I beg to move amendment No. 274, in page 49, line 14, leave out 'obtained' and insert 'transferred'.

With this we may discuss the following: Amendment No. 275, in page 49, line 14, at end insert

', unless such a person can establish on the balance of probabilities that he is a bona fide purchaser of such property without notice that the property was obtained by the defendant as a result of or in connection with his criminal conduct.'.

Clause stand part

Amendment No. 276, in clause 81, page 50, line 22, leave out 'the greater of'.

Amendment No. 277, in clause 81, page 50, line 25, at end insert 'or'.

New clause 5—Value of tainted gifts: variation—

'If the value of a tainted gift is found to be greater at the date the property was given than at the date the value of the property was found, the difference in such value shall be recoverable from the defendant but not from the recipient of the gift.'.

A series of questions arises under clause 78, and I drafted several amendments to highlight an issue that the Committee needs to consider. Let me start by considering the clause generally. It covers gifts

and their recipients, and of course the intention is that tainted gifts should be confiscated. There is no problem with that. If someone gives someone else a tainted gift, it is right and proper that it should be confiscated.

I am, however, anxious about subsection (1), to which amendment No. 274 relates. That subsection states:

''If the defendant transfers property to another person for a consideration whose value is significantly less than the value of the property at the time the defendant obtained it, he is to be treated as making a gift.''

This is about the circumstances in which a transfer has taken place for value. Let us suppose that a person obtains an asset illegally—it is the proceeds of crime—and at a subsequent date he sells it to a third party. For the moment, I ask the Minister to assume that the third party is an innocent third party, because that is important. If he were not an innocent third party, I would not be very concerned, and the stuff could be confiscated. However, as I read the impact of subsection (1), the valuation of the asset is the value at the time when the defendant obtained it, not the value at the time when he transferred it for value to the third party.

Once we have that in mind, it is not difficult to appreciate that the innocent third party may legitimately buy an item, say a chattel, that was worth £5,000 when it was obtained as the proceeds of crime by the defendant, but was worth only £2,500 according to market value—values do go down—when he transferred it for value. However, its value as a tainted gift in the hands of the recipient will be the value at the time when the defendant obtained it.

Moreover—this leads to the subsequent amendments—for the purposes of confiscation from the third party, the value that is attached to the item is the original valuation. Therefore, the third party will have to hand back not only £2,500, but an extra £2,500 out of his own pocket, even though he was completely innocent of any wrongdoing. That is unfair and completely barmy. I cannot believe that that is what the Government intend. We shall have numerous examples of individuals who obtain from defendants for perfectly straightforward and correct value items whose value is lower than it was at the time when the defendant originally obtained them. I tackled that first in amendment No. 274, by seeking to replace ''obtained'' with ''transferred''. The intention is that the valuation for purpose of recovery from a third party should be carried out as of the date of transfer, not the date of obtaining. Amendment No. 275 would qualify the clause, if accepted—it is an alternative—and highlights the fact that we are concerned only with an innocent third party.

I suggested that new clause 5 could be tagged on. I am mindful that the Government wish to recover the proceeds of crime and do not want to let the defendant off the hook. If that is what the Minister is worried about, I am perfectly prepared to allow the director to recover the balance between the value of the item obtained and its value at the date that it was

transferred from the defendant, but I am not happy about the Government recovering it from the innocent third party to whom the transfer was made.

Can the hon. Gentleman clarify one matter for me in respect of amendment No. 275? I recognise the phraseology from certain equity and land law books. Normally, the third party is referred to as the bona fide purchaser for value. What relevance is there in his refusal to include the words ''for value'' in his formulation?

Subsection (1) says:

''If the defendant transfers property to another person for a consideration''.

As ''consideration'' was referred to earlier, there seemed to be no point in using ''for value'' later; it is as simple as that. I agree with the hon. Gentleman about what normally appears; I did not intend to remove the concept of its being for value. If it is thought that the words ''for value'' ought to appear, I would be the last person to stand in the Minister's way. Indeed, he could reject the amendments and the new clause and redraft the clause; it might be better to do so. I claim no great drafting expertise, particularly with respect to equitable concepts.

