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Proceeds of Crime Bill

Proceeds of Crime Bill

Column Number: 911

Standing Committee B

Tuesday 15 January 2002


[Mr. Bill O'Brien in the Chair]

Proceeds of Crime Bill

Clause 311

Director's general Revenue functions

10.30 am

Mr. Nick Hawkins (Surrey Heath): I beg to move amendment No. 421, in page 180, line 10, leave out 'criminal' and insert 'unlawful'.

The Chairman: With this it will be convenient to take the following amendments: No. 422, in page 180, line 14, leave out 'criminal' and insert 'unlawful'.

No. 483, in clause 320, page 185, line 10, leave out 'Criminal' and insert 'Unlawful'.

No. 424, in page 185, line 14, leave out 'criminal' and insert 'unlawful'.

No. 425, in page 185, line 18, leave out second 'criminal' and insert 'unlawful'.

Mr. Hawkins: The amendments were suggested by the Law Society of Scotland. We considered them carefully and we believe that again, it is on to a good point. The amendments suggested by the society that we debated last week produced interesting debates, which we have all read in Hansard. It was certainly the Minister's view that the Law Society of Scotland had made some valid points.

There is particular advantage in the amendments before us, in that they would ensure consistency in the complex terminology between parts 5 and 6 of the Bill. The idea that it is important for such terminology to be consistent was mirrored in last week's discussions. It is important that a distinction be drawn between criminal and civil proceedings. Under the Bill, the director of the Assets Recovery Agency will discharge Revenue functions only when criminal proceedings are already concluded or when the Lord Advocate in Scotland has already decided not to proceed with a criminal prosecution. It is appropriate therefore to draw a distinction between the type of conduct that will come within the ambit of this part of the Bill and that which will be dealt with under its criminal provisions. By changing the word ''criminal'' to the word ''unlawful''—a change from which the other amendments would flow—such a distinction would be achieved. I shall listen with interest to what the Minister has to say.

Mr. Paul Stinchcombe (Wellingborough): Clause 246 defines unlawful conduct as conduct that is unlawful under the criminal law of the country. As a matter of clarification, may I ask what the amendment would add to that?

Mr. Hawkins: Part 6 refers to ''criminal'' conduct, and changing that to ''unlawful'' conduct would make the provision consistent with clause 246. As I have said, the purpose of the amendment is to ensure

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consistency between parts 5 and 6 of the Bill. At present there is no such consistency. As the hon. Gentleman rightly says, unlawful conduct is defined under clause 246.

Norman Baker (Lewes): Will the hon. Gentleman clarify whether he is seeking to make a material difference to the Bill, or is simply engaged in a tidying-up exercise?

Mr. Hawkins: There are distinctions between criminal conduct and unlawful conduct, but it would be helpful if there were consistency between parts 5 and 6 of the Bill.

Mr. Stinchcombe: What are the differences between unlawful conduct and criminal conduct, in light of the definition under clause 246? Does the hon. Gentleman include within the definition of ''unlawful'' actions in breach of planning control?

Mr. Hawkins: I must confess that I have not considered such action in respect of planning control. The Minister may shed some light on the subject in his response. However, ''unlawful'' conduct can go wider than merely criminal conduct. I shall have to think further about the implications of what the hon. Gentleman has just said about planning control. I need not take up the Committee's time further now, but a more lengthy discussion may arise from what the Minister says in his response.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): The use of the term ''unlawful conduct'' in part 5 of the Bill is intended to reflect the fact that civil recovery and cash forfeiture proceedings are civil matters. Part 2, which we have already discussed at length, and part 7, which we will discuss later this week, clearly refer to criminal proceedings, so the use of the term ''criminal conduct'' is appropriate in those provisions.

I accept that, in most circumstances—as my hon. Friend the Member for Wellingborough (Mr. Stinchcombe) pointed out—there is no material difference between the two terms. Unlawful conduct has been defined in relation to conduct that is unlawful under the criminal law. However, part 5 proceedings are civil proceedings, and involve proving something to the civil standard of proof and applying the civil rules of evidence. In those circumstances, it would make no sense to use the word ''criminal''.

