Clause 323 - Acquisition, use and possession

Proceeds of Crime Bill – in a Public Bill Committee am 10:30 am ar 22 Ionawr 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Amendment proposed: No. 428, in page 187, line 2, after 'he', insert 'knowingly'.—[Mr. Grieve.]

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 16.

Rhif adran 27 Adults Abused in Childhood — Clause 323 - Acquisition, use and possession

Ie: 5 MPs

Na: 16 MPs

Ie: A-Z fesul cyfenw

Na: A-Z fesul cyfenw

Question accordingly negatived.

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

I beg to move amendment No. 486, in page 187, line 21, leave out from 'provision' to end of line 22 and insert

'of goods or services provided by a person who knows or suspects that they may help another to carry out criminal conduct is not consideration'.

Let us recollect the debate that we had in the previous sitting on the proper test of knowledge. That issue was tied in with clauses 321 and 323. Amendment No. 486 is particularly relevant in view of the Division that we have just had on amendment No. 428. I wish to concentrate specifically on amendment No. 486, as there may be a general debate thereafter when we discuss whether the clause should stand part of the Bill.

The Law Society suggested the amendment to me. When I first read the clause I had some difficulty in understanding the Law Society's point. However, now that I do, I am persuaded that there is an issue that the Committee must consider carefully. As clause 323 stands, it provides that a person commits a criminal offence if he

''acquires criminal property . . . uses criminal property''


''has possession of criminal property.''

As we said last week, because of the bizarre way in which the clause is drafted, the test of whether property is criminal property relies in part on the mens rea of the person who holds the property—that is, whether he knows or suspects that the property is criminal property when he receives it.

There are also provisions under subsection (2) that emphasise that there are circumstances in which a person would not commit such an offence. Apart from

paragraph (a), which states that a person should make an authorised disclosure, paragraph (c) provides that a person does not commit the offence if

''he acquired or used or had possession of the property for adequate consideration''.

However, subsection (3)(c) provides that

''the provision . . . of goods or services which help''

a person

''to carry out criminal conduct is not consideration.''

I see the logic behind that. Those who drafted the legislation wished to emphasise that if a person acquires property for adequate consideration, he does not fall within the scope of the clause. Oddly, although a person might acquire property in the full knowledge that it had a tainted origin, he would not be criminally liable under the clause provided that he paid good consideration for it. However, such a person may be liable for handling stolen goods if the property is stolen rather than the proceeds of crime.

What happens if a solicitor provides advice? That question has worried the Law Society, and it raises an interesting point. Clearly, solicitors whose clients come to them for advice are bound, as we have said, by legal and professional privilege. An exemption is provided so that a solicitor would not have to make any disclosure in such circumstances. Indeed, a solicitor would be prohibited from making a disclosure.

A problem arises if a solicitor discovers from information that he has received while providing advice that it is reasonable to suspect that he has been paid with money that is the proceeds of crime. That must happen frequently. If I apply my experience as a barrister, I can see that if one has a dodgy client who seeks advice, and one forms a view while providing the advice that he looks like a crook, when the subsequent payment comes through from the solicitor—although of course, legal and professional privilege prevents one from disclosing the information except in limited circumstances—one may think, ''I wonder where all that money came from.'' That has certainly happened to me, and I am sure that it happens to solicitors, too, during their daily practice.

On the basis of subsection (2)(c), the solicitor should have nothing to worry about if he provided proper consideration—the service—in return for the payment. A rather curious problem arises if the solicitor concludes after giving the advice that that advice could have been used by the client to help him to carry out criminal conduct. In such circumstances, he would fall foul of subsection (3)(c) and not have provided good consideration for his payment. He might be bound by legal professional privilege, but technically he would have committed the criminal offence, because under the clause, he would not have provided good consideration in return for the criminal property that he suspects has been pushed in his direction from the client.

