Previous Section Back to Table of Contents Lords Hansard Home Page

The order deals with accredited financial investigators. These are financial investigators who are trained and accredited and subsequently closely monitored by the National Policing Improvement Agency under the Proceeds of Crime Act 2002. The Government believe strongly that seizing criminals' assets is a key measure that improves public confidence in policing and the criminal justice system. There is strong public support for taking away criminals' ill-gotten gains as well as evidence to indicate that criminals fear the seizure of their assets more than a term of imprisonment. Evidence from ACPO and the National Policing Improvement Agency also shows that using the skills of trained financial investigators contributes significantly not only to asset recovery but to combating a wide range of criminality.

As has been said, accredited financial investigators are not a new proposal. They have been in existence since 2003, following the Proceeds of Crime Act 2002, and have been using their financial investigation skills successfully since that time. There have been accredited financial investigators in local authorities since 2005. The latest order under the Proceeds of Crime Act simply extends some of the powers available to these investigators in line with powers already held by the police. These investigators, both within the police service and in other areas of law enforcement and the wider public sector, have therefore played an integral role in the recovery of the proceeds of crime since 2003.

7 Dec 2009 : Column 909

The Government made amendments to the 2002 Act in Sections 78 to 81 of, and Schedule 2 to, the Serious Crime Act 2007, extending the range of powers of accredited financial investigators. The new powers that can be exercised by suitably accredited financial investigators therefore have full parliamentary approval. Noble Lords asked why there was less than adequate consultation. There were a number of reasons why this occurred. In hindsight, and given noble Lords' contributions, it would have been wiser to have had wider consultation, but AFIs have been in existence since 2003 and the investigative powers of local authorities have been in existence since 2005. The extension of powers was provided for in the Serious Crime Act 2007. The statutory instrument issued earlier this year, SI2009/975, and the previous one, had attracted no parliamentary, media or other comment despite the fact that the Home Office Minister, Alan Campbell, wrote to Members of the Commons in December 2008, enclosing a copy of the earlier order, as those Members had expressed interest in the issue in earlier, unconnected debates.

What consultation did take place? In preparing the instrument during the summer months, Home Office officials worked in full consultation with the NPIA, the body with statutory responsibility to train and accredit financial investigators. The NPIA was satisfied that the new bodies listed in the order were suitable to be given new investigative powers and asked the Home Office to lay the new order. ACPO has said that the NPIA's Proceeds of Crime Centre is held in the highest regard across the world and maintains very high standards of professionalism. The individual agencies have requested access to the powers and were also closely involved in settling the details of the order.

My noble friend Lord Rooker referred to Cabinet Office rules in respect of consultation. I am told that these do not apply to negative SIs as such, although I have to say that the plea from the noble Baroness, Lady Buscombe, that we should take note of that in future and that there should be consultation, represented wise words that I will take on board.

A number of other important points were made by noble Lords. However, I should like to deal with those at the termination of my contribution.

Accredited financial investigators' powers can be exercised only by categories of persons approved by order of the Secretary of State, such as the one which we are discussing today. It is the Government's policy to accord these powers to public bodies. In answer to the question of the noble Lord, Lord Skelmersdale, on whether the Government have any intention to extend these powers to private bodies, Ministers sought these powers only for public bodies. As the noble Lord well knows, no Government can bring perpetuity into a debate, but there is no intention in the Government's mind to extend these powers to other bodies.

4 pm

Lord Skelmersdale: Why does that paragraph about the apparent possibility of extending these powers to private firms appear in the Explanatory Memorandum? Why is it worth saying, except to raise alarms such as those that I mentioned?

7 Dec 2009 : Column 910

Lord Brett: The alarm was raised, but I am seeking to give reassurance that it is not the Government's intention, and it was not the Minister's advice on this occasion, that the power should be sought other than for public bodies.

The Earl of Onslow: Presumably the Government have the power to appoint a private organisation. That is what one objects to most. These powers should not be given at all, except to very senior state powers.

Lord Brett: If the powers were to be extended, they would be the subject of another statutory instrument and would, therefore, be brought to your Lordships' attention, if not through noble Lords' perspicacity, then via the Times. Perhaps I may continue.

Concern has been expressed over local authorities having these powers. But, for example, trading standards officers who are members of local authority staff already investigate intellectual property crime. This is not small beer. This is a lucrative business for criminals, which includes pirated DVDs, clothing, electrical equipment and so on. The most recent Intellectual Property Crime Report suggests that the criminal gain for intellectual property crime was around £1.3 billion in 2006. These powers are, therefore, an important addition to local authorities in their fight against crime.

