Prime Minister Theresa May’s Conservative manifesto pledge to incorporate the Serious Fraud Office (SFO) into the National Crime Agency (NCA) was absent from the Queen’s Speech yesterday (21 June 2017), with lawyers welcoming the prospect it could be shelved.
The Queen’s Speech, which sets out the government’s statutory agenda, in this case for the next two years, omitted to mention May’s policy. Instead, it focused on other UK legislation, introducing a repeal and a customs bill to replace related European legislation.
The omission followed the SFO’s announcement this Tuesday (19 June) that it had charged Barclays Bank and four individuals with conspiracy to commit fraud and the provision of unlawful financial assistance – the agency’s first prosecution of a UK bank for its role in the 2008 financial crisis.
The charges against Barclays were the result of a five-year SFO investigation, one of the most high-profile for the office, which is headed by David Green QC and tasked with investigating and prosecuting complex fraud, bribery and corruption.
Asked whether the government was still planning to merge the two organisations, a Cabinet Office spokesperson told Legal Business it was ‘continuing to review options to improve the effectiveness of the UK’s response to economic crime, and any measures resulting from this work will be announced in due course.’
However, an SFO spokesperson said they were not aware of any primary legislative means for the proposal to be pushed forward.
The proposal to merge the SFO with the NCA, a non-ministerial government body led by Lynne Owens and created to tackle cyber-crime, modern slavery and organised immigration crime, was met with criticism. Both white collar crime and fraud lawyers raised serious concerns when the proposal was announced.
Barry Vitou, Pinsent Masons’ head of global corporate crime, said that leading judicial figures, the Attorney General and some MPs had all voiced support of the SFO over the last few days.
‘Diluting the concentration of expertise at the SFO just didn’t make sense, Vitou said, adding that it was ‘so important to keep a level playing field in the fight against fraud’ and the SFO’s rationale was ‘as good now as when it was founded in 1987.’
‘Considering the complexity of the task the SFO faces and its routine under-resourcing, it is doing a good job. Now the SFO looks set to stay, the focus must shift to ensure it is properly funded.’
The probe follows other recent progress by the SFO including a probe into corruption at Rolls-Royce which led to £671m settlement earlier this year, and a case settlement against Tesco for £129m.
Hogan Lovells London partner and public law expert Charles Brasted said that it is ‘not impossible’ for the policy to resurface at a later date. He added: ‘It could be tucked into another bill, or introduced in a new bill that was not anticipated.’
Kingsley Napley white collar partner Stephen Parkinson told Legal Business he was ‘confident’ that the policy would not be revived due to the government’s weak parliamentary power, a development he described as ‘hugely significant.’
Parkinson also described the government’s intention to ‘review options’ as merely a ‘face saver’.
Vitou said that the omission should signal the end of the proposal.
At the time of the proposal, Parkinson criticised the idea, adding that major organisational change ‘always leads to paralysis.’
Michael Potts, managing partner of Byrne and Partners also voiced concerns, saying that it would ‘cause the momentum of the proper prosecution of serious fraud and corruption/bribery to stall just when the SFO is getting some traction’.
