Question proposed, That the clause stand part of the Bill.

Clause 21 increases the economic anti-money laundering levy for very large firms, meaning firms regulated for anti-money laundering purposes and which have UK revenue greater than £1 billion per annum. The charge for very large firms increased from £250,000 to £500,000 with effect from 1 April 2024. There is no change to the charge for firms with revenue below £1 billion per annum. The levy was introduced in the 2022-23 tax year as a source of sustainable funding for measures to tackle economic crime and support the delivery of the Government’s commitments contained in the economic crime plan 2. The Government made it clear during the public consultation that levy charges may be adjusted periodically in response to new information, inflation or under-collection. The adjustment is made in response to receipts falling short of the levy’s stated £100 million revenue target.

The clause amends part 3 of the Finance Act 2022 to replace the current charge for very large firms with the new charge of £500,000 per annum. The change will impact an estimated 100 to 110 very large firms across the anti-money laundering regulated sector including, but not limited to, financial services, legal and accountancy firms.

No other aspects of the levy’s calculation or operation are changing and we therefore anticipate administrative impacts on affected firms to be negligible. This adjustment to the economic crime levy for the largest firms will put funding for measures to tackle economic crime on a sustainable footing, helping to protect UK citizens and make the UK a safer place to do business. Only the very largest firms will pay more and burdens will remain low. I commend the clause to the Committee.

We support the measures in clause 21 to raise the funds needed to tackle money laundering, fraud and other types of economic crime, but I cannot ignore the fact that the Government’s efforts to tackle economic crime have been a complete failure. Fraud and scams, for example, have rocketed under this Government, with at least £7.3 billion stolen directly from consumer bank accounts in the UK through fraud last year alone.

Last year, the Government published their fraud strategy to widespread criticism from industry for largely rebadging old measures and re-announcing existing national teams, such as the re-announcement on the replacement of Action Fraud from 2022. The consensus from experts in the industry is that the measures in the strategy will not significantly move the dial, as they do not establish a regulatory framework for tech companies and telcos to participate in the fight against fraud, including through data-sharing with financial services firms and enforcement agencies to enhance detection and prevention measures.

UK Finance, for example, has stated that it is increasingly difficult to understand the imbalance between the financial services sector’s contribution through the levy and that of other sectors that do not contribute but are known to be introducing risk into the same system. We also know that most scams originate on social media or via telecommunications networks yet those sectors do not face the same obligations regarding contributions, nor do they compensate victims defrauded through their platforms. Does the Minister agree with UK Finance? Does he accept that until the Government find a way to bring the tech giants to the table, efforts to tackle fraud and scams will continue to fail?

UK Finance has also raised concerns about the transparency of the levy and reporting on economic crime. On reporting for anti-money laundering purposes, I have heard from numerous City firms that, despite frequent requests, they receive little granular feedback on the impact their reports make. Does the Minister agree that better feedback and wider publicity around successes could help AML-regulated firms to see the value and importance of work in this area more clearly, keeping it at the forefront of their minds? What are the Government doing to ensure that happens?

This is a welcome move in principle and in targeting economic crime, but I would agree with the comments we have just heard—this does not shift things in the way that they need to be shifted in order to deal with the issue. It does not seriously tackle online crime, which is relatively rampant, with people being conned and funds being taken illegally. It does not really do much for fraud and economic crime and fails to tackle issues such as money laundering. There has still not been enough action on limited partnerships, for example, which continue to allow unknown individuals to funnel money through those mechanisms. Why are the Government not taking this issue more seriously than through these minor actions in the Bill?

I am grateful for the comments from Opposition Members. I think we all agree that we want to tackle these issues in the most serious way possible, with the most force. I am comforted by the comments from the Financial Action Task Force, which previously said that the UK has one of the strongest regimes when it comes to tackling economic crime. The levy specifically seeks to fund the tackling of anti-money laundering rather than fraud or sanctions, which I will come on to in a second.

It is appropriate to stress that the levy is a targeted measure on the anti-money laundering regulated sector, therefore the proceeds go towards tackling anti-money laundering. That is in the context of the economic crime plan 2, which covers up to 2026 and is backed by £200 million from the levy plus £200 million of Government investment. We are taking broader action on fraud in the technology sector specifically, not least through the online fraud charter, the Online Safety Act 2023 and the telecommunications fraud sector charter.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey mentioned sanctions evasion. We are cracking down on kleptocracy and sanctions evasion through the economic crime plan 2. The Office of Financial Sanctions Implementation actively monitors sanctions evasion every single day.

On corruption, the Foreign, Commonwealth and Development Office leads our efforts to support companies to tackle corruption and strengthen governance across the world. The Government are actively working with partners across the world to strengthen international standards, not least through the UN convention against corruption. In the UK, we also have the National Crime Agency’s international corruption unit. There is significant action to tackle fraud and corruption as well as sanctions evasion, but of course we can always do more and we are vigilant about that.

On the reporting and transparency of the levy, there was a reasonable question from the hon. Member for Hampstead and Kilburn and from the sector. There will be a report on the levy this year and it will be reviewed in 2027. We will engage with stakeholders leading up to that review.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.