Proceeds of Crime Bill

---

[back to previous text]

Mr. Davidson: That is vital. It is crucial that that be made explicit, and it be put beyond the ability of the courts to reinterpret Parliament's intention. It should be absolutely explicit that any assets that someone has are liable to be seized to repay the amount from which they are assessed as having benefited through crime.

Mr. Johnson: A split seems to be opening up in the Labour ranks. I distinctly heard the Minister say that there was no question of taking away property except in so far as it had been illegally obtained. However, if I understand the hon. Member for Glasgow, Pollok correctly, he is saying that he wants everything that a criminal has to be up for grabs, and that all assets are fungible and may be taken away. He would not support the insertion of the word ``illegally'' in the reference to property in subsection (2)(b).

Mr. Davidson: I thank the hon. Member for Henley—and for The Spectator, South—(Mr. Johnson) for raising that issue. I may be expressing myself poorly, but let us suppose that someone who had obtained assets as a result of criminal conduct argued that they were no longer available because they had been spent, and that the assets that were available had been obtained legitimately. That should not be a reason for someone to be allowed to go scot-free without paying any compensation. It has been said that there is a split between our Front and Back Benches. Well, there are occasions when Back Benchers are more in line with the mood of the country than some elements of the Mr. Softy tendency. On occasions, that tendency has been displayed in another place—but that description does not apply to the Ministers in this Committee.

I seek clarification from the Minister about the length of time. I am unclear about why reference is made in some parts of the Bill to a period of six years, as under clause 11. Does that apply to clause 9, or are someone's available assets counted back to the beginning of time or, as in the case of the hon. Member for Beaconsfield, to the second or third generation, when his family were stealing cattle and sheep? I was under the impression that he claimed Scottish ancestry. He said in his maiden speech that his relatives lived in Roxburghshire 400 years ago. He then went on:

``by the middle of the 18th century, my family had graduated from being cattle and sheep thieves''—[Official Report, 21 May 1997; Vol. 294, c. 789.]

If he is now saying that his relatives were Scottish cattle and sheep thieves who were stealing from the English, that may put a different light on the matter. It may be less of an offence than I had originally thought; it would be helpful if he clarified it. I was under the impression that, as a good lawyer, he was preying on his neighbours, which is certainly worthy of contempt.

Mr. Foulkes: Again, we have had an interesting debate. I accept that it is unlikely, but let us imagine that the hon. Member for Beaconsfield were convicted for being involved in criminal activities. If a confiscation order were taken out against him, it would not be appropriate to take account of the benefits that his long-deceased ancestors may have obtained from their alleged stealing of sheep and cattle. I hope that I have reassured the hon. Gentleman, if not my hon. Friend the Member for Glasgow, Pollok.

Mr. Grieve: I am small fry compared with my right hon. Friend the Member for Devizes (Mr. Ancram), whose family made a huge fortune in the 16th century. They became such important thieves that they eventually received a peerage, which is fairly standard practice. However, my right hon. Friend would not be able to lay his hands on those assets now.

Mr. Foulkes: The right hon. Member for Devizes used to be my pair, and I know all about his background. Devizes is the third seat that he has represented in Parliament. No doubt it will be the last.

The Chairman: Order. The Chair is unaware of the existence of pairing.

Mr. Foulkes: Yes, and so are the Whips, at the moment.

I assure the hon. Member for Henley that there is no split between my hon. Friend the Member for Glasgow, Pollok and me on the matter. We are as one on the Bill, as we are on many matters.

12.30 pm

Mr. Johnson: I do not understand how that can be the case, because the hon. Member for Glasgow, Pollok has already called the Minister Mr. Softy, if I understood him correctly. I direct the Minister's mind like a laser towards the hon. Gentleman's point. He believes that all assets owned by a criminal should be recoverable. However, the Minister believes that only assets that are the proceeds of crime should be recoverable. If a criminal can demonstrate that he has assets that are honestly gotten, should those assets not be recoverable?

Mr. Foulkes: I am about to address that point. I must do so quickly, before this becomes associated with the alleged split between the Chancellor and the Prime Minister, and who is on which side of that argument.

The Chairman: Order. Happily, those issues are definitely out of order.

Mr. Foulkes: In every way, Mr. Gale.

I can tell the hon. Member for Henley and my hon. Friend the Member for Glasgow, Pollok that it does not matter if the criminal has spent the illegitimate money because even if it has been spent, it will still be counted for the purpose of calculating the benefit from criminal conduct. When calculating the available amount, we will examine all assets, whether they are legitimate or not.

As for the six-year period, when a person has a criminal lifestyle, we will examine his benefit from general criminal conduct. That represents all conduct, however far back it goes. Assumptions help in that assessment, but they are restricted to the six-year period.

Mrs. Helen Clark: Why was the six-year period chosen?

Mr. Foulkes: That is a very good question.

