Bankers’ crimes are overlooked

For Jeremy Bentham the effectiveness of the criminal justice system was based on the deterrent effect of a human calculation of the pain of punishment. He argued that certainty of detection was one of the key factor which made people obey the law.

The condition of the criminal justice system in the UK has majored on the intensity and duration of punishment, with constant measures to make prison hurt and to lengthen sentences. But the more that is spent on punishment, the less is left to spend on ensuring certainty of detection.

Nowhere is this better illustrated than in the financial world where, some suggest, the worst and most damaging criminality occurs.

The chance of anyone being prosecuted for financial crimes running into £1billions is vanishingly small. The number of financial professionals convicted of bribery, insider trading, and cartels in any year can be counted on the fingers of one hand.

As public outrage grows, the government is far from moving to put matters right. In April 2010 George Osborne announced an Economic Crime Agency to take over from the Serious Fraud Office with new powers. It would also sweep away Fraud Prosecution Service, the Revenue & Customs Division and the Office of Fair Trading (OFT). However, successful lobbying by these agencies persuaded the government not to proceed.

The one change the SFO has seen is a really large budget cut. It has dropped from £51 million in 08/09 to £33million this year and will be down to £29 million by 14/15. The OFT is facing a 25% budget cut. And so on.

This approach to white collar crime is all the more odd given Mr Osbourne’s eloquence to the Telegraph in April 2010:

“We are very, very bad at prosecuting white-collar crime. We have six different government departments, eight different agencies, a complete alphabet soup, and the result is that these crimes go unpunished. There is £30bn worth of fraud taking place in the British economy each year.”

Mr Osborne added:

“Frankly, robbing someone of their pension through some con is almost as bad as mugging them in the street”.

Indeed.