London is the global hub of money laundering, with 28 percent of it centred in the City of Westminster alone according to Transparency International UK. They found 2,189 companies registered in the UK and their offshore havens were used in 48 Russian money laundering and corruption cases, including bribery and embezzlement and involving over £82 billion.
Huge amounts of this money are funnelled through Westminster property – nearly £430m by Russians accused of corruption or government links. In neighbourhoods like Bayswater, it’s having an impact on housing: the owners of one in ten homes in Westminster are unknown, making this the topic of discussion amongst local residents rather than right-to-buy as in other parts of London, as it clearly skews the local property market.
Unsurprisingly l twice raised the issue when l was an Assembly Member at the London Assembly to then Mayor of London, Boris Johnson.
He and his office were in denial, though he subsequently accepted “…there needs to be proper transparency in the Land Registry and elsewhere.” But now he’s at No 10, he can do something about it by creating a foreign property ownership register in the UK and seizing the London properties of Putin’s cronies.
These aren’t new ideas: at the last General Election there was a call for a oligarch levy (officially known as the Offshore Company Property Levy) and John McDonnell MP set out Labour’s plan to take on the Russian oligarchs. It would have introduced a charge on purchases of residential property by offshore trusts located in known tax havens, based on a blacklist of tax havens developed by HMRC. It is similar in principle and application to the 15 per cent levy recently introduced in Toronto on foreign property owners or that Singapore and Hong Kong have maintained for many years. It appears its time has come!
Only last weekend, the French Interior Ministry seized property and assets of oligarchs in France. They have overridden legal attempts to stop them by invoking emergency powers. Anything is possible, you just need the will.
But in London, sanctions on Putin’s cronies were held up by their London law firms challenging such a move. Paris acted, and we used emergency powers during Covid to push through a lot more than this, so clearly the Conservatives lack the will to act- although what they lack in will, they make up for in donations, with nearly £120,000 donated by Russian government-linked oligarchs to the City of Westminster’s Conservatives alone.
It’s clear that corruption is on our doorstep. Westminster is a great place to live, but not only does this contribute to misery around the world by sustaining authoritarian regimes, it also has a direct impact here. The investment of enormous sums of dirty money in Westminster’s property market drives up house prices and property rents, taking them out of the reach of most local people.
It should not have taken the Russian invasion of the Ukraine to make money laundering the issue it has become globally. Now national and local politicians must finally deal with its implications in our global city.
This blog has been published in Westminster Extra in their edition for the week beginning the 4th of March 2022.