Further, we are encouraging the use of these powers against all levels of crime. One of noble Lords' concerns was regarding the fare dodger or the person who does not pay council tax. These are areas where, initially, the civil law is involved. The issue here is criminality, so there has to be a proposal to involve the criminal law. Currently, there are 1,282 AFIs: 621 are employed by police forces or are non-warranted police officers; 354 comprise Serious Organised Crime Agency staff; 107 are in local authorities; and some 200 are in other public bodies. We are adding four new bodies to the list of 22 which the noble Baroness kindly quoted-the Gambling Commission, VOSA, Transport for London, and the Intellectual Property Office. We expect that to increase the number of AFIs by six people.

Lord Bowness: The Minister has justified the powers for local authorities to deal with intellectual property, and has now said that the Government are adding the intellectual property agency, or whatever, as a body. I wonder why both bodies need those powers. While he is giving examples, could he perhaps cite cases of "major criminal activity" involving "major criminal figures" untouchable by prosecution confiscation that justify the powers of Transport for London and the Royal Mail? We would be grateful to know the sorts of crimes the investigators of these agencies would pursue.

Lord Brett: I noted the point made in questions and will answer it in due course, if I may. I think that £1.3 billion in 2006 represents a considerable amount of criminal gain. As I was saying, we have added four new bodies and will add only another six AFIs. We do not anticipate that there will be a great expansion in the number of AFIs beyond that. There may be changes in that local authorities or other agencies may increase or decrease their AFI staff, depending on the areas of their involvement and what they are dealing with. I

7 Dec 2009 : Column 911

should add that we required the Intellectual Property Office to be included because it has a supervisory role to handle international and complex cases and needs investigative powers to perform the function. The order provides it with powers so to do. It will investigate cases that have passed the relevant local authority for prosecution, so there is an overlap. The IPO deals with the bigger cases that often go beyond local authority or even national boundaries. I hope that that helps the noble Lord.

As I was saying, there are some 1,282 AFIs, the vast majority of which-almost 80 per cent-are within the staff of the police and Serious Organised Crime Agency. Many of the posts in other bodies are held by former police officers. It is the Government's view and that of those involved that any withdrawal from accrediting investigators would be a serious step back in the outstanding progress we are making to drive up the amount recovered in the past six years. In 2001-02, £25 million was recovered and £148 million in 2008. It is also important to note that there is proper judicial oversight.

The Countess of Mar: My Lords, sorry to interrupt the noble Lord yet again, but could he tell us which organisations were responsible for recovering that money?

Lord Brett: I do not have a complete list in my brief but I will happily seek the same and write to the noble Countess.

Judicial oversight exists. First, confiscation powers remain in the hands of judges, not the police or other financial investigators. A confiscation order can be made only by a Crown Court judge following a conviction for a criminal offence. The decision to restrain or freeze a defendant's assets pending the possible making of a confiscation order can be made only by a Crown Court judge. An application for a search and seizure warrant has to be made to and approved by a Crown Court judge. When suspect cash is seized it can be further detained and forfeited only on the order of a magistrates' court.

Essentially, many of the fears expressed by noble Lords should be allayed by two factors: that AFIs will be very well trained, which I shall come to in a little while, and that they will be very well vetted by the National Policing Improvement Agency. It is wrong to suggest that these new tools are being treated lightly. Investigators will have to be vetted to a very high standard.

The noble Lord, Lord Thomas of Gresford, referred to confiscation of funds. I understand that there was a fear that the officer who seized cash would then leave the person with the burden of proof that it was not criminal in origin. That is not the case. When an officer seizes cash, the burden is on the seizing body to prove criminality. A confiscation or investigation order will be issued on application to a judge. It is not the decision of the investigator. There are also the safeguards that I mentioned of NPIA monitoring and the code of practice. Therefore, we do not think that it changes the status at all.

Lord Thomas of Gresford: With respect to the noble Lord, my point is that if Transport for London, through its investigator, goes after a person who owes it money

7 Dec 2009 : Column 912

and seizes the assets or asks the judge to confiscate the assets, the person whose assets are being seized has to prove, under the Proceeds of Crime Act, that he has come by those assets without crime-not necessarily the crime concerned, but any criminal activity. That is the architecture of the Act. Presumably, that means that the investigator for TfL pursuing a congestion charge fine, or something of that sort, will be able to apply for all the assets of an individual to be confiscated unless he can prove to the judge that he has come by them legitimately. Surely that is a wholly disproportionate extension of the powers.

