|Serious Crime Bill [HL] - continued||House of Commons|
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Chapter 4: Other Measures to Disrupt Serious Crime
Clause 78: Power to search for firearms
285. This provision was added to the Bill by a non-government amendment in the House of Lords.
286. At present, an officer at least of the rank of inspector can give an authorisation in the circumstances set out in section 60 of the Criminal Justice and Public Order Act 1994, following which people and vehicles within the specified locality can be stopped and searched.
287. This clause confers additional powers on a police constable who has reason to believe that someone is carrying a firearm within a particular area. In these circumstances, the provision gives a constable the power, on his own authority, immediately to arrange for the area to be sealed and for people or vehicles in that area to be searched by any means. This search could include, but is not limited to, the use of technical equipment such as search arches or wands, or by personal searches.
288. The geographical area to be sealed off is not limited under this provision; nor is the period of time during which an area may be sealed off.
Clause 79: Orders of the Secretary of State and the Scottish Ministers
289. Subsection (1) of this clause ensures that orders made by the Secretary of State or the Scottish Ministers are made by statutory instrument. Subsection (2) enables the power to make orders to be exercised to make different provision for different cases, descriptions of cases, or purposes. An order may also make supplementary, incidental, consequential, transitional, transitory and saving provision. Subsection (3) sets out the orders which are subject to the affirmative resolution procedure. Subsections (5) and (6) set out the orders which are subject to the negative resolution procedure.
Clause 80: Supplementary, incidental or consequential provision
290. Subsection (1) of this clause confers on the Secretary of State a power by order to make supplementary, incidental or consequential provision. The effect of subsection (3) is that the power does not extend to matters that are devolved under the Scotland Act 1998. Where such an order amends or repeals any provision of an Act, it is subject to the affirmative resolution procedure under clause 79(3); otherwise it is subject to the negative resolution procedure (see clause 79(4) and (5)).
291. Subsection (1) of this clause gives effect to Schedule 14. Subsection (2) provides for the Secretary of State to make, by order, appropriate transitional, transitory or saving provisions in connection with the coming into force of any
provision of the Bill other than the provisions specified in clause 84(4). The power in respect of these provisions is exercisable by the Scottish Ministers.
292. This clause gives effect to Schedule 15 which sets out legislation to be repealed or revoked by the Bill.
293. This clause sets out the extent of the Bill. Subsection (1) lists the clauses of the Bill that only apply to England and Wales. Subsection (2) lists the clauses that apply to England, Wales and Northern Ireland. Subsection (3) lists those clauses that apply to Scotland only. Subsection (4) lists the clauses that extend to Northern Ireland only. Subsection (6) provides that any amendment, repeal or revocation in Schedule 5, 8, 10 or 15 has the same extent as the enactment amended, repealed or revoked. Subsection (7) provides that, subject to the limitations contained in subsections (1) to (6), the Bill extends throughout the United Kingdom.
294. This clause provides for commencement. Subsection (1) provides that the provisions of the Bill will be brought into force by means of commencement orders made by the Secretary of State, with the exception of the clauses listed in that subsection and clauses 84 and 85, which will come into force on Royal Assent, and the provisions listed in subsection (4), which are to be brought into force by Scottish Ministers. Subsection (2) requires the Secretary of State to consult the Scottish Ministers before making an order under subsection (1), in relation to clause 69(1), paragraph 2 of Schedule 10 or paragraph 24 of that Schedule. Subsections (3) and (4) provide that the provisions listed in subsection (4) will be brought into force by orders made by Scottish Ministers.
295. This clause sets out the short title of the Bill.
FINANCIAL EFFECTS OF THE BILL
296. A full Regulatory Impact Assessment has been conducted and can be viewed at http://www.homeoffice.gov.uk/documents/Serious-Crime-Bill-RIA.pdf.
297. The financial case for the Bill is based upon the need to protect all citizens, including the tax payer, from the impact and cost of serious crime, including in particular fraud. The key financial impact of the Bill will come from the data matching and data sharing provisions. The potential savings from the data matching provisions, in addition to the savings made by the current exercise, are an estimated £22.2 million per National Fraud Initiative cycle of 2 years. The estimated fraud savings for the public purse from the data sharing provisions are between £137 - £273 million per year. There will also be additional benefits to the private sector. If the membership of CIFAS (the UK's Fraud Prevention Service) option is taken, total subscription costs of membership would be up to £250,000 per year, plus one off joining fees of up to £125,000.
