The
Committee consisted of the following
Members:
Chairman:
Dr.
William McCrea
Austin,
John
(Erith and Thamesmead)
(Lab)
Blunt,
Mr. Crispin
(Reigate)
(Con)
Brake,
Tom
(Carshalton and Wallington)
(LD)
Campbell,
Mr. Alan
(Lord Commissioner of Her Majesty's
Treasury)
Coaker,
Mr. Vernon
(Parliamentary Under-Secretary of State for
the Home Department)
Flello,
Mr. Robert
(Stoke-on-Trent, South)
(Lab)
Grogan,
Mr. John
(Selby)
(Lab)
Gwynne,
Andrew
(Denton and Reddish)
(Lab)
Huhne,
Chris
(Eastleigh)
(LD)
MacShane,
Mr. Denis
(Rotherham)
(Lab)
Pritchard,
Mark
(The Wrekin)
(Con)
Redwood,
Mr. John
(Wokingham)
(Con)
Reed,
Mr. Jamie
(Copeland)
(Lab)
Ruffley,
Mr. David
(Bury St. Edmunds)
(Con)
Simpson,
David
(Upper Bann)
(DUP)
Whitehead,
Dr. Alan
(Southampton, Test)
(Lab)
Wood,
Mike
(Batley and Spen)
(Lab)
Ms R. Hollis, Ms J. Chandola,
Committee Clerks
attended
the Committee
Eighth
Delegated Legislation
Committee
Wednesday 19
March
2008
[Dr.
William McCrea
in the
Chair]
Draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2008
2.30
pm
The
Parliamentary Under-Secretary of State for the Home Department
(Mr. Vernon Coaker):
I beg to
move,
That the
Committee has considered the draft Proceeds of Crime Act 2002 (Cash
Searches: Code of Practice) Order
2008.
The
Chairman:
With this it will be convenient to consider the
draft Proceeds of Crime Act 2002 (Investigations in England, Wales and
Northern Ireland: Code of Practice) Order 2008 and the draft Serious
Crime Act 2007 (Amendment of the Proceeds of Crime Act 2002) Order
2008.
Mr.
Coaker:
It is a privilege to serve under your
chairmanship, Dr. McCrea, for what is, from memory, the first time. I
welcome all other Members to the
Committee.
On the
draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice)
Order, the Proceeds of Crime Act 2002 gave powers to the police and
customs officers to search for and seize cash obtained through unlawful
conduct, or that was intended for use in such conduct, and to secure
its forfeiture in magistrates courts proceedings. Those powers, which
can be found in chapter 3 of part 5 of the Act, have been a huge
success. Some £1 million per week has been seized pending
forfeiture, and forfeitures make up 25 per cent. of the £125
million of proceeds recovered last year.
Section 79 of, and schedule 11
to, the Serious Crime Act 2007 will, when they come into force on 6
April, extend the powers to a wider range of investigators. The ability
to search for, seize, detain and seek the forfeiture
of cash is to be extended to accredited financial investigators. An
accredited financial investigator is an investigator who is not a
constable or officer of Her Majestys Revenue and Customs, who
has been trained and accredited by the National Policing Improvement
Agency under section 3 of the 2002 Act to undertake such
functions.
Until now,
accreditation and training has been provided by the Assets Recovery
Agency, which has accredited members of staff for the Serious Fraud
Office and local authority trading standards offices. Because agencies
with accredited financial investigators are beginning to operate their
investigations independently of the police and HMRC, it makes sense for
them to have the full range of tools under the 2002 Act. They will be
fully trained by the NPIA to undertake their new
powers.
There are
various safeguards connected to the search powers in recognition of
their sensitivities, such as the statutory code of practice, which sets
out how the search powers are to be exercised. It should be noted
that the code relates only to the search powersit does not cover
other powers in chapter 3 of part 5 of the 2002 Act, such as the power
of
forfeiture.
Significantly,
the current code, which provides guidance on the powers, has operated
successfully for more than five years. The new updated code is required
before the extension of the search powers comes into operation on 6
April. The draft order will bring the code of practice into
operation.
An initial
draft of the code was published for public consultation on 3 December
2007, and the consultation period ended on 25 January. We revised the
draft code in light of the comments we received, and
the final version is before the Committee. A summary of responses to
the draft code will be issued in due course. The amended draft code
closely follows the precedent of the previous code and the updated
Police and Criminal Evidence Act 1984 codes, particularly code A, which
relates to stop and search, and code B, which relates to searching
premises and seizure of property. They are tried and tested schemes for
the best general practice for officers to follow when conducting
searches.
The content
of the draft code is broken into several sections. Among other things,
the introduction section includes an obligation to ensure that the code
is publicly available for consultation. The general section draws
particular attention to officers obligations under the Human
Rights Act 1998 and the Race Relations Act 1976. I am satisfied that
the order and the code are compatible with both of those
Acts.
