Though I have no doubt it functions as dupe rather than principal villain, the Institute of Economic Affairs (IEA) has has always had peculiar skill for dressing up authoritarianism as reform. Its latest proposal, the creation of a “Serious Economic Crime Office” (SECO), testifies to the intellectual bankruptcy that is the culture of our public life. With promises of efficiency and innovation, this report offers nothing more than a roadmap to expand prosecutorial overreach, and enrich a handful of well-connected interests. Have a look at the summary:

• The Serious Fraud Office has experienced regular criticism and periodic scandals related to its operation, which have often led to calls for serious reform through to abolition.
• The Serious Fraud Office should be reformed into a Serious Economic Crime Office (SECO) with a wider remit covering prevention, the capacity to use more regulatory sanctions and the ability to build a stronger relationship with the private sector.
• SECO should embrace the holistic use of alternative justice mechanisms, using deferred prosecution agreements more widely, establishing a leniency programme, creating a register of serious economic crime offenders and using larger fines.
• SECO should undertake a much more significant role in the advancement of economic crime prevention through the development and promotion of good practices and, in the most extreme cases, ‘Ethics orders’, which can be targeted at corporations to implement ethics and compliance programmes.
• There is a gap in supporting SME victims of economic crime, and the resources and role in prevention of the new SECO should be utilised to provide support to this group in enhancing their resilience and resources in some cases to pursue relevant litigation.
• The new SECO should also work much more closely with private actors – who are already the most significant in tackling economic crime – to enhance its and the private sector’s capabilities through accreditation and standards, staff exchanges and some contracting out of investigations through approved structures to maintain separation of powers.

The False Concept of Economic Crime

The focus of the IEA’s proposal is the nebulous category of “economic crime.” According to the report, this encompasses offences such as money laundering, insider dealing, and other financial improprieties. However, these so-called crimes are largely constructs of modern regulation, created without a foundation in the common law. Unlike traditional offences such as theft or fraud, which have clear victims and long-standing legal precedent, economic crimes often criminalise behaviours that infringe no one’s rights but merely violate state-imposed rules. This lack of grounding in fundamental legal principles renders the category more a tool of state control than a legitimate pursuit of justice. Money laundering, insider dealing, and other such offences are modern inventions—prosecutorial constructs masquerading as moral imperatives. These offences were largely unheard of before the 1980s and have no basis in the common law of England. At their heart, they criminalise actions that violate no one’s rights but challenge the state’s desire for control.

The solution to the supposed epidemic of economic crime is not the creation of an empowered bureaucracy like SECO. It is the abolition of these offences altogether. Fraud, theft, and breach of contract—the true economic crimes—are already adequately covered by existing laws. The rest should be consigned to the dustbin.

Plea Bargaining: A Travesty of Justice

The IEA’s enthusiasm for plea bargaining is another mark against its proposals. Plea bargaining is an inherently corrupt system. It allows prosecutors to secure convictions by coercing defendants into guilty pleas under the threat of harsher penalties if they choose to exercise their right to a trial. One stark example is the case of Ziad Akle, whose conviction in the Unaoil corruption scandal was later overturned after it emerged that prosecutorial misconduct and pressure tactics had tainted the process. Such cases show how plea bargaining undermines the principles of justice, reducing it to a negotiation rather than an examination of evidence in court. It allows prosecutors to coerce defendants into surrendering their rights under the threat of harsher penalties. It is not justice; it is blackmail.

By encouraging a wider use of deferred prosecution agreements (DPAs) and leniency programmes, the IEA seeks to institutionalise this travesty. These mechanisms bypass the courts and reduce justice to a private negotiation between prosecutors and corporations. The results are predictable: the powerful walk away with a slap on the wrist, while smaller players are crushed under the weight of selective enforcement.

Ethics Orders: Compulsion in Disguise

The IEA’s suggestion of “ethics orders” is a thinly veiled attack on individual liberty. These orders would compel companies to adopt ethics and compliance programmes, ostensibly to address corporate cultural failings. This would include appointing independent monitors to oversee implementation and ensure adherence. Failure to comply could lead to severe penalties, all without the scrutiny of a formal trial. Such orders bypass the safeguards of due process, imposing state-mandated behaviour without the legitimacy of parliamentary approval or judicial oversight. By effectively dictating how businesses must operate, ethics orders represent an encroachment on corporate autonomy and the rights of business owners. They would transform compliance into a form of compelled state service, undermining the fundamental principle that no one should act under compulsion except by lawful judgement. These orders would compel companies to implement compliance programmes and appoint independent monitors to oversee their operations. Failure to comply could result in severe penalties. This is state-mandated behaviour modification, imposed without the due process of law.

