Billions of pounds have been laundered through the City of London, despite Britain remaining one of the safest and cleanest places in the world to do business, the home secretary has said.
Amber Rudd issued the warning as she announced plans for a new national economic crime centre, with the power to task the Serious Fraud Office to investigate the worst cases of fraud, money laundering and corruption.
The national economic crime centre will be based within the National Crime Agency and will oversee the national police response to financial crime, backed by greater intelligence and analytical capabilities.
The move, which will include naming a Home Office minister responsible for tackling economic crime, is part of a revised anti-corruption strategy published on Monday that targets “corrupt insiders” in sectors including policing, prisons and border force, and pledges greater transparency over who owns and controls businesses to improve trust in Britain as a place to do business.
The Guardian’s disclosure of the Panama Papers has already led to the creation of a government taskforce using the data to improve official understanding of the complex and opaque structures used to mask offshore tax evasion. The revised strategy document says that by October, a joint financial analysis centre had opened civil and criminal investigations into more than 66 individuals for suspected tax evasion.
The latest official figures suggest that £90bn a year in crime proceeds are laundered each year in Britain, including money from large-scale drug dealing and people trafficking. It is also estimated that fraud costs a further £6.8bn a year – the equivalent of £225 a household.
The home secretary said: “Today we are taking action against economic crime, and by that I mean the high-level crime, the billions that have been laundered through the City of London, making sure we reduce that and we are very clear we expect higher standards of integrity in this country.
“But [it is] also about everyday economic crime that affects everybody. I don’t know a single person who doesn’t know somebody who knows somebody who has been the victim of some sort of online fraud. On those two elements, high-level economic crime and everyday economic crime, we’re taking action to make sure we reduce it in this country,” said Rudd.
She will personally chair a new economic crime strategy board to drive action and Conservative MP John Penrose has been appointed the “anti-corruption champion” by the prime minister.
Rudd stressed that economic crime was not victimless.
Among the victims was Karen Mackie from Aldershot, Hampshire, who lost her solicitors practice and her home after she fell prey to a phishing scam whereby fraudsters pretending to be from her bank phoned and asked about an issue with her accounts.
The 56-year-old was told to hang up and ring the number on the back of her card, but the scammers had kept the line open and, in the belief she was through to the anti-fraud team at Natwest, did as she was instructed, transferring thousands of pounds into the criminals’ accounts.
“I became quite ill afterwards as a result of it,” she said. “I lost my practice because my insurance wouldn’t pay out, as it turned out they were in financial difficulty. In other circumstances, the insurance company of the solicitors have paid out. We subsequently lost our home this year. The long-term effects just continue.”
The government’s new, more robust approach to money laundering, bribery and corruption includes new powers for the national economic crime centre to coordinate the private sector response as well as directly task the SFO. The revised strategy sets out six priorities, including: reducing the insider threat in high-risk domestic sectors; strengthening Britain as a financial centre; reducing corruption in public procurement and grants; and improving the business environment globally.
“To secure our future prosperity, we must do all that we can to make sure that Britain remains one of the safest and cleanest places in the world to do business,” said Rudd. “Our security and prosperity are inextricably linked. As the UK prepares to leave the EU, we have an opportunity to leverage our reputation for integrity and fair play as we establish new trading relationships.”
