‘UK must be as hard on white-collar fraud as on terrorism' — British MP



Published time: June 16, 2013 12:10




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In a free market society, the prosecutorial approach must be as tough as it is easy for corporations to hire and fire people, British MP Dominic Raab tells RT, adding that he’d treat white-collar crime “in the same way he would counter-terrorism.”

Raab represents an emerging group of young right wingers in the
Conservative Party, who have recently written a book called
Britannia Unchained.

RT: In the book you say that the British are “idolous
[sic], obsessed with the idea of the gentleman amateur.” What
does that exactly mean? Do you think that British are living
beyond their means?

Dominic Raab: What we actually do is we quote the great
British historian Niall Ferguson, who says Europeans are the
idols of the world. And we look how Britain has become steadily
more Europeanized over time. We are not saying all Brits are
lazy, far from it, what we are saying is you have a shrinking
proportion of people in Britain who are pedaling harder and
harder to sustain not just our economy but also to pay for the
vital precious public services we all enjoy and that is not
sustainable economically, it is also socially divisive. So we do
need to look at things like welfare dependency. We also need to
look at things like marginal rates of taxation. “Hard work should
pay,”- that is the message we are sending out in a book.

RT: That’s interesting, because the recent report shows
that more than half of the households in Britain take more from
the state than they contribute.

DR: Well, there’s some interesting incentive of policy
studies to produce this report. And it is fascinating, because
there is lots of talk, for example, about a wealth tax, but
actually, what you have got at the moment is something like the
top 10 percent paying something like 55 percent of income tax
overall, and actually until you are earning something in the
region of 40,000 pounds a year, you don’t actually net of all the
other things that you take out; a pay of any tax – pay any tax –
and so I think it’s quite interesting within the concept of
austerity and fairness.

Actually, we probably don’t have a wide enough tax base at the
moment, and we’re all going to work a bit harder and we’re all
going to put a bit more in; we are going to have to retire a bit
later. I think it is questionable whether we need quite so many
people staying in full-time education for so long. What about the
idea of youth apprenticeships, the 14- to 16-year-olds. That was
the Labour [party] idea that was abandoned, actually, something
that would be quite sensible to look at. I think it’s also about,
saying, you know, you don’t need to be a success in this country;
you don’t have to go to university. The vocational root is also
critically important; so we are looking at this in the round, but
it’s certainly true to say that we must make sure that hard work
pays.

RT: Aren’t all those things more to do with the
economic situation rather than people not working hard enough,
not wanting it enough.

DR: It’s partly about that, but let’s face facts: since
1950 the average working as of this country have come down by
third, so it’s certainly a bit of that as well. You can look at
the difference between private sector pay and public sector pay.
Overall public sector pay is higher than private sector pay, yet
they work lower hours and are less productive. There are
differences between sectors and between professions, so there is
actually a fit, a very crude stereotype of certain distinctions,
but overall one of the things we are going to have to do if we
are going to keep up with the ambitious hungry industrious
countries spanning Asia to Latin America, we are going to make
sure that hard work pays; and that’s exactly what George Osborne
said.

RT: Is the British way of life in danger?

DR: I don’t think so. Remember what Niall Fergusons in his
story said is that there are, you know, a few key things that
made Britain great in the 19th century and one of them was hard
work and a lot of people are working their socks off. I think
what we need to see that those that work the hardest, the
grafters, the grinders, the strugglers, the strivers need to make
sure they see the fruits of their labor and that’s the key
message.

RT: You are a great proponent of a free market, so
let’s talk about that for a bit. One of the results of a free
market is that it makes easier to fire people among other things,
but surely it must also then be made easier for businesses and
bankers to face the music if they do screw things up, so instead
of bailing them out, they must be allowed to fail. How likely is
that to happen in a country like this where there is such strong
corporate and banking lobby?

DR: It is an interesting question. I don’t believe I am
unfettered or I am reservedly in the free market. We need the
rule of law, we need competition law, we need regulation. I think
the idea if we would have none would be rather extreme. The
question is: has the pangolins swung too far the other way and
not just that we have got too much regulation, have we got the
right kind of regulation at our banking sector; and the city
wasn’t under-regulated, it wasn’t smart regulation, so I think
that’s an element. I think that banking reforms are absolutely
critical. But look, I would like to see far tougher prosecutorial
approach to white-collar crime in the same way as I would to
counter terrorism. And actually what we have seen is that the
Serious Fraud Office is quite a weak institution. If you look at
things like false accounting and some of the other crimes in this
white-collar sector, actually, our conviction rate is not nearly
robust enough. If you are fiddling the system, if you are
breaching the law, than certainly you should be brought to book.
I have absolutely no bones about that.

RT: One example of an embryonic free market is Russia
20 years ago and the free market seems like it was something
never actually achieved, but in the process of trying to get
there a lot of people are forced into poverty and made redundant.
So unless society is perfectly just and free from corruption, a
free market surely will always work better for those who hold the
economic reins.

