I welcome the first panel to our first oral evidence session in our Committee inquiry on the link between serious organised crime and neighbourhood crime that we see on all of our high streets. We are very grateful to our first two panellists. I will ask you to introduce yourselves and then we will go into questions.

Thank you for having me. My name is Sarah Woodcock. I am the CEO of The Anti-Slavery Collective.

I am Phil Lewis. I am the Director General of the Anti-Counterfeiting Group, which is—the name is on the tin really—the UK not-for-profit association that represents about 3,000 brands.

I will start with a question to Phil Lewis. What would you say attracts organised crime groups to the counterfeit goods market in the United Kingdom—what is the draw?

I think money will always be the draw with transnational organised crime. We can perhaps talk about what they use it for. Counterfeiting is high profit and to an extent it is considered, in comparison to other forms of illicit trade, to be less of a problem to them because the sentencing is comparatively lower. The high profit and the sentencing for counterfeiting will attract them, to the extent that counterfeiting across the world now is worth about $467 billion—about £345 billion. It affects the UK in the sense that the trade in the UK is valued at about £12 billion. We ought to think about where the money goes, because that is the big thing. The money goes to seed-fund other forms of criminality, including drugs, weapons and forced labour. They use the money from this to fund that, and that is not from me; that is from Europol and Interpol, who have evidenced it. The whole thing is about money and how they can move this money at lightning speed. It is cash-based, and that is what they like as well.

Do you think there is a bigger market in the UK—or what has changed in the last five to 10 years?

Obviously the online growth has been enormous, and since the pandemic people who perhaps were not as trusting of using online purchasing now are. I think about 60% who now use it but did not use it before say that they will continue to use it. The counterfeiters know this. They are sophisticated, they are businessmen, they are entrepreneurs, and they know this. They also know that they can get products straight to someone’s door, and that presents a problem for us because of the volume—high volume but a low number of packages.

Do the counterfeiters drive the demand for their goods, or has that always been there and since the pandemic they have just been able to target it?

I think we have always had a bargain-hunter mentality; that is true. The problem is they know this as well. When I talk about them being sophisticated, they know the market, they know what people like, particularly the youth. They know what is attractive to them, but it extended the scope and scale as well. In the pandemic, for instance, when people could not get what they wanted from the shops, they expanded the manufacturing to those items that might be more threatened, like household goods, electricals and so on. We also saw therapeutic buying, which was a different thing because people were buying to make themselves feel better. They were locked up, and that had a big impact as well. Although that is a real problem, 70% of fakes coming into this country still come by maritime routes, so while the cases for small packages are much higher and that overwhelms our postal hubs and our customs, the volume coming in at our ports is still the big problem. If you think of a big container ship, which might have between 12,000 and 20,000 containers on it, it would take a customs team all day to look at one, and they know that as well. Mostly it comes from south-east Asia; 80% comes from China and Hong Kong. There is even some interest here around that as well because they are very affluent and China, of course, is a Formula 1 economy now. They are moving the manufacturing to less developed and less affluent countries. That makes them a big employer and brings them closer to our market, but it also makes them very affluent. It makes them very acute in their political dimensions as well.

Sarah, do you want to add anything?

Yes. As part of our research, we have focused in on a profound attitudinal shift in the UK on counterfeits. Compared to 20 years ago when people might have been ashamed or there was a bit of a stigma around wearing counterfeits, that has entirely gone. People are entirely frank about buying, wearing and owning counterfeit goods, and that is especially obvious when you are talking to young people. As Phil mentioned, a third of young people in a recent EU Intellectual Property Office survey had knowingly bought a fake in the last year. The Athletic, the sportswear publication, surveyed their readers and 77% of football fans had knowingly bought a fake football shirt. It is just not in the same position it was in 20 years ago. If you couple that with fragmented regulation and the explosion of e-commerce platforms, you have a perfect storm of counterfeiting, and then there is the globalisation of supply chains. It is a perfect storm.

Following on from that, I will ask a question about public awareness, which Sarah has touched on. How aware are the public of the negative impacts of counterfeiting market goods?

It varies across demographics and we can’t look at any particular group. You have to look at them separately. Our research has focused on younger demographics; if you compare them to boomer generations, there is a big attitudinal shift between those two groups. Younger demographics are very attached to their counterfeits. They are very keen on their counterfeits and that is sportswear, leisurewear and luxury goods—those three things. As an organisation, we primarily focus on fashion and apparel wear and counterfeits cover pharma, electronics and all sorts of things. On public awareness, we certainly see very worrying rationalisations behind the purchase, such as, “Well, what is the difference? The big brands are making all this money. Why can’t I have my slice of luxury?” There is an element there of the public understanding that there are risks but not really accepting those risks—not really taking them into consideration.

I think that is absolutely right and I don’t think we have had a grander strategy about consumer awareness either. We tend to hit and then retreat, hit and retreat. You have to be very careful with consumer awareness because I remember about 20 years ago it became very cute to say that it was funding organised crime, funding terrorism even, and you would get the response, “No, I get my fakes from Bobby down the market. He is not a terrorist. He lives down the street.”

Have you found that there are any good deterrents that work, that deter people from buying or getting involved?

Yes, you have to hit “What’s in it for me?” really, and that is the deterrent we have found. For instance, in Northern Ireland, where we had the trouble, after “the troubles” as were, both paramilitary groups were combining at one time to sell fakes for the cause or whatever it might have been. They found a very effective way of getting to consumers and it was very simple in some cases. For instance, in pubs it would be beermats or whatever with a football shirt on the front and it would say “buy this” and you turned it over and there would be a needle because of the drugs. It is all about how will this affect me personally, and I don’t think we have ever got to grips with that. On our side of the water, one thing that did have an effect at one time was the fact that the counterfeiters or the sellers were not working and they were making an awful lot of money. When the honest people who were working saw that, they didn’t like it and that was the social side of things.

That nicely follows on to the next question. How do you see counterfeiting linked to other serious organised crime activity that is going on? You have mentioned the link to drugs.

