Clause 22 - Order made: reconsideration of benefit

Proceeds of Crime Bill – in a Public Bill Committee am 4:30 pm ar 27 Tachwedd 2001.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed [this day], That the clause stand part of the Bill.

Question again proposed.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

When you listen to or watch a soap opera, one of the things that you need is a résumé of episodes that you have missed.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. As one who does not watch soap operas, I need no such thing.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

I realise that difficulty, Mr. McWilliam, but if we had a different Chairman, I could have reminded him of what I said before I was politely interrupted. However, I will spare you that. I was worried that if a genuine mistake were found by the director or the prosecution services, it would be possible for them to ask for the amount to be reduced rather than increased. That relates to subsection (1). No doubt the Minister will respond in due course.

Subsection (4)(c) states that property that is gained before the review should be taken into account. If the hon. Member for Glasgow, Pollok (Mr. Davidson) was here, we might be in danger of agreeing about the need to tighten up. What is the situation regarding property that is criminally obtained—if that it the correct phrase; I am sure that the Minister knows what I mean—subsequent to the first order if further criminal gain has resulted in new property? I understand that subsection (4) means that that could not be taken into account, but I wonder why. If one wishes to confiscate property that is the proceeds of crime—and I understand that the Minister is interested in general property that is acquired illegally rather than specific property from the crime—why is any property that was criminally obtained subsequent to the first order excluded? There may be the possibility to tighten that up.

Subsection (7)(b) states that the court ``may vary'' what was previously decided. It will be helpful if the Minister confirms that that means that the court could reduce that amount, although the prosecution is required to present only arguments that would increase it. That is the point that I made before lunch. Notwithstanding the constraint on the prosecution, subsection (7) suggests that the court could listen to arguments and decide that the amount should not be increased and that a mistake was made in the first place, so the amount should be reduced. I assume that that is the meaning of ``may vary''.

Subsection (8)(b) refers to the date of the original order. If I read it correctly, as a non-lawyer, I understand that a court may intervene to make a new order or vary the order. Instead of the original dates for appeal periods and cut-off dates, which we discussed on earlier clauses, a new order would restart such time limits. I raise that to make it clear in my mind that if a new order is made, the period of appeal starts again, rather than an appeal being ruled out of time because it was not made within the period of the original order. It would be useful to clear that up.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. It would also be helpful if hon. Gentlemen were to ask permission to remove their jackets. If they were to do so, I would gladly grant it, but I have not yet heard anyone seek such permission.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

It is not often that I apologise on behalf of hon. Members on both sides of the Committee. I foolishly assumed—it shows that I am a non-lawyer—that your generous ruling allowing us to remove our jackets during the previous sitting applied to this sitting, Mr. McWilliam.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Unfortunately, the rule is that it must be done sitting by sitting. The other daft thing about the rule is that it does not apply to hon. Ladies.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

I shall not go into what might or should apply to hon. Ladies. I shall merely say that if you describe it as a daft rule, Mr. McWilliam, I shall describe it as daft that I forgot to ask your permission. I hope that you will accept my apology and retrospectively grant me permission to leave my jacket where it is. I am sure that other jacketless Members would wish to say the same thing.

Where was I?

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

No, I was not going round in circles, I was moving on to subsection (9). It would be potentially dangerous to repeat what I said several times before lunch, but I want to draw the Minister's attention to the fact that we are watering down the powers to raise money and to confiscate by saying, once again, that notwithstanding what the court feels that it should impose, if the convicted person cannot afford it, it will be a lesser amount. I have said several times that that is not a sensible way to proceed. It seems to me that if a court feels that the amount of money that should be taken from somebody is X, then it should be X irrespective. If the person cannot afford it, that is tough luck. The hon. Member for Glasgow, Pollok has arrived just as I am saying something that will be music to his ears.

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. Unfortunately, it has been music to his ears on rather too many occasions. The rule is that tedious repetition is not allowed. The repetition may be becoming tedious, and the hon. Gentleman has just received a yellow card.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

Yes, I wondered whether it was tedious, repetitious or both. I was about to move on anyway, so I shall not chance my arm on that. One of the benefits of having more than one Chairman is that the rule is not so rigidly applied. Nevertheless, I was going to leave the matter even before you asked me to do so, Mr. McWilliam.

