The comments made by Oliver Heald, the Conservative MP for North East Hertfordshire, on Twitter on 22 October 2022.
I am supporting Rishi Sunak for Leadership of the Conservative Party. He is experienced, has good judgment and will help the country in difficult times. #RishiSunak
The tribute made by Oliver Heald, the Conservative MP for North East Hertfordshire, in the House of Commons on 9 September 2022.
I rise to make my own tribute as well as one on behalf of my constituents of North East Hertfordshire, in Royston, Baldock, Buntingford and Letchworth. The Queen was very much loved and admired in our area—a remarkable woman and wonderful head of state. She knew our area well from visiting her mother’s family, who live in St Paul’s Walden, a village near Hitchin.
We were lucky that the Queen was able to be with us for some of our area’s most important events. She opened the new North Herts Leisure Centre at Letchworth Garden City and later, in 1993, my first year as an MP, she came to open a new housing development at Beech Hill and a sheltered housing scheme at Tabor Court in Letchworth. Letchworth was also proud that she chose the Marmet pram, made in Letchworth, as the baby carriage for the new King. On such occasions, what struck me was the Queen’s ability to put people at their ease and get them to talk to her. She was kindly and had that dry sense of humour.
I remember one Privy Council meeting at a time when the country was having difficulties with the European Union—similar to those mentioned by the right hon. Member for Derby South (Margaret Beckett), although in a different period. At this particular meeting, Her Majesty approved the high hedges order for Guernsey. Afterwards, she said with a twinkle in her eye: “I am so pleased that we have sorted out those high hedges in Guernsey—is anything else going on?”
People in North East Hertfordshire loved the Queen and we will miss her. Our thoughts are with the royal family. Long live the King!
The comments made by Oliver Heald on 9 April 2021.
Ian Gibson, Labour MP of years gone by has sadly passed away. A good MP and one prepared to make common cause across Party.
The speech made by Oliver Heald on 12 February 2007.
Let me start by welcoming the Government’s renewed emphasis on social exclusion. We share their concerns and welcome further efforts to help those on the edge of society. Although I promise not to refer to Polly Toynbee, it is only right to say that I agree that we should not let people fall too far behind the caravan of society.
We clearly have problems of social exclusion; the proportion of children in workless households is the highest in Europe, more than half the children in inner London are still living below the poverty line, more than 1.2 million young people are not in work or full-time education despite a growing economy, and 2.7 million people of working age are claiming incapacity benefits—three times more than the number who claim jobseeker’s allowance.
The Minister for Social Exclusion knows from her background in social work, as I do from helping many disadvantaged people as a lawyer. She laughs, but if she has ever been to a law surgery, she will know what I mean. The statistics do not convey the full misery and hopelessness in which some people find themselves. Family breakdown, financial problems, addictions, poor educational achievement and worklessness are key matters at the heart of social exclusion that lead to people being trapped in pockets of permanent poverty.
As the Minister said, approximately 2.5 per cent. of every generation appears to be caught in a lifetime of disadvantage and harm. We argue that far more people are affected to some extent by the factors that I have mentioned. It is important to maintain a vision that is broad enough to help all those who are affected by social exclusion and does not simply concentrate on a tiny group that has particular problems. The Minister said that one of the core principles of the Government’s action is better identification and earlier intervention—I am happy to agree with that.
The groups at the highest risk of social exclusion are those affected by the issues that I mentioned. The Leader of the Opposition has asked my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith)—He is in Birmingham. He had a prior commitment to do with the subject that we are discussing. He had hoped to be here today. It is important to bear in mind that his social justice policy group has just published “Breakdown Britain”, which examines family breakdown in great detail. My right hon. Friend treats family in his report in its wider, less restricted sense and breakdown as meaning dissolution and dysfunction. He also considers homes without fathers and single parenthood.
Most people learn the fundamental skills for life in the family—physically, emotionally and socially—and the findings in the report are evidence based. I believe that they are important. The rate of marriage has declined but divorce rates are now stable. The continuing rise in family breakdown is driven by the dissolution of cohabiting partnerships. As the Minister said, there seems to be an intergenerational transmission of family breakdown, with high rates of teenage pregnancy. My right hon. Friend has been given the task of first producing a detailed analysis. He has published a detailed document. It runs to approximately 500 pages but it is very good.
