Proceeds of Crime Bill

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Mr. Foulkes: When my hon. Friend the Under-Secretary was replying to various points made by the hon. Member for Beaconsfield, I was thinking about how long I have been around. I remember, with great affection, the hon. Gentleman's father. He was a distinguished and delightful Member of Parliament, and I had great respect for him. I have tried to think of an adjective to describe the hon. Gentleman himself, and the words ``diligent'', ``courteous'' and ``learned'' came to mind. However, when he turned up yesterday at Westminster Hall to speak in a debate about rural Scotland, ``ubiquitous'' seemed to be the only adjective to describe him. He is diligent in pursuing certain points, and he has the courtesy and accuracy that is not always shared by Opposition Members.

Clause 49 sets out the powers that the court can confer on a management receiver to manage property. I say to the hon. Member for Spelthorne that that person is managing the property pending conviction and confiscation. The clause makes a change from the present legislation, which does not set out such powers in detail. That is because they are inherently available to the High Court. Given that the Bill now gives the Crown court, instead of the High Court, the power to appoint both management and enforcement receivers, it is prudent to set out in full the powers that it will need to ensure that the provisions work effectively.

Subsection (7) prevents the powers from being exercised in relation to property that was made subject to a charging order under earlier confiscation legislation in England and Wales or Northern Ireland. No provision was made for charging orders in the Scottish legislation.

Subsection (8) states that the courts may not confer on the receiver the power to manage, deal with or realise property, including interests in tainted property,

    ``unless it gives persons holding interests in the property a reasonable opportunity to make representations to it.''

That has the same effect as provisions in existing legislation. In addition, we have made some technical amendments to this and other clauses that will add to its effectiveness.

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Let me deal with specific points made by hon. Members. I say to the hon. Member for Beaconsfield that if the management receiver were not paid by someone—and it seems appropriate to pay him out of the assets—we could not employ him. The hon. Gentleman will be reassured to hear that there are provisions for compensation in clause 72 that could be used if there were a serious fault.

I say to the hon. Member for Henley (Mr. Johnson) that the clause is cross-referenced with many other clauses that qualify and deal with the points that he raised. Clause 41(7) states that there should be no ``undue delay'' in proceedings. Under other clauses, the defendant may apply to the court to have the order varied or set aside, if he is concerned. The time limit on proceedings is a matter for the court, but normally the High Court specifies and reviews the period. We expect the Crown court to do the same.

I say to the hon. Member for Spelthorne that interest must be taken into account, because the assets under restraint are still owned by the defendant, and the receiver merely manages them on the defendant's behalf. The receiver must retain the value of the assets. I refer hon. Members to clause 69(2), which states that the powers must be exercised with a view to maximising their value. A defendant would have lost money as a result of 11 September regardless of whether the assets were managed by a receiver or by him.

I say to the hon. Member for Beaconsfield, and indeed to other Opposition Members who made similar points, that the clause deals with anticipated criminal proceedings. We must strike a balance. We must take account of the interests of the state, of the public and of victims. I hope that I have dealt with the matters raised.

Mr. Grieve: I appreciate the Minister's point that we are dealing with anticipated criminal proceedings. The purpose of bringing those proceedings is to convict the defendant and confiscate his assets. Dealing with crime is an important part of the Government's law enforcement armoury. My anxiety is not about that but about people who emerge from the process with no conviction and no confiscation order, or those who are convicted but do not receive a confiscation order. Such people have rights. I am concerned to ensure that, so far as is possible, the process minimises any adverse impact on such people's financial arrangements.

I have drafted an amendment to clause 69 intended—although perhaps it does not do it particularly well—to encapsulate what troubles me with regard to these clauses, which are linked in many ways.

If we do not deal with the issue in the right way, I foresee that applications with regard to interference with property rights will be made under the Human Rights Act. The applicants will say, ``These assets were seized. They were managed in this fashion. The payment of the receiver cost thousands of pounds.'' Receivers do not come cheap; they make more money than almost anybody else. I cannot remember what the receivers of Railtrack are charging Ernst and Young for its services, but it is a fairly stupendous sum.

The applicants may go on to say, ``Receivers came in, and they had to draw down on my assets to meet their needs.'' As I have said, if those assets are merely a cash sum, that can easily be replenished. However, if a business has to be sold, that cannot be easily restored.

I am concerned about how the management of assets should take place in such circumstances—we will return to that matter when we debate clause 69. Historically, receivership has usually come about when someone is going bankrupt—or, at least, heading for insolvency. The justification for appointing a receiver to manage those assets is that the person who owns them is already unable to meet his financial obligations.

