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House of Lords

Tuesday, 8 July 2014.

2.30 pm

Prayers—read by the Lord Bishop of Truro.

Vehicles: Heavy Goods Vehicles

Question

2.37 pm

Asked by Lord Berkeley

To ask Her Majesty’s Government whether they have plans to strengthen the enforcement of drivers’ hours and construction and use regulations with respect to heavy goods vehicles.

The Minister of State, Department for Transport (Baroness Kramer) (LD): My Lords, the Government have plans to strengthen enforcement, including: continued targeting; introducing four new purpose-built Driver and Vehicle Standards Agency check sites; using the joint DVSA and police HGV task force in London set up last year; and a fixed-site automatic number-plate recognition camera network. We are consulting about proposals to use financial penalty deposits for historical drivers’ hours offences, developing plans for some specialised vehicles, and working to get more serial offenders to traffic commissioner inquiries more quickly.

Lord Berkeley (Lab): I am grateful to the noble Baroness for that comprehensive Answer. I would like to know when some of these things are going to happen, but they sound really good. My reason for asking was that I recently met an HGV driver who had driven on trade plates from the south of England to Edinburgh, and then back to the south of England and back to Edinburgh, within 24 hours. I hope that these regulations will stop that kind of thing. Will the Minister confirm exactly how it could be stopped in the future?

Baroness Kramer: My Lords, the noble Lord raises an important issue about trade plates. Vehicles which have not yet been put into service are exempt from the EU drivers’ hours rules and so do not need to use a tachometer. However, drivers of these vehicles would need to comply with the GB domestic drivers’ hours rules, which restrict driving to 10 hours a day with a duty limit of 11 hours a day. Obviously, for enforcement, without the tachometer we are very much dependent on intelligence. I have passed the noble Lord’s information back to the various authorities to pursue. Intelligence is an important part of enforcement here. We also rely heavily on whistleblowers. Drivers are encouraged to report any breaches of these rules to the DVSA on its helpline, which is 0300 123 9000. All calls will be treated in confidence and driver anonymity is ensured. I will confirm to the noble Lord the various processes that follow on from the receipt of that information.

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Lord Mackay of Clashfern (Con): My Lords, is the explanation of the example given by the noble Lord, Lord Berkeley, the very powerful attraction of Edinburgh?

Baroness Kramer: I cannot deny the attractions of Edinburgh, but I suspect the answer is more nefarious.

Lord Snape (Lab): Can the Minister tell the House how many people are employed countrywide in the enforcement of these regulations? How many prosecutions have there been under these regulation over the past 12 months? If she does not have that information to hand, I would be happy to read about it in Hansard.

Baroness Kramer: I will be delighted to follow up with any gaps. The noble Lord will be aware that an important task force in London, the new Industrial HGV Task Force, which is made up of eight officers from VOSA and eight from the Metropolitan Police, was launched in September 2013. That has been extremely effective in increasing enforcement. The task force is running a whole series of exercises. Between 1 October and 27 June, it stopped 2,798 vehicles: 764 were compliant—about 27%;—1,232 prohibitions were issued; 724 fixed-penalty notices were issued; and 35 vehicles were seized. Somewhere here, if I can find it, I have more general information; I will write to the noble Lord with that.

Lord Bradshaw (LD): Can the Minister tell the House whether she has information about how many people have been killed or seriously injured by drivers who were driving outside the limits, and whether for the latest year—if figures are available—she has any evidence of what happens to such drivers?

Baroness Kramer: Accidents that involve HGVs have been falling for the past five years, although slowly. In 2013, there were 6,524 reported accidents, of which 270 were fatal. That has fallen by 8% since 2009. Where evidence exists to show that an HGV driver is at fault, he is reported for prosecution. We do not hold the numbers of those prosecuted and the results of those prosecutions, but we will refer that to the Home Office to see whether it has further detail.

Lord Vinson (Con): My Lords, 90% of goods in this country are delivered by road most efficiently. That is ever likely to be so because the alternative—to send them by rail—is a three-stage journey that is entirely uneconomic in a small country such as ours. Therefore, will the Minister resist any pressure to raise transport costs, which affect us all, particularly when advocated by members of the rail lobby?

Baroness Kramer: My Lords, I think that the noble Lord’s question is rather out of scope. Safety on the roads is an issue on which we have to be both vigilant and effective.

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Lord Davies of Oldham (Lab): My Lords, the noble Baroness’s answers were rather too long for the House. However, they were not too long for me, because I agreed with them.

Baroness Kramer: I thank the noble Lord, Lord Davies of Oldham, for his support.

Baroness Sharples (Con): Is my noble friend aware that I had a heavy goods vehicle licence during the war, and that there were no restrictions at that time?

Baroness Kramer: However, I am sure that there were also no accidents or breaking of the rules.

Lord Campbell-Savours (Lab): My Lords, the Question was about the use of trade plates and in what circumstances truckers would want to use them. Is there not a restriction on the amount of time they can run on trade plates?

Baroness Kramer: I will write to the noble Lord with more detail on that. This is about vehicles that have not yet been put into service, so the various restrictions are around that. I will send him more detail on that.

Earl Attlee (Con): My Lords, at what point does the Minister think she will be in a position to mandate the use of sensors on HGVs to detect cyclists? It cannot be done immediately, but at some point we should be able to do that. When does she think she will be able to do that?

Baroness Kramer: The noble Earl is quite right that that will be an important safety development. At the moment the sensor equipment we have that reliably detects other vehicles, pedestrians and cyclists is still in development. Unfortunately, some of the systems treat a tree as if it were a cyclist, and of course, once you get wrong information, the driver begins to ignore it. Therefore we are pursuing these issues very rapidly, and the department will welcome any uptake of effective systems by vehicle owners. However, vehicle registration is at the EU level, and mandatory fitment will need to be agreed with the other member states.

Baroness Gardner of Parkes (Con): My Lords, will the Minister consider amending the construction and use regulations to remove the exemption for skip lorries and cement mixing lorries from the requirement to have a safety bar? These are the vehicles which are killing many bicycle riders now.

Baroness Kramer: My Lords, there are constraints on some of these vehicles, but the noble Baroness is right to say that there are special vehicles which are exempt. We have been looking at reducing those exemptions, and I will be glad to keep her up to date with where that process is going.

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Faith Group Relationships

Question

2.45 pm

Asked by Lord Carrington of Fulham

To ask Her Majesty’s Government what measures they plan to take to improve the relationship between the Muslim community and other faith groups in the United Kingdom.

The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con): My Lords, the Department for Communities and Local Government published its strategy Creating the Conditions for Integration in 2012. This sets out the work of the Government and other organisations in helping to create the right conditions for everybody in society to participate. The Government are supporting projects to break down barriers, encourage community cohesion and celebrate what we have in common.

Lord Carrington of Fulham (Con): My Lords, I thank my noble friend for that Answer. With some young British Muslims being radicalised, does she agree that it is very important that they are taught at a very young age, either in school or elsewhere, to understand the similarities between all religions, in particular the shared values of the Abrahamic religions, so they can understand that Christianity and Judaism are not the enemies of Islam? Can she suggest the best way to make this come about?

Baroness Warsi: My Lords, it is important that all people, especially young people, have an understanding of the diverse communities in which we live, including different faith communities. My noble friend may be heartened to know from surveys, including a DCLG survey from a few years ago, that 90% of Muslims agreed that people from different backgrounds get on well, as opposed to 87% of the general population; 89% of Muslims agreed that it is possible to fully belong to Britain and maintain a religious identity, compared to 72% of the general population; and 74% of Muslims believe that there should be more mixing between different communities and different ethnic and religious groups, compared to 71% of the general public.

Lord Patel of Bradford (Lab): My Lords, will the Minister say what plans the Government have to work with the media to encourage them to stop publishing demonising articles about whole communities because of the actions of a handful of terrorists?

Baroness Warsi: As an ex-chairman of the Conservative Party, I wish I could get the media to stop publishing demonising articles. The noble Lord raises an incredibly important point. One of the strands of the work of the cross-government group on anti-Muslim hatred is looking at how we can work with the Society of

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Editors, among others, to ensure that headlines are, first and foremost, not sensational, but secondly, reflective of facts.

Lord Harries of Pentregarth (CB): Does the Minister agree that in many parts of the country, relations between Muslims and other faith communities are extremely good? This was true in the diocese of Oxford when I was there and continues to be so. Because of the good relationships between faith leaders, including Muslim leaders, it has been possible to dissipate many potential signs of trouble.

Baroness Warsi: The noble and right reverend Lord makes an incredibly important point. I am incredibly proud of the work that the Government have done in harnessing the power of faith groups to create that understanding. One flagship has been the Near Neighbours programme. The Government have invested £8.5 million since the start of this Government in the Church of England’s Church Urban Fund, using the network of the Church of England to create better understanding between different faith communities.

Lord Hussain (LD): My Lords, will the Minister tell the House if she thinks that the Government’s approach in dealing with the so-called Trojan horse issue is a help or a hindrance in the fight to tackle extremism in this country?

Baroness Warsi: My Lords, my noble friend makes an important point; everything that we do in tackling extremism must be done in a way that actually resolves extremism. Our language, our policy approach and our conduct must satisfy the end goal rather than the process.

Baroness Uddin (Non-Afl): My Lords, would the Minister take the opportunity to pay condolences to the family of the student Nahid al-Manea, who was brutally murdered on the streets of England? Does she accept that some of these very brutal attacks and the rise of Islamophobia are real reasons why some young people are resistant to working across different faith groups? I agree that an enormous amount of work has been done in this country. Would the Minister accept that England’s record in the arena of multifaith work is second to none?

Baroness Warsi: My Lords, the issue of anti-Muslim hatred and Islamophobia is something that I have personally championed. One of the first speeches that I gave in government was about Islamophobia. I used the phrase, “Islamophobia has passed the dinner-table test”—and probably still bear the scars of it. It is important that we fight this new form of hate crime and that the Government have, rightly, invested in projects such as Tell MAMA, to record and make sure the data on anti-Muslim hate crime are accurate and credible.

It is important to make another point; we have been here before. There have been moments in our history when we have not been entirely comfortable with a faith community and we have questioned the loyalty

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of faith communities, whether that was the Jewish or the Catholic community. But our trust in our institutions and values has got us through it—and we will get through it again.

Lord Scott of Foscote (CB): My Lords, I have an interest on this Question because one of my two sons has become a Muslim and one of my two daughters has become a Muslim. I have 12 lovely grandchildren, seven of whom are little Muslims—or not that little now, because one of them is 21. And, of course, I have a Muslim son-in-law and a Muslim daughter-in-law. Family relationships since those events took place have been as happily familial, as close and as good as any parent or grandparent could wish. If an improvement is needed in relationships between faith groups, one way of promoting that might be to encourage interfaith marriages.

Baroness Warsi: First and foremost, my Lords, it is important that we allow people to marry somebody of their choosing, whatever faith they belong to. That is why I am incredibly proud that the Government have done so much work on the issue of forced marriages, including criminalising a practice that should have been criminalised many years ago.


NHS: Rural General Practitioner Dispensing

Question

2.52 pm

Asked by Lord Lea of Crondall

To ask Her Majesty’s Government whether they will hold talks with NHS England about steps that could be taken to slow down the closure of rural dispensing general practitioner practices, against the background of the operation of the one-mile rule covering new free-standing pharmacies, and the phased withdrawal of the minimum practice income guarantee.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): I and my ministerial colleagues are in regular contact with NHS England. We are not aware of significant closures of rural dispensing practices. The “one-mile rule” is a long-established precept under NHS pharmaceutical services legislation, which determines whether patients in designated rural areas remain eligible to receive dispensing services from their GP. We have no plans to review or amend that precept. NHS England is asking practices that believe they may be adversely affected by the phased withdrawal of the minimum practice income guarantee scheme to contact their local area team to discuss their concerns.

Lord Lea of Crondall (Lab): I thank the Minister for that reply, but the British Medical Association, at its conference last week, produced a statement citing NHS England as expecting scores of closures of such

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dispensing practices. I have a supplementary question and a proposal, but I think that the House may find it useful if I give the background.

Noble Lords: Question!

Lord Lea of Crondall: Given the loss of income from the double whammy of what is called the one-mile rule and the phased withdrawal of the minimum practice income guarantee, many practices will go below the red line of viability. Will the Minister therefore hold talks with NHS England and suggest that, when there is such a double whammy, the one-mile radius rule could be applied to new patients but not to existing patients—so numbers would be reduced through mortality over the years?

