Proceeds of Crime Bill

Public Bill Committee, 4 December 2001.

Standing Committee B

Clause 75 - Criminal lifestyle

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 270, in page 47, line 24, leave out paragraph (c).

John McWilliam (Labour, Blaydon)

With this it will be convenient to take the following: Amendment No. 279, in page 47, line 26, leave out paragraph (e).

Amendment No. 280, in page 47, line 28, after 'benefited', insert

'to a minimum of £5,000'.

Amendment No. 271, in page 47, line 30, after 'offences', insert

'punishable by imprisonment or a by a fine of or above level 2 on the standard scale'.

Clause stand part.

Amendment No. 272, in clause 76, page 48, line 5, after 'concerned', insert

'and which is punishable by imprisonment or a by a fine of or above level 2 on the standard scale'.

For the avoidance of doubt, it may be helpful if I clarify the scope of the debate. On 15 November, the Committee had a long debate about the desirability or otherwise of using the term ''criminal lifestyle'' to describe defendants who meet the condition set out in clause 75. The debate that we are now to have relates to the condition attached to the term ''criminal lifestyle'' and the definition of conduct that forms part of a course of criminal activity. I wish to make it clear at the outset that it will not be in order to refer to the desirability or otherwise of employing the term ''criminal lifestyle'' during this debate, because that matter has already been discussed and we have made a decision.

Dominic Grieve (Conservative, Beaconsfield)

It has been acknowledged in previous discussions that this is a key clause in respect of the workings of the confiscation provisions. I shall obey your strictures, Mr. McWilliam, not to stray into a discussion about the desirability of the term ''criminal lifestyle''. We may even come up with a better term, but the detail of what constitutes such a lifestyle will be critical in respect of how the Bill works, whether unfairness may creep in, and whether the measure will cover the offences that most people expect it to or whether it will be widened to catch those who commit offences that most people may consider do not fall within the category of a criminal lifestyle.

It may be helpful if I run through the amendments tabled by the official Opposition. Amendment No. 270 would leave out subsection (2)(c), which refers to such offences that may be

''specified in regulations under this section by the Secretary of State''.

Amendment No. 271 would introduce the same restriction that we discussed last week about whether certain minor offences—those not punishable by imprisonment, but by a level 1 fine on the standard scale—should fall within the offences that constitute a criminal lifestyle. Amendment No. 272 is consequential and relates to clause 76.

I shall explain first amendment No. 270. The Bill defines what type of offence constitutes a criminal lifestyle. For the most part, the offences listed do not fully encapsulate the intention of the legislation. Subsection (2)(a) deals with drug trafficking offences. Subsection (2)(b) refers to money laundering offences. Subsection (2)(d) deals with

''conduct forming part of a course of criminal activity''.

Subsection (2)(e) concerns

''an offence committed over a period of at least six months''.

For the moment, we will leave aside the question whether paragraphs (d) and (e) are too widely drawn, in that they are capable of targeting offences that were not committed for gain. I am aware that such offences constitute one of the trigger provisions that bring people within the criminal lifestyle definition.

We are anxious about the provisions that might be specified in regulations made by the Secretary of State. The Minister has been helpful. He sent me a list—I am sure that other members of the Committee have received a copy—with examples of criminal conduct that the Government consider to be indicative of a criminal lifestyle. He has already set out along the path of defining the areas that the Government might deem necessary to regulate by statutory instrument.

Many of the offences listed are already covered under paragraphs (a), (b), (d) and (e), and do not require any further definition under paragraph (c). To demonstrate that, it may be helpful if I cite some examples from the list, which includes

''people trafficking, in the sense primarily of trafficking for sexual exploitation''.

Although it does not fall within paragraphs (a) and (b), the offence, by its nature, will be part of a course of criminal activity and would have been committed over a period of at least six months. The same would be true in the case of

''facilitation of immigration offences (including illegal working)''

''forgery of travel and other immigration-related documents''.

