Previous Section Back to Table of Contents Lords Hansard Home Page

(1) The Secretary of State shall publish each year a report on the effects of requests for banking information introduced under this Act.
(2) In each report under subsection (1) the Secretary of State shall include—
(a) a cost assessment of complying with requests for information,
(b) the frequency of requests from participating countries, and
(c) the time taken to comply with requests."

The noble Viscount said: My Lords, in Amendment No. 64, standing in my name and that of my noble friend Lady Anelay, we return once again to the subject of annual reports. This is not a probing amendment. It concerns an issue which we raised in Grand Committee and to which we want to return again.

Many noble Lords who spoke in Committee agreed with us in principle that, as we are breaking new ground with the banking section of the Bill, parliamentarians

25 Feb 2003 : Column 218

have a right to know the cost to the taxpayer of complying with requests. I understand the point that the Minister made in response to this amendment in that an annual report would require resources. However, I cannot agree with his statement that those would be disproportionate or a potential waste. He has, after all, reminded us that, in any case, the cost to the banking industry of complying with the regulatory impact assessment will be between £1.26 million and £3.7 million a year.

It is essential that there is transparency in this matter. As my noble friend Lord Renton and the noble Lord, Lord Monson, pointed out in Committee, we are in uncharted waters. In our view, in terms of monitoring, it is insufficient to rely on the odd parliamentary Question to check on what is an unfamiliar procedure but one that is absolutely crucial to the effective operation of this part of the Bill. The BBA has also stated that it is completely behind the measure that we propose, and it believes that the debate in Grand Committee showed the important issues involved.

A report would also put pressure on the Home Office to meet another concern that the BBA has in relation to the partial regulatory impact assessment—the PRIA—of the protocol to the Convention on Mutual Assistance in Criminal Matters between EU member states. After supporting the convention but noting that it had to be on the basis of mutual benefit, the BBA said—I hope that your Lordships will permit me to quote this:

    "The UK, and the information which the UK will, potentially, be able to obtain will not be less or less timely than that which the UK will normally provide. Differences could arise through, for example, different legal procedures or bank secrecy rules, in particular where the retail banking structure is less concentrated than in the UK. Such differences could reduce the benefits for more ready access to information in response to requests for mutual legal assistance".

An annual report will help to establish the extent to which there is a level playing field both in theory and in practice.

I return to a remark made by the Minister; namely, that he will consult the BBA when the Government reconsider the process for handling requests for information once an order has been made. He also stated that he would consult other relevant bodies. Would it be possible for him to name them now? That would help us to see how widely the Government are consulting on the issue. I beg to move.

Lord Bassam of Brighton: My Lords, I am delighted that the noble Viscount has moved this amendment as it gives us a chance to return to our favourite topic of annual reports. I shall not level my common allegation that when stuck for an amendment one dreams up an annual report to demand.

I see the point made by the noble Lord. Our argument is that an annual report is unnecessary and burdensome. On a matter of costs, a balance has to be struck as to whether the potential evil that it is attempting to monitor is outweighed by the evil of the unnecessary activity. In our view it is the latter case.

25 Feb 2003 : Column 219

We would not want noble Lords to believe that we are not concerned about costs. For that reason we have had detailed and intricate consultation in the preparation of the Bill and we have been careful to consult the BBA. At an earlier stage in the proceedings on the Bill we undertook careful inquiries with the BBA to see whether in general it was happy with the arrangements that we are putting in place. My understanding was that that was the case.

We believe that costs should be kept to a minimum. We shall be careful in our approach to the whole issue. As regards reviewing procedures on an annual basis, although the matter covered in the amendment will be monitored, we believe that the requests and the return of evidence obtained under them will be routed via the Secretary of State and that costs will be kept to a minimum. The absence of a requirement for an annual report does not mean that the effects of the new processes and procedures will not be monitored, nor that the banking industry will be excluded from any future consultations on the subject. We intend that they will be consulted.

I am sure noble Lords will be aware that the procedures are not unique to this Bill. They mirror procedures put in place through the Proceeds of Crime Act and they will be available to domestic investigators as well as to overseas authorities. It may be worth reminding ourselves that there is no parallel requirement for an annual report on the use and operation of proceeds of crime procedures, although they make much the same demands. It will take banks as long to comply with a domestic request made under that legislation as one made under the protocol. I do not recall a large demand for annual reporting on the proceeds of crime processes.

We shall not look at customer information and account monitoring orders made under the protocol in isolation. I give that clear undertaking. As regards the provisions in the Bill, we shall have the advantage of seeing how effectively the relevant provisions of the Proceeds of Crime Act operate in practice. It is worth reminding ourselves that those measures came into effect yesterday with the launch of the asset recovery agency.

