Proceeds of Crime Bill

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Mr. Field: I endorse my hon. Friend's comments. I was also interested in what was said by the hon. Member for Wellingborough. I can only assume that, unlike Samson, after the shaving of his facial hair, he now has more energy to debate the Bill. Underlying all that has been said—possibly the untold story of why the Minister is so insistent that we continue to use the definition ''criminal'' rather than ''unlawful'' conduct—is, as my hon. Friend the Member for Beaconsfield rightly said, the fact that no criminal act needs have taken place, and the director will have great powers in relation to a range of taxes that we shall discuss later.

It is for that reason, above all, that the conduct concerned should be described as ''criminal''. In colloquial terms such conduct may be regarded as criminal, but clearly it is not so for the purposes of the criminal law in this country. That disguises the fact that such draconian powers are in the Bill. Such an argument has already been advanced both in Committee and on Second Reading. Firm powers will be handed to the agency and its director, yet no criminal act needs to have taken place. To that extent, therefore, words do matter. I appreciate that from the Minister's point of view, the phrase ''criminal conduct'' brushes under the carpet the fact that there are draconian powers under part 6. That is why we are so insistent that the word ''unlawful'' should be used. It would ensure clarity and not allow expensive lawyers to get their non-criminal clients off.

Mr. Ainsworth: We have no intention of brushing the powers in the Bill under the carpet. All that holds me back from going into more detail about how the powers will and will not operate is that that would make our discussions drift far wider than the amendment.

The hon. Member for Bosworth said that he was concerned not only that I was being intransigent, but that the people in the Box were not writing furiously as I spoke. He should have listened to the hon. Member for Spelthorne (Mr. Wilshire), who said in a previous sitting that when the officials were writing furiously, he realised that he was on to something. Perhaps the hon. Gentleman should recognise that when they are not

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writing furiously, he is not on to anything, and no one outside the Room is worried. Obviously, I accept that words are important. I do not have a legally trained mind, nor have I put on airs and graces in Committee to pretend that I have. None the less, I require that some argument be put to me—and the only one I have heard is that it is important that the words used in the Bill are consistent.

Part 2 refers to matters that will come before the criminal court, so the terminology used is relevant to the criminal legal system. Under part 5, issues will come before the civil courts, so it is important that the terminology used is appropriate to the civil legal system. The matter under discussion is neither a criminal nor a civil matter.

My hon. Friend the Member for Wellingborough said that he was anxious to prevent lawyers from making a fortune out of the Bill. From my common-sense approach—rather than a legal-minded one—I wonder in what circumstances lawyers will be able to do that. We are talking about the gateway—under the Bill, that will be defined by Parliament—when the tax affairs of an individual, when appropriate and when the mechanism allows, are handed from the Revenue to the director. That will not occur before the civil court or the criminal court. Our purpose is to decide what we want the director to have to show before he can say that he wants to control a person's tax accounts for a period. Therefore, clarification of our intentions is more important than consistency with other parts of the Bill.

11.15 am

Mr. Stinchcombe: Does the Minister not fear that if two different formulations are used within a Bill, lawyers will strive to give them two different meanings, so as to define two different types of conduct?

Mr. Ainsworth: I think that both terms are clearly defined. As I have said, the purpose of the clause is to provide a gateway that defines the circumstances in which the Revenue will give up a person's tax affairs for a time. Stating that the director must be satisfied that there are reasonable grounds to suspect that the proceeds that he is pursuing are the product of criminal activity provides a clear gateway.

If I hear an argument that shows that the Bill would be improved by changing the terminology, I will be more than happy to consider it. Frankly, I have not heard anything to convince me, and I ask hon. Gentlemen to accept that that has not been the case. When I reviewed the list of matters that I had agreed to reconsider under part 2, I was astonished by its length.

Mr. Grieve: The Minister is to be greatly commended for his flexibility in relation to part 2, and the various matters that he said he would consider. Does he not agree that if the point made by the hon. Member for Wellingborough—which I, too, tried to express—were correct, that in itself would be a good reason to alter the wording and thus improve the Bill? The Minister has not really touched on that.

