Tireless: Margaret Hodge’s determined crusades have left her stepping on toes on both sides of the political divide
It’s a lovely cold but sunny day in Westminster, but veteran Labor MP Margaret Hodge has little time to enjoy the weather. Instead, she’s packing. The Member for Barking in East London and her staff are sifting through boxes and cupboards full of paperwork and books before she leaves for the general election.
“If you withdraw, you only get five days’ notice to clear out when an election happens, so we’re getting ahead of it,” she laughs.
The 79-year-old Hodge has held her seat since 1994. She announced in 2021 that she would no longer stand.
Much of the paraphernalia being searched relates to tackling tax evasion and the dirty money she believes is sloshing through the British financial system – perhaps the campaign that will define her career.
For years she has argued that Britain’s growing status as a laundromat for tainted cash is endangering its economic prospects and national security.
“Britain makes a lot of money because it is one of the most important financial centers in the world, and our prosperity is built on being a trusted jurisdiction,” says Hodge. ‘But that reliability is fading away.
‘We are increasingly becoming the choice 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 – are exploiting our lack of rules and toothless regulators.”
Hodge says there is a ‘spectrum of bad behavior’ in Britain – from paying your cleaner in cash to tax avoidance by tech giants. “The Googles and Amazons of this world are particularly guilty. Economic crime costs our economy around £350 billion a year. That is 15 percent of our GDP.’
It is a current topic. Jeremy Hunt is trying to find ways to provide 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 tackling tax avoidance. “You need to be able to track the money to make sure people are paying the right taxes on their assets,” she says.
‘You should collect the money from the people who do not pay according to their ability, so that it goes into the common pot for the common good.’
This would provide additional money to invest in areas such as healthcare, Hodge points out. “Every penny lost through dodgy tax schemes could be spent on public services.”
She adds: ‘If HMRC worked harder and more effectively in prosecuting those who deliberately avoid their fair share of tax, then perhaps there would be more money in the public purse to fund services.’
Recent attempts that Hodge has championed in Parliament to pass laws to curb dirty money have, in her words, been too weakened by ministers – even those who previously supported her from the backbench.
She cites the Economic Crime and Corporate Transparency Act, which came into force in October after lengthy back-and-forth between the Commons and the Lords.
“When that Bill landed he was limp and we did a lot of work to strengthen him. But did it go far enough? No.’
Hodge points out that the new law has failed to properly fund enforcement to combat economic crime, nor to create a specific criminal offense for companies that fail to take adequate measures to prevent money laundering .
She also criticizes Tory MPs Kevin Hollinrake and Tom Tugendhat, who she said supported the crackdown efforts but “lost their nerve” once they were in government.
Hodge argues that trying to eradicate dirty money remains a partisan issue, but that it often requires “challenging” what she calls the “practices of the financial services industry.” ‘These tax avoidance constructions were devised by bankers, accountants, lawyers and real estate agents. So stopping them is the best way to puncture this growing balloon of black money.”
She believes the government’s attempts to keep the city onside after Brexit have played into the hands of tax evaders and dirty money agents.
‘Because of Brexit, the government is very nervous about doing anything that they think could damage financial services in the short term.’
Last year, Hodge’s anti-corruption efforts drew the ire of Tory donor and businessman Mohamed Amersi. He was accused by former Conservative minister David Davis of trying to suppress a report by Hodge on the influence of corrupt money in politics.
But she is used to difficult fights. During the Jeremy Corbyn years, she famously confronted the former Labor leader in parliament over criticism of the rise of anti-Semitism in the party. And in 2010 she crushed an electoral challenge from the fascist British National Party.
Overcoming adversity is part of her 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.
Her father, industrialist Hans Oppenheimer, co-founded the steel trading firm Stemcor in 1951. Hodge remains a shareholder.
She entered politics in 1973 after winning a seat on Islington Council, becoming an MP 21 years later.
Will Labor make cleaning up its dirty money problem a major promise in the run-up to the election? Hodge laughs and says she promoted it to management. “If I wrote the manifesto, it would be in there. But we’ll have to wait and see.’
Hodge points out that the issue of dirty money is not partisan. “Both Labor and the Conservatives have created this situation,” she says – a bold statement from a minister in the last Labor government. She admits, “Labor was deregulated like crazy and we became an attractive place to hide money.”
She says Foreign Secretary David Cameron and ex-chancellor George Osborne were among those who helped set up the first beneficial ownership register in 2016. The register makes public who owns a company or property and is an important tool in the fight against corruption. But attempts to extend this to Britain’s overseas jurisdictions have so far failed.
Hodge emphasizes that this allows the British financial system to be exploited by rogue states. She points to organizations such as Iran’s Islamic Revolutionary Guards Corps – a banned terrorist organization in the US, but not in Britain – which allegedly uses Iranian banks with branches in London to funnel money to groups such as Hamas and Hezbollah.
“It’s absolutely ridiculous that we allow this to happen,” she says. “People associated with the IRGC also have millions in assets here.”
Allegations have recently emerged that banks including Lloyds, HSBC and Standard Chartered have provided services to entities linked to the Islamic theocracy.
Hodge has also called for mandatory checks on the origins of political donations. She 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,” she says, adding that this risks depriving Britain of clean money, which is essential for investment.
‘We don’t need the kleptocrats, the criminals and the drug smugglers. You cannot grow an economy with black money.’
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