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West Midlands Regional Business Crime Conference

18th June 2008

Jonathan Djanogly speaks to the West Midlands Business Council's Business Crime Conference about the Conservative party's approach to business crime.

Thank you, Chairman Cllr. Khan, for giving me the opportunity to respond to Vernon Coaker's address on business crime and it's good to be here in Birmingham today - where the Conservatives will be back in the autumn for our conference. May I, first of all, pay tribute to the Business Council of West Midlands for organising this conference and providing the platform to discuss such an important issue locally, yes, but also for our economy. The fact that business organisations including the Chambers of Commerce, the FSB and the British Retail Consortium have all published reports on business crime is telling in itself as to the seriousness which businesses attach to countering criminal activity.

Certainly, the Conservative party takes the issue of business crime very seriously. Earlier this year, our Shadow Home Affairs team released a paper on Cybercrime and as a Shadow Minister for Business, Enterprise and Regulatory Reform, I can confirm that this is also an issue of concern for the Shadow DBERR team who are to be meeting with our Shadow Home Affairs and Justice teams next month to coordinate our approach to business crime.

We believe that the current Government has for too long failed to recognise the extent of the threat that crime against business poses to our economy and that measures it has introduced to tackle the problem of business crime have been simply inadequate. The Government's Crime and Disorder Reduction Partnerships (CDRPs) seem to be failing to encompass the whole business community in effectively tackling the problem; indeed polls show that only 27% are aware of their existence . In the meantime, over half (58%) of all small businesses in the UK have suffered at least one crime , and according to the British Chambers of Commerce, the cost of crimes against business has risen by a massive 20% since 2004. The total cost of crimes against business now stands at £12.6 billion , so measures put forward by the present Government would seem to have had little impact in reducing crime against business.

The effect of business crime is far reaching. Not only does it impact on the profitability of individual businesses, it also deters potential investors and can lead to business closures. The effect of crime on small firms can be devastating for the wider community. The possible consequence of such firms closing down or relocating with the resulting job losses can be the decline of town centres and the deterioration of wider communities. 80% of businesses have indicated that crime against business is a problem in their local area.

Facing this issue, the government has to date failed to provide a clear and unequivocal response. In our view it simply has not taken the issue of business crime seriously enough.

In recent years, we have seen an explosion of business crime incidents reported in statistics with:

  • 58% of businesses experiencing at least one incidence of crime in the last 12 months.
  • Over 80% of businesses with more than 50 staff or more have experienced at least one incidence of crime in the last 12 months.
  • According to British Retail Consortium Retail Crime Survey 2007, compared to the previous year, violent acts against staff have increased by 50%.
  • In the retail sector, the level of detected incidents per 100 outlets has been rising over the past seven years, with a marked increase since 2003 .
  • Verbal abuse has more than doubled since 2000.

A negative impact on the economy

The Home Office has previously estimated the total cost of crime in Britain each year is £59.9 billion. This figure would suggest that business crime now accounts for a substantial share of the total cost of crime. Almost 70% of respondents of the recent British Chambers of Commerce survey claim that crime has impacted upon their businesses. 60% claim that it has wasted staff time, and one third say that it has disrupted trading, reduced staff morale, and given rise to increased insurance costs.

Locally although as Cllr. Khan noted crime is low compared to other cities, I am aware that according to the Government Office for the West Midlands, business crime costs business and the criminal justice sector in this region £123 million per year. This represents some £335,000 of crime against business per day . Although I was pleased to hear that locally business crime has fallen for the last two years, so credit where credit is due, and I was very impressed with the joint working initiatives described by Cllr. Khan.

Business crime does not just blight individual business managers- it holds up the regional economy itself.

Unreported business crimes make things worse for the current government

A striking example of the failure of the Government to take this issue seriously enough is that the figures showing a sharp rise of crime against business do not reveal the full extent of the problem, as much of the business crime in the UK goes unreported. Indeed, the lack of a national definition of business crime from which police forces can record instances of crimes committed against business means that the true extent of the problem is unknown.