Earl Howe: My Lords, the phasing out of the minimum practice income guarantee is being gradually implemented over seven years to give adequate time for GP practices to adjust. In fact, most practices stand to gain under that arrangement. I would encourage any practice to take the matter up with the local area team at NHS England if it has particular concerns. The provisions governing whether a doctor can continue to provide dispensing services to eligible patients when a new pharmacy opens nearby, which is a separate issue, have been in place for a long time and are subject to a long-standing agreement. If an application for a new NHS pharmacy is made to NHS England that would affect, for example, the noble Lord’s dispensing practice, that practice is able to make its views known. There is an appeals process as well. If a new pharmacy were approved that does affect the practice’s dispensing patients, it is open to NHS England to phase in gradually the shift from using the practice’s dispensary to a pharmacy for those patients affected.

The Countess of Mar (CB): My Lords, does the Minister agree that this agreement arose from the 1911 Act—well over 100 years ago—and that there is extreme unrest among patients who are forced to go to a pharmacy when they have been used to using a dispensing doctor? Does the Minister intend to continue subsidising what are known as essential small pharmacies and not give patients a choice?

Earl Howe: My Lords, I do not think that it is a question of opposing choice against the rules that we have in place. The rules are there as a result of very long-standing agreements between the medical profession and the pharmacists. I do not think that there is an appetite on either side to open those rules up for renegotiation. A balance has to be struck somewhere and the professions are content with the balance that has been struck.

Baroness Brinton (LD): My Lords, given that half of patients who use dispensing GP services include at least one person over 65 and that one in six is a disabled person, can the Minister tell us whether the one-mile rule makes sense in very rural areas, where public transport may be very sketchy, especially as the one-mile rule is as the crow flies, not via the roads?

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Earl Howe: My noble friend makes a good point. That is why the rules contain an exception for those who find it difficult to travel and who may therefore wish to have medicines dispensed from their own dispensing GP practice. Those rules do apply to disabled people and to those whom my noble friend describes.

Lord Hunt of Kings Heath (Lab): My Lords, does the Minister not regard it as somewhat ironic that yesterday we had the Government trumpeting their Deregulation Bill but today he defends what essentially is an uneasy truce between the BMA and the pharmaceutical interest, in which often the public are the losers? Is it not time for that to be reviewed again?

Earl Howe: I simply ask the noble Lord why his Government introduced those rules when they were reviewed only a few years ago, before the current Administration came to office.

Viscount Tenby (CB): My Lords, I am grateful for the assurances that the Minister has given so far in respect of possible closures as a result of the change in the financial arrangements and also, of course, of developments in towns, which inevitably result in the creation of new general practices and new associated pharmacies. On the question of rural practices where a proportion of patients are very old indeed, I ask the Minister to reiterate that great care will be taken that they will not be disadvantaged in any way by the future arrangements.

Earl Howe: Yes¸ my Lords. As I have described, there is a provision in the rules to take account of elderly and infirm people who find it difficult to travel and who may therefore still wish to have their medicines dispensed by their own dispensing GP rather than be forced to travel a longer distance.

South Sudan

Question

2.59 pm

Asked by Baroness Kinnock of Holyhead

To ask Her Majesty’s Government what assessment they have made of the concerns expressed by the Disasters Emergency Committee over the prospect of famine in South Sudan.

Baroness Northover (LD): My Lords, the humanitarian situation in South Sudan is extremely critical and could get dramatically worse due to existing vulnerabilities and the unpredictability of the current conflict: 4 million people are at immediate risk of food insecurity and up to 7.3 million people are estimated to be at some risk. Should harvests fail, famine in late 2014 is a very real possibility in conflict-affected areas.

Baroness Kinnock of Holyhead (Lab): My Lords, I thank the noble Baroness for a very comprehensive and encouraging analysis of where we are in South Sudan. However, in view of the grim predictions made

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by the Disasters Emergency Committee, does she agree that the international community has to do more, provide more funding to ensure that we can make a difference and act very quickly to avert a catastrophic famine? She will know that humanitarian access is a major obstacle facing relief agencies working in South Sudan. What are the Government doing to press for greater humanitarian access to be granted by all parties in the conflict in South Sudan, including cross-border access?

Baroness Northover: The noble Baroness shows great understanding of the situation in South Sudan. As she rightly points out, the key to this is the conflict there. That is at the heart of why there is a problem—and why there is a problem with access. She rightly highlights the difficulty of getting aid in. We are working very hard on logistics with the UN, the ICRC and international NGOs to try to get assistance in through air transport and other means but it is proving extremely difficult. Clearly, the cessation of hostilities would be the key to sorting this out.

Lord Avebury (LD): My Lords, considering that fewer than half the pledges made at the Oslo conference in May have been honoured, should not the Disasters Emergency Committee write to the defaulters pointing out that, if they paid up, the shortfall of $1 billion needed to avert famine in Sudan would be cut by a third? Why are the BRIC countries and the oil-rich Gulf states missing from the list of 26 contributors to the crisis response plan?

Baroness Northover: First, I am immensely glad to see my noble friend back in his place and, as ever, fighting for the rights of the vulnerable.

Noble Lords: Hear, hear.

Baroness Northover: The Oslo conference, at which my honourable friend Lynne Featherstone worked very hard to secure contributions, did indeed produce firm commitments from international donors. We entirely agree that the pledges should be honoured and we welcome any steps taken in that regard. As regards the one my noble friend has just suggested in relation to the DEC, we would certainly welcome it taking such a move. On his second point, he is right: we constantly seek to expand the number of contributor countries.

Lord Alton of Liverpool (CB): My Lords, given that the whole of South Sudan is mired in violence and, indeed, corruption, what confidence does the noble Baroness have that the aid will reach the people it is meant to reach and will not be subverted for other purposes? Will she also comment on the reports published yesterday that the situation in the north is also deteriorating, with 5 million people there now suspected of being at risk of famine?

Baroness Northover: The noble Lord is quite right to point to these challenges. He will probably also know that the EU should be bringing forward a sanctions regime shortly, which we support. The United Nations

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is also looking at that because it is extremely important that problems such as looting are dealt with and that anyone who is getting in the way of the delivery of humanitarian aid is properly challenged and tackled.

The Lord Bishop of St Albans: My Lords, the situation is dire. As well as the 4 million people in need of humanitarian aid, more than 10,000 people have already been killed and 1.4 million people have been displaced. When we are facing such terrible problems it is important not to underestimate the role played by various agencies already on the ground, including many Anglican and ecumenical agencies working with the Anglican Alliance. Indeed, Archbishop Daniel Deng has been a leader in the efforts to bring peace. How can Her Majesty’s Government support the churches working on the ground in their humanitarian and peace efforts and in delivering aid?

Baroness Northover: I too pay tribute to those who are working in these extremely difficult circumstances. The right reverend Prelate will know that the United Kingdom is a leading donor. We are meeting about 7.5% of the total appeal at the moment and working to support all the agencies that are managing to get in. We do not underestimate the difficulties.

Baroness Hayman (CB): My Lords, I declare an interest as a trustee of the Disasters Emergency Committee. Does the noble Baroness agree that it is essential to flag up and respond to these complex and developing crises, which can be just as devastating if not as instantly newsworthy as the sudden catastrophic natural disaster?

Baroness Northover: The noble Baroness is absolutely right. Of course it is the fact that this is a very fragile state which leads to the problems that we are indentifying here. It is one of the reasons too why it is important to act early and to plan ahead, which the United Kingdom is seeking to do.

The Earl of Sandwich (CB): Does the noble Baroness agree that the key players in this future operation will be Kenya, Uganda and Ethiopia, which is receiving hundreds of thousands of refugees already? What are Her Majesty’s Government doing to back up those resources on the border?

Baroness Northover: We are concerned about not only those in South Sudan but obviously those who have been displaced into the neighbouring countries, who indeed have a destabilising influence. We are supporting both those within South Sudan and those in the neighbouring countries, and are very concerned about the instability caused by that.

Lord Collins of Highbury (Lab): My Lords, I pick up a theme that has already been partly covered. People in this country respond generously to disasters when they happen. Here we know that a disaster is going to happen and that millions may die; they have

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not died yet. Can we have an assurance from the Government that they will act now rather than wait for a disaster to happen?

Baroness Northover: I assure the noble Lord that not only are we acting now but we were one of the leaders in putting into place plans in anticipation of what might happen. We took very seriously the advice that was put forward a year or two ago about being early responders, and are implementing that.


Openness of Local Government Bodies Regulations 2014

Housing (Right to Buy) (Maximum Percentage Discount) (England) Order 2014

Motions to Approve

3.07 pm

Moved by Baroness Stowell of Beeston

That the draft regulations and order laid before the House on 3 April and 5 June be approved.

Relevant documents: 1st and 2nd Reports from the Joint Committee on Statutory Instruments (special attention drawn to the instruments). Considered in Grand Committee on 1 July.

Motions agreed.

Jobseeker’s Allowance (Supervised Jobsearch Pilot Scheme) Regulations 2014

Motion to Approve

3.07 pm

Moved by Lord Bates

That the draft regulations laid before the House on 4 June be approved.

Relevant documents: 2nd Report from the Joint Committee on Statutory Instruments, 2nd Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 1 July.

Motion agreed.

Serious Crime Bill [HL]

Committee (2nd Day)

3.08 pm

Clause 34 agreed.

Clause 35: External orders and investigations: meaning of “obtaining property”

Amendment 30 had been withdrawn from the Marshalled List.

Amendment 30A

Moved by Baroness Hamwee

30A: Clause 35, page 28, line 5, at end insert “to the extent of the property or advantage obtained”

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Baroness Hamwee (LD): My Lords, this is a tiddler of an amendment, which it is embarrassing to move if there are noble Lords waiting for enlightenment about the philosophy and underlying architecture of the Bill. I have succeeded in imprisoning a number of my noble friends up here, because I was unable to find anywhere closer to the front.

Baroness Anelay of St Johns (Con): My Lords—while my noble friend takes her seat—we are now in the second day in Committee on this Bill. Admittedly a smallish number of Peers are seeking to take part, but that number take the Bill very seriously. I am sure that, like me, they would like to hear from my noble friend Lady Hamwee as she moves her amendment.

Baroness Hamwee: My Lords, I am grateful to my noble friend. This amendment relates to an interpretation provision. In Clause 35, new subsection (6B) provides for what:

“References to property or a pecuniary advantage”,

mean in the context of the proceeds of crime. It seems to me that in that legislation and in the legislation that we are amending, some references to property or advantage would be to the whole of it—for instance, if the property is to be subject to confiscation—while some would be to the extent of what has been obtained by a criminal act, for instance the amount confiscated. My amendment really amounts to a question to the Minister as to whether to take it that we should read what is appropriate in the context. In other words, is what I have said implicit and am I worrying about something quite unnecessarily? The second of these examples—in other words, a limited extent—seems not to be provided for in the clause. I beg to move.

The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con): Perhaps I may help my noble friend and reassure her because Clause 35 deals with a technical amendment to the Proceeds of Crime Act, which will expand the types of cases that UK authorities can deal with on behalf of their international counterparts. The Proceeds of Crime Act currently enables, among other things, requests and orders made by courts in other jurisdictions to be given effect in the United Kingdom. One such order is that allowing for the recovery of specified property or money where that property or money is believed to have been obtained as a result of, or in connection with, criminal conduct. The scope of the order is therefore restricted solely to the recovery of specific property or money.

Domestic law, by contrast, recognises that the proceeds of crime can include not just specific money or property but a so-called pecuniary advantage, such as not paying a tax that is lawfully due. The reason that pecuniary advantage was not originally included within the assistance that could be provided to other jurisdictions was due to the scope of international agreements at the time when the Proceeds of Crime Act was enacted. In recent years, however, the international approach has broadened but the law has not kept pace. As a result, law enforcement agencies are unable to assist those in

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other jurisdictions in recovering from a defendant convicted of crimes such as tax evasion amounts held in the United Kingdom.

I am sure that my noble friend agrees that it is right that we should be able to co-operate as widely as possible in such matters; this clause will help us achieve that. The clause does not affect the position with regard to domestic cases. However, it extends our ability to assist foreign jurisdictions with the recovery of any pecuniary advantage obtained as a result of criminal conduct. I hope that, with that explanation, I have satisfied my noble friend and she will be able to withdraw her amendment.

Baroness Hamwee: My Lords, this is one of those occasions when one wants to hold back and read the answer, which is not at all to suggest that I doubt my noble friend. Of course, I share the intention and I am grateful to him for that. I will read the answer but, for the moment, I beg leave to withdraw the amendment.

