New economic crime law needed in the UK to tackle the financial fraud

Britain needs new economic-crime law to tackle financial fraud

Wed Oct 10, 2012 4:54PM GMT

Britain needs a new economic-crime law to be introduced to halt repetition of financial scandals such as the manipulation of the Libor benchmark, the opposition Labour Party has demanded.

The proposal was tabled by the party’s home-affairs spokeswoman, Yvette Cooper, at the party’s annual conference in Manchester, northern England.

Cooper said the law is needed to provide clarity for the police and prosecutors and to help prevent future financial scandals, as well as determining which agencies should investigate and tackle financial fraud.

“Look at the Libor scandal that emerged this summer,” Cooper said. “It is a multibillion-pound fraud. People were fiddling figures to get rich, while small businesses paid the price. Yet no one has been arrested.”

“In the U.S. they have seen 800 prosecutions for serious fraud since last year,” Cooper said. “Here in the U.K., where the Serious Fraud Office budget has been cut by 25 percent, they have pursued only 20. If you don’t pay your TV license, you’ll end up in court. But defraud millions of pensioners or small businesses and you can get off scot-free.”

However, the Labour Party was attacked by the Liberal Democrats, the junior party to the UK’s coalition government with the Conservative Party of Prime Minister David Cameron.

The Lib Dems accused Labour of double standards over its attitude to the finance industry during 13 years in power to 2010.

The Liberal Democrats issued a poster showing Labour leader Ed Miliband as a poodle on a leash held by a banker, with the slogan “Labour: 13 years as the bankers’ lapdog. Two years trying to hide it.”

“Governance of Libor has completely failed,” said Martin Wheatley, Managing Director of Financial Services Authority.

“This problem has been exacerbated by a lack of regulation and a comprehensive mechanism to punish those who manipulate the system”, Wheatley added.

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