Proceeds of Crime Bill

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Mr. Wilshire: The stand part issue—rather than the Government's specific amendments—worries me. If I understand the matter correctly, all three conditions must be met. If that is so, the requirements before relief is given are excessive. Satisfaction of any one requirement may well be adequate. There is justification for saying that someone who suffered a loss prior to a not guilty verdict should be reimbursed. Compensation must be payable.

We have had this debate before, so I shall not try your patience, Mr. McWilliam. The example used earlier is highly relevant. If an item of more than merely monetary value is disposed of before a not guilty verdict is passed, compensation, as well as reimbursement, should be payable. A wrongdoing on the part of an investigator need not occur before compensation is payable.

I am concerned as to why the Government consider it necessary for all three conditions to be met. I should expect the clause to state that compensation is payable if any of the conditions is met. I would be interested to hear the Minister's view on that.

Subsection (3)(b) mentions a defendant who is pardoned. Clearly, if someone is acquitted, those powers should kick in. I understand that. I appreciate the Government's argument in a case in which a defendant's conviction is overturned on appeal, but in order to be pardoned—I speak as a non-lawyer and may be wrong—a person must first be guilty. A pardon is not the same thing as a successful appeal.

A pardon is a label: a pardoned person has committed a crime but has been let off. I am not persuaded that such a person should be entitled to the same consideration and compensation as an innocent person. I should be interested to hear the Minister's justification. If I am right, I hope that it is noticed that I am arguing for the legislation to be tightened up, not weakened. In my understanding, a pardoned person is still a criminal.

Subsection (4)(a) makes reference to

    ''a serious default by a person''.

Subsection (9) lists the relevant persons. If a police officer commits a serious default, the claim will be made against the police authority, I assume. I would be grateful if the Minister would confirm that. Is it likely that the person held liable will have to pay compensation, as well as the authority that employs that person? It would be helpful to know where a claim must be directed. Are both parties liable, or just the person, or just the employer? In principle, I agree with the provisions, but I would like clarification on the matter before we decide whether the clause should stand part of the Bill.

Mr. Foulkes: Once again, we are receiving mixed messages from Opposition Members. The hon. Member for Surrey Heath is worried about the burden on the taxpayer, but the hon. Member for Spelthorne is concerned that three conditions must be met, and wants it to be necessary to meet only one condition. Those two opinions seem to be contradictory.

Mr. Wilshire: I would be grateful if the Minister would explain that contradiction. It is possible to want to see justice done through the Bill and also to feel concern for the taxpayer—the two are not mutually exclusive.

Mr. Foulkes: They certainly seem mutually exclusive to me. As we have moved to a clause stand part debate, I shall explain that we have debated clause 72, in part 2, which relates to England. Clause 72 provides for compensation to be paid to suspects, the accused and recipients of tainted gifts who suffer loss. Compensation is payable only when an investigation has started but proceedings are never brought against the person, or when the accused is not convicted of an offence, or when the

    ''conviction is quashed or he is pardoned''.

In all cases, there must have been a ''serious default'' on the part of one or more of the enforcement authorities specified under subsection (9).

The restriction to serious default cases is based on the principle that the restraint and the realisation of property is ancillary to a criminal trial in the same way as the detention of a person pending trial. In neither case is compensation paid on acquittal as a matter of course.

4.15 pm

Clause 139 deals with Scotland. It is based largely on existing legislation, except that it has been extended to cover the situation when an investigation is started but proceedings are never brought. Under the Bill, it will be possible for a restraint order to be made as soon as a criminal investigation has been started. At present, that is possible only when proceedings have been started or are about to be started. In future, compensation will be payable subject to the current criteria, including the serious default test, from the beginning of an investigation, not only when proceedings have started. The compensation provision under the clause will help to ensure that the confiscation scheme represents a proportionate and balanced package.

The hon. Member for Surrey Heath asked who should pay the compensation. Ultimately, it will be the taxpayer. We believe that it should come out of the account of the police force because the accountability rests with the police force. That is important. The police are taking the action and they should be accountable for it. As for the Scottish provision, in light of the points that have been raised, we will consider—as we have agreed to consider in relation to England under part 2—whether compensation will be also be payable when there is serious default on the part of an administrator in Scotland. I hope that I have been helpful to the Committee.

Mr. Wilshire: I am grateful to the Minister for responding to some of the issues that I raised, but unfortunately, while replying to my original questions, he drew attention to another point. His reference to serious default sounded remarkably like the same issue that worried me this morning. Default in such circumstances means that someone has suffered an injustice. The Government are saying that, if the default were serious, they would deal with it, but that if it were minor, they would not deal with it.

