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5.13 pm

Norman Baker (Lewes): This is a welcome Bill. It is a sensible measure that closes loopholes and makes the law more effective in tackling crime—an objective that all of us will share. That is why the Liberal Democrats will support the Bill tonight if there is a Division.

That is not to say that there are not a number of details about which we have concerns and legitimately want to raise issues. I will refer to some briefly now and look forward to discussing them in detail in Committee. I hope that we can proceed on the basis of all-party support. Some hon. Members were a little harsh about the Conservative spokesman, the hon. Member for West Dorset (Mr. Letwin), who has now disappeared from the Chamber. He tried to be constructive—he may have been a little wrong on one or two issues—but he made a thoughtful speech. I hope that we will not have unnecessary confrontation on the Bill, either tonight or in Committee.

It is right that, as a nation and as a Parliament, we turn our attention to the financial aspects of crime. As the Government have said, some two-thirds of crime is motivated by profit. It follows that if we can significantly depress the likelihood of financial gain, the incentive to commit crime in the first place will be reduced. A precedent will be set for those thinking of following suit: the role models will be less attractive if there are no financial benefits to enjoy at the end. We must take away the status symbols—the fast cars, the luxurious swimming pools, the affluent lifestyle—that are so often built on foundations of crime, corruption and misery.

Incidentally, that may present a problem for the head of the asset confiscation unit that the Government propose. Judging by the experience in the United States and Ireland, that person may have difficulty in offloading casinos, racehorses and lap-dancing clubs. There is a limited market for those assets, but I am sure that the person concerned will do their best to ensure that they are sold off and the proceeds used for proper purposes.

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It is good to see the Government tackling the big fish in this way. It is easy to concentrate on what I would call simple criminals—the ones who rob banks and commit traditional crimes, who are often from the poorer elements of society—while more sophisticated criminals are allowed to get away with it. Such is the wealth and status that those criminals accumulate, and so extensive is their knowledge of the law, that they often become pillars of society, enjoying a respectability that is built on a foundation of corruption.

Mr. Foulkes: They could even be members of the Liberal Democrat party.

Norman Baker: I do not think that that is true, but you never know.

Criminals want respectability. Parliament should work to deny them that respectability, and to take it away from those who already have it. Hon. Members should work together to make sure that that happens, and that the Bill and the House send out the message that crime really does not pay.

The Bill will also prevent criminals from funding further criminal activities. I was struck that the brief from the Under-Secretary of State, the hon. Member for Coventry, North-East (Mr. Ainsworth), stated that, in the period 1990–2000, confiscation orders worth £20.5 million were made against drug traffickers. The brief rightly says that that is equivalent to 1,000 kg of heroin. We all know the links between drug money and crime. The National Crime Squad has said that 1 kg of heroin is equivalent to stolen property worth £220,000, or the proceeds of 220 burglaries. Therefore, it is not simply a matter of pulling in criminals or those using money for improper purposes: we must also protect the population at large from the consequences of that activity.

The Bill's detailed powers will allow better tracing and securing of assets, and they include the power to seize suspect cash. It is right to close the loophole that allows some cash but not other cash to be seized. The Bill will also allow restraint orders to be made available at the start of an investigation, rather than at a later stage. That is worthy of support in principle, as these days assets can be moved out of reach, quickly and without much effort, by pressing a button or clicking a mouse. We need to even up the battle between the law enforcement authorities and the criminals, as the latter may have gained the edge in recent years.

The Bill also facilitates criminal confiscation, by establishing a new basis that covers all crimes. Again, that will affect the most versatile criminals, whose fiefdoms cross the boundaries between crimes involving, for example, drugs, prostitution or tobacco smuggling. The civil recovery scheme, as set out by the Minister in his introductory remarks, will make it easier to track down those criminals, to bring them to justice and to seize their assets.

