By William James
LONDON (Reuters) - Britain is losing the battle against cyber crime and needs a new crack crime unit to fight the growing problem in cooperation with its global partners, particularly the European Union, a panel of lawmakers said in a report on Tuesday.
The Home Affairs Committee, which scrutinizes the government's domestic policy, said the "state-of-the-art espionage response team" would encourage companies, banks and institutions to report hacking attempts to uncover the full extent of online crime and halt its rise.
"We are very concerned that there appears to be a ‘black hole' where low-level e-crime is committed with impunity," the report said.
The government has said it will consolidate cyber crime policing into a new unified structure as part of a shakeup of the country's policing structure, but the report said this did not go far enough.
Other government efforts to rein in Internet crime include a partnership with the defense industry and telecoms companies, announced earlier this month, which aims to safeguard the country's defense supply chain against cyber attacks.
Prime Minister David Cameron last week also tightened up online pornography laws and demanded that Internet firms block access to child abuse images.
The committee said these efforts did not go far enough, however, and said the government was still too complacent when it came to cyber crime, ranging from identity fraud and data theft to the spreading of illegal images and extremist material.
Last week, five men were charged in the United States in connection with the largest cyber crime case in U.S. history. Major multi-national corporations such as Visa and French retailer Carrefour were among the victims.
"We are not winning the war on online criminal activity," said opposition MP Keith Vaz, chairman of the bipartisan committee, which heard evidence from police, industry bodies and security experts over the course of a 10-month investigation.
"You can steal more on the Internet than you can by robbing a bank and online criminals in 25 countries have chosen the UK as their number one target."
The committee expressed concern that Britain was isolating itself by deciding to opt out of many EU-wide justice measures, but also criticized individual EU members for not doing enough to stop attacks.
"We are deeply concerned that EU partner countries are not doing enough to prevent cyber attacks from criminals within their countries on the UK," the report said.
(Editing by Sonya Hepinstall)