Proceeds of Crime Bill

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Mr. Ainsworth: I recognise the worries of the hon. Members for Beaconsfield and for Cities of London and Westminster (Mr. Field), which are wrapped up with concerns about compensation. Both hon. Gentlemen are right to say that some of the provisions are new, although some are based on existing legislation. The hon. Member for Beaconsfield said that the provisions were wider. That point has been made in other contexts, and I understand why he made it. The provisions in subsections (2)(b), (3)(c) and (4) are not in existing legislation.

I will address the amendment, although I know that some of the concerns of the hon. Member for Beaconsfield arise in connection with compensation. The amendment would spell out explicitly that a person exercising pre-emptive restraint and management receivership powers must exercise them so as to interfere as little as possible with the existing financial arrangements of the defendant. The amendment would state explicitly how we would expect the powers to be exercised, and, indeed, how they have been exercised in practice for many years.

The amendment is unnecessary. It also creates a problem because the legislative steer in clause 69 applies both to realisable property held by the defendant and to realisable property held by the recipient of a tainted gift. The hon. Member for Beaconsfield would not necessarily want the defendant's interests to be paramount in the same way as those of the holder of a tainted gift whose property has been seized.

The exercise of the restraint and receivership powers is discretionary. The Bill enables any person who believes that the powers of restraint or receivership are exercised inappropriately to apply for a variation of the relevant order, and there is an appeal to the Court of Appeal against refusal to vary that request.

I must point out the consequences of some additions to the legislation. Subsection (3)(c) and subsection (4) enable the defendant or the recipient of a tainted gift to challenge the management receiver's decision to dispose of a particular asset on the grounds that it is irreplaceable. The provisions have regard to the fact that the defendant has not been convicted at that stage, so he should not be obliged to lose irreplaceable assets.

The management receiver will be obliged to manage the business under his control in the best interests of the financial well-being of that business. However, there may be parts of, or assets in, that business that are of special interest to the owner, which, if a hard-headed business look were taken at the matter, should be disposed of. If we had seized the assets of the hon. Member for Henley (Mr. Johnson), the management receiver might decide that it would be better to sell The Spectator.

Mr. Boris Johnson (Henley): Priceless.

Mr. Ainsworth: Despite the fact that that may be the financially sensible thing to do, the hon. Gentleman might be utterly opposed to such a move, and he should be allowed to go to court to ensure that it did not happen.

Mr. Johnson: I must, of course, set the Committee's mind to rest. If, in the unhappy event of my being convicted of a crime, the director were to seize The Spectator, that would to some extent prove the point that Opposition Members have been making. Although The Spectator may be connected with me and my conduct, it is in no sense my property. It is the property of Conrad Black, so selling it would be a grievous injustice. Were the director to place a restraint order on the conduct of The Spectator, that would prove even more of the eloquent criticisms that have been made. I hope that the Minister will take that as an example of exactly the way in which the Bill could go wrong.

Mr. Ainsworth: I sort of knew that the hon. Gentleman did not own The Spectator, but I thought that he should be drawn into our conversation and involved a little more in our proceedings.

I understand the anxieties of the hon. Member for Beaconsfield about compensation, and we shall discuss some of the issues involved later. Using restraint early will be absolutely necessary if we are to be effective, because of the possibility of dissipation. We run the risk of placing too many hurdles in the way of its use, and thus of ensuring that it is not used. That must be borne in mind, too.

The management receiver will have responsibility for taking care of the assets that have been transferred to him. Admittedly it is possible that he will not manage them as effectively as the original owner would have done, resulting in a loss. The original owner may subsequently be acquitted of the charges against him and feel that the loss is unjust. However, the managing receiver may manage affairs in a way that realises a lot more gain than the owner would ever have received. That gain would go to the owner on acquittal. We are discussing criminal proceedings. I understand the point that the hon. Member for Beaconsfield makes, but we must keep in mind the necessity for the measures in the Bill to be effective.

