Clause 8 - Recoverable amount

Proceeds of Crime Bill – in a Public Bill Committee am 11:30 am ar 20 Tachwedd 2001.

Danfonwch hysbysiad imi am ddadleuon fel hyn

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

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

I had hoped that all three clauses were straightforward, although relevant points were raised about clause 7.

Clause 8 establishes the basic rule governing the calculation of a confiscation order. The amount ordered to be paid is described as the recoverable amount. That amount must equal the defendant's benefit or the amount actually available for confiscation, if that is lower. The amount available for confiscation is referred to as the available amount.

The court will calculate the available amount only if the defendant asks it to do so. The onus rests on the defendant to prove that the available amount is lower than the benefit.

Photo of Ms Helen Clark Ms Helen Clark Llafur, Peterborough 11:45, 20 Tachwedd 2001

The defendant should be involved in order to ensure that assets acquired by true and honest gain are not subject to a confiscation order. Are we leaving to the defendant the whole process of determining what amount of assets will be recovered, especially given that the amount available for recovery is less than the amount enjoyed by the defendant from his criminal conduct?

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

I understand the point that my hon. Friend is making, and I shall deal with it later in our debate.

The court will calculate the available amount only if asked to do so by the defendant. The onus rests on the defendant to prove that the available amount is lower than the benefit. If that was not the case, the prosecutor would have to prove that there was sufficient property available to satisfy the confiscation order, which is a tall order in many cases, and virtually impossible when the defendant has hidden assets.

There is a discretion, however, in subsection (3) for the court to make any necessary adjustment to the recoverable amount to take account of claims by victims against the defendant in respect of the conduct concerned. That is consistent with the court's powers to have regard to such claims when making a confiscation order under clause 6(6).

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

The Minister has touched on a point that will arise when we discuss a later amendment. Who comes within the category of victim? Will they be the victims of the individual offences of which the person has been found guilty, or, more generally, will they be the victims of the general criminal conduct, who may emerge during the investigation? I have always assumed that it was the former, not the latter. There is some imprecision, and I should be grateful for some clarification.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

I agree that clarification is necessary. Perhaps it might be better to refer to the matter when we reach the hon. Gentleman's later amendment.

Subsection (2) makes it clear that in such a case, the revised amount must not exceed the available amount. Subsection (4) is new. It requires the court to deduct from the assessed benefit any benefit that is already the subject of a civil recovery order or a cash forfeiture order part 5. The aim of that is to avoid double recovery of the same benefit.

Subsection (5) is slightly different from the current legislation. Each time the court decides the available amount, it must draw up a statement setting out its calculations. At present, the court is obliged to do that only in cases when it decides that the available amount is lower than the assessed benefit. The purpose of the change is to improve the information available to the authorities when enforcing the confiscation order.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

I am worried about a couple of issues. Some flexibility that is not aimed at assisting the convicted person could be useful. Subsection (1) states:

``The recoverable amount for the purposes of section 6 is an amount equal to the defendant's benefit from the conduct concerned.''

In most cases, that is correct. However, in other cases it could prove utterly impossible to be 100 per cent. certain that the amount was equal to the benefit. There could be a huge dispute about whether it was equal. It may benefit the Bill for the courts to have some discretion. I understand why the amount should not be more than equal to the benefit, and that we should not be taking more than the defendant's benefit as a result of the crime for which he is being convicted. It may assist the court, however, to say that it the amount can either be equal to the amount of benefit or a lesser figure. That is for the benefit not of the convicted person but of the court, because it could recover an amount without there being a protracted dispute about what ``equal to'' might mean. There could well be an argument on appeal when it could be shown that the amount was not equal to the benefit so the order should be declared invalid. I can envisage such a thought process. Will the Minister consider having flexibility under subsection (1), whereby the court could say that the amount would not have to be more than the benefit, but could be less?

Subsection (2) states:

``But if the defendant shows that the available amount is less than that benefit the recoverable amount is . . . the available amount.

It would be worth exploring the possibility of having flexibility in such circumstances, too. It does not take too much imagination to know that someone in such a position will do his or her level best to make sure that the available amount is as small as possible. However clever the lawyers are, however efficient the court is and however many accountants pore over such information, there will still be even cleverer lawyers and accountants who will reduce the maximum amount to a much smaller available amount.