As an illustration, let me try to give an example. From personal experience as a barrister—circumstances for a barrister might be slightly different, but a solicitor would have exactly the same problem—I can give a matrimonial case as an

example. A solicitor's client comes along and says that she is seeking a divorce from her husband. In the course of providing instructions to the solicitor, the client informs the solicitor that her husband has been a criminal and has concealed assets—I have certainly had that experience when providing advice as a barrister. Clearly, in those circumstances—especially after the passage of the Bill—there are several things that I would be likely to tell the client. One of the things that I, or the solicitor, would tell the client to do would be to inform NCIS. However, because of legal professional privilege, neither I nor the solicitor could do that. Obviously, I would also seek to advise the client on how best to protect her interests.

The solicitor, or barrister, cannot be responsible for the client if her visit to him was a sham, and was made for the purpose of eliciting advice or information that might facilitate the carrying out of criminal conduct, and which was reported back to the other party afterwards. That would be a clear breach of the clause. It would take place without the solicitor's knowledge, but the solicitor would still be guilty of a breach of the clause. I accept that in practical reality, it is most unlikely that that information would emerge. After all, legal professional privilege normally means that the information provided in the course of the legal advice would not come to light, and the solicitor might know nothing about what had happened. Nevertheless, there might be circumstances in which the client was subsequently prosecuted, waived the privilege and explained the advice that the lawyer had provided. The lawyer would then be in breach of the clause. That is what the amendment is designed to address.

The amendment is simple, small and—as I hope the Minister will conclude—innocuous. It would rewrites subsection (3)(c) so that it said:

''goods or services provided by a person who knows or suspects that they may help another to carry out criminal conduct is not consideration''.

It would therefore introduce a test of knowledge or suspicion, which would tie in exactly with the test of knowledge or suspicion in clause 331. That would seem to meet the problem, and I find it difficult to see a downside in terms of interfering with the preventive effect of clause 323.

The Minister and I have debated whether the wording should be ''knowing or suspecting'' or ''knowing''. However, leaving that to one side, and addressing clause 323 as it is currently drafted, the amendment would meet the needs of the lawyer who provides advice, as well as those of other categories of individuals who could face similar problems. It would emphasise that people could not be guilty of a breach of the clause if they did not realise that they were helping someone to carry out criminal conduct when providing a service for consideration.

Photo of Bob Ainsworth Bob Ainsworth The Parliamentary Under-Secretary of State for the Home Department 10:45, 22 Ionawr 2002

The hon. Gentleman's analysis of the effect of the clause is correct—although I wish that the concerns that he and the Law Society have expressed had gone wider than their own profession.

Clause 323 (2)(c) provides a defence for people such as tradesmen who are paid for ordinary consumable goods or services in money that comes from crime;

they are not under any obligation to question the source of the money. Subsection (3)(c) makes it clear that that would not be a defence if goods or services that helped a person to carry out criminal conduct were provided for adequate consideration.

The hon. Gentleman's amendment therefore addresses a useful point, and I acknowledge the role that the Law Society played in persuading him to table it. It highlights the fact that a trader may not always know or suspect that the goods that he provides for adequate consideration may later be used for the purposes of criminal conduct.

The provision is similar to existing legislation, and no problems—such as those that the hon. Gentleman outlined—have so far arisen. However, I acknowledge that a trader might provide for adequate consideration goods that were used for purposes of criminal conduct without having any grounds for knowing or suspecting that that would be the case. In such circumstances the trader would, technically, still fall foul of the possession offence. However, that would not apply in cases of inadequate consideration.

I offer to look into the matter, and to report back on the outcome of my deliberations. We will need to satisfy ourselves that by making an amendment of the kind that the hon. Gentleman has suggested, we do not inadvertently create a loophole that might assist less scrupulous traders. He focused on a specific situation that would affect lawyers, but as I have said, other jobs and professions might also be affected.

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

I hope that I made it clear that I acknowledge that that is the case. It is interesting that it should have been the Law Society that picked up this point. The example that it provided made sense; from the perspective of my professional experience, I could see how such a situation could arise. However, the Minister is right that any innocent trader could be affected if they supplied a service and found themselves unwittingly helping in the commission of crime.