The amendment's aim is simple: a reduction in value between the date property is obtained and the date it is transferred for value to an innocent third party should not be recovered from the third party. Clause 78 allows that—or can the Minister persuade me otherwise? I fully accept that it would be perfectly proper to recover the difference in value from the defendant if funds are available over and above the confiscated assets. However, an innocent third party should not suffer. The best thing that I can do now is listen to Minister's comments on the matter; we may be able to prolong the debate, if necessary.

The amendments would provide that the test for valuing any gift made by the defendant should be at the time the property was transferred to another person, not when the defendant first obtained it. Under amendment No. 274 read with subsection (2), where the defendant transfers the property for significantly less than the value of the property, the recipient would not be penalised if the value of that property subsequently depreciated.

Amendment No. 275 would do much the same in a different way. It would place the onus on the recipient of a gift to show, on a balance of probabilities, that he was a bona fide purchaser of the property without notice that the property was obtained by the defendant as a result of, or in connection with, his criminal conduct. It is a similar concept to one in part 5 on civil recovery.

These definitional clauses have been carried forward from previous legislation. Under the Bill, as under existing legislation, a gift is, in so far as its recipient is concerned, exactly what it says it is. It is property for

which the recipient has given no or inadequate consideration: the whole justification for recovering it is based on that fact.

I acknowledge some unfairness in the operation of the clause. Even if the other assurances that I have given to the hon. Gentleman come to naught, we may be heading for agreement on Grieve amendment mark 3 here. As he pointed out, the starting point of clause 78 is the value of property when the defendant first obtained it, not when it was transferred to a third party for significantly less than its full value. I am inclined to agree that the valuation of a gift should apply when the defendant transferred that gift to a third party.

The clause takes no account of any subsequent depreciation in the value of the property after transfer. An innocent purchaser of a car, for example, could be worse off if there were depreciation, so I sympathise with the hon. Gentleman's theory. In giving the matter further consideration, I have no desire to provide a loophole whereby the defendant or the gift recipient engaging in criminality escape confiscation. The point should be examined further, and I firmly undertake to do that if the hon. Gentleman withdraws the amendment.

May I ask the Minister for clarification of two points? If someone has done a Grieve and sold the asset on, to what extent will the degree of innocence be examined? If someone buys a gold Rolex for £5 in a pub, surely his innocence is in doubt. Secondly, will he explain the position on transfers to members of one's family? It is frequently discovered that a major criminal has no assets whatever, as he has transferred everything to his wife's name. Are such transfers included within the concept of tainted gifts?

They certainly are, and we can further clarify the point when we reach later amendments. My hon. Friend is right that that is a widely used method of placing assets beyond confiscation and we must guard against it. However, the hon. Member for Beaconsfield is largely correct, so the Bill probably needs to be changed along the lines that he suggests. We must examine that rather than automatically accepting his drafting.

I apologise for intervening. I should also have commented on amendments Nos. 276 and 277, which relate to clause 81, but I was so hooked on clause 78 that I did not discuss them. Those amendments are consequential and suggest a possible way of approaching the value of tainted gifts. I was conscious that if new clause 5—or something along those lines—was accepted, my anxiety about the effect of my probing amendments, which have potential downsides and would reword clause 81, would be unnecessary.

I am glad of that clarification. I was not going to be as kind to the subsequent amendments as to those that we have discussed. Is the hon. Gentleman indicating that he does not intend to insist on the amendments if we examine the issue that he raised? I understand his point, he made it well and we must examine the matter.

The Minister has responded sensibly and constructively to the amendments. I agree that there was a problem.

