After the scandal revealed by the Panama papers I wanted to know exactly what the Prime Minister intends to do to tackle the ownership of London properties by shady overseas investors. Therefore I took the opportunity to ask him the following question immediately after the statement he made on his own tax affairs to the House of Commons yesterday (11 April 2016):
“At the last count, 36,364 properties in London were owned by offshore companies—that is one in 10 in one London borough and 7% in another London borough. We should know who owns those properties. Many believe that this is about dirty money from countries such as Russia and from the Middle East. This is driving up costs, with a 50% increase since 2007. What is the Prime Minister going to do about dirty money propping up the London property market?”
The Prime Minister responded:
The first thing, which we have already done and which has had a huge impact, is to say that, if a company owns a property in a so-called envelope structure, so that we cannot get to the name of the person who owns that property, they have to pay an annual stamp duty charge of something like 15%. That has been a massive money raiser, providing money to spend on public services, and a huge disincentive for that sort of behaviour. However, I want to go further; as I said in my speech in Singapore, we need to have more information about who owns what in our country.”
Clearly the Prime Minister’s response fails to grasp the fact that money from offshore companies and tax havens is increasing the severity of the London housing crisis and he did not set out a coherent or effective strategy to deal with the problem. I will keep putting pressure on the Government on this important issue.