How Cameron is misleading over prosecutions for price fixing

The real obstacle is not an absence of applicable law, but the woeful underfunding of fraud investigation and prosecution.

Downing Street is trying to persuade us that if oil traders deliberately distort the price of petrol they cannot be prosecuted under existing criminal laws. This assertion is deeply misleading. If there is substance to the allegations against the oil companies said to be involved, there is now a very real danger that perpetrators will escape justice.

It has been reported that the government is in the process of drafting a new law targeting the manipulation of energy prices. However, because laws don't work retrospectively, wrongdoing prior to the law getting royal assent will not be captured. A Number 10 spokesman has said as much: "The law is the law so it will apply at the point it comes in. A change in the law that makes something illegal takes effect from the moment it takes effect."

If you accept the government's line that passing a new law is necessary, the resulting legislation will not bring anyone to justice or get to the bottom of what has been going on. It will do the opposite. It will draw a line under it and allow the sector to move on quickly and largely unruffled. That Number 10 is so quick to give up on the prospect of prosecuting under current law once again reflects the desire of Cameron, Osborne and company to let the City off the hook.

If people have been deliberately fixing prices to benefit themselves then it is already against the law. This has always has been the case. A scam is a scam. A fraud is a fraud. Different rules don't apply in the City than they do for you and me. There are some very plain, very simple offences in the Fraud Act 2006 that can be applied to price manipulation. For example, there's fraud by false representation. This is aimed at people who say something misleading to line their pockets or cause financial harm to someone else. There is also fraud by abuse of position for those who scheme against those whose interests they are not supposed to harm. And then there is good old fashioned common law conspiracy to defraud.

These are very broad offences and that is deliberate. The principles that underpin these offences are supposed to be applicable whoever is perpetrating the fraud, whoever they are defrauding and by whatever means they are doing it. The law must be interpreted this way otherwise criminals will always be ahead of the game. What a nightmare it would be if we individually had to criminalise every single abuse of every single commodity, market or financial product. There are thousands of these and new ones being invented every day. Such an approach would have disastrous implications for regulation and policy-making. Any slide towards it must be resisted.

The reason why City criminals are not in jail is not an absence of applicable law. The law is there for prosecutors who are front-footed and creative enough to apply it when the opportunity arises.

The real obstacle here is that fraud investigation and prosecution is woefully underfunded. The budget of the Serious Fraud Office is being slashed by 25 per cent. It has already had to ask for extra money to investigate the Libor scandal. If the director of the SFO does decide to investigate the energy market allegations, he is unlikely to be able to do so within the agency's current budget. A system has been established whereby he has to go to the Treasury and ask for the funds, giving that department an effective veto on high-value investigations. He will almost certainly have to go cap-in-hand to George Osborne and ask his permission. He has already had to do this for the Libor investigation.

In the US, the government easily recoups the money it spends on serious fraud investigations because its laws make it easier to fix liability on to companies and imposes much higher penalties. If reform is needed, surely that's where we should look.

So, in the event that there is something to these allegations, if there is no criminal investigation it will be down to two things: a lack of will and a lack of resources. It will not be down to a lack of applicable criminal law. The financial elite do not need special laws for themselves. This is one nation and there is one criminal law.

Emily Thornberry is MP for Islington South & Finsbury and shadow attorney general

Shell is among oil companies being investigated by European competition authorities. Photograph: Getty Images.

Emily Thornberry is MP for Islington South & Finsbury and shadow minister of state for employment.

Getty
Show Hide image

How Labour risks becoming a party without a country

Without establishing the role of Labour in modern Britain, the party is unlikely ever to govern again.

“In my time of dying, want nobody to mourn

All I want for you to do is take my body home”

- Blind Willie Johnson

The Conservative Party is preparing itself for a bloody civil war. Conservative MPs will tell anyone who wants to know (Labour MPs and journalists included) that there are 100 Conservative MPs sitting on letters calling for a leadership contest. When? Whenever they want to. This impending war has many reasons: ancient feuds, bad blood, personal spite and enmity, thwarted ambition, and of course, the European Union.

Fundamentally, at the heart of the Tory war over the European Union is the vexed question of ‘What is Britain’s place in the World?’ That this question remains unanswered a quarter of a century after it first decimated the Conservative Party is not a sign that the Party is incapable of answering the question, but that it has no settled view on what the correct answer should be.

The war persists because the truth is that there is no compromise solution. The two competing answers are binary opposites: internationalist or insular nationalist, co-habitation is an impossibility.

The Tories, in any event, are prepared to keep on asking this question, seemingly to the point of destruction. For the most part, Labour has answered this question: Britain will succeed as an outward looking, internationalist state. The equally important question facing the Labour Party is ‘What is the place of the Labour Party in modern Britain?’ Without answering this question, Labour is unlikely to govern ever again and in contrast to the Tories, Labour has so far refused to acknowledge that such a question is being asked of it by the people it was founded to serve. At its heart, this is a question about England and the rapidly changing nature of the United Kingdom.

In the wake of the 2016 elections, the approach that Labour needs to take with regard to the ‘English question’ is more important than ever before. With Scotland out of reach for at least a generation (assuming it remains within the United Kingdom) and with Labour’s share of the vote falling back in Wales in the face of strong challenges from Plaid Cymru and UKIP, Labour will need to rely upon winning vast swathes of England if we are to form a government in 2020.

In a new book published this week, Labour’s Identity Crisis, Tristram Hunt has brought together Labour MPs, activists and parliamentary candidates from the 2015 general election to explore the challenges facing Labour in England and how the party should address these, not purely as an electoral device, but as a matter of principle.

My contribution to the book was inspired by Led Zeppelin’s Physical Graffiti. The track list reads like the score for a musical tragedy based upon the Labour Party from 2010 onwards: In My Time of Dying, Trampled Underfoot, Sick Again, Ten Years Gone. 

Continued Labour introspection is increasingly tiresome for the political commentariat – even boring – and Labour’s Identity Crisis is a genuinely exciting attempt to swinge through this inertia. As well as exploring our most recent failure, the book attempts to chart the course towards the next Labour victory: political cartography at its most urgent.

This collection of essays represents an overdue effort to answer the question that the Party has sought to sidestep for too long.  In the run up to 2020, as the United Kingdom continues to atomise, the Labour Party must have an ambitious, compelling vision for England, or else risks becoming a party without a country.

Jamie Reed is Labour MP for Copeland.