Costly neglect

Fraud is the new crime pandemic in Britain. Forty per cent of all recorded crime is fraud, and around 40 million people were targeted in the first half of this year alone, with hundreds of millions of pounds lost each month. We have the highest levels of credit and debit card fraud in Europe by far. Yet less than 2 per cent of police resources are spent tackling it; unsurprisingly, only one in 1,000 reports results in a charge.

From phone and email scams to tax fraud and consumer fraud, the problem impacts virtually everyone. Yet all the Conservatives seem interested in is benefit fraud, which amounts to just 1.2 per cent of the Department for Work and Pensions’ welfare spending, a drop in the ocean compared to the other forms of fraud they neglect. And it is not only individuals who are affected – it is the public purse, too. In its annual report earlier this year, HM Revenue and Customs said funds lost to fraud included more than £1bn delivered through the coronavirus support written off by then chancellor (and now prime minister) Rishi Sunak. If there was even a partial recovery of funds lost to fraud, it could make a significant contribution to supporting public services.

Yet the Tories continue to deny the problem. Last February, then Business Secretary Kwasi Kwarteng claimed that fraud was not a ‘crime that people experience in their day-to-day lives’. Nobody need take my word for how wrong he is about this. Earlier this year, Treasury minister Lord Agnew resigned from the despatch box in the House of Lords accusing Sunak’s Treasury of having ‘little interest in the consequences of fraud to our society’ and making ‘schoolboy errors’ that cost taxpayers dearly. If the government’s own minister can acknowledge that this crime pandemic has been made worse by the Tories, so should all of us.

Labour must make tackling fraud and economic crime a priority in its plans for government. I recommend four policy proposals to achieve this goal.

First, Labour should adopt a ‘zero tolerance’ approach to fraud. Any government taking its responsibility to make good use of taxpayers’ money seriously should commit itself to ensuring no fraud is written off. Such a policy could be enacted on day one of a Labour government to put an end to the plague-like growth of fraud under the Conservatives.

Second, Labour should create an anti-fraud commissioner. There are many different organisations involved in tackling fraud, including the Serious Fraud Office, the National Crime Agency’s Economic Crime Command, the City of London Police, UK police forces, HM Revenue and Customs, the Financial Conduct Authority and the National Economic Crime Centre. They cover a wide range of sometimes overlapping remits; an anti-fraud tsar could provide a much needed focal point, sharing expertise and experience across the enforcement network. To improve accountability, an anti-fraud tsar could be required to present an annual report to parliament about anti-fraud efforts across all agencies, providing improved monitoring of anti-fraud efforts.

Third, Labour should establish ‘failure to prevent’ as a criminal offence to ensure companies are held to account for criminal activity that their business facilitates or complicity, as recommended in October by the House of Commons’ Justice Committee. This would be an important preventative measure: we should be tough on fraud, but also tough on its causes – and a large volume of fraud is perpetrated from abroad or through third parties, such as email and social media platforms. Punishing complicity would help prevent more cases of fraud in the first place.

Finally, Labour should improve support for fraud victims. Fraud can be devastating emotionally as well as financially and it is still far too difficult for those affected by fraud to obtain specialist support. Labour should introduce a minimum standard of care that fraud victims can expect to receive and ensure all police forces in England and Wales work with appropriately trained victim care units within a year, as also recommended by the Justice Committee. Labour should also help to alleviate the stress of falling victim to fraud by making it easier for victims to follow progress on their case.

Britain is facing a plague of fraud that is rapidly getting worse. Its impact is widespread and costly. After over a decade of complacency – epitomised by Sunak’s actions as chancellor – Labour has the chance to show the public that we are ready to make the UK a hostile environment for fraud and deliver better security for the British public.

Image credit: Jared Eberhardt via Flickr