Proceeds of Crime Bill

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The Chairman: Order. This is a narrow clause. It concerns accreditation and training—nothing else.

Mr. Hawkins: I am grateful to you, Mr. McWilliam, but you will understand why we wish to draw a comparison with recent events. This is indeed a narrowly drawn clause but the distinction between what is compulsory and what is permissive is important. It is an issue that will crop up in other clauses. We will have quite a few debates about the use of ``must'' or ``may''. We will be interested to hear the Minister's justification for this being compulsory.

Mr. McCabe: I wonder whether we are beginning to witness the first signs of an Opposition rift. Earlier, the hon. Member for Cities of London and Westminster urged the Minister to ensure that the person appointed director had the knowledge, training and experience to carry out the job. Then the hon. Member for Spelthorne expressed his concern that the canteen lady might be asked to perform duties beyond her capability. Now the hon. Member for Surrey Heath is arguing that any Tom, Dick or Harry could be the financial investigator and that it does not matter whether they have any training or accreditation. Does he feel any embarrassment about the different positions adopted by his colleagues?

Mr. Hawkins: That was a nice try, but the hon. Gentleman's point had a significant flaw. His description of my argument was incorrect. We are not saying—

The Chairman: Order. It had another significant flaw. It was not relevant to the amendment and should not be discussed further.

Mr. Hawkins: He nevertheless reached the end of his point. My point is not that any Tom, Dick or Harry could be a financial investigator. That is not what the amendment is about. We say that the director may establish a system for the accreditation of financial investigators if he so wishes, but that it would be wiser for the Government to leave it to the director to see whether that is how he wishes to conduct the affairs of the new agency. How widely has the Minister consulted? When I reminded him about it on the previous clause, he talked about consultations with the National Crime Squad and NCIS but he did not touch on the Serious Fraud Office, fraud squad and special branch.

Have the Minister and his officials talked to the Financial Services Authority? I have fairly extensive experience of the current and past regulatory structures in the City of London, which were at the core of my job when the regulatory system was much more complex and parts of the City of London had different regulatory bodies. The Government have created a new, super-regulator—the Financial Services Authority—and we want the Minister to tell us whether it is happy with the blanket powers that the Government propose.

Is it anticipated that one of the pools of recruitment for the new accredited financial investigators will be people who currently work for bodies such as the Serious Fraud Office and the FSA? Will the financial investigators have access to some of the existing databases? I was horrified to learn that a good financial database that was built up by an earlier regulatory body, known by the acronym FIMBRA, is being thrown away. That is relevant when the role of the new accredited financial investigators is being considered and we are deciding whether the power should be compulsory or permissive. FIMBRA built up a superb computer database with which to track the rogues: an independent financial adviser who had defrauded people in one part of the country could be tracked if he moved somewhere else and prevented from operating. Accredited financial investigators will need to have such skills, and we want the Minister to tell us whether the people's experience in the City in the past 10 or 15 years, when the current process of regulation was being developed, will be used.

Mr. Tredinnick: Does my hon. Friend agree that a regrettable prejudice against the City can be detected in some contributions from Labour Members? My hon. Friend the Member for Cities of London and Westminster made an important point: if we do not listen to the City, which is the main financial centre in Britain, we will be enacting an measure that does not carry with it a large proportion of those who will have to work with it.

The hon. Member for Birmingham, Hall Green (Mr. McCabe) suggested that there were rifts among Opposition Members, but there are divisions among Labour Members, and not just in the Lobbies. Before he fires his arrows at the Opposition, he should ponder some of the statements made by his hon. Friends.

The Chairman: Order. That intervention was rather wide of the mark. I remind hon. Members that interventions are supposed to be brief. Hon. Members who want to catch my eye can do so.

Mr. Hawkins: I am grateful for my hon. Friend's intervention. He is right. He shares my interest in financial services regulation and in that respect it is fair to say that one of the most active—

The Chairman: Order. The hon. Gentleman should not pursue the matter. Let us stick to the amendment, which is strictly on the subject of accreditation and training.

Mr. Hawkins: Yes, Mr. McWilliam.

I have raised the Opposition's concerns on the matter and I shall be interested to hear what the Minister has to say. Unless he can satisfy us, we may have to return to this important point on Report and in another place. I hope that if he cannot accept the amendment he will at least undertake to reflect with his officials on whether we may have a serious point. We are happy for the director to have some powers, but they should be permissive, not compulsory.

If the Minister undertakes to reflect on that and says that if he decides on reflection with his officials that we may have a good point and that he might table a Government amendment, that would be helpful. However, if he does not, we may have to return to the matter. I suspect that such issues will be regarded with considerable anxiety by people involved in the City of London, who follow our proceedings with care.

12.30 pm

Stephen Hesford: I urge my hon. Friend the Minister to reject the amendment. The director must satisfy himself that the financial investigator is able to do the job. That will also ward off what I would categorise as attacks from people in the City. If financial investigators were not accredited, their work would be more open to attack from those in the City. With respect, I suspect that that is precisely the point that Opposition Members are making.

Mr. Carmichael: I am much more comfortable saying that, on this occasion, Liberal Democrat Members disagree not merely with the rhetoric but with the amendment. In moving it, the hon. Member for Surrey Heath referred to the construction of the Financial Services Authority, and he makes a valid point inasmuch as that was a chequered, difficult and involved procedure. In my experience of such matters, if something is difficult, reasons can be found for not doing it unless it absolutely has to be done, and for that reason the inclusion of ``must'' instead of ``may'' is important. I return to the point that I made earlier about the importance of Parliament making a clear statement on the direction of what will be an arm's-length agency.

Mr. Davidson: The Bill states that the director must establish a system. Could he establish two systems? Will there be a Scottish equivalent of ``accredited financial investigator'', or will the one category cover both? Legal and financial measures are sometimes different in Scotland, and I should be grateful for the Minister's clarification.

I hope that if we find that we must have one system, two methods—

Mr. Hawkins: To coin a phrase.

Mr. Davidson: Thank you. I hope that in such circumstances we would ensure that as far as possible we avoid producer domination. In the event of differences in nuance between the Scottish and English systems, enormous scope will exist for separate courses, lecturers and accreditation, and enormous costs will be built up by the producer interest. I hope that we would ensure that any differences are minimal.

I take it that this will be our only argument over the question of ``must'' and ``may'' and that if the matter is resolved in this case it will not arise as a matter of principle at later stages in the debate. This seems to be the first attack by the Conservatives, who are trying, have tried and will continue to try to emasculate the Bill by inches—or rather, centimetres.

I do not believe that everyone in the City is a crook, but I do not believe that they are all not crooks, either, and the fact that the City and some professions such as lawyers, bankers and accountants have failed to put their own house in order means that the Government have to take action. Simply saying that the City creates some wealth for the country as a whole does not mean that any practices that take place there must be allowed to continue willy-nilly. It would be far better for the country as a whole if the Conservatives showed some anxiety about the lawyers, bankers and accountants in the City and elsewhere who help distribute the proceeds of crime.

The Chairman: Let me tell the hon. Gentleman that the meanings of ``must'' and ``may'' vary enormously, and make the difference between a probing amendment and a matter of extreme principle. Amendments will be selected according to whether they are in order.

Ian Lucas: I, too, urge the Minister to reject the amendment. The creation of a system of accredited financial investigators will form an important check and balance on the director of the agency. That will make the agency more effective, because any complaints about a person's conduct can be measured against that system. There is no reason why the director cannot be closely involved in setting up the accreditation system of financial investigators. It is important that the system is put in place, and that the director helps to set it up.

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Prepared 13 November 2001