In introducing this week’s King’s Speech, the new Prime Minister said “the fight for trust is the battle that defines our political era.” But some key measures crucial for restoring trust in the integrity of our politics and financial systems failed to make it into the 40 bills within. If the first King’s Speech of a new government is about signalling its top priorities, then tackling the UK’s political integrity deficit and illicit finance don’t yet appear to be among them.
That doesn’t mean of course that there isn’t plenty of work going on behind the scenes to come up with ambitious proposals, both non-legislative and legislative, in the not too distant future on some of these issues. We very much hope that is the case and it is of course very very early days for a government with a long to-do list.
But here are things that anti-corruption experts and campaigners would have hoped to see in the King’s Speech to flag the government’s early interest and a sense of urgency, and about which we hope to see early announcements from the government:
- A commitment to speedy and concrete ethics and integrity reforms
- An Elections Bill to introduce tougher rules on donations for political parties and restore the independence of the Electoral Commission among other democracy reforms and
- A recognition that a third economic crime act will be needed to address ongoing critical gaps for tackling dirty money and to ramp up asset recovery
Taking these in order:
1. A commitment to speedy and concrete ethics and integrity reforms
Labour’s manifesto contained a commitment to “restore confidence in government and ensure ministers are held to the highest standards” not least by introducing a new Ethics and Integrity Commission. And in a welcome start to the new government, the Prime Minister met the Independent Adviser on Ministers’ Interests on his first day in office to discuss standards, and promised to give the role the powers to initiate investigations.
Ahead of the election, standards experts laid out a seven point plan to restore public confidence in government ethics which they said should be accompanied by a short bill in the first session of parliament to “give statutory backing to the existence of a Ministerial Code and to the key ethics watchdogs.” It is naturally disappointing then that there was no sight of a short bill to this effect in the King’s Speech.
It is nearly three years since the Committee on Standards in Public Life found that a standards system based on convention no longer works – standards regulators without statutory footing can never be truly independent, and can too easily be ignored, or worse, abolished.
Downing Street briefed after the Speech that they don’t need legislation to establish a new Ethics Commission. But that will beg the question for many as to whether a new Commission without legislative backing will be either truly independent or very robust.
If the Commission is to be a convening body rather than a regulator – a model outlined in pre-election speeches by those now in government – then you can see why Downing Street might argue no legislation is needed. But that makes it even more urgent to put the existing regulators (which the Commission under this model would convene) on a statutory footing to preserve their independence – something Lord Anderson’s Public Service (Integrity and Ethics) Private Members Bill has laid out how to do, if those working on this are looking for a model.
Meanwhile, there are plenty of non-legislative measures that the government can and must take immediate action on to upgrade the standards framework. Just yesterday, Lord Pickles highlighted that the new government should implement a number of improvements “in its first weeks” to upgrade how the revolving door is regulated – a system he described as “bust.” Delivering on the full suite of the Committee on Standards in Public Life recommendations – from tackling the revolving door to revamping lobbying transparency – within the first year would be one clear way of showing that the government really means business on standards.
2. Tackling the gaps in the UK’s election finance
Labour’s manifesto promised to “protect democracy” by “strengthening the rules around donations to political parties,” but a much trailed Elections Bill which could have been a vehicle for doing so didn’t make it into the King’s speech. We are left with a throw-away line about “strengthen[ing] the integrity of elections.”
With broad consensus that the UK’s political finance laws and enforcement are not fit for purpose, and a range of reforms proposed by independent expert bodies long outstanding, there is some urgency to this. The Electoral Commission for instance was battered and weakened by the outgoing administration, and urgently needs beefing up.
Labour cannot afford to leave electoral reform too long without opening itself to accusations or perceptions that it’s rewriting the rules in its favour in preparation for the next election or that it’s not as serious as it claims about restoring trust in politics and strengthening democracy. Wales’ First Minister Vaughan Gething’s resignation after just 118 days in office over political donations should be a stark warning about how political finance scandals can so easily derail a government and distract it from getting on with delivering the urgent stuff.
3. Closing the loopholes that allow dirty money into the UK
The last government engaged in a major and long overdue legislative overhaul to improve the UK’s defences against economic crime after Putin’s invasion of Ukraine. While this was a good start, there are some major outstanding issues that need to be tackled with a third economic crime act.
The last government’s Criminal Justice Bill which fell before the election contained major reform of the UK’s regime for confiscating criminal assets – reforms that had been drawn up and recommended by the Law Commission. Labour has opted instead for a Crime and Policing Bill with no explicit mention of recovering criminal assets.
The now defunct Criminal Justice Bill also contained provisions to enable the government and the banking sector to unlock funds in suspected criminal accounts for investment in economic crime enforcement. This would have allowed, by government estimates, an initial injection of £200 million and an additional £30 million annually to boost enforcement. This should be a no-brainer for a cash-strapped incoming government.
Meanwhile, major loopholes around corporate transparency left by the last economic crime bill, including on trusts, shareholder information, and non-Scottish Limited Partnerships, need to be tackled sharpish to prevent dirty money seeping into London. And new measures to protect law enforcement bodies from unreasonable costs when seeking to recover the assets of deep pocketed organised criminals and kleptocrats, are crucial to ramp up asset recovery efforts.
Corporate transparency and asset recovery will both be under the spotlight when global anti-money laundering watchdog, the Financial Action Task Force, comes to evaluate the UK in 2027, so the new government doesn’t have long to show it is delivering results on this.
And the UK needs these measures under its belt if it truly wants to take a global leadership role on tackling corruption and dirty money, as promised by the new Foreign Secretary, and to deliver on making the UK the “anti-corruption capital of the world.” The Foreign Secretary’s promise to host a summit of international financial centres will be harder to deliver if the UK hasn’t taken serious steps to get its own house in order.
Conclusion
Rishi Sunak made the mistake of saying he would lead a government of ‘integrity, professionalism and accountability’ but then failed to deliver any of the key reforms necessary to make good on that promise. The new government has a real opportunity to make its mark and deliver real change in its mission to restore public trust. That change will get harder as the shine of the new government wears away so early and ambitious action is essential.
The government should beware of falling into the trap of thinking that political integrity reforms are a nice to have that can come later. They are not – they are essential to delivering the government’s full agenda and ensuring they bring the public along with it in doing so.
