The most common and most likely answer to this crossword clue is the 5 plus 2 letter word LOCKS UP
I've seen this crossword clue in The Daily Telegraph
L
O
C
K
S
U
P
Buddy explains!
The straight part
We know that "What a policeman does to a criminal/hair-raising" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case what a policeman does to a criminal/hair-raising = locks up.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.