House of Commons portcullis
House of Commons
Session 2001- 02
Publications on the internet
Standing Committee Debates
Proceeds of Crime Bill

Proceeds of Crime Bill

Standing Committee B

Tuesday 20 November 2001


[Mr. John McWilliam in the Chair]

Proceeds of Crime Bill

Clause 10

Available amount

Amendment proposed [this day]: No. 32, in page 5, line 30, leave out paragraph (b) and insert—

    `(b) to pay any sum which is a lawful and bone fide debt.'.—[Mr. Grieve.]

4.30 pm

Question again proposed, That the amendment be made.

The Chairman: I remind the Committee that with this it will be convenient to take amendment No. 75, in page 5, line 33, leave out subsection (3).

The Minister of State, Scotland Office (Mr. George Foulkes): Before the break, one of my colleagues was saying that my responses to Opposition Members may be too kind and generous. I was pointing out that the amendment, like most of the Conservative party's amendments, would weaken the Bill's powers to deal with those who have gained proceeds through criminal action. It would make it more difficult for such proceeds to be recovered, and I find that astonishing.

Mr. Dominic Grieve (Beaconsfield) rose—

The Chairman: Order. Before I call the hon. Gentleman to speak, I wish to say that gentlemen may remove their jackets. Those who have done so already without permission had better consider putting them on again.

Mr. Grieve: The Minister's remarks surprise me. Our job is to scrutinise the Bill. If there are areas in it that need to be strengthened, we shall suggest ways in which that can be done. It is difficult to see areas in which the Bill could be strengthened, as I think is the Government's intention. Indeed, if we were to embark on such a strategy, we might end up with a regime such as that run by Mola Omar. We are heading gently in that direction as it is. If legitimate areas require strengthening for the purpose of ensuring justice, we shall table the appropriate amendments.

Mr. Foulkes: We have not seen any yet. Issues can be probed just as well by proposing to make matters harder for criminals as they can by proposing to make matters easier for them. Yet again and again, time after time, amendment after amendment, all we get from the Tories, who profess to be hard on criminals and to want to confiscate the proceeds of crime, is, ``Oh, no. Let's make it a bit easier. Let's find exceptions. Let's find ways round it. Let's give them loopholes.''

Mr. Nick Hawkins (Surrey Heath): We all understand the party political knockabout in which the Minister is now indulging. However, he has chosen to make such comments about absolutely the wrong clause. Even the hon. Member for Glasgow, Pollok (Mr. Davidson) understood that amendment No. 32, of all those that we have discussed, has the least to do with happens to the defendant. Until the Minister spoke, I thought that the Committee had accepted that the amendment was about innocent people who might be unfortunate enough to have dealings with those who are the subject of the Bill. The Minister is on the wrong track.

Mr. Foulkes: Aha. I am about to prove the hon. Gentleman wrong. Nothing could be further from the truth. Genuine worries have been expressed about debtors, especially by Liberal Democrat Committee members.

Mr. Hawkins: All of us have expressed concern.

Mr. Foulkes: Perhaps Conservatives have expressed concern, too. The amendment would substantially undermine the Bill's provisions.

Mr. Mark Field (Cities of London and Westminster): The Minister believes that Opposition Members are being awkward or soft on criminals, but we are scrutinising the provisions. Such matters will receive the same scrutiny—if not more—from solicitors and barristers when they go to court. There must be a sense of justice. We are discussing the payment of a lawful and bona fide debt. We do not want innocent third parties to suffer three, four or five transactions down the line. It would be wrong to have a draconian rule against those individuals. I am sure that Labour Members understand our position. There should not be a new law in that regard.

Mr. Foulkes: I understand the hon. Gentleman's position. Barristers, advocates and lawyers can make their own case and speak powerfully for themselves. People in another place will, no doubt, have vested interests. Our vested interest is on behalf of people who are suffering because of drug dealers, money launderers, criminals, and their activities. That is why we want the Bill to be as powerful and effective as possible.