An annual report dealing only with requests made under Chapter 4 of the Bill would not represent the whole picture. Other, less formal, more practical monitoring methods may well be better suited. It will soon become apparent if those orders place an onerous burden on the banking industry or take a very long time to execute. It is worth reminding ourselves that in general costs will be borne by the requested state, which will have to meet the cost of compliance when a request is made, unless there is a particular agreement to the contrary where exceptional costs may arise. The amendment is unnecessary. It will not reduce costs burdens. For those reasons, we oppose it.

The noble Lord asked what other bodies we might consult. I cannot provide him with a full list at this stage. We shall consult the financial crime team which implements the Proceeds of Crime Act. We shall seek to share experience with it. We shall continue to

25 Feb 2003 : Column 220

consult the BBA. No doubt it will wish to advise us of relevant bodies which should be consulted. Therefore, we intend to listen; we shall be sensitive as to how these measures are applied; and we shall actively pursue our commitment to consultation.

9.15 p.m.

Baroness Carnegy of Lour: My Lords, before the noble Lord sits down, I do not think he commented on my noble friend's point about the bankers' desire to have a level playing field. Banking, as he well knows, is an international business these days. Different arrangements in different countries pertain in banks. Will the Minister make sure that in future consultations the British Bankers' Association is asked whether the arrangements are fair vis-á-vis banks in the various countries involved? Perhaps he will comment on that matter.

Lord Bassam of Brighton: My Lords, we are sensitive to that issue. This is a mutual agreement. One would expect that, just as there will be costs on banks in the UK, if we or other states seek information in other jurisdictions costs will be incurred there. I made it plain that the general international rule is that the requested state meets the cost of compliance with the request in most circumstances.

To that extent, there is a commitment to a level playing field. We are sensitive to the point. We shall listen carefully to what the BBA says on that precise issue because it is only right that we should play our part in ensuring that that level playing field exists.

Viscount Bridgeman: My Lords, I am most grateful to my noble friend Lady Carnegy for raising that point. Earlier, it was clear that countries outside the EU—indeed, outside Schengen—could be admitted to the scheme. I certainly understand the argument so persuasively advanced by the Minister for relying on parliamentary process to hold the Government to account for the operation of this part of the Bill. But this is a virtually new aspect to banking supervision in the fight against international financial crime. In our view, there is a strong case for providing a formal report, available in the Library of both Houses. To rely on a random sequence of parliamentary Questions is not an acceptable alternative. I beg to test the opinion of the House.

9.19 p.m.

On Question, Whether the said amendment (No. 64) shall be agreed to?

Their Lordships divided: Contents, 23; Not-Contents, 57.

Division No. 4


Anelay of St Johns, B.
Astor of Hever, L.
Blatch, B.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Carnegy of Lour, B.
Cope of Berkeley, L. [Teller]
Cox, B.
Crathorne, L.
Dixon-Smith, L.
Howe, E.
Hunt of Wirral, L.
Lyell, L.
Masham of Ilton, B.
Northbrook, L.
Northesk, E.
Park of Monmouth, B.
Pearson of Rannoch, L.
Saltoun of Abernethy, Ly.
Seccombe, B. [Teller]
Stodart of Leaston, L.
Waddington, L.
Wakeham, L.


Andrews, B.
Barker, B.
Bassam of Brighton, L.
Berkeley, L.
Borrie, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Campbell-Savours, L.
Carter, L.
Corbett of Castle Vale, L.
Crawley, B.
Davies of Coity, L.
Davies of Oldham, L.
Dixon, L.
Dubs, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Fyfe of Fairfield, L.
Gale, B.
Gilbert, L.
Golding, B.
Goldsmith, L.
Goodhart, L.
Gould of Potternewton, B.
Greaves, L.
Grocott, L. [Teller]
Hardy of Wath, L.
Harris of Haringey, L.
Haskins, L.
Hogg of Cumbernauld, L.
Hunt of Kings Heath, L.
Jones, L.
Lester of Herne Hill, L.
Livsey of Talgarth, L.
Lofthouse of Pontefract, L.
McIntosh of Haringey, L. [Teller]
Mackie of Benshie, L.
Mar and Kellie, E.
Orme, L.
Randall of St. Budeaux, L.
Rea, L.
Russell, E.
Shutt of Greetland, L.
Simon, V.
Smith of Leigh, L.
Stone of Blackheath, L.
Taylor of Blackburn, L.
Thornton, B.
Tordoff, L.
Whitty, L.
Wigoder, L.
Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

25 Feb 2003 : Column 221

9.28 p.m.

Clause 47 [Transfer of UK prisoner to assist investigation abroad]:

Next Section Back to Table of Contents Lords Hansard Home Page