298. On the other areas of the Bill, in order to address the problems with the criminal law around encouraging and assisting crime identified by the Law Commission, including where a person provides assistance to a serious criminal group, the estimated cost is £950,000 - £1.59 million. The introduction of Serious Crime Prevention Orders will provide law enforcement with a flexible means of preventing the harm caused by serious criminals. We estimate a total cost for applying for these orders of about £318,000 - £353,000 per year.
299. The merging of the Assets Recovery Agency with the Serious Organised Crime Agency and other measures in the Bill designed to improve the asset recovery regime will help to deliver the Government's target of doubling asset recovery receipts to £250m by 2009-10. There are expected to be savings achieved from the merger, which will also enable better financial management of the fluctuations of income from taking cases through the courts. It is expected that the short term costs of the merger will be more than outweighed by these efficiency savings. Finally, in relation to the extension of surveillance powers for Her Majesty's Revenue and Customs to investigations into serious crime, irrespective of whether it is an ex-Customs or an ex-Revenue matter, the costs will be covered from existing budgets.
300. Serious Crime Prevention Orders will provide a new tool for law enforcement. However, as it is anticipated that orders will be highly targeted and used on a relatively small number of individuals / organisations, we do not believe this will place additional burdens on public sector manpower. SCPOs will have some impact on Courts Service manpower, however, we believe that this will be minimal as it is likely to be largely offset by the preventative nature of the orders.
301. It is not anticipated that the merger of ARA and SOCA will require any job losses or additional manpower resource.
302. The power given to public authorities to share information with a designated anti-fraud organisation will be used voluntarily by organisations who wish to become members of that organisation. Therefore, effects on manpower are likely to be assessed by individual authorities as part of their cost-benefit analysis of membership.
303. Placing the National Fraud Initiative (NFI) on a statutory footing is unlikely to have a noticeable effect on public sector manpower as audited bodies already engage with the NFI process. There will be no compulsion for other bodies to join except bodies subject to inspection but not audit by the Audit Commission. There will be
minor manpower implications for them resulting from mandatory participation in the NFI.
304. The RIA is available on http://www.homeoffice.gsi.gov.uk/. The RIA provides a cost-benefit analysis of the impact of the Bill in respect of equity, fairness, enforcement, sanctions, monitoring, review and consultation.
305. Vernon Coaker MP, Parliamentary Under Secretary of State for Policing, Security and Community Safety, has signed a statement to the effect that he is satisfied the benefits of the measures for which the RIA has been published with the Bill justify the costs.
306. Clause 84 of the Bill provides for commencement.
EUROPEAN CONVENTION ON HUMAN RIGHTS
307. Clauses 1 and 20 confer a power on the High Court or, following conviction for a serious offence, the Crown Court to make a serious crime prevention order. The Department has considered whether such an order is a criminal charge or a criminal penalty for the purposes of Article 6 and Article 7 of the ECHR. The Department has concluded that an order is not a criminal charge or penalty for the purposes of those Articles for the following reasons:
The majority of orders will be made by the High Court which is a court of civil jurisdiction.
308. As a consequence, it is the Department's view that the additional protections in Article 6(2) and 6(3) and the prohibition on retrospective criminal penalties in Article 7 will not apply in relation to applications for serious crime prevention orders.
309. An application for an order must comply with Article 6(1). It is the Department's view that the procedure that has been devised for applying for an order will comply with the right to a fair trial in Article 6(1) because an application must be made to the High Court or the Crown Court and the normal rules of civil procedure will apply.
310. It is the Department's view that Article 6(1) will require legal aid to be made available in certain circumstances in relation to proceedings for orders.
311. It is the Department's view that an order may be made which engages a person's rights under one or several of the following Articles: Article 8, Article 10, Article 11 and Article 1 of the First Protocol. Interference with any of those Articles of the Convention can be justified if it meets the three stage test of being in accordance with the law, in pursuit of a legitimate aim and necessary in a democratic society.
