My Lords, we have tabled this amendment to add another property dimension to the register of persons with significant control. There are a variety of considerations as to the way we do that, consistent with the notions of transparency we are trying to bring in. We were minded to table the amendment to probe the Government on this issue largely as a result of Transparency International’s very interesting report on properties in London being bought through offshore corporate secrecy. We have tabled this amendment to try to deal with this issue in the context of the persons with significant control register, where they use a holding company to acquire these properties. The amendment would establish a register of persons with significant control for property.
Research that analysed data from the Land Registry and the Metropolitan Police Proceeds of Corruption Unit found that 75% of properties whose owners were under investigation for corruption made use of offshore corporate secrecy to hide their identities. Since 2004, more than £180 million-worth of property in the UK has been brought under criminal investigation as the suspected proceeds of corruption. However, this is believed to be only the tip of the iceberg as the scale of proceeds of corruption invested in UK property is understood to be considerably higher. Indeed, more than 75% of the properties under criminal investigation use offshore corporate secrecy. Some 36,342 London properties, totalling 2.25 square miles, are held by offshore haven companies, invariably through UK corporate entities. Of these, 38% are in the British Virgin Islands, 16% in Jersey, 9.5% in the Isle of Man and 9% in Guernsey. Almost one in 10 properties in the City of Westminster, 7.3% of properties in Kensington and Chelsea and almost 5% in the City of London are owned by companies registered in an offshore secrecy jurisdiction.
According to the latest figures, which cover October 2013 to September 2014, estate agents contributed to only 0.05% of all suspicious activity reports submitted. This figure does not match the risks posed by money launderers to the UK property market, the distortions created or the problems associated with the amount of money involved. It is important to understand that the overall value of these transactions in the report alone, which is only part of what can be easily identified, is, on rough calculations, between £100 billion and £250 billion.
Naturally, this amendment is insufficient by itself to tackle the problem and will not deal entirely with these sorts of issues and the distortions to the market that the corrupt money brings. A debate about how
transparency should be established over who owns the companies that own so much property in the UK through making such transparency a Land Registry requirement is for another Bill at another time. However, this provision is useful as a result of the frequent structures that are developed to hide ownership, largely by establishing UK holding entities. This Bill provides an opportune moment to take our first step in addressing this. It will not address the problem but it is a step in the right direction. I beg to move.
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