The Chairman: Order. The Committee has already dealt with that under clause 72.

Mr. Wilshire: On a point of order, Mr. McWilliam. We dealt previously not with default but with a different issue.

The Chairman: Order. I am not talking about what happened at this morning's sitting. Clause 72 dealt specifically with default.

Mr. Hawkins: I understand the Minister's point about accountability, but he has not really dealt with my worry. I accept that clause 139 mirrors clause 72. I found the provision, shortly before he referred to it, when I was searching through the Bill to find the reciprocal provision for England and Wales. He did not respond to my point in relation to the Lord Advocate or the commissioners of Customs and Excise, and to compensation coming from central funds. A problem arises with police authorities because taxpayers' money comes to them as a ring-fenced budget that is not to be exceeded. If a large compensation claim were made against one particular police authority and it had to pay the claim from one year's budget, that could severely restrict its operational effectiveness. It would not have enough money for other matters. That does not apply to the Lord Advocate or to the commissioners of Customs and Excise because of the central funds standing directly behind them. Furthermore, the taxpayer does not always stand behind police authorities with delegated budgets. A lump sum could be given to a particular police authority, whether in Scotland or in England, and a large claim could affect its operational effectiveness.

Concerns have been expressed. Police authorities north and south of the border have been affected by exceptional costs in the past. After the Lockerbie disaster, the police authority for that area of Scotland incurred high costs. On that occasion, the Government, rightly, provided an exceptional payment to cover those extra costs. It would be helpful if the Minister would state that, were there to be a big compensation claim, the Government would stand behind the police authority concerned and ensure that other policing expenditures were not affected.

Mr. Foulkes: That is a spurious parallel. Nobody has suggested that the police in Dumfries and Galloway were in any way responsible for the Lockerbie disaster. We are talking about accountability—about people thinking carefully before they make decisions and take actions. There is a big difference between compensation for serious default and the operational costs incurred by a police force as a result of an incident such as the Lockerbie disaster. With regard to accountability, it is important to remember that central Government funds are finite, as are those of the Lord Advocate—and as are those of police authorities.

Amendment agreed to.

Amendment made: No. 252, in page 85, line 4, leave out from 'Part,' to end of line 6.—[Mr. Foulkes.]

Clause 139, as amended, ordered to stand part of the Bill.

Clauses 140 to 143 ordered to stand part of the Bill.

Clause 144

Tainted gifts and their recipients

Mr. Foulkes: I beg to move amendment No. 253, in page 88, line 8, leave out 'there are' and insert

    'his particular criminal conduct consists of'.

The Chairman: With this it will be convenient to discuss Government amendments Nos. 254 to 256 and clause stand part.

Mr. Foulkes: These are drafting amendments that bring the terminology into line with that which is employed in clauses 77 and 78 of part 2.

The clause deals with tainted gifts. Amendment No. 252 makes it clear when gifts are caught by the Bill. Amendments Nos. 254 and 255 correct erroneous cross references. Amendment No. 256 brings clause 144 in line with clause 78(2) in part 2.

Mr. Grieve: This brings us back to a topic that was recently under discussion. That discussion prompted the Minister to assure me that he would reconsider the matter in general, and I assume that that assurance applies as much to the Scottish provisions as it does to those in England and Wales. I am now sure that that is the case, as I see that he is nodding.

However, I am puzzled about the original wording of subsection (10)(b), and the change to bring it in line with the new provisions. I wish the Minister to explain why that difference existed in the first place. Although—acting perfectly properly—he glossed the question by saying that he is merely bringing the one in line with the other, the original Scottish wording, which we are now deleting, introduced quite a substantial difference in the way in which property was valued, for the purpose of determining the share of the property transferred. Under the original Scottish scheme, the denominator of the fraction that goes to make up the value was the consideration provided by the accused at the time that he obtained the property, whereas the English scheme referred to the value of the property at the time that it was obtained.

For once, I think that the English scheme may have been preferable, because it is unclear—especially when dealing with property that may belong to criminals—what the considerations would have been to obtain the property in the first place. However, I want to leave that point aside for the moment.

Let us assume that the property had been purchased. The English scheme puts the market value on the property, as externally assessed. The Scots were content, for a long period and apparently without difficulty, to put a value on the property based on the actual consideration that the accused provided for it. That could have profound implications on shares and valuations in property. I am interested to hear from the Minister why the Scottish system had that terminology and how it worked in practice compared with the English system.

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