Amendment proposed [this day]: No. 426, in page 186, line 11, after 'he', insert 'knowingly'.—[Mr. Hawkins.]

Question again proposed, That the amendment be made.

I remind the Committee that with this we are taking amendment No. 428, in clause 323, page 187, line 2, after 'he', insert 'knowingly'.

I want to continue with the points that I was making this morning. I regret that the hon. Member for Surrey Heath (Mr. Hawkins) was not here to hear me start. I see that he has now arrived. Better late than never, I suppose.

Will the hon. Gentleman reconsider that judgment?

It is better never late, I suppose. I am particularly glad to see the hon. Gentleman. He was not able to join us in our deliberations this morning. Only one of the three Liberals was present this morning and only one is present this afternoon. I wonder why they did not accede to the Scottish National party's request to have a Member on the Committee.

Perhaps I can assist the hon. Gentleman. The reason is that we could not accede to a request that was not made.

Goodness me, I find that difficult to believe. Are you seriously telling me that the SNP did not ask for a place on this serious Committee?

Order. As the Chairman of the Selection Committee, it would be improper for me to tell you that.

Goodness me, who can I ask in those circumstances? The hon. Member for Orkney and Shetland (Mr. Carmichael) is telling me that the SNP did not ask for a place on the Committee and the Chairman is telling me that he cannot say.

The hon. Gentleman was referring to my fractional lateness. I understand from my hon. Friend the Member for Beaconsfield (Mr. Grieve) that I missed only about

three words of the hon. Gentleman's opening remarks. I am probably no later than he and I both are when we try to catch passes when we play for the Lords and Commons rugby team.

Order. Before we continue in that strain, the question of whether it is better to be late, even ''knowingly'', is not in order, as the amendment applies only to the words in the Bill.

That is an excellent point, Mr. McWilliam.

I shall be exceedingly helpful to the hon. Gentleman. He asks whom he should contact regarding vacancies on the Committee. The system has changed and the Whips Office now looks after the minor parties, so he should address his question there.

Mr. Davidson rose—

Order. That is not about the amendment.

Thank you, Mr. McWilliam. I thought that I was being called to order before I had even spoken, which would have been a record even for me.

I should like to consider the point about the SNP not having asked for a place on the Committee. That seems scandalous, and hon. Members may wish to return to the subject in due course.

I was speaking about the fact that the Conservative party's position on such matters is a disgrace. While it mouthed that it was opposed to money laundering, its actions did not indicate that it took the issue seriously. We must ask whether that is a serious problem that must be addressed. Lawyers, accountants and bankers face a major difficulty that professional organisations have so far been unable to cope with through their internal mechanisms. I was struck by the fact that the hon. Member for Beaconsfield referred to the proposals as tyrannical, which seems a trifle over the top. We must remember that we are dealing with professions that pride themselves on their standards of professional ethics and schemes of self-government. [Interruption.] It must be absolutely clear that when huge sums are under account such schemes of self-government are effectively worthless. [Interruption.]

Order. There seems to be more than one meeting going on in the Room this afternoon. I should be obliged if hon. Members would listen to the person who has the floor.

Thank you, Mr. McWilliam. None of the conversations that were taking place involved the Liberal Democrats, as there is only one of them.

I can have a conversation with myself.

Indeed. Wherever two Liberals gather, there are four opinions, three press releases and four cracks in the road.

Those schemes of professional ethics are effectively worthless when huge amounts are dangled in front of those involved. Lawyers, bankers and accountants cannot be trusted to police themselves. In the past few years, they have spent more time in self-congratulation than self-investigation, and in such circumstances the Government must act.

I read the other day that

''solicitors are considered a soft target by fraudsters and money launderers because they lend legitimacy and respectability to illegal transactions''.

[Interruption.] Am I being heckled by the Liberal, or is he just talking to himself? I am disappointed to interrupt that dialogue.

Monologue.

No, there are two of them—he is schizophrenic—and that was probably Orkney talking to Shetland, having a vicious internal dispute.

Order. As long as the hon. Gentleman does that in English and not Norse, we are all right.

Either way, I suspect that we would have difficulty understanding him.

That quotation is from the Law Society's website, which issues several instructions to lawyers that are clearly not honoured in every case in practice.

Is the website to which the hon. Gentleman refers that of the Law Society of England and Wales or the Law Society of Scotland?

The Law Society of England and Wales, but it is described as ''the Law Society'', in the same way as the Rugby Football Union describes itself as such even though it is only the English one. That is an egotism of the English that the rest of us are prepared to tolerate on occasion. The Football Association is another example.

On several occasions, the website has said that lawyers should take certain measures. It states that clients should be sent standard phrases in a client care letter, such as

''For the protection of our clients we operate a money-laundering reporting procedure. In certain circumstances, information will be revealed by us to the appropriate authorities in relation to any suspicion of money laundering.''

That seems to be good practice. The problem is that lawyers are not abiding by it.

The website goes on to advise lawyers about things that might cause ''fleeting suspicions''—not the Law Society's phrase, but that of the hon. Member for Henley (Mr. Johnson). The Law Society's advice to solicitors is to ''be alert'' to anything unusual, such as unusual settlement requests, for example by cash or third party cheque, unusual instructions, such as no discernible reason for using the firm, or large amounts of cash, for example holding cash in a client account pending instructions or merely in order to forward to

a third party, or a secretive client who is reluctant to give details of his identity or answer questions about the deal.

The fact that the Law Society must advise its members that the presence of any of those factors should give cause for suspicion suggests that even the society does not trust its own members to reach the right judgment in circumstances in which chunks of money are dangled in front of them.

