(7 years, 6 months ago)
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Thank you for calling me, Mr Owen. I apologise for not being here on time. I had a meeting with the—
You are running out of excuses, Mr Shannon. Just carry on.
I congratulate the right hon. Member for East Ham (Stephen Timms) on making a very good case with lots of knowledge. His immense knowledge has been tremendous to have.
The role the Serious Fraud Office plays is essential and the House should ensure that it continues. The SFO initially had a financial threshold for its cases of £1 million, which was increased to £5 million. However, such thresholds soon became outdated, and the current director has published a statement of principle to make clear the main factors he takes into account when considering a case. We all know what those are: whether the apparent criminality undermines UK plc commercial or financial interests in general and those of the City of London in particular; whether the actual or potential financial loss involved is high; whether the actual or potential economic harm is significant; whether there is a significant public interest element; and whether there is any new species of fraud.
Current cases include, as other Members have said, investigations into the manipulation of the LIBOR rate; the recapitalisation deal by Barclays bank with Qatar at the height of the financial crisis; alleged bribes paid for the award of contracts relating to Rolls-Royce; alleged false accounting relating to Tesco; alleged bribery of public officials relating to Alstom; and alleged bribes paid to induce customer orders relating to GlaxoSmithKline. The list goes on and on.
Members have mentioned whistleblowing, and I myself have referred a whistleblowing incident to the SFO. Although it did not reach the aforementioned level, it was passed on to the financial regulatory authority. There must be a way to deal with the big firms; the individuals—the whistleblowers of this world—cannot take on such cases themselves. The SFO is essential in helping to take on the big firms. We have all watched or heard of the film “Erin Brockovich”, in which the David is able to take on the Goliath, but that is not the norm. The norm is that litigation costs are out of this world and, as a consequence, wrong is allowed to take place.
I fully support the SFO and hope I have made that clear. Indeed, its ability to look into cases should be much wider, and should include the case that I referred to it, which was of major importance at the time. However, there must be value for money and accountability for public spending, and the public must rest assured that there is no way to deal with those issues other than with the funding that is required.
Right hon. and hon. Members have spoken about how the core budget can be supplemented by blockbuster funding, and the right hon. Member for Cities of London and Westminster (Mark Field) mentioned that song from many years ago. He referred to hairstyles; I can refer to the days when I had hair. Indeed, I suspect that you remember those days as well, Mr Owen.
It is always good to look back and remember what we had in the past.
The core budget can be supplemented by the blockbuster funding—that is clear—but if we are still recovering those large amounts of money, can that money go to the centre and can those recoveries be publicised, Minister, to show value for money? It is all about how the system works and how it works best.
I agree with the report from Her Majesty’s Crown Prosecution Service, which found that the blockbuster funding model does not represent value for money and prevents the SFO from building future capability and capacity. I understand the reasons and the thinking within that. Temporary and contract staff are often more expensive than permanent staff, and managing surge capacity is a constant drain on human resources and other staff. Increased core funding would provide the SFO with the ability to build capacity and capability in-house and lead to less reliance on blockbuster funding. I agree with that reasoning, and I think that other Members have expressed that also. Minister, I look forward to your addressing those issues to our satisfaction.
In a previous life, I worked as a local councillor—for some 26 years—and often queried the use of long-term temporary contracts for staff supplied through agencies because of the cost increase, often going through the pros and cons of the issue. Although I understand the rationale of needing to grow or shrink depending on the size of the case, a larger base to begin with could—would, I believe—save money and provide job security for those with the specialised know-how. There must always be the ability to access blockbuster funding for cases such as LIBOR, which was an extremely transparent case, but there should not be a standard top-up that excuses the need to do what every Department from Health to Work and Pensions has done—cost-cut, look at efficiency measures and see whether staffing arrangements are adequate.
In conclusion, and ever mindful of the timescale that you set me, Mr Owen, I do not believe that what I have just set out is happening in the SFO. I put on record my wholehearted support for the body, but I believe that it must learn to cut costs like the rest of us. I agree that that can be done through a larger core budget—that is where we start, and the Minister might refer to it—and through the ability then to apply for blockbuster funding in exceptional cases, not just as a matter of note or opportunity. Thank you, Mr Owen.
I now call the Front-Bench spokespersons, starting with Kirsten Oswald.