 House of Commons |
Session 2006 - 07 Publications on the internet General Committee Debates Serious Crime |
Serious Crime Bill |
The Committee consisted of the following Members:Emily
Commander, Committee
Clerk
†
attended the Committee
Public Bill CommitteeTuesday 10 July 2007(Morning)[Mr. Joe Benton in the Chair]Serious Crime Bill10.30
am
Schedule
9
agreed
to.
Clauses 69
to 71
ordered to stand part of the
Bill.
Schedule
10
agreed
to.
Clause 72Powers
to seize property to which restraint orders
apply
Question
proposed, That the clause stand part of the
Bill.
Mr.
Douglas Hogg (Sleaford and North Hykeham) (Con): We are
extending various powers to accredited financial investigators that are
currently enjoyed by police officers under the Proceeds of Crime Act
2002, and I am cautious whenever I see a proposal that powers of
seizure should be entrusted to somebody other than a police officer. We
need some clarification on why that is happening in this case and what
safeguards
exist.
The
Parliamentary Under-Secretary of State for the Home Department
(Mr. Vernon Coaker):
I will speak to clause 72
and add points that are relevant to one or two of the following
clauses. I am aware that the right hon. and learned Member for Sleaford
and North Hykeham tabled amendments to leave out this and the
subsequent three clauses. As he said, those clauses provide for
accredited financial investigators to act under the powers of the 2002
Act. Such investigators already have access to an array of powers:
investigating money laundering; investigating the extent and the
whereabouts of a suspect’s benefits of crime; and, applying for
an order to restrain a person’s assets. Those powers have proved
a great
success.
The
Government recognise the important contribution of the agencies for
which such investigators work to the rise in the value of money
recovered from criminals. An extension of those powers beyond the
police and Her Majesty’s Revenue and Customs to others, such as
the Serious Fraud Office, fraud investigators in the Department for
Work and Pensions and the immigration service, has strengthened our
overall capacity in the recovery of the proceeds of crime. The
important point is that we are trying to improve our capacity to
recover the proceeds of crime from people who are seeking to gain from
criminal activity.
Currently,
appropriately accredited financial investigators can apply for
restraint orders. Those are interim orders to freeze property and are
made in anticipation of a confiscation order following conviction.
Police and customs
officers have separate powers to seize property, subject to a restraint
order, to prevent its removal from their jurisdiction. The clause will
extend the powers of accredited financial investigators, giving them
the ability to seize such
property.
Mr.
Hogg:
I intervene at this point only because the Minister
is nearing the end of his notes. What troubles me is the identity of
the accredited financial investigator. We are referred to section 435
of the 2002 Act, which I have here. However, when I go to that section,
I find no definition of who the accredited financial investigator is. I
tell the Minister that the Committee would be much happier if it knew
something about the identity of those individuals who are so
undesignated.
Mr.
Coaker:
The right hon. and learned Gentleman anticipates
my remarks. The accredited financial investigators will first undergo
training by the National Policing Improvement Agency, which will then
accredit them and monitor their performance. Hon. Members will be aware
that other clauses move the responsibility for training financial
investigators from the Assets Recovery Agency to the National Policing
Improvement Agency. Therefore, they will be trained and accredited by
the NPIA, will be expected to conform to a code of practice and will be
monitored in carrying out their duties. Of course, as well as
accrediting them, it will be perfectly possible for the NPIA to take
away that accreditation. Its responsibility, therefore, is to accredit
people; and, if they go through the appropriate training and are
accredited, they will be able to exercise those powers. I am coming to
a point that may answer the right hon. and learned Gentleman’s
next
question.
Mr.
Hogg:
It may be that I anticipate the next answer. The
Minister has told us who will train the financial investigators, and I
am jolly glad to know that. But where are they seated; are they private
sector characters or are they seated in public organisations? At the
moment I do not have a sense of who will employ, instruct and pay them,
on whose behalf they will act, and where they are to be
found.
Mr.
