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Public Bill Committee Debates

Draft Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors in England, Wales and Northern Ireland: Code of Practice) Order 2008

The Committee consisted of the following Members:

Chairman: Mr. David Wilshire
Allen, Mr. Graham (Nottingham, North) (Lab)
Baird, Vera (Solicitor-General)
Bellingham, Mr. Henry (North-West Norfolk) (Con)
Blackman, Liz (Vice-Chamberlain of Her Majesty's Household)
Clwyd, Ann (Cynon Valley) (Lab)
Field, Mr. Frank (Birkenhead) (Lab)
Heathcoat-Amory, Mr. David (Wells) (Con)
Hemming, John (Birmingham, Yardley) (LD)
Hesford, Stephen (Wirral, West) (Lab)
Hogg, Mr. Douglas (Sleaford and North Hykeham) (Con)
Howarth, David (Cambridge) (LD)
Hurd, Mr. Nick (Ruislip-Northwood) (Con)
Jack, Mr. Michael (Fylde) (Con)
Ladyman, Dr. Stephen (South Thanet) (Lab)
Murphy, Mr. Denis (Wansbeck) (Lab)
Touhig, Mr. Don (Islwyn) (Lab/Co-op)
Edward Waller, Committee Clerk
† attended the Committee

Fifth Delegated Legislation Committee

Tuesday 8 July 2008

[Mr. David Wilshire in the Chair]

Draft Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors in England, Wales and Northern Ireland: Code of Practice) Order 2008