The Law Society's website rightly and properly deals with the issue, and its alternative interpretation is that it wants to ensure that all proper steps are taken to deal with questions about the funding of organised crime and money laundering. I know that the hon. Gentleman is suspicious of all lawyers, but that is an equally acceptable and proper interpretation of the website. The society is simply trying to ensure that the law—even as it stands under the Bill—is followed properly.

Some people may believe that, but I am not one of them. The implication is that the Law Society believes that its members cannot be trusted to act properly unless they are told what to do. The society also suggests to its members—and I will return to the matter in another context—that they should be ''alert to anything unusual'', such as

''suspect territory (for example, countries where drug trafficking or drug production may be prevalent, or where the banking systems are less sophisticated than in the UK).

If any unusual factors give cause for concern, solicitors should explore the unusual nature with the client to allay concerns or ensure the transaction proceeds as normal.''

The instructions and advice being issued to solicitors are clear, but they are not being abided by. The society advises solicitors to

''Consider adopting a policy. The firm may wish to agree a policy that says sums of more than a fixed amount will not be accepted in cash unless previous authorisation is given. In this way, should cash be offered or if cash is desirable, the circumstances can be explored in good time and the circumstances considered in advance.''

The fact that it has issued those instructions to its members suggests that it is unhappy with the existing arrangements.

As I was reading in bed last Sunday, as I am prone to do, the Journal of Money Laundering Control 1999, volume 3, several sections leapt out at me as being relevant to the provision. Of particular relevance is a piece by Andrew Campbell, who cites Bosworth-Davies and says:

''The activities of professional advisors, particularly lawyers has, in the past, caused considerable concern in the field of money-laundering activities, due in no small part to the existence of the secrecy generated by the attorney-client privilege.''

I hope that we shall discuss that issue at a later stage, because it is absolutely clear that the existing arrangements are unsatisfactory. The journal, which made interesting Sunday reading, went on to mention that

''The NCIS received 14,000 reports of suspicion of money laundering in 1997 but only 236 of these came from solicitors. In 1996, 300 reports from solicitors had been received.

The National Criminal Intelligence Service has made it clear that it is disappointed by the attitude of solicitors in respect of what it describes as their ''legal and moral'' obligations. While it is of the opinion that solicitors are failing to report suspicious circumstances, the Law Society takes a more generous view and puts a spin on it by suggesting that the reason why the number of reports is falling, or is not particularly high, is

''an indication that criminals are finding that solicitors' firms are providing a 'more hostile environment for money laundering'''.

That is a justifying description. A particularly helpful observation from Bosworth-Davies is that

''many lawyers are of the opinion that the money-laundering laws do not apply to them,''

I have heard nothing from Opposition Members to persuade me that they believe that money laundering regulations should apply to them or their friends. It strikes me that they are consistently trying to defend the indefensible and implying that everything is hunky dory.

It is difficult to understand how the hon. Gentleman can reach that conclusion. Although he was present in Committee in the flesh this morning, perhaps his spirit was elsewhere. He clearly has not been listening to what we were saying. First, we have not disagreed in Committee with the principle of the previous money laundering provisions. I can see the merit of them. Secondly, we have said to the Committee that the intention behind the provisions is not one with which we disagree.

The specific matter on which we have disagreed is the test to be applied when determining whether there has been criminality in respect of a breach of the provisions. If the hon. Gentleman cared to focus on that, he might find that it would be a better matter for him to discuss than wider issues about which he makes assertions that are not backed by the evidence or the facts.

I listened with considerable care to most of the points made by Conservative Members this morning. I confess that I was out of the Room a couple of times and that, on a few occasions, I found myself losing the will to live after hearing the constant repetition. In general, however, I clearly established the opinion that, while Conservative Members were paying lip service to the issues under the Bill, virtually everything that they proposed would water it down. They are not tough on crime and they are not tough on the causes of crime. They demonstrate all the rigidity of a blancmange. They should stand up a little more firmly in favour of taking action in such matters.

I remember listening with amazement to Conservative Members earlier when they told us that the rules should not be as tight as proposed under the Bill on the basis that, if they were too tight, it would be too difficult to carry out such provisions and that would make it easier for drug dealers and others to launder money. I have never supported such an argument when I have heard it applied to burglary,

assault or theft, when the number of cases and the imposition of law cause difficulty in catching the criminal and processing the cases. It is certainly no reason for not taking seriously the burden of proof for the crime of assault.

I appreciate that the hon. Gentleman and I will never agree about his interpretation of where we are coming from. I shall not repeat what was said by my hon. Friend the Member for Beaconsfield, but we may be right—expert practitioners have advised us that we are right—that much of what is proposed by the Government is likely to be so cumbersome that it will be unworkable and enormously damaging to the City of London. Will the hon. Gentleman understand that his Government have made a huge effort over the years to cultivate—and to praise—the City? Surely, it would undermine the Chancellor of the Exchequer's strategy if the City of London were so damaged by the Bill that all the business on which the economy, including that in the hon. Gentleman's constituency, so deeply depends was shifted away to places such as Frankfurt.

Is the case being advanced that we should be lenient with money launderers, crooks and rascals so as not to place the City of London at a competitive disadvantage vis-a-vis other jurisdictions? British legislation is being introduced in parallel with legislation elsewhere and with action being taken by intergovernmental taskforces to deal with misbehaviour in tax havens and other locations in which financial arrangements are of dubious provenance.

With regard to the legislation and international forums, the Government's intention is to ensure that there are equally toughly enforced level playing fields across all jurisdictions. I would welcome it if we could employ a lighter touch because we were confident that the City of London—and elsewhere—could self-police. I regret that we have to go down this road, as it is more bureaucratic than I would wish, but we are going down it only because the City of London cannot be trusted to police itself—neither can lawyers and accountants, but bankers are perhaps the worst, because they deal with larger sums.