Most of the research has been done outside of the UK but it has an impact. For instance, Europol and Interpol, two big institutions, were the ones that identified that the seed funding was existent and that that money was being used for all these menacing and deviant crimes such as forced labour, drugs and weapons. I mentioned that they are sophisticated. They use counterfeiting to identify weaknesses at borders. If they can get those through, they can get the drugs through and they can get illegal immigration and trafficked people through.

That brings me to my next question, about the relationship between counterfeiting and modern slavery; Sarah may want to pick up on this. What role are you seeing forced labour playing in the counterfeiting goods market and its activity?

Fundamentally, the goods are so cheap because somebody is being exploited. It is not possible to produce those goods at the same price and in the same manufacturing conditions unless the raw materials and the labour have been compromised. It is definitely our position that there is a systematic framework of exploitation, and that forced labour is not a side effect of counterfeiting but an essential precondition of counterfeiting. The counterfeiters need that cheap labour—some people call it the slavery discount—to be able to offer those low prices to the general public. On how it connects, we see it intersecting in three ways. We have seen evidence of forced labour and exploitation from start to end of counterfeit supply chains. That includes, obviously, the manufacturing and production zones, mainly in China, Hong Kong, Turkey, south-east Asia, as you would expect, but where counterfeit supply chains differ from ordinary fashion supply chains is that we are still seeing evidence of forced labour and exploitation as you move down the supply chain. That is in distribution, assembly and particularly sales. Selling means high-risk moments where the person selling that illegal good is having to take quite a big personal risk to make that sale. It doesn’t matter whether you are on the Metro in Paris with a small rug full of goods or on a market—you are the one taking the risk. We have seen time and again that individual being the one who is most at risk of exploitation.

Hence we are moving into the less developed countries where the cost of manufacturing is lower, and that is where the risks come because they become politically influential after that. It becomes very difficult and, as I mentioned, it gets closer to our own gates, and with that comes increasing danger to us as well.

The second way is that raw materials within counterfeit supply chains have not followed or adhered to any standard regulations or protocols or any kind of legislation on where those products were sourced. The counterfeiter will always take the cheapest route, will always buy the cheapest cotton, and therefore is much more likely to source goods from state-enforced labour zones. The third way, which I think we have discussed, is we have seen counterfeiting, which is an exceptionally lucrative low-risk activity for organised criminals, seed-funding a range of other really nasty, dangerous criminal activity such as commercial sexual exploitation and human trafficking.

What steps do you see working as a deterrent for combatting the relationship between modern slavery and counterfeiting? Secondly, what additional powers, if any, need to be given to enforcement agencies to assist them in breaking down the relationship?

I have a thing about the laws, to be honest with you. I often ask the question to my community: what do criminals do? They break the law. They simply are not afraid of new laws. They are afraid of getting caught and they are afraid of having their profits taken from them, so that is an essential for us. Part of the grander strategy that we need is to ensure that our enforcement agencies are up to speed with the Proceeds of Crime Act, which is an excellent piece of legislation but underused because most of our trading standards organisations that are frontlining on this really don’t have financial investigators within their organisations—they can’t afford them. The successful ones are those who have them, and that is where you hit them. You take the money off them and that becomes the deterrent. As I said earlier, that is what they are in it for—nothing else; no morals, no conscience, none of that.

A crucial element here is data collection. I know that is an overused phrase. If I can be more specific, the connection between serious organised crime, counterfeiting and forced labour and exploitation is little understood, even by us, and we seem to be the only ones trying—we are trying to look at that connection here in the UK in an in-depth way. Enforcement agencies like Trading Standards, who are boots on the ground up and down the United Kingdom, have officers who understand the local communities, the dynamics of informal economies, which is obviously where a lot of this exists. Those officers do not currently have to do any compulsory training on forced labour, exploitation and modern slavery. If they could access that training, which we are in the process of doing, I think that would be really helpful. The PIPCU, which is the specialised police force within the City of London, is very focused on this issue, funded by the Intellectual Property Office, but broadly speaking more training could support officers who are working on counterfeit raids to not just look at the raid from a criminality perspective or an immigration perspective, which often comes into this, but also look at it from a human rights perspective. I think if more was understood about the signs of exploitation, which are very hard to spot and are deliberately concealed by serious organised crime groups, we would be able to make the concrete connection between how those two things co-exist. If that was better understood, we could leverage more resources for this crime.

No single authority, no single country will defeat this on its own. It is a $460 billion trade. Exchanges of information and intelligence are vital and any obstacles to that cross-border, cross-sector present us with a real problem and we are on the back foot. We very often come across, “We are not sure we can share this,” and I always argue the point that you can share intelligence for the prevention and disruption of crime. Very often we don’t dare to share, and we should. It has to be cross-border and cross-sector because these people are part of transnational organised crime networks. They are not the people you see on the streets, so we need every weapon at our disposal.

I don’t understand what you mean about you don’t dare to share. Can you explain that point?

For instance, some of our authorities are reluctant to share because of the GDPR and, as I just said, you are allowed to share for the prevention and detection of crime. Unless I am mistaken, I don’t think I have ever seen anything that gives you the absolute right to anonymity anyway. We are not always after nominal intelligence. We are after data and that brings with it some problems as well because—I don’t want to be disrespectful—politicians and the media love the blue light. They love the sexy bit of this, which is knocking over markets and arresting people and all the rest of it, but that does not take us up the hierarchy. I think that some of the metrics that we collect from those raids are antiquated and they are fanciful as well because they don’t give us any systemic result. We need to be able to bring all of our intelligence and information together so that we can tackle up the chain.

The police are under a great deal of pressure about what their priorities should be, and tackling knife crime and violence against women and girls are way up there. How much priority do you think they should be giving to counterfeit crime?

