Clause 2 - Director's functions: general

Proceeds of Crime Bill – in a Public Bill Committee am 11:15 am ar 13 Tachwedd 2001.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs) 11:15, 13 Tachwedd 2001

I beg to move amendment No. 2, in page 2, line 19, leave out subsection (5).

The clause will allow us to have a wide-ranging discussion, because it relates to an important issue in the Bill. We have already touched on it in discussing clause 1 stand part. The amendment raises a specific issue about the guidance given to the director by the Secretary of State.

When we debated the matter on Second Reading, we had little sign of what form the guidance would take. However, as I said earlier, the Minister helpfully produced a guidance document, which arrived on our desks yesterday or the day before. It sets out the proposed guidance that the Secretary of State will give the director on how to exercise his functions so as best to contribute to the reduction of crime. Some aspects are innocuous and sensible. I am pleased that the guidance refers specifically to the director's need to liaise with prosecution authorities to ensure that no prosecution will be jeopardised by his activities, which is the nub of the matter.

Perhaps more controversial, especially in view of later clauses that deal with the triggers for confiscation, is point 5, which states:

``Where a criminal conviction has been obtained, the Secretary of State considers that the use of criminal confiscation is a method of targeting the proceeds of crime which will best contribute to the reduction of crime.''

No attempt is made to identify whether, for instance, the sort of crime referred to is crime for gain or any old crime. On the basis of the guidance note, if you had a road traffic conviction for speeding, you would bring yourself within the ambit of the Secretary of State's guidance. Some important issues arise from that.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. When the hon. Gentleman uses the word ``you'', he refers to the Chair, and I assure him that I do not have a conviction for speeding.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I am sorry, Mr. McWilliam. I was oblivious to the fact that I had said ``you''. I was not suggesting that you had a conviction for speeding or for anything else.

We are discussing a guidance note, but there is nothing to prevent the Secretary of State from issuing dozens of guidance notes subsequent to the Bill being enacted. How does the Minister view that? Is what we were handed by the Government prior to this debate a tablet of stone or holy writ? Is it the defining guidance document for the director, after which he will be told to get on with it, or is it the first of dozens of guidance notes that the Home Secretary will send winging to the director's desk as he seeks to meet the performance targets that we discussed under earlier amendments?

If the guidance note is a tablet of stone, why was it not included in the Bill as a substantive clause? If it is not, how does the Minister see future guidance being developed? Above all, what opportunity will the House have to debate such guidance? The Bill sets out clearly what the director should do. He is supposed to hunt for the proceeds of crime by confiscation or civil recovery. That is an onerous task and one that is clearly a quasi-prosecutor's role. I was a little alarmed when the Minister drew a distinction between a prosecutor and the director of the Assets Recovery Agency because, for civil recovery, the powers given to the agency are draconian in the extreme compared with what has existed before.

As we said on Second Reading, the Government are setting up a structure that can lead people to be drawn through machinery that will ultimately confiscate their assets under a civil standard of proof. I am not even sure that it is a civil standard of proof; it seems to be a method based on the balance of probabilities. We must consider carefully what we are doing and what guidance will be given. I hope that the Minister can respond fully to my argument because the issue is one of the most important that we shall be debating this morning. The guidance will be critical. As the Minister made clear, the director will be susceptible to it because he will have to respond to it. In itself, I do not take great exception to the guidance note, apart from flagging up the interesting issue under point 5 about whether the Bill applies to all crime generally rather than to crime for gain.

Having said that, I am deeply troubled by the prospect that the paper is only guidance note No. 1 and that a great deal more guidance notes will regulate the manner in which the director operates. They will fetter his discretion and we may end up with a system of administrative enforcement that is dictated by politicians and that will bring the mechanism of the Bill into disrepute. As I said to the Minister on Second Reading, we support the principle behind the clause. It is important that those who enrich themselves through crime have their assets removed.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department 11:30, 13 Tachwedd 2001

The amendment would remove the requirement on the director to have regard to the guidance given to him by the Secretary of State about how he might exercise his functions in a way that is best calculated to contribute to the reduction of crime. The Secretary of State would then have no statutory authority to give guidance to the director at all. The amendment would not prevent the Secretary of State from providing guidance but it would remove the obligation on the director to have regard to it.