312. The power to make the orders will be set out in the Bill, which meets the first limb of the test for justification. The purpose of the orders is to prevent serious crime which is a legitimate aim for the purposes of the second part of the test for justification. The final limb of the test will be met by the court ensuring that any order that is imposed meets a pressing social need and is proportionate to the legitimate aim pursued. The court must balance the interference with the individual's rights and freedoms against the need to protect society from the harm caused by serious crime. The court is a public authority for the purposes of the Human Rights Act 1998 and it must, therefore, act compatibly with the Convention rights as required by section 6 of the Human Rights Act 1998. The Bill also contains a number of safeguards in clauses 7 to 16 which limit the scope of the orders. This includes express provisions to ensure that third parties that may be significantly adversely affected by an order can make representations to the court and if necessary applications for variation and discharge in clauses 10, 18 and 19.
313. Clause 11(3) provides a power of entry and search for the purposes of serving a serious crime prevention order. If the power is exercised Article 8, which protects the right to private and family life, will be engaged. It is considered that any interference with that right can be justified. The power appears in the Bill so it will be in accordance with the law. The power will pursue the legitimate aim of the prevention of crime because it will allow the order to take effect and the purpose of the order is to prevent crime. It is considered that the exercise of the power will be proportionate because the power can only be exercised by a constable or a person authorised by the relevant applicant authority; the power only arises once a serious crime prevention order has been made or varied by the court and the subject of the order was not represented at the proceedings; a set of premises can only be entered if there are reasonable grounds for believing that the subject of the order can be found there; a set of premises can be only be searched for the purposes of finding the subject of the order; and force can only be used if it is necessary to do so.
314. The right to a fair trial under Article 6 includes the right of a person charged with a criminal offence to remain silent and not to incriminate himself. The order cannot require a person to answer questions orally (see clause 12) but a person could be required to provide documentary information or to answer questions in writing and it is conceivable that such information could be incriminating. As a consequence, clause 16 places restrictions on the use to which such information can be put. The clause does not place an absolute prohibition on the use of such information because the privilege against self-incrimination is not absolute and can be interfered with in certain proportionate circumstances (Brown v. Stott  1 WLR 662).
315. Clause 26 provides that a person who breaches the terms of his SCPO commits a criminal offence but the person will not be guilty of the offence if there was a reasonable excuse for his actions. It is the Department's intention that it will be for the defendant to prove that he had a reasonable excuse. It is the Department's view that it is fair and reasonable to place such a legal burden on the defendant for the following reasons:
316. Clause 27 allows the court on convicting a person of an offence under clause 26 to order the forfeiture of anything in the possession of that person at the time of the offence which the court considers to be have been involved in the offence. This will engage Article 1 of the First Protocol but it is the Department's view that any interference can be justified. A forfeiture order will be in accordance with the law because the power to make it will appear in the Bill. A forfeiture order will be in the general interest because it is aimed at preventing serious crime and is made in connection with criminal proceedings. A forfeiture order will be proportionate and be subject to suitable procedural safeguards for the following reasons:
317. Clause 28 gives the applicant for an order the power to present a petition to the courts for the winding up of certain bodies if that body has been convicted of a breach of an order and the applicant considers that is would be in the public interest for the body to be wound up. The court may make an order for winding up if it is satisfied that the body has been convicted of a breach of an order and it is just and equitable for the body to be wound up. This clause will engage Article 1 of the First Protocol because the body concerned will be dissolved and its assets will be handled and dealt with by the liquidator on the order of the court. It is the Department's view that any interference can be justified. A winding up order will be in accordance with the law because the power to make such an order appears in the Bill. The interference is in the general or public interest because the relevant applicant authority can only present a petition if it is in the public interest and there has been a conviction for breach of an order.
318. It is the Department's view that the interference made by clause 28 is proportionate for the following reasons:
319. Clause 63(1) enables a public authority to disclose information as a member of an anti-fraud organisation which has been specified for the purpose by order made by the Secretary of State (definition of "specified" in subsection (8)). "Public authority" means any public authority within the meaning of the Human Rights Act 1998. The information may be disclosed to the organisation itself, to any members of it or to any other person to whom disclosure is permitted under the arrangements made by the organisation.
