Working with partners to defeat economic crime
The Security Minister spoke at the UK Finance Economic Crime Congress to set out how the government is working to detect, disrupt and defeat economic crime.
Let me start by thanking UK Finance for inviting me and for organising the Economic Crime Congress.
The irony hasn’t escaped me that we’re in Angel today to discuss how we tackle the devils of economic crime.
It’s especially good to be here in the Business Design Centre.
It’s a magnificent institution with a long, illustrious history that can trace its origins back to the Smithfield club, established by the fifth Duke of Bedford.
Now he’s someone who’s famous for his opposition to the hair powder tax, which was levied to fund a war with France.
I’m sure that you will be very relieved to know that this government has no plans to bring back the hair powder tax or to go to war with France.
Turning to more pressing matters, let me put on record this government’s wholehearted support for the financial services, which are so vital for our country’s success.
And they are by no means confined to the City of London.
And I want to pay tribute to UK Finance for the sterling work that they do on behalf of more than 300 firms.
And this, I think, is a really important event today, because it brings together the whole community involved in fighting economic crime.
Economic crime drives many other crimes and security threats, as well as being a hugely destabilising phenomenon in its own right.
And as Security Minister, these issues cross my desk every single day.
So, I know too well, just like all of you in the room, about the pernicious nature and the vast scale of economic crime.
We also know that fraud is only a subset of economic crime, and yet fraud alone is the most prevalent crime, accounting for around 39% of all surveyed crime.
39%.
And anyone could all too easily become a victim.
Around one in 16 adults were victim to fraud the year ending June 2024.
Fraudsters have a demonic talent for hurting us in our homes, whether by knocking on our door or getting us on the phone or online.
The agony of the financial crime, the harm that they wreak is compounded by the psychological damage they leave behind.
I think that national security and economic growth are key foundations for long term change of the government’s missions, and it’s clear that economic crime presents a major threat both to our national security and our economic prosperity.
Money laundering, for example, has been allowed to run riot in our country for too long. This is not some abstract, victimless crime.
Money laundering directly enables the organised crime groups which bring such misery to our communities, drawing young people into crime and fuelling violence on our streets.
Inevitably it is difficult to quantify, but the impact on UK corporate structures costs hundreds of billions of pounds annually.
But the problem runs even deeper, because the proceeds of economic crime are not just fuelling criminal empires and terrorist threats, but rogue states too.
Putin’s illegal invasion of Ukraine placed the spotlight on the trade craft associated with illicit finance.
The Russian government is powered by dirty money and kleptocracy illicit financial flows linked to Russia pose serious risk to our national security.
The cyber-attack and ransomware gangs which operate out of Russia with the consent and the approval of the Putin regime pose a daily threat to our infrastructure, our public services and our companies, large and small.
And, as a new-ish government, we are determined to lead the world when it comes to standing up against economic crime, because everything else we want to achieve as a government is undermined if we do not.
Fraud undermines the personal and financial security of our families and communities.
Money laundering undermines legitimate businesses and financial organisations.
Bribery and corruption undermines the institutions which are fundamental to our economy and our society.
The UK’s economic growth depends upon our reputation for strong institutions and the rule of law. That’s how we persuade investors to come here.
Economic crime undermines all of that, so we need to treat it, yes, as a crucial economic vulnerability, but also as a crucial national security vulnerability.
Now, tackling economic crime requires a team effort.
It demands a system wide response with a pivotal role for the financial sector and the UK’s public private approach is admired right around the world, and I’m pleased to confirm that this government will maintain that approach and completely deliver the economic crime plan too.
Banks have invested significantly in trying to prevent fraudulent transactions, but we recognise that the banking sector can’t do everything on its own.
This is a massive challenge that affects us all, and it requires a joint response, government, law enforcement and from wider industry partners.
For example, data sharing is a vital piece of the puzzle.
Both the public and the private sectors hold vast amounts of data that can be better utilised.
The benefits of public private partnership have been seen in the data fusion pilot, which has reinforced the importance of sharing data across the system and working together to detect and disrupt organised crime.
