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Lord Filkin: My Lords, the noble Baroness, Lady Anelay, invites us to take the bait of what she said was the less severe Amendment No. 114 if we could not take the bait of Amendment No. 113. I am afraid that

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we fell into the same trap as the noble Lord, Lord Goodhart, and took Amendment No. 114 at its face value. It would make the whole Act fall. That has been our mindset in drawing up our response. The noble Baroness will hear our views on why that is a bad idea. We shall reflect further on what she spoke to—without any hint of optimism—rather than the amendment as tabled.

Amendment No. 113 would sunset the power in Clause 92—to make incidental and consequential provisions arising from the Bill—after three years. We were not altogether surprised that the amendment was tabled, following discussions in Committee, when some support was expressed for such a provision. During the debate on the special report of the Delegated Powers and Regulatory Reform Committee, the noble Lord, Lord Dahrendorf, expressed a strong preference in principle for sunset provisions, as the noble Baroness, Lady Anelay, mentioned. The purpose behind such a provision would be to place further restraints on the seemingly wide powers that the clause grants to amend legislation. However, as we have debated previously, those powers will be subject to thorough scrutiny and any order to amend Acts of Parliament would be subject to affirmative resolution, while any order to amend secondary legislation would be subject to negative resolution.

Clause 92 concerns only supplementary and consequential provision. It is not a power to carry out a wholesale rewrite of the Bill. The Government have no intention of trying to use it to make any provision not within the scope of the clause. To try to do so would be ultra vires and unlawful. The power has sufficient checks attached to ensure that it is appropriately used. The further check provided by a sunset clause is not necessary.

The amendment would set an unhelpful precedent. If every Bill were to include a sunset clause, the necessary reviews would place an unacceptably heavy demand on parliamentary time. The Government would prefer to review the recommendations of the Delegated Powers Committee case by case. We will be open to suggestion on the inclusion of sunset clauses where the committee thinks appropriate. The committee has proved itself to be a wise counsellor for the House on these matters, and I believe that we should continue to rely on its wisdom in the future.

In the case of this Bill, the committee did not conclude that a sunset provision would be appropriate, and the Government see no reason to think otherwise. I would reinforce that by drawing attention to the Bill's complexity, on which we have commented on many occasions, and which is demonstrated by Schedule 4, which runs to 11 pages. The amendments regarding road traffic offences also are extremely technical and complex. It would be marvellous if we were certain that, in three years, we would have identified every glitch and error. However, we would be foolish to think that we would be able to do that.

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In our view, Amendment No. 114 goes even further, by placing a three-year expiry date on the entire Bill. In effect, that would instigate a review procedure of the Act three years after it has come into force. Reference has been made to the acknowledgement by my noble and learned friend Lord Williams of Mostyn that sunset clauses can be a useful device which are appropriate in some legislation. I think that he was referring specifically to the Police (Northern Ireland) Bill and to 50:50 recruitment in the post-Patten proposals. Such measures to strike a balance between the different communities in Northern Ireland are clearly exceptional, and one very much hopes that they will not be needed in future. This Bill is different. We are saying that we think that there will be occasions when consequential amendments are necessary to deal with complex drafting inadequacies which we have identified in the Bill.

I am happy to assure the House that we will not let the legislation drift. I do not believe that there is a need for a statutory review process. As noble Lords are aware, large sections of the Bill build on and replace the Criminal Justice (International Co-operation) Act 1990. In Committee, when we were discussing the operation of that Act, various noble Lords indicted that perhaps that Act itself represents a review of the earlier legislation.

As this Act is implemented, the Government, the UK Central Authority and other bodies involved in the direct implementation of the provisions will be looking closely at the effectiveness of the legislation. So these provisions will not be allowed to drift, but will be reviewed as they are put into practice.

I cannot accept that legislating for just three years ahead is an efficient way to legislate or an efficient use of parliamentary time. I appreciate, however, that the noble Baroness, Lady Anelay, has said that the amendment does not express quite what she had intended to say. We will undoubtedly have opportunities between now and Third Reading to reflect on what she did mean. I hope that I have explained the broad thrust of the Government's position.

Baroness Anelay of St Johns: My Lords, the Minister has anticipated what I was going to say in some respects but not in others. I shall certainly reflect on the matter between now and Third Reading. I shall not press the amendments today. At that stage, however, I shall return to the issue of sunset clauses and the principle of having the "softer", three-year amendment in relation just to Clause 92. Today, I simply wanted to raise a debate on the principle of sunset clauses. The Minister anticipated that I might deploy an argument based on the words used by the noble and learned Lord, Lord Williams of Mostyn; but I have not done so. It was obvious that those advising the Minister thought that I might rerun the arguments I used in Grand Committee. I deliberated on doing that, but realised that that was not my strongest point. I realised that I have much better arrows in my quiver and was able to leave aside that argument.

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The Minister made one point to which I must refer. The Government have taken into consideration the fact that these matters shall be decided on a case-by-case basis by the Delegated Powers and Regulatory Reform Committee. We value enormously the work done by that committee, and we pay very close attention to every word in its reports. Ultimately, however, it is for the House to decide. There are occasions, very few in number, when the committee does not comment on something to which we object, and vice versa. So although the Minister is quite right that the committee should consider these matters further—I think that the noble Lord, Lord Goodhart, was right that these matters should be referred to the committee—I do not think that that is the only possible course of action. We will think about doing something about that at Third Reading. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 114 not moved.]

