Proceeds of Crime Bill

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Mr. Foulkes: Did the hon. Gentleman not hear me say that there are other constraints? There are public interest considerations, and there are considerations with regard to the resources of the prosecution authority. Nobody will pursue a halfpenny—although I think that the sum would now have to be a penny before it was legally possible to do that.

The hon. Gentleman's argument is making a mockery of the situation. It is a reductio ad absurdum. [Hon. Members: ''Oh.''] I hope that I got that right.

The Chairman: Order. The Minister is all right. So long as the Chair understands what he is saying, it is in order.

Mr. Grieve: The Minister cannot have it both ways. On the one hand, we are given the impression that NCIS is saying that it might want to know about even the smallest transaction about which there are suspicions—which expresses the Big Brother attitude of wanting to know everything. On the other hand, he is saying that NCIS would not bother to prosecute if it discovered that someone had suspicions about a minor transaction but did not report them. I am unsure whether that would be the case. If it is so important for NCIS to hear about a £5 transaction, and someone does not tell them about it, that person might be in jeopardy. I find his argument difficult to follow.

My hon. Friends and I have been guided by representations that we have received about the administrative burdens and problems that will be placed on legitimate organisations, companies and

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individuals, and about the stress and anxiety that people could experience if they have to think, ''What should I do in this situation?''

The Minister must bear it in mind that, in a legitimate business environment, the clients are entitled to confidentiality. [Hon. Members: ''Oh.''] That is an important point. Human relationships are dependent on the ability to maintain confidentiality. We have to do that all the time, in a family setting, and in others—although I hope that such a setting would never involve the commission of crime.

Clients normally assume that they are entitled to confidentiality when they are dealing with professional advisers. The point has been made that some companies are putting up notices saying, ''Clients must understand that if we receive information that indicates that they might be committing a criminal offence, or that money laundering may be going on, we will tell the authorities.'' I accept that that is a proper step to take, but it is a departure from the normal practices of commercial confidence—and in particular from the usual practice when clients are dealing with people from whom they would normally have a commercial right to expect that confidence.

At what point should that be departed from? With regard to tiny transactions, it is difficult to see how it could be departed from. Professional people would bear a heavy burden in such circumstances. The small size of the transaction would tend to dispel any suspicion that it might be illegitimate.

It should be possible to decide on a cut-off point, where one can say, ''If we are concerning ourselves with this, the system is getting out of control,'' because otherwise we would be demanding of people the constant revelation to the state authority of information that goes beyond the bounds of what is reasonable or proper for the prevention of crime.

Therefore, a philosophical issue is at stake, even though the principle of the requirement to give such information is a departure from the practice that existed prior to the passing of the earlier legislation. I can see the reasons behind that departure, although I do not welcome the fact that our society has got to such a pass that we have had to do that. It is a necessity. I am not saying that it is an unmitigated good—it is not. When it is extended to any transaction of any size, including minute ones—if the Minister thinks that £1,000 is too much, I am happy to consider a lesser figure—it approaches the borders of unreasonableness. At that point, I begin to think that the amendment has force, subject to what the hon. Member for Wellingborough said about a series of linked transactions. I accept that that could be a major loophole, which would have to be plugged.

Vera Baird: I appreciate why the hon. Member for Beaconsfield is concentrating on clause 324, in relation to which his argument may have more force, although not as much as he thinks. I am very worried that, under amendments Nos. 518 and 519, somebody who knows that they are dealing with criminal property would not be committing a crime if its value is £999.99. However, if its value was a penny more, a crime would be committed. Whatever the figure, that is a ludicrous

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basis on which to allocate criminality. I defy him to point to another example of that in English law—or Scots law.

Mr. Mark Field (Cities of London and Westminster): We have had a long debate on the matter, and I fully appreciate the concerns of the Minister and other Labour Members that we would be turning a blind eye to criminality by implementing such an amendment. However, the arguments made by both my hon. Friends have a certain amount of force. Dare I say that, in part, the Minister implicitly accepts that a blind eye will not be turned to such very small sums, but that the full weight of the investigative body will not be exerted on individuals in relation to relatively small sums.

