Soaring UK Crime Costs Economy £250bn A Year Report Says Blame Lies With Austerity

Soaring crime levels are costing the UK economy a staggering £250 billion annually, according to a report by the centre-right think tank, Policy Exchange. The report attributes this alarming economic burden to years of austerity measures that have severely undermined the police, judiciary, and prison systems. Backed by former Chancellor and Home Secretary Sajid Javid, the report paints a grim picture of how these funding cuts are not only fuelling an economic crisis but also damaging societal confidence.

The study estimates that crimes such as shoplifting, which it labels as an “epidemic,” are directly costing businesses, the public sector, and individuals around £170 billion per year. This figure equates to 6.5% of the nation’s GDP. Beyond this tangible financial hit, the report also highlights the intangible costs associated with a growing fear of crime, which discourages consumer and business activity, pushing the total estimated cost as high as 10% of GDP.

Policy Exchange advocates for increased government investment in criminal justice. The think tank suggests an additional £5 billion annually to address prison overcrowding, expand the policing workforce, and clear backlogs in the court system. This recommendation echoes concerns from politicians, particularly those in the Labour Party. Keir Starmer has previously criticised the Conservatives for years of police underfunding and lenient sentencing, which he claims are enabling the current crime surge across the UK.

The report also calls for tougher sentencing reforms, including automatic harsh penalties for repeat offenders and the deportation of foreign criminals. Javid, although proud of his record tackling crime during his time in government, acknowledged that significant challenges remain. He emphasised the links between public safety and economic prosperity, stating that societies which uphold law and order create the necessary conditions for thriving businesses and communities.

This increase in crime has manifested in police-recorded offences rising substantially since 2015, with shoplifting up 51%, robberies up 64%, and knife crime offences soaring by a shocking 89%. These figures, coupled with businesses warning of costly theft, underline the pressing need for action. Retailers, such as the John Lewis Partnership, have described the situation as an unprecedented challenge.

Despite calls for urgent spending, the government faces a complicated financial landscape. Labour’s promises to fix public services while avoiding a return to austerity may clash with defence spending priorities outlined in the upcoming spring spending review led by Chancellor Rachel Reeves. Questions remain about whether the necessary resources will be allocated to tackle this growing crisis, or whether competing priorities will leave the justice system underfunded.