It goes back to the seed-funding thing—the realisation. Focusing on counterfeiting will not defeat those aspects that you talked about; there is no doubt about that, but if we want to protect our borders and our national security we have to look wider. We are now seeing counterfeits arriving that we have not seen before—the dangerous stuff, the stuff that you would bring into your home: electrical goods, auto parts, safety bags in cars and so on, even pharmaceuticals. The terrifying thing is that where people now want to use Mounjaro to lose weight, the counterfeiters know this already: they saw those aspects coming. I don’t think we can identify counterfeiting over any of the aspects that you have said, but just bear in mind that it is a central form of criminality that is taking revenue away from our country into south-east Asia and we are losing all the revenue from this. I always say this: counterfeiters don’t build hospitals or schools—they are not interested in that—so we need to be able to use it as a focus as well.

We commissioned some economic research last year that showed the value of the counterfeiting trade in the UK, which we found to be £9 billion, and £2.5 billion was lost in tax revenue annually, which could equate to 47,000 new police officers, 51,000 nurses, 47,000 teachers. It is not an insignificant amount; in fact it is absolutely huge, and I think the question of scope is little understood. We have been working with a US-based think-tank that has estimated that counterfeiting is the most profitable income stream for organised crime groups globally—more than drugs, more than guns—because counterfeiting is so low risk and so lucrative and it is becoming easier and easier. In contrast to that scale, there seems to me to be a pervasive trivialisation of counterfeiting. It is tolerated in the legal system. We have seen evidence in the UK and Europe of prosecutors who are not prepared to take on counterfeiting cases because it is not that serious—it is just counterfeiting. They have other cases on their dockets that they want to prioritise more. I think that politicians are very wary of taking on counterfeiting because the general public love their counterfeits, so it is not exactly an election-winning issue. I think the general public are also prone to trivialising counterfeits: “It is harmless. What’s the big deal? Whatever conditions are going on in these supply chains, it is the same if you buy the real goods.” I think the police technically are not allowed to prioritise counterfeiting as much as other forms of violent criminality, and yet you can’t isolate counterfeiting from other forms of crime. It is converging. The money that serious organised crime groups make from counterfeiting, which is huge, is obviously funnelled into a range of other business enterprises, and those enterprises are very violent and dangerous in the UK.

I probably should refer to my entry in the Register of Members’ Financial Interests. I am a trustee of the Human Trafficking Foundation. I ought to put that on the record as we are discussing modern slavery. I am interested in the co-operation between police forces, Trading Standards and law enforcement. There are so many bodies involved in this. What is the co-operation as you see it at the moment, and what are the barriers to co-operation in this area?

On Trading Standards, to start at the frontline inland, resourcing is a huge problem. There are local councils now that perhaps have one trading standards officer with 133 different provisions to tackle. Certainly that is a problem around the country, so you get chequered enforcement. In some areas, where they have more officers, they will tackle it. In other areas, where they have just one person or two people, they simply can’t do it. The funding for Trading Standards within a local council has diminished, and that means that we have lost a lot of what we would consider to be chartered trading standards officers—the guys who really have the expertise and the experience. We have had to replace them with field officers because they cost less; they have less experience in all of this. It is a combination of those things. It is about numbers as well as skills. I mentioned earlier that local councils don’t have financial investigation people at their disposal, so that is a problem. On policing, the Intellectual Property Office funds the Police Intellectual Property Crime Unit, which has given us a great advantage. It has been very active. It began looking at the online problem but now it has moved into the physical side as well, but it is within the City of London Police and it is not a big resource to tackle something like this. I think there are about 16 or 17 officers—we are talking about transnational crime. It has an impact, but it is not really set up to deal with something this large and they know this. At the borders we have a similar issue with prioritisation. Illegal trafficking is high on the list, so there are pockets within the UK borders that don’t prioritise counterfeiting at all. In fact, with younger elements coming in, they don’t—there is a system called applications for action, and basically the brand owners will file an application for action with customs at the port and this will tell them what to look out for. They will identify what a fake might look like and what the authentic looks like. There are people at the ports now who have never seen an application for action. We really need a great deal of education and better training. That is something the ACG provides, but you can’t provide it right across the country, so those elements of disjoint are there. Then I go back to the sharing of intelligence, and there is a disconnect there as well. Q13 Jo White: That is the point I wanted to ask about. You are saying that there is no real formal intelligence route where you can share intelligence right up to the NCA?

No, and it will be tactical. They will identify a problem area and then work together perhaps on something. You have probably heard of Operation Vulcan, which was in the north-west of the country just outside Manchester.

We will come on to Vulcan in a moment. We have a specific question on that.

But that was tactical as well. It had a strategic view of what they wanted to do, but the actual work was tactical.

If somebody spots something on the ground, is there a mechanism by which you can then feed it up through regional level policing to the NCA?

Yes, but the problem will be if it is in the difficult box. It has to be significant and harms-based, and that is a big thing for us. We want a strategy that is harms-based, so looking at more dangerous fakes and the rest of it. As Sarah has already mentioned, a huge bulk of money is raised through what we would consider to be the jewellery of fakes—the football shirts and so on. The ACG is odd compared to some of the associations across the world because we have an intelligence co-ordination function and the idea is that we will pull intelligence together, package it professionally and then give it to an enforcement agency that will take it on. They are relieved of the burden of putting it all together and just carry out the work, but again it is tactical. We need to get up these hierarchies. As I have said already, that means cross-border, cross-sector intelligence, and co-ordination.