Mr. Grieve: Taking the Minister back to the point about the receiver—I do not say this with tongue in cheek—we know that the receiver will be entitled to draw down assets in order to pay himself. That raises the interesting question of what happens when the amount that the receiver claims out of the business is what tips the balance between whether the business should be liquidated or continued. Is that not one reason why the suggestion in my amendment might be beneficial?

Mr. Ainsworth: The amendment would not make any difference to the current arrangements; it merely points out the manner in which the receiver must manage the assets.

There is a problem with the amendment, as I have pointed out to the hon. Gentleman: it refers to the defendant, but not to the recipient of the tainted gift. It does not do what he claims; it does not remove the receiver's management costs from the issue. We might have to discuss that matter when, in connection with the provisions for compensation, we debate whether the threshold is too high.

I understand that the hon. Gentleman is flagging up an issue that he has broader concerns about, but the amendment would not, of itself, make any difference to the treatment of the defendant's property.

Mr. Field: I thank the Minister for alerting us to the purpose of subsection (4). His comments have provided some comfort. However, in practical terms, what is deemed to be impossible to replace might be a possession that has personal significance, such as a house that has been owned by the family for several generations, or works of art, or antiques. That is another reason why, in compensation for a receiver's fees, property that can be easily liquidated, such as moneys that are available within a business, or small bits of a business that can be readily sold off, will be targeted first. That calls to mind a point that my hon. Friend the Member for Beaconsfield made a few moments ago—

The Chairman: Order. This is a lengthy intervention, and it is not relevant to the amendment.

Mr. Field: I was responding not only to the amendment but to the Minister's comments, Mr. McWilliam.

The Chairman: Order. We are dealing with the amendment.

Mr. Ainsworth: The hon. Gentleman overlooks subsection (3)(c), which says:

    ``in a case where a confiscation order has not been made against the defendant, property must not be sold if the court so orders under subsection (4).''

If a house has been owned by the family for generations—or the item might perhaps be a work of art, a racehorse or whatever—the defendant will tell the court that he does not want the receiver to be allowed to dispose of that property. He will make his case, the court will instruct the receivers not to dispose of that property, and they will not be allowed to do so. Subsequently, when a confiscation order is made, the property will cease to belong to the defendant; it will become the property of the state, and the receiver will dispose of it as he deems fit, on behalf of the citizen.

Mr. Grieve: I take on board the Minister's point about subsection (4), and I was aware of its existence when I drafted the amendment. However, it seemed to me that the question of what is irreplaceable raises some interesting issues. I appreciate that the Mona Lisa might be irreplaceable, but I do not think that a house or a business is irreplaceable, which is why I tabled the amendment. If the Minister's advice suggests that I am wrong about that, I would be grateful to hear his explanation, as that would helpful to the Committee.

Mr. Ainsworth: Let me try to help the hon. Gentleman. As I interpret the Bill, we are not talking about Mona Lisas, or anything else that someone else believes is irreplaceable; we are talking about something that the defendant believes is irreplaceable, because it has sentimental value or whatever. If that interpretation is wrong, I will inform the hon. Gentleman, because I do not believe that, prior to conviction, that sort of action should be allowed.

Mr. Grieve: The end of this discussion has been particularly helpful, and I am grateful to the Minister for those last comments. We have reached the point where at least counsel acting for a defendant in such circumstances might be well advised, if there is a subsequent problem, to refer to the Hansard record of the Committee, to which reference can now be made during the course of court proceedings—that has been the case for some time—and read what the Minister has said. As I said to him, this goes beyond the Mona Lisa, castles and antique chattels that are not readily replaceable with equivalents.

There is also the question of the maintenance of a defendant's basic financial structure under a restraint order. I am reassured by the Minister's comments, although with subsection (2), one could spell out the principles. As the Minister has helpfully spelled out principles that are in accordance with the amendment that I drafted, and as those principles could now be referred to, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 69 ordered to stand part of the Bill.

Clause 70

Committal by magistrates' court

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