Tory MS ‘vindicated’ as police crack down on high street money laundering

Emily Price 

A Conservative Senedd Member has said he feels “vindicated” after a national crackdown on high street money laundering saw targeted raids on barbershops, car washes, vape shops, and American sweet stores across the UK.

Last year, Nation.Cymru reported how Gareth Davies faced strong opposition in the Senedd when he branded some small high street businesses in his constituency as “potential fronts for money laundering”.

His comments came during a debate on the Welsh Government’s Draft Budget in February 2024.

The Vale of Clwyd MS said barber shops, e-cig outlets and cash-only hand car washes were “thriving unimpeded by the Welsh Government” despite potentially engaging in illegal activities.

‘Fraudulent’

His comment caused uproar in the Chamber with Ogmore MS – and now Deputy First Minister – Huw Irranca-Davies calling for an intervention saying the Tory had classified a series of business sectors and entrepreneurs as “fraudulent”.

The Tory MS replied: “Take Prestatyn High Street – we had probably two barber shops 15 years ago, but there are probably about 15 now, all of a similar theme.”

MSs continued to call out in the Chamber with some demanding another intervention which Mr Davies refused.

Speaking after the debate Mr Irranca-Davies said the Conservative MS had written off “whole sections of high street businesses as money launderers.”

Illegal

But after a recent UK-wide crack down on small shops, barbers and vape stores suspected of being fronts for illegal activity like human trafficking and money laundering, Mr Davies says he has been “vindicated”.

Operation Machinize – led by the National Crime Agency (NCA) – saw coordinated raids on 265 premises across Wales and England. 

Police made 35 arrests, froze bank accounts holding more than £1 million, and placed 97 suspected modern slavery victims under protection.

The NCA estimates that £12bn of criminal cash is generated in the UK each year, which is typically smuggled out of the country or integrated into the legitimate financial system using a variety of laundering techniques.

The agency says cash-intensive businesses such as barbershops, vape shops, nail bars, American-themed sweet shops and car washes “are often used by criminals to conceal the origins of illicit cash”.

Concern

Earlier this month, Wales Online revealed that one town in south Wales has 13 barbers or hairdresser’s all within about 500 yards of each other – with a planning application for a 14th submitted to the council.

Also in April, North Wales Live reported how a council trading standards team in Denbighshire seized illegal vapes from 29 premises over two years.

Mr Davies says the action by the NCA follows “growing public concern and aligns with warnings first raised” by himself in the Senedd over a year ago.

He said: “When I first raised my constituents’ concerns about the rise of cash only businesses on our high streets, they were met with pearl clutching by Labour members who dismissed my concerns out of hand.

“I welcome the recent police crackdown a year on from when I first sounded the alarm, and I hope that OperationMachinize will yield results.

“I’d like the Welsh Government to clarify whether they now agree with me that this is a real problem given the National Crime Agency are now dealing with the issue under a UK Labour Government.

“My constituents would also be grateful to hear how the Welsh Government will equip local authorities to tackle the issue head on.”

The Welsh Government was invited to comment.