Lord Brett: It is with the greatest trepidation that I would cross swords with the noble Lord, whose extensive knowledge and experience of the law would expose my absolute lack of it, you might say. However, as I understand it, it is not the case that the burden of proof lies with the person on whom a freeze on their cash is sought. It is still for the prosecution to give good grounds to the court as to why that is. I will defer and seek further advice if the noble Lord is still insistent that that is the case, but that is not what my brief tells me.

Baroness Buscombe: My Lords, I am sorry to interrupt, but I want to affirm that the noble Lord, Lord Thomas of Gresford, is right. That is something that we debated at enormous length because we were deeply unhappy about shifting the burden of proof in this case.

Lord Thomas of Gresford: I see the noble Lord, Lord Rooker, nodding in assent, and he put the Bill through the House.

Lord Brett: In the face of which formidable argument and witnesses, I suggest that the best thing is that I take the question away to seek further advice on it.

If I may continue, I think that I have dealt with the issue of consultation, but a number of other important questions were raised. I shall seek to deal with some of them now.

On Transport for London, I do not believe that we are talking about congestion charges. First, congestion charges are not themselves a criminal offence, and criminality is the issue here; secondly, there may be major fraud issues between internal and external colluders, or certainly with external contracts, with an organisation such as Transport for London. You could even have something similar in the Rural Payments Agency. Those are areas of investigation for major issues of criminality; they are not intended for the person putting their bag in the wrong dustbin. I think that the noble Earl was seeking that reassurance.

The noble Baroness, Lady Hamwee, asked several questions, but one was about Northern Ireland. She said that we have not delegated policing to Northern Ireland, so how could this be delegated? The order is already in force in Northern Ireland; it came into force on 2 November. I am told that there is a separate list for Northern Ireland because it has separate agencies, which were consulted in Northern Ireland at the time of the order-although that may not help people here.

A number of other major points were made by the noble Baroness, Lady Hamwee. She asked why we are getting this order six months after the last one, to

7 Dec 2009 : Column 913

paraphrase. The first order this year followed three years of not having SIs. We do not want to overburden the House with numerous pieces of legislation to scrutinise, but that is not the case here. We stated the benefits of the powers to which accredited financial agencies should have access, in particular, the Serious Fraud Office and local authorities. Trading standards officers, in particular, had expressed their interest in the powers as part of their broader focus on proceeds of crime. They have both heavily invested in the expectation of the powers and wished to see them put before your Lordships' House at the earliest opportunity. Also, we have-as some may criticise the Government for having a tendency to do-changed the name of departments of state with some regularity. The Department for Business, Enterprise Regulatory Reform has been partially succeeded by the Department for Business, Innovation and Skills. Such changes are also reflected in the order.

Have any agencies been refused a request to be added to the list? The answer is no. The explanation is that the public bodies are sounded out by the NPIA and the Home Office if they declare an interest in having the powers. They are then sent a series of questions which they need to answer to justify their requirement for the powers. This tends to act as a steer for those who then pursue their inclusion or seek not to do so.

4.15 pm

The noble Baroness asked who does the accreditation and what it consists of. It is an intensive course that has five levels of training depending on which powers an investigator wants access to. The courses begin with six weeks' pre-course study to obtain the necessary knowledge. Passing an exam places an investigator on a five-day skills course. He then works in the workplace for 12 months and has to submit a portfolio of his work that is assessed by an operational/vocational qualified assessor. Accredited financial investigators are then intensively monitoring by the NPIA, which also delivers a continuous personal development programme. They are assessed by an independent assessor and trained as A1 assessors. In addition, the NPIA dips a sample of 10 per cent of those AFIs who have submitted their PDP each year. These dip samples take place in the workplace and involve an examination of the case papers that contain the supporting evidence for the online PDP submission, which then results in accreditation. Once AFIs have been verified, they move into continuous professional development, and a 5 per cent dip of those individuals takes place in the workplace each year. There is fairly intrusive continuous monitoring of individuals and the quality of their performance. If they fail, they can be removed. That has happened in two cases so far.

The noble Baroness's final question was about Clause 11(1) of the Explanatory Memorandum, which does not apply to small businesses. She asked why it is there. I thought that was an interesting question. The powers to investigate the proceeds of crime and to execute warrants in the search for cash are obviously focused on the criminal. If a sole business is involved in criminality, it is possible that this will lead to an additional burden, but we make no apology for adding

7 Dec 2009 : Column 914

to that burden in cases where there is criminal activity. Many of the powers are not new and have been in operation for the past six years. We have received no complaints about any burden on or intrusion in small businesses.

A question was asked about this being misused by zealous local authorities or other public bodies, and I think this is noble Lords' real fear. Criticisms about counterterrorism legislation being used by local authorities in unintended ways led to a circular from the Home Secretary making clear that that was not the case. If we were to find that that situation applied here, we would take similar action. However, we believe that with the involvement of the Home Office and the NPIA, there is ongoing monitoring which should mean that that should not be the case.

