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The Solicitor General (Lucy Rigby)
It is a pleasure to serve under your chairmanship, Sir John. I congratulate my hon. Friend the Member for Hendon (David Pinto-Duschinsky) on securing this important debate on fraud and economic crime and the work of the Serious Fraud Office in combating those threats. The debate has been thoughtful and considered, covering different types of fraud and plenty of personal stories and experiences.
Fraud, bribery and corruption undermine economic security and prosperity, and undermine the very significant majority of people in this country who play by the rules. That is why the Government are so determined to stamp out such crimes and to support the SFO in its core mission. That is how we will protect our economic security and prosperity, as well as the reputation and integrity of the UK as a leading international financial centre. It is also how we will protect working people from the pernicious types of fraud that have been so aptly described today.
As my hon. Friend said, the economic crime landscape has been fundamentally transformed by rapid technological advancement. Criminals now exploit new and powerful tools, from cryptoassets that enable money laundering to AI-generated audio or images, that have fundamentally changed how we traditionally tackle fraud. Those new types of intricate scams acquire new victims, as he and my hon. Friend the Member for Clwyd North (Gill German) mentioned. As has been covered already, the human suffering is heartbreaking.
Those changes in technology also bring us great opportunities to fight such crimes, as well as tools to do so more quickly and effectively. The environment demands constant innovation and growth, and I see that exemplified by the Serious Fraud Office, with the organisation’s ambition to be bolder and more pragmatic as it continues and succeeds in tackling complex fraud, bribery and corruption.
As has rightly been acknowledged, the Serious Fraud Office is a highly specialist agency. It does crucial work to investigate and prosecute the most serious and complex cases of fraud, bribery and corruption, and it is the only agency in the country to follow criminal investigations from cradle to grave—police, prosecutor and proceeds of crime, all under one roof. The SFO has a complex and challenging caseload, reflecting both the highly specialised work it does and the difficulty of accessing meaningful intelligence on some of the world’s most sophisticated criminals. Its investigations are typically high profile and high risk, and they are invariably cross border, requiring sophisticated expertise and co-ordination.
Like my hon. Friends the Members for Hendon and for Kensington and Bayswater (Joe Powell), I am heartened to see a refreshed SFO that is taking significant positive steps forward under the strong leadership of the director, Nick Ephgrave. He is committed to a focus on using new tools, enhancing the SFO’s intelligence capacity, and working with domestic and international partners—all furthering the SFO’s ambition to be bolder and more pragmatic. During his tenure, the SFO has charged 16 defendants on 43 counts of fraud, bribery and corruption; announced 10 overt investigations; and arrested and questioned 22 individuals. Since 2020, the SFO has returned more than £1 billion to the UK taxpayer in penalties, demonstrating the impressive financial contribution it makes relative to its small running costs.
The organisation currently has 35 active criminal cases, in addition to civil cases, proceeds of crime cases and mutual legal assistance cases, which bring its total caseload to about 150. Earlier today we saw an example of the SFO’s crucial work as it announced an investigation into Rockfire Investment Finance plc, relating to an alleged £400 million fraud against Thurrock council between 2016 and 2020. I saw the SFO’s work at first hand when I accompanied it on an early morning raid as it searched five properties and made three arrests in relation to a new multimillion-pound international bribery investigation.
As I noted, recovering ill-gotten gains and returning money to victims and the taxpayer is a crucial part of the SFO’s role. It is highly skilled at recovering funds under the Proceeds of Crime Act 2002: it recovered £160 million between March 2021 and March 2024. In January, it successfully secured its first unexplained wealth order as it seeks to recover a Lake district property believed to have been purchased with the proceeds of a £100 million fraud—demonstrating that, wherever criminal assets have been hidden or dispersed, the SFO will explore new methods to recover funds for victims and the public purse.
It is vital that the SFO continues to adapt to the increasing pace of change and technological innovation. Part of that drive is being put into action with faster case progression, stricter case discipline, and the creation of capacity for more investigations through the SFO’s “sharper, faster casework” initiative, as demonstrated by the fact that charges were brought in the Axiom Ince case only 15 months after the investigation was launched.
