Proceeds of Crime Bill

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Mr. Foulkes: These are disclosures.

Mr. Davidson rose—

The Chairman: Order. We are coming perilously close to the edge of order. I was already having some difficulty in establishing the relevance of the discussion, and I have now lost the drift of the argument. I would like us to return to the amendment.

Mr. Field: Thank you, Mr. Gale.

I was focusing on whether people who have nothing to hide should worry about the intrusion of the state through identity cards, and whether they should be happy to allow the state look through their affairs—tax returns, bank accounts and so forth. I made it clear yesterday, and do so again today, that that road leads to totalitarianism. The argument that if one has nothing to hide the state should have full rights over all one's affairs is made at the beginning of all totalitarian states. It was made in the 1930s in Nazi Germany, and has been made under a whole raft of dictatorships. I am deeply concerned about that argument.

I acknowledge that MPs are public servants who have a greater duty to be open about their personal affairs, but equally, private citizens should not be under threat from the Inland Revenue or other public officials to disclose what is in their bank account on the basis that if they have nothing to hide, they should

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not be reluctant to do it. That is a fundamental philosophical—as well as constitutional and political—concern, which rings true for many people on the Opposition side of the Committee. That is why we stress the need for specific safeguards. How does the Minister envisage putting safeguards in place to ensure that whatever permission is granted to a range of individuals under subsection (5), the liberty of the individual will be maintained?

Mr. Hawkins: I support my hon. Friends, and I strongly share the philosophical concerns expressed by my hon. Friends the Members for Cities of London and Westminster (Mr. Field) and for Spelthorne. We all recognise that those who work for the Inland Revenue have a job to do on behalf of the state, but although we want them to do the job properly, Parliament must be careful to ensure, as my hon. Friend the Member for Spelthorne rightly said, that officials are not allowed to go on fishing expeditions. Those of us who share concern about authoritarianism or the nanny state are bound to be concerned about the open-ended opportunities created by the new legislation. Such concerns are absolutely valid with regard to this part of the Bill, which is why I strongly support the amendment and what my hon. Friends have said about it.

10.30 am

It will always be a matter for great concern if we think that legislation may be misused in the future. We know that these particular Ministers would not want to be part of any misuse, but we must legislate for the future—and who knows how the legislation that we pass now might be misused in the future if we are not careful? I simply want to put on the record my strong support for what my hon. Friends have said.

Mr. Ainsworth: I shall try to give some reassurance to the hon. Members for Surrey Heath, for Cities of London and Westminster and for Spelthorne—but before I do, I must express my admiration, albeit in his absence, of the hon. Member for Spelthorne. He said that he might have been absent from some debates—but in order not to have noticed the issue that he has now raised, he must have been absent from all the debates on a large portion of part 1 and the whole of part 6. Moreover, he has other duties in Committee as a Whip, which he has carried out admirably—yet we now find that he has managed to conduct all his negotiations with my hon. Friend the Government Whip without having any knowledge of the content of the Bill. That is incredible, especially as his handling of matters has been beyond all criticism. His ability deserves some recognition.

As for fishing expeditions and the inappropriate use of the measures in the Bill, I cannot reopen the debate that we had on part 6, as I do not think that you would allow me to, Mr. Gale, even if I wanted to. There will not be fishing expeditions or people running rampant over taxpayers' rights and constitutional rights. The Revenue has strict legal duties to maintain the confidentiality of information provided by the taxpayer. Subsection (5)(c) allows the Revenue legally to disclose information to the director, but

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only if the information is relevant and appropriate to the director's functions and proportionate to the request. That is because of the interaction of the requirements of the Data Protection Act 1998, the Human Rights Act 1998 and the gateways provided in the Bill.