Does my hon. Friend agree that the City of London lost its good name a long while ago, and that it is time the Government tried to get it back for it, because it is incapable of doing it for itself?

That is a helpful point. In view of what has been happening recently, the good name of the City of London has been tarnished. Opposition spokesmen have mentioned the Maxwell case, and other Committee members mentioned Barings and Enron. London firms are involved in the Enron case: the firm of accountants that recently shredded documents for Enron has branches in the United Kingdom.

A recent visit that I and others made to Nigeria has a bearing on our discussion of the City of London. During our trip we discussed the present financial

difficulties in Nigeria. There are reports in today's press of riots in Nigeria that have been caused, in no small part, by its financial difficulties.

The country's previous leadership siphoned off huge sums of money. It is alleged that General Abacha siphoned $1.3 billion into foreign banks. The Financial Services Authority investigated the handling of bank accounts linked to the good—I mean bad—general. Its report of March 2001 revealed serious weaknesses in anti-money-laundering procedures at several banks in the United Kingdom: 42 accounts at 23 banks were investigated, and it was estimated that the turnover of those accounts in the four years to 2000 had been $1.3 billion; 15 of the banks were judged to have significant ''control weaknesses''—which is a revealing euphemism—and 98 per cent. of the funds passed through those banks.

The banks that handled this money were not the bank of Toytown, South and similar institutions. They were very respectable organisations with substantial reputations in the United Kingdom. The Nigerians would be justified in taking the view that the United Kingdom has been a recipient of stolen money from Nigeria, and that we have been slow in co-operating with the Nigerian authorities to return any of it. Our banking authorities have been less helpful to them than have those of Switzerland, France, Luxembourg and Liechtenstein. Authorities in those countries co-operated with the Swiss lawyers who have been representing Nigeria, whereas the British system did not.

I wish to draw attention to some of the banks, and some of the sums that they handled, lest we think that they simply made a few slips. Banque Paribas handled $36 million: the funds were moved in 10 payments from London to a Swiss bank, and the money was alleged to be bribes extorted from a French construction company. There was also a sum of $17.2 million—the funds were moved in two payments from London to a Swiss bank, and the money was alleged to be bribes extorted from Nigerian business men.

The Banque National de Paris—all the branches to which I am referring are in London, and presumably some of the staff involved were British—handled $7 million: two payments were moved to the bank's Geneva branch. The Credit Agricole Indosuez handled $92 million. Its funds were moved to London from Switzerland, the French bank's Swiss branch has been reprimanded, and a frozen account in London of Abacha's fixer, Bagudu, still contains $9 million, and so on. The Nigerian Government paid $225 million to Mecosta in a fraud, when they paid double price to buy back debt certificates. Barclays bank, a British bank, moved $172 million from London to Swiss banks, and there were alleged bribes and transfers from Abacha-linked accounts. Cash was also moved by Barclays to New York, and four payments were made to Zurich Credit Suisse, totalling $52.8 million. Six payments were made to banks in Geneva from Barclays accounts, totalling $36.8 million. Four payments were

made from Nigeria to Barclays in New York, totalling $83 million. Controls have not been tightened since then.

First Bank of Nigeria, which is based in London, also moved money around, although I shall not go into the details. Abacha's sons also control an account in the Berkeley square branch of Citibank. Movements to London included $13 million from money paid by Nigeria for vaccines. Movements out included the transfer of $10 million of vaccine money to New York, and the transfer of $39 million to Switzerland and elsewhere when investigations began after General Abacha's death. Interestingly, Citibank was described in United States Senate hearings as having a ''rogues' gallery'' of lucrative private banking clients. Citibank is increasingly active in London.

Midland bank—now part of HSBC—was also involved in relation to payments totalling $6 million. Payments under investigation include $2.1 million moved from the central Bank of Nigeria to the Cross Roads branch of Midland bank in Golders Green, north London. The equivalent of nearly $600,000 belonging to one of the Abachas' colleagues was found in another north London Midland branch. Other payments made by Addax, a Switzerland-based oil company, and $1.5 million moved to a Banque National de Paris account in Switzerland, were also via Midland.

The Union Bank of Nigeria, based in London, was similarly involved in the Abacha cash. ANZ Grindlays was involved to the tune of $72.2 million coming through London. NatWest, which is now part of the Royal Bank of Scotland, was involved in relation to the movement of $1.5 million from Luxembourg to an Abacha-linked account in the St. John's Wood high street branch. From there, it was moved into the hands of David Jones, of Smith and Tyers, in 1999. Merrill Lynch was involved in relation to $3 million transferred from Nigeria to London. The only people to come out of this with credit are those at Merrill Lynch's branch in Switzerland, who refused to accept one Nigerian deposit, and were praised by the Swiss authorities for conducting themselves correctly. Commerzbank AG was involved to the tune of $3.5 million.

That adds up to a substantial sum, all of which has flowed through London and been subject to fees and charges imposed by banks in London. I must confess that I was distressed, as someone who has generally supported human rights legislation, to find that Matrix, the human rights barristers, appeared on behalf of the Abacha family on the grounds of their human rights being neglected when the British Government were attempting to provide information to the Swiss and Nigerian authorities.

I realise that the hon. Gentleman is making serious points, and my hon. Friend the Member for Beaconsfield and I entirely agree with him in his criticism of such people. I hope that he will understand that the comments that he has just made about legal representation come close to home on his own side. I also hope that he understands our fear that

the kind of people whom he wants to hit will become more difficult to hit if the legislation proves unworkable, for the reasons that we have set out.

No, I do not accept the thrust of that. May I take a little time to respond to the hon. Gentleman's point about legal representation hitting close to home on our side? Does he believe for a moment that that should make any difference to us? My wife does not work for the firm and nor do any of my children. The matter does not hit close to home for me. I am unaware of any of my colleagues who work, or who have worked, for Matrix. Should that matter at all?

