Proceeds of Crime Bill

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Mr. Ainsworth: I am following the hon. Gentleman's point, and he has raised genuine issues for concern. I wonder if he could focus his argument. Why does he think that there is a particular problem in relation to tax? I foresee that the same issues could arise under foreign jurisdictions with almost any information that we were to pass to them. I am struggling to understand why tax is separate or different.

To what degree would individual approval by the Revenue give additional protection in the circumstances that he, quite rightly, worries about? To what extent should we trust the director and to what extent should we worry about human rights, rights in relation to self-incrimination and the comeback on those issues? To what extent do we think that referral back to the commissioner will add something?

Mr. Grieve: I do not want to get dragged into a general discussion of the powers under clause 423(1)(h) if I can avoid it. We shall come to that subject shortly.

The Minister is right that there are issues about disclosing any information that the director may have to hand to a foreign Government, because the director then ceases to have control of it. It could be used against the person concerned or others in a way that infringes, for example, human rights legislation in this country. Clearly, with some foreign countries, that risk is considered minimal, but even some of our European neighbours' track records in criminal investigation are, I regret to say, not very good. It is often a subject for discussion in their newspapers that the activities of their investigating magistrates, for example, turn out to be oppressive. We have criticisms of our system, too, but one has only to consider the nature and quality of some of the criticisms made in Europe to feel anxiety about the way in which some foreign countries, including some quite close to us that are regarded as democracies, enforce criminal law.

I shall focus on the specific question of why the Inland Revenue, or Customs and Excise for VAT, should be different. The Minister has acknowledged the difference by requiring that certain bodies give authorisation for disclosure under the clause; subsection (8) specifies the commissioners. For some reason, the Minister and the draftsman have considered that there should be special safeguards for tax material. I always understood that that is because of the special nature of the relationship of

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confidentiality between individuals and the bodies to which they pay their tax. That is well established in this country.

The Minister has acknowledged, owing to the way in which the clause is drafted, that the tax information that is likely to come to the Commissioners of Inland Revenue or Customs and Excise is treated as a special category. If I identify that that is a special category for onward transmission from the director, the Minister, in logic, must agree with me. If information was a special category when it was given to the director, surely it should remain a special category when it is in the director's hands.

That is acknowledged by the way in which clause 422 is drafted. That clause relates to further disclosure if information comes from the Inland Revenue or Customs and Excise. The Minister offered an attractive argument that we are discussing generic matters such as names and addresses, which may sound relatively innocuous and straightforward. However, that does not detract from the fact that the information originated in the confidential relationship between the individual and the Revenue or Customs and Excise. In such circumstances, there should not be a generic disclosure clause.

In the case of onward transmission from the director, he should return to the two bodies and say, ''You supplied me with information about Mr. Bloggs's tax affairs. I think that this would be very useful to the German authorities in the money laundering proceedings that they are to bring against him. Do you agree that it should be disclosed?'' The Revenue, with its Revenue hat on, would have a further opportunity to refuse that, if it had good reasons to do so, rather than giving a blanket permission, which could lead to difficulties.

If the number of cases will be as small as the Minister suggested, that would not cause a serious problem. It would mean only that after the Revenue gave information and generic guidelines to the director, it would not lose control of the information in a manner that could be held against it. I am worried about its reputation.

Mr. Ainsworth: And so should we be, but the hon. Gentleman tries to use the Bill's structure against my argument. The worries of the Revenue and Customs about ensuring their reputation for confidentiality and control of information has affected the way in which information is protected by the Bill. The same commissioners who have those worries are those who will agree any methodology that allows the generic transmission of onward information.

If we try to extend the culture of confidentiality beyond the director, I do not know what we would add to the Bill by providing that even if the commissioners are comfortable, in given circumstances, to give generic permission for onward transmission, we should say, ''No. Even if you feel that you are comfortable, we can't allow you to enter into such an arrangement.'' I understand that the hon. Gentleman is making a serious point, but I struggle to understand why he thinks that the very people who insist on confidentiality and who were involved in

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drafting the Bill would enter into such generic arrangements that would damage their reputation.

Mr. Grieve: I very much hope that they would not. I have paid compliments to the Inland Revenue and its attitude, born of my experience of prosecuting on its behalf. Perhaps the Minister will say that the Revenue asked for clause 422(3)(b), but I cannot help thinking that it is not necessary at present. If the director wishes to make use of such information, it is said that he must first gain permission to do so, but given the volume of disclosure that is likely to take place, the Committee may be more comfortable if such matters are dealt with case by case, for no other reason than that an individual taxpayer's affairs are ultimately thatindividual.

The trouble with generic disclosures is that, when someone has tried to identify a category and says that, in the case of names and addresses, for example, the person need not bother to come back, the issue tends to be forgotten about until something goes wrong. Someone will say, ''I think I made a mistake, so we should change the category.'' That mistake might not have happened if there had been a process by which it can be said, ''In the case of Mr. Bloggs, can we do this?''

The matter cuts both ways. It is difficult to see that a greater burden will be placed on either the director or the Revenue if clause 422(3)(b) is deleted. In the absence of a cogent argument against that, I am minded to press amendment No. 607 to a Division to register our concern. The Opposition are unlikely to win the vote, but will the Committee consider whether it is appropriate, in the case of tax affairs, which we have decided to treat particularly carefully, that there should be a right of onward information provision by the director, without the Inland Revenue being asked about it? I shall withdraw amendment No. 606 and press amendment No. 607 to a Division. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 421 ordered to stand part of the Bill.

Clause 422

Further disclosure

Amendment proposed: No. 607, in page 245, line 17, leave out paragraph (b).--[Mr. Grieve.]

Question put, That the amendment be made:--

The Committee divided: Ayes 6, Noes 15.

Division No. 49]

Carmichael, Mr. Alistair Field, Mr. Mark Grieve, Mr. Dominic
Johnson, Mr. Boris Tredinnick, Mr. David Wilshire, Mr. David

Ainsworth, Mr. Bob Baird, Vera Clark, Mrs. Helen David, Mr. Wayne Davidson, Mr. Ian Foulkes, Mr. George Harris, Mr. Tom Hesford, Stephen
Lucas, Ian McCabe, Mr. Stephen McGuire, Mrs. Anne Robertson, John Stinchcombe, Mr. Paul Stoate, Dr. Howard Watson, Mr. Tom

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Question accordingly negatived.

Question proposed, That the clause stand part of the Bill.

3.30 pm

Mr. Grieve: We have clearly covered a lot of ground on the clause. Let us consider subsection (6). It states:

    A permitted person who discloses such information to the Director may make the disclosure subject to such conditions as to further disclosure by the Director as the permitted person thinks appropriate; and the information must not be further disclosed in contravention of the conditions.

My question relates to the exchange of information with foreign countries. How will the effect of subsection (6) be guaranteed?

Mr. Wilshire: I had not considered that. I shall be interested to hear the answer.

Other aspects of subsection (6) worry me. It refers to conditions such as the person involved wants to attach. What sort of conditions does the Minister have in mind? The explanatory notes, to which I referred for guidance, give as an example ''sensitive operational details''. It occurs to me that this is a Pollok-type issue--a possible loophole. Is the Minister suggesting that information providers--which I imagine might include the intelligence services, as they were mentioned this morning--might for operational or sensitive security reasons attach a condition that the information cannot be passed on and therefore cannot be used? If so, might we be creating a loophole?

We now know, and the world will know, because it will be able to read the explanatory notes and the debate, including the Minister's comments, that if you can organise your laundering of money, or whatever else it is that you do, in such a way that somehow--

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