The Chairman: Order. It is an excellent question—and it can be addressed when we reach clause 11.

Mr. Foulkes: That is what I was about to say, Mr. Gale. We shall consider that question when we reach clause 11, which I am thankful to say is being dealt with by my hon. Friend the Under-Secretary.

We could insert the word ``criminal'' before the word ``conduct'' in clause 9, because it is about the calculation of the benefit rather than the available amount. We may examine that idea. However, I hope that, following my explanations, the Committee will agree that clause 9 should stand part of the Bill.

Question put and agreed to.

Clause 9 ordered to stand part of the Bill.

Clause 10

Available amount

Mr. Grieve: I beg to move amendment No. 32, in page 5, line 30, leave out paragraph (b) and insert—

`(b) to pay any sum which is a lawful and bone fide debt.'.

The Chairman: With this, it will it will be convenient to discuss amendment No. 75, in page 5, line 33, leave out subsection (3).

Mr. Grieve: I would like the Committee to think a little about the background purpose of what we intend to achieve and whether, in achieving it, we risk endangering innocent third parties excessively.

I have examined the wording of clause 10. I am sure that the Minister will tell me that it follows previous practice, but that does not mean that we should not examine it afresh. Clause 10 will provide that values are calculated, and thereafter the only deductions that can be made are fines and sums that would be included among preferential debts if the defendant had gone bankrupt. The consequence would be similar to a bankruptcy proceeding, and would have a similar effect on any creditor of a defendant whose assets were confiscated. Although I understand why bankruptcy is considered to be similar to the process on which we are embarking, the process is actually very different. A person goes bankrupt usually because he cannot pay his debts. Once that has happened, there is a system to try to ensure that certain creditors are preferential—they fall into quite a small category—and thereafter it is the law of the marketplace. If there is not enough money for everyone to be compensated, the main creditor who asked for the bankruptcy to take place takes precedence over the other creditors.

I am anxious about the process because these are not bankruptcy proceedings; the person does not have any debts but a public policy decision is taken, very properly, that an individual should be deprived of his assets because he cannot show that they were not illegally obtained. I should be interested to know what has happened in the past; if the process has been applied to earlier rules there are likely to have been innocent casualties.

The hon. Member for Glasgow, Pollok gave examples of individuals in his constituency leading a criminal lifestyle, which suggests that although they are living off benefits they have also been enjoying other assets and spending freely. Those are likely to be small-scale examples; because of the sub judice rules I cannot mention a case that especially springs to mind, as the person concerned is about to undergo trial. However, I can think of individuals leading a lavish lifestyle, who have very large properties and who have long been suspected of engaging in illegal conduct. Some seizure of assets might take place if those people had been convicted. In such circumstances, many individuals—small businesses, shopkeepers, and so on—who have provided them with goods and services may be awaiting payment, but as a result of the process they are not preferential creditors. If the vast majority, if not all, of the assets concerned are confiscated, perfectly legitimately, the shopkeepers and others will be the innocent victims of criminality and of the fact that the assets were originally obtained illegally or were the result of criminal conduct.

In such circumstances, and especially as we are in the process of extending the net to catch a much wider category of person, is it right to have a rule which says, in effect, ``You should have been more careful. You must assess whether a person is creditworthy. If, in spite of having a lavish lifestyle and huge assets, he is not creditworthy, because those are the result of criminal conduct, you have to suffer the consequences''? Is such a public policy decision the right approach, or should we consider that the matter is not akin to bankruptcy, where someone has to make a commercial assessment of a person's creditworthiness? If that assessment fails there will inevitably be victims.

In this case, we should be considering not whether the ordinary rules of bankruptcy should apply but whether there should be another set of rules to ensure that bona fide creditors receive compensation for the services or goods they have provided. Some services, once provided, no longer have a monetary value; goods in the defendant's possession may have a monetary value but they may be of considerably less value than the amount that was supposed to be paid for them. I simply flag up the issue, and I would be interested to hear the Minister's comments. If his aspirations are realised, we are about embark on a process that will lead to many such proceedings and applications. As a result of the lawful and justifiable steps that the state will take against them, it will also impel many people into bankruptcy.

Are we to say to the many victims, ``Sorry, this is one of life's commercial realities and you will have to face up to it. There is nothing we can do for you''? Or are we to say, ``You may not be a preferential creditor, but you are undoubtedly a bona fide creditor, so you should be paid out''? It is a public policy issue, and I fear that it might lead to considerable harshness. Where is the necessity in public policy terms to justify such harshness?

Finally, I may have misunderstood the Minister earlier, but I fail to grasp the connection between the amendment and salting away one's assets. I can see a vague connection. Under the clause, a defendant could claim that he owed money to individuals who are not bona fide creditors, which might make the court's task a little more complicated.

 

---

Prepared 20 November 2001