We do not have the 30 years of experience that Phil has, but from my perspective, it would appear that co-ordination locally works quite well. The brand comes down, they see their product, which has been counterfeited on a market stall, and they do a test purchase and establish that it is a fake. They are contacting Trading Standards officials, and they also work with local police. In that sense, that is working quite well. Where I would see the big disjoint is obviously towards national reporting processes: how are we connecting the dots between all of those kinds of efforts done at local level? It is also worth mentioning that British and international brands play a significant role here. They are on the frontlines in generating a lot of this intelligence, whether online or in-person purchases. They are often the ones who are driving the Trading Standards officers or the police officers to conduct these raids. The police officers and the Trading Standards officers are completely overwhelmed by it. At least with the direction from the brands, they can focus their efforts, so I think there is some work there. Going back to the Proceeds of Crime Act, while I think it is a promising piece of legislation, from what I can tell it does not really have the element of incentive in it any more. Given that we are talking about huge sums of money for counterfeiting, it would be the perfect instrument, you would think, if law enforcement forces around the country could be incentivised to grab that money, retain it and then use it for more investigation work. However, it takes years for the money to trickle down through POCA, and then it is divided between all these different parties and groups. Then, as far as I am aware, you have to apply to use some of these POCA funds, so it does not have that immediacy. The US has a very different system where law enforcement agencies or the FBI can take that money immediately and plough it straight back into investigation efforts, so there is definitely an element there. Reporting and escalation is a real issue connected to the problem of forced labour and exploitation, which obviously I am mostly focused on. From what I can tell, if any officer or brand official is in a raid context and they spot something that looks deeply exploitative and concerning—at the moment, levels of awareness of those signs and the reporting mechanisms are almost non-existent. That is something that really needs to be addressed.

What you say about the USA is interesting. The USA also has the hot goods provision to stop things even entering the economy in the first place.

Of course, even if you have a financial investigator in Trading Standards and the money does come in—and there is a long lead time, as Sarah said—there is no control over where that money would go. If a local council has carried out a survey of what consumers would want, counterfeiting may not be on that list, so the money would be used for something else. You have all those kinds of intricacies as well surrounding the POCA.

We have a minute left, and you referred, Mr Lewis, to Operation Vulcan. Could you give us a very quick overview of the key lessons from Operation Vulcan?

One of the most notorious “markets” in Europe—actually it wasn’t a market; these were buildings that had been in existence for about 20 years, some of them council-owned, by the way—was a hive of criminality. It was fostered by counterfeiting, but it brought in all those different elements: the forced labour, drug selling—all of that—all around this one area. We wrote to the different council leaders, the mayor, and the chief of police. The chief constable—Stephen Watson—had just come in and it crossed his desk, so he asked his officers to take him around Cheetham Hill, which is the area—it is on Bury New Road. He went down there. I will not say exactly what he said, but he said, “This needs clearing.” He introduced a clear, hold and build strategy there. He brought in the private sector, he brought in Trading Standards, he brought in police and he brought in the immigration service as well. That combined effort, over 14 months, cleared the whole area. That was the first thing—the clear. The hold: they kept coming back and now it is being regenerated. There is a lot of new building going on there. There are a lot of new businesses moving in. It really worked. However, there were elements. Displacement, for instance—these counterfeiters are relentless, so where has it gone? There is a lot of suspicion that it has moved to the Camden area. There is a lot of suspicion that it has moved to other places. Counterfeiters go online. The displacement element is a key to all of this as well. Did we do enough on the forced labour? Did they understand it enough? It remains to be seen. They could see the forced labour in front of them. That probably needed a little bit more focus, I think. However, to be fair, it was such an energetic and successful piece of work that we ought to be very proud of it.

Let's have a concluding point from each of you and then we will stop.

We had a conversation with a police officer from Manchester who said they did not see very much evidence of forced labour and labour exploitation, and then in the next breath described a situation that exactly fitted the bill for forced labour—that would have met the legal threshold for forced labour. I think, yes, that is a significant point.

It brings us to the training aspect as well.

Thank you so much. We have run out of time. That has been absolutely fascinating. If you have any other points that you think the Committee should be aware of, please do let us know. We are going to do some more work on this. Straight after this, there is another panel with law enforcement. If there is anything else that you feel we need to know as we go through this process, please let us know, but the session has been absolutely fascinating and really helps to set the scene. Thank you very much. Witnesses: Steve Rodhouse, Deputy Chief Constable Wendy Gunney and Temporary Deputy Chief Constable Catherine Akehurst. [Robbie Moore in the Chair]

Welcome to the second panel of our current inquiry into the impact of serious and organised crime on local neighbourhoods. Before we get going with the questioning, could I ask each of the witnesses to introduce themselves?

I am Deputy Chief Constable Wendy Gunney. I currently lead the serious and organised crime portfolio on behalf of the National Police Chiefs’ Council.

I am Temporary Deputy Chief Constable Catherine Akehurst. I am the National Police Chiefs’ Constable Programme Lead for the Neighbourhood Policing Guarantee.

Good afternoon. My name is Steve Rodhouse. I am one of the director generals at the National Crime Agency. My portfolio includes leadership of all the serious and organised crime threats that we face.

Thank you all for your time this afternoon.

By way of introduction, could you outline to the Committee what you believe to be the scale and size of serious and organised crime in the UK?

I should start with that. In a moment I will talk a little about the national strategic assessment that we produce every year, which is an important document. It will be very rich information for the Committee because it is prepared with information from across the serious and organised crime system. It takes into account policing information, and information from the private sector, academia and beyond, and that will give you a very rich picture. It is fair to say that serious and organised crime is a profound threat that impacts upon our communities. It is felt nationally, it is felt in our economy, it is felt in our communities, and it affects the safety, resilience and confidence of those communities. All that makes it sound very abstract, but I am sure you are very aware that it is not an abstract threat. It is quite hard to put a financial cost on organised crime, but in terms of fraud alone that is an annual impact of around £14 billion. Cyberattacks are characteristic of organised crime. Just one attack on Jaguar Land Rover cost the economy almost £2 billion. If we talk about people’s lives, there are more than 3,700 deaths annually in England and Wales as a consequence of drug misuse, a consequence of serious and organised crime, so it is a really broad threat. The annual assessment will say that organised crime is growing, the impact and harm from organised crime is growing, and we assess that it will grow in years to come. A number of cross-cutting themes came out of this year’s assessment, which is probably worth touching upon. You will not be surprised to hear me say that technology and technological transformation is driving organised crime more than ever. Our collective use of technology is not new, but progression in areas like AI means that there are more opportunities than ever for both victims and offenders to come together wherever they live on the globe. Our assessment shows that criminal markets are both converging and expanding because global criminal groups are able to diversify their activities. I can give you examples of compounds in parts of the world that are used for both executing frauds and cybercrime. You have offenders who are involved in exploiting for sexual harm one day and then may be engaging online in cybercrime and fraud the next. It is a kind of converging market. Some of that is driven by global instability. Instability across the globe provides more desperate people willing to put themselves at risk to become involved in organised crime. It provides more victims. You can think about organised immigration crime. Instability across the globe provides a ready flow of demand for that particular organised crime service. In our assessment, taking all that together means organised crime being felt more harmfully across the globe. There is lots of rich detail that I can go into, but that is a summary as to where I would start.