10.30 am
The Chairman: Before we begin, it might assist the Committee if I confess to having sat through the 39 sittings of the Proceeds of Crime Bill Committee in 2002, so I am more likely than some to know what is and is not in order.
The Solicitor-General (Vera Baird): I beg to move,
That the Committee has considered the draft Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors in England, Wales and Northern Ireland: Code of Practice) Order 2008.
It is a pleasure to appear in a Committee under your chairmanship, Mr. Wilshire, particularly because I, too, was a member of the Bill Committee when the 2002 Act was passing through Parliament, as was my hon. Friend the Member for Wirral, West, who sits behind me. It was a long Committee, although it was bags of fun.
The order was laid before the House on 18 June with an explanatory memorandum and a draft code of practice running to 203 paragraphs, which I hope Members have had an opportunity to look at. The order will bring that code into operation and governs the exercise by prosecutors of their investigative powers in relation to civil recovery of assets and, in some parts, to criminal confiscation investigations.
The 2002 Act—the members of that Bill Committee are all enjoying this reunion—came into force in 2003 and created investigative powers to be used in tracing criminal assets. The Act created the following powers that can be applied for and executed: production orders, which are served on a financial institution and ask for material such as bank documents; search and seizure warrants, whose function is self-evident; customer information orders, by which someone has to provide information about their customers in response to a demand; monitoring orders, which provide more than just a snapshot and can require information for up to 90 days of movement on an account; and disclosure orders, by which an officer can require someone to answer questions or produce documents.
Those powers have been exercised in England and Wales and Northern Ireland by the Assets Recovery Agency and by law enforcement agencies such as the police and Her Majesty’s Revenue and Customs since 2003, both operating under a code of practice issued by the Home Secretary under section 377 of the 2002 Act. The Serious Crime Act 2007 amended the 2002 Act by merging the Assets Recovery Agency and the Serious Organised Crime Agency with effect from April 2008. The ARA’s investigative powers have been moved to SOCA and to several specified prosecuting authorities, which are superintended by the Law Officers. Those are the Director of Public Prosecutions, the director of the Serious Fraud Office, the director of the Revenue and Customs Prosecutions Office and the Director of Public Prosecutions for Northern Ireland.
The staff of SOCA will continue to operate under the Home Secretary’s code of practice, which was recently amended to take account of the 2007 changes and keep it consistent with the development of codes of practice under the Police and Criminal Evidence Act 1984, which has changed over the years. The Home Secretary’s code was the subject of a public consultation ending in January 2008 and was brought into effect by an order of both Houses of Parliament on 1 April 2008. Scottish Ministers issued a code for the operation of those powers in Scotland.
That covers SOCA, but the prosecutors who now have those powers will be bound by a code of practice issued by the Attorney-General, and that is the code of practice to be brought into operation by the order. In all material ways, that is identical to the one that the Home Secretary has issued and which was already debated and passed in March 2008 by Committees of both Houses, which means that the different agencies exercising the powers will do so to the same standard and with the same safeguards.
The code that the order puts into force was put out to public consultation in March, but there were no responses, presumably because anyone who wanted to say anything had already addressed their issues in the Home Secretary’s amended code.
The code gives detailed guidance to the staff of the prosecuting authorities on how they should apply for and execute the five investigative measures available to them in respect of civil recovery investigations. It also gives guidance to prosecutors on their own criminal confiscation investigations, which is that they should apply for disclosure orders on behalf of the law enforcement agencies. The introductory part of the code gives an overview of the powers and of how they are applicable, and includes general best practice. It then provides more detailed information on each of the measures, including a step-by-step guide for prosecutors to follow when exercising their powers. The code is intended to be self-explanatory and easily understood. It will be available for the public to consult through the prosecuting authorities, and it will be part of the training for all staff of the prosecuting authorities who will exercise the powers. It has comprehensive safeguards to ensure that the powers are exercised fairly and proportionately, for example by making arrangements for someone interviewed under a disclosure order to have legal and financial advice, and the support of an appropriate adult if necessary. That is entirely consistent with the Home Secretary’s amended code.
In summary, the draft code clearly sets out the processes and how to implement them, and the safeguards required for their effective and fair operation. It resembles in every way the Home Secretary’s code. Obviously, I have talked more about the draft code than the order. The order is the pin on which to hang the code to give it its legitimacy. My only further point on the order is that in relation to Northern Ireland it is made by the Attorney-General in her capacity as Attorney-General for Northern Ireland.
10.37 am
Mr. Henry Bellingham (North-West Norfolk) (Con): It is a pleasure to serve under you, Mr. Wiltshire. I thank the Solicitor-General for her clear explanation of the draft code of practice.
This is tough legislation. It brought in wide-ranging new powers, but they were needed—in our judgment—to combat the changed circumstances of the day. We were faced with many different scenarios, including in the areas of money laundering, drug dealing and organised terrorist activities. In my constituency fairly recently there was an organised gangmaster operation that required new powers of response on the part of the police. We welcome the new powers, but they nevertheless need a fair, clear and comprehensive code of practice. I am grateful to the Minister for her explanation of the code of practice, and I have a few specific points to put to her.
The individual whose property it is has a right to privacy under article 8 of the European convention on human rights, which was incorporated into our law through the Human Rights Act 1998. That right to privacy has to be balanced against the benefit gained by the prosecuting authorities. Will the Minister comment on that? We support the new powers, but if cases are going to end up in the Court as a result of people claiming that their human rights are being breached, that will be an important consideration.