The
section on the scope of the search power provides guidance on the
circumstances in which the powers are available. It gives guidance on
the meaning of reasonable grounds for suspicion and makes the objective
nature of the test clear. The section entitled authority to
search for cash provides guidance on the procedure required
when an officer is seeking judicial prior approval of a search. The
section entitled reports to the appointed person gives
guidance on the requirement in section 290 of the Act to report to an
appointed person and sets out the related procedure. A report is
required to be sent to the appointed person if searches were not
approved by a judicial officer and cash was either not seized or
detained for more than 48
hours.
The appointed
person is an independent person who oversees the operation of the
search power. He will shortly issue his sixth annual report. So far, he
has been content with the exercise of the powers and has made no
recommendations. The remaining sections of the code, which deal with
the steps prior to a search, the actual search, and the search record
of both persons and premises, are similar to the PACE codes. They help
to ensure that the persons who are subject to the powers are made aware
of the officers purpose and powers, that people are dealt with
fairly and openly, and that an officer is proportionate in exercising
these powers. Examples of safeguards in the code are in paragraph 62,
under which a person is allowed to call their own witness to a search,
and in paragraphs 53 and 64, which require all searches to be fully
recorded and kept on a search
register.
The nature
of the order means that I have spoke more to the draft code than to the
order. The only further point specifically on the draft order is that
it brings the code of practice into operation on 6 April.
I shall now turn to the draft
Proceeds of Crime Act 2002 (Investigations in England, Wales and
Northern Ireland: Code of Practice) Order 2008. The Proceeds of Crime
Act 2002 contains powers of investigation into the extent and
whereabouts of the proceeds of crime. The provisions for those
investigations are set out in paragraph 8 of the Act. There are five
investigation powers: production orders, search and seize warrants,
disclosure orders, customer information orders, and account monitoring
orders. The powers are limited to financial investigations under the
Proceeds of Crime Act 2002; namely, confiscation, civil recovery,
detained cash and money laundering investigations. They are strictly
limited to those four types of investigation and are therefore not
available for investigations into other proceedings under the
Actfor example, revenue collection under part 6 or criminal
investigations more
generally.
Section 377
of the 2002 Act requires the Secretary of State to prepare and publish
a code of practice for use by certain persons exercising the
investigation powers in England, Wales and Northern
Ireland. The Attorney-General will issue a separate code to provide
guidance for prosecutors exercising investigation powers. Scottish
Ministers also issue a code for the operation of the investigation
powers in Scotland. Significantly, an existing code covering these
powers has operated successfully for five years.
Other investigation schemes
have related codes of practice to ensure that there
is a measure of control and consistency in how the relevant powers are
to be used in practice. The recently amended codes of practice under
the Police and Criminal Evidence Act 1984 provide guidance on specific
procedures. This draft code is drawn heavily from the successful
precedents of the existing code and the updated Police and Criminal
Evidence Act 1984 codes. The code ensures best practice by those
operating the powers of investigation within the Act and an assurance
that the powers will be used proportionately against the people and
organisations affected by the
Act.
As with the cash
search code, an initial draft of the code was published for
consultation on 3 December 2007. The consultation period ended on 25
January this year. We revised the draft code in light
of the comments received and a revised final version is before the
Committee. An amended version of the code is necessary because of
changes to the investigation powers in the Proceeds of Crime Act 2002
that are to be made by the Serious Crime Act 2007, on 1
April.
The main
relevant amendments are first, that the Assets Recovery Agency is being
merged with the Serious Organised Crime Agency and it will take on the
powers of confiscation and civil recovery investigation. Investigation
powers in relation to civil recovery investigations are also being
conferred on the Director of Public Prosecutions, the director of
Revenue and Customs prosecutions, the director of the Serious Fraud
Office and the Director of Public Prosecutions for Northern Ireland.
The use of the powers in section 8 of the Serious Crime Act 2007 by
those persons is to be covered by a separate code under section 377 of
the 2002 Act.
Secondly, the
Serious Crime Act 2007 enables the production order and search and
seizure warrant provisions to be used for investigating the derivation
or intended use of cash seized under chapter 3 of part 5 of the
Proceeds of Crime Act 2002. Those provisions provide for the recovery of
cash in civil summary proceedings. This new type of investigation is
known as a detained cash
investigation.
Finally,
the code has been updated to reflect developments in policing more
generally, which have been included in other codes, notably those
issued under the codes of the Police and Criminal Evidence Act 1984.
For example, paragraph 10 of the code has a provision that
investigators should consult community liaison officers if there is a
reason to believe that proposed action may have an adverse effect on
relations between law enforcement and the community. Paragraph 180 of
the code is also new. It reflects the fact that there now exists new
technology to record interviews, where as previously they were tape
recorded. That passage provides guidance for the use and storage of any
medium used for the recording of interviews.
The introduction part of the
code provides a general overview of the provisions that appropriate
officers need to follow. It provides best practice for appropriate
officers in regards to making applications for and
serving the warrants and orders. It also outlines the procedures for
the retention of documents and information. The code then provides a
detailed step-by-step guide for appropriate officers to follow when
carrying out investigation powers under section 8 of the 2007 Act. It
is intended to be self-explanatory and easily understood. The code will
form part of the training for financial investigators that is provided
by the National Policing Improvement Agency.