There is an argument about the £5 watch in a pub. However, the question is about the intention and motivation of the person who obtains the goods. If the person genuinely believes that the goods are not stolen and that the transaction is above board, why should he or she be penalised? That would not be the case with a £5 Rolex watch. Someone may have received Railtrack shares that would have significantly decreased in value over time, and doubtless would continue to decrease after they had been obtained. It is almost sharp practice to sell a person Railtrack shares, although that is not covered by the clause. However, there is a question about innocence of motivation when a person obtains goods.

Throughout our proceedings, the Minister has been constructive and has undertaken to examine bits and pieces such as this clause. He half said that he would examine a matter that I raised this morning. Can he give us a list of the matters that he is examining—I am losing track—and say how he aims to return to them?

My extended resource is keeping a list of all of those matters. I am trying to give people a fair indication of the degree of sympathy that I feel with points that are raised. I will return to the Committee after examining all such points. I am not intending to dip into matters that were raised during discussions on part 2 before we have concluded our consideration of that part. We will try to ensure that all points are addressed. The current point must be examined. In the absence of the hon. Member for Spelthorne, we need not waste any more time, which will annoy him on his return.

I am grateful to the Minister. I reassure the hon. Member for Glasgow, Pollok because, as the hon. Member for Lewes said, the amendment would not prevent the court from examining critically the transaction that he described.

I genuinely appreciate the hon. Gentleman's point about changes in value. However, we cannot live with amendment No. 275 for two reasons. First, he cannot insert the full value formulation of equities in his amendment because the trigger is a transaction significantly less than full value: the £5 Rolex. Secondly, the amendment does not address constructed notice, rather than actual notice.

The hon. Gentleman may be right. My failing—or advantage—was that I approached the matter after deciding that I did not like the provision. I took a blunderbuss approach. I drafted a series of amendments that do not all necessarily tackle the issue. The more I consider the matter, the more I prefer new clause 5.

Amendment No. 275 would protect the purchaser from the full rigour of subsection (1) if he could prove that he had acted in a bona fide way. In those circumstances, an alternative framework would have

to be available. I have set out to provide that framework in new clause 5, which states that the difference in value

''shall be recoverable from the defendant''.

I take the hon. Gentleman's point about constructed notice. There may be a fault with my drafting, but I repeat that I intended to protect a bona fide purchaser for value.

With the greatest respect, that is where the error occurs. The person cannot be a purchaser for value because of the introductory words to the clause.

I disagree. The introductory words to the clause—I assume that the hon. Gentleman means subsection (1)—

I refer to the words:

''consideration whose value is significantly less''.

Yes, but let us reread subsection (1), because the hon. Gentleman may be right, but I am not sure that I follow his point. It states:

''If the defendant transfers property to another person for a consideration whose value is significantly less than the value of the property at the time the defendant obtained it, he is to be treated as making a gift.''

Let us take an example. A defendant obtains £1 million as the proceeds of crime. On the advice of Sotheby's, he purchases a painting that he believes is worth £1 million. It is subsequently discovered that the painting is not a Rembrandt but a copy and he sells it for £100,000 to a third party. The third party has the bona fide belief that £100,000 is the painting's true value. Indeed, that may well be the painting's true market value at the time that it is sold. The third party falls liable to reimburse the balance of £900,000 to the director on confiscation.

Apart from the fact that the hon. Gentleman's example is a tad contrived, is not he misinterpreting the meaning of the word ''value''? In his example, surely the value of the painting at the time that the defendant bought it would be £100,000 regardless of the fact that he paid £1 million for it.

I do not think that that is right at all. It is perfectly possible for a chattel to have a value based on people's estimation of it, and for people not to give it the same value later. It is still the same chattel.

Let us leave aside decisions about whether the painting is a Rembrandt. Take Sir Lawrence Alma-Tadema, whose paintings sold for thousands of pounds when he painted them. Some 50 or 100 years later, they were worth virtually nothing. In the 1880s, a painting by Alma-Tadema sold for £5,000 or £10,000, which was a colossal sum in those days. In the 1950s, it could have been picked up in the sale room for a few hundred pounds, and anybody who had been sensible enough to buy it would have discovered that, by the 1970s, it was worth hundreds of thousands of pounds. That is how that article has fluctuated in value. That

may be an extreme example, but it is not difficult to think of numerous kinds of property assets that might fluctuate similarly.

