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25 June 2024

Financial Crime in the Manifestos

Both parties have now published their 2024 General Election manifestos. The Conservatives have promised to “keep turning the tide against fraudsters”, and boast to have reduced fraud by 13% in the last yearLabour is promising to “stop the chaos, turn the page, and start to rebuild our country” and complain that fraud accounts for almost two in five crimes

But what are the parties actually proposing to do to tackle fraud and business crime? And who might we be better off with?  

The Conservatives are keen to highlight their introduction of new fraud offences in the Economic Crime and Transparency Act 2023.  They argue that they have already dedicated adequate resources to this important issue, albeit their critics will say, only recently.  The Conservatives are using crime statistics, including the recent decline in fraud cases, as arguments for the continuity vote.  However the Conservatives do promise to enact a new “Fraud Bill”.  This will look to give the Department of Work and Pensions powers similar to HMRC, to treat benefit fraud like tax fraud with new powers to identify, investigate and pursue fraudsters. 

The Labour Manifesto commits Labour to introducing a “new expanded fraud strategy”, in an effort to tackle “the full range of threats, including online, public sector and serious fraud”.  Labour have promised to work with technology companies to stop their platforms being exploited by criminals. 

Further, Labour’s promise to work with national policing bodies and police staff to standardise the approach to procurement, IT, professional standards and training – to ensure that the police service is “organised so as to enable investment in specialist capabilities, such as digital forensics, and to more effectively tackle cross-border issues such as serious organised crime”.  This investment in specialist capabilities is needed if law enforcement is to keep pace with the increasing sophistication of criminals. Further, for those who operate in the criminal justice sector delays around digital forensics occur all too often.  

The Conservatives flag an awareness that money laundering has long been a prominent issue in our financial services market.  The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (most recently amended in 2023) set a high bar for financial and service firms’ on-boarding new clients.  The Conservatives plan to go one step further, promising to “ensure all British Overseas Territories and Crown Dependencies adopt open registers of beneficial ownership”.  If enacted, this may see a fundamental changes to the role of offshore tax havens such as the BVI and the Cayman Islands where confidentiality is king. 

In terms of specific policies, the Conservatives plan to enact a ban on ‘SIM farms’ and cold calls in relation to financial products.  SIM farms are devices which can house hundreds of SIM cards and are used to send bulk messages for fraudulent purposes.  With these policies, the Conservatives are speaking to their base; such frauds often targeted at older members of the community. 

Labour also speak to its base, seeking to accommodate the environment into their fraud policy.  They promise to give regulators new powers to block the payment of bonuses to company executives who are responsible for polluting waterways.  These new powers will introduce new criminal charges for persistent offenders, including “severe fines”. 

The Conservatives plan to fund new policies by a continuation of legislation tackling tax avoidance and evasion, in the hope this will raise £6billion a year. If past figures are to be believed, this seems like an achievable target. Labour says it has been cautious, leaving almost £2.5bn unspent of the revenue it expects to raise through new tax measures.   

It is disappointing that the Conservatives, like Labour, have not committed to investment into the agencies that tackle fraud, such as the SFO. However, there is a long queue of expectant recipients – just where will financial crime be placed in that queue? It is perhaps unsurprising that a good deal of Labour’s proposed budget has been allocated to more hot-topic (and perhaps vote-winning) policies such as immigration, wealth creation and the climate.  There is no recognition of increasing cyber fraud statistics, nor a solution to the ever increasing wait times for fraud cases to be heard in a criminal justice system already stretched to the very limits.  Legal practitioners, and prosecutors, will hope that whichever party wins on 4 July this will herald the positive change so sorely needed for the criminal justice system. 

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Mark Jones
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Henry Watkinson
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