Coaker:
As I have said, the right hon. and learned
Gentleman’s incisive mind, which we have all come to respect,
absolutely anticipates my next remarks. An accredited financial
investigator will need to be a member of the staff of a body listed by
order by the Secretary of State. Those are public bodies that have a
criminal investigation role. They include the Financial Services
Authority, the Environment Agency and fraud investigators from the
Department for Environment, Food and Rural Affairs. In answer to his
point, the accredited financial investigator will need to be a member
of such a body, as designated by order by the Secretary of
State.
Mr.
Hogg:
May I sound a word of caution? I listened to the
organisations listed by the Minister and I think that we are moving
quite a long way from law enforcement agencies. For example, he
mentioned some of the DEFRA organisations and the Environment Agency.
While they may have some enforcement role to perform, we are moving
quite a long way from organisations whose
primary responsibility is the enforcement of criminal law. I am not
going to oppose the measure, but I do think that there is a problem,
and we need to watch carefully those whom he has
designated.
Mr.
Coaker:
I think that the right hon. and learned Gentleman
is absolutely right. We all want to recover the proceeds of crime from
individuals, and he is quite right to alert the Committee to the
extension of powers and sound a note of caution. I give the reassurance
that we will, of course, monitor how those powers are used. We expect
the NPIA to take its responsibilities very seriously, as it will be the
regulatory body for the training of those accredited financial
investigators.
Question
put and agreed
to.
Clause 72
ordered to stand part of the
Bill.
Clause 73
ordered to stand part of the
Bill.
Schedule 11Powers
to recover cash: financial
investigators
‘ (1) Section
302A (powers for prosecutors to appear in proceedings) (as inserted by
section (Powers for prosecutors to appear in cash recovery
proceedings)(1) above) is amended as
follows.
(2) In subsection
(1)—
(a) after
“constable”, in the first place where it appears, insert
“or an accredited financial investigator”;
and
(b) after
“constable”, in the second place where it appears, insert
“or (as the case may be) an accredited financial
investigator”.
(3) After
subsection (3)
insert—
“(4) The
references in subsection (1) to an accredited financial investigator do
not include an accredited financial investigator who is an officer of
Revenue and Customs but the references in subsection (2) to an officer
of Revenue and Customs do include an accredited financial investigator
who is an officer of Revenue and
Customs.”’.
The
Chairman:
With this it will be convenient to discuss the
following: Government new clause 17—Powers for prosecutors to
appear in cash recovery
proceedings.
Government
amendment No.
240.
Amendment
agreed
to.
Schedule
11, as amended, agreed
to.
Clause 74
to 76 ordered to stand part of the
Bill.
Clause 77Extension
of powers of Revenue and
Customs
Question
proposed, That the clause stand part of the
Bill.
James
Brokenshire (Hornchurch) (Con): The clause will give
effect to schedule 12, which will extend the powers in the Regulation
of Investigatory Powers Act 2000 to all criminal
investigations undertaken by
Her Majesty’s Revenue and Customs. The clause has been raised in
the context of the ongoing review of HMRC’s powers. The Law
Society has raised a number of concerns in relation to the provisions,
stating:
“In
our responses to the ongoing consultation we have made clear our view
that HMRC should not have wider powers than those available to the
police.
It is equally
vital to ensure that the use of any new powers is authorised at an
appropriately senior level within HMRC. At present, the senior
authorising officers for the police are Chief Constables (Commissioners
for the Metropolitan and City police forces), whereas for HMRC those
authorised will be officers of HMRC. We believe the act must make clear
the level of seniority required to authorise such intrusive powers and
should identify an equivalent level of seniority to that of Chief
Constable. In addition, the officers in question should be limited to
those in HMRC’s new Criminal Investigations
Directorate—as is the case with the proposed powers of
arrest—who have received thorough training in the exercise of
these powers.”
Those seem
sensible and reasonable points. What assurance can the Minister give
that they have been or will be
addressed?
Mr.
Coaker:
It may help the Committee if I say a few words
about the clause. In answer to the hon. Gentleman, my understanding is
that those authorised will be senior officers. At present, only five
officers within HMRC are authorised to act in that sphere of work, so
it is not a widespread responsibility—only a small number of
specially trained officers have
it.
