HANSARDCommons17 Jun 202535 contributions

Draft Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025

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The Committee consisted of the following Members:
Chair: Derek Twigg
† Asato, Jess (Lowestoft) (Lab)
† Bool, Sarah (South Northamptonshire) (Con)
† Botterill, Jade (Ossett and Denby Dale) (Lab)
† Crichton, Torcuil (Na h-Eileanan an Iar) (Lab)
† Fox, Sir Ashley (Bridgwater) (Con)
† Gardiner, Barry (Brent West) (Lab)
† Glen, John (Salisbury) (Con)
† Glover, Olly (Didcot and Wantage) (LD)
† Hume, Alison (Scarborough and Whitby) (Lab)
† Jarvis, Dan (Minister for Security)
† Kirkham, Jayne (Truro and Falmouth) (Lab/Co-op)
† Lam, Katie (Weald of Kent) (Con)
† Maskell, Rachael (York Central) (Lab/Co-op)
† Shah, Naz (Bradford West) (Lab)
Smart, Lisa (Hazel Grove) (LD)
† Tami, Sir Mark (Treasurer of His Majesty’s Household)
† Whittome, Nadia (Nottingham East) (Lab)
William Opposs, Committee Clerk
† attended the Committee
The following also attended (Standing Order No. 118(2)):
Roca, Tim (Macclesfield) (Lab)
Second Delegated Legislation Committee
Tuesday 17 June 2025
[Derek Twigg in the Chair]
Draft Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025
The Minister for Security (Dan Jarvis)
LabourBarnsley North
I beg to move,
That the Committee has considered the draft Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025.
It is a pleasure to serve under your chairship, Mr Twigg. With your indulgence, before I address the draft order I want to take the opportunity briefly to congratulate the Treasurer of His Majesty’s Household, my right hon. Friend the Member for Alyn and Deeside, on being awarded a knighthood in the recent birthday honours list. It is hugely well deserved recognition of a quarter of a century of service, and I am sure that the whole Committee will join me in congratulating him. [Hon. Members: “Hear, hear.”]
Driving down money laundering is critical to the Government’s key missions to deliver safer streets and economic growth, and I am determined that the Government will do all they can to bring justice to those seeking to wash their illicit funds through the UK. Close working with the private sector is integral to delivering on that objective. As our first line of defence, the private sector plays a fundamental role both in preventing the UK financial system from being exploited for criminal gain and in detecting suspicious activity where it has occurred.
I am proud that the UK was one of the first countries to establish a financial crime public-private partnership and has set the international standard in this area. Part of a successful public-private partnership is honestly reviewing what has worked in tackling money laundering and what needs to change for us to be more effective. With that objective in mind, and as part of “Economic Crime Plan 2”, the Government, law enforcement and the private sector have worked together to consider how public-private resource can be better directed to maximise our collective impact against the threat.
The draft order is one of the first outputs of that work. It raises the existing financial threshold for two exemptions that apply to principal money laundering offences under the Proceeds of Crime Act 2002 from £1,000 to £3,000. The uplift in the threshold will enable law enforcement resource to be focused on higher priority reports that provide greater opportunities for asset denial and disruption of criminal activity. It will also free up businesses’ resource to be redirected towards high-value activity that may have a greater impact on the threat. The measure is further expected to reduce the impact on banking customers by reducing instances of legitimate customers being unable to access their accounts, in particular where no further action is taken.
Katie Lam (Weald of Kent) (Con)
ConservativeWeald of Kent
It is a pleasure to serve with you in the Chair this morning, Mr Twigg.
One of the most basic principles of law enforcement is that no one should escape the consequences of committing a crime, but it is right that we target the most serious offenders first so that enforcement efforts have maximum impact. It is also right that when we ask businesses to take steps to prevent crime from taking place, those steps are proportionate. We therefore support the measures in the draft order.
Raising the transaction threshold below which businesses are exempted from money laundering offences will mean that more resources can be spent on tackling the most serious examples of money laundering. Given that, as the Minister said, only 0.1% of all transactions between £1,000 and £3,000 were refused in 2024, it is right that we reduce the burden on enforcement agencies at that level.
It is also important, though, that we continue to monitor money laundering at every level. With that in mind, will the Minister please tell us what steps his Department is taking to monitor the impact of these changes on money laundering on transactions below £3,000, and when, if at all, the Government intend to review the threshold again?
Barry Gardiner (Brent West) (Lab)
LabourBrent West
It is a great pleasure to serve with you in the Chair, Mr Twigg. May I just ask the Minister whether the Government intend to bring in similar thresholds for such things as benefit overpayments?
Dan Jarvis
LabourBarnsley North
I thank the shadow Minister, the hon. Member for Weald of Kent, for the constructive way that she has approached the draft order. These are not contentious or party political matters, and it is right that we debate them in that spirit. I am grateful for her support for the measures and I completely agree with her about the importance of ensuring that we target them, and our resource, as effectively as possible.
The shadow Minister asked, entirely reasonably, about monitoring and review. As she might remember from her own time working at the Home Office, there are processes in place to ensure that these activities are kept under very close watch. I can assure her that, following on from the work done by the previous Government, we will continue to keep these matters under very close review.
Given that I have referenced the previous Government, I want to take the opportunity to commend the right hon. Member for Salisbury for the work that he did and the leadership that he showed in this policy area during his time in government. In particular, I thank him for his work to introduce the economic crime levy. I am sure that he knows this, but it is worth repeating that the levy raises around £100 million per year from the anti-money laundering sector, and it has provided extremely valuable and long-term, sustainable resource for funding measures to tackle money laundering. I am grateful to him for the work that he did in government.
I reiterate in response to the shadow Minister that we will monitor these matters on a regular basis. She will understand why I will not say too much about the technical detail of the work that is done to spot suspicious activity that falls beneath the threshold, but I am sure that she will remember from her time in the Home Office that there are mechanisms in place that seek to prevent people from bending or breaking the rules by behaving in a certain way in relation to transactions below the threshold. I think that she knows what I am referring to.
My hon. Friend the Member for Brent West raised an important point, but I am struggling to remember precisely what it was. Perhaps he will briefly remind me.
Barry Gardiner
LabourBrent West
Of course. I think we all agree that we should have thresholds that are proportionate and do not involve undue bureaucracy while ensuring that money is not badly spent or, indeed, that money that is spent is recovered where it should not have been spent in the first place. Given that we have proportionality in this area, I wondered whether the Minister could enlighten us whether we are looking to do the same in other areas, such as benefit overpayments.
Dan Jarvis
LabourBarnsley North
I am grateful to my hon. Friend for his question. As a very experienced Member, he will understand that the Home Office is responsible for the Proceeds of Crime Act, and although of course we have conversations with other Departments about other matters, the matter that he mentions is not one that sits within my area of responsibility. No doubt colleagues in the Department that I think he is referring to will listen carefully to his remarks; I am sure that they will be as grateful for them as I am.
I am grateful for all the contributions to the debate. SARs intelligence is a critical tool in our ability to identify, disrupt and recover the money that underpins the most serious and organised crime in the UK. Increasing the threshold to reflect the current landscape is an important step as we seek to improve the effectiveness of the anti-money laundering system, prioritise resources, enable greater disruption of criminal activity and prevent criminals from enjoying the proceeds of their illicit activities. Once again, therefore, I commend the draft order to the Committee.
Question put and agreed to.
Committee rose.