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Serious Fraud Office (Senior Staff)

Volume 556: debated on Tuesday 8 January 2013

1. What steps he is taking to recover payments made to former senior staff at the Serious Fraud Office that were not properly authorised. (135612)

3. What steps he is taking to recover payments made to former senior staff at the Serious Fraud Office which were not authorised by the Cabinet Office or Her Majesty’s Treasury. (135616)

As set out in my statement to the House on 4 December 2012, on learning of these agreements and payments, the new director of the Serious Fraud Office sought legal advice on whether the arrangements might be reopened and on whether money might be recovered. The advice he received is that the agreements, although entered into without the necessary approvals, are binding on the Serious Fraud Office.

If one of our constituents is overpaid on tax credits, or on their housing or council tax benefits, which often occurs through no fault of their own, the state claws the overpayment back, yet the Serious Fraud Office has made unauthorised redundancy payments to bureaucrat fat cats—some of nearly £500,000—but seems to be doing nothing to recover them. What, therefore, will the Attorney-General do to get the money back? Perhaps he could get a new lawyer, but he could also take action against those responsible for irresponsibly giving away public money.

I share the right hon. Gentleman’s disquiet about what has happened. Nevertheless, it is the duty of the director of the Serious Fraud Office, who is the accounting officer in this context, to take legal advice and to observe it when he receives it, and the legal advice he has received is quite clear. It is perhaps worth making one further point. The vast majority of the sums paid out would have been in line with the civil service compensation scheme. In my judgment, some payments may well not have been in line with the scheme, but the majority were—I would stress the totality of the sums involved. Should there be any further developments, I will inform the House of them. Like the right hon. Gentleman, I do not consider the matter to be satisfactory—it causes me disquiet, and the Public Accounts Committee may well wish to look into it.

I thank the Attorney-General for his reply to my right hon. Friend the Member for Warley (Mr Spellar). In that spirit of openness, will he publish the findings of the independent investigation into the payouts commissioned by the current director of the Serious Fraud Office? Will he also indicate whether any legal or disciplinary action will be taken against the individuals responsible?

On the first point, my office and the Serious Fraud Office have received requests for this information, and we are currently considering whether any further information can be released. I would like to see as much of the information released as possible.

On the second point, it is right to make it clear that the person responsible for making these payments is no longer working in the civil service.

Does the Attorney-General realise that this is merely a symptom of something seriously wrong with the Serious Fraud Office in terms of its leadership, culture and record over recent years?

May I recommend that the hon. Gentleman look at the report by Her Majesty’s Crown Prosecution Service Inspectorate on the Serious Fraud Office, as he will see that it has many laudatory things to say about the way in which the SFO has operated and sees it as capable of achieving significant outcomes in challenging cases? That is not to say that I do not think that there is room for improvement—I certainly do. A new director, David Green, has been appointed, and I have every confidence that he will be able to make the necessary changes. For example, he will be implementing the changes that the inspectorate recommended, and it will of course make a follow-up report to track that progress.

While we are on the subject of the efficiency of the Serious Fraud Office, may I ask the Attorney-General how it is that, despite the appalling behaviour of some bank staff in some British banks and the enormous fines that have been imposed on those banks by the regulatory authorities in both New York and London, no senior banker in this country has yet been prosecuted for complicity in serious criminal banking offences?

I know that in respect of this question the right hon. Gentleman will have in mind fraud in particular, which properly concerns the Serious Fraud Office. He did not say it, but I know that is what he meant.

I thank my right hon. Friend for his question, in whichever context. The Serious Fraud Office is carrying out a major inquiry and investigation into the LIBOR scandal. The conduct of the investigation is obviously a matter for the SFO, but the matter has not been ignored.

The Attorney-General has referred to the report by Her Majesty’s Crown Prosecution Service inspectorate. I have read it, and it says that the Serious Fraud Office needs to improve its performance and appears to be suffering considerable resourcing problems. Will he consider the suggestion by the director of the SFO that the agency be allowed to retain more of the proceeds of crime that it confiscates? Might that be a way in which it could increase its funding?

The hon. Lady raises an interesting question which may turn out to be a good subject for debate in this House at some point. There is clearly potential for changing the rules on the retention of the proceeds of crime by prosecuting agencies, but it is equally right to point out that it is not an uncontroversial subject. Disquiet is expressed about prosecutors being dependent on asset seizure for the way in which they operate, and that also raises some profoundly difficult ethical issues. For those reasons, I would counsel caution about whether that is necessarily the right way forward, although I am open-minded about any improvements that can be made on funding.