If someone has purchased such a property for the value that was appropriate at the time that it was transferred to him, and provided that he was unaware of the—if I can use the expression—funny money origin of the assets of the defendant, so that the purchase was not a linked transaction that in some way connects him to the criminality of the defendant, he should not be penalised; and yet, the clause, possibly unintentionally, does exactly that.

An alternative view is that that is deliberate. Does my hon. Friend agree that that might be the case—that, to retrieve the assets, there might be an intention to target the recipient of a gift?

The hon. Member for Wellingborough (Mr. Stinchcombe) should be reassured that we are not talking about anything other than a bona fide transaction having taken place between the initial defendant and a subsequent purchaser. However, the clause might be intended to sweep up someone else, who may have deep pockets, into the confiscation procedure, so that those pockets can compensate the state, in view of the fact that there has been a reduction in value between the time when the defendant obtained an asset and when it was transferred to a third party.

My hon. Friend may be right. The Government have attempted rigorously to plug every conceivable loophole.

I wish to mention, in passing, that it is remarkable that, in the explanatory notes, clauses 77 and 78 are lumped together, and that nothing is really said about clause 78. That makes me think that, at the time when the explanatory notes were composed, the full implications of what was seen as a follow-on clause to clause 77 were not fully examined. I do not know whether that is the case, but it is a possibility.

I wish to flag up another issue, if only to dismiss it from my own mind: the provision is also fairly draconian with regard to the defendant. Someone might obtain £1 million as the proceeds of crime, which he then invests unwisely so that he loses it, but under the terms of the legislation, if he transfers the asset, he is still liable to repay the original amount. That illustrates the rigour of the legislation that the Minister has introduced, and I do not wish to stand in his way. However, it means that there will be occasions, particularly if new clause 5 is adopted, when somebody who might have obtained £1 million through tainted money could find, at the time of the restraint order and the confiscation, that the money has hugely diminished in value, through no deliberate action on his part, but that he would, nevertheless, stand to pay the original amount valued at the date that he obtained it.

Let us try to be clear about the issue before we move on from it. I do not wish to speak for long, but the hon. Gentleman said that the amendments were a blunderbuss, because he did not like what he saw in the Bill. I accept that he felt that he had to use that weapon to deal with that.

However, we should not allow for the depreciation of the value of a tainted gift after it has been transferred, nor should we preclude the appreciation of the value of a tainted gift after it has been transferred or introduce a difficult mechanism that requires the prosecution to prove the date of the transfer. I fully accept the point about the value changes that occurred before the transfer. The hon. Gentleman has a genuine issue there that we need to address. However, I do not agree with his other points.

I understand what the Minister said, and his point that the argument should be widened. The Committee needs to be aware of what is being proposed. Let us take the example of a tainted gift. A criminal obtains a large amount of money and buys a painting that he believes, at the time, is worth £1 million. He gives the painting to his daughter. However, it transpires that he has made a bad investment and at the time of the confiscation proceedings the painting is valued at only £100,000. How will the shortfall be made up? Is the painting handed to the director so that he can sell it, or do we say to the daughter, ''Terribly sorry, when your father gave you that painting it was reckoned to be worth £1 million. Please stump up £900,000''? I apologise for not touching on the matter previously, but the wording of clause 77 could produce such a result. No doubt the use of discretion would prevent a person from being unjustly penalised, although the Minister may say that, if a person accepts a tainted gift, it is that person's problem. Unless the burden falls back on the defendant, the provision could be unfair.

