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7.29 pm

Mr. George Osborne (Tatton): I wish to make a couple of general observations about the Bill, the principle of which I support, before moving on to specific concerns about a number of clauses, particularly those relating to the controversial new powers of civil forfeiture.

I begin by taking issue with something that the Home Secretary said in his speech to the Labour party conference at the beginning of the month. He said that it was not lawyers and judges who secured the liberty and freedom of our people; it was political action bringing about change. He expanded on the theme the next day in an article in The Times, saying:

"Freedom springs not from abstract legal process but from political action. After all, British democracy was not created by lawyers and judges."

I hold no brief for lawyers—I think that I am about the only speaker so far who has not been a lawyer, although my wife was once. However, I believe that the Home Secretary profoundly misunderstands our history and the development of our freedoms. We in Britain were proud of our constitution before we were proud of our democracy. Our constitution was formed as much from the steady development of our common law by our courts as by the political actions of politicians in this House and elsewhere. The essence of the constitution is that the actions of the state are subject to the rule of law. The freedoms of each one of us, as my hon. Friend the Member for West Dorset (Mr. Letwin) reminded us, occur at the interstices of the laws.

Primary among those freedoms is the freedom to live without fear of arbitrary arrest and imprisonment. It has been enshrined in common law for centuries and is known as habeas corpus. Equally important is the freedom to hold property. I take issue with some Labour Members

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who talk as though that freedom applies only to the very rich. For people who own their own council flat or have a small building society savings account, the freedom to hold property is very important. It is a bulwark between the power of the state and the freedom of the individual. That is why we should treat with care and examine with caution any Bill—particularly one as complex as this—which threatens the institution of property.

The Cabinet Office report which led to the Bill refers to

"a significant extension of the powers available to the State".

Our freedoms are not absolute, and it is the difficult duty of any Government to attempt to balance the competing freedom of the individual with the freedom of society to live free from the fear of crime. According to the Cabinet Office report:

"There is a careful balance to be struck between the civil rights of the individual and the need to ensure that the State has the tools to protect society by tackling crime effectively."

The mere mention of civil rights has Ministers reaching for their revolvers, but, unfashionable though it is to say it, I think that civil liberties are important and need constant protection. There are always good reasons why one civil liberty should be undermined, why another should be eroded and why a problem can be resolved by a change to yet another. Civil liberties need constant protection and there are always good reasons for undermining them. That is why we must be constantly on our guard.

Is the threat to our society from organised crime or money laundering such that it warrants a restriction of the rights of the individual? If we accept that the threat warrants it, do the powers in the Bill go beyond what is necessary to achieve our objectives? I accept that the threat to our society and our security from large-scale crime, drug dealing, organised crime and money laundering is very real. I pay tribute to the hon. Members for Wirral, West (Stephen Hesford), for Central Fife (Mr. MacDougall), who made his maiden speech, and for Dumfries (Mr. Brown). They all spoke movingly about the problems that drugs cause in their constituency, as they do in mine. I do not pretend that mine is a deprived inner-city area, but drugs are nevertheless a major concern for my constituents. Drugs pose a very real threat, and we lack the means to tackle it effectively. We also lack the means to tackle the way in which terrorist organisations are funded, as they rely largely on the proceeds of organised crime.

Fighting the crimes which corrode our society and starving terrorists of funds must include getting hold of the huge sums that people earn. Being caught must not simply be a career hazard for a criminal—it must destroy his career. We must find a way of reaching those whom the Minister for Police, Courts and Drugs described in his opening speech as the untouchables. The Home Office estimates that about 400 criminal bosses are sitting on profits of £440 million, half of which is held by only 39 people.

Despite a succession of confiscation laws passed by Governments of both parties, it is clear that the laws are not working. The Bill passes the first test that I set it. There is a significant threat to our society from large-scale crime. One way of tackling that is by getting at the profits of the criminals, and we lack the means. That justifies restricting the individual's right to hold property.

