House of Commons portcullis
House of Commons
Session 2001- 02
Publications on the internet
Standing Committee Debates
Proceeds of Crime Bill

Proceeds of Crime Bill

Column Number: 947

Standing Committee B

Tuesday 15 January 2002


[Mr. Bill O'Brien in the Chair]

Proceeds of Crime Bill

Clause 313

Source of income

Amendment proposed [this day]: No. 477, in page 181, line 32, leave out subsection (1).

4.30 pm

Question again proposed, That the amendment be made.

Mr. Dominic Grieve (Beaconsfield): As I was about to say before lunch, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 313 ordered to stand part of the Bill.

The Chairman: If the Committee wishes, clauses 314 to 316 can be taken together.

Mr. Nick Hawkins (Surrey Heath): On a point of order, Mr. O'Brien. Can clauses 314, 315 and 316 be taken separately?

Clause 314


Question proposed, That the clause stand part of the Bill.

Mr. Hawkins: I have only minor points to make about the clause. Will the Minister explain the thinking behind the appeal being made only to the special commissioners? My hon. Friend the Member for Beaconsfield (Mr. Grieve) and I were thinking about that, and we considered whether to table an amendment to the clause that would offer a parallel way of appeal to the High Court. On balance, however, we decided that because some issues will undoubtedly require specific taxation expertise, the Government may be right to leave such matters with the special commissioners. I should be grateful if the Minister would say whether, during the drafting of the Bill, those who advise the Government went through the same thought process, because this part deals with the extension of existing powers and will give the director special extended powers.

Did the Government consider introducing a role for the High Court? At present they have not, but I wanted to flag up the issue because I can envisage that in another place, some Law Lords with specific expertise may think that there should be the option of a parallel appeal to the High Court, for the protection of the individual. If that were to be considered in another place, it would be helpful to have heard about the Government's thinking in Committee.

Mr. Grieve: The Minister may wish to consider another issue in respect of the clause. In a sense, I was

Column Number: 948

pleased that the appeals procedure makes special provision that the

    ''Presiding Special Commissioner may nominate one or more assessors to assist the Special Commissioners'',

and that those assessors

    ''must have special knowledge and experience of the matter to which the appeal relates''.

I assume that means that, in the case of a tax matter that has been handled by the director, not the Board of Inland Revenue, there will be—for the purposes of an appeal—special commissioners who have particular or expert knowledge of proceeds of crime issues. I should not think that such people exist at present, so I presume that some steps will have to be taken to train them. Otherwise, the risk is that they will be drawn from within the law enforcement world, which would not be desirable. I sorry not to have tabled an amendment along those lines, but the idea is interesting. I do not expect that that expertise is currently available, because such legal procedure and practice are novel.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): I am urged to put some of our thoughts about the High Court and the assistance of specialist knowledge on the record.

Clause 314 provides that when the director is exercising his Revenue functions, the right of appeal is to the special commissioners, who are independent and are administered by the Lord Chancellor's Department. They are separate from the commissioners of Inland Revenue and will be separate both from the director of the agency and from the Home Office.

The special commissioners will be able to hear appeals from those who have, for example, been the subject of an investigation by the director that has resulted in a no-source tax assessment. The special commissioners will consider the evidence that both parties bring before them and will determine questions of tax liability. There are further rights of appeal from the special commissioners to higher courts.

The right of appeal provided for under part 6 is an equivalent right to that enjoyed by taxpayers in their dealings with Inland Revenue. The one exception is that the right of appeal is limited to the special rather than the general commissioners. That is because the special commissioners have the specialised legal expertise that such cases will require. That does not deny the subject any right of appeal, but it directs the appeal to the appropriate commissioners for that type of hearing.

The special commissioners may need to be able to draw on specialist advice to hear those cases. The clause therefore provides for the appointment by the Lord Chancellor, after consultation with Scottish Ministers, of assessors with special knowledge and experience of matters relating to such appeal hearings. Such specialists may have particular expertise in financial investigation and valuations, for example. The Lord Chancellor will be responsible for the administration and remuneration of such appointments.

Column Number: 949

The clause will provide a valuable safeguard. It will provide a right of appeal against the director's taxation functions equivalent to that enjoyed by other taxpayers. The hon. Gentleman talked about the High Court. There are rights of appeal to the High Court on points of law, and further rights of appeal to the Court of Appeal and the House of Lords, if leave is granted.

