Lord Cromwell (CB)

My Lords, economic crime, in particular fraud, is now the leading form of UK crime and, together with money laundering and bribery, costs the UK billions of pounds each year. It also undermines public trust, public confidence and economic growth. The good news is that enforcement against these economic crimes and associated confiscation of assets, while complex, generates substantial receipts—some £566 million per year currently. Yet, while we entrust the police and other law agencies with more and more tasks, mostly both difficult and vital, the very agencies responsible for securing these funds from criminals face acute resource challenges, particularly in recruiting and retaining specialist staff, updating skills and modernising ageing IT systems and capabilities, as a number of other speakers across the House have referred to so powerfully today. I suggest to the House—and not for the first time—that those enforcing the laws we so carefully create and pass here must be properly resourced. An obvious means of doing this would be to use the confiscated criminal assets via a ring-fenced fund to resource the agencies concerned. There are two existing schemes in this area. The economic crime levy is an annual charge on UK businesses regulated under the money-laundering regulations. This private sector contribution could logically be matched by greater reinvestment of enforcement receipts. The current asset recovery incentivisation scheme, ARIS, is subject to the curiously named “annularity rules”. This means that money not used by the year end, which is sometimes just weeks away from when the money is obtained, is lost. A ring-fenced fund would enable stronger agencies, which would then deliver greater asset recovery and confiscation which, reinvested into the fight against economic crime, would establish a virtuous circle of self-financing investment and effectiveness. Beyond the obvious capacity and effectiveness benefits from such targeted resources, a ring-fenced fund would demonstrate to working people that the Government are exploring all avenues to crack down on economic crime. There is a certain fiscal poetry here—not a phrase one hears very often, I believe—in that this would all be achieved without adding to anyone’s tax burden, but by making the criminals pay: a form of “polluter pays”, if you will. In the House of Commons, an amendment to the Bill was put down to require the Government simply to investigate the viability of such a ring-fenced economic crime fighting fund using a proportion of the assets I have referred to. This cross-party proposal secured broad parliamentary support. It was signed by 28 MPs from Labour, Conservative, Liberal Democrat and Green parties on Report. Unfortunately, there was insufficient time to debate the amendment, but there were productive conversations with the relevant Ministers. To underline again, the amendment did not suggest, and I do not suggest, that the Bill is used to establish such a fund, simply that its viability is investigated. I have already shared these ideas and, indeed, a draft of the amendment with the Minister. I look forward to hearing the Minister’s thoughts on this subject when he winds up this debate and would also welcome a meeting to discuss it with him.