|Proceeds of Crime Bill
Mr. Hawkins: What my hon. Friend rightly says leads me to a further thought. In light of our increasing knowledge about the increasing complexity of the system, might the Minister be forced to review the compliance cost assessment that the Government must provide for all Bills? My hon. Friend and I might want to re-examine that in light of what he has just said.
Mr. Grieve: Perhaps the Minister would like to intervene or comment on that before I finish speaking. My hon. Friend is right, and I hope that the Minister will forgive us for raising the matter in this way. The Bill is Government legislation, and we want it to work, but the more I examine it, the more complicated the Revenue functions seem to be. The Minister may, however, say that the provision has not caused a problem in Ireland, which may be a compelling reason for not worrying about it.
Mr. Ainsworth: We spoke earlier about the need for a memorandum of understanding on how the Revenue will work with the director. The jobs involved must be
Column Number: 958done anyway. Therefore, regardless of whether Revenue staff do the routine jobs so as not to involve, and unnecessarily increase the number of, the people working for the director, the director will work the matter out in a common-sense way with the Revenue.
The hon. Gentleman should not minimise the issues involved. I should have thought that one of the most regular ways in which criminals try to legitimise their income is to set up front companies that employ people, pay statutory sick pay and do all the other things that companies must do. That is exactly how such activity goes on, and will be found out.
Mr. Grieve: The Minister is right, and I do not disagree with his analysis. However, he may agree that if a criminal sets up a front company for the purpose of laundering his assets, and the director cannot seize those assets under part 5 or the confiscation provisions in part 2, the mere fact of setting up a front company would normally imply that the criminal involved is prepared to pay tax in the ordinary way to the Board of Inland Revenue. However, we are discussing the director's use of taxing powers in order to tax money that in ordinary circumstances might be expected to escape the attention of the Board of Inland Revenue. I may have misunderstood the matter, but that is what I would normally assume lay behind the provision.
I accept that, as the Minister said earlier, as the director will focus on criminality and the proceeds of crime, he may turn his attention to a front business that is not only fuelled by ''funny money'' but does not pay tax properly. On the whole, history has shown that many people who engage in criminality do not pay their taxes, and try to minimise or evade tax generally, as well as having acquired their money unlawfully and illegitimately in the first place. I do not believe that there is a great deal between us, but if a business exists, the Board of Inland Revenue will try to tax it and will take all those factors into account.
Mr. Ainsworth: Yes, but the most relevant point is the focus. There are many small businesses in my constituency, and as long as they order their affairs so as not to draw undue attention to themselves, the Revenue will not single out a particular shop or small business that fronts a scam and launders money derived from it. However, the director may get there, because of other intelligence that he has. The main issue is the focus.
Mr. Grieve: The Minister is right.
I have a cottage on the River Thames, and when I am staying there, I occasionally notice moored in the local marinas very large pleasure craft that never seem to do very much. They change hands from time to time, and I do not suppose that I will be spilling the beans if I mention that there are anecdotal rumours that money is often laundered by acquiring and selling those large assets. Such transactions might generate capital gains tax, for instance.
Large pleasure craft—
Mr. Davidson rose—
Mr. Hawkins: Do they have drawing rooms?
Column Number: 959
Mr. Grieve: I do not know, but as they are often described as gin palaces, I suspect that a drawing room is the last thing they would have.
Mr. Davidson: I was going to ask what the rate of exchange was between a cottage on the Thames and sheep and cattle? How many sheep and cattle did the hon. Gentleman's relatives have to steal to fund the purchase of his ill-gotten gain? Will the Minister consider whether his cottage can be reclaimed by the state?
Mr. Grieve: My family benefits from the fact that its more nefarious activities were brought to an end by the union of the crowns in 1603. I am glad to tell the hon. Gentleman that as a result of that of that union, the people in the borders who were not deported to Northern Ireland, or, subsequently, to America—and who were not hanged, either—succeeded in transforming themselves into legitimate business men. That happened such a long time ago that even I would find it difficult to distinguish, for the benefit of the hon. Gentleman, between the assets that I own that are derived from criminality, and those that have subsequently been lawfully acquired.
Mr. Davidson: Is that the case for the defence?
Mr. Grieve: I return to the debate on the clause.
The Minister has persuaded me that I must not interfere with statutory sick pay, maternity pay or student loans, although I will be interested to see how those provisions work in practice. However, I am conscious of my own ignorance, and if those who sit in the other place have greater expertise, they will be able to draw on our discussion to point out any deficiencies that they identify in this part of the Bill.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 317 ordered to stand part of the Bill.
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