The provision of guidance to the director by the Secretary of State is an important element in the operation of the new agency. The intention is that the guidance will help the director to fulfil his responsibilities under the Bill, and will focus on how he can best contribute to the reduction of crime in accordance with subsection (1). The Secretary of State is well placed to give such guidance, given his overall remit on the reduction of crime.

We envisage that the guidance will have two main functions. First, it makes clear that the Secretary of State's view is that the reduction of crime will generally be best achieved by the prosecution of offenders. That is important, and provides the reassurance that many hon. Members have sought. The pursuit of the proceeds of crime will not be used as a soft option and an alternative to normal prosecution. Normal prosecution should come first, and considerations on the recovery of the proceeds of crime should not impinge on that decision, which should be taken in the normal way.

Secondly, the guidance will set out how, in the Secretary of State's view, the various methods of asset recovery might contribute to the reduction of crime. The document that I have issued is not set in stone. It represents our current thoughts about what the guidance would be. I assure the hon. Member for Beaconsfield that it is not our intention to issue further guidance notes delving into other areas. That is the kind of guidance that we envisage is covered in the Bill, and that should be provided to the director. We do not intend that different aspects of the work should be covered in subsequent guidance notes, but that such guidance, or some variation of it, as we refine our thinking, is the guidance under which the director will operate.

Photo of Norman Baker Norman Baker Shadow Spokesperson (Home Affairs)

I hear what the Minister says about not intending to issue further guidance. However, if it subsequently transpires, following enactment of this legislation, that further guidance is required, how will that be undertaken? What steps will be taken to ensure that Parliament is made aware of such guidance?

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The hon. Gentleman raises an important point. We are setting up an agency that has no history in this country: it is a new venture. However, if a departure from the assurances given to the Committee was shown to be necessary by an unforeseen circumstance in the future, we would have to ensure that Parliament was given full oversight of any further measures. In relation to the current Bill, although this will not necessarily be the final document, guidance will be along the lines provided to the Committee, and will not allow the Secretary of State to intervene in the working of the agency and give directions, which, effectively, would result in a politically directed agency pursuing the proceeds of crime. All aspects of the agency must be free from direction and independent.

First, we want to ensure the primacy of the pursuit of the criminal through the normal processes of the law, as that is the most important element in reducing crime in this country, and the pursuit of the proceeds of crime must always be secondary to that. Secondly, guidance must be given as to the hierarchy that should be used for the different powers in the Bill. If someone is being pursued through the criminal courts, and is being convicted of an offence, confiscation should be the normal route by which the proceeds of crime should be sought. Only if that does not happen should we start considering civil recovery and, if that is not a possibility, we should examine the taxation of the proceeds of crime. It is sensible to give the director such guidance and not allow him to be a free agent in how he uses the powers that we are giving him and the order in which he chooses to pick up the different tools with which we have provided him.

Photo of Stephen Hesford Stephen Hesford Llafur, Wirral West

Does the Minister agree that the Secretary of State is best placed to hold the ring between prosecuting a crime and the proceeds of crime? That is why the measure is important.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

Absolutely. The director will be accountable to Parliament for his decisions. I do not know whether the hon. Member for Beaconsfield has left the Committee, but he referred to point 5 in the guidance note and said that it applied to all crime, not only to acquisitive crime. The agency will not be concerned with crime that does not involve acquisition. It will not be involved in anything other than proceeds, so acquisitive crime will be the maximum area with which it will be concerned. I do not know whether that paragraph is problematical. From first reading, I do not think that it is, but I am happy to consider it and make absolutely certain that it is not a problem. Point 5 states:

``Where a criminal conviction has been obtained, the Secretary of State considers that the use of criminal confiscation is a method of targeting the proceeds of crime which will best contribute to the reduction of crime.''