In summary, I am satisfied that
the draft code sets out clearly the processes and safeguards required
for the operations of these investigation powers. Due to the nature of
the order, I have spoken more about the draft code than the actual
order. The only further point specifically on the draft order is that
it brings the code of practice into operation on 1
April. A commencement order bringing the amendments relating to the
abolition of the Assets Recovery Agency into force on that date is
being prepared. The amendments relating to detained cash investigations
will come into force on 6 April.
Finally, I turn to the draft
Serious Crime Act 2007 (Amendment of the Proceeds of Crime Act 2002)
Order 2008, the third of the orders that we are discussing this
afternoon. The draft order deals with a minor amendment to section 280
of the Proceeds of Crime Act 2002. That section was amended firstly, in
the Serious Organised Crime and Police Act 2005 and was amended again
in the Serious Crime Act 2007. However, I assure the Committee that the
issue we are dealing with in this order is a minor and technical one.
In civil recovery
cases under part 5 of the 2002 Act, the organisation responsible for
taking proceedings for a civil recovery order is known as the
enforcement authority. Under the amendments made by the 2007 Act, the
enforcement authority in England, Wales and Northern Ireland can be one
of a number of persons, for example, the Serious and Organised Crime
Agency or the Director of Public Prosecutions.
Where a court
makes a recovery order it must appoint a trustee for civil recovery.
The enforcement authority must nominate someone suitably qualified to
act as a trustee. That could be someone from their own staff. The
trustee acts on behalf of the enforcement authority and is under a duty
to secure the property, which will be
vested in him or her, and to liquidate non-cash assets for the benefit
of the enforcement authority. The trustee must also get the best price
for the property vested in him, so as to maximise the amount payable to
the enforcement authority.
Section 280
of the Proceeds of Crime 2002 Act sets out what must be done with the
money that the trustee has collected together under the recovery order.
Once certain payments have been made from recovered monies, any
remaining sum must be paid by the trustee to the enforcement authority.
That authority can use the money it receives to pay the remuneration
and expenses of the trustee. However, the enforcement authority is not
allowed to deduct the salary costs when a member of its own staff has
been appointed as a trustee, although it should be able to recover
those costs where the trustee is an outside contractor engaged by that
authority.
The effect
of the amendments made by the 2007 Act to the 2002 Act has been to make
it unclear what the proper position of contractors is with regard to
the netting off of their remuneration from recovered monies. The
amendment in the third order clarifies that position. I am
sorry that this has needed a bit of introduction, but the orders
contain some detailed
changes.
2.46
pm
Mr.
David Ruffley (Bury St. Edmunds) (Con): Thank you Dr.
McCrea, and let me say what a pleasure it is to serve under your
chairmanship for the first time. It is, however, the
second time today that I have debated with the Minister and it is a
true pleasure. Clever, balanced, fair, detailed, on top of his brief
and handsomehe is all those things. We had an excellent debate
this morning on neighbourhood policing, but here we have something more
technical and less scintillating.
I will begin
by taking the third order that the Minister referred to: the Serious
Crime Act 2007 (Amendment of the Proceeds of Crime Act 2002) Order
2008. We share the Ministers analysis that the order is not too
controversial and seeks, among other things, to clarify the reference
to members of staff in section 280(4) of the 2002 Act. The Minister has
accurately summed up our understanding of the effect of the order, and
we have no objection to it.
We do, however, have some
questions about the first two orders: the Proceeds of
Crime Act 2002 (Cash Searches: Code of Practice) Order 2008, and the
Proceeds of Crime Act 2002 (Investigations in England, Wales and
Northern Ireland: Code of Practice) Order 2008. The 2002 Act was
amended by the Serious Crime Act 2007 to take into account, among other
things, the abolition of the Assets Recovery Agency and the transfer of
functions to other agencies. It also created a new type of
investigation to look at the provenance or intended use of cash seized
under the powers of the 2002 Act, and the extension of powers under
that Act to certain civilian financial investigators.
As defined by sections 292 and
377 of the Proceeds of Crime Act 2002, the updates, which are the
subject of these orders, must be made in the relevant codes of practice
and must be approved by us today. As I have indicated, we cannot do
that without some thorny questions being answered. First, let me take
the order
relating to detained cash investigations, which is
probably the least controversial of these two orders. Currently, there
appear to be no powers to investigate the provenance or intended use of
cash that has been seized and detained. The creation of that form of
investigation will mean that production orderswhich allow
financial investigators to obtain information about an alleged
offenders financial affairs, normally his or her bank
accountcan be served on cash already seized. That will enable
the law enforcement bodies to construct forfeiture cases, which can
then be heard before magistrates
courts.