DR: Well, the big problem we had in Russia is that the
institutions that guarantee the rule of law were either nascent
or faintly week and let’s be clear about it: in the same way is
in democracy and in the free market: we need strong institutions,
you need the rule of law; that is what was missing in Russia. I
don’t think that Britain is in the same kind of situation, but
actually some of that stuff about cronyism and the complaints
about the banksters. Actually I think that if those that have
clearly broken the criminal law were seen to be brought to book
without scaring them, without bashing the whole industry, without
becoming anti-inspirational and telling everyone that makes
money, creates wealth, creates jobs for the same brush. That is
an important message to send to the public: “You can’t get away
with murder if you are at the top end of the income scale.”

RT: We do see charges brought against corporations.
They don’t win and then inquiries launch, but nothing ever seems
to come of it. What can be done about that?

DR: Well, I think, for example, in the Libor vote interest
rate-rigging scenario. I mean, the thing that strikes me, and
people have said, is the legislation strong enough and broad
enough in order that prosecutions can take place to deal with
that kind of behavior. I mean, fraud is already a criminal
offence. False accounting is already a criminal offence. I don’t
think, personally, the key issue or overriding issue is lack of
legislation. What you need is a serious fraud office which is
equipped with the expertise and the manpower; it’s not hugely
expensive when you think of all the other money that goes into
our regulatory bodies, but to have the vigor and the robustness
to take on and prosecute when the case is there, when they have
got enough evidence, and that’s where we lack. We lack a sharp
enough prosecutorial cutting edge.

RT: You seem to be advocating a more results-driven
society in which, as you say, “the talented and the hard-working
have nothing to fear”. But what about the average, the mediocre,
if you like? They are always going to exist in society. Where is
their place here?

DR: Look, there is the society; I believe in the
compassionate form of conservatism. We should have a safety
blanket for the vulnerable, for the sick, for the disabled, for
the homeless. All of that of course is critically important. I
also think for the strivers on their middle-income jobs, actually
they should see more fruits of their labor; that’s the whole
point about lifting 2 million people out of income tax at the
lowest end. I am making sure work pays and the welfare dependency
doesn’t become a lifestyle choice.

So absolutely I think that the tax rates need to be addressed
across the board, but let’s also bear in mind that 1 percent pays
something like 30 percent of the income tax in this country, 10
percent pay 55 percent. This idea that we can plug out the dead
whole by whacking the gazillionaires, we will be quite able
enough to do it but, you know, if you want to do it and that’s
some catharsis for the country, you know, there is an argument
for it, and frankly I think it smacks a bit of a lynch law. But
don’t pretend and don’t kid ourselves for a second that that will
plug the dead hole this country is in.

RT: But some might say that smacks of social
engineering essentially.

DR: Well, I don’t think so. What he is trying to send is that
message which is that: if you are for example with – they have
talked about housing benefit, and benefits, for example – why
should a home on a loan with middle income who have got, let’s
say, two children, and they take a financial decision. Can we
afford to have more children? Shouldn’t actually families on
welfare with more and more children, shouldn’t they take some
responsibility as well? I mean, I think for a lot of people that
would strike a certain degree of resonance.

RT: There is a government strategy that politicians
have been talking about where regions that do well economically
get rewarded and incentivized for that, but regions that do badly
are essentially left infested. That’s also presumably a free
market idea, but how is it justifiably in terms of fairness?

DR: I think it’s right to say that we want to incentivize
growth; are that actually, if you are taking the kind of measures
locally, they kind of attract business; you are to see more of
the revenue back from that; that’s a positive incentive, but
there is a huge amount being down under the infrastructure rate
to money gaining into road and rail, but also broadband, to try
to make sure we have got the infrastructure that would not just
only boost Britain’s competitiveness as a whole, but attracts
investment to pass the country which haven’t seen the huge
private sector investment for some time. That is very much the
one nation ideal and vision that both George Osborne and David
Cameron are talking about.

RT: Doesn’t all of this in summery leads to the UK
becoming an even more unequal place than it is already?

DR: Well, labor taught about equality for years and yet
according of the Gini coefficient, which the…the wonks tell me,
is the measure of inequality, just got inequality in Britain got
worse. What we can’t, we are not going to plug the inequality
problem by spending more money, but the truth of the matter is
that in the 21st century, with the globalization, with intense
competition – George Osborne talked about this, the competition
from Latin America and from Asia – the number one priority is
economic growth. 

If we don’t drive the dynamism of the private sector and get that
economic growth, who will pay for it, who will create the jobs,
who will pay the revenue from our precious public services? If we
can’t compete, then frankly, unless we have got the money coming
in, unless we are earning our keep, you know, debating about how
we are going to spend that money, frankly, is an academic
conversation. We have got to make sure that bedrock fundamentals
for our competitiveness are in place and after that, we will
hopefully be in the position that we can look at, not just for
those on the lowest incomes and for the vulnerable, but also make
sure that we can take those measures to make sure your hard work
pays, make sure the strivers, the middle class, to see more of
their money back.

This article originally appeared on: RT