Whether the Bill passes the second test is another matter. Are the new powers that the state proposes to take upon itself necessary, or do they go beyond what is

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required? Many of the Bill's provisions are necessary. The creation of a national Assets Recovery Agency is clearly necessary when individual police forces lack the expertise or, I suggest, the will to pursue complex financial forfeiture actions. It also makes sense to unify the various money-laundering offences, although I note what my hon. Friends the Members for Sutton Coldfield (Mr. Mitchell), for Arundel and South Downs (Mr. Flight) and for Cities of London and Westminster (Mr. Field) said about that.

At the heart of the Bill is the change to the existing criminal confiscation regime and the creation of the new civil power of forfeiture. Pressure groups such as Liberty and Justice have criticised both as unacceptable erosions of the liberties of the individual. They object to the so-called reverse burden system that puts the requirement on persons convicted of a certain number of offences to prove that their assets are not the earnings of a criminal lifestyle. Some of my colleagues may disagree with me on this, but I have no problem on civil liberty grounds about the clauses that strengthen the criminal confiscation regime. There is a huge distinction between people who have been convicted of a criminal offence in a court of law and people who have not.

My hon. Friend the Member for West Dorset made the point that we do not know what these offences are and I hope that during the Bill's passage we will be given some idea of the nature and seriousness of the offences under discussion. However, I assume that they will be fairly serious. When a person commits a serious criminal act and it is proved beyond reasonable doubt in a courtroom that they have done so, they have in my view forfeited many of the liberties that the rest of us enjoy. The consequences include the possibility of being locked up in prison and losing the assets that they have earned through their criminal activity.

Why does clause 75 restrict criminal confiscation orders, except in the case of drug crimes, to persons who have been convicted of a number of offences? If they have been convicted of one offence, they need to be convicted of the same offence on two separate occasions in the past six years or of four offences on the same occasion. Surely being convicted of one serious offence such as arms trafficking or the trade of prostitution should be enough to call into question a person's lifestyle and the legality of their assets. If Ministers are right to say that we are dealing with criminal untouchables, requiring the police to catch those people red handed not just once but several times seems to undermine the whole point of the Bill.

A harsher criminal confiscation regime would also make less necessary the one part of the Bill that I find it difficult to accept—the proposed new power of civil confiscation. It allows the state, for the first time, to seize the property of people who have never been convicted beyond reasonable doubt of a criminal offence in a court of law but who merely, on the balance of probabilities, are deemed likely to have taken part in unlawful activities. That gives the state major new powers of a totally unfettered kind, the full nature of which is spelled out in the explanatory notes.

Of clause 245 the explanatory notes say:

"This is an entirely new right of action . . . Cases where criminal proceedings have not been brought would include cases where there are insufficient grounds for prosecution".

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Of clause 246 they say:

"The criminal standard of proof, under which matters must be proved beyond reasonable doubt, does not . . . apply".

Of clause 247 they say that

"it is not necessary to show that property was obtained through a particular kind of unlawful conduct, so long as it can be shown to have been obtained through unlawful conduct of one kind or another."

In other words, the Bill is giving massive legal force to the old lament of the policeman: "We know he did it; we just can't prove it." Indeed, the hon. Member for Glasgow, Pollok (Mr. Davidson) echoed that lament when he said, "They got off but they are guilty as sin."

I believe that the Bill undermines the very foundation of our freedoms, which is that people are innocent until they are proved guilty, that the state cannot merely seize the property of the individual but must establish that the individual has forfeited his liberties under the rule of law. The way that we do that in our society—the way we have always done it—is to take individuals to court, establish beyond reasonable doubt that they are guilty, preferably to a jury of their peers, and prove that they have committed a criminal offence.

The new power of civil forfeiture is born of an understandable frustration at our inability to pin things on certain individuals, but it is a sloppy and dangerous short cut to improving our criminal law.

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