The amendments would not, however, remove the references to ''criminal property'' currently contained in part 6. Moreover, the reasons for using the term ''unlawful conduct'' in part 5 are not relevant to part 6. The term ''criminal conduct'' in this case is used in the context of the gateway that dictates whether the director may exercise his taxation function.

Mr. Hawkins: Surely the point is that parts 5 and 6 are civil, rather than criminal, in nature. It would therefore be more consistent to use the same terminology in both those parts. That would mark the distinction that the Minister has been talking about between the civil and the criminal parts of the Bill. We will return to that matter when we discuss part 7.

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Mr. Ainsworth: We shall have the opportunity, either in the stand part debate or when we consider the more substantial amendments that follow, to discuss more widely the interaction between the Revenue and the director, and that the way in which he does his job. Part 5 dictates the civil proceedings. That is why different terminology was used in that part of the Bill.

Norman Baker: I confess that I am having difficulty following what the Minister is saying. Is he arguing that the words ''criminal'' and ''unlawful'' are synonymous, or that the term ''unlawful'' is wider than the term ''criminal'', and therefore inappropriate—or is he simply saying that the terminology chosen reflects that part of the Bill, and not making any comments on the meaning of the words?

Mr. Ainsworth: The latter, fundamentally. The use is different. It is not the same as what is defined in part 5, because those are issues that will appear in print in the civil courts. The reason for using the wording in part 6 is to provide a clear understanding, and it is important that we satisfy the Committee as to how we structure the Bill in that regard. We must ensure that the way in which the director operates his tax functions is clear and well defined. There should be an absolute minimum spillover into any other functions, and certainly no spillover into the way in which the Revenue operates. Those are important issues. People will need to be satisfied that we are not changing the way in which the Revenue operates. We are providing a clear gateway defining when the director can make an application to have a case transferred to his jurisdiction.

The purpose of the terminology is to define that gateway and to make it clear when something ceases to be within the realms of the Revenue and enters the realms of the director. We think that the terminology in the Bill is the most appropriate. It is not the same terminology as is necessary in part 5, to be used in front of the civil court.

Mr. Stinchcombe: I am still slightly confused. Criminal conduct is defined in clause 320 and unlawful conduct is defined in clause 246. However, it is defined as conduct that is

    ''unlawful under the criminal law''.

What is the real difference between the terms?

Mr. Ainsworth: As I said, we see no material difference between the two terms. It was important to use the correct terminology in part 5, and my hon. Friend will have noticed that the Opposition gave no clear answer when asked what the amendments would achieve by changing the wording in part 6.

Mr. Dominic Grieve (Beaconsfield): I shall speak about this at greater length in a moment, but there is a distinction, because there has been differentiation between criminal and unlawful conduct throughout the Bill. An assertion that a person has committed a crime is usually backed up by a conviction for that crime. If a person has not been convicted, their conduct, although it may constitute a crime, is described simply as unlawful.

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I think that I am correct in saying—although I shall be grateful if the Minister will clarify this—that the taxation provisions can be enforced even when no crime has been proved against an individual. In such circumstances, would it not be better to follow the way in which the rest of the Bill is drafted and describe the person's conduct as unlawful rather than criminal?

Mr. Ainsworth: Let me continue and say what I was going to say, because it touches on this important issue, which the hon. Gentleman and others may wish to explore on other amendments or during the clause stand part debate.

We must provide a clear gateway through which the director exercises his tax functions if he has reasonable grounds to suspect that income arises as a result of a person's criminal conduct. When considering the reasonable suspicion test, it is natural to refer to criminal rather than unlawful conduct, because many police powers that operate in the context of the criminal law depend on a reasonable suspicion test. Once the gateway criterion is met, unlike what happens under part 5 proceedings, the director is not required to prove in civil proceedings that conduct contrary to the criminal law has occurred. In fact, after the gateway criterion is met, the conduct is irrelevant. Therefore there is no reason why we should refer to unlawful rather than criminal conduct.

The question is who deals with the person's tax accounts during the set period. There should be a clear definition of when the director may apply for the transfer of the accounts. The trigger for that is a case passing the reasonable suspicion test that the property's source is criminal conduct. That is clear, and further clarity is not gained by changing the word to ''unlawful''.


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