There is one
related point that I would like the Ministers views on. My
right hon. Friend the Member for Haltemprice and Howden (David Davis)
last week highlighted the lack of use of financial reporting
ordersanother type of financial investigation tool that allows
courts to order a criminal to report on their financial affairs,
enabling the authorities to check that the criminal has no other,
illicit sources of income. In a written answer, the Minister of Justice
stated that
there have
been no financial reporting orders given as a primary disposal since
they were introduced in the Serious Organised Crime and Police Act
(2005).[Official Report, 10 March 2008; Vol.
473, c. 155W.]
We also
know, contrary to what the Minister of Justice appears to have stated
there, that the Serious and Organised Crime Agency has said that 12
financial reporting orders have been issued. The source for that is the
2006-07 annual report of SOCA, published in May 2007. On the related
issue, it would appear that a useful tool is being under-utilised. I
would very much like the Ministers views on that, by way of
context for the instruments that we are discussing
now.
The second big
issue arising from the two statutory instruments, which I have
separated out, relates to the abolition of the Assets Recovery Agency
and the transfer of its functions. The Serious Crime Bill 2007 sounded
the death knell of the Assets Recovery Agency in its then current form.
The Chairman of the Public Accounts Committee
highlighted in a trenchanttypically trenchantway the
deficiencies in the operation of the ARA. On 7 March he said that
youreferring to the agency
management
have
spent £65 million and you have recovered £23 million. You
have no complete record of the cases referred to you. You have worked
on over 700 cases and only managed to recover assets in a mere 52; 90%
of financial investigators you have trained have not completed the
courses that they need
to.
The
agency did not live up to expectations. The question remains for the
Minister: what general lessons have been learnt from the
agencys short-lived experience? What reassurance will he give
us today that the successor bodies are doing a better
job?
I
would also like to flag up to the Committee the concerns expressed
about the agency in the full National Audit Office report, published in
February last year. The report uses the phrase,
Despite efforts by the Agency to
encourage bodies to refer
cases
to it, which bears
on the whole issue tackled by the instruments. Asset recovery is
important, but it is not going to be effective if referrals are not
made to the agency. The agencys experience was
that
four police forces
and most local authorities and Trading Standards
Offices
had yet to refer any cases
to it at all. What steps will the Minister take to ensure that that
rather sad experience under the agency is not now repeated by the asset
recovery activity of
SOCA?
Questions arise
regarding how the game has been raised on the part of those who try to
recover assets on the publics behalf. There was a great deal of
poor case-management information in the old agency. There
was a high turnover of staff and the fact that
apparently, they did not record their time, so that the agency could
not measure the resources deployed on each case, was obviously a source
of concern. It is therefore important that we note such criticisms
identified by the NAO and ask the Minister to reassure us that such
matters are being examined as we speak, and not that they will be
addressed in the
future.
The
role of SOCA and its new performance in relation to asset recovery is
of great concern to us. It is taking on more responsibility, but some
of us are worried about its turnover of staff. The number of staff
seems to be decreasing. In 2006-07, SOCAs annual report stated
that, by the end of the financial year, SOCA employed 4,200 full-time
equivalent staff. According to a response given on 5 March 2008 to a
written parliamentary question tabled on 31 July this year, that had
fallen to 4,008. Why have I asked those questions? The statutory
instruments will ultimately have an impact on the SOCAs job.
What does the Minister have to say about the falling number of
employees? It would be useful to know whether any of them who used to
work at SOCA now work on asset
recovery.
The
Minister spent some time talking about the extension of powers of
accredited financial investigators. That is probably the most sensitive
and contentious issue, which prompts the most questions. The change
proposed under the codes follows the extension of powers to accredited
financial investigators, otherwise known as AFIs. For the first time,
the power to execute search and seizure warrants in confiscation and
money laundering investigations will be extended beyond police
constables and officials from Her Majestys Revenue and Customs
to AFIs.
Since 30
December 2002, a customs officer or a police constable may seize cash
at the borders or inland if he or she has reasonable grounds for
suspecting that the cash is recoverable property or intended for use in
unlawful conduct, and if the sum seized is in excess of a minimum
amount. The minimum amount was set originally at £10,000 and
reduced subsequently to £5,000 in March 2004. On 31 July 2006,
the minimum amount was reduced further to £1,000. Seized cash
may not be detained for more than 48 hours, except by order of a
magistrate.
Some
of us are cautious whenever a Government introduce proposals whereby
powers of seizure are entrusted to someone other than a sworn police
officer. Unfortunately, the draft codes do not provide clarification of
precisely why that is happening, although I can make a shrewd guess.
More importantly, what are the safeguards? What disciplinary safeguards
operate in respect of an AFI that might also operate in respect of a
sworn officer of the
Crown?
Two
questions have not been answered. First, which accredited financial
investigators will be given the new powers? That question was put to
the Minister by my right hon. and learned Friend the Member for
Sleaford
and North Hykeham (Mr. Hogg) when the
Serious Crime Bill was in Committee. He was referring to section 435 of
the Proceeds of Crime Act 2002, which contains no identification of
accredited financial investigators. At the time, the Minister
said
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.[Official Report, Serious Crime
Public Bill Committee, 10 July 2007; c.
