MPs have held the UK’s first parliamentary discussion on criminal high street businesses, amid growing concerns that some shops are being used as fronts for money laundering, tax abuse and organised crime.
An All-Party Parliamentary Group (APPG) on anti-corruption and responsible tax brought together experts from policing, government, finance, regulators and trade bodies for a two-hour evidence session in Westminster Hall.
The roundtable, held in partnership with the Royal United Services Institute (RUSI), discussed the rise of high street outlets - such as minimarts, vape shops, barber shops and candy stores - suspected of money laundering and tax abuse.
The first of its kind
The discussion is thought to be the “UK’s first consultation on this issue”, which is “damaging the retail sector up and down the UK”, said the APPG.
How to clean up the high streets
The APPG heard that, in order to build on the progress already made in the Pride In Place initiative (which will give communities the power to veto dodgy shops), the national and local government, enforcement bodies and other partners need to focus on the following areas:
- Boost funding to enforcement agencies and regulators, at least in part via frozen/seized criminal assets.
- Take firm action to protect vulnerable people who end up staffing or acting as nominee directors for high street money laundering outlets e.g. overseas students.
- Improve communication and data sharing between enforcement agencies at both local and national levels, also between the public and private sectors.
The next steps
As a result of the roundtable, the APPG said it would explore a mandatory licensing or registration system for all hairdressers and barbers. Regulation already exists in this area, but is currently only a voluntary requirement.
It would also investigate the idea of introducing greater penalties for those letting agents and landlords who, in order to maintain rental income/gain greater commissions, knowingly enable money laundering and tax abuse in their properties.
Additionally, the party group would look at encouraging far wider use of the Companies Act, which gives enforcement agencies the power to wind up companies for a variety of reasons, including criminal enterprise.
APPG member and former chair Joe Powell MP said high streets are being “hollowed out” by illegitimate businesses that often don’t pay the tax they owe, sell illicit goods and have links to serious organised crime.
”That has real consequences for those that play by the rules, and for communities fed up with seeing illegal activity in plain sight,” said Powell.
“Today’s meeting of all the main players involved in enforcement and prevention in Parliament was a big step forward in sharing the great work happening such as Operation Machinize’s raid on over 2700 premises, and identifying where gaps exist.
“I know the Government is committed to improving our High Streets, and tackling tax evasion and money laundering. We look forward to seeing action in the coming weeks to bring this about.”
The need for a cross-system approach
Kathryn Westmore, senior research fellow at the centre for finance and security at RUSI, said: “Criminals have been exploiting the UK’s high streets for too long. They exploit legitimate business structures to launder their illicit proceeds, generate criminal revenue and facilitate organised crime on our streets.
“The insidious nature of the threat demands a cross-system response and so today’s roundtable was a welcome step forward in considering a range of options to clean up our high streets.”
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