Proceeds of Crime Bill

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Mr. Davidson: Presumably the hon. Gentleman wants to be tough on Rastafarians and tough on the causes of Rastafarians.

Mr. Hawkins: Not on the causes of Rastafarians—but I have always claimed to be tough on crime and tough on the causes of crime, as my record during the past nearly 10 years shows. That is a side issue that I must not pursue further, Mr. McWilliam, or you will rule me out of order.

We are now on to the de minimis provisions, which I touched on with a few words before we voted. My hon. Friend the Member for Beaconsfield and I have had extensive discussions with experts on the subject, especially members of the anti-money-laundering committee of the Law Society. Despite the views of some Labour Members, many people engaged professionally in the City of London—lawyers, accountants, tax advisers and others—are as opposed to money laundering as the hon. Member for Glasgow, Pollok. They would agree with nearly everything that he said in the serious part of his speech on the previous group of amendments.

Those people want the Bill to be effective. As recently as Monday lunchtime, they specifically told my hon. Friend and me that they did not want provisions so ridiculously onerous that huge amounts of time would be wasted on reports to organisations such as the National Criminal Intelligence Service on the tiniest matters. That is the only reason why we want to insert a de minimis provision.

I shall not fall out with the Government if the Minister claims that £1,000 is too high, and that NCIS says that a de minimis provision of no more than £500 would be sensible. My hon. Friend and I had to consider the figure carefully, and that was the decision at which we arrived. I hope that the Minister and Labour Members do us the honour of accepting that we have not tabled the amendment to seek to water down the legislation. We want organisations that are professionally involved in finance in places such as the City of London to concentrate on what is effective against serious and organised crime.

I do not believe that the Minister will be able to tell the Committee that NCIS will have the resources to cope daily with huge numbers of reports from every financial institution in the City of London about what they might think is dodgy, when the sums involved are tiny. It was suggested to us that if the Bill were enacted unamended, firms of solicitors in the City of London would think that the only way to protect themselves from allegations would be to have vast departments that reported almost everything. The same would

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apply to tax advisers and those in financial services and banking, where I used to work as a corporate in-house counsel.

That is not to say that everything is riddled with crime but, using 20:20 hindsight, a legitimate firm that carries out legitimate business might be worried that if it had not made a report to make itself safe, someone might come along later and say, ''This turned out to be dodgy even though the amounts were tidy. You should have reported it.'' In the late 1980s, I saw the growth within financial services of a whole new industry called ''compliance''. As a result of various scandals, the previous Conservative Government rightly introduced regulatory provisions, although they were very complex. All the reputable institutions set up vast compliance departments.

4 pm

I shall anticipate the hon. Member for Glasgow, Pollok by making the criticism that the legislation and regulations that my party introduced in government—but before I was a Member of Parliament—were over-complex. At one stage, the plc for which I worked dealt with five different regulatory bodies with competing rule books. We used to have something called regulatory arbitrage, when we would decide whose overly draconian rule book to row about. The whole process eventually ground to a halt, and all the arrangements were changed during my first term in Parliament—under the Conservative Government—and during this Government's first term.

I was fascinated, as other hon. Members may have been, to see a half-inch thick book in my parliamentary post this morning. It introduced the latest update from the Financial Services Authority. I have not yet had time to read it, because the Committee started as 8.55 am, but it completely reverses a doctrine called polarisation. I shall not bore members of the Committee with all the implications of polarisation, but it may be familiar to some of them. However, the change represents a complete reversal. When the Government came to power in 1997, various Ministers made statements about how they would carry on with the polarisation regime. I have always taken an interest in the issue—and I know from our time together on the all-party group on insurance and financial services that you have, too, Mr. McWilliam. There has been a major change.

I make that point to convince sceptical Labour Back Benchers—as I seek to all the time—that we genuinely want the Bill to work. We have never said that the Government are completely wrong to introduce their provisions—not on Second Reading, not when we responded to the drafts before the Bill saw the light of day, and not in Committee. We are trying to end up with a workable Bill because that is the point of the Committee system. I hope that the Minister will respond constructively to the introduction of de minimis provisions so that we can at least discuss whether it is sensible to have a limit below which reporting should not take place.