Amendment 30A withdrawn.

Clause 35 agreed.


Clause 36: Confiscation orders by magistrates’ courts

Amendment 31

Moved by Lord Ponsonby of Shulbrede

31: Clause 36, page 28, line 7, at end insert—

“( ) In section 97 (confiscation orders by magistrates’ courts), for subsection (1) substitute—

“(1) The Secretary of State shall by order make provision for enabling confiscation orders under Part 2 of the Proceeds of Crime Act 2002 (confiscation: England and Wales) to be made by magistrates’ courts in England and Wales.””

Lord Ponsonby of Shulbrede (Lab): My Lords, my amendment is concerned with confiscation orders in magistrates’ courts. Under the Proceeds of Crime Act 2002, magistrates’ courts lost their power to make confiscation orders. They had previously had this power for appropriate offences under the Criminal Justice Act 1988. Magistrates continue to this day to have responsibility for the enforcement of confiscation orders.

Section 97 of the Serious Organised Crime and Police Act 2005 gave the Secretary of State power to make provision for magistrates’ courts in England and Wales to impose confiscation fines of up to £10,000. This would have to be done by means of an affirmative instrument. While Section 97 has been brought into force, it only gave the Secretary of State the power to make provision by order. In the intervening nine years, this has not happened. Given that magistrates used to have this power, and continue to play a role in the non-payment of confiscation orders, I can see no reason why this should not be taken forward.

3.15 pm

The Government have set out in a briefing note that they have work in hand to bring these measures forward. They have not given any timescale by when the measures

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will be brought forward. Indeed, the Home Office forward planner of secondary legislation mentions confiscation orders, but it does not give any detail about the timescale. So the amendment, which I have put down as a probing amendment, would replace the current text of the section of SOCPA 1997 which gives the Secretary of State the power to make provision for confiscation orders in magistrates’ courts, with a new text which would require him to do so.

I hope that I am pushing at an open door. I would be very grateful for clarification of the timetable for bringing forward this provision. I beg to move.

Baroness Hamwee: My Lords, both my Amendments 31A and 31B would delete wording, but they enable me to ask a question. The Secretary of State, and in the case of Northern Ireland, the Department of Justice, have the power to make an order to substitute a different amount for the maximum amount of the confiscation order which can be made by a magistrates’ court. Can the Minister give the Committee an assurance that the Secretary of State will consult before such an order is made? I appreciate that it is not in his gift to give any assurance on behalf of the Department of Justice, but he might be able to make a comment, because I know that the Government have been in touch with the Northern Ireland Assembly.

Baroness Williams of Trafford (Con): My Lords, as the Proceeds of Crime Act currently operates, a confiscation order may only be made by the Crown Court. As a result, if someone is convicted of an offence in the magistrates’ court and the Bench considers the case is appropriate for a confiscation hearing, the matter must be referred to the Crown Court. This is clearly not the most effective use of resources for handling simple cases. As the noble Lord, Lord Ponsonby, notes, there is already legislation on the statute book that would enable the Home Secretary to modify Part 2 of the Proceeds of Crime Act so as to enable confiscation orders to be made in a magistrates’ court in cases where the criminal benefit did not exceed £10,000. The relevant legislation can be found in Section 97 of the Serious Organised Crime and Police Act 2005.

I can fully understand the frustration of the noble Lord, as a sitting magistrate, in having to refer all confiscation cases to the Crown Court when it would be perfectly possible for straightforward cases to be dealt with in the magistrates’ court, subject to that £10,000 threshold. The noble Lord is all the more frustrated given that the legislation to allow magistrates’ courts to make confiscation orders has been on the statute book for almost 10 years, as he pointed out. The provision in Section 97 of the 2005 Act had, of course, already been on the statute book for five years when this Government came to office. Like the previous Administration, we judged that there were other priorities for improving the asset recovery regime and responding to serious and organised crime, including the setting up of the National Crime Agency. However, we are now working towards enabling magistrates’ courts to make confiscation orders, including putting in place the necessary judicial training from spring 2015.

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Given that we are now actively working to implement a scheme empowering magistrates to make confiscation orders, I hope the noble Lord will agree that his amendment, which places a duty rather than a power on the Home Secretary to make such a scheme, is unnecessary. I would be happy to update the noble Lord in the autumn on progress in this area. On that note, I hope that he will be content to withdraw his amendment.

Turning to Amendments 31A and 31B, my noble friend Lady Hamwee indicated that her intention was not to remove the power to vary the £10,000 limit by order but simply to seek an assurance that there would be proper consultation before the order-making power was exercised.

Generally, our approach is that magistrates’ courts should be able to make confiscation orders only in less serious cases. However, there may be situations in which the defendant has been convicted in the magistrates’ court but is potentially liable to an order greater than £10,000. Such a case would still need to be sent to the Crown Court to be dealt with. The order-making power in the clause allows for the £10,000 threshold to be varied if the evidence following implementation shows that the limit is generally too low.

Once we have brought into effect the provisions allowing for confiscation orders to be made in magistrates’ courts, we will keep the arrangements under close review. I assure my noble friend that before any change is made we will consult with the senior judiciary, the Magistrates’ Association and other practitioners as to whether the £10,000 threshold can sensibly be raised.

I also remind my noble friend that this order-making power is subject to the affirmative procedure, so any change would need to be considered and approved by both Houses. I hope that with these comments I have been able to provide my noble friend with the assurance she is seeking.

Lord Ponsonby of Shulbrede: My Lords, I thank the noble Baroness for that answer. I think we got half a step forward. She said that there would be training in 2015 but could not quite go all the way and say when magistrates would actually receive these powers. Nevertheless, as I said, this was a probing amendment. I have got a little bit more information so I beg leave to withdraw the amendment.

Amendment 31 withdrawn.

Amendments 31A and 31B not moved.

Clause 36 agreed.

Clause 37: Unauthorised acts causing, or creating risk of, serious damage

Amendment 31C

Moved by Baroness Hamwee

31C: Clause 37, page 29, line 25, leave out “sea adjacent to” and insert “waters of”

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Baroness Hamwee: My Lords, Amendment 31C is a small probing amendment. There is a definition in the clause of “a country or territory”, which provides that references to them include,

“the territorial sea adjacent to a country or territory”.

My amendment would change that to “territorial waters”. I simply ask how extensive is territorial sea that is adjacent? It must be less than territorial waters. The natural meaning of adjacent, I would have thought, is “very close to the land”. Why is there a limit and what is the limit? I would guess that this is relevant in the context of the clause about computer misuse to damage to such things as wind turbines and oil rigs, and perhaps, in a transport context, ferries and maybe fishing. I am sure there is a list of matters. I am fairly unclear as to what the clause means. If my noble friend can help, so much the better. I beg to move.

Baroness Williams of Trafford: My Lords, I hope I can clarify things to my noble friend’s satisfaction. As we know, cybercrime has a global reach; a perpetrator sitting in their bedroom in London could be hacking into a computer system anywhere in the world. The new offence acknowledges this reality and captures serious damage caused in any country. The clause goes on to define a reference to “country” as including a reference to a “territory” and to,

“(i) any place in, or part or region of, a country or territory;

(ii) the territorial sea adjacent to a country or territory”.

It is the last of these three points that my noble friend’s amendment seeks to address, and she raises a very interesting point.

The Territorial Sea Act 1987 specifies that the breadth of the territorial sea adjacent to the UK is 12 nautical miles. I can therefore reassure my noble friend that this form of words does not mean, as one might usually expect, the sea very close to the coastline, but captures the full 12 nautical miles of territorial water surrounding the UK.

However, the position will not be the same for all countries. Although the 1982 United Nations Convention on the Law of the Sea sets 12 nautical miles as a maximum for territorial waters, some states may have chosen a smaller limit. The boundary line for a country’s territorial waters will be governed by its own laws and by international agreements and conventions. The non-specific language in the Bill reflects this variation. Where the damage is caused in the UK the territorial sea adjacent to the country will be the 12 nautical miles around the UK. Where the damage is in another country we would expect the court to take into account the laws of the country in question, together with any relevant international conventions, such as the UN convention, and any other agreements, in determining the territorial sea’s breadth. I hope that my noble friend has found this explanation helpful and that she will agree to withdraw her amendment.

Lord Elton (Con): Can my noble friend say whether territorial waters and a territorial sea adjacent to a country are normally co-terminous? My noble friend referred to some countries defining a territorial sea as extending less than 12 nautical miles, but she did not say whether it was less than the territorial waters of the country. I hope that is not too arcane.

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Baroness Hamwee: My question was very similar—perhaps I will put it in a slightly different way. The explanation as I heard it is that this is about territorial waters. The language used seems to be that which is used to define territorial waters, whichever country one is talking about. However, it seems that there is no difference between the territorial sea adjacent to somewhere and the territorial waters. To give the Minister slightly more breathing space, perhaps I can also ask her to explain what a “territory” is, as distinct from a “country”?

Baroness Williams of Trafford: My Lords, to answer my noble friend’s question last, and hopefully throw light on my other noble friend’s question: a “territory” is a geographical concept, the land and sea over which a state has jurisdiction. A country’s land mass may be divided into several territories, so the state of a country may also have jurisdiction over far-flung territories. For example, the state of the country of the United Kingdom has jurisdiction over various overseas territories, such as the British Virgin Islands. However, it is a matter for each state to determine, subject to the 12-mile limit. I hope I have not further confused the House.

Lord Elystan-Morgan (CB): My Lords, I hope to make a marginally relevant point. Is it not the case that by now the whole concept of a belt of territorial jurisdiction, 12 miles out from land, has been outdistanced by the realities of time? Grotius, I believe, was the international lawyer, who, many centuries ago, advocated a three-mile limit. Why? Because that was the range of a powerful cannon in those days. Then, ordnance became more and more powerful. Today, 12 miles is nothing in relation to the power of ordnance. Should not the whole question of the 12 miles therefore be eradicated?

3.30 pm

Baroness Williams of Trafford: Well, my Lords—

Lord Swinfen (Con): Before my noble friend answers that question, might I ask whether our gas and oil rigs and our large, hideous windmills that are beyond the 12-mile limit are within our territorial waters? If so, do not our territorial waters in some instances stretch very much further, and have we not claimed areas out into the Atlantic within the continental shelf in order to protect our own oil rights? Is the limit not much greater than 12 miles?

Lord Bourne of Aberystwyth (Con): Perhaps I can help on that. The law of the sea gives a territory an exclusive economic zone of 200 miles, which covers such things as mineral rights, wind farms and so on. Territorial waters are quite different: it is where jurisdiction is exercised over people within territorial waters. The limit is still 12 miles. Occasionally, it may be less if it overlaps with another country’s 12 miles, as it would, for example, in the Channel, where a median line is drawn between the United Kingdom and France.

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Lord Swinfen: If my noble friend will forgive me, if we have territorial rights that are limited to only 12 miles, who has jurisdiction over the gas and oil rigs that are further out than 12 miles? Are they outside the jurisdiction of the United Kingdom? If a crime is committed on them, is it not a free-for-all?

Baroness Williams of Trafford: I thank my noble friend Lord Bourne for very helpfully clarifying the issue over mineral rights et cetera. If a crime took place on an oil rig, windmill or anything out to sea, it would be a matter for whichever country had a flag on it. I hope that clarifies the matter in respect of anything that might be in any sea anywhere in the world.

On whether the 12-nautical mile radius should still stand, I do not think that that is a question for today. The fact is that it does stand.

Lord Elton: My Lords, I was hoping to protract the glory of this small question, but I think that I had better sit down in order to wrestle with my machine that is bleeping.

Baroness Williams of Trafford: Saved by the bell, my Lords.

Baroness Hamwee: My Lords, after the tutorial that we have had from the noble Lord, Lord Bourne, I feel that I should just say that I surrender—but, before I do so, I will comment that it would be easier if the Bill were to refer to each country’s territorial waters as that country has determined, rather than using what appears to be general language without making reference to the technicalities. I am grateful to my noble friend the Minister, who no doubt now knows a great deal more about territorial waters than she really ever wanted to. I beg leave to withdraw the amendment.

Amendment 31C withdrawn.

The Lord Speaker (Baroness D'Souza): The Question is that Clause 37 stand part of the Bill.

Clause 37 agreed.

The Lord Speaker: The Question is that Clause 38 stand part of the Bill.

