Standing Committee B
Thursday 22 November 2001
[Mr. Bill O'Brien in the Chair]
Interest on unpaid sums
Question proposed [this day], That the clause, as amended, stand part of the Bill.
Question again proposed.
Mr. David Wilshire (Spelthorne): I seem to recall that I was halfway through a sentence in which I was trying to establish a fact from the Minister of State, Scotland Office, who has perhaps returned to his native land
Mr. Mark Field (Cities of London and Westminster): Not soon enough.
Mr. Wilshire: We will gloss over that. The Minister apologised for not being present this afternoon.
I believed that I heard the Minister say that a fixed rate of interest would be paid, and I said that that was probably not what he meant. Comment was made from a sedentary position that that was not what was said and I have no doubt that when the Under-Secretary replies, the exact rate of interest to be paid will be clarified. I will not repeat my argument, and I made these comments only so that you would know where we left off, Mr. O'Brien.
A further point worries me about the payment of interest on unpaid sums. There are opportunities for delay. Before we discussed this clause, we debated whether matters should occur immediately, in a specified period, after six months, or after 12 months. The Minister said that the time could be even longer than that and, if that were the case, interest would be chargeable. There are occasions when my hon. Friends and I are accused of being soft on criminals. There are also occasions when Labour Members have amazed looks when we appear to be harder than them. That shows how reasonable, flexible, thinking and responsive my hon. Friends and I are, unlike Labour Members who have one record that is played repetitively.
At the risk of sounding harder than the Minister, I am puzzled why interest is not instantly payable. A debt is a debt, and if interest is chargeable on a debt, it should be chargeable from the moment that the debt arises. I appreciate that there is a question about what happens if there is a later collapse. However, it is possible to repay the interest with interest so that we see that justice is done. A specified period of six months, 12 months or 24 months before the interest kicks in means that large sums could be involved. We should consider closing the potential loophole of playing a delaying game to avoid paying interest until later.
Why have we not had an explanation about the interest, which can and should be paid straight away, and about what the rate of interest should be? We have considered how matters should progress if a court deems fit and whether there should be a right of appeal against the imposition, or even the rate, of interest. I am curious to hear the Minister's response.
Mr. Nick Hawkins (Surrey Heath): I agree with every word that my hon. Friend said. Conservative spokesmen associate themselves with his comments.
The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): If the hon. Member for Spelthorne (Mr. Wilshire) reads the clause, he will see that the matter is clear. Interest is payable from the time when the order becomes payable. If the defendant has asked for time to pay and that is being considered, interest is not payable for that period. There is no doubt about that. The clause states:
``If the amount required to be paid by a person under a confiscation order is not paid when it is required to be paid, he must pay interest on the amount for the period for which it remains unpaid.''
I turn to who sets the level of interest and whether it is appealable. The level of interest is that which applies to other cases under the Judgments Act 1838. It can be varied by order from the Lord Chancellor's Department. It is currently 8 per cent. The level of interest that will apply will not be appealable because it is set in statute and applies to other issues.
Mr. Wilshire: I understand what the Minister said and I accept that the clause refers to
``when it is required to be paid'',
but we do not know when that is. We were told originally that the order is payable the moment that it is made. We were then told that, if a specified period of, say, 12 months was agreed, it would not be payable, and that it would even be possible to extend the period to 24 months. However, at that point, the Minister of State said that interest would be payable. It is far from clear when interest is payable. Why cannot it be stated clearly that from the moment the order is made, interest is payable, and if there is found to have been a mistake, the money is repaid and interest is paid on the repayment?
Mr. Ainsworth: We have such a provision. It is clause 13, under which interest is payable from the time that the order is required to be made. New subsection (2A) states:
``For the purposes of this section no amount is required to be paid under a confiscation order if
The clause dictates what happens when those issues have been dealt with and when the order is required to be paid. If it is not paid, interest is applicable.
(a) an application has been made under section 12(4),
(b) the application has not been determined by the court, and
(c) the period of 12 months starting with the date on which the confiscation order was made has not ended.''
The hon. Gentleman is becoming mixed up because of a comment that arose in our discussions this morning about clause 24. That clause allows us to revisit the available amount on the request of the defendant. My hon. Friend the Minister of State said that, if that revisiting takes place, any interest that has been paid can be taken into account. It would be hardly be just if it were not taken into account. That clause provides the ability for the available amount to be revisited. That procedure may result in a lowering of the amount required. Any interest that has been charged will be taken into account when the re-evaluation takes place.