282.]
Of course, the bodies that
I have referred to in the quotation from the Minister are part of the
list, but they do not make up an exhaustive list. It seems odd that if
we are discussing altering important codes, we do not have an
exhaustive list. It would be useful if the Minister could provide us
with the full list of bodies that he deems to have a criminal
investigation role.
I
shall briefly return to the National Audit Office report into the
Assets Recovery Agency, which was published in February last year. It
states:
We
found contradictory information on the number of financial
investigators. At the time of our fieldwork we were told that it was
2,788.
I understand that
that was derived from a number of questionnaires that were sent out.
The NAO goes on to
state:
We
found that the database (of accredited financial investigators) had
details on 3,198 registered
users.
The
report also said that data on the details of financial investigators
held on the support system was unreliable. The NAO found that more than
a quarter of the registered users were unknown to the Assets Recovery
Agency 2 per cent. had retired and 31 per cent. had
left their organisation and were no longer involved in financial
investigation work.
The Minister needs to comment
on what I have just said because we seem to be granting powers to
execute search and seizure orders without being crystal clear about who
will be in receipt of those powers. The report I have mentioned is, of
course, historical. Since the report, will the Minister confirm not
just if action is in progress, but if steps have already been taken to
ensure that there is an up-to-date and factually correct database with
the details of all accredited financial investigators. Is the Minister
in a position to say that such a list exists? I repeat: not that such a
list is being looked at, not that work is underway, not that progress
is being made towards putting together a fully definitive database, but
that it has actually been done. [
Interruption.
]
And that it has been assented to, as my hon. Friend the Member for
Reigate notes from a sedentary position. I also propose that such a
list be placed in the House of Commons
Library.
I have a
further important question that will form the conclusion of my remarks:
what is the exact role that AFIs are expected to fulfil? That may seem
an odd question, so let me explain what I mean. The codes of practice
state that the search and seizure warrant must be executed by an
appropriate person. As detailed in the introduction, section 352 (5) of
the Act provides that an appropriate person
is
a constable, officer
of HMRC or a suitably accredited financial investigator for search and
seizure warrants.
Will the Minister
explain why he thinks it is appropriate that search and seizure
warrants should be executed simply by those with an appropriate
accreditation? Or why it is appropriate to extend to them the powers to
potentially detain someone, to conduct a search and also, as I
understand the instruments, to search a house? Some would argue that
that is a significant departure from allowing only sworn officers of
the Crown to exercise such powers. Civilians who are simply accredited
will now be able to do those things if the measures go through and
become fully
operational.
The
explanatory memorandum to the instruments
states:
It is
a natural extension of the role of accredited financial investigators
to allow them access to the powers that are currently limited to the
police and HMRC such as executing a search warrant and searching for
and seizing suspicious cash...This parallels other developments in law
where civilians take on more law enforcement functions; see, for
example, the exercise of police powers by civilian staff under the
Police Reform Act
2002.
It
is all very well to argue by analogy with the civilianisation that was
encouraged and progressed by the Police Reform Act 2002, but under that
Act civilians working for the police cannot execute a search warrant or
conduct a legal search. Those duties and powers remain in the realm of
sworn officers. Police community support officers cannot conduct a
search of an individual or a house under the same circumstances that a
sworn officer can.
Let
us be clear that the role of civilians in the police is vital in
supporting front-line officers. No one would dispute that for a second.
Let us also remember that civilianisation is not a
clever new Labour idea. Sometimes the idea is put abroad that it was a
way of modernising the work force, but such work force modernisation
has been going on for at least 18 or 20
years.
I make no
criticism of civilianisation. However, we know from the police service
experience that, up until now, it has been broadly limited to helping
with case file preparation in the majority of cases. That includes
interviewing suspects to obtain witness statements.
There are many examples among the investigative
support officers in Surrey, in the force area of my hon. Friend the
Member for Reigate, where good pilot schemes have been undertaken.
However, that is probably different to performing a front-line activity
such as searching and executing search warrants. In conclusion, the
codes of practice do not make the logic
clear.
More
importantly, I understand that the Minister might say, Why not
extend civilianisation to the execution of warrants? If he
wants to elide that point, can he tell us what the position would be if
an accredited financial investigator abuses those powers? Let us assume
that, in the majority of cases, those search activities are
successfully carried out according to the powers granted under the
instruments. Let us assume that most of the time it will be all fine
and dandy. However, what happens in the case of a rogue financial
investigatora wrongunsomeone who abuses the
powers and is incompetent or corrupt? Clear and well defined
disciplinary procedures apply to police constables and HMRC officers
who step over the line. Could the Minister give us a clear explanation
of the disciplinary regime that AFIs could face if they
step over the line, and tell us what complaints
procedures are available to members of the public who are on the
receiving end of inappropriate searches or warrant execution by
civilian AFIs? Those are my questions for the Minister, and I look
forward to hearing his responses, the quality and comprehensive nature
of which will determine our position on approving, or otherwise, the
orders.