I want to refer to subsection (11), which I find curious. I am surprised that it has not cropped up in debate before. It states:

``In deciding under this section whether one amount exceeds another the court must take account of any change in the value of money.''

I suspect that we all know what that means. However, it seems to me that it leaves the interpretation wide open to abuse. I assume that it means that the court may take account of inflation. Despite what the Chancellor has been saying downstairs, it is highly unlikely that the value of money will increase rather than decrease, irrespective of which party is in power. The provision seems to say that the court may take account of inflation between the time when the first order is made and the time when the second is made.

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

I wonder whether my hon. Friend has given any thought to the idea that subsection (11) might also take account of changes in the exchange rate, given that a significant amount of money may have been sequestrated, having come from abroad, or may be overseas currency that has been subject to a confiscation order under clause 6.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

In so far as it is possible to go down that route before you try to stop me, Mr. McWilliam, my hon. Friend is right. I had considered that that was one of the issues. However, it seems to me that a reference to a change in the value of money should, in legal terms, be much more specific than that general statement allows. If the Minister confirms my supposition—that it means that if inflation has taken its toll, one must compare the real value of the original order with the current value of the subsequent one—the Bill should say so.

On the basis that politicians of all political persuasions are adept at using the statistics that suit their purpose best, simply referring to inflation will not necessarily ensure that one arrives at a factual figure for the absolute percentage increase that one should apply. If my supposition is correct, the Bill could usefully include an explanation of how the change in the value of money should be calculated. Should it be with reference to the retail prices index or other statistics, given that there are statistics, damned statistics and lies and we do not want a court to go down that avenue? My hon. Friend the Member for Cities of London and Westminster (Mr. Field) said that not only are we talking about the value of money—I assume that the Bill refers to the changes in the value of sterling—but it is appropriate for someone of my political persuasion—

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. I have given the hon. Gentleman some leeway, but if he starts arguing the pound against the euro, what happens if it changes and whether or not it should change, he will be out of order.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

You are very perceptive, Mr. McWilliam. I was about to ask what would be the exchange rate to the euro in the event of it coming into force. However, given that you have ruled that I must not say that, I would not dream of so doing. Nevertheless, irrespective of whether it is appropriate to debate the euro, there is a genuine point to be made in that when a Bill asserts what account should be taken of the differences in value, irrespective of party political banter, it should contain a legal definition of what is meant and how it is to be calculated.

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

I thought that the hon. Gentleman would never stop. His first point was whether there should not be a requirement on the prosecutor to discover—if that were the case—that there may have been an overcalculation of the benefit and make that known to the court so that the amount could be reduced.

We must remember that the benefit resulted originally from a statement by the prosecutor or the director and the opportunity was given to the defendant to rebut the statement to show that the items involved were not the proceeds of crime. I cannot envisage circumstances in which the prosecutor will discover under the clause that there has been an overcalculation of the benefit. Therefore, the hon. Gentleman's argument is not necessary.

The defendant is given the opportunity to seek a postponement if he is unable to show the origins of the properties. Under usual circumstances, that postponement can extend for up to two years and, in exceptional circumstances, it can go beyond that. However, we should not be writing into the Bill a requirement that the defendant can return at any time after six years, having managed to make a case that the items that were thought to be the proceeds of crime at the time were not. The process would be wide open to abuse. We should stick with the Bill and the ability of the defendant to seek postponement so that he can prove the origins of the property.

The hon. Gentleman referred to further criminal activities that were not connected with the original conviction that took place after the original hearing, and asked why the benefits or proceeds of those activities could not be confiscated, too. The Bill relates to criminal confiscation of the proceeds of the crime for which the person was convicted. If further crime were committed after the original conviction, it is a matter for that conviction to take into account the criminal gains that were made. It is not for the prosecutor to return to a previous conviction and attempt to rope in the gains made by subsequent crime.

The hon. Gentleman asked whether the reference in subsection (7)(b) to the court's ability to vary the order allows the court to reduce the order. It does not. At the time of the original decision there is an opportunity to prove the benefit of the criminal activity and the available amount. The purpose of the clause is not to allow the court to vary the order downwards, but to allow the prosecutor to return and show the benefits that were originally assessed to be inadequate.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne 4:45, 27 Tachwedd 2001

I am grateful to the Minister for having made that clear. There is an argument of principle about whether the court should be able to vary the order downwards. However, if as the Minister says, the Government intend that that should not be possible, would it not be better if the wording of the clause referred to the ability to ``increase'' or ``vary upwards''? That would avoid doubt by putting into words what the Minister has just said. As the Bill stands, however, ``vary'' could be taken to mean upwards or downwards.