I offer the example of vehicle hire. A person could rent a vehicle to someone and be paid in money that was criminal property. That person could have acted on a bona fide basis even if the van were then used to move the proceeds of crime from point A to point B. Such a person could fall foul of the law—although is unlikely that he would be prosecuted, as prosecuting authorities would exercise their discretion, and it would be glaringly obvious that he had acted innocently.

I have told the Minister many times that unless it cannot be avoided, it is undesirable to enact legislation that criminalises people but then leaves it to the prosecutor's discretion whether to prosecute. As a basic rule, whenever possible we should enact law that criminalises the activity of criminals, not those who are blameless. I am grateful to the Minister for listening to what I have said about the amendment, and for taking my points on board.

In conclusion, I find it difficult to see how anyone in a reasonable environment could say that the amendment had a downside. If it were accepted, prosecutors would have to prove that a person whom they believed to have provided services for a valueless consideration in order to help someone to carry out criminal conduct, knew or suspected what he was doing. If a prosecutor were convinced that a person knew or suspected what he was doing, the burden for the prosecutor would be slightly heavier. However, that burden is one that any right-thinking person would believe that the prosecutor should bear in any case: he should prove that the person knew or suspected that he was facilitating criminality in taking the property for a good consideration. It is difficult to understand how anyone could formulate any proper argument that that should not be done.

I hope that the Minister will accept the amendment or something similar. I shall withdraw it, but I ask the Minister to let us know his decision before Report; otherwise we shall have to return to the subject. I would be grateful—and so would those who are likely to be affected by the issue—if on Report, we could agree an amendment on the subject. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs) 11:00, 22 Ionawr 2002

We cannot simply leave the clause as it stands without giving further consideration to what it does. Last Thursday, we discussed the state of knowledge required to commit an offence under the clause. In retrospect, I feel that my efforts to draw the Committee's attention to the issue that arose under the clause were diverted, although that was understandable as our discussion was linked to the amendment that would have put the word ''knowingly'' into clause 321.

Yesterday I looked at the transcript of that discussion, and it was glaringly obvious that resources had been heaped on discussing clause 321, while clause 323 had gone by the board. I noted with interest what the hon. Member for Redcar (Vera Baird) said in her important contribution to our debate on Thursday. When pointing out some of the derivation of the legislation, she extolled the Minister as a ''verray, parfit gentil knyght'', and commended him for his reasonableness.

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

As my hon. Friend is making Chaucerian references, which Labour Member does he think would be the Wife of Bath?

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

My lips are sealed on such matters. I would not wish to identify the Wife of Bath among Labour members of the Committee—or from elsewhere in the House. Occasionally names spring to mind—not necessarily Labour Members—but certainly not the name of anyone in this Committee.

The hon. Member for Redcar went to some lengths to emphasise that the changes being made in respect of states of knowledge were, for the most part, beneficial.

When I reread the Bill and its origins in previous legislation, I found it impossible to reach that conclusion.

I now turn to the generality of clause 323. In our previous debate, I said that there was a close relationship between this provision and the offence of handling stolen goods. The more I consider the matter, the more persuaded I am of the closeness of that relationship, although I accept that it is not identical. For example, the scope of this clause is much wider. It deals not only with stolen property, but with the proceeds of crime. Although all stolen property is the proceeds of crime, not all the proceeds of crime are stolen property.

As I said earlier when we discussed the Law Society's amendment, No. 486, under the clause there could be a defence of providing good consideration, which might not exist in relation to stolen property. That is a somewhat recondite point, however, and I am not sure that it will take us much further. However, the clause encompasses the offence of handling stolen goods, plus an extra layer. I think that the hon. Member for Redcar and I agree that the origins of the Bill are the result of a consolidation of measures under the Criminal Justice Act 1988—as amended in 1993—and the Drug Trafficking Offences Act 1986. Section 93B(1) of the 1993 Act states:

''A person is guilty of an offence if, knowing that any property is, or in whole or in part directly or indirectly represents, another person's proceeds of criminal conduct, he acquires or uses that property or has possession of it.''

