Tireless: Margaret Hodge’s determined crusades have resulted in her treading toes on both sides of the political divide.
It’s a beautiful cold but sunny day in Westminster, but veteran Labor MP Margaret Hodge has little time to enjoy the weather. Instead, she’s packing her bags. The member for Barking in east London and her staff are sorting through boxes and cupboards full of paperwork and books ahead of her departure ahead of the general election.
“If you withdraw, they only give you five days’ notice to withdraw when elections are called, so we get ahead of ourselves,” he laughs.
Hodge, 79, has held his seat since 1994. He announced in 2021 that he would not run again.
Much of the paraphernalia being discussed relates to the fight against tax evasion and the dirty money she claims is flowing through the British financial system (possibly the campaign that will define her career).
For years he has argued that the UK’s growing status as a tainted money launderer is endangering its economic prospects and national security.
“Britain makes a lot of money being one of the world’s key financial centers and our prosperity has been built on us being a trusted jurisdiction,” says Hodge. “But that reliability is declining.
‘We are increasingly becoming the option for dirty money. And in the long term that is bad for the economy. “The Chinese and the Russians – all potential threats to national security – exploit our lack of rules and our toothless regulators.”
Hodge argues there is a “spectrum of bad behaviour” in Britain, from paying the cleaner in cash to tax avoidance by tech giants. ‘The Googles and Amazons of this world are especially guilty. Economic crime costs our economy around £350 billion a year. “That’s 15 percent of our GDP.”
It is a current topic. Jeremy Hunt is struggling to find ways to make room for tax cuts in next week’s budget in a bid to avoid Tory electoral oblivion.
Hodge says the Chancellor is missing a trick by not clamping down on tax avoidance. “You have to be able to follow the money to make sure people are paying the right tax on their wealth,” he says.
“We should take money from people who don’t pay according to their means, so that it goes into the common fund for the common good.”
This would provide additional cash to invest in areas such as healthcare, Hodge says. “Every penny lost to dubious tax schemes could be spent on public services.”
He adds: “If HMRC worked harder and more effectively to pursue those who deliberately avoid paying their fair share of tax, then perhaps there would be more money in the public purse to fund services.”
Recent efforts Hodge championed in Parliament to push through laws to crack down on dirty money have been, in her words, too watered down by ministers, even those who previously supported her from the backbenches.
He cites the Economic Crime and Corporate Transparency Act, which became law in October after a long tug-of-war between the Commons and Lords.
‘When that bill came in, it was weak and we did a lot of work to strengthen it. But did it go far enough? No.’
Hodge notes that the new law did not adequately fund law enforcement to combat economic crimes, nor did it create a specific offense for companies that do not implement adequate measures to prevent money laundering.
She also criticizes Conservative MPs Kevin Hollinrake and Tom Tugendhat, who she says supported the crackdown efforts but “lost their nerve” once in government.
Hodge maintains that trying to root out dirty money remains a cross-party issue, but it often requires “questioning” what she calls the “practices of the financial services sector.” ‘These tax evasion schemes are put together by bankers, accountants, lawyers and real estate agents. So stopping them is the best way to puncture this growing balloon of dirty money.”
She believes the Government’s attempts to keep the City on its side after Brexit benefited tax evaders and dirty money dealers.
“Because of Brexit, the Government is very nervous about doing anything that it thinks could harm financial services in the short term.”
Last year, Hodge’s anti-corruption efforts drew the ire of conservative businessman and donor Mohamed Amersi. Former Conservative minister David Davis accused him of trying to suppress a Hodge report on the influence of corrupt money in politics.
But she is used to difficult battles. During the Jeremy Corbyn years, she confronted the former Labor leader in Parliament to criticize him over the rise of antisemitism in the party. And in 2010 she crushed an electoral challenge from the fascist British National Party.
Overcoming adversity is part of your heritage. Born in Cairo to German and Austrian Jewish refugees, Hodge’s family moved to Orpington, south-east London, in 1948 to escape anti-Semitism during the first Arab-Israeli war.
His father, industrialist Hans Oppenheimer, co-founded the steel trading company Stemcor in 1951. Hodge remains a shareholder.
She entered politics in 1973 after winning a seat on Islington Council and then became an MP 21 years later.
So will Labor make tackling the dirty money problem a key promise before the election? Hodge laughs and says he’s been promoting him to the leaders. ‘If I were writing the manifesto, I would be in it. But we’ll have to wait and see.”
Hodge points out that the dirty money issue is not a partisan issue. “Both Labor and the Conservatives created this situation,” he says, a bold statement from a minister in the last Labor government. She admits: “Work became deregulated like crazy and we became an attractive place to hide money.”
It says Foreign Secretary David Cameron and former Chancellor George Osborne were among those who helped create the first beneficial ownership register in 2016. The register reveals who owns a company or property and is a tool key in the fight against corruption. But efforts to extend this to British jurisdictions abroad have so far failed.
Hodge insists this allows rogue nations to exploit the UK’s financial system. He points to organizations such as Iran’s Islamic Revolutionary Guard Corps – a terrorist organization banned in the US, but not the UK – which allegedly uses Iranian banks with branches in London to funnel money to groups such as Hamas and Hezbollah.
“It’s crazy that we allow this,” he says. “People associated with the IRGC also have million-dollar properties here.”
Allegations have recently emerged that banks such as Lloyds, HSBC and Standard Chartered have provided services to entities linked to the Islamic theocracy.
Hodge has also called for mandatory checks on the origin of political donations. He also wants to restore the ability of the election watchdog, the Electoral Commission, to initiate criminal proceedings against rule-breakers.
“Dirty money has infected dirty politics,” he says, adding that this risks depriving the UK of clean money, which is vital for investment.
‘We don’t need kleptocrats, criminals or drug traffickers. “You cannot grow an economy at the expense of dirty money.”
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