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

The subsection relates to circumstances in which

``the defendant's benefit exceeds the amount found as his benefit for the purposes of the confiscation order''.

Paragraph (b) states that

``if it exceeds the amount required to be paid under the confiscation order''

the court

``may vary the order by substituting for the amount required to be paid such amount as it believes is just.''

Therefore, if the amount is increased but the court believes that to take the entire increase into account would be unjust, it may choose not to take into account the entire increase. The Bill does not allow the court to conclude that the benefits were lower than those in the original confiscation order, and nor should it.

As I said, at the time of the original confiscation, the defendant can put his case and show that his property was not the proceeds of crime. He has the opportunity to request a postponement in order to do that, of up to two years in normal circumstances and, in exceptional circumstances, beyond two years. That should provide him with the opportunity to prove his case. I do not understand why we should include yet another provision for that.

In discussing subsection (9), the hon. Gentleman suggests that we are being too soft and allowing people unnecessarily to keep the proceeds of crime. The provisions in subsection (9), like those in earlier clauses, are included in order to avoid double counting. The court goes through a process when it originally confiscates the proceeds of crime. It discounts other orders that may have been made subsequently. It may have imposed a fine after the confiscation order was made. It would be wrong if, in revisiting the benefits of the proceeds of crime, the court did not take into account any other orders that the defendant had been required to meet, and the fine imposed on him. We would effectively be confiscating the proceeds of crime twice, through either other orders or the fine imposed at the original confiscation hearing.

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

I am sorry to break the Minister's flow on that point, and I do not want to be difficult by referring back to his previous response to my hon. Friend the Member for Spelthorne (Mr. Wilshire). However, since he discussed subsection 7(b), I have been examining it carefully, and I believe that he is mistaken. Nothing in the words ``may vary the order'' and put in such amount

``as it believes is just''

constrains the direction of the variation. I hope that the Minister and his officials will look again at subsection (7)(b), because the words at the beginning of paragraph (b) do not have the effect that the Minister says they do. The court is given the power to ``vary the order'' by

``such amount as it believes is just''.

The court is not constrained to use its discretion to vary the order in only one direction.

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

We must read all of subsection (7), and not just paragraph (b). It states:

``If the amount found under the new calculation of the defendant's benefit exceeds the amount found as his benefit for the purposes of the confiscation order the court—

(a) must make a new calculation . . . and

(b) if it exceeds the amount required to be paid under the confiscation order, may vary the order by substituting for the amount required to be paid such amount as it believes is just.''

The subsection applies in instances in which the recalculation increases the amount of benefit from the original confiscation, and it allows the court to decide that, if circumstances arise, it might not be just to increase the confiscation order to take in the whole of that increase. I do not believe that the subsection allows the court to decrease the amount from that prescribed in the original confiscation order.

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

The Minister is right to say that we must consider the whole of subsection (7), which prescribes the only circumstances in which the court may vary the amount found as benefit. If the court is given the power to vary the order, and to decide that the amount to be paid is just, its final decision is not constrained, whatever circumstances led it to make the calculation. That is my point.

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

The power given to the court begins only when the defendant's benefit exceeds the amount that must be paid. In any case, the clause is not intended to allow reconsideration of whether the amount should be decreased.

The hon. Members for Orkney and Shetland (Mr. Carmichael) and for Beaconsfield (Mr. Grieve) have shown their combined expertise at redrafting on their feet. I do not know why we bother to employ parliamentary counsel when Opposition Members are so talented. I do not believe that the clause allows courts to reconsider whether the amount should be decreased.

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

Despite the combined capacities of the hon. Member for Orkney and Shetland and myself, we do not pick up on every point. My hon. Friend the Member for Surrey Heath (Mr. Hawkins) made a good point. It is clearly implicit in subsection (7) that an upward variation is intended, but there is a provision that the variation need not extend to the new amount: it could be somewhere in between, if that is considered just. He is right to say that, on the face of it, subsection (7) could be read as stating that if the amount under the new calculation exceeds the amount found as the defendant's benefit, the court has the unfettered power to vary the amount and move it up or down. That was a good point that the Minister might bear in mind, because no one in the Committee expects the amount to be adjusted downwards.

