UK must crack down on dirty money after Russia report, says Labour

Labour has stepped up pressure on the government to launch a tougher crackdown on money laundering after the Russia report warned that the City of London was being used as a “laundromat” for illicit funds.

Issuing a warning to Boris Johnson’s government that it could not shrug off the damning intelligence and security committee report, the party called for urgent steps to be taken to clean up business practices and to prevent dirty funds from being recycled in the “London laundromat”.

In a letter to the government, the party demanded that ministers bring forward the 2023 date when UK overseas territories – such as the Cayman Islands and British Virgin Islands – will be forced to publish public registers of company owners, saying it needed to improve transparency much more quickly.

David Cameron first promised the registers during his premiership, although progress to introduce them has been slow and pushed back to 2023.

Labour also said ministers needed to put in place new powers to target the assets of individuals using the UK to launder money, and that additional funding should be made available to National Crime Agency.

The letter from the shadow Treasury minister, Pat McFadden, and the shadow foreign minister, Catherine West, comes a week after the long-delayed Russia report warned that foreign influence in the UK had become the new normal.

In a scathing assessment, it said successive governments had welcomed oligarchs and their money with open arms, connecting them with British businesses and political figures at the highest levels.

“The government cannot simply shrug off this report,” said McFadden. “We need a strong response both in terms of our own security and the protection of the rule of law. It does our economy no good if corruption and illicit funding is allowed to go unchallenged.”

West said the report raised questions about the Conservatives’ failure to crack down on money laundering. “The Tories have had 10 years to sort out tax havens in British jurisdictions, but there are concerns that funding from Russian donors to Johnson’s Tory party coffers could be holding them back.”

In its response to the Russia report, the government said it was clear that tackling illicit finance and driving dirty money and money launderers out of the UK was a priority. “We are not complacent and we will ensure the full weight of law enforcement bears down on dirty money,” it said.