Veteran MP Margaret Hodge: Britain should clamp down on tax dodgers

It is a stunning chilly however sunny day in Westminster, however veteran Labour MP Margaret Hodge has little time to benefit from the climate. Instead she is packing. The member for Barking in East London and her employees are sorting by means of packing containers and cabinets bursting with paperwork and books forward of her departure earlier than the General Election.

‘If you are standing down they solely offer you 5 days’ discover to filter when an election is known as, so we’re getting forward of it,’ she laughs.

Hodge, 79, has held her seat since 1994. She introduced in 2021 that she would not be standing once more.

Much of the paraphernalia that’s being sifted by means of pertains to tackling tax evasion and the soiled cash she says is sloshing by means of Britain’s monetary system – arguably the marketing campaign that may outline her profession.

For years she has argued that the UK’s rising standing as a laundromat for tainted money is imperilling its financial prospects and nationwide safety.

‘Britain makes some huge cash from being one of many world’s key monetary centres and our prosperity has been constructed on the again of being a trusted jurisdiction,’ Hodge says. ‘But that trustworthiness is ebbing away.

‘We are more and more changing into the selection for soiled cash. And in the long run that’s dangerous for the financial system. The Chinese and the Russians – the entire potential threats to nationwide safety – exploit our lack of guidelines and toothless regulators.’

Hodge argues there’s a ‘spectrum of dangerous behaviour’ in Britain – from paying your cleaner in money to tax avoidance by tech giants. ‘The Googles and Amazons of this world are significantly responsible. Economic crime prices our financial system round £350 billion a yr. That’s 15 per cent of our GDP.’

It is a well timed topic. Jeremy Hunt is scrambling to seek out methods to supply room for tax cuts in subsequent week’s Budget in an try to stave off Tory electoral oblivion.

Hodge says the Chancellor is lacking a trick by not clamping down on tax avoidance. ‘You’ve received to have the ability to comply with the cash to verify persons are paying the appropriate tax on their wealth,’ she says.

‘You must be getting the cash in from the individuals who do not pay in line with their means, so it goes into the frequent pot for the frequent good.’

This would offer more money to spend money on areas equivalent to healthcare, Hodge factors out. ‘Every penny misplaced to dodgy tax schemes is one which might be spent on public companies.’

She provides: ‘If HMRC labored tougher and extra successfully in pursuing those that intentionally keep away from paying their justifiable share of tax, then perhaps there can be more cash within the public coffers to fund companies.’

Recent efforts Hodge championed in Parliament to push legal guidelines clamping down on soiled cash have, in her phrases, been watered down an excessive amount of by Ministers – even those that beforehand supported her from the backbenches.

She cites the Economic Crime and Corporate Transparency Act, which grew to become legislation in October after a prolonged backwards and forwards between the Commons and the Lords.

‘When that Bill landed it was wimpish and we did a number of work to strengthen it. But did it go far sufficient? No.’

Hodge factors out that the brand new legislation did not correctly fund enforcement to combat financial crime in addition to not creating a particular offence for companies that fail to place sufficient measures in place to forestall cash laundering.

She additionally criticises Tory MPs Kevin Hollinrake and Tom Tugendhat, who she says supported crackdown efforts however ‘misplaced their nerve’ as soon as in authorities.

Hodge maintains that making an attempt to root out soiled cash stays a cross-party situation, but it surely usually requires ‘difficult’ what she calls the ‘practices of the monetary companies sector’. ‘These tax avoidance schemes are constructed by bankers, accountants, legal professionals and property brokers. So stopping them is one of the best ways of piercing this rising balloon of soiled cash.’

She believes the Government’s makes an attempt to maintain the City on aspect following Brexit performed into the arms of tax dodgers and soiled cash brokers.

‘Because of Brexit, the Government may be very nervous about doing something that they assume might harm monetary companies within the quick time period.’

Last yr, Hodge’s anti-corruption efforts drew the ire of Tory donor and businessman Mohamed Amersi. He was accused by ex-Conservative Minister David Davis of making an attempt to suppress a report by Hodge into the affect of corrupt cash in politics.

But she’s used to tough battles. During the Jeremy Corbyn years, she famously confronted the previous Labour chief in Parliament to criticise him over the rise of anti-Semitism within the social gathering. And in 2010 she crushed an electoral problem from the fascist British National Party.

Overcoming adversity is a part of her heritage. Born in Cairo to German and Austrian-Jewish refugees, Hodge’s household moved to Orpington, south-east London, in 1948 to flee anti-Semitism in the course of the first Arab-Israeli War.

Her father, industrialist Hans Oppenheimer, co-founded metal buying and selling agency Stemcor in 1951. Hodge stays a shareholder.

She entered politics in 1973 after profitable a seat on Islington Council, then grew to become an MP 21 years later.

So will Labour make cleansing up the soiled cash drawback a key promise forward of the election? Hodge laughs, saying she has been selling it to the management. ‘If I have been writing the manifesto, it will be in it. But we’ll have to attend and see.’

Hodge factors out that the problem of soiled cash isn’t social gathering political. ‘Both Labour and the Conservatives created this case,’ she says – a daring assertion from a Minister within the final Labour Government. She admits: ‘Labour deregulated like mad and we grew to become a horny place to cover cash.’

She says Foreign Secretary David Cameron and ex-Chancellor George Osborne have been amongst those that helped to create the primary register of helpful possession in 2016. The register discloses who owns an organization or property and is a key device within the combat towards corruption. But efforts to increase this to Britain’s abroad jurisdictions have thus far come to nothing.

Hodge insists that this permits the UK’s monetary system to be exploited by rogue nations. She factors to organisations equivalent to Iran’s Islamic Revolutionary Guard Corps – a proscribed terrorist organisation within the US however not the UK – which allegedly makes use of Iranian banks with branches in London to funnel cash to teams like Hamas and Hezbollah.

‘It’s utterly barmy that we enable this,’ she says. ‘People related to the IRGC even have tens of millions in property right here.’

Allegations have just lately emerged that banks together with Lloyds, HSBC and Standard Chartered have supplied companies to entities tied to Islamic theocracy.

Hodge has additionally been calling for necessary checks on the origin of political donations. She additionally desires to deliver again the flexibility of elections watchdog the Electoral Commission to begin prison proceedings towards rule breakers.

‘Dirty cash has contaminated soiled politics,’ she says, including that this dangers depriving the UK of fresh cash that’s important for funding.

‘We do not want the kleptocrats, the criminals and drug smugglers. You cannot develop an financial system on the again of soiled cash.’