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Mr. Ainsworth: I do not accept that. If I did, our discussion would have been a lot shorter.

Mr. Hawkins: This has been a fascinating debate, because of the extent of cross-Committee and cross-party agreement—with the exception of the Minister. The hon. Member for Wellingborough has backed up in spades what I, and my hon. Friends the Members for Beaconsfield, for Henley (Mr. Johnson), for Cities of London and Westminster (Mr. Field) and for Bosworth, have been saying. It seems that the only person who cannot appreciate the significance of having the same wording in both parts 5 and 6—the civil parts of the Bill—is the Minister. In those circumstances, it is clear that we need to press the matter to a Division.

Mr. David Wilshire (Spelthorne): Before my hon. Friend finishes, I hope that he will make the obvious point that one of the biggest reasons for supporting the amendment is that it has not required any help from me.

Mr. Hawkins: I always welcome help from my hon. Friend the Member for Spelthorne—not least for that intervention—and now I wish to press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 8, Noes 12.

Division No. 25]

Baker, Norman Brooke, Annette Field, Mr. Mark Grieve, Mr. Dominic
Hawkins, Mr. Nick Johnson, Mr. Boris Tredinnick, Mr. David Wilshire, Mr. David

Ainsworth, Mr. Bob Baird, Vera Clark, Mrs. Helen Foulkes, Mr. George Harris, Mr. Tom Hesford, Stephen
Lucas, Ian McCabe, Mr. Stephen McGuire, Mrs. Anne Robertson, John Stinchcombe, Mr. Paul Stoate, Dr. Howard

Question accordingly negatived.

Mr. Grieve: I beg to move amendment No. 479, in page 180, line 22, at end insert—

    '(2A) No general Revenue function shall be exercised by the Director in any case where an enquiry has previously been carried out by the Board into the tax affairs of a person or company for the same period.'.

I hope that the amendment will provide a better opportunity than the clause stand part debate would allow for a general examination of the manner in which part 6 will work in practice. I must tell the Minister that I have little difficulty with the immediate idea that there may be circumstances in which it will be possible to exercise Revenue functions against individuals when none of the other powers in the Bill may be invoked. However, the power is unusual and I am unsure how it will dovetail with the ordinary powers of the Board of Inland Revenue when dealing with people's tax affairs, especially those of people who have not paid tax on income that they may have received.

I recall—the Minister may confirm this—that the fact that a person has an unlawful source of income does not mean that the Inland Revenue cannot tax it.

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The Revenue may not know about the income, but if it did, it would be able to tax it. During my time as a barrister, I encountered civil court proceedings during which evidence, previously unknown to the Inland Revenue, emerged which, my instructing solicitor explained, led to the Revenue taking an interest in an individual's tax affairs. Therefore, the Revenue already has such powers.

At what point, and for what purpose, will the director usurp those powers to fulfil the desire to curb criminality that is set out in the Bill? Either the director or the Inland Revenue will be in a position to exercise the powers, although the sights of the Board of Inland Revenue may not be as focused on them as are those of the director when he performs his functions. I should be grateful to hear in some detail from the Minister about this matter, because we must be careful not to set up an easy-fix solution that enables the director to tax people in a way that the Board of Inland Revenue could not, simply because he cannot work the extensive and fairly draconian powers conferred on him for confiscation and civil recovery. Otherwise, we may end up with a palpable injustice.

Those are complex questions, and although I have read part 6, I do not know the answers. The Minister may be able to provide me with information about, and interpretations of, part 6 that I have not been able to work out for myself. Much will depend on the way in which it operates. That raises the issue, which we have previously discussed, of our anxiety about conferring huge discretionary powers that could be abused—although the Minister will reassure us that that is not the intention.

Stephen Hesford (Wirral, West): On a point of clarification, is it not almost certain that when the director becomes involved in an exercise of that kind, it will be to consider a period that the Revenue has already examined, as events may come to light some time down the line? Is this not therefore a wrecking amendment?

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