Perhaps that is an insight into how the Conservatives work: they would take account of who had relatives or connections in a particular firm, but I do not believe that we should. It is irrelevant that Matrix may have a connection with a Labour Member. I am surprised that the hon. Gentleman even raised that. I do not want to labour the point—[Hon. Members: ''Go on.'']—although people obviously feel that I should.

To put the hon. Gentleman's mind at rest, may I confirm that I have no connection with that firm or any of the firms that he mentioned and nor, to the best of my knowledge, do any of my family, relatives, neighbours or friends? However, I disagree fundamentally with what he said, and I shall vote with my hon. Friends on the matter.

That is a fascinating point that has nothing to do with the point that I raised.

I return to the question of Matrix striking a little close to home. I shall give way to the hon. Member for Surrey Heath if he wishes to clarify the extent to which my criticism of the banks and legal firms that are involved in the matter should take account of any connection that I might have with them. Even if I have an account with a bank, I am not responsible for directing its affairs. That is perhaps unfortunate, for it and for me. The question of connections is neither here nor there.

I see that the hon. Member for Surrey Heath has chosen not to respond but has passed responsibility to his apprentice.

This may arise from a misunderstanding of what was said. The hon. Gentleman appeared to criticise a barristers' chambers with a human rights track record for taking on the Abachas' case. That is unjustified, because there was a professional duty to do that and failure to take the case would have been a breach of professional conduct by a member of the chambers.

That is an interesting point, although I do not follow the connection between that and the matter hitting close to home, which was the point made by the hon. Member for Surrey Heath. The hon. Member for Beaconsfield did not mention anything hitting close to home, and I assume that that means

that he is deserting the field on the point. Will anybody clarify it? Does the hon. Member for Henley wish to speak?

I hesitate to try to improve on anything that was said—I could not really improve on it. I speak only because the hon. Gentleman persists in ignoratio elenchi and failing to understand the point that is put to him. It is clear that learned and distinguished counsel at Matrix chambers believe that there are human rights points to defend, over which, once again, the hon. Gentleman is prepared to ride roughshod.

That is an interesting point, but I do not see its relevance to hitting close to home, about which I asked for clarification. The hon. Member for Surrey Heath told me that the matter was close to home and that I should be cautious. Nobody has clarified why that is, or should be, the case. I shall move on and remain puzzled at the double standard that the Opposition apply. Perhaps it is all in the context of sneaking.

Lest hon. Members think that I am attacking only British banks, may I mention that several banks in Jersey are implicated in the foul trade?

Order. The provision does not extend to Jersey. The hon. Gentleman will be out of order if he persists in making his point.

You make a very fair point, Mr. McWilliam. I was raising the matter only to clarify that the guilty banks in Jersey also have branches here. The style of operation that they adopt in Jersey is likely to be the same culture that pervades the whole organisation. In Jersey, there is Deutsche Bank, the Bank of India and Citibank.

I want to concentrate on what is reasonable and what is unreasonable. I referred earlier to the point that if people did not know, they ought to have known. I very much want the onus of activity placed on the professionals who are involved. When the defence put forward is, ''I had no suspicions whatever,'' it should be reasonable for the courts to say, ''Well, given the circumstances, you ought to have had suspicions, so you are guilty of something anyway.'' The sooner we have a few high-profile hangings of lawyers, accountants and bankers who have been caught by the Bill, the more salutary the effect will be.

Order. I remind the hon. Gentleman that capital punishment is not covered by the Bill, nor have I seen any amendments to that effect.

There might be one later. I shall certainly consider tabling a new clause to that effect on Report. It would draw the attention of lawyers and others to such matters if they thought that they would be severely punished. The great advantage of capital punishment is that it would reduce recidivism considerably.

My hon. Friend the Member for Glasgow, Cathcart (Mr. Harris) referred to tanning studios. Like him, I have a substantial number of them in my constituency, but I must confess that I have never seen anyone go

into them. There is a widespread suspicion that most of them are used to launder drug and other criminal money in Glasgow.

Given that the hon. Gentleman said that he has never seen anyone going into the tanning studios, can he tell us how many hours a week he hangs around outside them?

The hon. Gentleman makes a valid point. Perhaps I have not been scrutinising such premises as closely as I should. As I drive to and fro on constituency business, I see many commercial premises. I see people going into newsagents. The Committee may find it difficult to believe about my constituency, but I see people going in and out of public houses. I see them going in and out of bookies, but I have never seen people going in and out of tanning studios—

Mr. Carmichael rose—

Not even Tommy Sheridan. I anticipated the hon. Gentleman's witticism, so he has no need to intervene.

Given the number of tanning studios in Glasgow, if members of the Committee wandered down any street in the city, they would expect to be confused into thinking that they were in the Caribbean. In fact, all they would see is peelie-wally faces—I look forward to seeing those words in Hansard—who obviously have been nowhere near tanning studios. Unless only a few people are now burned to the colour of toast and have been overdoing such treatment, it means that the studios are not being used properly, yet they are in abundance.

Does my hon. Friend agree with Strathclyde police, who have told me that it is well known that tanning studios in the Glasgow area are being used for money laundering, but the problem has always been to get them to court so that the people involved can be convicted. The Bill will go a long way towards bringing to book the people who operate such places, not only to get the money from them, but to get them for their criminal processes.

My hon. Friends the Members for Glasgow, Cathcart and for Glasgow, Anniesland (John Robertson) have had several discussions with Strathclyde police, who confirmed that, in their view, several tanning studios were being used for money laundering. Similarly, we have information that a number of taxi firms are being similarly used. The police also confirmed—as have others in the west of Scotland—that several lawyers' firms are well known to them, the criminal fraternity and others to be conduits for drug money and other ill-gotten gains. Their difficulty is finding the means under the existing law to catch such people.