However, with regard to the matter under discussion, receivers might be introduced in cases involving people who are solvent. Indeed, those people might be exceedingly prosperous and successful, and they might play a major role in the economic life of their locality—and all that might be damaged, long before a decision on confiscation was made, if the receivers were introduced. That would not matter if confiscation were to take place. However, if situations arise in which there is no confiscation, I foresee that there will be serious problems.

As the Minister has rightly said, in the past the sort of regime that we are debating has been sparingly used, because there have not been many relevant cases. However, if he succeeds in the legislation, it is to be anticipated that there will be a large number of cases, and we would therefore have to accept—because of the laws of statistics and human nature, and the capacity of human beings to get things wrong—that the cases in which individuals are subjected to this process will increase, and that there will also be a rise in the number who are acquitted of any offence and have their assets, nominally, returned to them. The Committee would not be doing its job properly if it did not challenge proposals that might lead to individuals claiming that their livelihoods suffered a massive adverse impact that cannot be adequately compensated in monetary terms.

The matter is made even worse by the fact that—we will also consider this later—the term ``serious'' default is introduced in a subsequent clause. That suggests that compensation might only be made available not in cases where damage has been suffered, but in cases where one can show, by applying a difficult test, that the proceedings should never have been commenced or that certain actions should not have been taken during the proceedings. That troubles me greatly.

Although I do not know the best way to progress, I oppose the amendment because it widens the existing powers. I appreciate why they are being introduced, but, until I am satisfied that we have got the overall framework right, I do not want the existing powers to be widened. The receivers are being given more power than they have had hitherto in cases of this kind.

Mr. Foulkes: I understand the hon. Gentleman's concerns, and I accept that they are genuine, rather than artificial or manufactured. However, I am unsure whether they are best dealt with in our discussion on this clause. With regard to that, he has tabled amendment No. 136, which the Committee will discuss later.

Mr. Grieve: The Minister may well be right, which is why amendment No. 136 proposes changes to clause 69, rather than to this clause—although they are linked.

Mr. Foulkes: I accept that they are linked. The powers should, initially, be defined as widely as possible. The purpose of the legislation is to deal with people who have been carrying out drug trafficking or money laundering—people who are serious criminals. The hon. Gentleman wants, in spite of some of the amendments he tabled earlier, to tackle those criminals. Therefore, the definition of the powers should be as wide as possible. When we consider the exercise of those powers, we can decide whether further inhibitions are needed to protect the genuine and legitimate rights of those on whom were are making restraining orders in respect of the property.

I am mindful of, and sympathetic with, the hon. Gentleman's point, but we need not discuss it in more detail now. I hope that, in retrospect, he will consider not opposing the Government amendments, and that he accepts the appropriateness of having as wide powers as possible. No doubt he can envisage situations when—because the powers are not wide enough—we allow criminals to get off the hook and not have restraining orders made against them. It is better to have such powers defined, and insert at a later stage any necessary safeguards.

Amendment agreed to.

Amendment proposed: No. 40, in page 31, line 1, leave out `sell' and insert `realise'.—[Mr. Foulkes.]

Question put, That the amendment be made:—

The Committee divided: Ayes 12, Noes 4.

Division No. 9]

Ainsworth, Mr. Alistair Baird, Vera Carmichael, Mr. Bob David, Mr. Wayne Davidson, Mr. Ian Foulkes, Mr. George
Hesford, Stephen Lazarowicz, Mr. Mark McGuire, Mrs. Anne Robertson, John Stinchcombe, Mr. Paul Stoate, Dr. Howard

Field, Mr. Mark Grieve, Mr. Dominic
Tredinnick, Mr. David Wilshire, Mr. David

Question accordingly agreed to.

Amendments made: No. 41, in page 31, line 37, after `(2)(b)' insert `or (d)'.

No. 42, in page 31, line 42, at end insert—

    `(8A) The court may order that a power conferred by an order under this section is subject to such conditions and exceptions as it specifies.'—[Mr. Foulkes.]

Clause 49, as amended, ordered to stand part of the Bill.

Clause 50 ordered to stand part of the Bill.

Clause 51


Amendments made: No. 43, in page 32, line 14, leave out from `property' to end of line 15.

No. 44, in page 33, line 16, at end insert—

    `(8A) The court may order that a power conferred by an order under this section is subject to such conditions and exceptions as it specifies.'—[Mr. Foulkes.]

Clause 51, as amended, ordered to stand part of the Bill.

Clause 52


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