The Bill also contains new taxation arrangements. Who can disagree that it is right in principle that undeclared or otherwise inexplicable income should be taxed? That seems to me uncontroversial. Other hon. Members have noted also that the provision will strengthen existing money-laundering arrangements.

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I have one or two questions for the Minister. First, there is now a range of options for dealing with people and their assets. They include criminal prosecution, civil action to recover assets from people who have not been convicted of a crime, and the taxation of assets. Will the Minister clarify whether that range of options amounts to a strict hierarchy that will be applied? I see that the Minister is nodding. My colleague Jim Wallace, the Scottish Justice Minister, has said that prosecution of criminals must always take priority, and that it will continue to do so, adding:


I am pleased that the Minister endorses the hierarchy identified by the Scottish Parliament.

How will it be decided which avenue to pursue? There will have to be an assessment of whether criminal proceedings can be sustained. I guess that the normal test will apply, but sometimes such decisions are borderline. Can two avenues be pursued simultaneously or, if criminal proceedings have been started, will that prevent civil proceedings from taking place until the criminal proceedings have concluded? Can two such procedures take place in parallel, and do the Government regard that as a good or a bad idea? Some clarification would be helpful.

I understand from my Scottish colleagues that in Scotland both criminal and civil proceedings are initiated by the Lord Advocate, but in England initiation proceedings will be divided between the Crown Prosecution Service and the director of the Assets Recovery Agency. What mechanism will exist between the two bodies in England to ensure that appropriate action is taken at the appropriate level and that there is no overlap? Will the Minister also confirm that no conflicting action will be taken?

In an earlier intervention, I referred to a person who has been subject to criminal proceedings and has been acquitted. The Minister said in response that such a person could be subject to civil action. That was a clear answer, for which I am grateful. I understand that the test for criminal proceedings is different from the one which applies to civil proceedings. That is clearly set out in the legislation. To the person in the street, however, it may look rather odd if someone who has been subject to high-profile criminal proceedings has been acquitted and then the same information is used for a further action against that person, which may or may not be successful. If it is not successful, taxation action can presumably be taken. That will look a little odd unless there is a very good explanation for it. There is a potential problem here, at least in presentational terms. I draw it to the Minister's attention as I know that the Government are interested in presentational points.

Simon Hughes (Southwark, North and Bermondsey): Surely not.

Norman Baker: My hon. Friend says, "Surely not." Perhaps I am wrong and the Government are not interested in spin after all.

I am concerned that the new arrangements could effectively be akin to plea bargaining. Despite evidence against someone for dangerous driving, for example,

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it may be decided that a prosecution cannot be guaranteed to be successful. Under those circumstances, a guilty plea would be agreed for the lesser charge of driving without due care and attention. If criminal proceedings might not be successful and assets can be returned or accumulated as a consequence of civil action, there might be a mechanism to guarantee—perhaps with the agreement of the person who holds the assets—that criminal proceedings will not go ahead. It is important to clarify that because that could be a dangerous road to go down—fewer criminal proceedings could take place if lesser actions were guaranteed to be successful. I am keen to understand the Government's thinking on that.

The shadow Home Secretary, the hon. Member for West Dorset, who is not yet back in the Chamber, referred to the important point about third parties. Those who are aware of the legislation will doubtless seek to ensure that even at the initial stage they take action to prevent their assets from being frozen. They may seek to transfer assets elsewhere—to another member of the family or to bank accounts in countries where the Government's writ does not apply. If there is no agreement between the two nations, the Government will not be able to retrieve the assets. How will the Government ensure that the law is not circumvented by such manoeuvres at that early stage.

Innocent third parties could be affected by assets being frozen. What about innocent family members, who may not be aware of illegal or improper activities undertaken by another family member or by a business partner? What about someone whose income may result from someone else's criminal activity but who has been at arm's length and unaware of that activity? Why should they be penalised in those circumstances? How will the Government seek to establish motives, and what safeguards will exist to protect innocent third parties without weakening the proper measures taken against those against whom the Government wish to proceed?


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