The process of making recommendations has not yet happened—my right hon. Friend will do that in the summer. The shadow Cabinet will then consider them.
Survey evidence from YouGov based on a large sample showed a worrying correlation between those who experience family breakdown and other problems. It showed that those who are not brought up by both parents are more likely to experience educational problems, drug addiction, alcohol problems, serious debt or unemployment. On dysfunction, my right hon. Friend’s policy group identified a breakdown of nurture in many families that are unable to provide for core needs, such as secure attachment, protection, realistic limits to behaviour, freedom to express valid emotions, autonomy, competence and a sense of identity, which are gained from a nurturing family.
The report also worryingly points out the link between family breakdown and youth crime. The reduction in committed relationships has also affected the amount of family care that is available to the elderly. The Local Government Association recently said that that is an expensive problem for the country.
It seems harsh to mention public spending but there is a high cost in benefits—more than £20 billion on lone parent benefits. We all know about the increasing housing needs that family breakdown generates, and the extra care costs for councils due to changed demography are estimated to be £146 million. My right hon. Friend the Member for Chingford and Woodford Green will report on his conclusions in the summer. At that point, we will consider our policy response.
Recently published research shows that the poorest households in Britain are paying a higher share of tax and getting a lower share of benefits than they did before 1997. The figures show that if the poorest fifth of households were paid the same share of total taxes and got the same share of total benefits as in 1996-97, they would have £531 a year more; and the second poorest fifth of households would have £427 a year more. To add insult to injury, the poorest fifth of households pay a higher proportion of their income in taxes than any other group.
The claim in the action plan mentioned by the Minister—that the steady rise in income inequality has been halted—is simply not the case. The fact is that levels of income inequality are now slightly higher than they were in the 1980s or 1990s. The Minister ended up saying that there has not been an increase, while acknowledging that the position has not improved. However, what the Institute for Fiscal Studies said in its report was that inequality was slightly higher. The Government wonder in the action plan why those on the very lowest incomes have seen the lowest rates of income growth, which I think is a valid question.
“those on the very lowest incomes have seen the lowest rates of income growth”,
comes from page 17 of “Reaching Out: An Action Plan on Social Exclusion”, published in September 2006. The Institute for Fiscal Studies said that there has been
“little impact upon the slight upward trend in inequality that has been experienced over Labour’s term in government.”
That is a straightforward quotation.
Social mobility, which is so important, has been reduced since 1997. The Secretary of State for Trade and Industry, who is well respected in the House, said in a speech to the Social Market Foundation on 13 September:
“It is actually getting harder for people to escape poverty and leave the income group, professional banding or social circle of their parents. In fact, it’s currently harder to escape the shackles of a poor upbringing in Britain than anywhere else in Europe”.
If your parents are poor, you are likely to be poor—and that is after 10 years of a Labour Government.
It is not just that the rise in incomes—once one takes account of tax—has not been the success story one would hope for, as the cost of living for families is rising fast. The Leader of the Opposition recently highlighted the true levels of inflation on items affecting people on low incomes. He pointed particularly to energy prices, which are up 71 per cent. since 2003. Mortgage payments, which are also important to many, are up 78 per cent. and taxes are up 81 per cent. He has asked the Office of Fair Trading to investigate the rises in energy prices.
The Minister and I would agree about the importance of education—she mentioned it—to reducing social exclusion. Unfortunately, success has proved elusive. Three quarters of 16-year-olds from low-income families in England and Wales failed to get five good GCSE passes at grades A to C. That is double the rate that applies to other students. The Public Accounts Committee recently highlighted the failure of 1,500 schools and only today we have learned—it is in the news—that 500 schools have failed to meet the 25 per cent. target for five good GCSE grades. If we look into some of the most excluded groups, such as children in care. About 89 per cent. of children in care failed to get five good GCSE passes—a poor record of dealing with the low achievement of children in care.