Another point
worth making to the hon. Gentleman is that work in that area is divided
into criminal and civil cases. One aspect of the arrangements that
concerned people was that the two parts of HMRC’s operations
should not be merged, as they are very distinctive and it is a small,
specialised
body.
Clause
77 and schedule 12 extend the surveillance powers available to HMRC to
tackle serious crime. At the moment, they are available only when the
crime relates to an ex-Customs and Excise matter. The clause would make
them available also for serious crimes that relate to ex-Inland Revenue
matters. The change is necessary to address the emerging patterns of
criminality targeting ex-Inland Revenue tax systems, such as
self-assessment, tax credits and gift aid. That criminality involves
not only the evasion of tax on income or commercial profits, but
organised attempts fraudulently to extract money from the Exchequer.
For example, in June four people were jailed for a total of 19 years
for committing a £1 million fraud involving the gift aid scheme.
The extension of the powers would allow HMRC more effectively to
investigate and bring to justice criminals engaged in serious attacks
on ex-Inland Revenue systems. The powers would help to establish the
links between those involved in the criminal activity, the financial
structure of the activity, and where the proceeds of the crime are
located. For example, the serious criminals behind organised tax credit
fraud involving identity theft may engage foot soldiers to operate bank
accounts for them. The extended powers would make it easier to
establish the links between the foot soldiers and the major players,
allowing the full extent of the crime to be
uncovered.
HMRC
consulted on the change from March 2006 to January 2007. The majority
of those who responded were in favour of what is proposed, provided
that the powers could be used only in criminal investigations
into serious tax crime, and that they continued to be subject to the
same safeguards and controls that apply to HMRC criminal investigations
into ex-Customs and Excise matters. The same concerns were voiced when
the clause was considered in another place. I am pleased to assure the
Committee on all those matters. The powers can and will be used only by
trained specialist officers who work only on criminal investigations.
They cannot be used by other HMRC staff engaged in civil compliance
work, such as checking the accuracy of tax returns. The powers cannot
be used to inquire into major tax avoidance, on the ground of
safeguarding the economic well-being of the UK. They can be used only
when necessary, and they must be proportionate to the
circumstances.
10.45
am
The
interception of communication requires a warrant from the Secretary of
State. Intrusive surveillance must be approved by a surveillance
commissioner, and the most intrusive property interference also
requires the approval of a commissioner. All property interference must
be reported to the commissioners, who can quash any authorisation. As
the hon. Gentleman will know, use of the powers will be overseen by the
independent Interception of Communications Commissioner and the Office
of Surveillance Commissioners. Complaints can be made to the
investigatory powers tribunal, and HMRC is subject to inspection by HM
inspectorate of constabulary. None of that will change.
I assure the hon. Gentleman
that only senior officers will be able to apply for warrants, and there
will be rigorous internal controls on applications. I think that that
is the reassurance that the hon. Gentleman sought. It will involve only
a small number of people in HMRC, and only senior directors will be
able to apply for warrants.
James
Brokenshire:
I am grateful to the Minister for his
assurance that only a small number of people will be involved. I ask
him to reflect on the provisions of schedule 12, particularly whether
it could make it clearer precisely who is mandated by the provisions.
Will he give an assurance in response to the points raised by the Law
Society? If he is able to identify and deal with those points, will he
bring forward appropriate amendments on
Report?
Mr.
Coaker:
I think that there are appropriate safeguards, but
given the spirit in which the Committee has conducted its business, and
without saying that I will bring forward an amendment—I am not
making that commitment—I will consider the matter and point out
the specific safeguards that we believe are already in place. That, I
hope, will answer the points made by the hon. Gentleman and the Law
Society. I will consider the matter, but I will not give a commitment
to bring forward amendments on Report. Rather, I shall simply consider
whether the schedule gives us all the safeguards that we
want.
Question put
and agreed
to.
Clause 77
ordered to stand part of the
Bill.
Schedule
12 agreed to.
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