Given that the proceeds of crime are being targeted, we are talking about acquisitive crime.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

I apologise that I was not in the Room when the Minister first drew attention to that point. I was called out for a moment. I am grateful to him for his reassurance. It goes some way towards meeting my anxiety.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Does the hon. Gentleman want to speak?

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

The amendment has not yet been withdrawn.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

Alarmingly, I find myself in agreement with a great deal of what has been said from the Conservative Front Bench. However, I would be seriously worried if Conservative Members ever tabled an amendment that reflects their rhetoric. There is a serious point to be made about setting up arm's-length agencies. The amendment would weaken parliamentary accountability. If the requirement were for the director merely to take account of—not necessarily to follow—the mandatory power, rather than the discretionary power, an element of parliamentary accountability would be lost. That is a more important principle than second-guessing what may or may not be contained in future guidance that may be given to the director of the agency.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs)

The hon. Gentleman's comments have considerable force and one of the purposes of Standing Committees is that probing amendments are tabled to elicit explanations. As that process proceeds, only a small minority of amendments may be put to the vote. I am grateful to the Minister's explanation because there are other parts of the Bill under which what type of crime will be bitten on in the confiscation process can be examined in more detail. However, in light of his reply, I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

I draw attention to a couple of points that could bear a little scrutiny so that we know the Minister's thinking. The point that I made earlier becomes relevant for the first time in relation to subsection (3). It states:

``The Director may do anything (including the carrying out of investigations)''.

I flag up what I said earlier: it might be unsuitable for certain employees—and, perhaps, some staff who are contracted to provide services—to be involved in the carrying out of investigations. The Government might wish to clarify what the director can and cannot delegate, because skilled specialists ought to carry out such sensitive activities, rather than anyone whom the director might engage.

I also wish the Government to reflect on a more important point. Subsection (4) states that

``subsection (3) does not allow the Director to borrow money.''

I understand why that point has been made. I could discuss the issues that it raises at length, but I do not intend to do that now. Later, however, the Committee might need to debate the point.

Subsection (4) has relevance to subsection (2), which states:

``In exercising his functions as required by subsection (1) the Director must—

(a) act efficiently and effectively''.

I am surprised that the word ``economically'' has not been included in subsection (2)(a), particularly as the director is not to be allowed to borrow money, because if you are not allowed to borrow money, the pressure to act economically becomes overwhelming.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon 11:45, 13 Tachwedd 2001

Order. Nobody has said that I cannot borrow money. I have never had any problems in that regard. I am being picky because many new Members are present and they must learn how to speak correctly in the Committee: the word ``you'' is employed only to refer to the Chairman.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

It has taken me 14 years to fail to learn such conventions. I hope that the new Members will take less time than that successfully to learn them.

I apologise for suggesting that you need to borrow money, Mr. McWilliam. Unlike me, you do not need to do that. Perhaps you could advise me how to organise my private life so that I do not have to borrow money.

If the director is to be prevented from borrowing money, the Government might wish to add the word ``economically'' to subsection (2)(a), because when I was involved in local government, and subsequently, when I became a Member of Parliament, I was constantly reminded that the three Es meant efficient, effective and economic, and they used to enjoy the support of the entire House, rather than merely my party.

The director must act in each of those three ways. The efficiency with which he does his job will, perhaps, be tested by examining the processes that he follows, and his effectiveness will be measured by assessing the outcomes. However, it would not be sensible for the agency and its director not to be subjected to a debate about whether they are costing too much. The principle of value for money must be upheld—even with regard to the activity under discussion.

The director or his staff might decide to pursue the proceeds of a crime and it might transpire early in the investigation that those proceeds will not amount to much. The director should be asked to justify himself, particularly when there is a possibility that the cost of recovery will exceed the sum recovered. That is an important point and it should be debated. Nothing is to be gained by vindictively chasing people when ultimately it is the taxpayer who loses, rather than the criminal. In such circumstances, the concept of the director economically going about his work is just as valid as efficiently or effectively going about his work. Will the Government reflect on that and consider whether they might table an amendment of their own?