The Government admit it. The Minister for Children and Families has said that despite the Government’s efforts—no one is denying that the Government are trying—the gap between the outcomes of looked-after children and others is “extremely wide” and “completely unacceptable”. The future for many children in care is very depressing. Almost half of young women in care become mothers within 18 to 24 months of leaving care; and between a quarter and a third of rough sleepers have been in care. I think that tackling the present level of under-achievement has to be a major priority.
Schools can play an important role in the overall strategy to halve teenage pregnancy by 2010. If teenage parents are encouraged to increase their participation in education and training or employment, they may reduce their chances of long-term social exclusion. The likelihood of teenage pregnancies is far higher among those with low educational achievements, even after adjusting for the effects of deprivation. Nearly 40 per cent. of teenage mothers leave school with no qualifications at all. We need to give young people access to consistent help from professionals who understand them and can advise them—with proper assurances of anonymity, where appropriate. It is concerning that, despite the work of the teenage pregnancy unit, set up by the Government, pregnancies among under-14s are actually rising and the overall target for reduction has been missed.
In terms of health, despite the Government target to reduce infant mortality by 10 per cent., the relative gap in the infant mortality rate between the general population and the poorest social classes has increased by 46 per cent. since 1997. Despite the clear link between mental health and social exclusion, the Government have had to reduce the percentage of funding for mental health in many parts of the country. Children are often the worst affected with 15 per cent. of those with mental health needs having to wait more than 26 weeks to see a specialist. Well, those are all Government figures.
Aside from treatment, we need to provide people with mental health problems with better access to training and employment. Just 20 per cent. of those with severe mental health problems have jobs. Four out of 10 employers have said that they would not consider employing someone with a history of mental illness. If we are to move forward, we must tackle that stigma and discrimination.
Concern is being expressed in the voluntary and not-for-profit sector that the Government are asking it to deliver a Government agenda, rather than allowing it to develop innovative services based on its knowledge and expertise. I hope that the Secretary, Cabinet Office, the hon. Member for Wolverhampton, South-East (Mr. McFadden) will give the House an assurance when he responds to the debate that the kind of measures that the Minister for Social Exclusion was describing—monitoring, ensuring standards and so on—will not involve cutting back on the innovation that some social enterprise voluntary bodies have been able to give us to tackle these deep-seated problems.
There is a considerable body of evidence that good public health—particularly the encouragement of good practice and healthy living—can really improve health outcomes. This is an area in which the Government certainly took their eye off the ball during their first few years. For example, there was an epidemic of sexually transmitted diseases, particularly in London, before they took action. They also took a very long time to take action on the issue of tuberculosis, particularly among the Asian community. In public health terms, there are real concerns about how slow the Government have been to react to these major problems.
It is well established that some of the cheapest and most successful health systems in the world are those that place a strong emphasis on public health, so that fewer people require treatment for the more expensive conditions. One of the problems with the Labour Government is that they have never really got down to implementing any solid reform in the public service sector in order to deliver on their intentions. Those intentions have often been very good, but the delivery has often been a bit of a shambles.
I have visited many projects that help the socially excluded, and one lesson that I have learnt is that it is not possible to make sweeping decisions from on high. The socially excluded are, by their very nature, individuals with complex needs. Solutions to social exclusion must come from the bottom, from the people who know the individuals and their problems. This is not about abdicating responsibility; it is about giving the power to those who should have it. There is a role for national initiatives, but they only work if those delivering them on the front line accept them.
We wish the new social exclusion taskforce well, and we hope that it will be more effective than previous attempts. We are concerned, however, that the new body does not appear to have the same direct backing of the Prime Minister as the original social exclusion unit, which was based at No. 10. We accept that tackling social exclusion is an enormous challenge that will involve efforts across many Government Departments, but this will require the full and energetic support of No. 10, simply because it crosses so many portfolios.
Rather than relying on traditional thinking, and on the ideas that underpinned the last nine initiatives on social exclusion, is it not time to look for a new direction based on trusting people and on social responsibility? We need to trust the professionals, the social enterprises and the voluntary sector to tackle multiple deprivation through a combination of long-term funding, increased scope to innovate and a level playing field. We also need to trust local government, and to accept that civil servants and Ministers in Whitehall might not have all the answers. We need to move away from thinking that everything is the responsibility of the state, and towards a new spirit of social responsibility in which we work together to empower local people and local communities. We should not be so arrogant as to believe that politicians have all the answers. Our approach should not be solely about what the Government can do. It should be about what people can do, and what society can do, because we are all in this together.
