Backbench Business Debate on Economic Crime Law Enforcement
On the 7th of July 2022, the APPGs on Anti-Corruption & Responsible Tax and Fair Business Banking, led by Dame Margaret Hodge MP and Kevin Hollinrake MP, secured a House of Commons Debate on Economic Crime Law Enforcement. There was overwhelming consensus from across the House that there exists a massive gulf between the scale of the problem of economic crime and our enforcement response. We know that roughly 40% of crime committed in the UK is economic crime, yet only 0.8% of our resources in staff hours are dedicated to tackling this terrible scourge of financial wrongdoing.
The unique abuse of the UK financial system by Russian oligarchs was a common thread throughout the debate. Alison Thewliss MP remarked that there has not been “a single Russian economic crime prosecution in the UK”. Margaret Hodge MP shone a light on the reticence of our enforcement agencies to investigate 14 suspicious deaths on British soil of individuals who were hostile to the Russian state. According to American intelligence officials, this reticence was due to a desire to preserve the billions of pounds of Russian money that pour into British banks and properties each year. Our failures of economic crime law enforcement show that we are “lying down in the face of what is, not just dirty money, but murder and deceit”, in the words of Labour Shadow Home Office representative, Jess Phillips MP.
There was general agreement, that catching up with economic crime required expanded capacity, more resources, as well as legislative changes to get “a better bang for our buck from our enforcement agencies”, as Kevin Hollinrake MP put it. MPs from across the house were supportive of many of our Economic Crime Manifesto proposals, including ring-fencing a budget for tackling economic crime, introducing corporate criminal liability, capping costs for all prosecutions of economic crimes, and creating an Office for Whistleblowers.
Indeed, Bob Neill MP noted that the SFO has secured through deferred prosecution agreements the recovery of some £1.6 billion. If a modest percentage of that were ring-fenced, rather than going back to Treasury, it would allow for reinvestment in the agencies on the frontlines of economic crime. On this matter, the Parliamentary Under-Secretary for the Home Office, Kevin Foster MP reiterated the Government’s commitments: a package of £400 million to tackle economic crime over the next three years, the creation of a kleptocracy cell within the NCA, as well as its review of the UK’s whistleblowing framework.
Another overarching theme emerged during this debate: we are still reliant on analogue solutions to what are digital problems. For John Penrose MP, the Government’s former Anti-Corruption Champions, the debate around economic crime is stuck in a 1980s time warp. We are all still talking about bobbies on the beat, when increasingly we need to have bobbies behind screens, patrolling digital highways. Alison Thewliss MP also highlighted this problem: the criminals who carry out financial crimes are always several steps ahead of the Government on technology, skills and expertise. For Jess Phillips MP, we have simply not kept pace at all.
Many participants pointed to the huge gap in enforcement resourcing that exists between the UK and its international partners. Under Biden, the Americans have increased their expenditure on enforcement by more than 30%, when the UK has had a real cut of 4.5%. This disparity is mirrored in our enforcement results. Margaret Hodge MP looked at Standard Chartered bank as one example. In 2019 it was fined by both the USA and the UK for poor money-laundering controls. The UK obtained fines of £102 million. What do the Americans get? Over 800% more: £842 million. The fragmented nature of the UK’s economic crime landscape is also to blame. Alison Thewliss MP highlighted the value of Scotland’s crime campus, where 27 enforcement bodies are based in one location. The Government spokesperson, Kevin Foster MP, emphasised the leading role the National Economic Crime Centre plays in setting strategic priorities for the enforcement response to economic crime and bringing agencies together but he recognised the need to go further.
As a global financial centre, participants agreed that the UK has a unique role to play in tackling the scourge of dirty money. For Liam Byrne MP, “our country led the industrial revolution and is a proud hub for the global financial services industry... it is imperative that we destroy economic crime around the world”. Kevin Hollinrake MP concurred, in that the UK plays a major role in facilitating worldwide economic crime, and this is also why it must play a major role in clamping down on it. There was general consensus that the first Economic Crime Bill did not begin to touch the scale of the problem. The motion calling on the Government to bring forward an economic crime enforcement strategy that allows for a significant increase in resource was agreed to, and participants looked towards the second Economic Crime Bill for this proposal to be implemented.