Dame Margaret Hodge MP - wise words 28 October 2021 (updated 8 January 2022 for Hansard 2 December 2021 and related complaint to Parliamentary Standards Commissioner)
Dame Margaret Hodge MP 28 October 2021
YouTube link to RUSI site https://rusi.org/news-and-comment/video-commentary/dame-margaret-hodge-uk-needs-corporate-transparency-reform
Why does Corporate Transparency reform in the UK matter?
Well it matters globally in that when we look at, for example, the Panama papers, over half of the entities that were cited signed in those papers were UK shell companies.
When you look at the FinCEN leaks again, over 3000 of the entities cited in those leaks were UK shell companies.
So that’s where we have both a domestic reach and a global reach.
I think it matters to us because we have increasingly become the jurisdiction of choice for every kleptocrat, criminal and money launderer in the world and that’s bad.
You know we used to have a reputation for being a trusted jurisdiction governed by the rule of law, and therefore those who did business with us could have trust in us. If we don't tackle the corruption that we facilitate, we will lose that reputation.
What are the solutions to this problem?
We need better transparency, we need better regulation, we need better enforcement, and we need better accountability. Toughening up the role of those facilitators, regulating them better and actually making them accountable. One my constant battles, is trying to persuade the government that if you are really going to bear down on corruption and financial crime, you have to make those facilitators accountable, the directors of the organisations personally accountable for the actions they take.
Having said that, they've made all sorts of paper commitments, but year upon year upon year, we wait for that to be translated into actual legislative proposals, a bit of a law there that we can interrogate and wend its way through Parliament and year on year on year. we're disappointed.
So again, I've been told there'll definitely be something that 2022 parliamentary cycle, I wait with baited breath, but what we do want to see is legislation that desperately does the reform of Companies House and it's affordable. I mean, at the moment it costs £12 to form a company in the UK, you could quadruple that to £50 and use the income that you gain to establish a really strong regulatory capability and support and resource some of the policing. It's so simple, it's so obvious and 50 quid to set up a company is not really a barrier to economic activity and growth.
What is your ideal vision for changing corporate registration?
I think ensuring that when you create a new corporate entity, the information can be verified, giving the powers to Companies House to interrogate, enabling them to cooperate with other agencies, making sure that all the formation agents are properly regulated and inspected, putting some controls on international formation agents so that they can't use the UK system to wrong effects.
These are all things which are perfectly part of my vision.
What is your vision for Corporate Transparency Reform?
David Cameron initiated the original anti-corruption strategy, the summit. I don't think it's been properly monitored or robustly and ambitiously implemented, but the worry is it comes to an end next year. What next? Companies House reform would be absolute priority number one, I think accountability enablers would be priority number two. I think looking at Trusts as well as companies would be priority number three. And I think looking at transparency around the ownership of properties might be priority number four, but that's just for starters.
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