The OECD ranks Britain as one of the best places to start and grow a business. We’re home to five of the top 10 fastest-growing businesses in Europe because people know we’re an open, liberal, free-trading economy where entrepreneurial disruptive new businesses can be created easily, and where start-ups are treated fairly, even when they take on much bigger, established rival firms. Add in a world-class financial system, high corporate standards, a reliably fair and independent legal system and top-quality professional services firms, and it’s a pretty heady business cocktail.
Plus there’s the financial businesses in the City of London; our trade surplus in financial services is more than the next two countries (USA and Switzerland) combined. That’s a two-power standard to be proud of. Other countries would give their eye teeth to be in our shoes.
But a dynamic and exciting business ecology creates a few risks as well. Organised criminals, drug lords and kleptocrats who’ve stolen billions know that even bigger amounts of dollars, euros, pounds and yen slosh through the City every day. That makes it a perfect place for them to hide dirty money and invest it into legitimate firms. It only takes a tiny fraction of one percent of the City’s daily trading to be dirty to tarnish Britain’s reputation for integrity and fairness. Reputations take years to earn and moments to lose. We can’t afford that bright, exciting, dynamic business ecology to start looking louche and seedy instead.
So, what should we do? How do we stay clean, so dirty money knows it isn’t welcome here?
One of the simplest and most important weapons is transparency. Most UK and global companies and trusts are perfectly respectable, but a few are fronts for criminals to move ill-gotten gains around the world. The simplest way to stop them is to publish the details of who owns and controls them. That way we shine a pitiless spotlight into any dark and murky corners, so the kleptocrats and oligarchs have nowhere safe to hide anymore.
We’ve made a decent start already. Britain was the first country in the G20 to introduce an open, free-to-access register of everyone who owns and controls UK companies. Since then we’ve broadened it to include Scottish Limited Partnerships. And because it’s both free and online, it was accessed 6.5 billion times in 2018/19 alone. That’s quite some level of scrutiny. British real estate will be next.
But we’re not stopping there. Earlier this month we launched proposals to go even further, improving the quality and accuracy of the information on the register so it’s even easier to know who is setting up, managing and controlling our companies. If you’re an entrepreneur or an investor who wants to do business in the UK, your life will get a whole lot easier as a result.
Which is all lovely, but what’s the point if criminals can still find plenty of dark and shady corners in other parts of the world? Are we solving the problem, or just moving it to other countries instead?
So, we want open, transparent company registers to become the new, global standard which any respectable country will want to apply. It’s still early days, but we’re forming a group of vanguard countries to get the ball rolling. This week at the Open Government Partnership Summit in Ottawa, Britain launched the Beneficial Ownership Leadership Group to push the new approach, driven by a set of Principles. 22 countries, from Armenia to Nigeria, are considering or are underway with reforms, and others like Denmark and Ukraine have got public, open registers already. Open registers are popular because they’re simple, easy and cheap to introduce, and because they’re fundamentally the right thing to do. If we can make the world a cleaner, less murky, more transparent place with fewer corners for criminals to hide their dirty loot, Britain will have achieved something important and good. That’s got to be worth fighting for.