3.10
pm
Tom
Brake (Carshalton and Wallington) (LD): May I also say
that it is a pleasure to serve under your chairmanship this afternoon,
Dr. McCrea? I also spent some of this morning with
many of the same hon. Members discussing the issue of neighbourhood
policing. The hon. Member for Bury St. Edmunds is rightthis
subject is a little drier to debate than neighbourhood policing, but he
was right to hone in on what is also the key issue for the Liberal
Democrats: accredited financial investigators. How will the safeguards
that the Minister referred to operate? Who can be an AFI, and what is
the process for tackling people who do not observe the codes of
practice?
I hope that
the Minister will respond to many of the questions raised. I do not
want to add a large number of questions to his list, but I have a
couple of points. He spoke in glowing terms about the existing codes of
practice, which have operated successfully for the last five years.
Could he tell us what breaches there have been in those codes of
practice?
Tom
Brake:
None at all. That is extremely interesting. We must
hope that the amended codes of practice will be observed just as
extensively and successfully as the existing ones were. The Minister
said that there have been no breaches and therefore no action has been
taken in relation to the existing codes of practice. However, it would
be useful to know whether there is any automatic process to review such
codes of practice after a certain period, so that we can see whether
the revised codes of practice operate as successfully as the ones that
they seek to replace. With those few questions, I will sit and listen
to the Ministers response and act according to it.
3.13
pm
David
Simpson (Upper Bann) (DUP): I also welcome you to the
Chair, Dr. McCrea. As a member of my own party and a
colleague I wish you well in your chairmanship. I have listened
carefully to the comments made thus far and, like the previous speaker,
I do not intend to add many questions to the list. However, as a member
of the Northern Ireland Policing Board, I have some concerns in
relation to the abolition of the Assets Recovery Agency. The concern,
which I think has already been mentioned by previous speakers, is about
the extra workload that the Serious Organised Crime Agency will take
on. Rumourand it is only a rumoursays that SOCA will
not be able to handle the cases that are currently under investigation
by the Assets Recovery Agency. Perhaps in his response, the Minister
could tell us how that will be taken forward. A point was also raised
in relation to the criteria, and the code of conduct for the
investigators, and I assume that the Minister will elaborate on that.
We do not want to see the situation
that we had with the recruitment of police community
support officers some time ago, where we had 16-year-olds employed to
do the job, which was a total travesty and a disaster for the
reputation of the community support officers.
I am glad that there is such a
thing as PCSOs on the mainland here in the UK, because Northern Ireland
has been denied them and it looks as though it is not going to happen
for us. I shall not add to that, but there is concern that when SOCA
takes over the workload will be so great that it will be unable to keep
the same emphasis on criminality and the cash proceeds from it in the
Province. I am sure that the Minister and all hon. Members realise that
that criminality is causing great concern and that we want to see it
brought to an
end.
3.16
pm
Mr.
Crispin Blunt (Reigate) (Con): I join in the verse of warm
welcome to your chairmanship of this Committee, Dr. McCrea. I want
briefly to comment on the process that has brought us here to consider
these statutory instruments. The Minister and my hon. Friend the Member
for Bury St. Edmunds were elected in 1997. Since then, we have faced a
barrage of criminal justice legislation of one variety or another,
frequently of bewildering complexity. In conversations with the
Minsters hon. and learned Friend and occasional supporter, the
hon. and learned Member for Medway (Mr. Marshall-Andrews), I
have asked him whether he, as a practising Queens counsel, can
keep up with the weight of legislation being presented and passed by
Parliament. His answer was an unequivocal denial that he, despite his
profession, could keep abreast of it.
Having seen the details of the
orders being presented to us today and heard the Ministers
lengthy and careful explanation, this is a classic example of why we,
as legislators, have done a thoroughly bad job in the last 10 years of
examiningor not examining, more usuallythe detail of
the legislation that we have been invited to pass. All the orders are
putting right oversights of one sort or anotherin the principal
case, the dramatic oversight of setting up an agency that by any
standards has been a catastrophic failure, as the National Audit Office
has made clear. The performance of the Assets Recovery Agency has been
utterly disastrous by any reasonable standard.
In the tribute paid to the
Minister at the beginning of my hon. Friends remarks, leaving
the matter of his pulchritude to one side, it was said that he is a
fair and reasonable man. However, as a Minister and previously as a
Back Bencher, he has supported a Government who have brought forward a
torrent of legislation that has not been properly overseen by the House
because of the changes of process brought about by the governing
majority since 1997. This afternoon, we are dealing with a consequence
of that. It is thoroughly to be regretted, and I sincerely hope that
the Minister will try to effect a change in how legislation is
considered by the House of Commons, so that he and his successors, of
whichever party, will not have to put right all the legislative
oversights that have gone through over the past 11 years. I fear that
this will not be the last time that I will sit on a Committee
considering a statutory instrument dealing with matters of crime,
justice and home affairs, putting right what has gone wrong before, but
if the Government could take away that message, that would be a small
step forward.