Mr. Hawkins: That obviously means an appeal from the special commissioners. It might be helpful to state that in the Bill for the benefit of those who will read about those new provisions in the Bill. The right of appeal from the special commissioners on a point of law is well known to tax practitioners, and to my hon. Friend the Member for Beaconsfield and me. However, we are introducing new powers, and jurisdiction is being widely extended and is bringing such work into a new field. If that is not stated in the Bill, it will contain a clause headed ''Appeals'' which does not mention appeals from the special commissioners, and the matter would be unclear to those reading it.

Mr. Ainsworth: I accept what the hon. Gentleman says about what we include and what we do not include. We have said that we want to follow tax practice in its entirety, with the one major exception of tax levied on income the source of which is unknown. As he rightly says, the matter follows a route of which he and the hon. Member for Beaconsfield are aware. I am not sure whether it is necessary to include the details in the Bill. I shall reflect on whether that would help in any way. The Bill follows the route that is currently trodden in those cases.

There is a right of complaint against the actions of the director of the Assets Recovery Agency. When the director is operating his tax functions, there will be a right of recourse to the parliamentary ombudsman, the Parliamentary Commissioner for Administration, as there is against the actions of Inland Revenue when it operates its tax functions. That is provided for in schedule 8, paragraph 2. Therefore, there is another route to the High Court.

The assessors will—I hope—have specialist knowledge. Their expertise will be valuable to the special commissioners during such hearings. We want them to have expertise in financial investigation or value assessment, which might be particularly relevant when the special commissioners are hearing cases that involve no-source tax assessments by the director.

Although I am sure that expertise in financial assessment exists, I also agree with the hon. Member for Surrey Heath (Mr. Hawkins) that it will be necessary to develop that if we are to be fully effective in confiscating the proceeds of crime through the powers provided by the Bill. However, that is the kind of expertise that will be sought when sourceless tax assessments need to be conducted.

Mr. Grieve: I am sure that that is right.

Special commissioners with expertise in taxation have traditionally been drawn from a variety of sources—although they have tended not to be

Column Number: 950

connected with the Inland Revenue, to prevent questions about conflicts of interest from arising. However, it is noteworthy that the Minister has rightly appreciated that different types of special commissioners are now needed, and that raises the issue of how to find people with expertise in fields that have not been developed.

Mr. Ainsworth: We are thinking about such issues in connection with financial investigation and value assessment.

The hon. Gentleman and his hon. Friend asked whether certain matters should be spelled out in the Bill. Confusion could be caused if we were to start to do that where we are not departing from tax law. We have made it clear that the legislation follows normal taxation law, with all its rights of appeal, unless the contrary is stated. I do not want to include things in one part of the Bill that might cause doubt about whether we are following the normal taxation law in all the other parts of the Bill. We could then fall into the sin of omission, unless we were to compile a long list. Therefore, it might be clearer merely to state that the normal procedures will be followed, except in certain areas.

Mr. Hawkins: I am grateful to the Minister for his comments. The Bill is already very big, and I understand why he does not want to add much more to it. However, I was first called to the Bar in 1979, and during my career as a lawyer, and my—almost—10 years' service as a Member of Parliament, I have dealt with a lot of legislation. In my experience, most Bills describe the relevant appeal procedures; those are normally set out in full.

Therefore, the Bill under discussion is a special case. If a lay person—an accountant, for instance, who has not previously dealt with this area of law—were to read the Bill as it stands, he would get the impression that all he could do was appeal to the special commissioner, because there is no mention that he can go beyond that, on a point of law, to the High Court—and subsequently, if necessary, to the Court of Appeal and the House of Lords. As what we are discussing is a new procedure—an extension of the law, with new arrangements—if the appeal clauses were set out in the Bill, that would offer helpful guidance.

I have made my point, and the Minister has said that he will consider it, which I welcome. Although the clause stand part debate has been short, it has also been worth while, and I am sure that it will help to inform debate when the Bill passes to another place.

Question put and agreed to.

Clause 314 ordered to stand part of the Bill.


House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2002
Prepared 15 January 2002