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

I associate myself with the earlier remarks of the hon. Member for Glasgow, Pollok about parallel provision in Scotland and the rest of the United Kingdom, and in particular about the functions that might be carried out by the Lord Advocate north of the border.

Parts 2 and 3 largely replicate each other, although part 3 wears a kilt, and makes appropriate provision for Scotland. However, no direction is given to the Lord Advocate such as is given to the director of the Assets Recovery Agency in part 1. Such direction seems to be missing.

The Crown Office in Scotland publishes an annual report that includes performance indicators and targets. However, an important point is involved. Historically, the office of the Lord Advocate has never been keen on disclosing an ounce of information more than it absolutely has to. If such provision is to be made, will the Minister speak to his opposite number in the Scottish Executive in order to establish whether, when the time comes to consider amendments to part 3, further measures might be introduced to improve the position north of the border?

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster

Subsection (3), which relates to the director, refers in brackets to

``including the carrying out of investigations''.

That power seems broad, especially if it allows the director to initiate investigations or further or repeated investigations of particular individuals. Anxiety will be expressed about the breadth of the director's powers.

How does the Minister envisage that the provision will work? The clause refers to

``the exercise of his functions'' and specifically giving the director the power to carry out investigations. Is that envisaged? Will safeguards be provided relating to the director's duties for people who are subject to investigation or further, repeated or extended investigations?

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

I take very seriously the comments of the hon. Member for Orkney and Shetland (Mr. Carmichael) about parallel provision in Scotland. I do not claim to be an expert on Scots law, but some years ago, as a practising barrister in the midlands, I did a lot of work in Corby, where there are many people from Scotland. During that time, I had links with Scottish lawyers who dealt with cross-border cases. From that limited experience, I understand entirely his anxieties. The problem is that the bases of the Scottish and English legal systems are, as we all know, entirely different. Scots law is a Roman-law system, and English law is a common-law system.

I realise that no Government can make identical provision for north and south of the border, but both the hon. Member for Orkney and Shetland and the hon. Member for Glasgow, Pollok, who raised the matter in an earlier debate, are right to say that anxiety should be expressed if the provisions do not seem to operate in an entirely parallel way. I and my hon. Friend the Member for Beaconsfield will examine carefully more of the Scottish provisions later, and perhaps now is a good time for the Minister to deal with some of those points.

On the breadth of the director's powers, we are indebted to the Minister for the guidance that he gave us just before the Committee sat. I saw it for the first time this morning, although my hon. Friend the Member for Beaconsfield saw it late yesterday. I ask the Minister—I know that it is not his fault, and that we are only at the start of the Committee—to ensure that he gives us any further documents with a little more than 24 hours' notice, if possible. I am sure that he will respond to that if he can.

Opposition Members are concerned about the Government's proposal to give directors such broad powers because those who work in the City of London and elsewhere are bound to feel concern that such powers might be used oppressively against those who are responsible for our enormously successful financial institutions. The Government do not consciously wish to damage the important contribution that the City of London and banking institutions make to the United Kingdom economy, but, as the Minister will acknowledge when he responds, the British Bankers Association expressed concerns in its response to the consultation on the draft Bill.

My hon. Friends and I shall raise many of the concerns felt by the BBA and other City of London institutions, even though the Government took note of some of their points in the consultation.

Photo of Ian Davidson Ian Davidson Labour/Co-operative, Glasgow Pollok

Does the hon. Gentleman accept that if the BBA and others had put their own house in order, the Government would not have needed to introduce the legislation?

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

I do not accept that. I take the hon. Gentleman's views on the matter seriously, but he should recognise that some City of London scandals were caused by rogue financial institutions that have never been members of reputable bodies such as the BBA. He should consider carefully the membership of such reputable organisations. I am aware of such rogue institutions because I have worked for four of the major British clearing banks in the City, and advised them not to issue a credit card to the now infamous Bank of Credit and Commerce International.

