Serious Fraud Office

John Hayes Excerpts

Tuesday 3rd June 2025 Westminster Hall

[Sir John Hayes (in the Chair)]

I remind Members that they should bob if they wish to be called in the debate; I can see that some have already taken that advice.

[Joe Powell (Kensington and Bayswater) (Lab)]

It is a pleasure to serve under your chairship, Sir John. I congratulate my hon. Friend the Member for Hendon (David Pinto-Duschinsky) on securing this debate on the important work of the SFO in tackling economic crime. The all-party parliamentary group on anti-corruption and responsible tax recently met with the Serious Fraud Office team and its director. I have the pleasure of chairing that APPG, a role I inherited from our current anti-corruption champion Baroness Hodge. I thank the SFO’s staff and leadership for taking on incredibly complex cases in the national interest. It was clear that the SFO has an ambitious agenda to tackle serious economic crime, but it was equally clear that without sustained political and financial backing from Government, and cross-Government work to prevent economic crime and fraud, the agency will not be able to fulfil its potential.

I am therefore pleased that this Government have committed to a new cross-Government anti-corruption strategy, led by the joint anti-corruption unit at the Home Office. I hope that that strategy will include some of the policies that will help deter and prevent economic crime and fraud in the first place, and I will mention a couple of them before moving on to some recommendations for the SFO. The first, which has long been debated in this Chamber, is the role of UK overseas territories and Crown dependencies as facilitators of economic crime and fraud. We asked the SFO for an estimate on the volume of fraud and economic crime that has a connection to the UK overseas territories, and we are waiting for an answer.

However, needless to say, it is common practice to use shell companies in the overseas territories and Crown dependencies to launder the proceeds of crime to facilitate tax evasion and avoidance. I commend the Government of Gibraltar, who have taken an important step towards publishing a transparent register of company ownership. A few weeks ago, the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) and I met the Gibraltar premier. Our request is this: if Gibraltar can do it, why can the British Virgin Islands, Turks and Caicos, Cayman Islands and others not meet their obligations to Parliament on transparency over beneficial ownership? That will help us to follow the money, and it will help investigators in the SFO to bring successful cases.

The last deadline for the overseas territories was 30 April. That deadline was only set in the autumn, when we had the last joint council meeting, chaired by the Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). Only two overseas territories met that deadline for enabling legislation on publishing information on beneficial owners. What consequences will there be for those that have not met the deadline, and what support can be provided to get those registries up and running so that our investigators can follow the money?

The second area in which I think the public expect more co-ordination is the proliferation of economic crime and fraud on our high streets. In Kensington and Bayswater, a number of constituents have contacted me about our latest Harry Potter shop, souvenir shop, candy shop, barber shop, vape shop, nail bar and so on. Obviously legitimate businesses conduct those trades, but we know from the National Crime Agency’s recent Operation Machinize on barber shops across the country that there is a significant link between economic crime and fraud and serious organised crime. There are serious organised crime links on our high streets, but also VAT avoidance and business rate avoidance from companies that phoenix. We need co-ordination across the enforcement agencies, with His Majesty’s Revenue and Customs, the NCA and the SFO working together to enforce the law on our high streets. I think that a lot of our constituents would thank the Government for an additional push on that front.

I want to mention three areas where I think that the SFO could do with our support under its strong new leadership: first, on whistleblowing reform; secondly, on sustainable funding for disclosure; and thirdly, on enforcement on foreign bribery, which comes under the SFO.

First, I strongly welcome the SFO’s commitment to progressing a new incentivisation scheme on whistleblowing. In the United States, such schemes have unlocked more than $50 billion in recoveries, and significant numbers of UK whistleblowers have contributed tips to US authorities because the scheme incentivises them more than if they did so here. It is beyond time that the UK had a comparable mechanism, and I hope that the Government will look at ways to develop a properly resourced whistleblower reward scheme, subject to the outcome of the independent review by Jonathan Fisher KC on what exactly that would look like.

Secondly, despite recent progress, disclosure continues to consume a staggering portion of the SFO’s capacity at approximately 25% of its budget and 40% of its staff time. We know that the SFO can be one of the most effective agencies in tackling financial crime, but that means we must properly fund and support it, including, as my hon. Friend the Member for Hendon mentioned, with modern technology. Independent reviews have already shown that disclosure remains an Achilles heel for the justice system, particularly in the prosecution of complex economic crime. Support in this area would go a long way.

Thirdly, there is a lack of enforcement on foreign bribery, in particular by UK small and medium-sized enterprises in developing countries. According to recent analysis, there have been zero successful prosecutions of UK SMEs for such offences since 2016, when the NCA’s international corruption unit took over responsibility for pursuing that kind of bribery. That enforcement gap undermines the UK’s credibility and efforts to promote clean business globally, and we want to support our SMEs to go out and make those deals in a fair and transparent way. The SFO must therefore be properly resourced and supported to take the lead in this area. The Government should ensure that there is sufficient funding for the SFO to take a lead role in prosecuting all UK firms who commit bribery overseas, including SMEs.