What is so noteworthy about that provision is that in the amendments that the 1993 Act makes to the Criminal Justice Act 1988, that is the key example of the use of the word ''knowing'' on its own. Whoever drafted the Act in 1993 and followed the then Government's policy—I do not necessarily support every aspect of Government policy in the early 1990s—must have had the specific purpose of inserting the word ''knowing'' in section 93B. That person was happy to use the words ''knows or suspects'' in section 93D and a similar phrase in section 93A.

The hon. Member for Redcar highlighted a distinction in section 93C, which is entitled:

''Concealing or transferring proceeds of criminal conduct.''

She was right to say that the Government have reduced the test that relates to that because it had previously been a negligence test. There was a negligence test under section 93C, which the Minister has altered to a test of knowing or suspecting. That is in sharp contrast with section 93B, which is entitled:

''Acquisition, possession or use of proceeds of criminal conduct''.

That provides for a straightforward knowledge test.

I have not had time to read either the Hansard transcripts of the Committee in 1993, or the then Government's reasoning. I apologise to the Committee for that. Either the Government and the draftsman in 1993 took leave of their senses and were bandying words about—that is unlikely—or there was a background reason why they used a test for the acquisition, possession or use of proceeds of crime that was different from the other tests. With respect to the

hon. Member for Redcar, we did not examine that last week, which is why it is important to consider it now.

Photo of Vera Baird Vera Baird Llafur, Redcar

I, too, have read what I said last week, and I must make it clear that I was addressing primarily clause 321, because we were to consider clause 322 later. I said then that I expected to try to beef up clause 323, but a verray, parfit gentil knyght managed to persuade me that that was not necessary.

Photo of David Wilshire David Wilshire Ceidwadwyr, Spelthorne

How many bones were broken?

Photo of Vera Baird Vera Baird Llafur, Redcar

The hon. Member for Beaconsfield is right about the derivation of the test in section 93B(1), but I am not sure why that history is important, bearing in mind what has been done now. Last week the Minister made clear what has happened: the two tests have been put together. The test that I concentrated on was wider, and the other, which the hon. Gentleman forgot to concentrate on last time, was narrower. Now, they are consistent with each other. Is there anything wrong with that?

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

The hon. Lady makes a good point. However, I do not want the discussion to go by default. It seems that there was a purpose behind the test, and I hazard a guess that that was an anxiety about interfering and producing a different test from that for handling stolen goods. The crime of handling stolen goods may be committed in two ways. I fully accept that there seems to be an incompatibility with the second way, which is much closer to the section 93B test, because it is closer to money laundering. I find it extraordinary that a straightforward knowledge test was included when the 1993 Act was enacted. That test is much closer to the straightforward handling of stolen goods. I cannot help but think that that is because there was no wish to create an obvious conflict with a similar offence under which the same activity could be charged, using a different test from that commonly used for the handling of stolen goods. The draftsman may have seen fit to draw a distinction between that and the separate offence of assisting in a dishonest realisation of goods.

Photo of Ian Lucas Ian Lucas Llafur, Wrecsam

Is not the key distinction between the present offence and the offence of handling stolen goods that one can avoid the present offence by simply making a disclosure? That is where the hon. Gentleman's analogy falls down.

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

I accept that it is possible to avoid the offence by making a disclosure. If someone were to acquire property that they suspected was criminal property, and immediately reported their suspicions to the police, it would be surprising if they were charged with handling stolen goods—although strictly speaking, they might have committed that offence.

Although I understand the hon. Gentleman's point, I do not entirely accept it. I am the first to accept that the legislation was intended to deal with a problem different from that of handling stolen goods—as were the amendments to the Criminal Justice Act 1988. If we went out in the street and asked people to define money laundering, they would mention people who take funny money—in cash, or in a different form—and recycle it so that it becomes legitimate. If we asked

them to explain what is meant by the phrase ''handling stolen goods'', they would refer to people in pubs who trade in illegal videos—or jewels, silver, or whatever. I accept that the thrust of the legislation goes in two different directions.

