We should take Sunak’s plan to tackle fraud with a barrel of salt

When is this government going to stop taking us for fools?

Perhaps when their slavish followers in Westminster and beyond cease applauding every initiative as if it was the boldest and most decisive ever.

A case in point is the newly unveiled Fraud Strategy. Rishi Sunak puts his big boy boots on and proclaims: “The time has come to put the fraudsters out of business.”

There will be a new national fraud squad, or as it’s immediately been dubbed by his fawning supporters, a new “fraud FBI”, to take down the online scammers.

MI6 and GCHQ will be drafted in to help, says the PM. This new crack unit will be staffed by 300 specialist investigators, rising to 500 by 2025. The much-criticised Action Fraud agency will be replaced by a new fraud reporting service, costing £30m.

Unsolicited calls by insurance firms and other financial sellers will be banned; longer jail terms will be introduced and prosecutions sped up; banks may be allowed to delay processing payments so suspicious transactions can be scrutinised; officials will work with tech giants to ensure consumers can report likely scams with a single click; criminals will be barred from accessing “SIM farms”, enabling them to transmit millions of fake messages.

Victims will have access to an “online portal” where they can see step-by-step progress on their case; an “anti-fraud champion” role is to be created and the first post-holder will be Anthony Browne, the Tory backbench MP and former chief of the British Bankers’ Association.

Every box for what now passes in today’s Britain for getting tough, or rather being seen to be getting tough, is ticked. The new policy contains spooks and spies, James Bonds and geeks (at least we were spared the SAS). It’s got dedicated experts, the forming of alliances with the tech firms (the same tech giants that are so reluctant to cooperate on anything), a portal (must have a portal) and a czar, sorry, champion.

Fraudsters must be quaking, hiding in their bunkers. Except they won’t be. It’s billed as “war against fraud” but it’s only against one aspect of fraud. It’s one front, that’s all.

True, it’s the illegal activity that is causing a lot of hurt to many, fleecing ordinary individuals who are persuaded to share their bank details and before they know it, their cash has gone.

Fraud, though, is rife and comes in different forms. There is one common denominator, however, which is the unwillingness of government to do something about it.

A recent Commons public accounts committee report found that fraud accounts for 41 per cent of all crime. Yet of the 20,000 new police officers being recruited, MPs said that just 380 – or 2 per cent – will specialise in fraud. Over the past five years, fraud cases are up 12 per cent and prosecutions are down 25 per cent.

The Action Fraud hotline was receiving reports of fraud from 300,000 individuals and 600,000 businesses a year, of which less than 1 per cent resulted in a prosecution.

Even the pandemic was not immune. While the rest of the population was locking down, wearing masks and socially distancing, the fraudsters were happily making a killing. The Commons business select committee reports that £2.5bn was lost to fraud and error from the Covid business grant and bounce-back loan schemes, of which just a measly £10m has been recovered. Include the furlough and self-employed Covid support schemes, and the total handed over via fraud and mistake amounts to £4.5bn.

So bad, so endemic, is fraud that ministers have become fond of excluding economic crime from their statistics and reports for fear they will skew them downwards and make them decidedly less upbeat.

That attitude extends to the police. It is far easier to go after a villain with form for breaking and entering who has left a fingerprint or two (and there are a lot of those types) than wade through complex accounts and financial transactions. It will be interesting to see where, exactly, the new squad is going to find recruits excited at the prospect of solving what is commonly regarded within policing as the least sexy of crimes.

Demanding tougher sentences and a speedier legal process sounds good and reads well but quite how that will pan out when many fraudsters reside far away from Britain, in places that specialise in secrecy and non-extradition, remains to be seen.

Still, the charge against online fraudsters, while late, is to be welcomed, don’t get me wrong. It just doesn’t address anything like the scale of the problem.

I am not alone. Helena Wood, co-head of RUSI’s UK Economic Crime Programme, says: “Fraud ruins the lives of millions of people in the UK, yet the government has repeatedly failed to include fraud statistics in its estimations of crime levels. When included, crime is clearly rising and not falling.” She continues: “Although the strategy includes extra resources for policing fraud, these levels are not commensurate to the scale of the threat. They are certainly not enough to turn around decades of under-investment in the enforcement response to the crime affecting more British citizens than any other.”

Charles Bott KC, head of advocacy at BVI law firm, Martin Kenney & Co, says: “There are some sensible proposals here, but they are in limited areas and don’t begin to match the scale of the problem. Fraud investigation has been pitiful in the UK for many years and hasn’t been a priority for government or the police. Shockingly high fraud figures aren’t included when ministers claim crime is falling. We need something far more radical than what’s being proposed here to make a real difference.” He added: “Serious fraud, which undermines markets and financial systems, is almost out of reach at the moment and nothing in these proposals will change that.”

What did Sunak say? “The time has come to put the fraudsters out of business.” He should have said “some” fraudsters. But that does not have the same heroic ring, and besides, why bother when your acolytes will swallow every word?