3.19
pm
Mr.
Coaker:
May I warmly welcome the comments made by the hon.
Members for Bury St. Edmunds and for Reigate? Since I have been a
Minister, it has been my intention to deal with
matters in a practical, sensible and reasonable way. It has always
seemed ridiculous to be partisan about difficulties in legislation.
Sometimes, things need to be dealt with and cleared up, and that is
what people expect. There are differences between us on matters of
principle and in policy terms, but I take the point made by the hon.
Member for Reigate about ensuring that legislation is fit for
purposeindeed, some of my hon. Friends make the same point. I
reassure him that, while I have such responsibility, that will
certainly be my intention with respect not only to the matter under
discussion today, but to all the various issues that come before
us.
I understand the
points that have been made. There is a reasonable welcome for such
measures, although some concern has been expressed about them. It is
fair to say that there has been a little confusion about financial
reporting orders. I do not know whether the hon. Member for Bury St.
Edmunds has read the letter published today in The Daily Telegraph
from Bill Hughes, the director general of the Serious Organised
Crime Agency, in which he put the record straight in respect of
financial reporting
orders.
In a
parliamentary written question to the Ministry of Justice, the right
hon. Member for Haltemprice and Howden (David Davis) asked how many
financial reporting orders had been issued by the courts. My right hon.
Friend the Secretary of State for Justice replied by saying that no
financial reporting orders had been recorded as a primary disposal by
the courts. That is indeed the case. However, it must be noted that
financial reporting orders are secondary ancillary orders made by the
courts at the point of sentence after conviction, rather than a primary
disposal prior to
conviction.
As
it is such an important point, I repeat that financial reporting orders
are secondary ancillary orders made by the courts at the point of
sentence, following the principal disposal that could be a period of
imprisonment. More than 40 financial reporting orders have been made
since they were introduced in 2006 as secondary or ancillary orders. I
hope that I have been of help to the hon. Member for Bury St. Edmunds.
He made a reasonable point when he asked whether we were passing
legislation that will be effective and used. In the whole area of the
proceeds of crime, we expect such powers to be used along with
others.
The hon.
Gentleman also asked about the merger of the Assets
Recovery Agency with the Serious Organised Crime Agency, as did the
hon. Member for Upper Bann. We are discussing an extremely important
area of legislation for the Government. We all agree that seizing
criminal assets and taking the profit out of crime is essential.
However, it is new legislation and a new area of business. The Proceeds
of Crime Act 2002 was significant. It established a new way of working,
and it took the law into areas that it had not previously covered. In
Northern Ireland, it has been very well regarded and
successful.
The
Assets Recovery Agency trailblazed a lot of legislation. On numerous
occasions when it tried to take
assets away from criminals, it has been taken to court on various
pretexts of human rights and other legislation that, not being a
lawyer, I do not understand. Even when numerous assets have been
restrained, getting them into what we call the tin boxturning
them into moneyhas proved exceptionally difficult. However,
much of that legislation has now been tested in the courts, with
judicial precedents set, and I would expect to see an acceleration of
such work.
Also, if
the Serious Organised Crime Agency had existed when the Assets Recovery
Agency was set up, we would probably not have set the Assets Recovery
Agency up, but have included it within the Serious Organised Crime
Agency. Many of the people of interest to the Serious Organised Crime
Agency are the same as people of interest to the Assets Recovery
Agency. Our view is that the synergy of action and work between the two
is best done as part of one organisation, rather than as two separate
organisations. There is a good, practical case to be made for
that.
Notwithstanding
that, I will just deal with the point of the hon. Member for Upper
Bann. As he knows, I went to Belfast a few weeks ago, particularly to
try and reassure the staff about their future, but also to praise the
work that the Assets Recovery Agency had done in Northern Ireland. I
emphasised the importance we attach to the carrying on of that work and
that there is no diminution of resource available for that work when
ARA becomes part of SOCA. At the same time, as the hon. Gentleman
knows, we announced that the chief superintendent of the Police Service
of Northern Ireland would become the lead officer in Northern Ireland
for taking that work forward. We thought that his experience, and the
support he has in the wider community, would be of some
reassurance.
I repeat
for the record and for the benefit of the hon. Gentleman and, no doubt,
many of his colleagues in Northern Ireland that we are absolutely
determined to see that that work carries on, that there is no reduction
in effort and that the success in tackling crime in
Northern Ireland through the seizure of criminal
assetstaking profit away from the various
gangsterscontinues. If at any time over the next few months the
hon. Gentleman becomes concerned about anything, all he needs to do is
to contact me, and I will look at it for him. I know how important the
issue is for the people of Northern Ireland. I hope that putting it on
record again in the House of Commons is some reassurance about that
work.
Returning to
points made by the hon. Members for Carshalton and Wallington and for
Bury St. Edmunds, about financial investigators and who they are likely
to be, I am not in a position to list exactly who those accredited
financial investigators will be. They will be members of staff working
for designated bodies, which will include those listed by the hon.