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Mr. Davidson: If the minimum sum that must be notified is £1,000, is there anything in the amendments to prevent someone from coming along with £999.99 on several different occasions?

Mr. Hawkins: That, I understand, is a problem. The hon. Gentleman is right, which is why I said that I was not going nap on a particular figure. If he suggested a figure of £500, that would be fine. It would be perfectly acceptable for the Minister to table a Government amendment to deal with the issue. Before I tabled my amendments, I wondered whether one could deal with the sequential problem, because I do not want to open the floodgates either.

The spirit of the amendment is clear. We do not want organisations such as NCIS to be flooded, or entirely reputable organisations to have to set up vast and expensive departments and pass the cost on to customers, because huge amounts of business would probably flow out of the UK. In his remarks on the previous amendments, the hon. Gentleman attacked one offshore jurisdiction and said that all sorts of dodgy things happened there. I am sure that he does not want a huge number of jobs to be exported elsewhere. This is not an anti-foreign thing, because whatever part of the country we represent, our job as Members of Parliament is to help the UK to remain a successful financial centre. That is important, and jobs in the hon. Gentleman's constituency may well depend on us doing that, just as they do in mine.

I have said enough. Again, there are wide implications. I wonder whether the nearly four hours of debate on the two words of the previous amendment would qualify us for a place in the ''Guinness Book of Records''. That is all I need to say.

The Chairman: Order. It does not qualify. I had to sit through the debate on the John Golding amendment, which lasted for 12 hours.

Mr. Foulkes: My colleagues and I think that it is about time that I emerged from my slough of indolence to help my hon. Friend. He has done a sterling and tremendous job in dealing with amendments today, and also earlier in the week, when I was away.

The Chairman: Order. I hope that my good friend Mrs. Foulkes has not been writing to the other members of the Committee.

Mr. Foulkes: That is an interesting proposition, but I shall not go into too much detail.

Like the hon. Member for Surrey, East—

Mr. Hawkins: Surrey Heath. There is an East Surrey.

Mr. Foulkes: I am sorry, I meant to say Surrey Heath.

When I arrived, bright-eyed and bushy-tailed at 8.55 am, little did I know that it would be after 4 pm before we would reach the amendments now before us. However, like the hon. Member for Surrey Heath, I agree that the previous debate was worth hearing, and

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I was here for almost all of it. I hope that this debate will not be as long—we do not want a competition—but I hope that it will be as useful and constructive.

I am sorry to disappoint the hon. Gentleman by saying that his is a watering down amendment. My hon. Friend the Member for Glasgow, Pollok and others will agree that yet another Conservative amendment would make life easier for money launderers. I remind the Committee of what my hon. Friend the Under-Secretary said earlier. We are dealing with a huge problem—the Financial Action Task Force reckons that money laundering accounts for between 2 and 5 per cent. of gross domestic product. It is a huge amount of money, and the nit-picking of Opposition Members, their detailed questions and their legal points suggest that they do not fully understand and appreciate its extent.

Mr. Grieve: I do not have access to the intelligence, so I have to take the Minister's word for it that the problem is as large as he says. One of the difficulties is that despite the size of the problem, the number of prosecutions brought under the old legislation seems not to be so dramatically different from under the new, and there has been a remarkable paucity of such prosecutions. The Minister should understand that it is not necessarily a question of watering down, but of how to make the best use of the available resources. One of the questions is whether, by insisting on the disclosure of multiple minute sums, we would be helping in that important process.

Mr. Foulkes: I shall come to that, as the hon. Gentleman would expect. Sometimes, as during the previous debate, there are too many interventions, and although they make the debates lively they do not allow a Minister—or the Opposition spokesmen—to argue in a sustained and reasoned way. I shall answer that point and the point made by the hon. Member for Surrey Heath—

 
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