As hon. Members have said, only preferential debts, which are included in section 386 of the Insolvency Act 1986, are discounted from ``the available amount''. Those debts are mostly debts to the state, such as outstanding tax debts, but they also include outstanding remuneration of employees, which will satisfy the hon. Member for Lewes (Norman Baker). The Bill protects the same list of creditors that are protected in bankruptcy proceedings. It seemed to our draftsmen that it was right to use those provisions, and not, as the hon. Member for Beaconsfield (Mr. Grieve) said, because the rationale is exactly the same. The provisions seem to be appropriate and to have the right sort of pedigree and purpose.

Mr. Hawkins: I hope that the Minister will consider a serious point with those who advise him, even if he cannot accept it today. There is a difference between a trader who deals with a company that might be at risk of bankruptcy and a legitimate small trader. The trader can protect himself by all sorts of means such as credit checks, whereas it is impossible for the legitimate small trader to find out in advance that the person with whom he is dealing, who is apparently a pillar of society—to use the words of the hon. Member for Glasgow, Pollok—may later turn out to be a criminal. That is wholly different to bankruptcy, and that is why my hon. Friend the Member for Beaconsfield, the hon. Member for Lewes and I are making this point.

Mr. Foulkes: Credit checks are not 100 per cent. accurate, and nor is an assessment of criminals with a criminal lifestyle. If one considered the Kray twins, one might gradually have come to the conclusion that they might just be involved in a wee bit of work that was not absolutely legal.

Norman Baker (Lewes): One might have reached that conclusion with the Kray brothers, but I hope that, as a result of the Bill, people who have hitherto been regarded as respectable pillars of society will be identified and that the proceeds of their crime will be taken away. Individual small traders who deal with them are also regarded as respectable. We do not want to weaken the Bill, but we want to ensure that no further innocent victims are created.

Mr. Foulkes: I had better go on, because some of those questions will be answered during the discussions.

Other third party interests also receive protection elsewhere in the Bill. Persons with secured interests will be able to recover them. A typical example is a person with an outstanding mortgage. In such a case, it would be open to the mortgage company to apply for a variation or a discharge of a restraint order under clause 43(3) to recover his debt. There is also provision for such interests to be taken into account if a receiver is appointed and at the realisation stage of a confiscation order.

Secured creditors are also protected under the legislation by the legislative steer in clause 69(3)(a), which states that the powers of the court and receivers

    ``must be exercised with a view to allowing a person other than the defendant or the recipient of a tainted gift to retain or recover the value of any interest held by him''.

The only issue is whether unsecured creditors should take priority over the settlement of the confiscation order. We believe that they should not. If all debts were given priority over confiscation, there would be two undesirable consequences. First, defendants could acquire services on credit to defeat the confiscation process. That would mean that the available amount was reduced and the court would have to make a lower confiscation order against the defendants than would otherwise be possible, which would be a very effective means of evading confiscation. The kind of people that we are talking about would make such arrangements deliberately to evade confiscation.

Mr. Grieve rose—

The Chairman Order. Before I call the hon. Gentleman, I point out that if hon. Members want a clause stand part debate, interventions may count as part of it. The interventions thus far have been on the principle of the clause rather than a specific amendment.

Mr. Grieve: I understand what the Minister said and I appreciate that that is a potential problem but drafting surely would not go a long way towards curing that problem. I have two points to make. First, would it be possible to set a date within or outside of which the debts would not be given preferential treatment, thereby preventing defendants from using the situation when they knew that proceedings were to be brought against them? That seems perfectly practical. Secondly, I do not accept the Minister's point—I hope that he will respond to this—that debts from the unsecured creditor, such as the shopkeeper who provides credit, could be used by defendants in the way he suggests. Those categories can be identified.

Mr. Foulkes: I will come to specific categories in a moment. It worries me that the hon. Gentleman is again arguing the criminal's case.

Mr. Grieve: No.

Mr. Foulkes: Well, he is, because the criminals we are talking about employ not only competent solicitors and advocates such as the hon. Member for Surrey Heath (Mr. Hawkins), but competent accounts. The more loopholes that we provide, the more those accountants will say, ``Look, if you acquire services on credit in such a way, you can reduce your allowable amount effectively to evade having to pay.''

Mr. Grieve: I think that the Minister may have misunderstood. That problem can be met by drafting, not simply by the amendment. I am talking not about reducing the amount that one has to pay the state in order to pay a defendant's creditors but about the state taking it upon itself to reimburse bona fide creditors when it has recuperated cash.


House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 20 November 2001