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

It is good to hear that no Committee member would expect that result. I wonder whether the hon. Gentleman has the agreement of all Opposition Members on that, including the hon. Member for Cities of London and Westminster, who has come up with some interesting views in Committee.

I am more than happy to look over the clause with my officials to check that it says what I believe it to say, and that a downward variation cannot arise.

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

That is helpful, but the Minister should understand that my hon. Friend the Member for Beaconsfield and I are only trying to clarify the subsection. My hon. Friend the Member for Spelthorne made a good point. We want the clause to do precisely what the Minister wants it to do. We are not trying to weaken subsection (7)—we want to make sure that it operates correctly—but we genuinely believe that it contains a trigger and a power. The trigger makes the way in which it should operate implicit, but not explicit. The power is clearly unfettered—it is in the words.

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

On this occasion, I absolutely and unequivocally accept the hon. Gentleman's reassurance that he has no intention of changing, softening or weakening the Bill. He is merely trying to ensure that it works as intended.

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

I am not sure whether that was dissent from the Back Benches. [Interruption.]

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. There is a lot of conversation going on, but we are trying to listen to the Minister. Hon. Members who wish to have private conversations may do so outside the Room.

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

Thank you, Mr. McWilliam, for your protection from my hon. Friend the Member for Glasgow, Pollok. It is much appreciated.

Subsection (11) states:

``In deciding under this section whether one amount exceeds another the court must take account of any change in the value of money.''

After requiring the court to take into account the original proceeds of crime and any interest and benefit that may have accrued from investment, it would be strange and very unfair to not encourage it to take account of changes in the value of money. There are two sides of the coin when updating the decision with regard to benefits that the defendant may have accrued through the investment of his proceeds and the downside of time having elapsed.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

I can well understand why, having bowled the Minister some tricky and technical questions, the way in which I posed the last one may have slipped his mind. I do not disagree with him. I accept that there should be adjustment. However, the simple reference to a change is inadequate. The way in which it is taken into account and method used to calculate inflation should be in the Bill. I did not disagree with the principle, but said that the Bill was insufficiently clear to achieve the Minister's intention.

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

It might be difficult to spell out in the Bill exactly what the court must do to calculate the revaluation. I will consider what the hon. Gentleman said, but it would be difficult to lay down a set of proceedings that the court must follow when calculating movements in the value of money. The court must try to be just when updating the decision, and subsection (11) provides for that. I will consider whether there is a way of spelling out the calculation that would not lead to injustices that no hon. Member wants.

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

Does the Minister not agree that we have already examined investments, which would clearly be caught? Likewise, the Bill contains a provision on interest. What does the Minister envisage would be caught by subsection (11)? No doubt, when examining investment, there would be a freeze on various guilty defendants' accounts on which a confiscation order was made. I appreciate the time that would be taken between the freezing of an account and a final judgment and reconsideration of benefit. We may say that interest has accrued over a matter of months or years on a defined account, and there may have been a range of investments that, dare I say—

Photo of Mr John McWilliam Mr John McWilliam Llafur, Blaydon

Order. The hon. Gentleman has dared to say too much. That was a very long intervention.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department 5:00, 27 Tachwedd 2001

We are considering an application that is made for a review order to reconsider benefits because evidence has come to light to show that the benefits of the proceeds of crime were higher than originally discovered. Who knows what the convicted person has managed to do with that money in the preceding period? We are talking about moneys that arose as a result of the original conviction, but are only discovered later. We are trying to take into account all the proceeds of crime—but no more. To do that, we ought to be able to take into account what the defendant has been able to do with that money to appreciate its value—and if it has depreciated, we should take that into account.

If we cannot do both those things, we are in danger of committing a great injustice. As the hon. Member for Spelthorne has pointed out, subsection (11) enables us, in the overwhelming majority of cases, to take into account the depreciation that might have occurred. However, any depreciation will have been considerably less since the Labour party came to power, than it was under the preceding Conservative Government.

I have tried to cover all the points that have been raised, and I hope that the explanations that I have given have been satisfactory.

Question put and agreed to.

Clause 22 ordered to stand part of the Bill.

Clause 23 ordered to stand part of the Bill.