A substantial amount is coming in, allegedly from tanning studios to which nobody seems to go. Professional advisers are accepting it and putting it into the system, thereby laundering it. That happens

regularly. I believe that the professionals involved are well aware of the source of that money. If they are not, they ought to be. Any effort by Conservative Members to weaken the Bill in the way that they are proposing plays into the hands of the evil men and their assistants who are poisoning many young people in my community. That is why I am concerned about the flippant attitude that some Opposition Members have adopted to many of the arguments that have been advanced by Labour Members.

Despite protestations that they are adopting a balanced approach to the Bill, Conservative Members have spent 20, 30, 40 times as long trying to weaken it as they have trying to strengthen it. I cannot remember one Opposition amendment that would toughen the Bill. They are making efforts only to water it down, which confirms my view that the Opposition are the criminals' friends. I hope that the Committee will reject the amendment and, over the next few weeks, will look for ways in which to toughen some of the Bill's provisions, particularly when we debate lawyer-client privilege and the way in which that is used to conceal information about money laundering, drug trafficking and other offences.

I did not intend to speak, but I will because I have been so moved by the hon. Gentleman's remarks. His fascinating speech lasted about 40 minutes. It would have been listened to with great attention in Nigeria and elsewhere that he told us a lot about. He accused Conservative Members of being flippant and unbalanced in their presentation of views. He was being flippant in another direction and another sense. I want to take issue with his view of the world, which seems to be unremittingly pessimistic about human nature and the possibility of human goodness.

We heard an awful lot of stuff about how every banker and accountant in the City of London was corrupt. That was the gist of what the hon. Gentleman was saying. He does not seem to want to disown his general presentation, but throughout the past 29 sittings we have heard an unremittingly savage and depressing portrait of life in Pollok. There seems to be an endless Darwinian struggle there. He plays to the English stereotype of inner-city Glasgow, endlessly supplying us with accounts of people who must be presumed to be criminals, without there being any evidence to that conclusion. We have the impression of there being endless squabbles between smackheads snorting deep-fried Mars bars. I am sure that he does not mean to give that impression about his entire constituency.

I would hazard the guess that the hon. Gentleman has just made the case for my hon. Friend the Member for Glasgow, Pollok. Many people in Glasgow live in deprived areas that are plagued by drug dealers. I know that it is quite funny to say that, but some of us have to live with the repercussions, and that is not funny, believe me.

3.15 pm

I take that point very humbly and sincerely; indeed, that is the point that I was making. It is a tragedy that drug dealing goes on in such cities. The hon. Member for Glasgow, Pollok errs in having us believe that everyone is as guilty as some of his constituents are. He would have us believe that every tanning studio or parlour is a drug-ridden place and that everyone who is found with large amounts of money on their person must be culpable.

Is it too much to expect someone who suspects that money has been criminally obtained to disclose that fact?

That is the very point to which I was coming. Of course it is not too much to expect someone who genuinely has the fully formed idea that money is tainted or criminally obtained to disclose it. The amendment would ensure that we do not capture those who are innocent under the Bill. All that I wish to suggest is that there are reputable accountants, solicitors and lawyers in Pollok, just as there are reputable people across the country who might be caught out by badly drafted legislation.

The hon. Gentleman may remember that a couple of weeks ago—it feels like a year and a half ago—the hon. Member for Beaconsfield said that, despite the fact that many pieces of legislation issued under different Governments over many years have tried to clamp down on the problems that the Bill aims to solve, the fight was being lost. Will the hon. Gentleman tell the Committee whether he believes that the amendment will strengthen or weaken the Bill, and whether it will make us more or less likely to win that fight?

It has been the central contention of Opposition Members throughout the day that the amendment would strengthen the Bill, as it would make it more effective and more likely to catch the truly pernicious influences in constituencies such as Glasgow, Pollok—and, indeed, in my constituency, which in many ways is not that different from Pollok.

Will the hon. Gentleman please explain how the amendment would strengthen the Bill?

It would make it less easy for highly paid lawyers to get clients off the hook, and it would make the Bill more transparent, as it would be evident beyond peradventure that you cannot be done for money laundering unless you know that the money that you are concealing, disguising, converting or transferring is criminal property. The amendment would serve that purpose well.

Order. When the hon. Gentleman refers to ''you'' he is referring to me. That is a new series of crimes for my book. In past Committees, I have been accused of everything from money laundering through Rachmanism to murder, so the hon. Gentleman is not alone.

Mr. Harris: The hon. Member for Henley has shown great patience in giving way, for which I am grateful. Does he believe that existing legislation has failed because it was too tough, or because it was too lenient? Does he believe that the tide can be changed in the direction that the Committee wants by creating loopholes to get professionals off the hook in court?

I do not believe that anybody on the Committee would want to approve legislation that caught innocent people and sent the wrong people to prison. I sincerely accept that previous legislation may not have been as successful as it might have been. However, that does not justify our pushing through legislation that is badly drafted, and it would be a great irresponsibility to do so. It is therefore right to make an amendment to protect not the many, many guilty people in Pollok and elsewhere, but those who might be innocent. As I understand it, that is the purpose of the amendment. It is civilised and judicious, and we should agree to it.

I cannot seriously believe that any of the lawyers on the Opposition Benches believe that the amendment is sufficient. I am sure that I have heard it said several times that ''knowingly'' would be inappropriate. It is very difficult to prove that someone knows something. I suspect that the hon. Member for Spectator, South is talking out of the back of his neck when he recommends the amendment. I do not believe that it is consistent with the comments of Opposition spokesmen, who have been discussing the difference between suspicion and belief. It has been made clear that if ''suspicion'' were changed to ''belief'', they would be happy. I do not agree, and I do not support the amendment.