In the case of a tainted gift, we should not allow the recipient not to be liable for its value and for any subsequent appreciation in price, nor should we allow the recipient an argument about any depreciation. The defendant should not be able effectively to remove from his assets the full value of his criminal gain. The full value should fall on the defendant. If the hon. Gentleman thinks that draconian, I have to disagree with him.

Providing that the burden does fall on the defendant, I see the logic of the Minister's argument. Indeed, when addressing the matter of gifts, their recipients and the bona fide purchaser under amendments to clause 78, I drafted new clause 5 specifically to allow the difference to be recovered from the defendant.

The issue is wider than simply a transfer made for full value. There is also an impact on the valuation of a tainted gift. That brings me back to amendments Nos. 276 and 277, which I tabled to clause 81. I did not develop my argument, which is to offer the court an either/or option when the gift is valued. I want to leave aside for one moment a sale because that has a slightly different dimension.

Let us suppose that we are dealing with the matter of a tainted gift in a straightforward way. The defendant transfers a block of shares worth £1 million to his son, daughter or wife, but by the time the recovery procedure is complete, the shares are valueless. As the regulations stand, it is not a matter of the shares being handed to the director. It is a matter, potentially, of the value of the shares being reclaimable not from the defendant but from the person who received them. That is draconian legislation. It may be fair, it may be what the Committee wants, but it could have an enormous impact. I suggest to the Minister that, in circumstances where it could be argued that the recipient of the gift is innocent of knowledge, it could be suggested that people are being treated with hideous unfairness. Rather than handing back what they have, in reality, been given, they are being asked to compensate the director for the loss in value of the share, chattel or item between the date when they were given it innocently, and the date when they have to return it. The Minister and the Committee may wish to look carefully at that area, and consider whether that is what the Government think is necessary to deter criminals. Innocent victims will be ruined by this procedure.

Order. We are going around the same course on this debate. In all fairness to other business, we should try to conclude it.

The hon. Member for Beaconsfield spoke movingly about the problems faced by those who hand over £1 million of shares to members of their family. That is a dilemma that many of us have mercifully been spared. However, I am prepared to accept that the Conservatives live in another world. The amount of time that they have spent on this matter shows that they recognise that many of their people are likely to be affected.

May I spell out the effects of what has already been described as a Grieve but can also be described as doing a Dominic? If one does a Dominic, one gets £1 million, makes a bad business decision and loses £750,000 in value, so only £250,000 is left. There seems to be a suggestion that, in some way, that might be written off, and the criminal would not be responsible for repaying the full £1 million. The hon. Member for Beaconsfield seemed to be singularly exercised by that, and we should clarify whether he is more concerned about the victims of the crime in the initial instance or about the loss of value to those who committed the crime. It was especially noticeable that he chose to refer to Sotheby's, which, as I recall, is currently in court because of various crimes that it committed in conjunction with Christie's—market rigging and rigging of charges, if I remember correctly.

The hon. Gentleman and I move in disparate circles, so I am prepared to accept his word on such matters. I am reminded of the words of Woody Guthrie:

''Now as through this world I ramble

I see lots of funny men,

Some will rob you with a six-gun

And some with a fountain pen.''

The loss of value has a great deal to do with the value that people put on a particular good. As I understand it, the whole business of the Cities of London and Westminster is based on selling people things that are only worth what the person buying them thinks that they are worth, in order to turn a profit, so once we start unscrambling the question of knowledge at the time of purchaser's sale—

On a point of order, Mr. O'Brien. Is it in order to wander off into what the City of London may or may not be doing, which has nothing to do with the proceeds of crime?

I am just looking at the clause. The debate is being widened tremendously. Will the hon. Gentleman conclude his remarks?

If I was committing a Spelthorne, I apologise. Lectures on diversionary tactics are more appropriate from some hon. Members than from others. However, it seems to me that the whole question of price, value and millions of pounds purchased in shares plays a key part in the City of London's relationship to the matter. With your agreement, Mr. O'Brien, I shall rest on that point. I hope that those who do a Dominic in future will bear it in mind that if they make bad business decisions, and there is a loss of value in their £1 million of shares, they, and not the taxpayer, will be required to meet the loss.