Member for Bury St. Edmundsfor example, the Serious Fraud
Office, the Environment Agency, local authorities,
the Department for Work and Pensions and others. However, I can say
that before any of the new powers introduced by the Serious Crime Act
2007 are used, the Secretary of State will make a further order,
listing those bodies of which the accredited financial investigators
will be able to have access, for example, to the power to search for
cash. So
there will be a further order, which will list the bodies to which
accredited financial investigators have to belong, letting Parliament
approve those
bodies.
Mr.
Ruffley:
I am grateful to the Minister for giving way. We
are listening carefully to a thoughtful set of replies. Why is a
further order needed? Why can the list not be produced now? What is the
reason for the
delay?
Mr.
Coaker:
The frank answer is that the list is not yet
agreed and ready. Also, we thought it important for Parliament to have
a sayas the hon. Gentleman rightly pointed outin the
significant extension of a power to accredited financial investigators.
We did not just want to list the power. It is not available now. I have
replied as I have to him, because we wanted to make sure that
Parliament would have the opportunity to agree the list of bodies, or
notsaying that those are the appropriate bodies for an
accredited financial investigator, to whom we are extending such
powers. Parliament will decide whether that list of bodies is
appropriate.
Mr.
Blunt:
Can the Minister explain how Parliament will give
its approval? If the list comes forward in the form of an attachment to
an instrument, it will be
unamendable.
Mr.
Coaker:
It will come forward way in the normal way. An
order will be laid before the House and it will be a matter for Members
to pray against it in the normal way and for a debate to take place.
That is the normal way that lists are agreed or not by
Parliament.
Mr.
Blunt:
Given the restrictions on the way that Parliament
deals with orders, could a draft order be published before the order is
laid so that there would be an opportunity to amend the order by
discussion and suggestion before it comes forward as a
take-it-or-leave-it
instrument?
Mr.
Coaker:
I will give the hon. Gentleman an undertaking to
do that. I am not saying that it will be an affirmative resolution, but
I will ensure that when it is laid before Parliament a draft order is
sent to the hon. Member for Bury St. Edmunds. He will no doubt liaise
with the hon. Member for Reigate who may then want to make
representations to me about that list and we can try to take that
forward. If that helps the hon. Gentleman, I am quite
happy to do that. The important thing for me is to get this extension
power to accredited financial investigators, but I want to do it in a
way that is proportionate and sensible, and commands the widest
possible
support.
Tom
Brake:
Will the Minister also send me a copy of that list?
He did not have the advantage that I had of watching the looks on the
faces of his officials when he made that announcement. But we welcome
it.
Mr.
Coaker:
I am not sure what the look will be now
when I say, yes we ought to include the hon. Gentleman. This list of
bodies is important and we will look to put together a draft list and
to share it with people. In the end a list of bodies will be presented
to
Parliament in the normal way, through the order-making process, so that
we can establish it. I am keen to try to build a consensus around what
those public bodies may be. The hon. Member for Carshalton and
Wallington may see the list and object to it, but I have to add the
proviso that just because he objects, he may not get his way.
I was about asked a possible
database. We are looking at putting together a database of accredited
financial investigators. There is not one at present. In terms of
ensuring that they conform to the codes of practice, the public bodies
on the list to which I have referred will have their own complaints
procedures which people can follow. Alongside that, the National
Policing Improvement Agency was responsible for accrediting those
financial investigators and there will be a mechanism by which it will
review and monitor their
work.
This
is a technical debate, but it is extremely important. We have extended
the powers to accredited financial investigators for a simple reason.
If forensic accountants and the people who work for any of these public
bodies that we will listthe hon. Member for Bury St. Edmunds
and I have been through a few of thosehave the power that we
are now giving them, some of the people who are currently profiting
from their crime will have that profit taken away from them. Most
people would see that as reasonable. The safeguards are necessary and
it is important to demonstrate that all of that is
proportionate. At the end of the day we also must demonstrate that we
are on the side of the law-abiding majority who would expect as much
action as possible to be taken against those who seek to profit from
their
crime.
Question put
and agreed
to.
Resolved,
That
the Committee has considered the draft Proceeds of Crime Act 2002 (Cash
Searches: Code of Practice) Order
2008.
draft
Proceeds of Crime Act 2002 (Investigations in England, Wales and
Northern Ireland: Code of Practice) Order
2008
Resolved,
That
the Committee has considered the draft Proceeds of Crime Act 2002
(Investigations in England, Wales and Northern Ireland: Code of
Practice) Order 2008.[Vernon
Coaker.]
draft
Serious Crime Act 2007 (Amendment of the Proceeds of Crime Act 2002)
Order
2008
Resolved,
That
the Committee has considered the draft Serious Crime Act 2007
(Amendment of the Proceeds of Crime Act 2002) Order
2008.[Vernon
Coaker.]
Committee
rose at twenty-five minutes to Four
oclock.