Clause 94 [Extent]:

Lord Goodhart moved Amendment No. 115:

    Page 61, line 36, at end insert—

"( ) Her Majesty may, by Order in Council, direct that any provision of this Act shall extend, with such exceptions, adaptations and modifications, if any, as may be specified in the Order, to any of the Channel Islands or the Isle of Man."

The noble Lord said: My Lords, this is the last amendment on the Marshalled List and I shall be as quick as I can.

This amendment was moved in Grand Committee by my noble friend Lord Wallace of Saltaire. Its purpose is to authorise the Government, by Order in Council, to ensure that any part of the Bill may be extended in its operation to the Channel Islands and the Isle of Man.

It is clear that some parts of the Bill are of no concern to mainland United Kingdom, such as Part 3 on the mutual recognition of driving disqualifications. However, other parts are of very considerable concern—such as the provisions about freezing orders, under Chapter 2 of Part 1, and in particular the provisions relating to financial information under Chapter 4 of Part 1. It is clearly important that the islands should be as active in defeating money laundering and the financing of terrorism and international crime as the United Kingdom itself because of the status of the islands as offshore financial centres of real international importance. It is, therefore, desirable that steps should be taken to apply the relevant provisions of the Bill, or equivalent provisions, to the islands.

Of course, the best course would be for the islands to enact their own legislation. I hope, indeed, that that will happen. But the United Kingdom Government retain residual authority to advise the Queen to make an Order in Council, having authority in the islands. That power carries great influence. A great deal of pressure can be put upon the islands.

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Do the Government expect that the authorities in the islands will take steps to adopt legislation to the same effect as the relevant provisions of the Bill, so far as it is possible for them to do so? Will the Government use their influence and, if necessary, their powers to ensure that that happens? I beg to move.

8.15 p.m.

Lord Filkin: My Lords, I am glad to respond to the amendment of the noble Lord, Lord Goodhart, or rather to the questions behind it, as fully as I can, although in many cases they touch on issues of constitutional law which we do not have the competence to override, as I shall explain.

The amendment replicates an amendment that was tabled by the noble Lord, Lord Wallace of Saltaire, in Committee. It appears that we have not been able to satisfy him adequately.

The noble Lord has previously expressed his concern that clauses of this nature appear in some Bills but not others and is keen to know why. As we explained, a provision such as the amendment suggests can be included in UK legislation only after consultation with, and with the consent of, the islands. It cannot be done unilaterally, as the amendment would require.

As my noble friend Lord Bassam explained previously, unlike purely domestic legislation, it is not appropriate to include the standard extension wording where the Bill is enacting our EU obligations. Unlike standard Community business, where territorial extent is defined by the treaty, Third Pillar co-operation, which is implemented by this Bill, has no specific territorial application. The inclusion of Gibraltar and the islands in an instrument is considered with our European partners at the time it is negotiated and their inclusion can then be specified in the instrument where this is agreed. As the islands have chosen not to participate in the measures covered by this Bill, we cannot use the Bill to change that situation.

The motivation behind this amendment is the wish to ensure that the Channel Islands and the Isle of Man do not become havens for criminal finance and money laundering. The offshore banking industry thrives in those islands. As we explained previously, the UK Government have been active in promoting good practice in this area, setting up the Edwards Review in 1998 and following up its recommendations in co-operation with the islands. The Edwards report praised the islands' systems to combat money laundering in all the islands, and its detailed recommendations for improvements have largely been implemented.

The authorities are keen to remain compliant not only with international standards but also with international best practice. While they are not obliged to implement the EU Money Laundering Directive, in practice they have introduced many of the provisions of the 1991 directive and have gone further in some respects. We shall be introducing regulations to implement the 2001 directive later this year. We

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understand that the authorities in the Channel Islands have indicated that once we have done so they will consider introducing similar provisions where they do not already exist, as well as the money laundering provisions (Part 7) of the Proceeds of Crime Act. The same arguments apply in the case of the Isle of Man. Although at present the islands will not be able to participate in specific requests under the protocol, tight regulation of the financial sector ensures that financial criminality is not allowed to flourish.

When the UK was applying to participate in the Schengen convention, the islands were consulted about whether or not they wished to participate. In the event, it was not possible to agree a common level of participation between the islands and it was felt that widely ranging degrees of participation would serve only to create more confusion.

The Crown Dependencies were not consulted about the inclusion of a permissive extent clause in this Bill as they customarily enact their own laws in the field of criminal justice. As the noble Lord is aware, they have their own separate legal and judicial systems. It is exceptional these days for UK legislation to be capable of extension to the Crown Dependencies save in a few areas such as immigration. As we discussed before, a copy of this Bill will be sent to the islands and it will be for them to decide whether there is anything in it which

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they might wish to copy in their own legislation, as they have done in the past with earlier UK criminal justice legislation.

As my noble friend Lord Bassam informed the noble Lord during the course of our previous debate on the matter, the responsibility for the constitutional arrangements of the Channel Islands has now passed to the Lord Chancellor's Department. I understand that the noble Lord has written to the Lord Chancellor seeking a briefing meeting with officials in his department to discuss the application of UK legislation to the Crown Dependencies. I have seen the Lord Chancellor's letter of reply to the noble Lord, Lord Wallace of Saltaire, offering a meeting and indicating the name of the head of the constitutional policy division, who is commended as an expert in these matters. I very much hope that the offer of a meeting and a discussion will be useful to the noble Lord, Lord Wallace. I hope that I have explained why we cannot accept the amendment but that I have opened up an avenue of discussion with the Lord Chancellor's Department.

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