Economic Crime

Simon Fell Excerpts

Thursday 2nd December 2021 Commons Chamber

[Simon Fell (Barrow and Furness) (Con)]

I shall try to hobble on one leg, Madam Deputy Speaker. I thank the right hon. Member for Barking (Dame Margaret Hodge) and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for securing this important and timely debate. Frankly, it is time that we addressed some of these issues for once and for all.

Before I begin, I refer the House to my entry in the Register of Members’ Financial Interests. For 10 years before I was elected, I worked in fraud and financial crime with some of the largest institutions—banks, insurers, telecoms companies, charities and, in fact, the Government—trying to bear down on fraud and financial crime. I seconded members of my team to the national economic crime command and the joint money laundering and intelligence taskforce, and the organisation that I worked for chaired the joint fraud taskforce.

During that period working in fraud and financial crime, I learned that there is huge willing on the part of the industry, the Government and law enforcement to work together to tackle some of the issues at the heart of this debate. I think those in the industry are willing to go a lot further in putting time, resource, money and energy into tackling some of these issues, but in return they want their investment to be backed by action from the Government and law enforcement. They want to feel heat and to see people’s collars being felt.

Let us be absolutely clear: without peril, this is just a game of whack-a-mole in which one rogue actor—one criminal—can simply shut down their activity and start again. They collect their money, move on and make liquid their funds until that route closes, and then they just open another. That is the game they are currently playing—and it is a game to them. We should be dismayed that it is happening and being allowed to happen. As Members have already said, funds are being raised through serious and organised crime. They are the result of scams and low-level frauds, of insider information leaks, of hacks, of the exploitation of breach data, of corporate espionage, and of people deliberately exploiting the state. As my hon. Friend the Member for Thirsk and Malton pointed out, stopping the money flows is essential to stopping this activity full stop.

I recall a meeting about three years ago with the NCA, which had mapped an organised crime group and how it enabled and then laundered the proceeds of economic crime and of very human crimes. The OCG was linked to people traffickers. As my hon. Friend mentioned, those same groups are now exploiting vulnerable people and transporting them across the channel in dinghies. It was linked to low-level scams in which a vulnerable grandmother might get a phone call and suddenly have her life savings emptied out of her bank account. It was tied to complex financial marketing activity on the dark web, where credit card breach data is sold for criminals to exploit. It was also linked to drug imports and county lines drug running. The chain ran from grandmothers’ houses, across the channel, across the dark web, into the property market and all the way to the poppy fields of Afghanistan.

I make it clear that this is one group, and there are many of them. It is not a ragtag bunch of criminals trying their hand but a deeply successful, multimillion-pound business—a tax-avoiding business, too—and there are many of them out there. These people sought and exploited every single opportunity to enrich themselves, with no care for the misery or economic cost they left behind.

These criminal gangs result in real challenges for people. Insurance premiums are higher, delivery costs are inflated, public funds do not reach those who need them the most, small businesses are cratering and life savings are stolen. They also overinflate the property market, which is important. I recall sitting in the office of the NCA’s director of economic crime in Vauxhall. He pointed out of the window to the shiny new skyscrapers opposite and said, “Not a single one of them has curtains or a kettle in the kitchen, yet they change hands on an almost weekly basis for millions of pounds.” This is forcing people out of the property market. If we hope to ensure that some of our cities are ever again affordable for families to live in, we need to bear down on this activity.

These organised crime businesses are hugely complex. They run as cells, and they are intelligent. If part of the business is shut down, they know how to get up and run again. As reprehensible as they may be, I am slightly in awe of how clever they are and how they operate. But the reality of these businesses is wrought in the ruined and damaged lives they leave behind. I come back to my first point: without peril, we will simply not be able to act against them. The current whack-a-mole approach means that, for every snake’s head we chop off, another one appears.

As the right hon. Member for East Ham (Stephen Timms) said, fraud is the No. 1 volume crime in the UK. It is epidemic and completely out of control. We simply do not have a grip on it. It is all well and good for the City of London police to run a day of action and pick up the 10 most-wanted fraudsters in the UK, but there are 4.6 million cases of fraud each year. Where is the peril that will stop the behaviour? When the industry, the biggest banks, insurers, charities and the Government pull together to share information to bear down on those fraudsters, why are collars not being felt more regularly?

The Department for Work and Pensions ran 11 raids this morning to shut down an OCG’s £4 million benefit scam. I am glad to see there is some work happening in this area, but there is plenty more to do. We should be considering the economic equivalent of antisocial behaviour orders—economic crime prevention orders—to put those who commit fraud on notice by putting a mark against their name and saying there will be serious consequences if they do it again.

We should be looking again at how we can better empower information sharing and action against those responsible for these crimes. Taking away the ability to launder their funds would remove a good part of the incentive of people who run small boats, and taking away a county lines drug operator’s ability to trade out their earnings will do exactly the same. We need to look more closely at enablers. Thankfully, Companies House now restricts the amount of personal data available to the public on its website, which was a key enabler of fraud, but I join other colleagues in saying that we have to tread a fine line between encouraging entrepreneurship by making it easy to set up a business and making the UK a dynamic place in which to operate, and creating an easy entryway for criminality and allowing criminality to disguise itself with a veneer of acceptability.

The other key point on enablers relates to online safety and education, which will be key. Young people are sharing information right, left and centre on social media without a care for how it is going to be picked up and used against them. The point about advertising that was mentioned earlier was also spot on. The online harms Bill is absolutely where we need to be addressing this issue; to add to the layer cake of voices calling for the change that colleagues have mentioned, the director of the national economic crime command has also suggested that fraud should be included in that Bill.

In drawing to a close, I wish to thank the right hon. Member for Barking and my hon. Friend the Member for Thirsk and Malton for calling this incredibly important debate. The measures they are calling for in an economic crime Bill are proportionate and fair. We need to inject not only as much transparency as we possibly can into the system, but peril, too; we need to be making sure that criminals feel that heat. I believe the reforms they have suggested will get us there, and I very much look forward to hearing the Minister’s views.