The hon. Member for Redcar correctly pointed out that there are also analogous provisions in the Drug Trafficking Offences Act 1986. However, drug trafficking offences seldom involve stolen property. They involve the proceeds of illicit transactions in drugs, and that moves them into a completely separate category.

When the draftsmen put the test of ''knowing'' into section 93B of the Criminal Justice Act 1988, they knew what they were doing. However, the Committee is going to get rid of that, because we are insisting on a test of ''knowing or suspecting''.

I want the Government to describe how they foresee the relationship between clause 323 and the offence of handling stolen goods. The Bill does not propose to repeal the relevant section of the Theft Act 1968; that will remain on the statute book. If the Minister were contemplating repealing it, we could have a discussion about that relationship.

With regard to the bringing of prosecutions, people quickly cotton on to the available legislative framework, so it is highly likely that the offence of handling stolen goods will wither on the vine. I have already made that point, but it bears repeating. In relevant circumstances, a prosecutor will tell the Crown Prosecution Service that it no longer needs to use that offence, because someone who handles stolen goods can be charged with acquisition, use or possession under the money-laundering provisions of the Proceeds of Crime Bill, which for a conviction to be secured, require a test to be satisfied that is lower than that for the legislation on handling stolen goods.

It is not unusual for offences to be susceptible to different charges. If someone gets killed on a building site, the person responsible for that site might be charged with manslaughter, or with breach of section 2 of the Health and Safety at Work etc. Act 1974, if the deceased was their employee—or with breach of section 3, if they were not an employee. Alternatively, that person could be charged with a breach of the regulations—although a problem might arise in the Crown Court with regard to the relationship between the regulations and the substantive offence under the Health and Safety at Work Act.

Those offences have different penalties, but with regard to the subject under discussion, it appears to me that there will not be a difference in outcome. That is a key point. We should not muddle the criminal law by adding extra tiers without providing clarification. We have heard endlessly from criminal law review commissions about how Parliament is constantly multiplying the criminal law of this country, and the urgent need for simplification. Indeed, there have been demands for codification of the entire criminal law in a

new compendium, which I would welcome, even though it would take a Committee of the House rather a long time—and I have a horrible sense that I may have just volunteered to serve on it were that to happen.

Such simplification is urgently needed—and now we are creating a duplicate offence with a dissimilar test. I shall listen carefully to the Minister's comments. I have not made up my mind whether I want to resist the incorporation of clause 323 as an issue of principle. I am open to persuasion to leave it in, as it has a great deal of merit and can produce all sorts of good things. However, I hope that the Minister will accept that I am genuinely unhappy. He may have been be commended by the hon. Member for Redcar for introducing consistency between the different clauses in the Bill, compared with the different pre-existing provisions, but that consistency has been produced at the expense of inconsistency with pre-existing legislation. The pre-existing legislation of the Criminal Justice Act 1993 appears so muddled precisely because of the draftsman's anxiety not to stray too far out of line with the offence of handling under the Theft Act 1968—I can think of no other logical reason.

I wait with interest to hear from the Minister. I am sure that he will be a ''verray, gentil parfit knyght'' in this matter, but I say to the hon. Member for Redcar that it is possible to be a verray, gentil parfit knyght and serve a bad master. I suspect that the knight described by Chaucer served King Richard II, who, as is well known, embarked on a period of tyranny during his reign.

Photo of Vera Baird Vera Baird Llafur, Redcar 11:15, 22 Ionawr 2002

I think that it is a ''verray, parfit gentil knyght''. The hon. Gentleman must get his quotations the right way round.

I have forgotten what I was going to say—

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

On a point of order, Mr. O'Brien. The hon. Lady was so keen to insult my hon. Friend's lack of knowledge of Chaucer that she forgot what she was going to say.

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

Far from it. The hon. Lady was, properly, so carried away by my literary infelicity that she wished to correct that, and probably nothing else.

Photo of Vera Baird Vera Baird Llafur, Redcar

I have remembered what I meant to say.