The list also refers to

''conspiracy to defraud the Crown (e.g. benefits, taxations, grants, etc),

to arms trafficking and to

''involvement in counterfeit currency and counterfeit goods''.

Mark Field (Conservative, Cities of London and Westminster)

The list is exhaustive, but under the example of conspiracy to defraud the Crown, will the defrauding of individual learning accounts be covered

under paragraphs (a) to (e)? Perhaps the Minister had it in mind under the all-embracing paragraph (c) to criminalise such minor offences?

Dominic Grieve (Conservative, Beaconsfield)

My hon. Friend may be right. The list refers also to insider dealing, and in certain circumstances such an offence could fall outside the scope of paragraphs (a), (b), (d) and (e). In that case, the offence would have to have been committed within a short time. However, such an offence is likely to require some preparation and therefore to have taken place over the specified six-month period.

The list covers ''dealing in child pornography''. That may be an example of when a person could be arrested on the first offence and be able to show a shorter course of conduct. We may have to consider what the Minister means by

''it constitutes conduct forming part of a ... criminal activity''.

My understanding of the clause is that any of the tests must be satisfied. The conditions mentioned in paragraphs (d) and (e) need not be satisfied together, because (d) can be satisfied without satisfying (e) for the time over which the offence was committed.

I shall finish the list to ensure that it is on the record: pimping, brothel keeping, corruption and terrorist funding offences. I tell the Minister that if the list is designed to be exhaustive in so far as there may be categories of offences that the Government are concerned may fall outside the scope of paragraphs (a) to (e), the sensible thing would be to state and refer to such offences specifically by amending the Bill. Alternatively, if the occasions on which the Minister believes that the Assets Recovery Agency should be brought into play involve offences that are likely to be over a time frame of six months or more, I am struck that it is unnecessary to include paragraph (c) at all.

The Minister will understand the anxiety that hon. Members are bound to have about paragraph (c). We are giving unfettered power to the Secretary of State—subject to regulations—to classify any offence that he decides to incorporate. The legislation will apply retrospectively because a regulation that has been specified may refer to conduct that occurred prior to the legislation coming into effect. That is a more compelling reason why the Committee and Parliament should be wary of giving extensive powers, by regulation, to place within criminal lifestyle provisions categories of offence that Parliament and the public may have never imagined would be included in such provisions. I do not believe in giving excessive discretion to Ministers. Is there a compelling argument why the provision's inclusion is desirable?

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

May I suggest to you that the reason for giving Ministers almost unfettered discretion is that although the will of Parliament is clear, we are not confident that judges, courts and the legal system will act in line with what Parliament desires? Rather than giving judges and courts the scope to reinterpret what we want and take out measures that we want included, we give the Home Secretary the opportunity to amend the legislation to

ensure that what Parliament and the public want is achieved. Is this a further example of your looking for loopholes for crooks?

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman prefaced his remarks with ''you'', and ended up by accusing me of looking for loopholes for crooks. I assure the Committee that I am doing no such thing.

Dominic Grieve (Conservative, Beaconsfield)

I think that I disagree with the hon. Gentleman. By virtue of discussions that we have had in earlier sittings, we are discussing mandatory provisions. The courts and judiciary will interpret them in the light of that. Parliament will provide that the judges shall deem that a defendant has a criminal lifestyle, and they will be obliged to do that. The question is not one of anxiety about judicial interpretation. The scope for judicial interpretation by judges to find a way out in a way that Parliament did not intend is non-existent.

Nick Hawkins (Conservative, Surrey Heath)

Does my hon. Friend share my worry that various interventions—the most recent being made by the hon. Member for Glasgow, Pollok (Mr. Davidson)—show that Government Back Benchers in the Committee often want to give the Labour Home Secretary carte blanche to do anything that he wants, in which case what is the point of Parliament and scrutiny? We might just as well have electronic voting from hon. Members' constituencies. We could ignore the Committee process and just have the Home Secretary's rubber stamp.

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman is out of line. Electronic voting from hon. Members' constituencies is not part of the legislation.

