|Proceeds of Crime Bill
Mr. Grieve: I listened carefully to what the Minister had to say. I had hoped that he would explain in more detail the reasoning behind the amendments, rather than simply explaining the bare bones of what they would achieve. If I understood the hon. Gentleman correctly, the amendment is designed, in the case of a management receiver who is dealing with property under a restraint order, to give him the power to be remunerated from the assets that are under restraint and widen those powers to enable him to draw down certain assets more easily. I have a worry about that. The assets are under restraint. They are not assets that have been confiscated, nor is the confiscation process taking place. It must therefore be possible that, at a later stage, those assets—if the confiscation procedure does not work—might have to be returned to the defendant.
That brings us to an issue that we should look at later. Indeed, last night I was drafting an amendment about the potential knock-on effects on an individual of the way in which his assets are handled during the restraint procedure. Let us suppose that a person has a pool of money and the receiver draws down on that money while the assets are under restraint. If at a subsequent point—I ask the Minister to reassure me on this—no confiscation order is made, the pool of money will have to be replaced before it is given back to the defendant. That will compensate him, and the cost of the receivership will be borne by the taxpayer and by the state.
If, during the course of the receivership under the restraint order, there is a complete muddling of the defendant's existing financial arrangements, he may have a legitimate grievance. The immediate monetary loss that he has suffered will not in fact be his true loss. The true loss is much more complex, and is incalculable, because his business and everything associated with it may have been destroyed. The Committee ought to bear that possibility seriously in mind, because we are using the restraint procedure widely for a variety of individuals, with the intention that we will confiscate. Of course if we confiscate, there is no problem. However, if we end up not confiscating for any reason, it is incumbent on us to ensure that a regime is in place that minimises and removes any suggestion that the person has been subject to a financial disadvantage. That may be impossible to achieve in 100 per cent. of cases, but it means that careful thought must be given to issues such as who pays the receiver. While the assets are under restraint, there is a strong argument that the receiver should be paid by the state. If, after the completion of the process, a confiscation order is made, that is the time for the receiver to draw down his money from the confiscated assets.
Mr. Mark Field (Cities of London and Westminster): I shall speak simply to say that I agree with my hon. Friend. I appreciate what the Government are trying to achieve. The restraint period will be long drawn out, and significant expenses will be incurred. If large amounts of assets are under restraint, those assets should be available for the remuneration of a receiver. It should be remembered, however, that in any insolvency situation professional advisers have a prior claim. That is analogous, if not directly comparable. None the less, it would be inconvenient, apart from anything else, if assets were sold at what would inevitably be a knock-down sale price, and the restraint order and confiscation order then moved in the opposite direction. It would cause great embarrassment to the authorities if it was discovered that hundreds of thousands of pounds of undervalued assets had been sold off to pay fees, and the end result was the reimbursement of a defendant. It seems common sense that in the first instance, the state, rather than the assets of the defendant, should pay the fees over what should normally be a short period.
Mr. Boris Johnson (Henley): I just want to say how vehemently I agree with my hon. Friends, and to add a layman's point of view. During our discussion of the restraint orders, appeal process and so on, one question has formed in my mind, which I would be grateful if the Minister would answer. I can understand the logic of freezing the potential villain's assets, because although he has not been convicted of anything, we do not want him to scarper, disperse his assets and make them unavailable for confiscation. If the assets are frozen, the receiver can avail himself of them to remunerate himself. Before the individual has been convicted, his property is being taken away, and I can see that there may be arguments in favour of that—but how long will that situation go on?
Is there a time limit to the restraint order and the freezing process before the charges are brought and the potential villain is charged with an offence? There seems to be a long period during which assets can be frozen, and frittered away by the state, and then it may be discovered that the assets snaffled by the director and the receiver were not the proceeds of crime, so they may have to be returned to the individual concerned. How long will it all go on? Does the Bill contain a provision for minimising that period? I have not discovered such a provision yet.
Several hon. Members rose—
The Chairman: Order. The debate has ranged considerably more widely than the amendments. I am now taking a view on the clause stand part debate, so I suspect that if hon. Members wish to discuss clause stand part now, they should carry on as they are doing.