I want to put right something that has been said that is wrong—that my amiable Friend the Minister is a tyrant, because he is widening the state of mind necessary in order to be guilty of a criminal offence involving drug-trafficking money or money laundering. He has done that by making it easier to secure a conviction.

This morning, when I was musing about the comparison with handling stolen goods, which is inappropriate, because that is a completely different sort of offence, I wondered what the current law on money laundering and drug trafficking requires as a state of mind. I therefore read it over lunch, because I am a sad character.

Section 49 of the Drug Trafficking Act 1994 currently covers the offence that the clause will cover—concealing, disguising, converting or transferring property, or moving it out of the jurisdiction. That is the same offence. We lawyers should have a self-denying ordinance about speaking in Latin. We should stop talking about mens rea and inter vivos gifts and all the other terribly exclusive ways of talking designed to exclude from the discussion people who are not members of the club. That is why I shall talk about state of mind, rather than mens rea.

The state of mind necessary for the current offence of concealing, disguising, converting or transferring property is that a person is guilty of that offence if knowing or having reasonable grounds to suspect that the property is part of drugs trafficking.

Will the hon. Lady give way?

I shall finish my point. I am sure that the hon. Gentleman rises because he understands my point. Mens rea now is wider than the provision that we are introducing. People need not suspect that the stuff is dodgy money. They may be quite oblivious to whether it is dodgy, or indeed believe that it is not. If another person would believe that it was, because there are reasonable grounds for suspecting that, the person would be guilty, even if they never suspected it. That is a very draconian provision. Only about five minutes ago, I wrote down, accurately, what the hon. Member for Beaconsfield said, which was that he supported entirely the existing law on money laundering and drug trafficking. He therefore seems to be in favour of the existing, draconian provision, not the better one that the tyrant is trying to introduce.

There were a few moments this morning when the hon. Lady was not present in the Committee. I cannot remember whether she was present when we discussed clause 323, but I was more concerned about that. I said that although I could see the force of the argument in respect of clause 321, it was the combination of that with clause 323 that caused me particular concern. Unless I have misunderstood, clause 323, as it is currently drafted with regard to the state of mind, introduces an offence that is almost identical, if not rather wider in scope, than handling stolen goods, while at the same time introducing a different and lesser test.

I want to address clause 323. I appreciate that we are discussing an amendment that has been conveniently taken now, and that deals with the issues about the use of the word ''knowingly'' in that clause. However, there is another discussion to be had about the clause, and in that I will find myself in the unusual position of trying to beef up the legislation, rather than water it down.

In the old legislation, the provision operates within a restricted framework, because it is principally targeted at people who are subject to the regulatory framework, so it does not apply to every citizen of this country. However, clause 321 applies to every citizen.

I do not agree. I refer the hon. Gentleman to the point I made with regard to the Drug Trafficking Act 1984. I also refer him to the comparable provision in the money laundering legislation in section 93C(2) of the Criminal Justice Act 1988. I can see nothing in that that confines the operation of the provision to the regulated sector. It states:

''A person is guilty of an offence if, knowing or having reasonable grounds to suspect than any property''

represents another person's dodgy goods—if I may short-circuit the quotation in that way—they conceal, disguise, convert or transfer it.

Therefore, with regard to money laundering and the proceeds of drug trafficking the test is wider, rather than narrower, than it is in the legislation under discussion—which also currently incorporates the reprehensible notion that a person can be guilty by negligence. Opposition Members have tabled an amendment to clause 324 that will remove criminal liability by negligence, and I have made it clear to the Minister that I heartily agree with that amendment. However, clause 321 does not show the Minister to be a tyrant: he has not widened the provision. On the contrary, he has narrowed it—he is a ''verray, parfit, gentil knight''. Mr. Hawkins: I am grateful for the experience that the hon. Lady brings to the Committee, and I am delighted that she supports my amendment to clause 324. As she has already told the Minister that she supports it, I hope that she will vote for it, as it would make a welcome change if she were to support us.

With regard to the substantive issues that the hon. Lady raised, I wonder whether I heard her correctly at one point. Did the quotation that she cited from the Criminal Justice Act 1988, section 93C (2) contain the phrase

''or having reasonable grounds to suspect''?

If the money laundering parts of that Act contain that term, that supports the responses that my hon. Friends and I gave to many of this morning's interventions.

The hon. Gentleman quoted me correctly.

I shall not vote for the amendment to clause 324. I said that I agreed with it, but I want to hear what the Minister says. [Laughter.] Anyone can laugh at this, but that is absolutely childish. The correct way for a member of a political party to proceed is to try to persuade internally. The Bill will pass through several stages after it leaves us and I will not stop trying to get rid of liability by negligence. Voting has little to do with the matter.

May I reiterate what I have said already, because I fear that the hon. Member for Surrey Heath has not clocked it? The test under the old law is that a person is guilty if he knows something or has reasonable grounds to suspect it. That is not a narrower provision: it is guilt by negligence. A person does not have to suspect something at all—there need only be reasonable grounds for suspicion. A person can be unaware of any suspicion but be guilty. The hon. Gentleman missed the point.

I hope that I am innocent of the hon. Lady's charge. I understand her point. I agree with her entirely about a person not being guilty by negligence, which I think that she understands. However, our point, as we say in the amendment, is about a person

doing something knowingly. We also raised the alternative of reasonable belief, which I suggested when I responded to the hon. Member for Wrexham (Ian Lucas).

This morning, my hon. Friend the Member for Beaconsfield mentioned objective and subjective tests. That is the point that the hon. Lady makes. I have clocked it—to use her terminology—and I understand it.