320. The information disclosed is likely to include sensitive personal data. As such, the rights guaranteed by Article 8.1 of the ECHR (right to respect for private and family life) will be engaged. However, the disclosures which can be made pursuant to clause 63 are justified under Article 8.2 as being necessary for the prevention of crime. Research commissioned by the Home Office, which was published in 2000, estimated the cost of all fraud at over £14bn. This was thought likely to be an under estimate at the time and the figure is likely to be considerably higher. At the level at which these proposals would apply the UK's Fraud Prevention Service, CIFAS, which could be an anti-fraud organisation as envisaged by the legislation, reported savings of £682m to its members in 2005 as a result of its database. If public sector bodies were to participate in CIFAS savings are estimated
to be up to £275m. The measure has the potential to enable data sharing which would reduce fraud significantly and create substantial savings.
321. The requirement in section 6 of the Human Rights Act 1998 on public authorities to act in accordance with the Convention rights provides a safeguard against a disclosure in breach of Article 8. Furthermore, any disclosure under clause 63 needs to be consistent with the Data Protection Act 1998 (see clause 63(4)).
322. Clause 66 amends Schedule 3 to the Data Protection Act 1998 Act which provides specific protection for the processing of sensitive personal data (as defined by section 2 of that Act). At least one of the conditions in Schedule 3 must be met if the processing of such data is to be fair and lawful (see paragraph 1 of Schedule 1 to that Act). The amendment inserts a new condition in respect of the disclosure of such data as a member of an anti-fraud organisation (as defined in that condition). As such, the new condition is wider than disclosures made under clause 63 and includes disclosures pursuant to common law and other powers. Furthermore, the organisation does not need to have been specified under clause 63. The new condition will apply only if the processing is necessary for the purposes of preventing fraud or a particular kind of fraud. Such disclosures would engage ECHR Article 8.1. However, it is submitted that the necessity test sufficiently protects persons from contravention of this right and reflects the exception in Article 8.2 in respect of the prevention of crime.
323. Clause 67 brings Schedule 7 into effect which enables the Audit Commission to conduct data matching exercises for the purpose of assisting in the prevention and detection of fraud. This puts onto a statutory footing and extends the data matching exercise that Commission auditors have conducted for several years as part of the statutory audit of local government and the health service (known as the National Fraud Initiative). The exercise differs from the data sharing clauses in that data matching takes existing data sets from different organisations and compares them to identify potential fraud. Matches are then disclosed to the organisations concerned for investigation. For example, by matching pay-roll data against housing benefit those who have wrongly claimed housing benefit can be identified. If the match turns out to be fraudulent, the body concerned may wish to share that information with others under the data sharing provisions. The clause and schedule also replicates these provisions for the relevant audit bodies in Wales and Northern Ireland.
324. The Audit Commission will have powers to require the production of data sets it considers relevant from all bodies that fall within its remit, that is, bodies which it audits (principally local government and the health service) and other best value authorities. It will be an offence to fail to provide such data without reasonable excuse. The Audit Commission is given power to disclose the result of matches provided this is in connection with a purpose for which the exercise was conducted.
325. The provisions extend the current data matching exercises as they enable the Audit Commission to conduct data matching of data held by organisations which are not within its remit if it considers it appropriate to do so. This would for example allow matching of data held by a mortgage institution against local authority housing benefit data, as there is evidence of significant numbers of landlords with mortgages who claim housing benefit. Such bodies will participate on a purely voluntary basis. A statutory gateway is provided allowing disclosure of data sets voluntarily to the Audit Commission for data matching, which over-rides other restrictions on disclosure other than those imposed by the Data Protection Act 1998 or the Regulation of Investigatory Powers Act 2000. The gateway is without prejudice to existing powers to disclose.
326. The Audit Commission may prescribe a scale of fees for this exercise in respect of bodies it can compel to provide data sets. It is enabled to charge a fee to be agreed with other bodies participating on a voluntary basis. The Commission will be under a duty to prepare and keep under review a code of data matching practice to which all participating bodies as well as the Commission itself will be obliged to have regard.
