We have no idea how much money is leaving Britain
Bangladesh’s central bank wants to know why the money arriving from Britain jumped $2 billion in one year. We don’t know, and nobody seems to be asking.
Last month Bangladesh’s government answered parliamentary questions on remittances. In the year to June, Bangladeshis abroad sent home $35.6 billion, a record high. Saudi Arabia remained the largest source, with the UK in second at $5.07bn, up from $3.1bn the year before. That’s an increase of sixty per cent in a single year, against seventeen per cent for remittances as a whole.
It has only continued to increase too. Between July and September, $1.22bn arrived from the UK, a third higher than the same quarter last year. While this itself isn’t evidence of fraud, the increase has raised eyebrows and prompted investigation.
Bangladesh noticed this before us. In May, when figures were still coming in, a Bangladesh Bank spokesman said the central bank would be investigating this and act if necessary. An official said that even allowing for changes in how the money is recorded, there was no explanation for the sudden rise from the UK. Bank directors have concurred, seeing the increase as inexplicable. Mustafizur Rahman of the Centre for Policy Dialogue, a Dhaka think tank, went further, suggesting that much of the money could be the proceeds of money laundering, masquerading as wages.
So the Bangladeshi government wants to know why so much money is arriving from Britain. Strangely, the British state has shown little interest in the same question.
There is a partial explanation in that transfers via American-based wiring companies were listed as American in source, regardless of where they truly came from, until about a year and a half ago, but that was largely collected from the Gulf and totalled around $1.7bn. The Bangladeshi central bank isn’t convinced these recording changes have impacted the British numbers.
Awkwardly, Britain couldn’t settle the question entirely, even if it wanted to. The ONS has confirmed that we don’t publish official figures for how much money is sent out of this country, broken down by destination. What we know, we know from the recipients. The State Bank of Pakistan says $6.3bn arrived from Britain in the same twelve months, and India recorded around $12.8bn. Including Bangladesh, the subcontinent received around $24bn in a year. We only hear about it if their governments are generous enough to tell us, partly because they’re worried about its legality.
Money arriving from the UK, as recorded by each receiving country. Bangladesh and Pakistan: years to June. India: 2023-24, its latest survey. Britain publishes no equivalent breakdown of its own.
Fundamentally, I don’t think there's much wrong with an individual sending some of their wages to support loved ones back home. This is what immigrants have always done, including British emigrants overseas. It’s an individual’s own financial decision with their own hard-earned money.
But some money that leaves Britain wasn’t earned; instead, it began as public money. A decade ago, a ring run by an accountant in East London, Chowdhury Muyeed, and his wife Asma, used fake jobs and a single address to process benefit claims for Bangladeshis who had taken Italian citizenship and flew in to sign on, often going home the same day. Redbridge and Tower Hamlets councils lost at least £1.6 million to their scam, and the Department for Work and Pensions a further £420,000. Muyeed went to prison for five years for the scheme.
Tower Hamlets itself has had ministerial envoys since November 2024, after inspectors found an unacceptable level of patronage from the Aspire-run council. I don’t know how much of the over £1.1 billion in benefits paid to Tower Hamlets’ residents ends up abroad, but neither does the government, which is the problem.
America has started to take action. Since the start of this year, the U.S. has charged a one per cent tax on remittances, but is struggling to impose it on direct bank transfers. The tax was first proposed at 5% but was whittled down in Congress. This is not America ending remittances, as some are describing it, but it does put a small price and a paper trail on the transfers banks can’t trace.
Britain should follow America’s lead, and then go further. A levy on cash transfers, a requirement that money-transfer firms report these transfers based on destination, so the next time Bangladesh reports a 60% increase it isn’t news to the treasury. Proper source-of-funds checks above a modest threshold, of the kind any of us face when we try to move a house deposit, for example.
There are people on the right who want to go further too. The Critic argued for a levy of ten to twenty per cent on all remittances, and some would like to see them banned altogether, on the grounds that we cannot be seeing billions, potentially from welfare, leave our country each year. It’s a valid argument; this flow of capital came about through the cracks of the system, subsequently tolerated by the state, with no democratic mandate behind it. I don’t think an outright ban on remittances would produce a net benefit, and along with high taxes on the practice, it would likely just drive the system underground into the hawala/hundi networks, which would make it far more difficult for the government to track cash flows. Moreover, remittances are far more effective than all the aid the government gives to these countries, which is especially pertinent since we have just cut our own aid budget significantly.
Nevertheless, I am far more convinced that action should be taken than a year ago, and those are reasons to be careful on how to approach the issue, not reasons to avoid tackling the problem. Meanwhile, the same people who are telling us that the issue is overblown or conspiratorial can’t even tell us how much money leaves the UK, nor where it goes. They are in no position to tell us these aren’t valid concerns and aren’t symptomatic of other deeper problems. Importantly, the state must take a moment to be self-reflective and ask: Why is Bangladesh more curious about the UK than the British state?