I am glad that the hon. Gentleman cleared that up second time round. The Opposition have said all day that the provision is wider than before and that the Minister is a dreadful tyrant to introduce it. The opposite is true, and the Opposition have been barking up the wrong tree for four hours, which has been painful to behold and irritating to hear.

I shall address the idea of ''reasonable suspicion'', which the hon. Member for Lewes (Norman Baker) suggested would be better than suspicion. That suggestion muddles the level of suspicion with the grounds on which it is based. People can—and do—become suspicious instinctively that something is dodgy without giving any reasonable grounds for it. The suspicion may be due to instinct and experience. We do not want to license people in such a position to continue with a transaction rather than disclosing it, by introducing the ''reasonable'' qualification. The inclusion of the word ''reasonable'' is neither a good idea nor consistent with the Bill's purpose.

The difference between belief and suspicion is all that this can realistically boil down to. It is easy to see why belief is appropriate when considering stolen goods, because a person may have an item in front of them that was bought for a tenner, but is worth 50 quid. Therefore one knows for sure—or believes—that it is stolen. However, when we are considering outside observers in banking, who only look at transactions that come up on a screen or deal with somebody else's actions, it would be difficult and inappropriate to say that they must believe that there was a particular dodgy deal. The right trigger mechanism is that the outside observer is made suspicious. As soon as he is suspicious, we should encourage him to report the matter, which is what he must do.

I would never dare to interrupt my hon. Friend the Member for Glasgow, Pollok because I am a lawyer, and I am sure that I would get back twice as much if I did—and because he is excruciatingly funny and I am too busy laughing to interrupt him. He gave a forceful and detailed account of the evil at which the Bill, and this part of it, is directed. I was pleased to hear that. However, his speech presupposed that the measure is confined to the regulated sector. It is not, and never has been. If it were confined to the regulated sector, I would still suggest—even on my hon. Friend's principle that we can be draconian with toffs, but should be better to our people—that we should be careful. The regulated sector set out in schedule 6 includes, for instance, people working in building societies, who will not necessarily be the City of London people of whom he is always critical. Furthermore, it also includes business carried on by credit unions, which in my constituency are run by

volunteers. We must therefore be extremely careful. However, the Government have been appropriately careful, and the provision is narrower than the Opposition have painted it.

We have had a very wide-ranging discussion, which has taken longer and gone further than anticipated. I have no desire to lengthen it, but I want to make a couple of points.

First, I need to make a correction—I became a little befuddled when I was quoting figures for the international comparisons this morning. I have created confusion in Hansard, and it is necessary to put the record straight. The point that I was trying to make is that there is a lower level of prosecutions in this country than there ought to be given the size of the financial sector, in the light of international comparisons. I said that there were 298 prosecutions in Germany in 1994, which is not true; the actual figure is 198. My argument was correct, however. In Germany, in 1994 the figure was 198, in 1995 it was 321, and in 1996 it was 349. In the UK, during the period 1995-99 there were only 315 prosecutions. That seems to indicate a relatively low level in this country, in the light of international comparisons.

I want to put on the record the fact that I appreciate that the correct information is being made available, as, I am sure, does the whole Committee. I am sure that that is the end of the matter.

I am grateful for that.

I want to clarify the issues about which the Committee is falling out. I hope that I am neither the tyrant nor Mr. Softy, and I thank my hon. Friend the Member for Redcar (Vera Baird) for the defence of my position that she has so ably put up. In relation to the two amendments, we are tightening one aspect and loosening another. One amendment applies to concealment, and my hon. Friend was absolutely right to say that there is a negligence test in the existing legislation. The hon. Member for Surrey Heath was right in one of the things that he said—that the provision is principally targeted at the regulated sector—but he undermined his earlier argument that the provision does not apply to the regulated sector alone. As has been said, the existing legislation, which he and his hon. Friend claim to support, contains a negligence test.

Moving on to clause 323, the hon. Gentleman is right that the current threshold is higher than that which we propose. However, it does not amount to a negligence test; it is perfectly acceptable, and should not be heightened. I think that I upset the hon. Member for Beaconsfield, which I did not intend to do—I noticed a flash of anger from him for the first time in this Committee—when I accused him of wishing to apply different standards to different people. I like the liberal values that he appears to extol, which, coming from a Conservative Member of Parliament, surprises me. I do not believe that lower standards should be expected of some classes of people. In my experience—I hope that it is experience and not prejudice—in questions of ethics, the standard

of the behaviour of people on the shop floor is a darned sight higher than it is from those in the boardroom, by and large. We could justify the idea the other way round, although I accept that everyone needs to be protected by the law.

In cases of both possession and concealment, it is reasonable to expect someone with suspicions not to make transactions or continue to possess property without reporting that suspicion. The hon. Member for Beaconsfield seems worried that we are removing sub judice tests, but I do not believe that we are doing that. I am advised that we are not.

When we consider clause 324, which is confined entirely to the regulated sector, we shall have to debate whether we should include a negligence test under that clause, and to what degree, if any, we should allow subjective considerations. Although we may differ on those points, I hope that I can move my hon. Friend the Member for Redcar. Perhaps I cannot, but those are important issues.

Of course a person is free to argue that they bought property at a house sale, for example. Let us say that someone put an advertisement in the newspaper saying, ''I am going to Australia, everything must go,'' and that someone else got a bargain and bought an item well below its value at that sale. That person could argue that the circumstances were such that they did not suspect and should not be asked questions. That would be a defence, and to suggest otherwise is simply not true.

I am grateful to the Minister for some of the things that he has said. He has quite correctly tried to draw a distinction—as have we—between clauses 321 and 323. I remind him that when my hon. Friend the Member for Beaconsfield was talking about the dangers of a tyrannical approach in legislation, he restricted his remarks to part of one of our amendments.

