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Serious Fraud Office wins reprieve after May fails to mention abolition plan

LONDON (Reuters) - Prime Minister Theresa May on Wednesday left plans to abolish the Serious Fraud Office (SFO) out of her government’s two-year programme in an omission lawyers said could signal an end to the controversial pledge.

Prime Minister, Theresa May and opposition Labour Party leader Jeremy Corbyn, walk through the Peers Lobby in the Houses of Parliament during the State Opening of Parliament in central London, Britain June 21, 2017. REUTERS/Kirsty Wigglesworth/Pool

May’s Conservative party pledged in policy proposals before a June 8 election to fold the SFO, which prosecutes high-level fraud and corruption in British business, into the National Crime Agency (NCA) - a government department whose remit runs from tackling organised crime to child protection.

The Conservatives said the move would “strengthen Britain’s response to white collar crime”, but the plan was roundly criticised by senior lawyers who said it risked undermining the fight against complex economic crime and had not been justified.

Some legislators also sprang to the defence of the SFO, which reached settlements this year with Rolls-Royce and Tesco to end investigations into, respectively, bribery allegations and an accounting scandal.

May’s failure to win a parliamentary majority in the June election forced her to pare back the government’s ambitions. The proposal to abolish the SFO was notably absent from Wednesday’s Queen’s Speech, in which the government outlined its policy programme.

Private-sector lawyers said the SFO appeared to have won a reprieve.

“It does look as if the SFO is safe but if she (May) does try to absorb it into the NCA, she will find that the policy meets fierce resistance and I would expect her to be defeated on any vote in Parliament,” said Stephen Parkinson, a lawyer at Kingsley Napley.

Lawyers said the SFO’s unprecedented move on Tuesday to criminally charge Barclays and four former senior executives over alleged crimes during the credit crisis showed it had the skills to take on the British establishment.

Ben Rose, a lawyer at Hickman and Rose, said dropping the abolition plans would mean the government had “made the right decision for the wrong reasons; political expediency”.

But he added: “The SFO needs a political champion and proper resource rather than to be treated as a political football.”

The Queen’s speech, prepared by ministers and read out by Queen Elizabeth, comes as May is still trying to secure a deal with Northern Ireland’s Democratic Unionist Party to shore up her government.

Aides to May said the government remained committed to some policies not mentioned in the speech.

“What we’re saying on that is that we will consult widely and decide the next steps forward,” a spokesman said.

Duncan Hames, director of anti-corruption group Transparency International UK, said the government “appears to have heard the deafening chorus of expert voices saying it (SFO abolition) was a bad idea.”

But he said lingering uncertainty would blight the SFO’s reputation and stability. “The government should, without delay, make a definitive statement laying this issue to rest,” he said.

The SFO declined to comment.

Additional reporting by Elizabeth Piper; Editing by Adrian Croft