I have professional experience of trying to stop rogue banks operating. Unfortunately, the rogue BCCI succeeded in defrauding many bodies, including, as the hon. Gentleman will recall, some local authorities. I seem to recall that one of them was Orkney Islands council.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

The Minister rightly corrects me, and points out that the Western Isles council was one of those that suffered enormously in the BCCI scandal.

One must distinguish between reputable and disreputable financial institutions, and we are concerned that reputable organisations' views should be taken on board.

I hope that the Minister will confirm that when his officials draft further guidance, they will take advice from a range of bodies that are already involved in the investigation of fraud, including the National Criminal Intelligence Service, the Serious Fraud Office, special branch, and the fraud squad of the Metropolitan police and other police forces. I hope that he will tell us whether those bodies are being consulted by the Government and their officials on the breadth of the powers given to the director.

The director's powers should be specified clearly because he will have to confront a problem that was highlighted in today's press through the comments of Mr. Justice Scott Baker, a judge in front of whom I have appeared, and whose judgment I very much respect. The Minister will not want to comment in detail on current civil proceedings—nor will anyone else, as the proceedings are sub judice—but I refer to those matters that are in the public domain in today's papers. I do so to show the complexities of the matter.

I hope that the Minister will state that he takes seriously the concerns that many reputable bodies, as well as Opposition Members, have expressed on the subject of the breadth of the director's functions. I hope that he will say more about that later. If he can reassure us, we shall be happy for the clause to stand part of the Bill.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon 12:00, 13 Tachwedd 2001

Before I call the Minister, I thank the hon. Member for Surrey Heath for reminding me of something that I should have said at the start of our proceedings and that may be helpful to hon. Members who are not familiar with the system. When selecting amendments, we do so on the basis that we have one argument on one subject. I refer to amendments the principle of which has already been disposed of. If there are attempts to readdress that principle in relation to Scotland, such amendments will not be selected.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The clause sets out the director's general functions and the underlying purpose of the Bill is the reduction of crime through the recovery of the proceeds of crime. It therefore requires the director to exercise his functions in a way that he considers best calculated to contribute to the reduction of crime. The director's five main functions are set out in other clauses. First, he will share the confiscation functions of the law enforcement and prosecution authorities. In a criminal case, those authorities will be able to ask him to handle the financial investigation and the confiscation aspects while they concentrate on the criminal investigation and proceedings.

Secondly, the director will have sole authority to operate the civil recovery function in part 5. Thirdly, he will have sole authority to operate the tax powers set out in part 6, in particular to make sourceless tax assessment. Fourthly, he will train and accredit financial investigators who will be able to apply their skills in their own organisations. Finally, he will be required to advise the Secretary of State on matters relating to asset recovery. We envisage, in particular, that he or she will play a leading role in the development and implementation of the assets recovery strategy.

The director will be required to exercise his functions efficiently and effectively. When the hon. Member for Spelthorne first referred to that, I was of the mind that I did not know what the word ``economically'' would add to those two requirements. I can remember the strictures of the three Es being thrown at me. If I thought that the word added something, I should be more than happy to see it alongside the two Es under the Bill. While I reflect on whether the word will add anything, I ask him to think about how far we can go with the language. Surely the last thing that we want is for the director not to apply his powers ``adequately'' to the problems. Let us add that to the requirements and we can have three Es and an A.

I accept the hon. Gentleman's point that we do not want people pursued at great cost to the agency for relatively small amounts of proceeds. If ``economically'' adds something to the provision, I am happy to consider it. However, I believe that the director's functions are covered by the term ``efficiently and effectively''. Perhaps the hon. Gentleman will reflect on how far we can go with the language.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

As the Minister reflects on the matter, so shall I. There is something to be gained, however, by drawing attention to the fact that the director should take into account whether it is cost-effective to pursue a particular line of inquiry. More than anything else, taxpayers would not forgive us for spending more of their money than they received back. That is an economic argument. We can compare the different approaches of the Inland Revenue and of Customs and Excise, one of which applies more readily than the other the argument about whether it is worth while taking such action. I hope that the director will be charged with asking whether such action is worth his while.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The point is well made. If that point is not covered by ``efficiently and effectively'', we should seriously consider adding another word. If it is, however, the point should be accepted as being made.