To conclude, the SFO must be supported to improve outcomes, with additional resources for trained staff, modern technology and digital disclosure tools. The responsibility now lies with us—with this Labour Government, who have rightly put tackling economic crime at the heart of their agenda. The Foreign Secretary has said that we want to

“be the anti-corruption capital of the world”,

and I support that entirely.

Our APPG strongly supports the creation of an economic crime-fighting fund, which would allow enforcement proceeds to be reinvested into frontline agencies such as the SFO, which returned £3 to the taxpayer for every £1 invested. That is a sound investment for taxpayers and would help to ensure that the SFO is equipped to tackle some of the disclosure challenges that I mentioned, and to close the enforcement gaps on foreign bribery. I believe that the SFO is setting the right direction through its business plan and its newish leadership, and it is now for us to provide the funding and political backing to allow it to contribute to the UK’s leadership on economic crime.

[Sir John Hayes (in the Chair)]

I intend to begin the winding-up speeches at 5.50 pm, and we have two more Back-Bench speakers, so it would be lovely if I could get you both in.

--- Later in debate ---

[Ben Maguire (North Cornwall) (LD)]

It is a pleasure to serve under your chairmanship, Sir John. I thank the hon. Member for Hendon (David Pinto-Duschinsky) for securing this important debate. As the hon. Member for Strangford (Jim Shannon) just pointed out, last year alone fraud accounted for a staggering 40% of crimes against individuals in England and Wales. This is not a faceless crime; behind every one of those statistics is a victim, someone who has been left not only financially worse off, but emotionally distressed, fearful and often devastated. Whether it is a vulnerable pensioner scammed out of their life savings or a small business misled into paying false invoices, the human impact of fraud is real and growing.

We have already heard about the devastating impact of romantic fraud, as highlighted by the hon. Member for Clwyd North (Gill German), and the hon. Member for Strangford outlined the increase in fraudulent calls offering things such as fake holidays. I have heard from countless constituents in North Cornwall—hard-working people, whether they are pensioners or young adults saving for a first home—who have fallen victim to online fraud, authorised push payment scams and identity theft. They feel ignored, disempowered and unprotected. Far too often, they felt like the system just did not care. For them, justice feels out of reach, and that is because sadly, in most cases, it is.

Despite the enormous scale of this crime, only around 2% of recorded frauds are actually referred to local police forces for investigation. The vast majority of victims never see their cases taken forward, let alone justice done. That simply is not good enough. The Liberal Democrats believe that it is time to move beyond empty promises and underfunded initiatives and take bold, decisive action. We have set out in our manifesto a comprehensive plan to tackle fraud because we recognise it for what it is: a national emergency hiding in plain sight.

We would establish a dedicated online crime agency, a national body designed specifically to tackle online fraud, co-ordinate investigations across forces and employ the kind of digital expertise that is urgently needed to tackle cyber-enabled crimes. Right now, fraudsters exploit jurisdictional boundaries; they use fake identities, offshore servers and untraceable digital accounts. Victims in Cornwall, for example, might be targeted by criminals operating from London, Lagos or Luxembourg, and our existing systems are not designed to cope with that level of sophistication or scale. A specialist online crime agency could plug that gap.

The hon. Member for Hendon rightly pointed out how big banks need to seriously step up. We would name and shame banks with the worst records on preventing fraud and compensating victims. If we do not hold institutions accountable for allowing these scams to happen under their watch, nothing will change. In 2023 alone, criminals stole £1.2 billion from individuals through banking fraud and scams. While banks have improved reimbursement rates, nearly 40% of authorised payment fraud losses still go completely uncompensated.

While it is welcome news that, from October, payment providers will be required by law to reimburse victims of authorised push payment fraud, regulation alone will not be enough. We need pressure and transparency, so that banks feel real accountability to their customers. That is why we would launch a high-profile national fraud awareness campaign, giving people the tools to spot, report and avoid scams. The Government have a duty to act, but the public deserve to be better informed, supported and empowered.

Fraud prevention must be treated as seriously as fire safety, road safety or other forms of crime prevention. We should have national guidance for at-risk groups, and there should be a visible, accessible place to report crimes and get the help they need. Most importantly, we need to do more to support victims. The emotional harm caused by fraud, which has already been laid out by other hon. Members, is often overlooked, yet for many the betrayal, fear and shame of being scammed is as damaging as the financial loss suffered.

A constituent of mine who was the victim of such a devastating economic crime wrote to me of how it not only resulted in his farm business being “crippled”, but led to a detrimental impact on his livelihood, health and wellbeing, causing him worry, stress and severe depression. He ultimately required counselling, and has since been identified as at high risk of suicide, has become a recluse, and suffers from

“a host of health issues with heart and blood pressure problems, bowel cancer, severe migraines”.

Ultimately, it has taken a huge toll on his physical and mental health.

Let me be clear: we cannot continue to treat victims of fraud as if they are to blame for their misfortune, or expect individuals to prevent it. Fraud is a crime—not a mistake or bad luck. It is a deliberate act of deception, and the victims, whether they are small business owners, retirees or university students, to name a few, deserve justice and redress.

