John Penrose is a former Cabinet Office Minister. He is MP for Weston-super-Mare and the Prime Minister’s anti-corruption champion.
I’m delighted to hear that the Government is today going to set out a clear timetable for our long-promised legislation to break the secrecy surrounding foreign owners of British property.
Back in 2015, Britain became the first country in the G20 to make foreign owners of British firms come clean about who’s really behind them, by declaring it on a public register.
For most clean, reputable firms it made no difference at all. They had absolutely nothing to fear. But dodgy shell companies that were being used to launder criminals’ cash, or hide plunder from wars, are finding life far harder than before.
Even better, as a result of Britain’s lead, other EU and G20 countries have followed suit with their own registers too. If daylight is the best disinfectant, some previously-murky corners are getting a pretty powerful dose. The changes showed the world that post-Brexit Britain will be a strong, reputable, trading nation: a global citizen that takes a lead on international problems like corruption, and which welcomes clean international investment.
Today, we have an opportunity to lead the world again. More than £122 billion of property in England and Wales is owned by offshore firms. Many of them will be entirely reputable; exactly the kinds of clean international investors who Britain will want to welcome with open arms after we’ve left the EU.
But a few will be dodgy, anonymous shell companies. So a register of who really owns what properties, to match the one we’ve already established for British companies, will shine a pitilessly-bright beam of sunshine into any shadows that might be lurking. It will prove, conclusively, that the UK is not a bolthole for the world’s dirty money.
Luckily, having a Prime Minister who used to be Home Secretary makes things much easier, because she gets the problem already. She understands how economic crime and corruption don’t just put the UK’s hard-won international reputation at risk. They undermine faith in our entire society and make it harder to unlock security, prosperity, and wellbeing at home and abroad.
The rest of us don’t have to look far to find evidence that she’s right. Every week across the globe, new and high-profile corruption cases are reported in the media – in politics, business, and even sport. Corruption undermines economic and commercial legitimacy, because people can see the system is stacked against them.
And it’s often the poorest people who suffer most, whether it’s being denied access to health care or basic education because they can’t afford the necessary bribes, or dreadful public services because public contracts were awarded corruptly instead. The UK starts from a better position than that, of course, but we aren’t immune. Criminals are flexible, dangerously clever people who are always trying new techniques and technologies. That’s why the ownership registers are so vital.
What’s more, the knock-on effects of dirty money artificially driving up British house prices puts the dream of home ownership beyond too many people’s grasp as well.
So the Government has already said it wants to introduce the new ‘Property Register’. It won’t be easy, of course; being a global trailblazer is rarely simple. Creating a legally-watertight framework will be pretty complex, as it will have to withstand well-funded and vicious legal challenges from deep-pocketed, dodgy people around the world with masses to lose.
But we promised it, so it must be done. It was announced back in 2016, and consulted on last year. The world is watching and it’s time to deliver. There’s cross-party backing for it in the House of Lords and the House of Commons, and I expect the Government to make a sensible announcement today in the Lords on how this will be implemented imminently.
Government Ministers have declared an end to the ‘clear abuse of the London property market and high value properties across the country’ and that ‘we must not allow this city to be a haven for kleptocrats hiding their ill-gotten gains.’ I couldn’t agree more.