Government to ‘strengthen powers’ to deal with illicit finance

The announcement was made as part of the Queen’s Speech - which outlines the government’s proposed policies for the coming parliamentary session. The speech was read out by Prince Charles after the Queen pulled out due to “episodic mobility issues”. 

The bill will also enable the Payment Systems Regulator to require banks to reimburse authorised push payment scheme losses - which total hundreds of millions of pounds each year. 

In addition to this, the financial services and markets bill will revoke retained EU law on financial services and replace it with an approach to regulation that’s designed for the UK. This includes the Solvency II legislation governing the regulation of insurers. 

Alongside this, the legislation will ensure that people across the UK continue to be able to access their own cash with ease, and introduce additional protections for those investing or using financial products.  

Energy security 

The state opening of parliament also saw the introduction of an energy security bill, designed to support the transition to “cheaper, cleaner and more secure energy”. It will allow the energy price cap to continue past 2023 and enable the “first-ever large scale hydrogen heating trial” ahead of a 2026 decision. 

A new social housing and regulation bill will give more powers to a regulator to “intervene with landlords who are performing poorly on consumer issues, such as complaints handling and decency of homes”, and “inspect landlords to make sure they are providing tenants with quality accommodation and services they deserve”. 

The speech also said the government would “drive economic growth” and improve living standards through sustainable investment in public services, underpinned by a “responsible approach” to public finances, while reducing debt and reforming and cutting taxes. In addition to this, it will support the Bank of England to return inflation to its target. 

Legislation to tackle illicit finance
In addition to this, it will introduce measures that create new competition rules for digital markets and the largest digital firms, and establish the UK infrastructure bank in legislation, with objectives to support economic growth and the delivery of net-zero. 

Legislation will also be introduced to further strengthen powers to deal with illicit finance, reduce economic crime and help businesses grow. The reforms will give Companies House the power to challenge information provided by companies that appears dubious.

Responding to this, insolvency restructuring trade body R3’s president Christina Fitzgerald said the reforms are a “major step forward”. She explained: “Reform of Companies House is critical to the insolvency and restructuring profession’s efforts in the fight against fraud, and will be hugely beneficial to our profession’s work to recoup funds fraudulently claimed under the Government’s Covid support schemes.

“However, this legislation needs to be introduced quickly and there are some issues that need to be resolved before the Bill reaches the statute book. When appointed to deal with an insolvent company, insolvency practitioners need to be given automatic access to all of the information captured by Companies House about the company and its directors. 

“This isn’t part of the bill at the moment, but making access to this information automatic would make it easier to investigate director misconduct and uncover assets for the benefit of the company’s creditors.”

Audit rules and cost-of-living not in Queen’s Speech

This year’s Queen’s Speech is however almost as notable for its absences as for what’s in it. While the speech opened with a promise to grow the economy and ease the cost of living for families, there was no bill specifically aimed at tackling the cost-of-living crisis. 

Households have seen the price of their bills increase over the past few months, with the Consumer Price Index rising to seven percent in the 12 months to March 2022. Of this, housing, water, electricity, gas and other fuels contributed 1.08% to this increase, while food and non-alcoholic beverages contributed 0.67%. 

The Queen’s Speech also did not contain a bill designed to reform audit rules. The reform plans were drawn up by the government in the 2019 Conservative Party manifesto, with a white paper published by the government last year. 

It sought views on proposals to strengthen the UK’s framework for major companies and the way they’re audited. The proposals included the creation of a new professional body for corporate auditors, replacing joint audits with managed shared audits. 

It also suggests giving the Audit, Reporting and Governance Authority greater powers over company directors, and expanding the definition of what a public interest entity is. 

According to the Financial Times, last week more than 50 British businesses, unions and trade groups urged Boris Johnson and business secretary Kwasi Kwarteng to push forward with the proposed corporate governance reforms.