That brings me to the Public Authorities (Fraud, Error and Recovery) Bill, currently making its way through Parliament. On the surface, it offers important tools to recover public money lost to fraud, especially in the welfare system, and of course every pound stolen through fraud is a pound not going to our schools, hospitals or those genuinely in need. However, the Bill as drafted lacks a comprehensive impact assessment. Without that, we risk placing enormous emphasis on clawing back money from ordinary claimants, without matching it with investment in the prevention or prosecution of high-level economic fraud.

What about the billions lost through covid support schemes? Let us not forget that under the last Conservative Government, fraudsters were allowed to get away with billions of pounds of covid support funds. Meanwhile, revenue worth an estimated £38.9 billion a year goes uncollected due to tax evasion and criminal activities. We need a clear, cross-agency, strategic and well-resourced national effort to tackle economic crime and fraud, and the Serious Fraud Office has a central role to play in that. The hon. Member for Kensington and Bayswater (Joe Powell) has already called for a much more joined-up approach between the SFO, the NCA, HMRC and other agencies.

The SFO is the very agency tasked with investigating some of the most complex and serious frauds in the country, yet it remains under-resourced, underpowered, and far too often underperforming. We have seen well-publicised failures, with high-profile cases being dropped, poor conviction rates and concerns raised about its investigatory capacity. The SFO has been left to firefight with nowhere near the scale of investment it needs to pursue the most complex, high-value economic crimes.

If we are serious about tackling corporate fraud, money laundering and criminal networks exploiting our economy, we must give the SFO the independence and resources it so desperately needs. We need a Serious Fraud Office with teeth. That means increasing funding, improving oversight and ensuring that its leadership has the freedom to pursue complex cases without any interference. It also means ensuring that it works hand in hand with the National Crime Agency, local forces and international partners.

Fraud is not victimless. It targets the vulnerable and undermines trust in our financial systems. It is draining billions from our economy. I urge the Solicitor General and the Government to act—not just to reform the SFO but to lead a co-ordinated and compassionate national effort to protect our constituents from fraud and economic crimes. This Government and every Government have a moral duty to offer more than token support. We must build a justice system that investigates fraud robustly, prosecutes it swiftly and protects those most at risk of harm. The people of my constituency of North Cornwall, and communities across this country, expect and deserve nothing less.

[Sir John Hayes (in the Chair)]

I call the shadow Solicitor General.

[Helen Grant (Maidstone and Malling) (Con)]

It is a pleasure to serve under your chairmanship, Sir John. I congratulate the hon. Member for Hendon (David Pinto-Duschinsky) on securing such an important debate, on an issue that affects all our constituents.

In our time in government we took decisive action to combat fraud, including benefit fraud, and economic crime. Following Russia’s invasion of Ukraine, we introduced the Economic Crime (Transparency and Enforcement) Act 2022. That legislation enabled faster sanctions against oligarchs, and removed barriers to the use of unexplained wealth orders. In 2023, the Economic Crime and Corporate Transparency Act received Royal Assent. That legislation further enhanced the UK’s ability to target organised criminals and those seeking to abuse our open economy. New powers were given to Companies House to stop criminals using false names or registering companies with fictitious characters. The legislation was welcomed by many, including the Law Society and the Institute of Chartered Accountants.

In 2019, the Government published the economic crime plan 2019-2022. The plan represented a step change in our response to economic crime, and had 52 action points and seven strategic priorities. It was followed by the economic crime plan 2 in March 2023, which the hon. Member for Hendon assured me he has read in full. The second plan aimed to deliver real-world outcomes, and

“to cut crime, protect our national security, and support the UK’s legitimate economic growth”.

The Association of British Insurers called the plan

“a landmark in the fight against economic crime.”

In May 2023, the Government published a fraud strategy. It outlined the actions that the Government would take to further reduce fraud. It was especially welcomed by the Crown Prosecution Service and the City of London police for the additional investment it proposed. In February 2024, the Home Office announced that fraud had been reduced by 13% since the launch of the strategy.

Clearly, good progress was made by the Conservative Government during our time in office—but there is, of course, always more to do, so I have some questions for the Minister. I appreciate that she may not be able to answer them all today, given the time, so I would welcome her response in writing in due course.

What steps is the Minister taking to improve the number of prosecutions undertaken by the Serious Fraud Office and the speed at which those prosecutions progress? Is she confident that the SFO has the technical knowledge and digital technology for cryptoasset-related fraud? Does she agree that deferred prosecution agreements should be used more frequently to ensure swift justice and financial resolution for victims? What steps are the Government taking to ensure that the enhanced powers given to Companies House under the Economic Crime and Corporate Transparency Act are effectively implemented? Finally, will she assure the House that her Government will maintain the important momentum established by the Conservative-led economic crime plans?

Tackling fraud and economic crime is about safeguarding the livelihoods of our constituents and businesses across the UK. We remain absolutely committed to ensuring that the UK is a safe place to do business and we urge the Government to build on the robust foundations that we laid during our time in office. We will continue to hold the Government to account and push for stronger enforcement, greater transparency and more effective prosecution of economic crime.

[Sir John Hayes (in the Chair)]

Before I call the Minister, I ask her to leave a few moments for the Member in charge to wind up the debate and for me to put the Question.