The Minister mentioned how surprised he was to hear liberal values from the Conservatives. He is falling into the same trap as the hon. Member for Glasgow, Pollok, who often assumes that all Conservatives have one view. That is just as wrong as the Minister's general views on the boardroom and the shop floor. My experience in this country is that we are incredibly lucky that the standard of ethics and morals, both in the boardroom and on the shop floor, is high—perhaps higher than that in most other developed societies.

I do not argue with that. I always try to guard against the prejudices with which I may be afflicted. My belief, gained from meeting different people from different places as well as those whom I represent, is that the standards of people on the shop floor are high. Sometimes they pay a price for their honesty in a way that other people do not have to. That is my belief, and I hope that it is not prejudice.

The amendment does not stand up to the slightest consideration. It is disgraceful that it was even tabled. No one should be allowed to conceal property that

they suspect is laundered. The Conservatives are trying to loosen that provision and make it more difficult—almost impossible—to prove such a case, although the amendment to clause 323 might not be quite as bad. There is a subjective defence, and I believe that it is perfectly reasonable to take into account the circumstances in which people suspect. As my hon. Friend the Member for Redcar so ably pointed out, there are circumstances in which that could give rise to an offence.

May I seek clarification, if only for myself? Is the Minister saying that the clause is designed to replace not only the previous legislation but the previous test? I see the official nodding. The previous test was objective. Does the clause reflect a policy decision to weaken the legislation by moving away from what might loosely be termed the negligence approach, so that any court interpreting the measure will be obliged to do so in a subjective way? Is that what the Minister is saying?

What I am saying, and what I said in my opening remarks, is that in the area covered by clause 323, the current test is based on knowledge. It must be shown that the person had knowledge. [Interruption.]

Order. I am feeling a bit lonely; I seem to be one of the only two people in the Room listening to the Minister.

The current test is based on knowledge. The new test is based on knowledge or suspicion. We are tightening that provision and making it easier to mount a prosecution in that regard.

With regard to the issue of concealment dealt with in clause 321, as my hon. Friend the Member for Redcar quite rightly explained in her jog through previous legislation, the Bill is looser than the existing provisions. There are two separate tests at the moment. For concealment, there is a negligence test, which can be based on knowledge, suspicion or reasonable grounds for suspicion. Currently, it is not even necessary to have suspected—if somebody else thinks that a person ought to have suspected, he is liable to prosecution. We are removing the negligence test, but we are replacing it with one based on knowledge or suspicion. In clause 323 we are tightening the test up, moving from the idea of knowledge to the idea of knowledge or suspicion.

That clarifies a great deal for me, but I ask the Minister for a further clarification. What is the policy thinking behind the two different tests for the two different clauses? Why is a stiffer test considered appropriate for concealment, but a less stiff one considered appropriate for arrangement, as described in clause 322?

There are no different tests in the Bill. We are getting rid of the different tests contained in the existing legislation. We are proposing to apply the same test to both areas, based on knowledge or

suspicion of whether one possesses the proceeds of crime or whether one is dealing in or concealing criminal property. We propose that the tests should be the same, and that a person should be liable for prosecution if they know or suspect what they are doing. The fact that they suspected that the property might be the proceeds of crime would have to be shown in court.

The existing legislation applies two separate and different tests. In the language of the hon. Member for Beaconsfield, it applies a draconian test, which is more draconian than anything that we are proposing in the Bill, as it extends beyond the regulated sector. The provisions on money laundering and concealment currently include a negligence test, which is based on knowledge, suspicion or reasonable grounds to suspect. We are removing that, and by so doing we are loosening it. That is cleaner and tidier, and the two levels of proof required are being brought into line. I have heard no justification for not doing that.

Little did I know when we were all bright-eyed and bushy-tailed at five to 9 this morning that we would debate two single-word amendments for more than three and three quarter hours. I can genuinely say that in almost 10 years in the House, this has been one of the most high quality debates in Committee that I have ever participated in. The hon. Member for Glasgow, Pollok (Mr. Davidson), who has clearly done a lot of research, made a partly humorous but partly serious speech. The Minister is realistic enough to recognise that there are differences of principle involved, and I thank him for the constructive tone in which he responded to the debate. However, fundamental differences exist between our points of view.

It would not be sensible or proper to respond to all the issues that have been raised. Almost every member of the Committee who attended today has spoken; it may be the first time in the long history of this Committee stage that that has happened. All the contributions have been sensible, helpful and worth listening to, although many differences of view have arisen. At one stage this morning there was a clear difference, in emphasis if not in view, between the hon. Members for Wellingborough (Mr. Stinchcombe) and for Wrexham. There are clearly huge differences between the hon. Members for Glasgow, Anniesland and for Glasgow, Pollok on the one hand and the hon. Member for Redcar on the other, in their entire approach to this type of legislation. As Ministers in all Governments so often do, the Minister has driven a middle course between the extremes of his party.

Even though the two amendments, which are linked together, have different effects—and I do not wholly share the Minister's interpretation in that regard—we would like to vote on each of them separately. Different principles are involved, but we have covered the matter exhaustively. I could say many things in response, but several of them have been dealt with in interventions. We shall have to return to some of those issues, and others connected to them, such as de minimis provisions, when we come to later amendments and the clause 323 stand part debate.

At this stage, I simply want to support the arguments of my hon. Friends the Members for Beaconsfield, for Cities of London and Westminster (Mr. Field), for Henley and for Spelthorne (Mr. Wilshire). It will be helpful if we vote, because these issues will be equally exhaustively debated, along with the rest of part 7, in another place and on Report.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 12.

Question accordingly negatived.

Clause 321 ordered to stand part of the Bill.