‘There are practical ways for Labour to tackle the fraud epidemic’

In her recent letter to the Home Secretary, Emily Thornberry’s criticism of the government’s recently launched Fraud Strategy was unequivocal – though welcome, the long-delayed strategy in her view “does not come anywhere close to what we need”.

As Labour’s emerging leading voice on tackling the growing epidemic of fraud, the Shadow Attorney General is right to begin agitating on this issue. Fraud, as a crime representing 41% of all crime with links to organised crime and terrorism and one which is costing the UK economy, at conservative estimates, upwards of £190bn per annum, is widely recognised as a national security as well as a criminal justice issue. 

Indeed, the scale and reach of fraud in the digital era means it is fast becoming an issue on which voters will judge parties at the ballot box; far from being a marginal crime against the vulnerable and elderly, statistics show that this is a crime which is hitting all generations and demographics and is disproportionately affecting the tech-savvy ‘generation Y’.  With generative AI already emerging as a vector able to amplify this threat, this is a problem which is only like to escalate further.

While the agitations of individual shadow ministers on this issue are welcome, given these stark statistics and the growing calls for action from both victims and consumer groups at one end and the private sector at the other, the current lack of a more coherent Labour policy offering on this issue appears to be a significant oversight. As it stands, Labour’s criminal justice offering under mission two of its five missions – to halve serious violent crime and raise confidence in the police and criminal justice – has very little to offer in terms of a new and innovative response to the fraud problem. 

Rather than leading the way forward, this policy seems to be following the Conservative’s lead in focussing myopically on street-level policing and negating to police the realities on modern life where high streets are virtual and communities exist in both the real and the virtual worlds. Given this reality, it seems outdated that the only proffered response to the fraud epidemic is the time-worn response of establishing of a ‘whole of government response’, rather than putting forward a vision fit for the 21^st century face of crime.

This being the case, what could a more innovative Labour offering look like, particularly given the need, in the current climate, to develop such policy in a cost-neutral way?

First, it could show it is willing to take the necessary measures to tackle the disproportionate role social media companies play in acting as a conduit for fraud (and their seemingly limited willingness to take action on this). Although the fraud provisions in the much vaunted online safety bill will go some way to creating incentives to cooperate, its ability to fully shift corporate attitudes to this enabling activity is widely agreed to be limited.

A proposal to establish a ‘Tech Levy’ to pay for policing the consequences of social media’s facilitation of this crime – a kind of ‘polluter pays principle’ for fraud – is unlikely to find many public detractors and indeed follows the precedent of the government’s Economic Crime Levy; an annual financial charge on the financial sector to fund anti-money laundering initiatives. Furthermore, the establishment of a new criminal offence in relation to the facilitation of fraud already has support in the upper house and would be likely to garner cross-party support.

Second, it is widely agreed that the policing response to fraud is inadequate and failing victims and further undermining public confidence in the criminal justice system. The lack of an adequate response to this in the government’s Fraud strategy, which allocates only 400 new officers to the problem, offers an opportunity to push for bolder reforms. Based on the expert opinion of a group of civil society actors and police leaders, there is broad support for a recent RUSI proposal to adapt the established national security policing model to tackle fraud.

Finally, at the root of the lack of progress against the UK’s escalating fraud problem is a lack of political leadership. As an issue that impacts every department of government, but which has no clear departmental lead, fraud is everybody’s problem, but nobody’s priority. This is a cross-departmental issue which needs a single and coherent set of responses and someone with the authority to drive it through. A commitment to create a single, non-departmental economic crime minister, reporting directly to the national security council would be a useful way to show political leadership on this issue. 

In summary, there is an opportunity for Labour to build a coherent and unique alternative offering to the public on this issue. And as the Shadow Attorney General recognises, in a cost of living and public finance crisis inaction on an issue which is costing individuals, businesses and the public pursue billions per annum is untenable. As she notes, “we cannot let working people and pensioners continue being robbed of their hard-earned wages and savings by these gangs of parasites, while the government sits on its hands and pretends there is no problem”.  Recognising the problem is a good starting point; building a bold new response is another.