You were absolutely right, Mr. O'Brien, to say that we are making heavy weather of this issue, and it is becoming increasingly complicated. It is an important issue, and I shall try to do as you ask. I accepted that the hon. Member for Beaconsfield had a point with his first two amendments, and I agreed to consider them. I also said that I had no desire to provide a loophole whereby the proceeds of a criminal act, whether in the hands of the defendant or in those of the recipient of a tainted gift, would escape confiscation. I am sure that members of the Committee are aware that the most widely used method of putting the proceeds of crime beyond the reach of the forces of law is that seemingly innocent persons have the moneys transferred to them.

That issue must be covered thoroughly, so as not to provide a gaping great hole in the Bill that will put much of the value of the proceeds of crime beyond confiscation. I shall consider the points that the hon. Gentleman raised on his first two amendments, but I shall not open the way for such abuse, because that is almost always the first direction in which a criminal looks to hide his proceeds. His wife, daughter or son can clearly be categorised as innocent.

I agree with the Minister in that I am not getting carried away about the tainted gifts. I do not have the sort of lifestyle in which £1 million worth of shares is handed down in the family, without any idea of where the money came from. However, I was being convinced by the argument of the hon. Member for

Beaconsfield about someone innocently buying property. I do not mean pieces of art, but something like a car could be passed on within six months, and that would genuinely have lost value. As we know, cars lose value the day that they hit the road. An innocent person may become involved with such goods. I am reassured that the Minister will reconsider that matter, and I just wanted to put my car example into the pot.

We are thinking about tainted gifts—property that is transferred for sums significantly below its value. Criminals will look for seemingly innocent people to transfer their property to and put it beyond confiscation, and we must be mindful of that. I do not know whether we can draw our debate to a conclusion. It is mainly up to the hon. Member for Beaconsfield. I shall reconsider his first two amendments, but we cannot afford to open up the sort of loophole that has been suggested.

I shall be brief, because we have already gone round and round on this subject. As can be seen from the guidance notes, clauses 77 and 78 have been linked together. I appreciate that the Minister will reconsider two of the amendments outlined by my hon. Friend the Member for Beaconsfield. A decision must be made about what we are trying to achieve under clauses 77 and 78. The Government's view is that they want to get back the moneys in toto in respect of tainted gifts, and gifts that may not be tainted, too, when recipients or defendants have larger pools of money.

I know that my minority view will outrage the hon. Member for Glasgow, Pollok, but I am even worried about what will happen when it is clear when the proceeds of crime have diminished. In effect, we could say to a defendant, ''Here is a pot of legitimate assets, which we can now take from to make up the money that has been lost because the proceeds have diminished.''

Would the hon. Gentleman take the same view if the proceeds were diminished by someone who had gambled them on the horses, as opposed to someone who had made a bad investment, or would he take the view that that person had enjoyed the benefit of the proceeds, even if they had not derived financial gain?

That is a good point. There is a distinction between the hon. Gentleman's illustration and a more general example of a sheer diminution of assets.

I accept the Government's point of view on the subject. I felt an instinctive unease at the idea of saying to a defendant, ''You have two pots of money, a legitimate one and an illegitimate one. When the illegitimate one begins to diminish we can transfer to the legitimate pot.'' When one considers defendants who are benefiting from the proceeds of crime—I am sure that the hon. Member for Glasgow, Pollok will rise to his feet at this point—it is difficult to say that there are really two distinct pots of money. None the less, I hope that I have made my point.

There are points of principle that are particularly worrying for innocent third parties. I am greatly concerned that the Government may use the provisions in clauses 77 and 78 purely to maximise the amount of money confiscated from the proceeds of crime, and I am concerned that they may turn to innocent third parties to top up that sum when it has been diminished. I hope that the Minister will respond to that point.

