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Public Bill Committee Debates

Draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2008



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 Majesty’s 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 powers—it 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 officer’s 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 Act—for 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 handsome—he 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 Minister’s 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.
There is one related point that I would like the Minister’s views on. My right hon. Friend the Member for Haltemprice and Howden (David Davis) last week highlighted the lack of use of financial reporting orders—another 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 Minister’s 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 trenchant—typically trenchant—way the deficiencies in the operation of the ARA. On 7 March he said that “you”—referring 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 agency’s 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 agency’s 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 public’s 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, SOCA’s 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 SOCA’s 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 Majesty’s 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 investigator—a wrong’un—someone 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 right—this 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?
Mr. Coaker: None.
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 Minister’s 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. Rumour—and it is only a rumour—says 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 Minster’s 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 Queen’s 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 Minister’s 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 examining—or not examining, more usually—the detail of the legislation that we have been invited to pass. All the orders are putting right oversights of one sort or another—in 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. Friend’s 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 purpose—indeed, 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.
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 assets—taking profit away from the various gangsters—continues. 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. Edmunds—for 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 say—as the hon. Gentleman rightly pointed out—in 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 not—saying 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 list—the hon. Member for Bury St. Edmunds and I have been through a few of those—have 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 o’clock.
 
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