The hon. Member for Beaconsfield is mixing this up with the issue of handling stolen goods, but he knows that there are differences, and he has pointed some of them out. There will be some overlap—for instance, in relation to the proceeds of a robbery, if money were involved. I suspect that the application will be only to money in relation to an offence. Will not the interpretation be governed, or at least influenced, by the heading of part 7: ''Money Laundering''? What the hon. Gentleman seems to be arguing—this is where I cannot follow his logic—is that knowing, which is the test in the old law, should be the test in the new law. However, he subsequently agreed that his amendment was inadequate when I was being slightly critical of the intervention by the hon. Member for Henley

(Mr. Johnson), who was supporting the amendment without mentioning anything else.

Both the Conservative spokesmen seem to agree with me that ''knowing'' was an inadequate test. I would have thought that, as a seasoned pair of lawyers, they would recognise the impossibility of being able to apply the word ''knowingly'' in many situations to which the provision ought to apply. I am puzzled as to why the hon. Gentleman suggests that ''knowing'' is the test for handling stolen goods, when the test is much wider—it is knowing or believing, or dishonesty.

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

I am grateful to the hon. Lady, who makes a good point. Under the Criminal Justice Act 1993, the word used is ''knowingly'', which is the expression that we are trying to reintroduce. That is precisely the test. It is not knowing or believing; it is knowing. I have not heard a detailed critique from the Minister about any difficulty that the prosecution authorities have had in applying it, but he may be able to tell me whether that has happened.

The hon. Lady is right to say that the test is not identical to the one in respect of handling, but it is sufficiently proximate to have removed the anxiety that may have existed at the time. If the phrase ''knowing or suspecting'' was based on different tests, two offences would have been created. In his reply, the Minister may be able to persuade me that I am wrong, and that either the draftsman in 1993 did not know what he was doing, or there is a different explanation of why the different tests were introduced. That subject merits care. There is much to be said for trying to introduce conformity throughout the Bill, but we must be mindful of the knock-on effects of our decisions. I wait to hear the Minister's reply.

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

Listening to the hon. Gentleman, I understand with clarity why litigation costs so much. We spoke for almost a whole day about certain issues. If he was diverted from his argument, that was because the Opposition proposed two separate arguments. I alluded to that when I said that the hon. Member for Surrey Heath (Mr. Hawkins) was blunt and clear, while the hon. Gentleman's own argument was more circumspect. We were talking about two amendments, and it was clear that the main worries of the hon. Member for Beaconsfield were about clause 323. However, the hon. Member for Surrey Heath did not share his aim of narrowing some of the arguments down, and majored on clause 321.

I was surprised that the amendment tabled to clause 321 was pressed to a Division. I was even more surprised that the Liberal Democrats, having supported that amendment, today voted against the amendment tabled to clause 323. That was astonishing.

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

I believe that the Minister has been in the House as long as I have, so he should never be surprised when the Liberal Democrats do something totally inconsistent with what they did five minutes ago, or even five seconds ago.

On a serious point, the Minister should understand that, just as he shares his work load with his hon.—and equally able—Friend, the Minister of State, I

share the work load with my hon. Friend the Member for Beaconsfield. I make my points in my usual blunt fashion—as I said last week, I take that as a compliment—and my hon. Friend refines and extends the argument. That does not mean that our arguments are inconsistent with each other, but that they have several parts, which apply to different sections of the Bill.

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

I am not so sure about that. I do not believe that the differences were presentational. They were more substantial than that.

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

As the Minister has chosen to highlight the fact that I voted for the first amendment, I must point out that I abstained from the second vote.

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

No, the hon. Gentleman said that I voted against the amendment. It is reasonable to point out that, given that the first vote was lost, I did not understand why a second Division was held, which is why I abstained. There is nothing unusual about that. It is unhelpful for the Minister to proceed in a partisan way.

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

I apologise. If I suggested that the hon. Gentleman voted for and then against, I did not mean to—but how he justifies his support for the amendment to clause 321, which was tabled by the Conservatives, followed by abstention on the amendment to clause 323, I do not know. I cannot see the logic of that.