Photo of Mr Paul Stinchcombe Mr Paul Stinchcombe Llafur, Wellingborough

I wonder whether the point is well made. I thought that the principal purpose of the legislation was to stop crime being attractive, not to raise revenue.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

My hon. Friend is absolutely right. The purpose is not to raise revenue. The agency is required to contribute to the reduction of crime, and, in operating efficiently and effectively, that must be its guiding star. A purely money-based decision on whether to pursue a case is not appropriate. If an amount of money could be confiscated by one of the powers under the Bill from a particular individual, that could prevent great misery from being caused by that money being reinvested in the acquisition of drugs, which would cause serious problems on the streets of our cities.

Photo of Boris Johnson Boris Johnson Ceidwadwyr, Henley

I wonder whether we need both words. Is it possible to act efficiently without acting effectively, or to act effectively without acting efficiently? Perhaps we could save some ink by getting rid of one of those words.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

We now see the efficient and effective minimalist wing of the Conservative party disagreeing with the hon. Member for Spelthorne. The hon. Gentleman properly raises the question of how far to go with the language, and whether adding or taking away words contributes anything of substance.

Photo of David Tredinnick David Tredinnick Chair, Statutory Instruments (Joint Committee), Chair, Statutory Instruments (Select Committee), Chair, Statutory Instruments (Select Committee), Chair, Statutory Instruments (Joint Committee)

On the point raised by the hon. Member for Wellingborough (Mr. Stinchcombe), I must have not quite understood the thrust of the Bill. I had thought that the idea was to address the fact that, up to now, we have been unable to obtain as much money through confiscation as we hoped to obtain. We are hoping to achieve a higher level of revenue from the criminal fraternity overall. Would the Minister elucidate on that point?

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

That issue is central to the debate. In setting up the agency, we do not regard the recovery of the proceeds of crime as the end in itself. We regard it as the tool by which we reduce crime. By taking the profit out of crime, we discourage people from becoming involved in the activity in the first place.

On Second Reading, I referred to the public service adverts from many years ago, which many hon. Members will remember, telling us that crime does not pay. I am afraid that crime does pay, which is why many people become involved in it. It is about time that we took adequate measures to try to ensure that it does not pay. Recovery of the proceeds of crime is not the aim of the Bill but the method by which we seek to reduce crime. What are those proceeds used for? Often, they are used and invested to compete unfairly with law-abiding businesses and enterprises, as people want to launder them and legalise them by putting them into the legal part of the economy. We do not want that to flourish in this country, because it undermines legitimate interests and businesses. Proceeds are also reinvested to provide the wherewithal by which yet more crime can be committed. Those are the motives for confiscation. It is not a question of merely gaining access to the money itself.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

I have listened to the Minister's comments. However, even if the purpose of the Bill is not to make a profit for the taxpayer, that does not undermine my argument. If the purpose is to punish rather than make a profit, there must still be a point at which the cost of recovery could become so great that there is an economic argument for using public funds to deter crime in another way, instead of pouring it into an activity from which the amount of recovery is so small.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

The matter is not set in stone. Just because the agency has a requirement to deal with the reduction of crime, it should not be completely blind to the spending of its resources in the pursuance of the proceeds of crime. If it does that, it will waste the funds with which it has been provided and it will be less than effective in achieving the reduction of crime. I am happy to reflect on whether ``economically'' would add anything to the Bill. If it does, I will try to put it in, but I am not certain that it will.

Photo of Vera Baird Vera Baird Llafur, Redcar

Would not it be a misapplication of principle to incorporate the word ``economically'' into the clause, because it could restrict the director's freedom in cases in which there may be an uncertain balance whether the inquiry would produce more than it cost? The aim of crime reduction by targeting a middle-level profit maker would remain essential. Is not the suggestion that ``economically'' should be included in the clause misguided?

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

That is why I said that perhaps we should think about whether the word ``adequately'' should also be added. It is a dilemma and the last thing that we want is to send the agency the wrong signals.