Baroness Smith of Basildon: Should we not be debating whether Clause 37 should stand part?

Lord Swinfen: My Lords, the Lord Speaker put the Question that Clause 37 stand part of the Bill and it was accepted by the Committee. We are now on to the next amendment.

Clause 38 agreed.

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Clause 39: Territorial scope of computer misuse offence

Amendment 31D

Moved by Baroness Hamwee

31D: Clause 39, page 30, line 11, leave out subsection (4)

Baroness Hamwee: My Lords, I will speak also to my Amendment 31H. Perhaps I should speak slowly to give the noble Baroness, Lady Smith, an opportunity to work out how to make her points in the debate on this clause.

In Clause 39, Amendment 31D would omit subsection (4) and Amendment 31H would omit subsection (7), both of which refer to a case in which the accused is in one country and the offence is linked to another jurisdiction, which will very often be the case when there is computer misuse. My amendments are probing; I am asking my noble friend whether there is a risk that a person could be prosecuted for the same act in more than one jurisdiction, and how it should be determined which jurisdiction takes precedence. Obviously, this point arises not only in connection with the Bill and the new offences, so I am not raising a novel point, but it would be very helpful to the House to understand how that conflict might be determined—I use the term “conflict” somewhat hesitantly as, technically, it is not a conflict—when more than one jurisdiction is involved. The first of these two amendments refers to the UK and the second to Scotland. I beg to move.

Baroness Williams of Trafford: I am grateful to my noble friend for the explanation of her amendments. I believe that I can provide the reassurance that she seeks. I know that a number of noble Lords are interested in this issue; indeed, it was raised in the House at Second Reading.

It might help if I briefly explain why we are making the amendments to the Computer Misuse Act in Clause 39 and then set out the safeguards against subjecting a person to double jeopardy. As the Committee is well aware, cybercrime is a serious threat that often crosses international boundaries. The Computer Misuse Act already recognises the transnational nature of cybercrime and provides for the extraterritorial jurisdiction of certain of the offences under the Act where there is a significant link to the United Kingdom.

Clause 37 adds nationality to the categories of significant linkage to the UK. This means that a UK national would be committing a computer misuse offence while outside the UK even where there was no link to the UK other than nationality, provided that the offence was also an offence in the country where it took place. Therefore, in the case of concurrent jurisdiction, a UK national could be prosecuted under the Computer Misuse Act in the UK subject to the usual extradition arrangements or the accused voluntarily returning to the UK.

Decisions about prosecution rest with the Director of Public Prosecutions. It would be for prosecutors in the affected jurisdictions to negotiate where the prosecution

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should take place. For example, in the EU, Eurojust was established to deal with criminality that extends over borders, and it has guidelines to help prosecutors decide where a case should best be tried. There is a similar protocol agreed by the Attorneys-General of the US and the UK for cases that in theory could be tried by either jurisdiction. The Crown Prosecution Service has domestic guidelines that its prosecutors are expected to follow to help them decide whether to bring a prosecution in the UK or cede jurisdiction to another state with an interest.

My noble friend is rightly concerned to ensure that an individual cannot be prosecuted in both jurisdictions where there is a concurrent jurisdiction. This is a risk that the existing guidance and agreed processes have been designed to manage. Using the UK and Clause 39 as an example, a UK national could commit a number of Computer Misuse Act offences in country B even if the criminality did not impact on the UK. As I described, the way in which we would expect this to work is that the prosecutors in the UK and country B would decide where to pursue the prosecution. In the absence of country B taking forward a prosecution, the UK could take one forward and would need to go through the extradition process to return the subject to the UK. If the case was prosecuted and the sentence served in country B, and the subject returned to the UK, the UK could not then take forward its own proceedings. Double jeopardy would prevent the subject being prosecuted for the same offence in the UK.

It is important to note that the extraterritorial scope of the offences in question does not place any requirements for the offences to be prosecuted here, especially in cases where the offence has taken place outside the UK and the only link to the UK is the nationality of the subject. Similarly, if the subject was outside the UK, the usual extradition procedures would be followed where prosecutors agreed that the prosecution should be pursued in the UK. I trust that that provides the assurance that my noble friend is seeking and that she will be content to withdraw her amendment.

Baroness Hamwee: My Lords, that was very helpful. I may have missed this, in which case I apologise, but I take it that the arrangements to which the Minister referred at the beginning of her reply deal with where the prosecution actually takes place and the decision between two states as to who takes the lead.

Baroness Williams of Trafford: Yes.

Baroness Hamwee: Then I beg leave to withdraw the amendment.

Amendment 31D withdrawn.

Amendment 31E

Moved by Baroness Williams of Trafford

31E: Clause 39, page 30, line 39, at end insert—

“(2A) A sheriff shall have jurisdiction in respect of an offence under section 3ZA above if—

(a) the accused was in the sheriffdom at the time when he did the unauthorised act (or caused it to be done), or

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(b) the computer in relation to which the unauthorised act was done was in the sheriffdom at that time.”

Baroness Williams of Trafford: My Lords, this is a technical amendment. Clause 39 extends the extraterritorial jurisdiction of certain offences under the Computer Misuse Act 1990. In doing so, the clause amends Section 13 of the 1990 Act, which relates to criminal proceedings in Scotland, to establish the criteria for when a sheriff court has jurisdiction to try certain offences under that Act. Our amendments to Clause 39(6) and (7) extend these provisions so that they also apply to the new Section 3ZA offence—inserted into the 1990 Act by Clause 37—of impairing a computer such as to cause serious damage. I beg to move.

Amendment 31E agreed.

Amendments 31F and 31G

Moved by Baroness Williams of Trafford

31F: Clause 39, page 31, line 8, leave out “or 3” and insert “, 3 or 3ZA”

31G: Clause 39, page 31, line 10, leave out “or (2)(b)” and insert “, (2)(b) or (2A)(b)”

Amendments 31F and 31G agreed.

Amendment 31H not moved.

Amendment 31J

Moved by Baroness Williams of Trafford

31J: Clause 39, page 31, line 14, after “3” insert “, 3ZA”

Amendment 31J agreed.

Clause 39, as amended, agreed.

Clause 40 agreed.

3.45 pm

Amendment 31K

Moved by Baroness Smith of Basildon

31K: After Clause 40, insert the following new Clause—

“Annual reports: cyber-crime strategy

(1) The Police Reform and Social Responsibility Act 2011 is amended as follows.

(2) In section 12 (annual reports), after subsection (7) insert—

“(8) A report under this section must include details of the policing body’s strategy to deal with cyber-crime.””

Baroness Smith of Basildon: My Lords, I apologise if there has been some confusion. When the Question was whether Clause 37 should stand part of the Bill, I was loath to say no because, although I gave notice of my intention to oppose the Question, I really have no intention of opposing the clause. As noble Lords will agree, one way to have a general debate on the principle of an issue, rather than its individual parts, is to raise a clause stand part debate.

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At the same time as moving Amendment 31K, which would require the annual reports of police authorities and police and crime commissioners to contain a statement on how they are tackling cybercrime, I will make some general comments on cybercrime and computer misuse. This is a probing amendment. The Bill amends the 1990 Act to create a new offence of unauthorised acts that cause serious damage, to implement the EU directive on attacks against information systems and to clarify the savings provisions for law enforcement. We have no difficulties with those provisions, but we wish to have a general debate and promote a discussion on whether the Government are doing enough or whether the Bill could go further and provide better and more effective protection from cybercrime.

Noble Lords may be aware that we also sought to table an amendment to create a new offence of identity theft. We have raised this issue with the Government before because it needs new legislation. We were disappointed that the Government did not take the opportunity to include something along those lines in the Bill. Noble Lords will know that, within cybercrime, identity theft causes a great deal of concern and affects a large number of people. However, it was not included in the Bill and, unfortunately, our amendment to address this was not in scope. I am sure we will return to this issue another time but, when dealing with cybercrime now, it is important to look at and address the loopholes in existing legislation.

There is little doubt that digital technology and the internet have changed our lives and provided us with new opportunities. However, they also create new challenges and provide new opportunities for criminals. Returning to the theme of Al Capone, even his creative criminal mind could not have imagined the opportunities that would be available to his successors in the 21st century. A recent HMIC report says that this could either be,

“where criminals use computers to help them commit crimes that would have been committed previously without the benefit of such technology, for example fraud and theft, or where they commit new crimes that were not possible before”,

or were not even thought of,

“such as an attack on government online services using ‘malicious software’”.

Recorded incidents of fraud have increased by a quarter over the past year but convictions have gone down. However, business crime—which surveys indicate is going up—is not counted in official figures despite online crime exploding.

The consumer watchdog Which? estimates that half of us have been targeted by online scams. Anyone who looks religiously through their spam in the parliamentary e-mail system will see scams offering services which I am sure most of us, particularly the women, would not want to take advantage of. Recorded online fraud is up by 30% but that is just the tip of the iceberg, because most of it is never reported to the police.

The Home Affairs Select Committee concluded in its report last summer that,

“there appears to be a ‘black hole’ where e-crime is committed with impunity. Online criminal activity which defrauds victims of money is not reported to or investigated by law enforcement.

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Banks simply reimburse the victims with no pursuit of the perpetrators. Criminals who commit a high volume of low level fraud can still make huge profits”.

Many members of the public take out insurance with banks and other organisations to protect themselves against online crime and identity fraud. I have yet to understand how easy that is or how it pays out to a victim. Although they may get their money back, the inconvenience, distress and worry caused by it are tremendous.

Despite that, the Bill does not offer a coherent government plan for tackling online fraud and economic crime, even though it would have been an ideal opportunity to do so. Looking at large-scale cyberincidents, the recent HMIC report has some very worrying findings. Only three police forces, Derbyshire, Lincolnshire and West Midlands, have developed comprehensive cybercrime strategies. The rest of us who live in other areas have to rely on some kind of knowledge within the police force because there is no specific strategy. Only 15 forces have considered cybercrime threats in their strategic threat and risk assessments and, where those assessments exist, the plans focus only on investigating cybercrime and are silent about preventing it and protecting people from the harm that it causes. While the Government and PCCs are increasing their investment in regional organised crime units, those units have not yet developed the necessary cybercapacity to assist the police forces. That indicates that there needs to be a real debate around these issues. There need to be new plans, new strategies and new actions in place to tackle new threats. The police need to do more, not less, to tackle online fraud and crime.

I have outlined that there is no serious strategy and that fragmented forces lack the skills and organisational structure to be effective. The shadow Home Secretary has said previously that that has to involve better skills and that the police need to have the skills in this very specialised area. They need better organisation, and they also need to co-operate with the private sector. That needs to be part of strengthening the law on identity theft. We have seen that there is some good practice within the police, but it is patchy. If it is going to be effective, it needs to be universal. Ensuring that this issue is addressed in the annual report will focus greater attention on it and on the strategies and plans that have to be made. What does not have to be reported can be forgotten or added as an afterthought. If it is central to the PCC report, we will have some way of measuring the actions taken. The scale of the challenge is too great for it to be forgotten or an afterthought.

I am not suggesting that the report itself will effect a marvellous change overnight, but it will help to ensure that the importance of this issue is recognised. As well as the impact on business, there is growing recognition of the implications for national security and our national infrastructure and its resilience. The security services and GCHQ also recognise that they need to do more to tackle the growing number of cyberattacks and the effects they could have. That means building on the work being done with major public and private sector organisations because we have to ensure that they are resilient against hacking

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and major online onslaughts. We have also said that we want major reform of oversight functions and responsibilities and accountabilities, and we want a major overhaul of the system of independent oversight commissioners, stronger safeguards and a serious review of the legal framework, including a full review of RIPA.

These clauses are welcome. They have our support. The reason for Amendment 31K is evident. It is to try to raise the issue which is of such importance. I seek assurances from the Minister that the Government recognise just how much this is needed. I express some disappointment. We think the Bill is an opportunity to go further, do more and really address the issues of resilience, national infrastructure resilience and national security. We are disappointed that an important issue in this area—identity theft—is out of scope of the Bill so we cannot address it. We support what the Government are doing. We think there could be more. We would like more. We would like to work with the Government to achieve more. I beg to move.

Lord Phillips of Sudbury (LD): My Lords, I strongly support what the noble Baroness, Lady Smith of Basildon, said. The issue—if you can call it an issue as it is a series of issues—in relation to cybercrime could scarcely be of greater importance to our society. It is not just an economic crime of the greatest potential but a crime in all dimensions.

