Press release: Financial red tape targeted in new review

  • government commits to improving the efficiency and effectiveness of anti-money laundering regime
  • new review will target the way regulation is implemented
  • businesses are encouraged to submit evidence of over-complicated and ineffective requirements

A review to improve the effectiveness of rules designed to prevent money laundering and terrorist financing has been launched today (28 August 2015) as part of the government’s Cutting Red Tape review programme.

Businesses have expressed concerns that current guidance, rules and proof of identity requirements can be unnecessarily cumbersome and complicated. Inconsistency and confusion over how rules to stamp out money laundering are applied leads to a less effective regime, which disproportionately affects legitimate businesses.

The government wants these rules to protect the country and safeguard the UK’s world leading financial services industry, without putting disproportionate burdens on legitimate businesses or those companies that use their services.

This review is one of 6 chosen for the first wave of the government’s ambitious Cutting Red Tape programme, which will help towards saving businesses £10 billion over the next 5 years.

Business Secretary Sajid Javid said:

We are committed to saving businesses a further £10 billion in red tape to help create more jobs for working people, boost productivity and keep our economy growing.

This new review is about making sure the rules we have to protect our strong financial services industry from abuse are not unintentionally holding back new and existing British business. I want firms to come forward and tell us where regulation is unclear or its enforcement ineffective.

Economic Secretary to the Treasury Harriett Baldwin said:

The UK is a global financial centre, and is home to some of the most successful international financial services firms in the world. But we are clear that in order to protect the integrity and stability of our world leading financial centre, we need an effective Anti-Money Laundering and Counter Terrorist Finance regime.

That’s why we are leading from the front in implementing robust global standards to tackle money laundering, and that’s why we’ve launched a review today to improve the effectiveness of our Anti-Money Laundering regime.

Ensuring that supervision and enforcement are focused on the criminals who launder funds, whilst taking a proportionate approach for legitimate business, will build Britain’s strong reputation as a safe place to invest and do business.

The review will look at the implementation of legislation and activity carried out under The Money Laundering Regulations 2007, by national supervisors including the Financial Conduct Authority and HMRC. As well as identifying where more clarity is needed for businesses, it will look for evidence of where the activity of these regulators could be made more efficient and effective.

The review is seeking a wide range of evidence, including:

  • whether current guidance meets businesses needs
  • the effectiveness and proportionality of supervisors’ approach to supervision and enforcement
  • where and how supervision and enforcement is not proportionate to the risks posed
  • any examples of good practice that could help businesses meet their obligations and might be replicated elsewhere

The call for evidence will run for 8 weeks until 23 October 2015 and can be found on the Cutting Red Tape website. Five other sector reviews were launched on 16 July 2015 into: agriculture, care homes, energy, mineral extraction and waste.

Notes to editors:

  1. Cutting Red Tape reviews look into whether legislation and its implementation can be simplified or improved, addressing issues such as where different regulators are asking the same company the same questions, or where guidance or requirements are unclear, confusing or unnecessarily burdensome.
  2. The first wave of sector reviews focuses on problems that were identified as part of the Red Tape Challenge and Business Focus on Enforcement programmes in the last Parliament. This is one of the sectors which reports a high level of concern about red tape. This is why it was chosen as one of the early reviews.
  3. The CBI has said reducing the cost of regulatory compliance in financial services should be a top priority for government.
  4. More than 2 thirds of respondents to The ICC Global Trade and Finance Survey 2014 citied the anti-money laundering regime as a “significant impediment” to trade finance – stopping many small businesses from benefitting from global trade.
  5. Businesses can feed back their thoughts by:

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Press release: Business Secretary orders investigation into tipping

The Business Secretary has launched an investigation into abuse of tipping, as part of the government’s commitment to making sure everyone is paid fairly.

Delivering fairness for everyone is at the heart of this one nation government’s agenda. Recent media investigations into the practice of some major restaurant chains of withholding a proportion of tips left for staff to cover administrative costs have raised concerns at the very top.

Last week Business Secretary Sajid Javid said that this would be something that the government would take a serious look at and now he has ordered a formal call for evidence on the issue.

The Business Secretary Sajid Javid said:

When a diner leaves a tip, they rightly expect it to go to staff. In full. I’m concerned about recent reports, suggesting some restaurants pocket tips for themselves. That’s just not right.

I’ve ordered an immediate investigation to look at the evidence and consider the views of employees, customers and the industry to see how we can deal with the abuse of tipping.

As a one nation government we want a fair deal on pay for working people and that includes taking action on tipping abuse.

The call for evidence will look at how restaurants treat tips left by customers and whether government intervention is necessary to strengthen the voluntary code of practice run by the industry.

The inquiry which will seek information and views from the hospitality industry and other key stakeholders and will consider whether there should be a cap on the proportion of tips restaurants can withhold from staff for administrative costs and, if so, what this level should be.

Research from 2009 found that one in five restaurants did not pass tips to their staff, yet the vast majority of customers said they wanted waiting staff to receive tips left for them. More than three quarters wanted to see the restaurant’s tipping policy clearly displayed.

While there is a voluntary code of practice which is overseen by industry body the British Hospitality Association, restaurants may currently choose to ignore its 4 principles of transparency and adopt various tipping practices.

Follow what’s happening on social media using #tipping.

Notes to editors

The call for evidence has been launched by BIS today (30 August 2015) and the Citizen Space e-consultation site. It will run until 10 November 2015 and those interested can contribute using any of the following options:

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