Thank you. Could I ask other panel members to say a little bit about their perspective of how the threat is evolving over time?

Steve has given a good outline, but people in communities will perhaps not know some things about serious and organised crime. It is a bit like a tree with roots. Those roots are embedded into communities and into day-to-day criminal activities. It is hard to understand how serious and organised crimes are connected. The 43 police forces across the country deal with things for their own geography in isolation. This is where our regional organised crime units come into the mix to support the National Crime Agency. The National Crime Agency can look at national and international things. Then the regional organised crime units can map that serious and organised crime across those police force boundaries. Over the last few years we have equipped them with capabilities that face more towards the new threats that we are seeing—cryptocurrency, for example—and our prison units. We have staff particularly involved in that. We have teams that manage data exploitation. They use artificial intelligence to help their understanding of the data that we get from across regions. Serious and organised crime will always play itself out sometimes into what you can see in the physical world. As Steve said, so much more of it now is online. It is global, and completely cross-boundary, which creates challenges for all of us.

Steve, you mentioned the national strategic assessment. I note that the different domains of organised crime are assessed in terms of their threat and harm levels and how they are changing over time. Could you say a little bit about the balance of the threats and risks? I notice that particularly in some areas, for example, drugs seem to be increasing—significantly up in the assessment. Is that mapped with reductions elsewhere, or is that—

No. No domain has reduced in harm and threat but you are right to say that drugs has increased in both in this year’s assessment. That looks like more drug deaths, more consumption, lower prices for drugs, and it looks like more domestic supply in laboratories within the UK as well. That is one area in which this has evolved. To pick up on your point around the evolution of crime, the barriers to entry to become involved in serious knife crime are lower, in part because of that technological development I talked about. You can go online and effectively commission criminal services, whether that be to launder your money or to obtain a commodity in a way that you really could not do some years ago. That is one of the evolutions we found. People can connect with people to provide that service wherever they are on the globe.

We have mentioned that sometimes the impacts on communities are not immediately visible. Catherine, from a neighbourhood policing perspective here, and thinking about my own constituency, I think residents are very aware of drug-related behaviours and activities, whether they connect them to wider organised crime networks or not. Could you say a little bit about what neighbourhood policing teams across the country see as the local impacts of organised crime?

Absolutely. As we said, a lot of serious and organised crime is concealed. Communities might not link what they see to serious and organised crime. They see the symptoms of serious and organised crime, as you have described, around the likes of shop theft that might be linked to somebody with a drugs habit, and that links into the serious and organised crime of drugs importation. From a neighbourhood policing perspective, it is key that the officers involved are consistent officers working with partners and understanding their local communities, so both the physical elements and the people elements of those communities are important. As part of the neighbourhood policing guarantee, working with the College of Policing, we are now working to professionalise the role of a neighbourhood police officer and PCSOs. We have just launched training on understanding around serious and organised crime. It is important that our neighbourhood officers, who are that kind of face in the community, who work with communities—including business communities—understand that these sorts of signs and symptoms could be evidence of serious and organised crime. They may not be, but they should consider as part of their patrol some of the links around antisocial behaviour—I am sure we will come on to it—some of the issues around shops that may be cash-based trade, and recognise that they might be a link into serious and organised crime. That is the work we are trying to do with the policing guarantee, as well as bringing additional officers into place, so that we have that visible patrol gathering intelligence at that level, an understanding for them to be thinking about whether what they see is an impact of SOC.

The next section I want to focus on is tackling serious and organised crime—dealing with the challenges. Where do you see that there are challenges associated with the co-ordination in the response between police forces themselves, but also those partner organisations—local authorities and the like—to get a grip on it?

Our regional organised crime units are the ones that co-ordinate the GAIN networks. That is the Government Agency Intelligence Network. That is where all of our law enforcement partners can come together to share intelligence and also have the opportunity to bid for resources and support. We use quite a consistent system across the country with all our jobs. We assess each operation on its threat, risk and harm. That will get a certain score that will then go into our regional tasking processes. It is that process that Trading Standards or immigration enforcement can use to seek, if they need it, surveillance support. They can put that job on the table, and we can all have a look at how we can all support each other. It works well as a system, but clearly all of these threats are working in the same system. Therefore, you do have to pay attention to the things that score the highest because they are the most threat to communities and people, and there are elements of vulnerability in them. I would also point out the fragility of funding; we heard about it earlier from colleagues. I would definitely say that that plays out in terms of Border Force, immigration enforcement, Trading Standards, policing itself, and even the regional organised crime units. The funding that they rely on for capabilities that have been embedded into policing for 10 years or so, is year-on-year funding, and that does make them quite fragile. If you are looking for things like clear, hold, build, which take longer than 12 months to implement and develop, you need that commitment for funding.

We had a clear, hold, build strategy in my own constituency in Keighley. While the end result worked quite well, it definitely highlighted the challenges of making sure that there was a clearly defined outcome strategy with those partnership organisations—the local authorities and so on. How do you see that being enhanced through sharing of information and data? What are the challenges specifically associated with that among those partnership organisations, or indeed internally within the police?

Regarding partnership organisations, as we said earlier, we are pretty good at sharing in terms of individual operations and individual jobs that are happening on the ground. There is a challenge with being able to share data across police forces. If we get the chance to talk about reform, I think that is a fundamental element of getting reform right regardless of what size police forces we end up with. We must be able to share data and intelligence across police forces that hold significant legacy data within them because it is really important for understanding threat, risk and that harm of particular operations. We need to get that right first. Even some of our regional organised crime units are doing some brilliantly pioneering work with data exploitation. It is not only efficient, but it really enables us to understand that risk and harm a lot more quickly. I would say that continuing to invest in data exploitation—those platforms—is really, really important to any success for the future.