The only reservation I have about the amendment is whether it goes far enough. Besides having to deal with the strategy in relation to cybercrime, I would hope for something in the report about the extent of the implementation and enforcement of the laws we are passing and the laws we have already passed. It has become a commonplace in this House to remark upon the fact that we pass laws as if there is no tomorrow but fail again and again to implement the laws we pass. I therefore hope that the report will deal with that crucial aspect of the so-called strategy.

I am not clear as to whether we are in this group also now discussing whether Clause 37 shall stand part of the Bill. We are not? Right.

Lord Howarth of Newport (Lab): My Lords, when I first studied the Bill and saw that there were clauses relating to cybercrime as well as substantial parts focused on the problems of drugs, I thought that the sections on cybercrime would have something to offer on the development of the Government’s strategy to deal with our immense problems with drugs. However, I cannot see that there is any connection between these different parts of the Bill. That is a disappointment.

Will the Minister share with the House some of the thinking of the Home Office as to how it proposes to address the rapidly developing and immense problem of drugs-related cybercrime? As I noted at Second Reading, the internet has transformed the marketing and distribution of drugs, whether they are proscribed or whether they are new psychoactive substances that are not proscribed. It is now far easier for those who produce these substances and those who sell to be linked up with those who are interested in consuming them. Social networking has intensified this ease of

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communication. For example, I understand that it is not at all uncommon when party invitations are distributed by means of social networking that the message will contain a link to the point at which particular fashionable, newly arrived substances can be obtained.

This problem presents huge challenges to policing in terms of protecting the safety of all people, particularly young people. The Government and law enforcement agencies must be thinking very hard indeed about this. It would be helpful if the Minister would say, were he to accept my noble friend Lady Smith’s amendment, what he would expect to see in these annual reports on the subject of drugs-related cybercrime. We have social networking, which uses relatively familiar and accessible networks of communication, but there is of course the dark web. The Home Office must again be pondering and working very hard indeed to find ways in which it can even know what is going on on the dark web, let alone to police it. These are hugely important issues, and perhaps the noble Lord would share his thoughts on them with us.

Lord Swinfen: I also support the amendment. In doing so, I declare an interest: I run a medical charity that does all its work online, with doctors and nurses in 74 different countries. However, I am not so much worried about that, because I hope that our confidential information is secure. I am thinking of people using cybercrime to find their rivals’ pricing information and new product designs when tendering for various projects; in other words, hacking into other people’s and firms’ computers and getting confidential information for their own pecuniary and business advantage. This is an important amendment and I hope that my noble friend on the Front Bench will consider it sympathetically.

Baroness Hamwee: My Lords, to pick up on the point about drugs, it does not seem to me that they are necessarily excluded. The new section of the Computer Misuse Act deals with an act creating,

“a significant risk of, serious damage of a material kind”,

which includes “damage to human welfare”, which is in turn such as to cause, among other things, “loss to human life” or “human illness or injury”. All that links up very closely with what the noble Lord has been talking about. If what he has described is not covered, we will need to go back to Clause 39—but not today.

4 pm

Lord Taylor of Holbeach: My Lords, the noble Baroness, Lady Smith of Basildon, has created a new parliamentary device. I had long heard of the paving amendment, but today she has moved a door-stop amendment. It has enabled us to discuss an important aspect of the Bill, and I am pleased that we have the chance at least to consider the clauses that are designed to deal with cybercrime.

The Government’s approach and the scale of the investment that we have made across law enforcement agencies to develop and strengthen the operational response are designed to combat that emerging and complex threat. In 2010, the national security strategy named hostile attacks on UK cyberspace by other

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states and large-scale cybercrime as a tier-one threat to national security. To put these provisions on computer misuse into context, they are principally aimed at that level. That means that for the Government cyber is regarded as on a par with international terrorism as regards the risks to our national security. The Government have responded to that threat by committing £860 million over five years to the national cybersecurity programme. So far, we have invested over £70 million of that funding to strengthen law enforcement’s ability to tackle cybercrime.

We know that a co-ordinated approach is needed to tackle serious and organised crime, including cybercrime. We set out how we plan to achieve that in the Serious and Organised Crime Strategy, and I think that the noble Baroness will find some of the thoughts of the Home Office in that document, which we launched in October last year. At the same time we launched the National Crime Agency, which leads the UK response to serious and organised crime. The National Cyber Crime Unit in the NCA was established to provide the national crime-fighting response to the most technologically sophisticated cybercrime.

The National Cyber Crime Unit therefore provides the focus for our national response to combating cybercriminals. It is using its increased operational resources to arrest those responsible and to prevent and otherwise disrupt their activities. The National Cyber Crime Unit is also investing in state-of-the-art equipment and specialist expertise, keeping pace with the criminals who threaten the public. It also uses the NCA’s enhanced intelligence picture to proactively pursue criminals, targeting them where they are most vulnerable and signposting the public towards advice on how to protect themselves. Approximately half the NCA’s officers are being trained in digital investigation skills. That shows that we recognise the significance of cybercrime in fighting serious crime in this country.

The National Cyber Crime Unit has already had an impact in pursuing those criminals and disrupting their activity. Examples include the recent operation with its international partners to disrupt the communications used by criminals to connect with computers that are infected with malicious software, or “malware”, such as GameOver Zeus and CryptoLocker.

However, the NCA and the National Cyber Crime Unit cannot tackle that threat alone. The policing response to national threats is set out in The Strategic Policing Requirement, which chief constables and police and crime commissioners must have regard to, and which recognises both cybercrime—as a form of organised crime—and a large-scale cyber incident as national threats that require a policing response. While police forces can draw on the support of the National Cyber Crime Unit, it is also vital to build force capability to tackle the cyberthreat locally. We have therefore also provided funding to support the creation of cybercrime units within eight of the regional organised crime units.

The cyberunits will support the National Cyber Crime Unit and also help local forces prosecute and disrupt cybercriminals. They are also building links with institutions such as this to understand better the threat we face and the best tools to use in response.

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This year we have offered £25 million to support regional organised crime units. With funding from the national cyber security programme, the College of Policing is investing in new courses to build cybercapabilities in local forces. The training will increase knowledge and understanding of cybercrime and how to investigate it. It includes four e-learning packages and classroom courses to train 5,000 officers by 2015.

Lastly, we are also funding Action Fraud and the “Be Cyber Streetwise” campaign so that the public have a clear single point of reporting if they are victims of cybercrime, in particular financially motivated cybercrime, and know how to protect themselves and so reduce the risk of becoming a victim of cybercrime—the identity theft that the noble Baroness mentioned. Turning to Action Fraud first, we have rationalised the reporting arrangement so that Action Fraud is now the national reporting service for fraud and financially motivated cybercrime. The public and businesses can use it to report online or by phone. All reports go through Action Fraud, which then passes the reports to the National Fraud Intelligence Bureau. Both are now run by the City of London Police, the country’s national lead force for fraud. In January the Government launched a “Be Cyber Streetwise” campaign, delivered in partnership with the private sector, to encourage individuals and small businesses to adopt safer online behaviours to help them better protect themselves.

Although we have included Clause 37 in the Bill, I shall say a little about the new offence therein to capture cyberattacks which cause, or create a significant risk of, serious damage. This was referred to by my noble friend Lady Hamwee. Improvements in technology have brought many benefits and the use of IT systems has increased exponentially since the Computer Misuse Act was passed in 1990. It is surprising that we are building on that Act of 1990—it was a far-seeing piece of legislation. However, as we rely more and more on computer systems, and as they become increasingly interlinked to deliver maximum benefits, the potential for a cyberattack to cause serious damage also increases.

It is now possible that a major cyberattack on essential systems—for example, those controlling power supply, communications or food distribution—could result in loss of life, serious illness or injury, serious damage to the economy, the environment or national security or severe social disruption. However, the existing offence of impairing a computer, currently the most serious of the Computer Misuse Act offences, carries a maximum sentence of only 10 years’ imprisonment. This does not adequately reflect the level of serious economic or personal harm that a serious cyberattack could now cause.

The new offence will apply where an unauthorised act in relation to a computer—that is “hacking”, in common parlance—results, directly or indirectly, in serious damage to human welfare, the environment, the economy or national security, or creates a significant risk of such damage. The offence will carry a maximum life sentence where the attack results in loss of life, serious illness or injury or serious attacks to national security. Where the attack results in serious economic or environmental damage or social disruption, the

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maximum sentence will be 14 years’ imprisonment. This offence will ensure that, in the event of serious cyberattack, a suitably serious offence will be available to the prosecution and a suitable sentence available to judges.

A number of other issues have been raised, and it may be helpful to noble Lords if I write a summary covering different aspects. Identity theft was raised by the noble Baroness, Lady Smith, and the drugs issue was raised by the noble Lord, Lord Howarth. We recognise concerns about the whole business of legal highs and their availability on the internet. The Minister for Crime Prevention, Norman Baker, is currently reviewing law in this area, and the House will have an opportunity to consider the review’s findings later this year. It would be helpful to use the opportunity of this debate about the particular aspect of cyber misuse that is of serious consequence for me to write to noble Lords, including my noble friends Lord Phillips of Sudbury and Lady Hamwee. I would like to be able to reassure them on that point. Indeed, I think that my noble friend Lord Swinfen also raised a point that I would like to address in that way.

I hope that, given the reply that I have been able to make, and including those points in a more general discussion about this area, the noble Baroness will be in a position to withdraw her amendment. We have clauses in the Bill that address cybercrime and we have taken a significant step in recognising the importance of this to our national well-being.

Lord Howarth of Newport: I thank the Minister for what he said about drugs-related cybercrime. Will he also seek to offer the House some reassurance on a very major issue that he touched on? He emphasised the Government’s very proper concern to protect our critical national infrastructure against cybercrime. I believe that it is the case that a good deal of cybercrime emanates from China. The Government have just completed a negotiation with the Chinese whereby it is agreed that they will build our nuclear power stations. What reassurance can he give to us that we are going to be protected in the event of cybercrime coming from a Chinese source, conceivably in unfortunate diplomatic circumstances authorised by the Government in China? I appreciate that this goes beyond a routinely or merely criminal issue, but it seems exceedingly important to me—and something that the Government must have been thinking about. As he has been advising us on the Government’s measures and strategies to deal with cybercrime, perhaps he could also say something about that.

Lord Taylor of Holbeach: I think that I said in my general speech in response to the noble Baroness’s amendment in addressing this area that we recognise that serious damage to national interests and human well-being can be caused by individuals and also by organisations and states. I do not want to give an answer to the noble Lord’s particular suggestions. All I can say is that, obviously, we are anxious to work with China. It is an important nation in the world’s affairs and its assistance is important economically to the prosperity of the world.

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If I can add any more to what I have just briefly said, I will write to the noble Lord, but in any case I will be writing to all those who participated in the particular debate on this issue, because I think that could be useful.

4.15 pm

Lord Swinfen: What is the definition of cybercrime? I think it is a very wide one. I ask the question deliberately, because some time ago my charity—which, as I said before, works in 74 different countries—had its website hacked. It was repaired and the following day it was completely destroyed. We suspected that it was destroyed possibly by officials of another nation who did not approve of us giving medical advice to doctors working in that country. I suspect they thought that there might have been some nefarious purpose in it, although in fact it was purely charitable. I would be grateful if my noble friend would give me a definition of cybercrime.

Lord Taylor of Holbeach: Cybercrime is the use of computers—indeed, I may have it here. I have the Serious and Organised Crime Strategy, which uses the term. Cybercrime is the use of computers and electronic systems to commit a crime. Clearly, what happened to the noble Lord’s charity is a crime, committed extraterritorially. One of the aspects of cybercrime is that it is not globally isolated to particular territories or countries—hence the debates that we have been having on this particular issue. That is why we need to tackle it globally and why we need to be globally active in order to deal with it.

I believe that the clauses in this area are designed specifically to bring the Computer Misuse Act, which is what lies at the bottom of it, up to date, to recognise the threat that can exist from computer crime and particularly nowadays, when electronic use is so much greater than it was in 1990, when the Act was first brought in.

Baroness Smith of Basildon: My Lords, I am grateful to the Minister for his explanations and response to the debate and, indeed, grateful to those noble Lords who supported and spoke to my amendment. I am also grateful to the noble Lord for allowing a more wide-ranging discussion, although it may not have been technically correct. I quite like the idea that on the fourth anniversary of my introduction to your Lordships’ House I have created a new form of amendment, as the noble Lord put it.