One of the main arguments of the hon. Member for Beaconsfield is that he cannot believe that there was not a genuine reason for the way in which the Bill was drafted. When Opposition Members examine Bills, they consider the draftsman to be perverse and tyrannical. However, when those on the Government Benches consider proposed legislation, they believe that the draftsman must obviously have had a genuine reason for the drafting. That is probably a fault of parliamentarians, not draftsmen.

Photo of Dominic Grieve Dominic Grieve Shadow Minister (Home Affairs) 11:30, 22 Ionawr 2002

We have established the common ground between us. Last week the Under-Secretary said—and I am sure that he is right—that the draftsman enacts policy into Bills, so he cannot be blamed. The person who can be blamed is the one who made the Government's policy decisions, which required the draftsman to perform convolutions. Much of the material that was drafted under past Conservative Governments I do not find any more commendable than what comes from the present Government. I am willing to be impartial in such matters.

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

I do not want my hon. Friend the Member for Redcar, or any other member of the Committee, to detract from, or cast aspersions on, the gallantry that she showed me the other day. It was one of the nicest things that has ever happened to me, and I do not want anyone to row back from it.

We have had a long discussion on the clause. I do not want to delay the Committee, but the hon. Member for Beaconsfield rightly acknowledged the

overlap, and the fact that some of its provisions existed elsewhere, too. I accept that there is a good deal of overlap between the two offences. Section 22 of the Theft Act 1968 states:

''A person handles stolen goods if (otherwise than in the course of stealing) knowing or believing them to be stolen goods he dishonestly receives the goods or assists in their retention, removal, disposal or realisation by or for benefit of another person, or if he arranges to do so.''

For our purposes, the similarity with that offence and the clause before us is the fact that it is an offence merely to receive stolen goods, knowing or believing them to be so. It is therefore true that the receiver of stolen goods will commit the clause 323 offence as well as the offence under section 22 of the Theft Act. The penalties for both offences are the same. On indictment for either offence, a person is liable to a maximum period of imprisonment of 14 years.

There are many examples in United Kingdom law of conduct that falls under overlapping offences. The hon. Gentleman suggested that that occurs only when the penalties are different. I am not sure that that is so. [Interruption.] I think that he agrees. He knows that the measures under the Bill are not massively different from what applies in other areas of the law. Whether a person is charged with one offence or another, or both, will depend on the circumstances. Under present circumstances, whether a person is charged with one or the other offence, or both, does not seem to matter a great deal, because the maximum penalty would be the same.

The more pertinent question is whether there is a continuing need for section 22 of the Theft Act, when the clause captures the same conduct. It is said that a prosecution is much more likely under the clause than under section 22, especially given that the prosecution would only have to establish a mens rea element of knowing or suspecting that the items were stolen goods rather than the actual knowledge or belief, which would be a tougher test.

In defence of section 22, the handling offence is well established and works well in conjunction with the offence of theft to ensure that those who steal and deal in stolen property are appropriately penalised. We need clause 323 because it is much wider than the handling offence and covers any benefit gained from crime, not just stolen goods. For example, the clause would take in the profits of drug dealing, prostitution, video piracy and many other things that the handling offence does not cover. We cannot make a distinction between the proceeds of theft and other crimes, because that would require us to establish the predicate offence that had created the funds that were being laundered.

The differentiation in the current legislation between drug trafficking and other crimes has given rise to difficulties. Some money launderers are escaping conviction because the prosecution are unable to establish precisely what kind of criminal conduct gave rise to the funds in question. It should be enough that the prosecution can establish that

property is the product of some sort of criminal conduct.

More importantly—although the hon. Member for Surrey Heath will probably disagree—we need to include all conduct under the clause in order to fulfil our international obligations. I refer hon. Members to the EC money laundering directive of 1991, the Council of Europe convention on laundering, search, seizure and confiscation of the proceeds of crime, and the 1988 Vienna drugs convention, all of which require the inclusion of possession, acquisition and use of criminal proceeds in legislation as part of a country's commitment to criminalising money laundering.

