Proceeds of Crime Bill

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Mr. Ainsworth: I beg to move amendment No. 283, in page 185, line 23, leave out 'or a pecuniary advantage'.

The Chairman: With this it will be convenient to take Government amendments Nos. 284 to 288.

Mr. Ainsworth: The amendments change the definition of property in parts 6 and 7 in order to make it clear how a pecuniary advantage constitutes benefit from criminal conduct. They bring consistency to the way in which pecuniary advantage is dealt with under the Bill and ensure that parts 6 and 7 apply to a pecuniary advantage that has been obtained through

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criminal conduct in the same way as to other criminal property. Without the amendments, it might be argued that the definition of criminal property in parts 6 and 7 does not apply to pecuniary advantage. That would mean that assets obtained through evasion of excise duty, for example, would not be liable to inheritance tax under part 6 and that it would not constitute an offence under part 7 to launder such assets. That would create a serious loophole in the Bill. I hope that that explains why the amendments are necessary.

Mr. Hawkins: When I read the words in the Bill as originally drafted, I was reminded of debates and changes in the law that would have been discussed in the House at the same time as my hon. Friend the Member for Beaconsfield and I started our careers at the Bar. They related to some of the offences under the Theft Act 1978, as my hon. Friend will remember—it was probably before the hon. Member for Wellingborough was called to the Bar—and whether it was necessary to amend the Act to remove phrases such as ''pecuniary advantage'', which had been redefined by case law. All kinds of new formulations were introduced through revisions to that Act in subsequent legislation.

I went through that thought process when I saw the original draft of the Bill. The Minister is now proposing to take those words out again: he claims that if he does not amend the Government's original draft, other serious problems will arise. He says that taking out those words has implications with regard to whether certain activities are regarded as offences in parts of the Bill that we have yet to reach. I do not understand the logic of that.

Perhaps the Minister will receive a briefing that says that, ''If pressed''—ministerial briefings often provide extra arguments for such a contingency. I eagerly await his response, because I am not persuaded by his argument on the matter: I do not see that it follows that if those words are left in, problems will arise in part 7.

6 pm

Mr. Ainsworth: I am sorry, but I do not understand what the hon. Gentleman is concerned about. The changes are obvious, and even if my explanation is unsatisfactory, I have nothing further to add.

Mr. Hawkins: Let me explain to the Minister where I am coming from, as it is possible that I misunderstood his explanation.

Subsection (5) states:

    ''A person benefits from conduct if he obtains property or a pecuniary advantage as a result of or in connection with the conduct.''

That is clear: everything seems to follow naturally and logically. However, it appears that the Minister is now saying that, unless ''or a pecuniary advantage'' is taken out, problems will arise in a part of the Bill that we have yet to reach. I do not understand that.

Mr. Ainsworth: Is the hon. Gentleman ignoring the changes in the other amendments? Proposed new subsection (5A) states:

    ''If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or

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    in connection with the conduct a sum of money equal to the value of the pecuniary advantage.''.

There is not only an omission from the Bill but an addition to it. He is suggesting that we are simply removing the words, but that is not the case.

Mr. Hawkins: I am not suggesting that. Perhaps this is where the misunderstanding arises. I am saying that proposed new subsection (5A) is more confusing than the original draft of the two subsections in question.

Government amendment No. 284, which proposes new subsection (5A), is confusing and circular. However, if the Minister does not accept my point, he will no doubt press for his revised wording.

Mr. Ainsworth: He will.

Amendment agreed to.

Amendments made: No. 284, in page 185, line 24, at end insert—

    '(5A) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage.'.

No. 285, in page 185, line 28, leave out 'or pecuniary advantage'.—[Mr. Bob Ainsworth.]

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

Mr. Grieve: I hope that the Minister will forgive me, but while my hon. Friend was dealing with the subsequent amendment, I read part 6 again, and I concluded that I now understand why subsection (4) is worded in the way that it is. I think that the Minister has been properly advised, and the misunderstanding under which he and I were perhaps both labouring might have been due to the fact that, at the start of the

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debate, the emphasis was on clause 311 and the circumstances of criminal conduct that could give rise to the intervention of the director. That made me think that the matter under discussion governed the totality of part 6, whereas it clearly governs only the question of income tax. The question of inheritance tax is discrete under clause 315. In those circumstances, criminal property can be much wider than the person who has committed criminal conduct. That means that individuals who have not committed a criminal offence may find themselves investigated under the inheritance tax provisions and taxed because they are in possession of property that is criminal property. I think that I have now understood the provision. I am sorry if I muddled the Minister. I will try discreetly after our sitting to ascertain whether I have got the matter right.

Mr. Carmichael: Will the Minister explain the scope of subsection (1)? The definition of criminal conduct seems exceptionally wide. It seems that criminal conduct will include conduct that might be an offence in Scotland, say, but not in England. Furthermore, such conduct could be covered under the definition of criminal conduct if the conduct itself were committed in England, not in Scotland. Can he clarify that point?

Mr. Ainsworth: I doubt it. I will write to the hon. Gentleman about it.

Question put and agreed to.

Clause 320, as amended, ordered to stand part of the Bill.

Further consideration adjourned.—[Mrs. McGuire.]

Adjourned accordingly at seven minutes past Six o'clock till Thursday 17 January at five minutes to Nine o'clock.

The following Members attended the Committee:
O'Brien, Mr. Bill (Chairman)
Ainsworth, Mr. Bob
Baird, Vera
Brooke, Mrs.
Carmichael, Mr.
Clark, Mrs. Helen
David, Mr.
Davidson, Mr.
Field, Mr. Mark
Foulkes, Mr.
Grieve, Mr.
Harris, Mr. Tom
Hawkins, Mr.
Hesford, Stephen
Johnson, Mr. Boris
Lazarowicz, Mr.
Lucas, Ian
McCabe, Mr.
McGuire, Mrs.
Robertson, John
Stinchcombe, Mr.
Stoate, Dr.
Watson, Mr.
Wilshire, Mr.

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