Mr. Wilshire: The Minister raises another example of a point that I made about clause 7. I had not realised that it would apply to clause 13, too. We appear to have yet another clause that says what will happen. We have now been told that we can ignore the provisions under clause 13 if, under clause 24, we think that it is a good idea. I made the point on clause 7 and the Minister said that he would reconsider the matter. Does it not occur to him that the same stricture should apply under clause 13? If it is to be capable of being overruled, ignored or varied, it ought to say ``subject to the terms in clause 24''. We would then know where we stood.
Mr. Ainsworth: If the hon. Gentleman is determined to be confused, he will be.
Clause 13 makes it clear that interest is payable on unpaid sums. Clause 24 allows for the available amount to be revisited. If the defendant feels that he can challenge the available amount that has been decided, he should be given the opportunity to do that. If, as a result of revisiting the available amount, it is discovered that it is far lower than that which was originally imposed, any interest that has been attached to the original available amount must be taken into account in the re-evaluation. I do not find that confusing, and I am unsure why the hon. Gentleman does.
Mr. Hawkins: I can understand why my hon. Friend finds that confusing. As he has explained, he is not a lawyer.
In a genuine attempt to help the Government, I make a suggestion. Having listened to the difficulties that my hon. Friend has described, the Minister and his advisers should ponder whether, when the Bill comes to be reconsideredor redrafted perhapsclauses 13 and 24 ought to be combined, so that the two matters that relate to interest are included in the same clause. After all, the Government are always saying that they want to make legislation easier to read by ensuring that its language is nearer to plain English.
Mr. Ainsworth: We gave an earlier commitment that we would consider redrafting the Bill. In principle, I am happy to look at any redrafting that might make the clause, and the Bill, easier to understand, but I do not believe that that would be the case with regard to the matter under discussion.
That will be established when we discuss clause 24. It addresses a different issue. It deals with situations in which a defendant has persuaded the court to revisit the available amount. In revisiting that, the court must bear in mind what is just. If the court decided that the available amount was half that which was originally decided, it would not be just for it to continue to insist on the payment of the interest on the original amount.
I will study the hon. Gentleman's suggestion, and we will attempt to make matters clearer, if it is decided that that is necessary. However, I believe that those two clauses address separate issues.
Question put and agreed to.
Clause 13, as amended, ordered to stand part of the Bill.
Effect of order on court's other powers
Mr. Hawkins: I beg to move amendment No. 60, in page 7, line 35, leave out subsection (7).
This is a probing amendment, and I do not want to hear any remarks from the Government Back Benches that it is intended to wreck the Bill.
We are puzzledin much the same way as my hon. Friend the Member for Spelthorne was puzzled about clause 13. My hon. Friend the Member for Beaconsfield (Mr. Grieve) has apologised for his absence from the Committee, but he will return soon. He and I independently came to the same conclusion about subsection (7): it is, to be kind, inelegantly draftedor, to be critical, it is extremely confusing. It is almost circular in how it operates. If the writers of ``Yes, Minister'' were writing today and wanted to give Sir Humphrey, in one of their famous scripts, a long paragraph to read out that left the Minister, the fictitious Jim Hacker, completely confused, they would choose something just like subsection (7). Hon. Members need only read it to themselves quietly, as I hope they, including Labour Members, are now doing, to realise that it is the sort of thing that baffles ordinary mortals.
I am sure that in a moment the Minister will come up with some good reasons why the Bill must include something along those lines. As I said in relation to a probing amendment, we are not trying to attack the intention in either subsection (7) or clause 14 as a whole. As the Government have made clear, the Bill hugely extends the Government's powers to stop the Mr. Bigs, in particular, as we have all called themthe serious drug dealersfrom hanging on to their ill-gotten gains. Undoubtedly such a Bill should contain a clause that is designed to set out the effect on the court's other powers. We have no problem with the basic intention of clause 14, but we believe that there must be a simpler way, and one that would be easier to understand, to set out the point in subsection (7).
My hon. Friend the Member for Beaconsfield and I came separately to that conclusion. As the Minister and, by now, other Committee members know, we both spent many years in the courts dealing with both criminal law and complex civil matters and are therefore used to abstruse legal drafting. Long before I entered the House in 1992 and my hon. Friend the Member for Beaconsfield entered it in 1997, we often used to find that judges would ask, ``What on earth did Parliament mean when it introduced something as complicated as that?'' Members of the Bar and solicitors are familiar with being puzzled about that.
Following a much more recent decision that was not in force when I did the vast majority of my work in the courts, Pepper v. Hart, judges may now look at what Ministers say in debates in Committee in order to understand what Parliament intended. We must therefore be especially careful in our drafting and in what we say in Committee in order to ensure that points are refined. This is a Pepper v. Hart point.