327. The Secretary of State will have the power by order to add to the purposes for which data matching can be conducted to include assisting in the prevention or detection of crime (other than fraud), in the apprehension and prosecution of offenders, or in the recovery of debt owing to public bodies.
328. The information disclosed is unlikely to include sensitive personal data, as it is made clear that data matches only identify potential fraud, and no assumption about fraud can be made until the match is investigated further by the participating body. It should be noted that information might include sensitive personal data in the future if an order is made extending the purpose of matching as described above.
329. Information disclosed under these provisions will include personal data and the rights guaranteed by Article 8.1 of the ECHR (right to respect for private and family life) will be engaged. However, the disclosures which can be made pursuant to these provisions are justified under Article 8.2 as being necessary for the prevention of crime. Audit Commission figures show that the value of fraud and overpayments detected by almost 1300 public bodies taking part in the National Fraud Initiative in 2004/05 exceeded £111m, an increase of 33% on 2002/03. The aggregate figure for fraud and overpayments detected since the exercise began are now just over £300m. The proposed extension of data sharing has the potential to increase the level of fraud and overpayments detected considerably, leading to significant savings to the public purse as well as to private sector organisations.
330. The requirement in section 6 of the Human Rights Act 1998 on public authorities to act in accordance with Convention rights provides a safeguard against a disclosure in breach of Article 8. Furthermore, any disclosure under these provisions must be consistent with the Data Protection Act 1998.
331. It is made a criminal offence for any person or body to disclose data provided to the Audit Commission for matching, or the results of data matches provided to the participating organisations, except for a purpose authorised by these provisions. This offence provides further safeguards in respect of information obtained. The obligation for the exercise to be conducted in accordance with a code of practice will also provide added safeguards as it will set good practice standards for security of data and requirements for fair collection and disclosure.
332. Clause 68, together with Schedules 8 and 9, transfer certain functions and staff of the Director of the Assets Recovery Agency ("the ARA") to the Serious Organised Crime Agency ("SOCA") established under Part 1 of the Serious Organised Crime and Police Act 2005 and other persons. The Director and the ARA were established by section 1 of, and Schedule 1 to, the Proceeds of Crime Act 2002 ("POCA") with the functions conferred by that Act.
333. The amendments to Chapter 2 of Part 5 of POCA and to Part 8 of POCA enable SOCA to apply for various orders under those Parts. As respects Chapter 2 of Part 5 of POCA, the prosecuting authorities listed in paragraph 225 above may bring civil recovery proceedings in addition to SOCA. Some of the orders under Parts 5 and 8 of POCA engage Article 1 of the First Protocol (protection of property); others might engage Article 8 (right for respect for private and family life). In each case, however, the relevant order needs to be made by a court. The court needs to be satisfied that the order requested is consistent with the Convention rights, irrespective of the applicant for it.
334. To the extent that the Bill transfers functions of the Director of the ARA to SOCA, it also has the effect of extending the scope of the information that SOCA receives, uses or may disclose under sections 32 to 35 of the 2005 Act (together with the amendment to section 33 made by paragraph 157 of Schedule 8 to the Bill). This engages Article 8. It is submitted that any interference with the rights guaranteed by Article 8.1 is justified, having regard to Article 8.2, and SOCA's functions relating to the prevention of crime.
335. Clauses 69 to 71, together with Schedule 10, amend Part 8 of POCA to allow for investigations into cash detained under Chapter 3 of Part 5 of that Act. Chapter 3 of Part 5 provides for the search, seizure and detention of cash which is reasonably suspected of having been obtained through unlawful conduct or of being intended for use in such conduct, and for the forfeiture of such cash in proceedings before a magistrates' court or sheriff (in Scotland). Part 8 of POCA sets out powers for use in criminal confiscation, civil recovery and money laundering investigations. Part 8 is amended to create a new category of investigation (a "detained cash investigation") to investigate the origins or intended use of cash detained under Chapter 3 of Part 5. The amendments allow applications to be made for production orders and search and seizure warrants in respect of such investigations. An application for such an order or warrant must be made to a High Court judge or a Sheriff in Scotland.