I totally understand your philosophy of threat, risk, harm and how you analyse where your actions and focus should be. Obviously, it is focused on where there is violence, where there is violence against women and girls or where somebody is at risk of serious harm. Does that mean there is a deprioritisation of investigating the presence of organised crime on our high streets?

I would say no, because the regional organised crime units have a model of adopting, assisting or—oh, gosh, the words have gone from me now, but there is a methodology. They will do one of three things. Even if a job is not adopted, we will look to how, with the finite capabilities that we have got, we can assist to support those investigations. You would probably have heard about Operation Machinize, the nationwide approach to cash-rich premises in our high street that every single police force in the country played a part in, in terms of operational activity for that operation. I think the value for phase 2 of that is in aggregating all of that data to see what sits behind it. It can all be quite surface-level. You can go into a shop, and you can close a shop, and you can take the money, and you can arrest the people, but the big question is what sits behind it. Unless you research, analyse and look at all the information that you have gathered from the totality of your operation, you will never really understand the higher threats, which is when you can play for assets that the regional organised crime units have, the National Crime Agency, because you are showing a much bigger issue.

Wendy and Steve have described the national to regional and then there is the support that we receive locally. I can add something from a local policing perspective. There will be activity going on at a local level in areas that might not be scored as a threat on the assessments. We would call it tier 4 or potentially below. We have talked a little bit about working locally and the tactical working around it. Working with partners is really important for that neighbourhood policing element. Within our community safety partnerships, obviously responsible authorities have statutory duties to work around that, particularly with the serious violence duty now. We would be looking at things that have perhaps a more visible impact on the community. Thinking about concerns around deprioritisation, at a local level we may be looking at it from a different angle, such as concern from communities around antisocial behaviour or drug dealing in a certain area; but with that link in and that development from neighbourhoods around how they can work with partners, because it is important that such behaviour is seen as serious and organised crime; and then that two-way feed into the regional and the national supports us in being able to deliver that locally. There definitely is activity going on at a local level as well as the regional and national work.

One of the key words here is prioritisation, so the visible action on the high street, the Operation Machinize activity, is phenomenally important, absolutely. Almost all of those threats that were represented in Machinize and generally in the organised crime landscape emanate from abroad in some way, shape or form. Most of them have a national infrastructure around them. Therefore, it is right that we have a system that works at the national, regional and local level. Whether it is around the availability of drugs, the availability of firearms, or controls on our borders, it is important that we have a co-ordinated system. You asked about the challenges. One of them, of course, is prioritisation because there is more work available than there are resources to do it. This is not a pitch for money; that will always be the case. One of the biggest challenges, of course, is trying to prioritise across threats. Do I invest resources in dismantling a high-harm, child sexual exploitation online platform or a multibillion-pound money laundering system that goes from cryptocurrency from cyberattacks through to cash-based money laundering, or do I try to control the supply of synthetic opioids into the UK? They are very different things. That is why it is important to have it streamlined. We have an assessment of criminality. We have a clear strategy as to the route map and the actions that all of our organisations need to take. We have a local, regional and national performance programme that pulls that together, and there are clear roles and responsibilities. It is a complicated landscape: there are 43 police forces, nine regions plus the Met, each with their own governance, each legitimately with their own agenda and priorities. Yes, that is complicated. I would like to think that police reform can take us through that to some degree, but it will inevitably be a feature of the system that there are choices to be made.

We shall come on to reform as well towards the end. Can I ask about the Proceeds of Crime Act 2002? Do you feel that it gives enough power to be able to seize and recover criminal assets? If so that is fine, but if not, what additional powers do you think may need to be added or, from a legislative point of view, what needs to be considered?

I am happy to have a go at that though I don’t want to skip in front of others. On balance—and I have worked with my colleagues around this—the Proceeds of Crime Act is a good piece of legislation. We don’t believe it to be fundamentally flawed. There is incentivisation for organisations to take action that will take assets off the street. Obviously, there is a financial incentive, but we also know that it hits criminals where it hurts. It prevents them reinvesting in more harm. It does take time for the conclusion of operations to then be able to, in some cases, start the criminal process for asset recovery, but there is also the option to take the civil route for proceeds of crime as well. So I don’t come to you saying this is a flawed bit of legislation, to be honest.

Before I hand over to Jo, a final question from me about technology and the use of technology in assisting. How are police forces investing in technology to improve the response, improve the data collection, with that linkage in terms of dealing with organised crime, if at all?

This is where your system comes into play and where the National Crime Agency can do something once for the whole of law enforcement, and clearly that is the right thing to do. It is the same with the regional organised crime units. There is a reason why they work so well and why they were built. However, things in there are quite costly. They take quite a lot of training and commitment and they are quite niche. Therefore, why would 43 forces invest in doing it 43 times when we can do it 10 times across the country with the Met? With the Met, we invest quite a lot of technology into there so that it is available to all of the forces that the Met supports. There are a variety of programmes, and you are welcome to come out and have a look at our TOEX programme, which is tackling online exploitation. That is a platform that is built to support everybody in understanding the intelligence picture, bringing data together and exploiting it and making best use of it. We have policing.ai, which is newly being set up now and formed and which we hope will support the whole of policing in this landscape. There are pockets of areas that are already doing this well, but what we try to do—this is where I hope reform does step into this space—is do it once and do it well for policing. That is what we should do. That is where hopefully the national police service will come in.

Just very briefly, it is a continuing arms race around technology. It is something we are investing in. There are challenges around overcoming technical debt, but nevertheless we are making progress. Last year, the agency spent £244 million on our technology. The one point I would particularly add is around AI adoption and police.ai has been established with, I think, £115 million-worth of annual funding, to try to drive the sorts of efficiencies that you would expect from AI into systems. A final, final point on that is that covert intelligence gathering develops day by day in terms of technology. We have very productive relationships with the private sector, but also intelligence agencies to give us the best assets possible. I would not say any more—it is classified—but those relationships are there as you would expect.