Below is the text of the speech made by Sir Oliver Heald, the Conservative MP for North East Hertfordshire, in the House of Commons on 9 July 2019.
In my constituency of North East Hertfordshire, there have recently been intentional unauthorised developments of caravan sites on land bought by Travellers. This is becoming more common nationally and has been increasing locally.
It is important that the rule of law is upheld. To local residents who abide by the law, it just seems wrong that planning law can be flouted and treated with disdain. If planning permission is needed, it should be applied for in advance. My constituents are concerned that there should be a level playing field for the planning system. Unauthorised sites are frequently a source of tension between the travelling and settled communities. Although councils have some powers to deal with unauthorised sites, deliberate unauthorised development remains a significant issue.
In July 2018, there were 3,093 caravans on unauthorised sites nationally, of which 2,149 were on land bought by Travellers. The number of caravans on unauthorised sites increased by 17% between July 2017 and July 2018. So, what is going on? In a typical case, it seems that a Traveller will buy land where there would be little or no prospect of someone obtaining planning permission for a home. In my constituency, examples have included land in the green belt and land in a conservation area—I believe that all the sites were ones where planning permission to build a house or to develop a business had previously been refused.
On some occasions, on the Friday evening of a bank holiday a fleet of lorries, caravans and building equipment has arrived on a site, and people have started to lay internal roads and hard standing on the site without planning permission. In some instances, children are brought on to sites. This could be coincidental, or it could be designed to be used in later legal proceedings to demonstrate a family life for Human Rights Act purposes. Where notices are served by the council for enforcement or an injunction, they are ignored. As council enforcement proceeds, with a good deal of development already on site, applications are made for retrospective planning permission.
Jim Shannon (Strangford) (DUP)
I have a deep interest in planning matters and am perturbed to hear what the right hon. and learned Gentleman has said. Does he agree that the purpose of the planning system is to ensure that there is protection for the environment and neighbourhoods, and that planners need to work with developers or potential developers to find a way forward? If no such way is found, swift and firm action must be taken by local councils and, ultimately, by the judiciary.
Sir Oliver Heald
I accept that point. It seems to me that we are trying to have an orderly planning system on which people can rely as a level playing field, equal for all. If the planning system is not enforced, we end up with a system that can be railroaded, which is in effect what is happening.
As I was saying, as council enforcement proceeds, with a good deal of development already on site, retrospective planning permission is applied for. The process is delayed, with the inevitable inertia of court or planning inquiry proceedings, and the scope for applications for adjournments, so months can pass into years. Perhaps a personal permission is eventually obtained on appeal. Then, I am told, more unauthorised development might take place for a family member here or a living room there. Over a period of years, the initial failure to apply for planning permission has been rewarded with a full caravan site. That might help to explain why the number of caravans on unauthorised sites has increased by 17% in the past year.
If a site is intentionally developed without permission, should it not be put back into the state that it was in before, and then a planning application could be made? Should not the enforcement notices all be followed, and then, from the position of anybody else applying in advance, we should have that proper process.
Sir Paul Beresford (Mole Valley) (Con)
As the Minister is aware, I have had considerable difficulty in my constituency. Some of the sites have been fought over for 14 to 18 years. I have a very aggressive one at the moment. Perhaps the Minister might consider enabling the local authority to put a stop order on any development at all, emphasised and backed by the courts.
Sir Oliver Heald
That is a very constructive proposal and I would be interested to hear how the Minister responds to it. At the moment, if a site is intentionally developed without permission, there does not seem to be much of a disincentive to ignore planning law in the first place. The Government’s planning policies and requirements for Gypsy and Traveller sites are set out in “Planning policy for traveller sites”, which must be taken into consideration in preparing local plans and taking planning decisions. In theory, that encourages local authorities to formulate their own evidence base for Gypsy and Traveller needs and to provide their own targets relating to pitches required, which is a good thing. Where planning authorities are unable to demonstrate a five-year supply of deliverable sites, that in turn might make it more difficult for them to justify refusing planning applications for temporary pitches. However, where a council does what is suggested, that does not provide the certainty for the council or the local residents that is intended.