The government is very pleased to be developing with UK finance, a joint economic crime and data strategy which will help to create a unified data system, because without a fundamental shift in our approach, we risk being left further behind, and we have to be more responsive to technological changes and to the modus operand of criminals.
And we have to do this together.
So the government has worked with the private sector to define a clear set of priority areas to cover the highest money laundering harms.
This will enable us to focus resources on key threat areas and maximise our collective impact.
I’m very grateful for all the work the financial sector has done, and I wanted us to continue this close working relationship the tech the telecommunication sectors and other key players in the fight against fraud.
Data from the City of London Police and the banking sector suggest that the amount of fraud originating online could be as high as 80%.
Following a call to action from the Chancellor of the Exchequer’s Mansion House speech, the Chancellor, the Home Secretary and the Secretary of State for DSIT wrote to tech and telco companies to urge them to go further and faster on fraud and to impress that the government would be closely monitoring their progress.
It is only right that companies accept their responsibility for keeping their customers safe.
Government will do its bit by putting in place the right incentives to encourage industry constantly to improve protections.
The Online Safety Act will provide a framework for that, as will a continuous dialogue between government and industry.
Emerging technologies such as AI bring both significant risk and potential solutions.
They can help protect customers from fraud, detect money-laundering and improve customer service.
We want to work with you to keep people safe.
This government will go further.
We have been clear about the need for stronger action against organised criminals, fraudsters, corrupt oligarchs and kleptocrats.
My excellent colleague Lord Hanson of Flint has been tasked with overseeing the government’s response to fraud.
He is working closely with law enforcement and industry, including some of you here today, to better protect the public and businesses from this appalling crime.
He will be speaking later on about the government’s work on fraud, and I hope you will join him.
And, over the coming months, we will be developing our new fraud strategy.
But before then, we will publish a new UK Anti-Corruption strategy to address the UK’s vulnerabilities to corruption.
We will make it harder for corrupt actors to operate in the UK and overseas by tackling the movement of corrupt funds.
Our new strategy will improve global resilience to corruption through improved international partnerships.
Now, just on Monday, we announced the appointment of Margaret now Baroness Hodge, as our new Anti-Corruption Champion to drive action in government, build partnerships and advocate for international action.
Margaret is immensely capable and experienced and has been a tireless campaigner on Anti-Corruption and illicit finance, and I am excited that she is bringing with her this wealth of knowledge and expertise.
Currently, the UK’s response to corruption suffers from a variety of challenges and problems due to the hidden nature of corruption and the complexity of cases.
Our understanding of the true nature of the corruption threat in the UK is still limited.
Despite the Home Office’s 2020 Economic Crime Survey estimating there could have been as many as 130,000 bribes in the previous 3 years offered to UK businesses across 7 key sectors.
Police in England and Wales recorded just 169 corruption offences in the year ending June 2024, 19 of which were bribery offences.
That is a very concerning gap.
Now, at the moment, UK law enforcement doesn’t have the capacity to uncover and investigate cases, and this has to change.
So, I’m announcing today that the Home Office and the City of London Police have established a new pilot Domestic Corruption Unit.
It will considerably enhance intelligence development capabilities and provide useful insights on the corruption landscape and threat.
Crucially, it will lead proactive investigations, providing much needed capacity and a dedicated response in areas where previously this has been lacking.
This unit will bring together the different pieces of the system, such as national agencies, local forces, devolved policing bodies will work in unison to bring corrupt individuals to justice.
To conclude, dirty money, fraudsters and crimes of any kind are not working in the United Kingdom.
If left unchallenged, economic crime will continue to damage our families and our communities, our businesses and our economy and our international reputation.
Driving down economic crime is, therefore, central to the government’s goals to reduce crime, deliver growth and keep the people of Britain safe.
I know sometimes talk can be cheap, but this government will walk the walk.
And, with a bigger and better fraud strategy and a new UK Anti-Corruption strategy, we will take stronger, more effective action against economic crime - a corrosive force that undermines our prosperity, threatens our security and destroys trust in on our institutions.
This body demands a united front with the public and the private sectors working shoulder to shoulder together.
I know that we will commit to delivering the justice, security and integrity that the people of our country rightly deserve.
Thank you.