The UK government has refused to deny claims that it will ditch “vital” reforms to combat company directors using fake names to run businesses and the moitoring of dark money.
By Martin Williams, OpenDemocracy
The proposed Economic Crime Bill would have introduced identity checks to stop company directors from using fake names. Although it is illegal to use fake identities on the business register, there is currently no way of preventing it.
The official Companies House register includes Holy Jesus Christ, who apparently used to run a small business near Heathrow Airport. Legal documents give his occupation as ‘Creator’, his nationality as ‘Angelic’, and his country of residence as ‘Heaven’.
Another active company was highlighted by a Times journalist for having fake directors that include ‘Adolf Tooth Fairy Hitler’. And a Saudi Arabian labourer called Donald Duck runs a sales firm in south London.
Last year, plans were set out to clean up the system – and stop the UK from being a hub for dark money. But it has emerged that the government could scrap the bill from the Queen’s Speech, meaning it won’t be considered in the next parliamentary year.
The news was revealed after a Treasury minister, Lord Agnew, resigned in protest at the government’s failure to tackle fraud. In his resignation letter, Agnew said the decision to ditch the Economic Crime Bill was “foolish”.
Conservative minister Paul Scully has refused to confirm Agnew’s claims, saying he did not want to “speculate” on whether the measures would be delayed. “We will introduce the bill and the broader reforms when parliamentary time allows.”
Scully told MPs: “The government remains committed to tackling economic crime,” adding: “We acknowledge the need for action on economic crime.”
The government itself had previously been supportive of the measures, saying they would mean that “criminals have no place to hide”.
Conservative MP Kevin Hollinrake, who supported the bill, also criticised the government’s apparent decision to delay the bill – saying it would be “a very significant strategic error”.
“The legislation has been promised in manifesto after manifesto,” he told openDemocracy. “And with good reason, as the measures within it will crack down on fraud, corruption, organised crime, terrorism and the impoverishment of nations by corrupt politicians and kleptocrats. I call on the government to reconsider.”
Labour’s Margaret Hodge, who chairs a parliamentary group on anti-corruption, also slammed the decision, calling it a “serious betrayal”.
“Successive governments have promised action to combat fraud and dirty money. Just last month the prime minister pledged that the property register was forthcoming. They cannot kick the can down the road any longer without economic crime causing further untold damage.”
As well as verifying company directors, the proposals would also introduce greater scrutiny for British firms that are controlled from other countries. According to Graham Barrow, a Companies House expert, hundreds of thousands of company directors do not live in the UK and are not UK nationals.
Barrow says that a huge proportion of these people have no existence in the UK whatsoever, apart from their name being listed with Companies House.
For instance, working with data firm Numitor, he found that 8,914 UK company directors are Filipino nationals, 96% of whom still live in the Philippines.
Transparency International called on the government to bring forward the bill, which it said would “help address the UK’s role as a global hub for dirty money”.
“Ministers need to get their priorities right and put fighting economic crime firmly back on their parliamentary agenda before it is too late,” said the group’s director of policy, Duncan Hames. “To lose in Lord Agnew, a counter-fraud minister, may be a misfortune; to also lose your legislation to fight economic crime would look like carelessness.”
Condemning the decision to ditch the “vital” reforms, Spotlight on Corruption said it “undermines every international commitment the government has made over the past year to fight economic crime”.