336. There are at present no powers in POCA to investigate the provenance or intended use of detained cash; police and officers of HMRC are dependent on material provided by respondents in the case. This prevents them from fully investigating cases, in particular testing credibility, and also leads to delays in their investigations. The availability of investigative powers will result in forfeiture applications being made at an earlier stage.
337. Production orders and search and seizure warrants have the potential to infringe Article 8 (right to respect for private and family life). However, an application for such an order or warrant must be made to a High Court judge or a Sheriff in Scotland. Such a judge would only grant the application if the order or warrant would be compatible with the Convention rights.
338. Clauses 72 to 75, together with Schedule 11, amend various provisions in POCA to extend powers which are currently conferred on constables and officers of Revenue and Customs by those provisions to accredited financial investigators. An accredited financial investigator is an investigator who is accredited under a system established under section 3 of POCA.
339. The provisions to be amended by clauses 72 and 73, together with Schedule 11, are those relating to restraint orders in England and Wales and Northern Ireland and those relating to seizure of cash there under Chapter 3 of Part 5 of POCA. Under the amendments made by clause 74, accredited financial investigators may be authorised to execute a search and seizure warrant under sections 352 and 353 of POCA.
340. These amendments engage Article 1 of the First Protocol to the EHCR (protection of property); Article 8 (right to respect for private and family life) may also be engaged. However, the amendments do not create new interferences with those rights; in each case, they extend powers which are currently conferred on constables and officers of Revenue and Customs. Furthermore, in each case, the investigator on whom the powers are conferred must fall within a description specified in an order made for these purposes by the Secretary of State under section 453 of POCA. This power will be exercised to require that the investigators have had the necessary training. The powers in question fall within ECHR Article 8.2 by virtue of being necessary for the prevention of crime and accredited financial investigators have functions in the prevention of crime.
341. Clause 77 and Schedule 12 amend provisions of the Police Act 1997 and the Regulation of Investigatory Powers Act 2000 (RIPA) so that the surveillance regimes established by those provisions apply not only to former Customs matters but also to former Inland Revenue matters. In addition the surveillance power in section 48 of the Wireless Telegraphy Act 2006 is also applied not only to former Customs matters but also to former Inland Revenue matters by removing the provision preventing that in the Commissioners for Revenue and Customs Act 2005. It is the Department's
view that the amendments made meet the three stage test of being in accordance with the law, in pursuit of a legitimate aim and necessary in a democratic society.
342. The surveillance powers established by the enactments mentioned in paragraph 341 above engage Article 8 ECHR (respect for family & private life). Article 8 applies to both a person's home and business premises. It is the Department's view that interference with the Article 8 right to privacy is justified on the basis that the interference is in accordance with UK law, namely the 1997, 2000 and 2006 Acts. The main purpose of RIPA, which replaced the Interception of Communications Act 1985, was to ensure that the investigatory powers established by RIPA are compatible with ECHR. So, for example, section 32 of RIPA empowers senior authorising officers of prescribed authorities to grant authorisations to carry out intrusive surveillance. Section 32(2), reflecting Article 8(2) ECHR, precludes the grant of an authorisation unless it is necessary in the interests of national security, for the purpose of preventing/detecting crime or in the interests of the economic well being of the United Kingdom. A warrant cannot take effect unless it has been approved by a Surveillance Commissioner (s.36 RIPA). (To be eligible to hold a post of Surveillance Commissioner the incumbent must have held high judicial office.) The conditions for the grant of an authorisation will be the same whether the matter was one administered by the former Inland Revenue Commissioners or the former Commissioners of Customs and Excise and the safeguards in section 35 RIPA applying to authorisations will apply equally.
343. No substantive change to the RIPA surveillance regimes will be made by the amended provisions - apart from extending the range of HMRC matters covered by the regimes.
344. The surveillance powers in section 48 of the Wireless Telegraphy Act being amended by the Schedule were previously in section 5 of the Wireless Telegraphy Act 1949 and were amended by s. 73 RIPA to ensure ECHR compliance. Section 93 of the Police Act was similarly amended by section 75 RIPA. Again, no substantive change is being made to this legislation.
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