Mr. Wilshire: I am grateful for those remarks, Mr. McWilliam. I want to ask something specific about the matter that we are debating, but some of the points that I wish to make are not wholly relevant to whether we accept the amendment to change the word ``sell'' to the word ``realise''. I seek your guidance, Mr. McWilliam, because in a sense, my comments will be a stand part contribution. If I understand you correctly, it will be in order to raise other points that are wholly related to the stand part debate.
The Chairman: It strikes me that hon. Members are already discussing clause stand part rather than the amendments. The hon. Gentleman should continue, and we will dispense with the clause stand part debate.
Mr. Wilshire: I am grateful for your guidance, Mr. McWilliam.
I am sorry if Government Members sometimes think that I do not raise matters that are relevant or important to the layman. However, the points that I raise are all genuine, and the following points are especially so.
I am greatly worried by the debate. We are currently dealing with a person who, in British law, is innocent and not yet proved guilty. If that person is found to be not guilty of any of the charges, there are serious risks. The Government should spell out their thinking. My hon. Friend the Member for Beaconsfield said—I am sure that he is right—that if a not guilty verdict is returned, all assets that may have been taken must be returned. That is simple common sense. However, it is not that simple, because many issues that may arise must be addressed. For example, if certain assets are disposed of and must be reacquired, they could have earned interest, so interest will have been lost while they were not owned. Will the returning of the assets include interest earned? Natural justice would suggest that it should.
There is a further factor, which is—I do not apologise for returning to my mother's situation—that certain assets that a person or estate holds have a meaning and value that cannot be put in monetary terms. We should address seriously the issue of compensation, not only that of returning assets. If an asset that is disposed of cannot be recovered in its entirety, the price that would be fetched at auction will be inadequate, because more harm has been done to an innocent person than simple deprivation of money. Does the Minister envisage an allowance for compensation over and above the pure monetary value of an asset that is disposed of and subsequently recovered?
Some assets realised could be shares in public companies. Would such shares be recovered at the price at which they were sold or the price at which they would be bought back to return to the owner? We may consider the allowance of shares of a particular sort—I was going to discuss Railtrack, but that matter has overtones that would obscure my point—such as shares in the aviation industry. If proceedings had started before 11 September, shares in parts of the aviation industry would have been worth a lot, but now they are not. The value placed on them could be the value on the date when they were sold, which could have been after 11 September. Assets could have been seized before 11 September, and sold afterwards.
Mr. David Tredinnick (Bosworth): I have been looking at the Minister, and I suspect that he is not going along with what my hon. Friend said. Given the current terrorist problems, there are likely to be wild gyrations in markets. This is not about whether there is a 5 or 10 per cent. difference in valuation, because differences could be more substantial. My hon. Friend's point is extremely valuable, and I hope that he will pursue the question of how we assess and achieve a correct valuation.
Mr. Wilshire: I am grateful to my hon. Friend for making such a serious point. The Government must deal with it. Let us suppose that my assets were seized some time last August when I was in the process of disposing of them. I would have disposed of them between in August or at the beginning of September at a particular price. However, if the receiver had seized those assets in August and proceeded to sell them in October or November, would the Government argue that the true value of the property disposed of in October was the value in October or the value in August, when I would have disposed of them? As my hon. Friend the Member for Bosworth (Mr. Tredinnick) said, that could make a huge difference in the money raised, which could mean that large sums were involved.
It is easy to say that I am raising minor points, but we must contemplate the implications for British justice of someone being acquitted of all charges, despite every endeavour being made to replace the money that was seized. If the money that goes back is less than the value of the money seized, a huge injustice will have been done. The Minister must consider such possibilities.
I shall take your guidance, Mr. McWilliam, and raise now the couple of points that I would have raised on stand part. Under subsection (3),
If the entry results in damage to the property, after which the person is acquitted, I assume that the taxpayer will pay for that damage. I should be grateful to receive confirmation of that.
Under subsection (2), the court gives the
I assume that that includes selling the property. If the property disposed of is earning interest and that interest is being used by the person who owns the property to pay for his family, for example, who will get the interest on the property that is seized? Is it the state, or is the interest handed over to enable that person to continue living his normal lifestyle until he is convicted? I do not believe that it is just to take away a person's property and remove his income, as a result of which he will lose the means of sustaining himself while the whole process trundles along, only for there to be a not guilty verdict in the end. That person would have lost a huge amount of income for a long time. I should be grateful to receive the Minister's comments on that position.
|©Parliamentary copyright 2001||Prepared 29 November 2001|