Monday saw the pound spike and the FTSE 100 creep back into bull territory following Andrea Leadsom’s exit from the Conservative party leadership race. It was clear that bookies’ favourite Theresa May’s campaign to frame herself as the candidate for stability in the post-referendum chaos had resonated deeply with markets.
Yet while those in the Square Mile might be enjoying a brief moment of respite, the mood on Cockspur Street is likely to be markedly more gloomy.
Since her arrival in 2010, despite opposition from cabinet, May has been doggedly pursuing the Serious Fraud Office (SFO), seeking to chip away at its powers, break it up and bring it under the umbrella of her FBI-style National Crime Agency (NCA). Today, she is taking over the top job in government.
The certainty of the SFO’s future, along with its blockbuster government funding, seems to wax and wane in line with its success rate. With every failure, from the Tchenguiz brothers fiasco to the acquittal of all six brokers in January’s Libor trial, the SFO comes under renewed scrutiny.
Recently, however, the SFO has been enjoying a period of success and has started to flex its muscles. The record sentencing of Tom Hayes seemed to instil a renewed confidence in the SFO – it went on to secure the country’s first ever Deferred Prosecution Agreement with ICBC Standard Bank (a second has just been approved), is currently undertaking several major ongoing investigations (including into ENRC) and just last week saw the eight-month long trial of the so-called Barclays five culminate in three successful convictions.
Small wonder then that SFO director David Green likes to talk tough. With this string of victories under his belt the SFO’s future looks more secure than ever before. Meanwhile the NCA is still reeling from its widely reported search warrant scandal in November.
But if Green is not starting to think about his future, he should be. The SFO relies heavily on blockbuster funding from the government, and the new Prime Minister will be inheriting an enormous budget deficit. May will be primarily concerned with unifying the warring factions of the Tory party, but the cuts may well be on the agenda if the economy falters.
And there is one unavoidable fact of which Green must be acutely aware and which will likely resonate with May’s bean counters: the NCA is simply cheaper to run than the SFO.