My hon. Friend the Member for Kensington and Bayswater spoke about financially incentivising whistleblowers. It is absolutely right that, in this environment, the SFO examines new and potentially transformative tools in the fight against fraud and economic crime, including the financial incentivisation of whistleblowers. That is clearly a priority issue for the director, and I note that Jonathan Fisher KC will be considering such incentivisation as part of his independent review of fraud.
As has been widely covered, fraud does not stop at national borders, and it is therefore vital that enforcement activities do not either—that is to say that, when criminals do not observe national boundaries, nor will enforcement. That is why the SFO makes co-operation with international partners a priority. It recently launched a new international anti-corruption prosecutorial taskforce with Swiss and French partner agencies that will strengthen the existing ties with those countries and lead to greater joint working on cases, as well as a greater sharing of insights and expertise.
The SFO will continue to strengthen its key international partnerships to ensure continued, robust enforcement against international bribery and corruption, because it is firmly in our national interests to do so.
Joe Powell
Obviously, there has been some concern about the US Administration’s recent shift on the Foreign Corrupt Practices Act. Will the Minister assure us that the SFO is looking at the impact of that, where there is international bribery across jurisdictions? I am not expecting a political judgment about whether that is the right or wrong thing to do, but we must keep our eye on the impacts, particularly in developing countries.
The Solicitor General
My hon. Friend is absolutely right to highlight that key point, and I can confirm that the SFO is keeping a close eye on it in the context of its other international partnerships.
Hon. Members rightly highlighted disclosure, which is another key area in which the SFO is driving forward change. Managing increasing volumes of data and complying with disclosure obligations have become increasingly challenging in the data-heavy cases that the SFO handles. In 2023, 25% of the SFO’s operational budget was spent on delivering disclosure operations. The SFO is harnessing machine learning technology to enhance the efficiency of its disclosure exercises. Technology-assisted review has been successfully trialled on a live SFO case that is going through the courts, and it will be rolled out by operational divisions.
Given the importance of the SFO’s work, I was delighted that in October the Government were able to confirm additional funding of £9.3 million for it, giving it a strong foundation to push ahead with work to deliver organisational objectives. I have talked about the SFO’s role and performance in tackling fraud, bribery and corruption, but I also want to detail the action that the Government are taking more broadly to tackle the threats of fraud and economic crime. We of course take the threat of corruption, alongside illicit finance and kleptocracy, extremely seriously. As a nation with the utmost respect for the rule of law, and indeed for the importance of our security, the UK is leading the fight in addressing corruption.
That is precisely why the Home Secretary, the Foreign Secretary and the Chancellor announced that the Government will publish a new anti-corruption strategy this year, as my hon. Friend the Member for Kensington and Bayswater said. The Government are also developing an expanded fraud strategy, covering themes including enhanced data sharing, monitoring AI, tackling the impact of fraud on businesses and growth, and improving victim support and public awareness. We currently aim to publish that strategy, which is being developed by the Home Office, by the end of the year.
The Government have also published guidance to support organisations in understanding the new corporate criminal offence of failure to prevent fraud. The SFO is committed to making full use of the offence once it comes into force in September.
Lastly, I will make three very brief points in response to issues raised by Members during the debate. First, I will explicitly note the Government’s action to better protect taxpayers when it comes to public sector fraud in the form of the Public Authorities (Fraud, Error and Recovery) Bill, which it is estimated will save the taxpayer £1.5 billion over the next five years.
Secondly, with regard to the overseas territories, it is vital that we work closely with them to combat fraud, financial crime and money laundering, and on the enforcement of UK financial sanctions. We need to see greater transparency when it comes to company ownership, assets and real estate, which will be taken into account in the forthcoming anti-corruption strategy. Thirdly, I am more than happy to take forward the co-operation with Northern Ireland that was mentioned to deal with the very human side of fraud that the hon. Member for Strangford (Jim Shannon) raised.
In conclusion, it is clear that the world of fraud and economic crime continues to evolve rapidly, both in the UK and globally. It is vital that we adapt at the same pace to effectively crack down on this persistent threat to our economy and our prosperity, and that is something that the Government are 100% committed to doing.