As the noble Lord said, the question on the definition of cybercrime from the noble Lord, Lord Swinfen, was particularly appropriate. In this debate we have hit the nail on the head of how wide and vast this issue is. At one level we have the very big issues of national security and the resilience of our national infrastructure, which could be attacked by cybercrime. Then there are the issues around business security, with charities and organisations that can be affected by cybercrime. Then we come to the personal, which goes from merely inconvenient to causing misery and tragedy. All those things are encompassed in the term cybercrime.

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The noble Lord’s explanation of what the Government are doing was very helpful. I do not see that any of that detracts from my amendment or makes it any less relevant. I remind the noble Lord of the point I made at the beginning: only three police forces—Derbyshire, Lincolnshire and West Midlands—have developed comprehensive cybercrime strategies. Only 15 forces considered cybercrime threats in their strategic threat and risk assessment. I do not doubt that at a national level a lot of work is going on and that it is well funded. However, it seems to me that if the annual report of the police and the police and crime commissioners focused on this issue and identified the work that was being done on it, that would let the public know what is going on and create awareness of this matter. The point made by the noble Lord, Lord Phillips of Sudbury, is absolutely right: this would be a way of monitoring implementation and enforcement. I do not see that anything the Minister said detracts from the usefulness of Amendment 31K.

Lord Taylor of Holbeach: If I felt that it could be useful, I would take a slightly different approach towards it. I hope that the noble Baroness will read what I said about the efforts being made to ensure that police forces take proper account of this issue. The HMIC report was a wake-up call: it made us realise that, for all the progress we have made in the National Crime Agency and the National Cyber Crime Unit, we also need a local presence on the ground and the involvement of local police forces.

Lord Phillips of Sudbury: My Lords—

Lord Taylor of Holbeach: I would like to finish what I am saying. I should just say that the HMIC report drew on evidence gained last summer and in the early autumn. A lot has happened since that time, so I ask the noble Baroness to read what I said in response to her amendment. I think she will be impressed by the amount of progress that has been made.

Lord Phillips of Sudbury: The noble Lord has referred a second time to the new reporting initiative for police forces and mentioned specifically the City of London police. As it happens, I was with them this very morning, when the initiative to which he referred was discussed. However, resources are a matter of acute concern for every police force in this country. We must go beyond simply saying that the Government have initiated a new plan or a new regime because, as I tried to indicate earlier—the noble Baroness agreed with me—it is absolutely fundamental that we give police forces sufficient resources to enable them to undertake the duties that we lay on them. I hope that my noble friend will take that very much into account.

Baroness Smith of Basildon: My Lords, the point the noble Lord makes about police resources is very appropriate. I know how many police officers have been lost since 2010 in my own county of Essex. I am grateful to the Minister for coming back to this point. He described the wonderful things that are being done and how impressed I will be by that. I will read the

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report and look forward to being impressed. However, my point is that, if the work being done is impressive, why not tell people about it and include it in the annual report? As I have said before, I have been a Minister, albeit in the other place, and I have received notes telling me to resist amendments. However, it seems to me that Amendment 31K simply asks for a commentary in the annual report of the police and crime commissioners or for the police force to say what they are doing in this regard. I think that it would give people confidence as regards this issue.

As I say, I am grateful to the Minister for explaining this range of actions but, if they are so impressive, I see no reason why they cannot be included in the annual report. We may return to this issue. I will read the Minister’s comments and the documents to which he pointed but, for now, I beg leave to withdraw the amendment.

Amendment 31K withdrawn.

Clause 41: Offence of participating in activities of organised crime group

Amendment 31L

Moved by Baroness Hamwee

31L: Clause 41, page 32, line 13, after “group” insert “only”

Baroness Hamwee: My Lords, I have a number of amendments in this group. The clause deals with a new offence of participating in the activities of an organised crime group. The various amendments in this quite long group seek to unpack, as it were, what all that means.

Amendment 31L would provide that a person participates in the activities of an organised crime group only if he takes an active part in those activities. How involved does somebody really have to be in order to participate, as spelt out in Clause 41(2)? Does he have merely to facilitate an activity or actually enable it? Those are very different matters. The provision concerns helping an organised crime group to carry on the activities in question. One can make it possible for a group to carry on activities or one can make it easier for it to carry on activities. I do not know whether there is a distinction between those in the new offence.

The offence is committed if,

“the person knows or has reasonable cause to suspect”,

that there are criminal activities or that he is helping an organised crime group to carry on those activities. That is not actually suspecting—it is having reasonable cause to suspect.

I am aware of the Government’s range of concerns and the need to create the new offence in order to contain what is within the frame here. The threshold for the offence concerns me. I think we need to hear a defence of such a relatively low threshold. I am aware of course that the noble Baroness would make it even lower; certainly her position is closer to the Government than that in my amendment.

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My Amendment 31S questions—perhaps this goes in the other direction—why an organised crime group for this purpose consists of three or more persons. Is there not a crime group that consists of only two people and would not fall within this?

The last of my amendments, before I come back to some general points on the clause, is rather different. Clause 41(8) provides a defence if the,

“person’s participation was necessary for a purpose related to the prevention or detection of crime”.

I wondered, when I read that, whether this was about undercover policing. If it is, are there some distinctions between this offence and other offences? Or is there something particular about this offence that requires a defence to be spelt out specifically in this way? The question of undercover policing is of course a very topical and concerning one.

I raised at Second Reading, as did others, the concerns of the accountancy and legal professions about what their members—I do not mean dodgy accountants and dodgy solicitors, but ones who are perfectly respectable—have to do to ensure that they do not fall foul of these provisions. I think that the Minister has now met both the professional organisations. Perhaps this will be an opportunity for him to report to the Committee what progress has been made. I am picking up that it is good progress but I have not picked up much detail about it yet.

4.30 pm

Both professions are highly regulated so perhaps I may say to the noble Baroness, Lady Smith, that her Amendment 31R, which would exclude the regulated sectors, is blindingly obvious and I do not know why I did not think of it. I do not know whether its wording goes in precisely the right direction but it seems a very sensible approach. We debated the Deregulation Bill yesterday and both professions have to do a great deal to comply with all the regulations now in place, not least in connection with money laundering. What level of due diligence they would have to undertake to demonstrate that they could not have had reasonable cause to suspect their clients is not clear to me. I have had the experience of not entirely trusting what a client was telling me. However, when I was a practising solicitor, how far did I have to go actually to cross-question a client and take a position which was not to assist the client but, in effect, to oppose him and doubt what I was being told? That is a difficult and uncomfortable situation. What risk management processes does a firm have to put in place? The Minister will understand that I am talking about burdens such as time, money and all sorts of resources.

The Local Government Association has been in touch with me, as it will have been with other noble Lords, about the position of local authorities as not only housing providers but social landlords. One might well think of examples such as cannabis factories that could fall within this clause. If you let a house to a drug-dealing organisation, what precautions do you have to take to ensure that it is not an illegal organisation undertaking illegal activities? The activities of local authorities cover such matters as alcohol, public entertainment licences and the licensing of taxis. Cleaning

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services within council offices were also mentioned, as were letting contracts to resurface roads. The list would be extremely long. I am aware that in correspondence before today the noble Lord has mentioned the difficulties—I think that they are difficulties rather than restrictions—of prosecuting a body corporate, such as a housing provider. I hope that he can take this opportunity to explain that position to the Committee and put the matter on record. I beg to move.

Baroness Smith of Basildon: My Lords, I have three amendments in this group, Amendments 31N, 31R and 31T, and I have given notice of my intention to oppose the Question that Clause 41 stand part of the Bill to enable a wider general discussion around the issue. On the individual amendments, Amendments 31N and 31R concern a point referred to by the noble Baroness, Lady Hamwee, about the regulated professions. Currently, the standard for the new offence is,

“knows or has reasonable cause to suspect”.

That is deemed by organisations to be too high. The small businessman or sole trader may not have had experience of money laundering. This amendment removes that standard for lay persons and replaces it with “suspect” but keeps it for regulated professions with protections equivalent to those of Section 330 of the Proceeds of Crime Act 2002. Amendment 31T inserts protection from prosecutions similar to the consent regime in the Proceeds of Crime Act 2002 to provide a defence from prosecution where the person has sought consent from the Financial Intelligence Unit to continue with their work.

Clause 41 creates a new offence of participating in the activities of an organised crime group. It will be an offence to participate in an organised crime group’s activities knowing, or having reasonable cause to suspect, that those are criminal activities or that their participation will assist the organised crime group to continue with those criminal activities. The criminal activities can be any offence that is punishable by a prison term of seven years or more. The clause seeks to reach all of those who are engaged in criminal operations, including those whose specific role may itself be legitimate and appear legitimate, if they are actively supporting or benefiting from criminal activity.

Many criminal gangs include corrupt and complicit professionals who use their professional expertise and skills to evade the law. At Second Reading, I referred to this as being the “Al Capone” clause. I remind noble Lords that Al Capone was never convicted of crimes related to the worst aspects of his criminal empire. He was convicted of tax evasion. I have since been told that I am getting old and that my reference is dated. I should in fact have referred to a spin-off from the series “Breaking Bad” which stars a dodgy lawyer in the title role. The programme is called “Better Call Saul”. To prove that I am with it and up to date, I use a new reference at which the noble Lord is shaking his head in despair.

Cultural references aside, as I said at Second Reading, the activities of serious and organised crime gangs today are evil. They exploit the weak, the poor and the vulnerable. Whether they engage in drug trafficking, people trafficking into slavery and prostitution, organised illegal immigration, or extreme and violent pornography,

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the human misery caused by such gangs is limitless. It defies our imagination. They are also engaged in money laundering as a way of hiding the rewards of criminal activity. If we are really serious about tackling such evils, we must agree that the law should be able to reach all those who are involved in and benefit from such criminal activity.

Of course there has to be duty on any individual or organisation to take reasonable steps to assure themselves that their business dealings are legitimate and anyone who knowingly profits from criminal activities should be held legally accountable for their actions. We have given notice of our intention to oppose the clause standing part of the Bill. I stress that it is not because we oppose the clause—we do not—but because we want to seek some assurances from the Minister about the way it will work in practice. Some points are similar to those made by the noble Baroness, Lady Hamwee, and some are points that I raised in general at Second Reading.

We have discussed the clause and received representations and briefings, as have other noble Lords, from professional organisations whose members could be affected. I want to make it clear that in all cases, despite concerns they have raised about the wording of the legislation, they are very clear that any professional engaged in criminal activity brings their profession into disrepute and should face the full legal and professional consequences of their actions. There is no doubt about that. I am clear that they share the same commitment to ensuring that those who break the law should face the consequences. It is worth commenting that in addressing such issues I hope the Minister and his colleagues will want to work with the professional associations of those professions that could be affected to ensure that we get the legislation right. If he is able to say anything about the discussions and meetings he is having with those professions, it would be helpful. We want the legislation to be accurate and watertight. My experience is that no respectable professional organisation wants to see criminals within its ranks and they share the desire of the Government to work with the authorities to root out and deal with rogue professionals.

I now move on to something that is slightly an aside, but it is an issue that we have dealt with before. Like other noble Lords, I was surprised and disappointed not to see it tackled in the Bill. It concerns greater regulation and licensing of the private security industry. I am not going to labour the point. The Minister is smiling at me. He knows of my interest in and concerns about this issue. But this is a sad example of professionals wanting to work with the Government to seek better regulation of their industry and prevent bad behaviour and even criminality, yet the Government have failed to act in that area. The professionals I have met are clear that they share the Government’s objectives but they have concerns about whether the clause is needed and whether there might be unintended consequences. I will put on the record some of the concerns and hope that the Minister will be able to respond.

The Institute of Chartered Accountants in England and Wales does not consider that the clause is necessary. Developing the point made by the noble Baroness,

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Lady Hamwee, professionals within the regulated sector are required to undergo anti money-laundering—AML—training. They have legal responsibilities already under the Proceeds of Crime Act and the Money Laundering Regulations, including a duty to make suspicious activity reports to the Financial Intelligence Unit upon knowing of or suspecting any money-laundering. But there is currently no such requirement on an enterprising individual who sets up their own business outside the regulated sector and who may have no concept or proper understanding of what due diligence really means when entering into business relationships, despite the best intentions they may have.

The Institute of Chartered Accountants says that the clause as drafted would be too onerous on such individuals and could have the effect of criminalising a negligent or simply naive provider of goods or services when they are doing nothing wrong—just trying to earn a living—but the due diligence would be very onerous on them. The institute has suggested the amendments we have tabled. I cannot claim credit for thinking them up myself, as the noble Baroness, Lady Hamwee, suggested. I am grateful to the institute for its advice. The amendments retain the current objective standard of proof for regulated professionals but replace it for lay persons. It would be helpful if the Minister could respond to that point.

