People who defraud the government will face going to jail for more than a decade under plans being considered by Keir Starmer as part of a wider cleanup of British politics.
The Labour leader will pledge to restore standards in public life with “a total crackdown on cronyism” in a speech on Thursday marking the beginning of the election year.
Sources say a range of policy options are being considered as part of the cleanup plan, including tougher sentences for “fraud against the public purse”, such as the billions wasted through Covid loan schemes.
However a separate pledge to impose a five-year moratorium on former ministers from lobbying on behalf of companies over which they once had oversight is likely to be scaled back, the Guardian understands.
In a speech designed to set the tone for what is likely to be a bitterly-fought general election campaign to come, Starmer will warn that repeated public scandals risk undermining voters’ faith in politics in general.
The Labour leader is expected to say: “Trust in politics is now so low, so degraded, that nobody believes anyone can make a difference any more.
“After the sex scandals, the expenses scandals, the waste scandals, the contracts for friends – even in a crisis like the pandemic – people think we’re all just in it for ourselves.”
He will add: “To change Britain, we must change ourselves – we need to clean up politics. No more VIP fast lanes, no more kickbacks for colleagues, no more revolving doors between government and the companies they regulate.
“I will restore standards in public life with a total crackdown on cronyism.”
He will say that he came into politics “to serve”. Pointing to his past as a human rights lawyer, Starmer is expected to say: “When it comes to the work I’ve done with people around the world, living on death row – life and death decisions in your hands. Now there’s pressure that comes with that – of course there is, that goes with the territory. But that’s the responsibility of serious government, the responsibility of justice.
“It’s not a game. Politics isn’t a hobby, a pastime for people who enjoy the feeling of power, and nor is it a sermon from on high, a self-regarding lecture, vanity dressed up as virtue.”
Labour enters election year 18 points ahead in the polls, with the Conservative party struggling to close the gap which was established when the Partygate scandal first broke and which widened during the Truss administration.
In recent weeks Starmer has highlighted the scandal surrounding Michelle Mone, the Tory peer who is under investigation for fraud in relation to multimillion-pound government PPE contracts after a Guardian investigation. She denies defrauding the Department for Health and Social Care, but the Labour leader has called the situation a “shocking disgrace”.
Under plans being drawn up by Starmer’s policy officials, Labour would introduce stiffer punishments for those who commit fraud against the government.
The law allows for jail terms of up to 10 years for the most serious fraud cases. Benefits and tax fraud are considered worse offences, but judges are not allowed to hand down tougher punishments if a criminal has fraudulently claimed money from the government in other ways, for example by bidding wrongly for public contracts.
Figures released by the government last year show banks had flagged nearly £1.7bn worth of Covid loans as potentially fraudulent by the end of June, mostly from Rishi Sunak’s £47bn bounce back loan scheme.
The National Audit Office estimated last March that the government had been defrauded of £5.5bn in 2018-19 and 2019-20, which then jumped to £21bn in 2020-21 and 2021-22.
Campaigners say that tougher sentences for those who commit fraud against taxpayers would help tackle the problem, and bring the UK into line with countries such as the US, Canada and Australia. Labour is considering either bringing in a separate offence of fraud against the public purse or making it an exacerbating factor in sentencing guidelines, sources said.
George Havenhand, a senior legal researcher at Spotlight on Corruption, said: “The UK is out of step with its key allies, like the US and Canada, in having no specific offence of fraud against the government, other than in relation to welfare and tax, despite the fact that it costs the UK billions of pounds each year.
“If a targeted offence had been in place during the pandemic, the deterrent effect would have better protected the public purse from the vast losses to Covid loan fraud, the fraudsters who tried it on would be looking at tougher sentences and we could be seeing more taxpayers’ money recovered.”
However Starmer is also considering rowing back on another part of his plan to clean up government, which would have seen former ministers barred from lobbying for companies over which they once had oversight for five years after leaving office.
The proposals were announced last summer by Angela Rayner, Labour’s deputy leader, and formed an important part of proposals to clean up politics made by the Committee on Standards in Public Life in 2021.
They came after the Greensill scandal, in which the former prime minister David Cameron lobbied ministers on behalf of a bank for which he worked and which subsequently collapsed.
At the time, Rayner said: “Labour will stop the revolving door between government and the companies that ministers are supposed to regulate, banning ministers from lobbying for at least five years after they leave office, and with proper enforcement against those who break the rules.”
The government has rejected the idea of a five-year moratorium, saying that it would be an unfair restraint on former ministers. Now Labour sources say they also believe it could be excessive, though they are still deciding the exact policy as officials hurry to finalise the party’s manifesto by the end of the month.
Any decision to row back on the plan is likely to disappoint transparency campaigners, who have long called for stricter lobbying rules.
Havenhand said: “It should be possible to impose lobbying bans of at least five years in certain circumstances, including for former senior ministers, as a series of scandals in recent years has vividly illustrated.”