I fully accept that it is wrong that we should seek to take away from people—even criminals—property or assets that they have acquired legally and legitimately, but I do not understand why a convicted criminal who has managed to spirit away some of the proceeds of crime should not at a later date be held to account for the money that has gone walkabout, by targeting the assets that he subsequently acquires legitimately. Someone who has spirited away £2 million or £3 million of the amount that should be paid may suddenly win a £15 million jackpot on the lottery. That person will have avoided paying £2 million or £3 million of the ill-gotten gains of crime just because he managed to reduce the available amount, so I do not understand why he should not subsequently be required to repay the proceeds of crime when he suddenly finds himself in pocket. That does not fly in the face of my understanding of justice. Under subsection (2), it may benefit the court to say that the amount recoverable is either that or a sum that it may decide. The arrangement would then be flexible and could take account of what might happen subsequently.

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

I wish to raise a point slightly different from that raised by my hon. Friend. In our earlier proceedings, those of us who have had some experience of the way in which the old drug trafficking orders worked discussed the length of time that the courts took after the original criminal conviction. I hope that the Minister will be able to say whether the Government have made an assessment of how much court time is likely to be taken up in cases when the defendant asks for the matter to be assessed. All members of the Committee are concerned about pressures on court time. I understand why the Government say that they are putting the onus on the defendant because the prosecution may find it difficult to establish such points. I hope that the Government will have used their experience of how the old drug trafficking orders worked to calculate in what proportion of cases the matter may arise, and how much time will be taken up in court. The Committee will want an indication of that.

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

May I raise some points with the Minister, initially about subsection (1)? One of my colleagues has reminded me about the relatives of the hon. Member for Beaconsfield, who were cattle rustlers. Will the Minister clarify the amount considered to be equal to the defendant's benefit in the theft of a cow?

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

I do not think that my relatives committed an offence, because they stole the cattle from the other side of the border. As the law then stood, there would not have been any criminal benefit in such circumstances.

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

I shall not digress on the subject of cross-border traffic. I do not think that the hon. Gentleman's relatives were involved in a normal commercial arrangement—after all, in his maiden speech he described them as cattle thieves—so we can probably leave that aside.

I return to the cost of cattle theft. Is the amount equal to the defendant's benefit the replacement cost of the cow, or the price realised if it is resold? If it is the latter, will there be an obligation on the guilty party to clarify the price for which the cow was sold? That is particularly important in terms of reset. If the price is to stand, will the defendant be obliged to produce the name and address of the person to whom the stolen goods were resold? That would be helpful in some circumstances. The cow could have had value added to it—by cutting it into joints, for example. The money received from the sale of the individual parts would then probably be greater than the replacement cost of the cow or the normal resale price. That idea is particularly relevant to drugs. The cost of a kilo package of drugs would be much less than the price realised by selling the same quantity of drugs in small bags. Which amount would be used to calculate the benefit?

I shall now pick up the idea not of the little old lady with three shoplifting offences, but of tachographs, which the Conservatives advanced as a major factor. The Minister should be able to tell us about the defendant's benefit in tachograph offences. Recently, I was reading an article in the 16 June edition of the Leicester Mercury—as one does. The article said:

``Blakes Chill Distribution Ltd was fined a total of £72,000 and ordered to pay £9,000 costs by . . . magistrates after admitting 227 charges of failing to produce tachograph records. The firm, a subsidiary of Express Dairies Plc . . . asked for 217 similar charges to be taken into consideration.''

That seems to represent a consistent pattern of bad behaviour. [Interruption] Yes, as my hon. Friend the Member for Glasgow, Anniesland (John Robertson) says, it reflects a criminal lifestyle.

The article continues:

``The firm failed to produce these records within a permitted time scale during an investigation at its depot. As a result, 168,000 kilometres were missing from the driving records for one month alone.''

That shows that tachograph offences can be serious. Will the Minister give us guidance about how the defendant's benefit would be calculated in such circumstances?