Basically, what signs are the police looking out for when a shop is potentially linked to organised crime? How do you spot that?

I will respond from a neighbourhood policing perspective, although of course it is wider than neighbourhood officers, but they are the people who are working and patrolling day to day. As we have discussed, because SOC covers such a wide range of criminal types and issues, there could be a wide range of signs and symptoms. It will depend, and there are links, which we have talked about, across money laundering, people trafficking, and drugs networks. There are links between those elements of serious and organised crime as well. From a neighbourhood perspective, signs could be anything from children hanging around certain shops, which could be a sign of child criminal exploitation; cash and stock-rich shops that don’t appear to have many customers; and unusual opening times. We find sometimes that neighbourhood officers will report that they will attend shops, find that there will be people there, but no one will purport to be the owner or to work in that store. Of course all of those things could have innocent explanations, but there is an element there of getting those officers and staff to think with partners about what this could actually be. Key from a neighbourhood policing perspective is sharing that intelligence locally in the first instance. For example, where we have antisocial behaviour, we may already have case monitoring in place and be working with partners. We are looking at the different elements that we can support with. Policing may not necessarily be the lead agency around something; it could be a Trading Standards issue with local authorities, and we may not necessarily be looking at enforcement powers but thinking about safeguarding elements—how there might be a better way of tackling some of the initial signs of serious and organised crime. From a local perspective, that is what we would be looking at. I don’t know if there is anything Wendy or Steve want to add around that.

I would mention OPAL, which is the serious organised acquisitive crime response across the country. OPAL is jointly funded by the Home Office and what is call the Pegasus Partnership, which is retailers and policing working together. That team has managed over the last 12 months to focus upon the higher end of criminality operating in shoplifting and thefts on our high street, and therefore looking at the organised crime element within that as well. By focusing on the people committing the most crime in that particular space, they have seen a 73% reduction in offending in that area. It has supported retail crime operations across the country and obviously reduced the amount of money lost through that as well. I want to highlight some of that. It is a bit more nationally co-ordinated than a very local response.

How would the police respond locally? OPAL sounds very good, but I have not seen that rolled out in my area. How would a police officer respond in my area?

Locally if, for example, neighbourhood officers saw something that they thought might be a sign of serious and organised crime, reporting would be through working with their partners. Most local areas have business crime reduction partnerships that retailers are part of. We work with Trading Standards, so there would be discussions at that level. We would also expect local officers—and they will be well sighted on this—to submit intelligence through our intelligence systems, which are linked, and we have analysts that would pick up on some of those different types of threats, which would link up into and build the regional and national picture.

I have met with my local police officers on this issue and have been told that analysts cost money and therefore there is a financial commitment to it. The data and information might be there in plain sight, but the finances are not there to deal with that in-depth information. What would trigger bringing the analysts in and fund it?

From a local level, again, it is about each of the forces having their own policing and crime plans and their own priorities. They lean into the ROCUs for support around some of that area, and some of the areas where we have also got support nationally through to some of the work that Wendy spoke about. It is not about deprioritisation but about balancing threat, harm and risk. We may decide, for example, to look at building that picture rather than dealing with it in the first instance. Some forces will have geographic-based analysts; others will be looking at threat-based harm. Again, it is about understanding the piece. Steve has spoken about the strategic assessment that has recently come out from the NCA and the serious and organised crime strategy—feeding that down. We will be working through that at a local level, reporting it. At that local level, we would have local responsible officers who will build what are called 4P plans. Where we have threats, we would also be looking at those through the ROCUs and, with their support, at how we manage those threats both to individuals and place-based at that local level, with ownership probably with local neighbourhood inspectors and chief inspectors who are called local responsible officers. You are right, of course: analysts cost money. As Steve said earlier, this is not about coming in and saying, “We need more money.” This is about how we balance those priorities and how understanding of serious and organised crime is fed into the work that neighbourhoods do.

Like most small towns, we have seen a growth in vape shops, barber shops, and so on. How much does the NCA regard organised crime to be a city-based activity or something that is now percolating into the small towns of the north, for example?

It is right to say that organised crime is everywhere in the UK. Of course you will see visible representations in big cities where it might become more apparent. The experience of the country policing county lines as an organised mechanism of moving drugs across the country highlighted that that was very much about supplying organised crime into rural communities. I have met with local leaders in parts of the country where they are really concerned about things like theft of plant and farm machinery as an example of organised crime as well. This is a national challenge and an international challenge.

A local businessman in my constituency is quite good at looking at who owns property and has been using his detective skills on property ownership. He has suggested to me that there is a link between cash-intensive businesses involved in money laundering and Chinese underground banking. Would you agree with that analysis or is that something that he has picked out of nowhere?

Whether that person is right is another matter, but is there a phenomenon of Chinese underground banking in the UK? Yes, there is; our assessments say as much. Therefore, yes, there may well be connections between businesses that appear to be cash-rich or individuals who don’t appear to have legitimate means to fund their lifestyles. Some of that may well be linked to money laundering of all techniques and tactics, and may well be Chinese underground banking.

What are the lessons from Operation Mechanize?

I would say that we need to do more of it. Wendy talked about phase 2. We have had two phases of Mechanize so far and there is additional funding for this year to go further. A point we have not made at this session is that law enforcement can only do so much. Sometimes there are underpinning conditions around organised crime that we need other Departments to step into. The ability or desire for people to operate on the high street in this way is, in part, a consequence of perhaps a lack of demand for other types of shops and resources on the high street and other enforcement. There is something about looking at the underpinning conditions that allow people to take over properties and it being economically viable for them to do so. I think that is fair. Then there is a broader point, not specifically about Mechanize, but about the conditions for criminality and the support for people who don’t want to be involved in criminality but get drawn into it, whether it be about education, role models or employment. It is a well-trodden path that you can reduce criminality in the long term by that sort of investment, which will come from outside of law enforcement. I am sorry if that is a side point, but you get my point.