The duty on regulated professionals under the Proceeds of Crime Act to make reports of suspicious activity provides valuable intelligence for law enforcement agencies, giving them information on crime in action as well as past criminal activity. It also provides the person reporting the activity with defence from prosecution where they have sought consent from the Financial Intelligence Unit to continue with the work. Although that defence exists under the Proceeds of Crime Act, it is not present in Clause 41. My concern is that that could deter a professional who, having already started working for a client, realises or suspects that something is suspicious but, in reporting it, may fear being caught by the provisions of this Bill because it does not have the same defence mechanisms as the Proceeds of Crime Act, where reporting it provides a defence from prosecution.

In addition, the concept of assisting an organised criminal gang to carry on criminal activities is potentially problematic. The Law Society has pointed out that it is not clear under the offence,

“how far an individual must go to satisfy themselves that whatever service they are providing is not assisting criminal activities down the line somewhere. Certain criminal activities, such as drug trafficking, are more easily identifiable in some circumstances, e.g. a client may not be able to provide any evidence of legitimate income. Fraud and other financial offending, however, are not as easy to identify. It is not clear from the draft Bill what level of due diligence a solicitor would need to carry out to ensure that they could not be said to have turned a blind eye to criminal activity”.

Amendment 31T extends the application of Section 328 of the Proceeds of Crime Act to offences under this clause.

Returning to the question we raised at Second Reading as to who would be covered by the Bill, the Law Society says in its briefing that although the,

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“Home Office wishes to target so-called ‘professional enablers’ with this new offence … the legislation is drafted so widely that it would capture far more people”.

I raised this point at Second Reading; the noble Baroness, Lady Hamwee, has raised it today. I declare an interest as another of the vice-presidents in your Lordships’ House of the Local Government Association.

As Second Reading, my specific question was whether local authorities—I also included social housing providers and private landlords—could be caught by these provisions. The example I used was a drug dealer illegally using a rented property that a local authority, housing association or private landlord had rented in good faith. If that activity is reported to the landlord or the authority and no action is taken to remove the tenant, I asked whether there could be a case for action against the landlord if it could be argued they knew or had reason to suspect that criminality was taking place.

4.45 pm

I am grateful to the Minister, who responded to me about this in a letter and confirmed, if I understood him correctly, that the provisions could apply to these particular groups, but that reasonable cause to suspect would have to be firmly grounded on specific facts. That is helpful, and it would also be helpful if he was able to repeat on the record, for the clarification of your Lordships' House, some of the points he made in his letter.

However, the issue goes wider, and again I am grateful to the noble Baroness, Lady Hamwee, on this. The Local Government Association has sent noble Lords specific examples of where it is concerned about, or wants clarification on, whether or not an offence could be committed. One which the noble Lord might comment on again relates to organised crime gangs in cases where the council tenders for contracts to repair potholes and resurface roads. It may be that it carries out no background checks on the individuals and companies tendering for the contract and then awards the contract to the lowest bidder—particularly if it is under financial pressure, it may not do the checks one might expect it to do. It turns out that the company is run by a member of an organised crime gang and they are using that as a legitimate business in order to launder money gained from crime: it is actually a money-laundering exercise for the proceeds of crime. Would the local authority—or any individual who employed such people—be liable for prosecution? It may be that it would, but clarity is needed from the Minister as to the likelihood of such a thing happening—whether, under a strict application of the law, it would be liable.

Finally, I have a question about burdens on businesses. The impact assessment says there is no additional cost for businesses. However, when I spoke to the Law Society and the Institute of Chartered Accountants in England and Wales, it told me that the extra diligence requirement would mean firms having to put in place structures and processes to cope with the additional level of risk that has to be addressed, and that would place administrative burdens on firms, leading to greater costs in terms of time, money and resources. What assessment was undertaken in the impact assessment

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to reach the conclusion that there would be no additional costs on businesses? All the briefings and discussions we have had with organisations indicate that there would be additional burdens on businesses. Therefore, I cannot understand why it is considered that there will be no extra costs.

The solicitors said that they already carry out anti money-laundering, due diligence and risk management procedures. Criminal activity under this clause is far wider than just money-laundering, and the compensatory processes might not be adequate to avoid a Clause 41 allegation, particularly if you take into account the issue I have already referred to, Section 328 of the Proceeds of Crime Act. Therefore, it seems likely and to be expected, given that there is no defence—as there is in the Proceeds of Crime Act—that there would have to be different structures and administrative checking processes in place to deal with the additional risk. That would inevitably involve some additional cost. It would therefore be helpful to know from the Minister why the Government consider that there would be no extra costs.

The Government are rightly seeking to deal with the problem of professional enablers. We need to ensure that the defence works in practice, and helps to solve the problem, rather than sweeping up in its wake those who are innocent of any wrongdoing. Neither do we want to deter individuals who have information that would be helpful to the authorities in tackling crime from passing that information on because they fear prosecution.

I appreciate that I have raised a number of issues with the Minister, and I hope that he will commit to giving further consideration to these issues: not to the principle—I am not asking him to concede the principle at all—but in order to make sure that this works. If there is some merit to the concerns that have been raised, can he address them and perhaps bring something back at the next stage of the Bill?

Lord Taylor of Holbeach: My Lords, as the noble Baroness, Lady Smith of Basildon, said, Clause 41 creates a new offence of participating in the activities of an organised crime group. I am pleased that she and my noble friend Lady Hamwee welcomed the general principles that underline this measure.

I think that we would all accept that, for far too long, many of those who take part in organised crime have been able to remain out of the reach of law enforcement. As we set out in the Serious and Organised Crime Strategy in October 2013, we are committed to doing everything we can to pursue them. The new participation offence complements the existing offence of conspiracy, which is central to the majority of law enforcement investigations into organised crime and will remain so. As noble Lords will be aware, conspiracy is used to prosecute two or more individuals who have agreed to commit an offence where the agreement can be evidenced and where the individuals intended the offence to be committed or knew that it would be.

In practice, there are a range of players in many criminal enterprises. “Conspiracy” is used to target the major players who commit the offence or who are fully aware of it and their contribution to it. The

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participation offence will ensure that there is an appropriate and proportionate sanction for those others who “oil the wheels” of organised crime, who deliberately ask no questions and who then rely on the defence that they were not part of the overarching conspiracy.

The participation offence is therefore complementary to “conspiracy” and can form the second tier of such an investigation. It will be triable only on indictment, with a maximum sentence of five years’ imprisonment. It will ensure that we can prosecute effectively the full spectrum of those engaged in organised crime.

Perhaps I may turn to the anxieties which noble Lords expressed about the way in which we have constructed the clause. Both the noble Baroness, Lady Smith, and my noble friend Lady Hamwee pointed to a number of concerns about the offence that have been raised by both the Law Society and the Institute of Chartered Accountants in England and Wales. As was pointed out, I had said that I hoped to meet those organisations and, since Second Reading, I have been able to meet representatives of both. We had positive and useful discussions about a number of issues. I am pleased to say that those discussions are continuing with officials at the Home Office; we see this as a continuing dialogue.

One of the concerns raised was that the participation offence risks extending the reach of the criminal law too far, and as a result capturing the naive or unwitting; or catching individuals where the “facts” seem more firmly grounded with hindsight than they might have done at the time; or creating anxiety among people that they might inadvertently be captured by the offence. There is a tension between defining an offence that addresses the broad range of activity that sustains organised crime and avoiding inadvertently capturing activities innocently carried out. Noble Lords have pointed to that in their contributions. I believe that Clause 41 gets this balance broadly right.

First, the offence requires a person to have actively participated in or facilitated the criminal activity in some way. To which end, I understand why my noble friend proposed Amendment 31M, which would insert text to emphasise this point. However, it may exclude the possibility that an omission or failure to act would be captured by the offence if it were both deliberate and arose for the purposes of furthering the criminal activities of an organised crime group.

Secondly, an organised crime group must consist of at least three persons. Amendment 31S would seek to remove this stipulation, but I put it to my noble friend that this definition reflects the definition set out in the United Nations Convention Against Transnational Organised Crime. Thirdly, the group must be committing offences carrying a sentence of seven years’ imprisonment or more. This threshold was adopted to catch typical organised crime group activities—for example, blackmail, trafficking in class A or class B drugs, people trafficking, assisting unlawful immigration fraud and theft.

Finally, the effect of subsection (2) of Clause 41 is to define the circumstances in which a person could be considered to be participating in an organised crime group in support of the offence outlined in subsection (1) of the clause. The definition has been drawn so as to capture those persons who know, or have reasonable

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cause to suspect, that their activities are criminal activities of an organised crime group or will help an organised crime group to carry on such activities. A “reasonable cause to suspect” must be firmly targeted on specific facts, and it will of course have to be proved by the prosecution beyond all reasonable doubt.

My noble friend Lady Hamwee highlighted the concern that local authorities could be unwittingly caught by the same offence. However, it is possible to envisage a number of scenarios where this offence could be of significant benefit to local authorities—or, indeed, banks or other businesses, since it goes beyond the professions. It would provide an appropriate and robust sanction against corrupt insiders: for example, where a bank employee steals customer data and supplies it to organised criminals; or where a local council employee receives corrupt payments to facilitate organised crime.

It is also worth repeating that for the participation offence to be committed, a person must have had reasonable cause to suspect, firmly grounded and targeted on facts, as I have said. If those facts are present, the granting of licences, for example, should not happen. Licences should not be granted if there is reasonable cause to suspect, or knowledge. Any prosecution would also need to prove that the person actively participated in or facilitated the criminal activity in some way. That test may not be met in the letting of contracts for the provision of services to a local authority. As a further safeguard, the Crown Prosecution Service must be satisfied that any prosecution would be in the public interest. I want to take this up further with the Local Government Association because I think that some of its anxieties are unfounded, but I want to be certain that we are reading this correctly in this respect.

Baroness Smith of Basildon: I am grateful to the noble Lord. That is very helpful. I have just two questions. First, may I give him the list that the LGA provided to me and ask him to comment on it in writing to noble Lords? That would be helpful. Secondly, in the case that he mentioned of offences where somebody within an organisation is passing information or money out to an organised crime gang, would they not be offences already; or does this create a new offence, or just greater penalties? I would have thought that those kinds of activities would be offences already, perhaps under conspiracy.

Lord Taylor of Holbeach: Yes, they could be if they were seen as integral to the conspiracy. However, the whole concept of a participatory offence is the arm’s-length connection that there sometimes has been, which has made conspiracy an aspect of the law that is not particularly easy to use. By creating a participatory offence, we would make those connections with criminality that much easier to establish and, indeed, would cut off the support that organised crime groups have frequently had from insiders who have provided them with assistance. As I said, I hope to talk to the Local Government Association about its anxieties. I would be grateful if the noble Baroness let me have a copy of the particular things that she was concerned about

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and I will do my best to answer them in correspondence. I will make sure that other noble Lords and the Library are made aware of that, too.

5 pm

Lord Howarth of Newport: Before the Minister sits down, I should say that I did not speak earlier in the debate because my noble friend Lady Smith said everything I wanted to. Could the Minister develop his response a little to one very important point that she made? It was on the question of due diligence. There is a serious anxiety among professional people that it will be very difficult for them to demonstrate that they performed the due diligence that would clear them from any charge that they knew or had reasonable cause to suspect that their clients were engaged in organised crime. It would be helpful if the Minister gave us some illustration of the kind of due diligence that would be satisfactory and pass that test. Obviously, if people do not have cause to suspect, then proceed to provide the professional service to their client and so participate, how can they be confident that they will not be caught under Clause 41 in this regard?

Lord Taylor of Holbeach: I do not want to prolong this. In fact, I still have quite a lot to say on these amendments. I was not about to sit down at all. Indeed, I really ought to carry on or noble Lords will grumble that the Minister is taking too long to reply. However, I think I can address these issues.

The noble Baroness, Lady Smith, asked me if I could elaborate a little on things I already said in correspondence to her, for the benefit of noble Lords, so I will just give some description. A person commits a participation offence if they take part in activities where they know or have reasonable cause to suspect that they are criminal activities of an organised crime group or where it would help an organised crime group. That must be firmly grounded. Although it would be for the jury to decide whether the threshold had been met in the circumstances of a particular case, the prosecution would need to prove that, for example, a landlord’s activity—the noble Baroness asked about this—participated in or facilitated criminality in some way. As a further safeguard, the Crown Prosecution Service must be satisfied that it is in the public interest.