On top of this, nationally there is a lack of confidence that reporting will lead to anything happening with the result that 68% of businesses might not report a crime if there were no, or a relatively small loss or damage to their premises or property. As a result, one in three businesses, nearly double, that from 2004 are choosing not to report all crimes committed against them while 36% claim that they will not report an incident due to the lack of confidence in a suitable police response .

As the FSB have pointed out, the current government has also failed to address the broad extent of business crime - which includes not only retail crime, but also truck crime, e-crime, metal thefts and many more. I know that this conference will address many of these issues later today. E-crime, for example, is growing significantly and the Government was recently criticised by the Corporate IT Forum for failing to take business e-crime seriously enough .

Earlier this year, my Party issued a paper that looked at the threats posed by cybercrime, and proposed measures to tackle this growing problem, for us this is a priority.

Measures put forward by the current government are too timid to tackle business crime

So the Government needs to listen to the business community.

Of course, the Home Office only last year published its new crime strategy, which announced a renewed focus on working with local partners, and a specific plan to increase community confidence. However, there is some debate as to the extent that this renewed focus has in practice been extended to the business community. While businesses are concerned about crime in their local area, only 27% (according to the recent BCC survey) were aware of any Community Safety Partnership or crime prevention initiatives such as Business Crime Partnerships (BCPs). Such measures were put in place to tackle business crime but seem to have been implemented unnoticed and therefore remain simply unused.

At the same time, questions are being raised on the application of sentencing measures such as Penalty Notices for Disorder (PNDs). Where, of a total of 192,583 penalty notices issued, in 2006, only half were actually paid .

The Government's policy is characterised by a lack of priority, lack of urgency a lack of enforcement and a lack of coordination. There are at least seven different Government departments / offices involved in developing policy to combat business crime and cybercrime. Each appears to be developing initiatives in a vacuum without coordination or leadership.

So where are the Conservatives coming from on business crime?

II) The Conservative's view and approach to tackle crime against business.

Foremost, the Conservatives will listen to businesses, the police, Trading Standards and local authorities when formulating plans to tackle business crime.

Improving Reporting

To improve reporting crime, we note business group suggestions:

  • to introduce a separate national statistic for crime against business so that the police can properly understand the true nature of crimes committed against businesses.
  • to make crime against business a Key Performance indicator for police. Over 85% of businesses polled stated that this was crucial- so that the problem is prioritised by local police.
  • to review planning regulations to allow designing out crime and premises protection.
  • to use dedicated Police Business Crime Advisors to tackle this type of crime;
  • to review sentencing so that the deterrent effect is real; and
  • to grant the business community a greater role in local crime and policing partnerships.

Generally speaking, all of these suggestions sound reasonable and appropriate and we can discuss their implementation. The Conservatives will listen to individual managers and business groups across the country such as this one in order to implement measures that will address their needs.

Businesses currently state that one of the barriers to reporting crime is that the process is simply too time consuming. They would be encouraged to report crime if the process of reporting were made simpler. One way in which the Conservative party wants to make it easier to report crime is by making it easier and more accessible to report minor crimes online. There is currently only a very low level awareness of this valuable resource.

We also wish to address the specific issue of cybercrime. Identity fraud has grown from 8,000 cases in 1999 to 77,593 in 2007, an 862% increase. One person is a victim of online fraud in the UK every 10 seconds but of the 6% of identity thefts that are reported to the Police- only 1% are investigated. To deal with this, we will make the reporting of cybercrime and cybersecurity incidents much more straight forward and accessible by establishing a Fraud and Cybercrime Complaint Centre- as a single reporting centre for cybercrime along the lines of the US Internet Crime Complaint Centre (IC3) . We will also improve the way in which the Police record cybercrime, and reverse measures that prevent the public reporting on-line financial fraud to the police.

Promoting Greater Prevention

To promote greater prevention of business crime, we will encourage throughout the country initiatives such as that carried out by yourselves and Advantage West Midlands to set up a business support structure to provide a real opportunity for the provision of effective crime prevention advice to businesses and I congratulate you on the good work you are initiating here. Crime prevention advice, such as the code of practice developed by the Association of Chief Police Officers to “design out crime

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