Yes, I totally understand what you are saying. Obviously, you rolled out the November exercise across the country. Is that something—perhaps you cannot say—that you intend to repeat, or is it a model that you would like to institute across the whole of the country?

Yes. I think I can say that there is a small amount of money available to continue that work and consolidate it so it becomes more permanent. Most people would say we would like more money to do more activity more regularly. The point that has been made is that doing this one-off and then moving away does not solve the problem; there needs to be continued effort, and that is what Mechanize will do and continue to do. I accept there will be much more demand for the service than we can provide.

Who would you say is responsible for maintaining those gains?

Maintaining the gains?

Yes.

It is easy for me from a national organisation to say this. I would say that it is a local responsibility to take the ground. That is the clear, hold, build methodology, isn’t it? My frustration from 30-odd years of doing this is that we don’t always hold the ground for long enough, but in part that is a responsibility for local authorities and local services.

There is something that we can all do, though, isn’t there? Again, it goes back to my point of what sits behind it all. We are so data-rich from that phase of Machinize that we did last year. We don’t want to miss the opportunity to use all of that to our best advantage, to identify the higher-value targets that sit behind it and the locations that were more fruitful than others that might need a bit more attention. There will be an element of thematic understanding of who or what is causing the most threat, but also a geographical point, where we will perhaps come out and do more focused activity on specific areas that stood out from looking at the whole, the totality of Machinize.

Wendy, to what extent do you think shoplifting is linked to serious and organised crime?

This goes back to my point about the work that OPAL is doing. You have to bear with us, in that Catherine and I are not the serious and organised acquisitive crime leads. We do have one of those in policing if you want to talk in more detail about it. I can say this. Having OPAL as the team that looks at the whole of the shoplifting threat across the country and identifies the top tier of people who are committing cross-boundary, cross-geography shoplifting and thefts, and targeting them, arresting them, putting the criminal justice outcomes in place and reducing their ability to commit crime has resulted in that 70%-odd reduction of offending from those particular individuals. If you target the people that are going to cause you the most harm and prevent it, you will have the biggest impact. I suppose it is the same in that space as well.

Steve spoke earlier about the national strategic assessment that was recently published. Organised retail crime has shown some signs of stabilisation since 2024. However, within the strategic assessment, the threat and harm from organised acquisitive crime—and obviously that is linked into organised retail crime—has not substantially changed. Although we may see impacts, the threat and harm are still there. It is something that we have all talked about. It is important that we continue to work really hard on with our partners.

My seat has prolific shoplifting. What are the police doing about organised shoplifting? When does shoplifting move from somebody trying to fund their own drug habit to become an organised crime set-up? Also, where the police locally are often abstracted, like in my seat where it is a big thing—we are out of London and your eyes and ears in the community are not in the community—what do the police do about shoplifting when it becomes serious but the people that the police rely on to be their early warning system are not there?

In the law enforcement world, there are definitions of things. The individual who is shoplifting to fund their habit, although it might link into serious and organised crime, would not be treated as a serious and organised crime threat at that point. Serious and organised crime can be two people doing that for financial gain and, as you say, it probably happens more in city centres. However, it is expanding into other areas, and then we see that more organised element. I think you mentioned the neighbourhood policing work and the abstractions. In terms of the guarantee, obviously we are looking through that programme to 2029 to increase our neighbourhood personnel by 13,000. We will have increased by just over 3,000 across England and Wales in the previous financial year. We are just waiting for the final data. What is really key, though, is that the numbers are not the answer to the problem. You referenced your concerns around the availability of officers. We are in the process of looking at national abstraction standards. You have heard us reference this before. Obviously, forces are operationally independent. At the moment, the chief constables will make decisions about where they need to deploy officers operationally, but those standards and working with the college around an authorised professional practice this year will give clear guidance around those elements. There will always be exceptions and operational necessity for officers to be abstracted, but the purpose of the guarantee is not just about the numbers; it is having those officers visible, those named contactable officers, looking at the breadth of neighbourhood policing, so our police staff and special constables as well. Over the last year we have grown, and we are probably now starting to work on what the impact of that actually delivers for local communities. That is the work we are doing from an NPCC perspective this year.

I speak to a lot of the retailers where this is all going on in the retail part of the seat, and the reporting is very different and very varied. Shops are trying to make a profit; I understand that. The reporting is hard, really, because often you will go in and the police will arrive and such incidents are not reported for very good reasons. How do you think we can improve that?

We have the National Business Crime Centre. Superintendent Lisa Maslen leads that. Its priority role is to work with businesses to support the work that businesses can do to help reduce shoplifting, assaults on shop workers and various other offences that retail and wider business crime will see, but also look at ways that we can support them in terms of how best to report. Data shows us that what the business retail consortium will say is happening about shoplifting is very different from reported crime. There are lots of reasons why they will say that is or isn’t reported. Some of that is potentially related to the police response; some is related to the amount of work and the concerns in terms of their businesses in reporting, attending court and writing statements. There is work ongoing at the moment to look at routes for businesses to report more easily. Our website, Single Online Home, already enables businesses to report directly online if they wish. Again, that business crime centre gives us that focus, which—albeit nationally based—we are supporting and working on at that local level around setting standards, reflecting expectations from retailers around what we would want in terms of crime reporting, and what we need and why we need it, but also expectations from policing. Each of the forces will have a single point of contact that works as a liaison between the National Business Crime Centre and local forces too.

I am conscious that in about nine seconds it will be 6 pm, and I know that you have a hard stop. We did not get to the question on the White Paper reform, and we have some significant questions that we might write to you on, if that is okay, to get the level of feedback that will help the inquiry and enable us to ask you some further questions at a later date, if that is possible. I don’t want to not do the section justice, so we will write to you on that, but thank you all for your time this afternoon. It has been much appreciated.