Amendments 31L and 31Q seek to make other modifications to the scope of the offence. I understand my noble friend’s intention with these amendments and hope she will agree with me that these amendments would not materially change the effect of the provision. The main issue lies in the threshold—the mens rea, as lawyers would say—for the offence.

I listened carefully to my noble friend’s arguments and those set out by the noble Baroness, Lady Smith, that further consideration should be given to ensure that the participation offence does not capture the unwitting or naive. I also acknowledge that many situations look different with hindsight. What to a jury considering a case after the event will be a whole series of red warning signs clearly indicating organised criminal activity might have not appeared to be anything of the kind to the defendant at the time the events actually took place.

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I understand the problem of definition of mens rea. However, the threshold or mens rea of belief provided for in Amendment 31P may be said to be the state of mind of a person who says to himself, “I cannot say I know for certain that the circumstances exist but there can be no other reasonable conclusion in the light of all that I have heard and seen”. Quite honestly, this is a very high threshold, which would remove much of the utility of the offence, which we are not in a position to accept.

There are some 36,600 members of organised crime groups involved in drug trafficking, human trafficking, organised illegal immigration, firearms offences, fraud, child sexual exploitation and cybercrime, and then there are the professional and non- professional enablers who help organised crime. A threshold of “believe” will set the bar too high and will not change the way these people operate or deter them from helping an organised crime group. However, a balance must be struck and, in the light of this debate, I am persuaded that we should give further consideration to ensuring that the mens rea is such that it does not capture the naive or unwitting.

I also acknowledge the points made in questioning the need for a general defence to the participation offence as well as the desire of the noble Baroness, Lady Smith, to have defences specific to the regulated sector, which is the nub of Amendment 31R. It is important that there is no anxiety among people, including in the regulated sector, that they might be inadvertently captured by the participation offence. It is therefore right to consider, alongside the level of the mens rea, the need for a defence, but bearing in mind that if one is needed it needs to take into account that the participation offence will apply to professionals and non-professionals alike. We need to have this captured within the mens rea and the defence which should be all-embracing for the regulated and non-regulated sectors.

Amendment 31U seeks to remove the defence in Clause 41(8). This defence is required to protect, for example, undercover police officers who are participating in the activities of an organised crime group for the purposes of frustrating those activities or collecting sufficient evidence to bring the perpetrators to justice. The use of undercover officers will still need senior level authorisation and the police and others will have to demonstrate that the use of the officer is necessary and proportionate. There are a number of precedents for such defences in other statutes, including in respect of the offences in the Bribery Act 2010 and the offences in respect of indecent images of children in the Protection of Children Act 1978.

I will make some points on the particular concern, in Amendment 31T, that someone who has received consent in the submission of a suspicious activity report should not be prosecuted for the participation offence. As it stands, the clause would leave the decision to prosecute the participation offence under these circumstances to the discretion of the Crown Prosecution Service. It would be disproportionate to import the suspicious activity reporting regime for the participation offence when it is most unlikely that it would be in the public interest to prosecute someone in these

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circumstances; such a prosecution might even constitute an abuse of process. There is also the practical reason that the defence under Section 328 of the Proceeds of Crime Act is only in respect of entering into an arrangement which facilitates money-laundering; if there is evidence of actions constituting part of a wider programme of criminality, this should still be investigated and, if appropriate, prosecuted.

The noble Baroness, Lady Smith, also asked to what extent people must satisfy themselves that there is no wrongdoing. This is part of the question of due diligence raised by the noble Lord, Lord Howarth. The offence will address those who have reasonable cause to suspect or know they are assisting organised crime. It does not require people to carry out additional due diligence. It is for this reason that we do not consider that there will be additional costs for business. There is a much closer relationship between people’s actions in a professional, business or commercial occupation carrying out their trade than in some of the more sophisticated checks that have to be undertaken by professionals concerned with other legislation.

Lord Howarth of Newport: On the other hand, the regime that the Government are creating through this legislation must not be too easygoing because we face extensive problems of money laundering and participation in other offences. It must be the case that across the country there are professional people who are facilitating organised criminals to launder their money and transfer the proceeds of their crime out of the illegal economy into the legal economy. The Minister is walking a tightrope. I asked him earlier not to lay unreasonable burdens on professional people to demonstrate their innocence. On the other hand, the system has to be tough enough to make an impact on the problem that we suffer from as things are.

Lord Taylor of Holbeach: Right at the beginning of my speech, I talked about balance. I said that I thought we have got the balance in Clause 41 just about right. We do not want to upset the balance. We want to reassure people, particularly the professional groups that have been to see us and the Local Government Association, that that balance can be made to work for them. If it means that we come back on Report with some ideas on that, I am sure the House will welcome them because generally the House understands exactly where the Government are on this issue. Even though probing questions have been asked by my noble friend and the noble Lord and the noble Baroness, I understand that underlying them is their support for this participation offence and that they want to make it work.

Baroness Smith of Basildon: I want to raise a point on Amendment 31T. The Minister rejected the idea of a defence if a potential offence is suspected and reported. For example, under the Proceeds of Crime Act, a potential offence can be reported to the financial investigation unit. That is a defence, but not a guarantee, against prosecution. My concern is that one of the reasons that that defence is in the legislation is so that those who uncover what they believe may be illegal

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activity are not deterred from reporting it to the relevant authority. It is very useful information. Has the Minister considered whether it will have a deterrent effect if somebody working for somebody discovers some way down the line that there may be criminal activity? Does he consider that they may fear reporting it if there is no defence for them to be gained by reporting it? When the Minister meets the professional associations concerned, will he discuss the processes by which they will establish due diligence to see whether there are any additional costs involved that they can outline to him?

Lord Taylor of Holbeach: Our discussions went into that area. We discussed how these matters would be considered by them. The noble Baroness will appreciate that as we want to encourage people to report suspicions as soon as they have grounds to suspect, even more so if they know, they should have every incentive to report the matter. However, one would not want to create a general defence that would enable somebody to have, in effect, a “get out of jail free” card so that when things got a bit hot, they were automatically able to create immunity for themselves against prosecution. I am not convinced by the argument that where we are is wrong. We want to talk to professional organisations because we see how important it is to have them on side in the fight against crime. I know from what they have said to us that they are approaching this issue in exactly that way. They want to make sure that their professions are supportive in the fight against crime, and that any within their professions who are not pursuing that objective but are assisting crime are punished.

5.15 pm

The noble Baroness teased me about the Security Industry Association; I know this because I was with the noble Baroness, Lady Henig, going home on the bus last night. I can say only that I am working to achieve what I think the House would support on this, but it is a little removed from the general subject of the Bill.

This has been a good debate. I will reflect on the points that have been raised because I consider them to be of high value, particularly on the potential for the new offence to capture the unwitting or naive participant and on the need for a defence to address the concern that people might inadvertently be captured by the offence, particularly when acting in the normal course of their business. I will therefore reflect further on whether the offence as drafted achieves the desired result on these points and return to the House on Report. While I can give no undertaking at this stage to bring forward government amendments on Report—noble Lords would not expect me to—we will, in particular, examine further Amendment 31N and the case for a defence when somebody is acting reasonably.

Equally, I trust that noble Lords will also reflect on the comments that I have made in responding to the other amendments in this group. I assure noble Lords that we will continue to work with the professional bodies for the legal and accountancy professions as the Bill makes further progress.

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I am confident that the participation offence will give law enforcement agencies a new and powerful tool to target those who oil the wheels of organised crime, and put relentless pressure on a greater proportion of the 5,300 organised crime groups operating in this country and, in doing so, identify those who help them. On that basis, I invite my noble friend to withdraw her Amendment 31L and urge the Committee to support Clause 41 in the knowledge that we will come back to these issues in the autumn.

Baroness Hamwee: My Lords, of course I will reflect, but I think that I will add a couple of things to my noble friend’s list between now and Report. I am of course pleased to hear what he says about the work with the Local Government Association. I think the noble Baroness, Lady Smith, was suggesting that I was a vice-president of the LGA, as she is. Some time ago, I was chucked out on the basis that I had been a vice-president for too long. I do not know quite what that says about anything, but I am not a vice-president. I was, however, practising as a solicitor and am still on the roll; perhaps I should have said that, but I think it has been clear.

My noble friend used a phrase like “giving an incentive to report when one is suspicious”. That has to be seen in the context of a client relationship. That is not easy. My noble friend has talked about balance but it is not a two-way balance; there are a lot of factors in it.

Clause 41(8) provides that it is,

“a defence for a person charged with an offence under this section to prove that the person’s participation was necessary for a purpose related to the prevention or detection of crime”.

It would be helpful if that had been drafted in a way to refer one—with a “subject to”, for instance—to the provisions which make it necessary for authorisation for the undercover policing to take place. I do not know whether I can put that thought into my noble friend’s mind.

Finally, the Minister suggested that the terms “help” and “enable” are synonymous, but I do not think they are. To help means to assist—to make something easier, while to enable means to make it possible. They are not the same, which is one issue within all this that I would like to reflect on further and maybe come back to at the next stage. However, I have no doubt that my noble friend, in his usual generous way, will want to discuss some of that before we get to that stage. It is clearly a matter of considerable concern around the House that we get the clause right. No one is opposing it, but we want to make it workable, and supported by all those who may be affected. I am grateful for the detail of the response, and I beg leave to withdraw the amendment.

Amendment 31L withdrawn.

Amendments 31M to 31U not moved.

Clause 41 agreed.

Clause 42 agreed.

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Schedule 1: Amendments of Serious Crime Act 2007: Scotland

Amendment 31V

Moved by Baroness Williams of Trafford

31V: Schedule 1, page 57, line 30, at end insert “; or

(b) in addition to an order discharging the person absolutely.”

Baroness Williams of Trafford: My Lords, these amendments make further amendments to Part 1 of the Serious Crime Act 2007 as a consequence of extending serious crime prevention orders to Scotland.

The most substantive amendment in this group is Amendment 31Z, which inserts proposed new Section 27A into the 2007 Act. Sections 27 to 29 of the 2007 Act already make provision for the winding up of companies, partnerships and other bodies corporate where they have been the subject of a serious crime prevention order and are then convicted of a breach of that order under Section 25 of the 2007 Act. Hitherto, all SCPOs have been made against individuals rather than bodies corporate, but it is important that the legislation continues to provide for the possibility of an SCPO being made against a company or other commercial enterprise.

Proposed new Section 27A of the 2007 Act makes bespoke provision for the winding up of companies or other relevant bodies and dissolution of partnerships in Scotland. As now, the test of the winding up of a company or other relevant body or dissolution of a partnership will be that it has been convicted of the offence of breaching a serious crime prevention order and Scottish Ministers consider that it would be in the public interest for the company—or, as the case may be, relevant body—to be wound up or the partnership to be dissolved. Amendment 31Z effectively completes the provisions in Schedule 1, ensuring that all elements of Part 1 of the 2007 Act are extended to Scotland.

Amendment 31AA is in response to the helpful comments made by the noble and learned Lord, Lord Hope of Craighead, at Second Reading. In his comments, the noble and learned Lord correctly identified that new Section 36A of the 2007 Act, as inserted by paragraph 23 of Schedule 1, went wider than the England and Wales equivalent in Section 36 of the 2007 Act. As drafted, new Section 36A provides that in any proceedings before the High Court of Justiciary or the sheriff in relation to serious crime prevention orders, the civil standard of proof is to apply. Amendment 31AA clarifies that the civil standard of proof applies where the High Court of Justiciary or the sheriff, when sitting in a criminal capacity, are considering the making of an SCPO on conviction, or the variation of an order made on conviction, or the variation or replacement of an order following a conviction for breach. The criminal standard of proof would naturally apply, as now, to criminal proceedings in relation to the offence of breach of an SCPO. I am most grateful to the noble and learned Lord for highlighting the need for this amendment.

The other amendments in this group are minor technical or drafting amendments. I beg to move.

Amendment 31V agreed.

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Amendments 31W to 31Z

Moved by Lord Taylor of Holbeach

31W: Schedule 1, page 58, line 12, at end insert “; or

(b) in addition to an order discharging the person absolutely.”

31X: Schedule 1, page 58, line 43, at end insert “; or

(b) in addition to an order discharging the person absolutely.”

31Y: Schedule 1, page 59, line 33, leave out “Scottish Ministers” and insert “Lord Advocate”