To draw an analogy, it would be interesting to know how many prosecutions have taken place in relation to sums of up to £1,000. It would be useful to have such statistics ready when the Minister sums up. We have already espoused our concern—which we shall no doubt reiterate at length on Tuesday, when we consider other aspects of part 7—that there is a real risk that an enormous regulatory and compliance burden would be imposed on financial institutions in the City of London. That would worry me, especially if firms of solicitors and accountants were required to account for every last transaction. The whole process might collapse if we are not careful. The real risk would then be that the money laundering provisions, which are important, would come into disrepute.

The Minister has already said, in part, that small sums would not be investigated. Would the level be fixed at below, say, £1,000, or £500, or indeed £5,000? If we are to tackle the real Mr. Bigs effectively, it would be a crying shame if the entire process were to be strangled by bureaucratic paperwork, which would be imposed on the regulated sector, and to an extent the unregulated sector. I would be grateful for guidance from the Minister, as a de minimis provision would be sensible.

Another alternative might be not to include such a provision in the Bill but to ensure that it is understood through a nod and a wink, or through annual or bi-annual guidance notes from the agency to the regulated sector. Hon. Members of all parties would think it a crying shame if a massive burden of regulation were so to drown the compliance and regulation officers that the real criminals that we are trying to bring to book escaped.

4.45 pm

Mr. Davidson: It is interesting that the initial argument advanced in favour of the amendment concerned reducing the burden of work involved, yet when we moved on in the discussion, the hon. Member for Beaconsfield—not for the first time—let the cat out of the bag and started to raise issues of Big Brother and confidentiality. He was almost arguing that it is an Englishman's right and privilege to fiddle his taxes by keeping his accounts secret.

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The point that was made about confidentiality seems absurd. It is not for a moment being suggested that every disclosure would be published in the equivalent of the Evening Times to be seen by all and sundry. Disclosures would be kept within a strictly regulated, confidential crime-fighting mechanism. Breach of confidentiality would therefore be minimal. Emotive terms such as Big Brother smack of the ''sneaking'' defence, which was advanced by the hon. Member for Henley before he had to go off and sell his papers.

I draw to the Minister's attention the letter from the Law Society of England and Wales to which I referred earlier. It suggests a standard phrase to be included in a client care letter. I quoted it earlier, but it is also relevant now:

    ''For the protection of our clients we operate a money-laundering reporting procedure. In certain circumstances, information will be revealed by us to the appropriate authorities in relation to any suspicion of money laundering.''

I cannot understand why any honest person dealing with a respectable legal practice would have any reservations about that sub-policy.

Mr. Hawkins: Will the Minister give way?

Mr. Davidson: Gosh. Is the hon. Gentleman better informed than me?

Mr. Hawkins: I hope for the hon. Gentleman's sake that I am being prescient again, but I suspect that it is the time of the afternoon.

Mr. Field: Will my hon. Friend give way?

Mr. Hawkins: No. I am intervening.

The Chairman: Order. There cannot be an intervention on an intervention.

Mr. Hawkins: Nothing would give me greater pleasure than if the hon. Member for Glasgow, Pollok were made a Minister, although I hope that his Government's tenure will be limited.

Is the hon. Gentleman criticising what the Law Society of England and Wales put on their website or, as I think, is he beginning to recognise that the Law Society of England and Wales is behaving perfectly properly? That would stand slightly at odds with his usual wholesale criticism of all lawyers as crooks and shysters.

Mr. Davidson: I do not think that all lawyers are crooks and shysters, and not just because some of them are good lawyers. Some of them have standards of probity. [Interruption.] Shall I wait until the hon. Gentleman has finished his conversation?

Mr. Hawkins indicated dissent.

 
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Prepared 17 January 2002