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

I would not want the hon. Gentleman to believe that my hon. Friend the Member for Beaconsfield and I suggested that tachograph offences were not serious. If he believes that we said that earlier, he has entirely misunderstood the point. My hon. Friend and I know of tragic cases with fatal consequences that arose because people committed tachograph offences. None the less, the hon. Gentleman is making a good point.

Photo of Ian Davidson Ian Davidson Labour/Co-operative, Glasgow Pollok 12:00, 20 Tachwedd 2001

What I described was the impression that I received on the previous sitting. The Opposition mentioned tachograph offences and the little old lady with the shoplifting offences in order to belittle what was proposed and attempt to divert us.

I can give the Minister another reported example, in which the father of the Scottish Formula 1 star David Coulthard was fined and sentenced by Scotland's traffic commissioners. An article about it states:

``A public inquiry into two haulage firms run by Mr Coulthard revealed he had personally paid fines totalling almost GPB 30,000 for drivers who had broken the law more than 130 times . . . More than 70 offences were admitted by drivers at courts across the country after a major investigation''.

An operation discovered that

``drivers at a Carlisle-based firm that was subcontracted by Hayton Coulthard had accumulated 130 offences relating to falsified tachograph records in November, 1998. The firm J&K Williamson, trading as Williamson and Co, claimed at Kendal Magistrates Court in June 1998 that Hayton Coulthard had ordered their drivers to break the law by falsifying records.

The inquiry heard claims that Hayton Coulthard had threatened to withdraw contracts if they did not comply.''

Those examples confirm the points that I made in the previous sitting about tachographs. That example shows not a trivial offence committed by one driver, but a case in which employers force drivers to commit offences under threat of dismissal and withdrawal of contract.

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

I entirely agree with the hon. Gentleman. He may recollect that I raised the example of health and safety offences. I have been involved in health and safety cases in which the offence was clearly committed for criminal gain. I do not disagree with the hon. Gentleman, but the points that we made about tachograph offences in the previous sitting showed how wide the category of offences is. Individual tachograph offences that are not linked to the type of conduct that the hon. Gentleman identified fall into a different category. His examples show how broadly the nature and seriousness of tachograph offences can vary.

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

I must confess that that was not the impression that I gained from Opposition Members. I thought that it was clear that they were trying to suggest that the Bill could be used to pick up trivial offences such as shoplifting or tachograph offences. If that is a retreat by the hon. Gentleman, I am prepared to accept his confession of wrongdoing, and I shall say no more about the matter. Perhaps he will reconsider his outrageous defence of cattle rustling, to which I shall return on another occasion.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

We have had an interesting debate—more interesting than I had expected. I am glad to see the hon. Member for Spelthorne returning, because we are talking about the recoverable amount, and I am sure that he will agree that we have three options: the amount can be more than, equal to, or less than the

``defendant's benefit from the amount concerned.''

We all agree on that. No one suggests that it should be more than the defendant's benefit; at least, I have not heard that argued—

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

I am surprised.

Mr. Foulkes—however much that may surprise the hon. Member for Beaconsfield. The amount available for recovery could be less than the defendant's benefit, and we have described those circumstances. It seems sensible that the Bill should specify that the amount recoverable should normally equal the defendant's benefit. That brings me to my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson).

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

I followed the Minister's argument until the very last moment, when he said the words ``normally equal''. I have made the point that the sum should not always, but normally will, equal the defendant's benefit. The sum could, therefore, be less, and it could be to the court's advantage that the sum should be less than the defendant's benefit. I had hoped that the Minister would take that point on board.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

As I understand it—unless I have got it wrong—we have already dealt with the question of the available amount. When the available amount is less than the defendant's benefit, ``You cannot take the breeks off a Hielan'man''. A Hielan'man wears a kilt; he does not own breeks, so they cannot be taken away from him. I am sure that the hon. Member for Spelthorne understands what I am saying.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

Perhaps the Minister credits me with more intelligence than I possess, because I have always thought that I would need a visa to travel north of Watford.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

I am sure that the hon. Gentleman would be welcome in Scotland at any time.

I return to the points that have been made about the phrase,

``equal to the defendant's benefit''.