I listened to the hon. Member for Beaconsfield's point about the depreciation of shares—but what would happen if a criminal had made a substantial amount of money, and in trying to render it beyond confiscation, transferred it in Marconi shares to his daughter at the start of the year, when they were worth £12 each? The shares are now of no value. It would be unfair to say that his daughter should be liable for anything other than the new value of the shares, and we could not return to the defendant, who would effectively have hidden all the proceeds of his crime, or at least a large part of them.

That is entirely fair, from the Minister's point of view. It is difficult to suggest that a family would necessarily be an innocent third party, but an entirely innocent third party may happen to have large assets, and the Government could look upon those assets as a legitimate pool from which they could grab money.

I notice that the heading of clause 78 is ''Gifts and their recipients'', not ''Tainted gifts and their recipients''. It is clear that the clause is not confined to tainted gifts, which are dealt with in clause 77.

Will the hon. Gentleman will clarify a question about gifts? Surely an innocent party who receives a gift will wonder, ''Why am I being given this gift? Why is this person giving me £1 million out of the blue?'' If there is some obligation—a relationship, perhaps—the third party may be innocent. However, it seems unlikely that any innocents would be involved.

Does the hon. Gentleman really suggest that if a person passes £1 million on to someone who puts the money into shares that fall in value, no one is responsible for repaying the original amount? If the £1 million in the form of Marconi shares given to the defendant's daughter becomes worth £100,000, and that amount is retrieved from the daughter, does no one have an obligation to make it back up to £1 million? If that is what the hon. Gentleman is saying, I should be grateful if those on the Conservative Front Bench would clarify whether they are as united on this question as they say they are on everything else.

Mr. Field rose—

Order. We are now discussing the ramifications of the issue with which we started. It is time that we brought the debate to a conclusion.

May I reply briefly, Mr. O'Brien? The presumption that the hon. Member for Glasgow, Pollok makes is that if the daughter had £900,000 of her own assets, independently, those assets should be fair game for the director to grab. I would be deeply

concerned if we were talking about an entirely innocent third party, because, under the clause, if there is a difference between the value of an asset when it is obtained by the defendant and its value when it is transferred at a later stage, there is an assumption that a gift has been made. The ramifications of clause 77 therefore come into play.

I am sorry to have gone into such great detail about that, Mr. O'Brien, but I was merely trying to gain an understanding of precisely where the Government are coming from. Do they regard those clauses simply as a means of getting back as much money as possible when there has been a diminution in value? Alternatively, will they try to clarify the position of a class of innocent third parties, whose assets should be free from the threat of being taken away under those provisions?

I shall draw the debate to a conclusion and withdraw the amendment, especially in the light of the Minister's comments. I am grateful that he will consider the matter again. I also want to apologise to the Committee, because one of the reasons why we went round the houses was that at first I limited my comments to the question of transfers—the sale of property. I almost persuaded myself that my anxieties, which I had tried to flag up in connection with my amendments to clause 81, were unjustified.

Ironically, as the discussion progressed I started to come to the conclusion that my anxieties, which had prompted the amendments on how to value tainted gifts—whether made by sale or by handover—were justified, and at least merited some thought. However, I appreciate that the Minister disagrees with me about that. I am also conscious that because I chose examples involving paintings, Sotheby's and so on, the Committee may regard the problem as one confined to wealthy people. For the benefit of the hon. Member for Glasgow, Pollok, I shall now give an example of a problem that might be brought to his constituency surgery.

Let us suppose that an elderly housebound grandmother in council accommodation in his constituency has a grandson who, unknown to her, is a drug dealer on the streets. However, he is still quite nice to granny, and he turns up to give her gifts such as a digital television set for her drawing room—[Laughter.] In my book, it is called her drawing room. There will come a time when the grandson is pursued and convicted of offences, and the director comes looking for his profits.

