7 hours ago
16
At least £325bn worth of dirty money is flowing through the UK every year, according to research that is sparking concerns about funding for state investigators and the government’s push into crypto assets.
The figure is equivalent to more than 10% of UK GDP and includes illicit funds linked to financial crime, money laundering, corruption, illegal trade and tax dodging, according to the report by the Finance Innovation Lab charity.
Including the UK’s crown dependencies and overseas territories, such as Jersey and the Cayman Islands, the figure jumps to more than £788bn annually.
The research is believed to be the first comprehensive attempt to quantify the scale of illicit finance flows linked to the UK, with cross-border data on tax evasion and financial crime revealing the extent of the UK’s international role as a hub for dirty money from across the world.
The figures were released as the UK postponed the Illicit Finance Summit, originally due to take place on 23-24 June, to December.
The Finance Innovation Lab urged Labour ministers to “demonstrate leadership” by confronting the UK’s role in enabling economic crime and tax evasion.
One of the report’s authors, Jesse Griffiths said: “Rachel Reeves has described the UK’s financial sector as the ‘crown jewel’ of the economy. Our report shows that, all too often, it is in fact playing a central role in supporting illicit financial flows: harming our economy, taking money from our public services, and supporting crime. Understanding the true scale of this is an essential first step toward ensuring the financial system works for society, not against it.”
The all-party parliamentary group (APPG) on Anti-Corruption and Responsible Tax is backing the Finance Innovation Lab’s calls for government action, including a rise in funding for state investigators including the National Crime Agency and Serious Fraud Office, which they said would be likely to pay for itself through higher fines and asset seizures.
The Lab is also calling for a “pause” on ministers’ plans to make London an international crypto hub, a plan influenced in part by the Trump administration’s exuberant promotion of alternative digital assets. That is despite crypto assets increasingly being linked to money laundering and hidden market dealings.
“The UK’s global role as a financial hub brings economic benefits, but also attracts criminal, corrupt and tax abusive activity that undermines national integrity, distorts markets, and erodes public trust,” the report said. “Government plans to make the City a global hub for crypto assets risk exacerbating this.”
It added that a crackdown on UK-linked tax havens was key, requiring full transparency over the real owners of shell companies in overseas territories, including the British Virgin Islands.
Phil Brickell, Labour chair of the APPG, said: “After years of inaction from previous governments it is time for us to become part of the solution, not part of the problem. It’s time to give our enforcement agencies the resources they need to crack down on the scourge of economic crime, and for key UK overseas territories to finally lift their veil of corporate secrecy.”
The Treasury was approached for comment.