I ask the Minister to forgive me if I have not read the draft as well as I should have, but will she tell me what happens if material or information is subject to legal privilege? That is mentioned in the code, but I would be grateful for more detail. Regarding a warrant in a civil recovery investigation, what is the time scale for the search? Obviously it has to be completed within a certain time, and I should be grateful if the Minister would elaborate on that.
If, during a search of premises, entry is forced and damage is done—there will be occasions when that is necessary—who is responsible for making good and securing those premises? The premises may have been entered by another party and there may be a claim against the authorities involved. Who is responsible and what measures will be put in place to cover that eventuality? Otherwise, we support the order. We support what the Government are doing. We welcome the code of practice that has been issued and we hope that the legislation will be effective in combating some of the serious problems that society faces today.
10.40 am
John Hemming (Birmingham, Yardley) (LD): I, too, express pleasure at serving under your chairmanship, Mr. Wilshire, and thank the Minister for her explanation of the order. I also thank the hon. Member for North-West Norfolk for his points. I want to go into a slightly different area relating to the interface between the targets for asset recovery in public service agreement 24 and the decision making that will occur under this. I encountered a similar sort of problem in my constituency. Targets had been given to the police for getting revenue from sending people on training courses. A constituent who was innocent of a crime was told that she had to go on a course or she would have to defend herself in court. My advice to her was to defend herself in court and the prosecution was subsequently dropped.
How can we work out whether the interface with the PSA target is causing a disproportionate action by investigating officers? That is a difficult question, but it is an important point when these targets have an effect on decision making. In the case of my constituent, it created an unjust situation. She was threatened with prosecution for a crime of which she was clearly innocent. That was obvious when I looked at it but she was very frightened by the whole process. It worries me when the decision making gets skewed too much. That happens when targets are applied.
Does the Minister have any answers? Otherwise, this sort of approach is something which, sadly, needs to be done. Regarding the drugs business in central Birmingham, it has been said that if the drug dealers do not think that they will keep their assets they are less likely to trade in illicit substances in the first instance. We are generally supportive of the principle, but I ask the Minister to respond to this question about the interrelationship between the target and the decision-making process.
10.42 am
The Solicitor-General: I am grateful for the support that both hon. Gentlemen have afforded through their parties to the legislation and their support for these changes and this new code. Let me deal first with the questions posed by the hon. Member for North-West Norfolk. They are far more about the legislation than about the code of practice, such as the interaction between article 8 on the right to privacy and the right to search, which has to be obtained by applying to the court. As he knows, article 8 is only a condition. It is not an absolute right and it can give way to proportionate measures necessary in the interests of a democratic society, particularly in the pursuit of tackling crime and punishment. That provision is in the legislation and not in this code of practice. The legislation was certified by the Minister at the time to be compatible with the convention. There is no reason to doubt that that was right.
Legal professional privilege is also set out in the 2002 Act, including its precise position, the balance to be struck between the rights of people to have confidential communication to their lawyers protected and the need for there to be access to documentation in order to pursue criminally obtained assets. They are not touched on directly by this code of practice. The hon. Member for North-West Norfolk asked me specific questions. The time limit for a search is a month. Making the premises secure would be a duty of the prosecutor. The time limits are in paragraph 76 and the duty of the prosecutor to secure premises is in paragraph 86. I hope that he is content with those replies.
I cannot comment on the issue raised by the hon. Member for Birmingham, Yardley because it is difficult to understand from the shorthand version, which was all he was able to pass to me. He is asking whether the existence of the PSA to recover criminal assets will drive police or prosecutors—hon. Members should remember that we are talking only about prosecutors—into intemperate decision making. They have targets of all kinds and are reliable and balanced decision makers. If some particular case has caused him to be concerned, he can of course resort to the Independent Police Complaints Commission or the prosecutions complaints authority if he thinks fit. I can make no further useful comment on how the targets and the decision making are likely to interact, except to say that experience shows that the prosecution authorities are mature, well organised and properly structured with appropriate supervision.
I hope to cheer hon. Members up with a tailpiece to this short proposition. The legislation that you, Mr. Wilshire, my Parliamentary Private Secretary and I examined in Committee for so long in 2002 has been immensely successful, as millions upon millions of pounds of criminal assets have been recovered, through either confiscation orders or civil recovery, and the totals are mounting sizeably. For instance, the Assets Recovery Agency recovered £23 million during the around three years of its life, whereas the Serious Fraud Office recovered £13.7 million in the last quarter alone. Indeed, in this quarter it has just obtained £41 million by way of compensation with a default sentence of eight years, which is the largest order to be made in criminal proceedings.
It seems that the effort that the 2002 Bill Committee put in and the patience and stamina we exhibited in ensuring that the legislation got safely and properly through Committee was well worth while, as it has been an important tool in the fight against criminals. As the hon. Member for Birmingham, Yardley said, prison is one thing, but taking away assets cuts a criminal far more to the quick and is likely to be a far more effective deterrent. I hope that that has cheered hon. Members up.
The Chairman: I feel a little happier after your summary, because although you rightly pointed out that Mr. Bellingham was probably out of order and that I did not stop him, I suspect that you were probably out of order also and I did not stop you, so I feel much more balanced at the end of the debate.
Question put and agreed to.
That the Committee has considered the draft Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors in England, Wales and Northern Ireland: Code of Practice) Order 2008.
Committee rose at twelve minutes to Eleven o’clock.

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