, told The Canary:

The UK has been amongst the biggest centres for money laundering since the deregulation of the City of London in the 1980s. This is a consequence of the largely unregulated financial sector and the myriad enablers and facilitators of corruption and money laundering, including the large audit firms, legal firms and consultants.

The Canary asked Feinstein about the government’s “ambitious new partnership to fight economic crime” called the National Economic Crime Centre. The campaigner and former politician said:

I have no faith in this government meaningfully tackling this problem as these facilitators and enablers are amongst their biggest political donors. Attempts to streamline legal enforcement on this issue have been characterised by illogical decisions and appalling implementation.

He continued:

This will be made worse by a post Brexit environment in which the government envisages the UK becoming an even less regulated offshore haven. There is simply no political will to address the issue, as a consequence of which Britain will, if anything, become an even greater enabler of global corruption and money laundering.

‘Many hundreds of billions’

In October 2015, the NCA website said it:

assesses that many hundreds of billions of pounds of international criminal money is laundered through UK banks, including their subsidiaries, each year.

So if anything, the Home Office may have vastly understated the amount of illegal funds cleansed through the City of London. From “many hundreds of billions” to ‘at least tens of billions’. Yet the Conservative chancellor Philip Hammond recently praised The City for its contribution to the country:

Tax Evasion and Money Laundering

In January 2013, a European Parliament select committee published a report on the link between tax evasion and money laundering. The report said:

tax evasion provides incentives to established financial institutions as well as authorities or politicians to engage in corrupt activities, in quest of their own enrichment or other benefit. Financial institutions/banks are interested in increasing their profits by making use of this stream of funds, even if that implies circumventing the existing rules.

By design

This means that the mechanisms financial institutions and accountants create to evade tax are inevitably used to facilitate money laundering. This is made worse by countries ‘racing to the bottom’ to offer ever lower corporate tax rates.

The UK corporate tax rate is currently 19%, the lowest on record, down 33 percentage points from the peak rate of 52% in 1982. The rate is set to drop to 17% in 2020.

These latest figures show money laundering is a massive problem. Surely it’s time for people to come together and tackle systemic corruption once and for all.

Featured image via Wikimedia Commons/Christoph Braun

Get involved

  • Learn more about major corruption in the UK.
  • Also see the work of Tax Justice advocate in the UK.
  • Write to your MP and demand they take action on large scale tax evasion and money laundering (always be concise, specific and respectful to be effective)

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