Phil Brickell

It is a pleasure to serve under your chairship, Mr Twigg. I congratulate my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) on securing today’s important debate. He is a distinguished advocate for the financial services sector, and I reiterate his points about unlocking cash sat on deposit in ISAs and making it work harder, not only for savers but for British businesses. The previous Chancellor of the Exchequer, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), was keen to support in that challenge, and I want to stress it again as we look towards this autumn’s Budget. My contribution will make a slightly different point from that of my hon. Friend the Member for Buckingham and Bletchley. Before entering this House, I, too, spent my career in financial services: first, in a brief stint in commercial banking, and then, for a long time as a specialist tackling financial crime. I saw first hand the strengths of our world-leading financial sector and the vulnerabilities that can be exploited by those seeking to abuse them. That experience taught me a simple lesson: the future of financial services in this country has to be a clean one. A successful City—a successful financial services sector that works for everyone up and down the length of the country and, ultimately, a successful British economy—is not built on turning a blind eye to dirty money, but on trust, transparency and integrity. As chair of the APPG on anti-corruption and responsible tax, I regularly engage with UK Finance, the City of London, compliance professionals and senior representative from across financial services. The message I hear repeatedly is that businesses do not want weaker regulation; they want smarter regulation, a point that the right hon. Member for Godalming and Ash (Sir Jeremy Hunt) alluded to. That should mean regulation that works to prevent bad faith actors, maintains the integrity of our economy and is looked at with envy by investors and competitors from further afield. A secure financial system is inherently more investable, as investors seek certainty, strong institutions and robust enforcement of the rule of law. This Labour Government, building on the platform provided by the Economic Crime and Corporate Transparency Act 2023, have made significant strides on that issue. It would be remiss of me not to thank them for the anti-corruption and fraud strategies published over the last 12 months, and I welcome the Treasury’s move to consolidate the fragmented anti-money laundering professional body supervisors under the FCA via the forthcoming Financial Services and Markets Bill. However, to really capitalise on the opportunities that are available, I would like the Government to commit to two core deliverables as part of their wider approach to economic crime: better regulatory enforcement and better transparency. On enforcement, the FCA will need to be adequately supported to fulfil its new regulatory obligations. The reality is that enforcement pays for itself many times over, across the wider landscape. The compliance work of His Majesty’s Revenue and Customs has generated around £22 for every £1 spent on compliance staff. Those are extraordinary returns on investment. We should view spending on economic crime enforcement not as a cost but as an investment in Britain’s prosperity and security. Of course, we are in a difficult period for public finances, which is why we should look carefully at how financial penalties for firms that do not abide by the rules are used. Between 2016 and 2025, the FCA secured more than £1 billion in regulatory and criminal fines, but significant sums are ultimately returned through rebate mechanisms rather than being used to strengthen the enforcement capabilities that generated the penalties in the first place. There is a strong case for allowing the FCA to retain a greater proportion of anti-money laundering fines to meet its enforcement costs, particularly as it takes on significant new supervisory responsibilities. I welcome the Economic Secretary to the Treasury to her place. As she knows, I am a long-term advocate for establishing an economic crime fighting fund, allowing a proportion of enforcement receipts to be reinvested in the agencies responsible for protecting our financial system. The financial sector rightly pays its way via the economic crime levy, so what about the criminals? Let us make them pay too. At present, billions of pounds have been raised through economic crime fines and enforcement activity, yet frontline agencies continue to face resource pressures. A sustainable, multi-year funding model would allow the likes of the FCA, the National Crime Agency and the Serious Fraud Office to further invest in specialist expertise, to build capability and to plan strategically for the long term. The Financial Action Task Force is already in town, ahead of next year’s mutual evaluation review, in which it will mark the UK’s homework on enforcement against economic crime. I would welcome the Minister’s initial reflections on whether existing schemes, such as the asset recovery incentivisation scheme, are performing as hoped, and on whether we might expect to see some reform to police funding in the forthcoming economic crime plan. I appreciate that that might not all fall squarely within the Minister’s brief, but I know that she has taken a keen interest in these matters previously and has a strong grasp of the cross-cutting nature of these issues across Whitehall. On the second point—transparency—equitable, clean growth can be achieved by reducing the compliance costs faced by legitimate firms, freeing up capital that could be more productively invested elsewhere. A major reason for those costs is the continued difficulty of identifying the true owners of companies hidden behind opaque offshore structures, as I saw first hand in my previous career. That is why I have long argued that the UK’s overseas territories must finally implement meaningful and accessible public registers of beneficial ownership, as we have in this country via Companies House. Every hour spent by compliance teams untangling complex offshore ownership chains is an hour not spent supporting customers, financing businesses or driving growth. Every duplicated check increases costs for legitimate firms, while benefiting those who rely on secrecy. Public registers of beneficial ownership would make “know your customer” checks faster, cheaper and more accurate. They would reduce duplication, lower compliance costs and strengthen confidence in our financial system. That would help to ensure that honest firms are not left carrying the burden created by hidden ownership structures and dirty money. I will not relitigate past debates on the issue, but I do want to place on record once again my wholehearted desire to see all British overseas territories, particularly the Cayman Islands and the British Virgin Islands, finally fulfil long-made promises by throwing open their books. Dirty money is not just a financial crime problem. It is a threat to economic growth, it distorts markets, it undermines trust, it damages fair competition and it weakens our institutions. I want a future financial services sector that is competitive because it is trusted, successful because it is transparent, and prosperous because it is clean. I will do everything in my power to support the Government achieve that objective.