It has been central to our thinking that we do not want the director to be able to stray into the normal affairs of the Revenue. He cannot get involved with the crimes that are investigated by the Revenue, such as tax evasion. Such investigations are not his function, and will continue to be conducted by the Revenue. A memorandum of understanding will be drawn up by the director and the Commissioners of Inland Revenue to dictate exactly how requests will be made and dealt with. They will be specific to the director's functions, and he will have business involving his taxation powers only when he has had a case passed on to him, he has followed the hierarchy of the Bill's provisions, other people have considered criminal investigation, and he has considered criminal confiscation and civil recovery.

This may come as a shock to the hon. Member for Spelthorne, as we move towards our 38th sitting, but in those circumstances, we are giving the director the ability to raise a tax assessment on the proceeds of crime. I am sorry that that revelation has come so late to him. That power will not allow for fishing expeditions. It is strictly governed by, for instance, the rules of proportionality and data protection—and the rules of confidentiality that apply to the Revenue will also apply to the director.

Mr. Grieve: I am grateful to the Minister for re-emphasising some important points about how the legislation is intended to function.

The Minister should not be surprised that the subject under discussion has frequently been raised, as it causes genuine anxiety. We are breaking down some of the barriers that have existed between Departments in exchanging information. Those barriers were erected to encourage people to be open and honest in their dealings with Departments, and to reassure them that their confidences would be respected.

What we are discussing would be a major change from the situation that prevailed when the Inland Revenue began its relationship with taxpayers in the 19th century. As the Minister will know, people at that time were so concerned about maintaining confidentiality that many funny schedules were created to prevent any one tax inspector from having full knowledge of an individual's finances.

We are moving a long way from that. The hon. Member for Glasgow, Pollok often says that people who have nothing to hide have nothing to fear. That might be true, but it does not mean that confidential information that people who have nothing to hide have provided to a specific Department for a specific purpose should be used for another purpose. If people were to lose confidence in their dealings with Departments, channels of communication would dry up—and that applies to the Inland Revenue in particular. If that happened it would hinder the operation of the legislation.

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Mr. Davidson: The hon. Gentleman said, ''used for another purpose''. If information provided for a specific purpose is passed onto someone who studies it for another purpose, and they decide that it contains nothing untoward, it will not be used for any purpose, because no action will be taken. It would be used only if the person who provided the information had cheated on their taxes.

It has been established that the Conservative members of the Committee are the friends of the criminal. If they are also the friends of the tax evader, they will all support the hon. Gentleman's opinion on the matter under discussion—and if that is the case, it should be noted.

Mr. Grieve: The hon. Gentleman is jumping to a conclusion about the way in which the legislation could work. It would not merely make it possible to reveal the tax information that had been passed to the Inland Revenue in respect of an individual against whom proceedings may have been brought under the Bill. Its scope would be wider. In certain circumstances—with regard to civil recovery, for example—it could cover the transfer of information relating to individuals against whom no such imputation had been raised. That could happen, and for understandable reasons. For instance, the director might want to see the complete picture with regard to a case. The hon. Gentleman should bear that in mind. Such circumstances would arise very rarely, but tax information might be revealed pertaining to an individual whom the hon. Gentleman would regard as innocent.

Mr. Ainsworth: Some of the hon. Gentleman's comments are correct. Let us bear in mind some of the discussions that we have had about the need for standards, and for a certain culture to be developed in the agency. We should also bear in mind the fact that—and here I am contradicting my hon. Friend the Member for Glasgow, Pollok—the director will not deal with matters such as tax evasion. The Revenue will continue to deal with tax evasion.

Mr. Grieve: I do not disagree. I think that the Minister and I agree that information pertaining to an individual's financial relationship with the Inland Revenue, which is usually provided for the purposes of taxation, could be made available to the director in the exercise of his functions, even though it may relate to a person against whom the director is not aware of any imputation of wrongdoing. He may need that information to lay his hands on money in someone else's hands. My interpretation is that the Bill is sufficiently widely drawn to encompass that circumstance, certainly on civil recovery. If I am wrong, the Minister will correct me.

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