Dominic Grieve (Conservative, Beaconsfield)

My hon. Friend is right. We have the duty to decide what should fall under the term ''criminal lifestyle''. If we want to create an extensive list, we can do so. The hon. Member for Glasgow, Pollok will agree that there is nothing to prevent us from listing in the Bill all the offences that the Government consider indicative of a criminal lifestyle—the Minister could easily do that. Such a list might extend subsection (2) but would not cause any real harm.

We are not legislating: we are handing the Secretary of State the power to define ''criminal lifestyle'', and we know that the term will not be scrutinised adequately. I accept that there are circumstances in which it is reasonable to give a Secretary of State such executive power, because he has to take daily executive decisions that Parliament could not try to define. Nevertheless, as we are defining a new category of ''criminal conduct'', an offence that is punishable by confiscation of assets, it is incumbent on us to be careful about allowing him too much leeway.

If the Bill created a criminal offence where none had previously existed, it would be unusual and surprising for Parliament to give the Secretary of State the power to create any number of other criminal offences at will. Unfortunately, we do that too frequently with many

Euro directives, which we incorporate into our law through statutory instruments. It would be undesirable to give the Secretary of State those powers for such an important provision. I look to the Minister for a justification of the course of action adopted in subsection (2)(c), because I cannot find one.

We have already discussed the issues raised by amendment No. 271, but they should be considered further. The amendment would provide some small fetter on the extensive use that could be made of the power to decide what constitutes conduct that

''forms part of a course of criminal activity''.

I do not wish to repeat extensively the arguments made last week. I accept that this is a similar debate, albeit in a slightly different context. I simply signal that subsection (3) allows conduct that

''forms part of a course of criminal activity''

to apply to virtually any offence in which financial benefit is shown to have accrued. That could apply to an offence as far down the scale as a failure to have a rear light on a motor vehicle, as arguably a defendant could benefit from not replacing the light bulb. It is as simple as that.

Perhaps the Committee feels that we should include the provision that we have called the Al Capone'' or Al Capone principle, because it offers the state a powerful tool with which to find an excuse for bringing confiscation proceedings against someone who has never had anything more against him than such minor offences as any relatively law-abiding citizen might accrue in six years. The provision is an excuse to go after his assets through the confiscation procedure. Given that there is a civil recovery procedure in the Bill, there are powerful arguments, when one is dealing with such minor offences, to say that the burdens placed on the state, in respect of the civil recovery provisions, should not be arbitrarily removed to allow an excuse for confiscation. The debate, and the Minister's comments, have made it clear that the justification for including the confiscation provisions is that you already know, by virtue of a person's previous criminality, that he falls into a category whereby some of the protections that might be afforded to law-abiding people can properly be dispensed with.

Where do we draw the line? That is a question for the Committee to answer. However, if you decide that offences of level 1 on the standard scale should still be included within the trigger provisions, it could be argued that you are going too far. That is why I tabled amendment No. 271.

The Liberal Democrats propose a minimum limit of £5,000 in amendment No. 280. I will allow the hon. Member for Lewes (Norman Baker) to speak to that amendment, but I may seek to catch your eye, Mr. McWilliam, to comment on it. It would introduce a more powerful protection than amendment No. 270, and the Committee might wish to ponder those alternatives.

The hon. Member for Lewes also tabled amendment No. 279, which I shall comment on after he has spoken to it. However, leaving out subsection (2)(e) would be problematic, because it provides some protection, in

relation to the types and nature of offence. I assume that he wishes to remove it to strengthen the scope of the legislation, and I am interested to hear how that would operate.

With regard to amendment No. 270, the Minister must provide a careful justification of the power in subsection (2)(c). Definitions can be provided, and he has, helpfully, already done that. Why, therefore, should we give an unfettered discretion to the Secretary of State?

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman used the word ''you'' a lot in his speech. That word refers to me alone.

Dominic Grieve (Conservative, Beaconsfield)

On a point of order, