Proceeds of Crime Bill

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Mr. Grieve: My hon. Friend may also want to bear in mind something else that the hon. Member for Wellingborough said, which we have not developed. He referred to the possibility that although an objective offence might remain, it might nevertheless have a completely different set of penalties. The Committee has not had an opportunity to consider that. If the Government wish to come forward with such proposals, I am sure that my hon. Friend and I will consider them, even if we might continue to have serious reservations.

Mr. Hawkins: My hon. Friend is right to raise that issue. We may come back to it as later amendments tabled to the clause or penalties under this part of the Bill are considered. That might be another way of dealing with the matter, as the hon. Member for Wellingborough rightly said.

I simply repeat, especially to sceptical Government Members, and in particular to the hon. Member for Glasgow, Pollok, that we want a piece of legislation that will work, and that will not so overburden the authorities with reports that the entire system grinds to a halt. Our scepticism about that might be right. We are not claiming to be experts—although I worked in this field some years ago as chairman of a compliance committee for a major plc, and have also worked in insurance, banking and financial services, albeit under a previous regime—but we have been advised by experts. Those who are experts in the system as it has operated in the past few months and years tell us that it is not working now, even with a much lower level of reporting.

The hon. Member for Glasgow, Pollok, who is rightly trying to protect his constituents—we applaud him for that—wants a system that will work. The difference between us is over whether he is right in believing that everything that the Government introduce must be perfect simply because it will hit

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the Mr. Bigs. I do not think that it is. No one looking at a Bill as complex as this can be absolutely confident that any Government have necessarily got it right. Even though they are a Labour Government I earnestly encourage him—were it not for politics, I would be calling him my hon. Friend the Member for Glasgow, Pollok—to be sceptical of any Government of any party who say, ''We are certain we have got this right.'' There may be circumstances in which even a wicked Tory Opposition, as the hon. Gentleman sees us, are right in saying, ''Hang on a minute, the Government might not be producing something effective here.''

I freely accept that the problems in my constituency are not as serious and deep-seated as those in the hon. Gentleman's, but there are people suffering because of drug pushers and dealers there, and I raise the issue regularly in the House. All of us who have dealt with drugs cases in the courts, as I have over many years, both in prosecuting and defending, know their terrible cost, and there are deaths from drug misuse in my constituency too. We want a piece of legislation that will protect my constituents as well as those of the hon. Gentleman.

Mr. Davidson: I have always seen myself as a critical friend of the Government—but they are always keener on friends than on critics. However, does the hon. Gentleman agree with the hon. Member for Cities of London and Westminster, who clearly said that he wanted the clause watered down? Does he accept that the phrase ''watered down'' does not give the immediate impression that the hon. Gentleman wants to strengthen it in a way that makes it work? Can we expect the young lad who has just got it wrong and given us the wrong line to be banished from the Committee, as the hon. Member for Henley has been banished?

Mr. Hawkins: My hon. Friend the Member for Henley will be returning, and has not been banished in any way.

My hon. Friend the Member for Cities of London and Westminster will no doubt speak for himself, and may want to make a further contribution to explain his use of that particular phraseology.

Mr. Field: When answering that intervention my hon. Friend pointed out that Conservative Members want to ensure that the Bill works properly. The worst possible thing is to have draconian rules that either are ignored and are not enforced, or which are so stifling that there is enormous bureaucracy in the City of London and all the other financial institutions, which would be a disaster. That would lead not only to work leaving the City of London but, more importantly, to disrespect for the law. This is all about making the Bill work. We simply wanted the draconian measures watered down, not their effect. Indeed, the opposite is the case. Our plan is to ensure that we get the law right, and that it is properly enforceable and enforced.

Mr. Hawkins: I agree with every word that my hon. Friend has just said. That is the complete answer to the hon. Member for Glasgow, Pollok.