Finally, the Association of Chief Police Officers is very enthusiastic that this is brought into existence because it believes that it will relieve the police, who do not have the skills to deal with things such as fake drugs, some trading standards offences or some waste management offences. They can now be dealt with by people who have narrower expertise than police officers, which relieves the police of that burden.

Lord Rooker: My Lords, that being the case, and given the answer my noble friend gave me about the negative resolution, which I fully accept in terms of consultation, if I had put the possible use and extension of these powers to the House in 2002, it would not have bought the negative procedure and would have demanded the affirmative procedure. I do not expect an answer to this question now, but will the Home Office look at whether, if the situation we have today was envisaged in 2002, it would have put the affirmative procedure in the Bill? If that is the case, this ought to be looked at again.

Lord Brett: Hindsight is powerful, but it is not powerful enough to go back seven years. How we deal with crime, and the crime that we have to deal with, is fast moving and continues to be a fast-moving series of events. The answer would have been no at the time. Clearly, today there is an issue. It is before your Lordships' House. It has by the noble Earl's determination been something that your Lordships have debated. I hope that we have allayed the fears that it will not be misused as people fear it could be-for people who were not paying the congestion charge and the like. It is important that we have these powers on the statute book, because they are requested by the very people who are currently dealing with these forms of crime. I hope that I have allayed your Lordships' fears sufficiently for the noble Earl to consider withdrawing his Motion.

The Earl of Onslow: The noble Lord ended by saying he "hoped". Hope springs eternal. It is worth summing up, as I understand it, what this debate has been about. It has not been about whether there should be powers to seize goods from the ungodly who have ungodlily taken them from the public. It has not been about getting the big drug barons to cough up their ill gotten gains. It has not been about big people cheating on intellectual property. It has not been about any of those things. It has been about whether the powers of the state are being unnecessarily increased.

7 Dec 2009 : Column 915

The noble Lord, right at the end, said that the Home Office sent a circular round when it heard that the anti-terrorist powers were being misused. He hoped that was satisfactory. It was not satisfactory. People are still rocketed for taking photographs of St Paul's Cathedral. When the man to whom this attempt was made complained to the police assistant-or whatever she was called-she said that none of the other people who she had told not to take photographs of St Paul's Cathedral had complained. This insidious entry of powers by the Government to reduce the liberty of the subject is why we are here. We are here to protect those liberties-they are precious beyond anything. My noble friend Lady Buscombe picked up late again, when some of us were perhaps a bit dozy, on the Civil Contingencies Act. That was a happy little Act, which at one stage allowed a junior Minister to repeal habeas corpus while Parliament was in recess.

This is a habit that this Government have got into, and it is an appallingly bad habit. I thank immensely the noble Lord, Lord Neill, for helping guide me through the constitution of the Holy Roman Empire, because that was what he was doing only in its more complicated form. I say to him and to the noble Lord, Lord Campbell, both of whom I respect, that the reason I want to divide the House is because the Government perhaps might pay a little bit more attention if we divide the House than if we do not. The problem has not been allayed. My fears have not been allayed. Therefore, I wish to test the opinion of the House.

4.23 pm

Division on the Motion.

Contents 182; Not-Contents 118.[The Tellers for the Contents reported 182 votes; the Clerks recorded 181 names.]

Motion agreed.

Division No. 1


Aberdare, L.
Addington, L.
Afshar, B.
Alderdice, L.
Allenby of Megiddo, V.
Anelay of St Johns, B.
Ashcroft, L.
Astor of Hever, L.
Baker of Dorking, L.
Barker, B.
Bates, L.
Best, L.
Bew, L.
Blackwell, L.
Bowness, L.
Bradshaw, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Buscombe, B.
Butler of Brockwell, L.
Butler-Sloss, B.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Campbell of Surbiton, B.
Cathcart, E.
Chorley, L.
Clement-Jones, L.
Cobbold, L.
Colwyn, L.
Condon, L.
Cope of Berkeley, L.
Cotter, L.
Cox, B.
Craig of Radley, L.
Craigavon, V.
Crickhowell, L.
Cumberlege, B.
De Mauley, L.
Dear, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
D'Souza, B.
Dykes, L.
Eames, L.
Eccles, V.
Eccles of Moulton, B.
Elton, L.
Falkland, V.
Falkner of Margravine, B.
Fearn, L.
Fookes, B.
Fowler, L.
Freeman, L.
Next Section Back to Table of Contents Lords Hansard Home Page