Photo of Ian Lucas Ian Lucas Llafur, Wrecsam

Is not the primary purpose of the Bill to deter? For example, the general public must realise that, if they commit a drug-trafficking offence, enforcement action against them will follow. Saying that an economic assessment will be made of whether the Assets Recovery Agency should proceed will diminish the deterrent effect of the Bill, the primary purpose of which is to reduce crime and deter people from becoming involved in it in the first place.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

My hon. Friend is absolutely right. When deciding what matters should be pursued, we need to bear in mind what the individuals who are in possession of the proceeds of crime are capable of doing with them. We must consider what a well-placed person in an organised crime gang can purchase with a relatively small amount of criminal proceeds if he has access to wholesale, upstream heroin or cocaine. What is his ability to use that money to make a substantial profit? Such considerations must be taken into account when issuing guidance to the agency.

Photo of Ian Davidson Ian Davidson Labour/Co-operative, Glasgow Pollok

Given the way in which Conservative Members are supporting the proposal as a clawback measure and an income raiser, this is one of the few occasions on which they have endorsed a stealth tax. My hon. Friend should resist the proposal to include the word ``economically'' because there is a real danger that the targets will be distorted. If costs are weighed against probable revenue, projects will be rejected because they may reduce the averages and mess up the target scores. Risk assessments will raise the hurdle at which the decision to pursue a case will be made. The proposal is far more insidious than it at first seems.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

Being the simple soul that I am, and completely trusting of all other Members of Parliament

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon 12:15, 13 Tachwedd 2001

Order. Sedentary interventions are to be deplored. I used to be a Whip, too.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

I took the suggestion of the hon. Member for Spelthorne at face value and assumed that he was trying to assist in making the agency more effective. I had not considered that he might have an ulterior motive: to attempt to undermine the agency's ability to do its job. I will have to reflect on that possibility when I consider his suggestions.

I turn to the points made by the hon. Member for Orkney and Shetland. On the accountability of the agency, only the taxation issues will apply to Scotland. However, he raised questions of accountability with regard to the Lord Advocate's Department. The Lord Advocate will have the responsibility to publish comparable targets for criminal confiscation in Scotland, and Scottish Ministers will be responsible for the publication of targets with regard to civil recovery. The Committee will discuss matters of accountability in more detail when it reaches the relevant parts of the Bill.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

My point is that there is no compulsion on the Lord Advocate to publish those targets. The Crown Office voluntarily undertook to publish its annual report at the beginning of the 1990s, in response to the justice charter, but an element of compulsion should be placed on the Lord Advocate.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

It is appropriate for the hon. Gentleman to flag that issue. He is giving a warning that he will raise it again when the Committee reaches the relevant parts of the Bill, and the Government will respond to it in detail.

The hon. Member for Cities of London and Westminster expressed concern about the agency's powers, and the possibility that it might have to conduct repeat investigations. All the coercive powers that are provided for contain safeguards. That will become apparent when we get to part 8, which contains provision for proper oversight of the use of those powers.

The agency will be allowed to exercise non-coercive powers, such as the voluntary interviewing of witnesses, and I hope that the hon. Gentleman accepts that that should be the case. The Government seek to ensure that the agency will be able to exercise with a free hand powers that are not coercive or intrusive.

With regard to the use of the powers provided for in part 8, the Committee will want to be assured that the safeguards are adequate, so that they do not allow, for example, the on-going harassment of individuals. I think that that is provided for, but the hon. Gentleman might wish to explore the matter further.

I think that I have covered the points that have been raised—but the hon. Member for Surrey Heath is looking annoyed with me for having said that.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

I was not annoyed with the Minister: I was seeking to jog his memory, as he has not addressed my questions concerning bodies such as NCIS.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department

NCIS, the National Crime Squad and similar agencies were consulted as part of the preparation of the Bill. They were also involved in the discussion that took place before the draft Bill was produced. All those agencies are supportive of the Government's measures. We have taken their guidance into account, and they are happy with our proposals.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.