In preparing its local plan, East Hertfordshire District Council undertook a thorough process to establish Traveller needs. That was scrutinised by the planning inspector as part of the public examination of the draft plan and, after due consideration, the plan was approved by the Secretary of State and adopted in November 2018. Yet within weeks, it was being argued successfully on a retrospective planning appeal before another planning inspector that this did not adequately reflect Traveller need in the district because it did not include the appellant, who was not actually living in the district at the time of the council survey a few months earlier. Surely the local plan should have more force than that. There should be a period from adoption of the plan within which it is not possible to reopen issues such as that of need.
The plan should be determinative—at least for a reasonable period.
In a welcome January 2014 written ministerial statement, the Government sought to re-emphasise existing policy that
“unmet need, whether for traveller sites or for conventional housing, is unlikely to outweigh harm to the green belt and other harm to constitute the ‘very special circumstances’ justifying inappropriate development in the green belt.”—[Official Report, 17 January 2014; Vol. 573, c. 35WS.]
I asked the Minister whether that still applied.
In September 2014, the coalition Government published, “Consultation: planning and travellers”. This made intentional occupation of land without planning permission a material consideration in any retrospective planning application for that site. Will the Minister confirm that that remains the case?
The guidance “Dealing with illegal and unauthorised encampments: a summary of available powers” was published in March 2015. Since then, there have been a number of debates in which hon Members, including my hon. Friend the Member for Mole Valley (Sir Paul Beresford), have highlighted these issues. On 9 October 2017, the then Housing Minister, my hon. Friend the Member for Reading West (Alok Sharma), said that the Government expected local authorities and the police to act and announced a review of the effectiveness of enforcement against unauthorised encampments, and made the point that this was not a reason for local authorities and the police not to use their existing powers.
On 12 October that year, the then Minister, my hon. Friend the Member for Nuneaton (Mr Jones), reiterated that the law must apply to everyone and agencies should work together to deal with wrongdoing. In April 2018, the Government launched a consultation and published their response in February this year. In it, the Government set out their intentions for further action on unauthorised developments and encampments, including:
“Practical and financial support for local authorities including new good practice guidance and funding for planning enforcement to support local authorities to deal with unauthorised encampments more effectively…Supporting traveller site provision through planning policy and the Affordable Homes Programme…Support for the travelling community to improve life chances”.
Many Gypsies and Travellers now live in settled accommodation—mostly in bricks and mortar—and do not travel, or do not travel all the time, but they do consider travelling part of their identity. The number of Traveller caravans is on the increase. In July 2018, the figure was 22,662—an increase of 29% since July 2008. There are concerns expressed by Select Committees of the House that this is leading to unsatisfactory conditions in unauthorised sites. It is also worth making the point that Travellers have the worst outcomes across a wide range of social indicators, so work to improve their life chances is welcome.
The Government have said that they will consider writing to local authorities that do not have an up-to-date plan for Travellers, to expedite the requirements of national planning policy and highlight examples of good practice. But this may be ineffective if the general view of councils becomes that, even if they prepare a plan and it is approved as part of the local plan by the inspector and the Secretary of State, such a plan can still be impugned within weeks in a retrospective planning appeal. I understand that the Government intend to publish further consultations on options for strengthening policy on intentional unauthorised development, but action is needed now to uphold the rule of law, provide a level playing field, and remove the stress and tension caused to local communities by intentional unauthorised developments.
Below is the text made by Oliver Heald, the then Solicitor General, in Cambridge on 2 September 2013.
I would like to thank Professor Barry Rider for inviting me to speak to you this morning on the first day of the 31st Cambridge International Symposium on Economic Crime. I would also like to thank the organising institutions and sponsors for their vital support for this event.
The Cambridge Symposium on Economic Crime is an internationally recognised event. Each year the symposium attracts the foremost experts from a range of different backgrounds, including government, law enforcement, business and academia. Some have travelled a very long way to be here today, despite significant other demands on their time. The importance of this symposium is demonstrated by the fact that it attracts such an eminent group of attendees. Those who are here have a valuable opportunity to meet with peers from around the world, to exchange knowledge and experiences, to improve our respective understanding of the threat posed by economic crime to the global economy and to develop our responses to it.