The grandson is precisely the category of offender who, as the Minister has explained, will be one of the targets—not just the Mr. Bigs but the people driving their expensive cars round the housing estates in the constituency of the hon. Member for Glasgow, Pollok. The grandmother will be informed that she has been given a tainted gift. As she is a law-abiding woman, she will be horrified, and say, ''Take the thing away.'' However, the director, through his prosecutor, will say, ''I'm terribly sorry but I can't just take the digital television away, because it isn't worth half what it was when it was given to you. I'm afraid you will have to compensate the fund for the difference between the realisable value of this television set today and its value

at the time you got it.'' That may well spell her ruin and the disappearance of all her savings. The hon. Gentleman will find that that is a problem that could come over the doorstep of his constituency surgery, unless the director exercises great discretion, which he may. This is not only about wealthy people.

I apologise for being absent from the Committee, but constituency problems tend to crop up when one does not want them. I hope that the point that I am about to make has not already been made.

A further example on which I would appreciate comment is charities. A criminal may just have a conscience, and when the authorities are close to catching him, he may decide to give substantial amounts of shares to charities. Many charities will keep shares as a source of income. If many Marconi shares were given to the Salvation Army, would it have to sell some of its other assets to meet the call on the funds that it received in all good faith? We must reflect on what will happen to charities if they become liable.

My hon. Friend makes a perfectly sound point. In exactly the same way, the charity may have not only to hand back the shares but to make up the difference in value.

I am grateful that the Minister has been swayed by my arguments about sale. However, after our discussion, the issue may develop further than that and address tainted gifts generally. Although I appreciate that there is an obligation on us to close loopholes and ensure that people cannot get away with transferring assets through tainted gifts—I fully accept that that is a classic way of dissipating proceeds—innocent third parties who have received gifts or made purchases could be substantial losers, in a way that the public may consider unfair.

As the Minister will be aware from my new clause 5, I am happy with the notion that if such a shortfall exists, the burden should be on the defendant to make it good. I am worried that the innocent third party should not have to make good the amount if he or she was innocent at the time of receiving the gift or making the purchase, and was willing to return the value of what was held at the time of the demand. I urge the Minister to examine both examples. Although the situation is most acute in the case of a purchase, because of the potential difference in value between the date of obtaining the asset and the date of sale or transfer, the problem exists equally with a straightforward gift to an innocent third party. I cannot believe that the Minister or director will want to claw the value back from the innocent third party in a manner that may place them under an acute financial burden.

I hope that the Minister will consider both examples and let me know what he plans to do, because we must return to the issue on Report. I am grateful to him for listening carefully, and for the Committee's indulgence for my describing sitting rooms as drawing rooms. I am willing to withdraw—

We are, of course, hugely worried about prolonging this discussion, Mr. O'Brien—but I must clarify the situation. The hon. Gentleman must realise that in many circumstances it is no good transferring the liability back to the defendant, because he will have nothing more to confiscate. Therefore, we would potentially open up a loophole. I am determined that we will not do that.

I understand the Minister's point, and there are two possibilities. The first possibility is that defendants own legitimately acquired assets as well as the assets that fall to be confiscated. In those circumstances, I accept that the likelihood is that the proceedings will completely clean defendants out. However, under new clause 5 as I have drafted it, if a defendant has anything left over, I would expect the director to be able to look to that fund to make good any shortfall. As has been said, the director would be able to look to such assets if there were a shortfall in the amount that he could recover.

However, let us suppose that that is not the case; let us imagine that the defendant has not got a penny left, and has transferred to an innocent third party an asset that, although it is recoverable, has substantially diminished in value through no fault of the third party. Does the Minister think that it is fair that in such circumstances the innocent third party should make good the shortfall?

The same question was asked more than an hour ago, and I do not intend to allow that discussion to be reopened. The hon. Gentleman must decide whether to withdraw the amendment.

I decided some time ago, but the Minister's intervention prompted me to make a further comment. I am grateful to him for listening, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 78 ordered to stand part of the Bill.