My hon. Friend the Member for Glasgow, Pollok asked about the calculation, and he raised interesting questions about cows: should the value of the living cow be calculated, or the value of the cow after it has been butchered and made available for other purposes? He also raised the recurring questions of tachographs and muddled shoplifters. I direct him to clause 80, which describes how the value of property obtained from criminal conduct is calculated. The Committee will return to the interesting question of the calculation of specific benefits in specific crimes and cases.

The hon. Member for Spelthorne said something that must not be allowed to pass unchallenged, and I will deal with that after I have dealt with the following two points. The court has the power to revisit the available amount—to take another look at it—and that matter is covered in clause 23. The question of court time was also raised. We have not undertaken an estimate of the time it takes to assess the available amount, but it is essential that that is done, and the court should do it. I assure hon. Members that that is not a new requirement.

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

I accept the Minister's point that that time will need to be taken, but I ask him, yet again, to consult his officials so that he can offer an assessment of how much time will be taken. If he cannot provide that now, will he do so later? It would be possible to make an assessment of it, based on the experience of drug trafficking orders, and that would be helpful to the Committee.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

I am not sure whether that would be helpful to the Committee. The hon. Gentleman is worried about the amount of time that will be taken up by the court, but I am also concerned about the time that would be unnecessarily taken up by officials in calculating matters that are difficult to calculate. That would impose extra burdens. My hon. Friend the Under-Secretary has more than this piece of legislation to deal with: as the hon. Member for Beaconsfield said, legislation on terrorism is also being considered, and it would not be sensible for Home Office Ministers and officials to spend a lot of their time making assessments and calculations that would not be of any real benefit to the Committee.

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

I shall put my point to the Minister in a different way. One of the legitimate concerns that is always felt about legislation that introduces new operations into the criminal courts is how it will work in practice. If I thought that officials in the Home Office and the Lord Chancellor's Department never undertook such assessments, I might agree with the Minister that what I am requesting would impose an unreasonable extra burden. However, he would surely concede that they frequently undertake such assessments.

My request is not unreasonable: I have made it when shadowing both the Home Office and the Lord Chancellor's Department, and estimates were provided. I am not asking that my request be acceded to immediately, but when Parliament scrutinises proposals such as those under discussion, it must have some idea what effect they will have on the operation of the criminal courts.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

I tell the hon. Gentleman again that this is not a new requirement. If he wishes his question to be answered, he should go and see how long it takes under the present legislation, or he should talk to the hon. Member for Beaconsfield, who could give him an indication, as he has practical experience of the matter.

I return to a strange point that was made by the hon. Member for Spelthorne, as it epitomises many of the points that have been made by at least one of the Opposition parties. He was anxious that the available amount should not be reduced by salting away money in other ways, so that the court would not have access to as much money as possible. However, amendment No. 32, to which he has put his name, would do precisely that. That epitomises what my hon. Friend the Member for Glasgow, Pollok said earlier—it is difficult to know whether Conservative Members really want to make the Bill effective.

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

We shall deal with amendment No. 32 in a moment, but I must take the Minister to task. How is the point made by my hon. Friend the Member for Spelthorne incompatible with amendment No. 32, which asks the Committee to consider whether bona fide debts should have a special category? As I shall explain, there are social and economic reasons for that, and it has nothing to do with salting away money.

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

Order. As I have said repeatedly, these are complex and interrelated issues. None the less, I would not want the merit or otherwise of amendment No. 32 to be debated at this point.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

Of course—and neither would I, Mr. Gale. I was just pointing to an inconsistency and referring to it in passing. We shall discuss it in greater detail later.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

If this is on the same point, it might be better not to give way to the hon. Gentleman just yet.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

This is nothing to do with amendment No. 32. I just wanted to say that I failed to make myself clear when I was explaining what concerned me. I was not trying to encourage people to salt away money. I was flagging up the point that, despite the desire on both sides of the House to make the maximum effort, if history runs true to form, some people will still succeed in salting away money. I was merely saying that that should not be an excuse for not seeking to get it back in the future, which is the opposite of what I think the Minister heard me to say. I apologise for that.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

No, no. I apologise if I misunderstood the hon. Gentleman. Now that I understand him, and appreciate what he said, there is every reason for the Committee to agree that clause 8 should stand part of the Bill.

Question put and agreed to.

Clause 8 ordered to stand part of the Bill.