The subject of this year’s symposium is ‘Economic Crime in the Modern World, and the Role of the Private Sector – Partners and Problems’. As the first speaker this morning I will try to develop this theme, and outline some of the issues that others will address in more detail later this week.
First, I will describe what I see to be the magnitude of the challenge faced by those of us who are responsible for tackling economic crime in today’s globalised economy.
The challenge posed to society by economic crime
In the United Kingdom, the profile of economic crime is now higher than ever before. Since the global financial crisis began in late 2007 it seems that financial institutions, markets and businesses have endured years of perpetual crises. Rarely has a week passed without the emergence of some new allegation of financial misfeasance, fraud or corruption.
In particular, the problems in the banking industry have received huge publicity. The most high profile current issue in the United Kingdom is the LIBOR scandal; the allegations that bankers have colluded to manipulate the London inter-bank lending interest rate.
In the summer of 2012 the UK’s Serious Fraud Office commenced a major investigation into the LIBOR allegations of criminality. I am very encouraged that the Serious Fraud Office is making good progress and has charged some individuals with criminal offences. It is vital that law enforcement agencies are seen to have both the will and capability to investigate offences relating to complex financial transactions.
Similar scandals concerning the manipulation of bench mark rates have been exposed in other jurisdictions. In today’s complex global economy, where these bench mark rates are used in so many derivative financial products, it is difficult to comprehend the extent of losses that may have been caused. Certainly, the consequences are spread across the world.
Technological change and the development of complex financial products have transformed the way that business is conducted, presenting new opportunities for fraud and money laundering activity. This poses significant challenges for law enforcement organisations and for legislators.
Law enforcement agencies and regulators seek to address criminal wrongdoing by applying existing laws to criminal behaviour that was not in contemplation when those laws were passed. Legislators attempt to develop rules that will prevent these problems happening, but without knowing how business will be transacted in the future.
However the recent economic crime scandals are not limited to the technological advances or the complexities of the financial sector. Allegations of corruption have recently been made against some of the UK’s most important and respected companies and there have been cases of financial misconduct by politicians.
A great deal has been written about these economic crimes and the general public is now much more informed, and concerned. The cumulative effect of these scandals has been to weaken public confidence in the probity of political institutions, financial institutions and businesses that collectively form the fabric of society.
These are the organisations that the public trusts to make the laws that govern how society is to behave, to act in our interests when looking after our pensions and to be responsible employers. Public confidence in these institutions has been undermined by dishonesty and greed. It is vital to the stability of democratic society that public faith in these institutions is restored.
Steps that the UK has made to address the threat of economic crime.
During the past decade there have been dramatic changes in the UK’s response to the evolving threat of economic crime. An important new agency is being established to co-ordinate the fight against serious and organised crime. The UK has introduced new laws to combat bribery and corruption. UK prosecutors will soon have new tools available to deal with corporate offending.
On 7 October 2013 the new National Crime Agency will be launched. The National Crime Agency (or NCA) will be an operational crime fighting agency with a statutory responsibility for detecting and preventing serious and organised crime.
The NCA will comprise of four commands each of which will have responsibility for overseeing and co-ordinating the UK’s response to a specific area of criminal activity. The NCA’s Economic Crime Command is to be responsible for tackling fraud and cyber crime. The Economic Crime Command will work in partnership with existing agencies, including police forces and the Serious Fraud Office, to identify strategic priorities and co-ordinate operations in the fight against economic crime. A key feature of the NCA, and a significant point of difference with other law enforcement agencies, is the function of prevention and deterrence. The NCA is to be the national intelligence hub for economic crime; it will be responsible for building and maintaining a comprehensive intelligence picture of the threats, harm and risks to the UK from organised criminals. Using existing national fraud intelligence analysis, it will achieve a greater understanding of the links between organised and economic crime. In the past decade the UK has enacted a several pieces of new legislation specifically to combat economic crime – most recently, the Bribery Act 2010 and the Crime and Courts Act 2013.