I cannot accept that the conduct mentioned in the clause should be reduced to ''knowledge or belief'', as the hon. Member for Beaconsfield attempted to argue in a previous sitting.

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

If that is correct, presumably the Minister is saying that those who drafted the amendments to the Criminal Justice Act 1988, which I assume was amended partly because of the EC directive of 1991, failed to do the job properly. As we discussed earlier, the Criminal Justice Act 1993 uses the word ''knowing''. I am surprised at the Minister's comments. The last Conservative Government were not generally found wanting in their desire to crack down on crime, yet he seems to suggest that they did not implement the directive properly, as they used ''knowing'' rather than ''knowing and suspecting''.

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

I do not know the details about that. The hon. Gentleman has read Hansard, as he readily acknowledges. I congratulate him on the work that he has done in digging out the background to the existing legislation. I do not know exactly what the motives were for the way in which the 1993 Act was framed.

We have considered our international obligations and believe that the provisions are necessary in order to meet them. We also believe that we have included the appropriate tests. It is no good looking back at what was the case previously. Surely we need to examine the matter in its setting, and to consider the problems that we face today. We must decide what measures are justifiable and necessary in order to tackle those problems.

It is all very well for the hon. Gentleman to quote selectively from past Acts, but on every occasion he and his colleagues have attempted to make the prosecutor's burden more difficult, not less. I ask him to use practical argument not only to consider what has happened in the past but to justify making that burden more difficult in the present. Our international obligations are fairly loose on the question of how the mental element is to be incorporated in law as regards possession. It is left to countries to include such provision in accordance with their legal principles and constitution. However, clause 323 is needed if we are to meet our obligations and if those obligations do not dictate to us what should be the burden on the prosecution with regard to the offences under the clause.

There is an overlap, but it is not unusual for such overlaps to exist. Prosecutors might ask why someone

is not pursued under this legislation, rather than under a previous Theft Act, but that Act should not be removed from the statute book, as it is well used, and it is highly appropriate in the circumstances that often apply. There is no reason in principle to make the prosecution's case more difficult, just because of the overlap that the hon. Gentleman has identified.

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

I am grateful to the Minister for that full explanation. I make no criticism by noting that we remain none the wiser about why those interesting distinctions were introduced in amendments to the 1988 Act. We would have to go to the Library and dig out old Committee Hansard reports to be further enlightened about that.

With regard to those distinctions, it is clear that the draftsman was looking at issues that arise in each clause differently, even if they were intended to cover a series of offences. The Minister has chosen a different approach—a consistent test approach—in the clauses that we are debating, with the exception of clause 324 where, interestingly, the he has chosen a different test. I suspect that that will be the subject of lengthy debate when we come to discuss that clause. The priorities have been reordered.

The attempt by my hon. Friend the Member for Surrey Heath and me to get the Committee to accept a different test of ''knowingly'' has failed, but I do not wish to be seen as attempting to wreck clause 323. It is a valid clause, and I do not want it to fall by the wayside, so I will not oppose it, but I hope that when the Bill reaches another place those who are—perhaps—better versed in the law than we are will consider the matter. I am concerned about the plethora of alternative offences that are punishable with the same maximums and yet have a different test applied to them.

I do not share the Minister's confidence that there will not be a change in the way in which prosecutions are brought. In the ordinary course of events, it is inevitable that prosecutors will follow the line of least resistance and prosecute under part 7, because it has a lesser test. That might well happen—indeed, I would do it myself if I were in that position.

An odd anomaly is developing, but previous draftsmen have attempted to keep the two offences—handling stolen goods, and acquiring, using or having possession of criminal property—along the same tracks.

I would like the Minister to go away and canvass his officials again, as I suspect that he might have to do that when the Bill goes to another place, even if he does not have to do that here. He has acknowledged that there are different tests, which we will address when we consider clause 324. I continue to worry about the matter, but not to the extent that I wish to prevent the clause from standing part of the Bill.

Question put and agreed to.

Clause 323 ordered to stand part of the Bill.