The fundamental principle of English law is that no one should be required to act under compulsion except by Act of Parliament or a lawful judgement of the courts. Ethics orders violate this principle. They represent an alarming encroachment on corporate autonomy and the rights of business owners.

The Real Causes of Corporate Excess

The IEA’s report misses the mark entirely when addressing corporate excesses. The problem is not a lack of oversight or enforcement. It is the perverse incentives created by the modern corporate structure.

Limited liability, while a useful tool, has been stretched beyond its original intent. Artificial persons now vote as shareholders, diluting accountability. Complex corporate structures shield bad actors from responsibility. Simplifying corporate governance and narrowing the scope of limited liability would do more to curb excesses than any ethics order or DPA.

Additionally, the burden of excessive regulation and taxation forces businesses into increasingly convoluted arrangements to survive. By reducing these burdens, the government would create an environment where businesses can operate transparently and responsibly.

SECO: A Bureaucratic Monster

The IEA’s vision for SECO is a bureaucratic wish list. By proposing an agency that works closely with private actors to accredit investigators and contract out cases, SECO would further blur the lines between public authority and private interests. Private firms, such as forensic accountants or law firms, would wield quasi-governmental powers without direct accountability, with attendant risk of conflicts of interest and selective enforcement. For instance, the report’s suggestion to contract out investigations to accredited private entities risks creating a system where the highest bidder influences justice. This intertwining of public duties with private profit is not merely inefficient but deeply corrupting, fostering an environment ripe for abuse and cronyism. It calls for an agency empowered to impose fines, issue ethics orders, and maintain a public register of offenders. It would also work closely with private actors, accrediting investigators and contracting out cases. The lines between public authority and private interest would blur, opening the door wider to corruption and abuse.

The proposal to list companies and individuals on a public register of offenders is particularly shocking. This revival of the pillory would destroy reputations without the safeguards of a criminal trial. It is a tool of humiliation, not justice.

Prevention as a Euphemism for Control

The report’s emphasis on prevention is equally troubling. By setting standards and accrediting compliance programmes, SECO would become a de facto regulator of corporate behaviour. This is a dangerous concentration of power. Prevention, in the IEA’s hands, is a euphemism for control.

The state has no business micromanaging private enterprises. The best way to prevent crime is to create a just and transparent system where bad behaviour is exposed and punished through proper legal channels. SECO, as envisioned, would do the opposite: it would centralise authority, bypass accountability, and expand the state’s reach into every corner of economic life.

A Libertarian Alternative

If there are problems with fraud and corruption, the solutions lie not in expanding the state but in limiting it. Here is what a genuine reform agenda might look like:

1. Abolish Economic Crime Offences: Repeal laws that criminalise actions without clear victims. Focus on traditional crimes like fraud and theft, which are already well-defined in law.
2. End Plea Bargaining: Ensure that all prosecutions are conducted openly and fairly, with defendants’ rights fully protected.
3. Simplify Corporate Structures: Prohibit artificial persons from voting as shareholders and narrow the scope of limited liability. This would increase accountability and reduce opportunities for abuse.
4. Reduce Regulation and Taxes: Create a business environment where transparency and responsibility are rewarded, and the need for convoluted arrangements is eliminated.
5. Strengthen the Courts: Ensure proper funding and managing of the judicial system to ensure that complex cases can be tried efficiently and fairly. This would do more to deter wrongdoing than any administrative agency ever could.

Conclusion

The Institute of Economic Affairs’ report on SECO is deeply flawed and represents a concerning departure from the principles of English law. By prioritising bureaucratic overreach and regulatory convenience, it risks undermining justice and promoting a system prone to abuse and inefficiency. It abandons the principles of English law in favour of bureaucratic overreach and prosecutorial convenience. It panders to the worst instincts of the state while ignoring the root causes of corporate excess.

If we are to have a fair and prosperous society, we must reject this vision. The answer lies not in creating new agencies and offences but in restoring the rule of law, simplifying the corporate structure, and reducing the burdens on honest businesses. The IEA’s proposals are another step in the wrong direction—a direction towards total serfdom.