The Bribery Act came into force in July 2011 and included a new offence for corporates: ‘failure of a commercial organisation to prevent bribery’. The Bribery Act also provides a statutory defence if the organisation can prove that it had put in place adequate procedures to prevent persons associated with it from engaging in bribery. This new offence, and the available defence, has placed an onus on companies to review their operations and implement appropriate compliance processes. It obliges businesses to take responsibility for ensuring they operate in a lawful and ethical fashion.
This year the UK Parliament passed the Crime and Courts Act 2013 which provides UK prosecutors with a new tool for dealing with corporate offences; deferred prosecution agreements (or DPAs).
DPAs will give UK prosecutors a new flexibility to deal with corporate offending when a civil remedy is insufficient, but where prosecution and the associated consequences (for example, reputational damage, loss of share value and redundancies) might be disproportionate. As an alternative to launching a full criminal prosecution, a UK prosecutor will soon be able to offer a company the opportunity to resolve its position by negotiating the terms of an agreement. The Act suggests a non-exhaustive range of provisions which a DPA may include for example, financial penalties, compensation to victims, implementation of a compliance programme and donations to charity. The terms of the DPA will need to be “fair, reasonable and proportionate” and will be subject to approval by the Court. If the DPA is fully adhered to over the specified time period, the company will avoid the expense, uncertainty and reputational damage associated with a full criminal prosecution.
Those are just some of the important changes that the UK has made to combat the evolving threat of economic crime. Of course governments and lawmakers are obliged to attempt to design a legal framework to make rules to fix problems. However I would now like to say a few words about the important role the private sector has in this arena. In the past some companies have chosen not to address ethical and legal problems. When companies were caught out, they adopted an approach of “deny and defend”. However, companies have a clear interest in protecting the integrity of markets and attitudes and behaviours with regard to ethics and compliance are now changing. This was demonstrated recently by the strenuous efforts that many companies took to review their practices in light of the Bribery Act and to put in place measures to prevent bribery and corruption.
For some time there have been examples of lawmakers imposing obligations on businesses to co-operate in the fight against economic crime. Approximately a decade ago in the UK, the Proceeds of Crime Act imposed an obligation upon the regulated sector to report to the appropriate authorities suspicions of laundering of criminal proceeds. This has imposed a sometimes onerous but always important responsibility on businesses, with the underlying message that they need to take positive steps to notify authorities when they become aware of potential wrong doing.
Businesses can assist in the fight against economic crime by acting responsibly. If and when a company discovers wrong doing, it should take steps to notify the authorities and can expect to receive some reasonable quid pro quo for doing so. An example of this is the widespread use of leniency programmes for those companies which provide information or assist investigations connected with cartel offences. Similarly, DPAs will provide a new mechanism which should encourage companies that discover internal wrong doing to self-report in the confidence that they will receive a fair and reasonable benefit for doing so.
Businesses can develop their internal processes to prevent economic crime; ensuring staff are trained to be fully aware of their legal and ethical obligations. Compliance and risk management must be treated as important issues. Compliance officers should be communicating regularly and substantively with senior executives.
Furthermore there is a commercial imperative for private sector companies to assist to develop solutions to prevent fraud. Technological advances have opened up new opportunities for illegal activity. Fraud is being perpetrated on an increasing scale using the internet against the public and private sectors by data and identity theft. Virtual currencies provide a new vehicle for money launderers. There are opportunities for private sector companies to develop products and services to make online processes more robust and secure, and to assist the public sector to improve its defences and reduce the cost of fraud.
Conclusion
Economic crime is more visible than ever before and the speed of technological advance, and new ways of doing business, makes the task of fighting economic crime ever more difficult. The traditional response to new types of crime is for governments to address them by making new law. However new laws usually involve creation of additional red-tape burdens for business. If businesses continue to treat compliance as an important issue, and take the initiative to find and prevent problems, this will produce a more effective response to the challenge of economic crime, and will reduce the need for governments to fashion laws which impose expensive obligations on the private sector. Thank you for your attention and for inviting me here today. I hope this week’s symposium will be a thought-provoking and enjoyable experience for all of you.