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I need not detain the Committee any longer, but I want to hear the Minister's response and, in particular, what he thinks—

Stephen Hesford (Wirral, West): Because of his lunchtime conversation with the representatives of the Law Society of England and Wales, the hon. Gentleman asks what might be a reasonable excuse. I am surprised that Conservative Members need to ask that question, which sounds alarms in my mind. I have jotted down four possible reasonable excuses, which are fairly obvious to anyone who applies his mind seriously to the subject, so I am worried about the expert who they have been talking to.

One possibility is that in the compliance procedure, a designated individual is given the information, and given the specific task of making that information available to NCIS. Somebody will say, ''I gave this information to my colleague. The company should now hand it over, and I expect that to have been done.'' Another possibility is that at the time under review, the person concerned may have been ill and may not have taken full cognisance of what was in front of him. I am sure that a court or the prosecuting authorities would want to take that into account. A third—

The Chairman: Order. This is not an intervention; this is a contribution. If the hon. Gentleman wants me to call him, I will call him, but after the hon. Member for Surrey Heath has finished.

Mr. Hawkins: Clearly I shall have the opportunity to respond after the hon. Gentleman has spoken. I understand some of the points that he is making, but may I put to him, for a change, not the view of the Law Society of England and Wales, or even of the Law Society of Scotland, but an example of the way in which the clause may go wrong? It also comes back to the point that my hon. Friend the Member for Beaconsfield made about who will be caught by the provision. The British Bankers Association says:

    ''the proposed offence of failure to report (clause 324) will place staff, especially junior staff, in an impossible situation.''

Again, that is the expert view of people at the sharp end.

The BBA continues:

    ''The reporting of suspicion goes one step further than reporting knowledge and having reasonable grounds for suspicion goes further still. Whilst it is easy for anyone using hindsight or working in a investigative role to decide that an action is suspicious''—

using 20:20 hindsight—

    ''it will not necessarily be so apparent to a member of staff in a line role. Such staff will have many day-to-day pressures and may rarely ever come across a criminal activity. The BBA firmly believe that criminal sanctions for negligence should not be extended to junior staff. We do not believe that it is consistent with the Human Rights Act''—

that is particularly pertinent, given that the Government have, as usual, certified that the Bill is consistent with that Act—

    ''for a staff member to be potentially liable to a five-year prison sentence for a failure to act where he/she has no criminal intent.''

The British Bankers Association thinks, as we do, that the Bill goes too far.

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5.30 pm

The BBA says that the following scenarios will become reportable if the clause is not amended. The first is:

    ''Customer A pays a cheque into his bank account, which he knows to be worthless. Prior to the cheque being returned unpaid, Customer A draws against the uncleared cheques. Customer A does not pay any further funds into his account to settle his account.''

The second is:

    ''Customer B, knowing that he does not have enough funds in his account to meet his liabilities, either by way of cleared funds or authorised overdraft, uses his Switch card to purchase goods and/or to obtain cash, before the bank can put a stop on Customer B's Switch card. If Customer B has no intention to pay further funds into his account to settle these liabilities, this is either a theft offence or an offence of obtaining a pecuniary advantage by deception.

    Under the existing legislation, there would be no obligation on the bank to report those offences to NCIS, as the conduct does not constitute an offence of money laundering.''

In other words, those cases are treated as small banking matters that can happen on any day of the week to any high street bank.

The BBA continues:

    ''With the absence of a de minimis requirement in the legislation it would create a huge burden on the money laundering reporting officers.''

The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): That is not relevant.

Mr. Hawkins: I am raising it now because the BBA's examples are both specifically concerned with clause 324, and I thought that I should deal with them together.

Will the Minister respond to the serious criticisms of the professional bodies at the sharp end? The British Bankers Association and the Law Society of England and Wales believe that the measure goes too far. The Minister may say, ''We don't agree; we have to hit all these organisations'', but we say that it will cause the entire system to grind to a halt. It will not hit the real criminals—the Mr. Bigs whom we all want to hit and against whom the Bill is really aimed. The procedure will be so unwieldy that it cannot be effective and will achieve the reverse of what the Minister is trying to do.

 
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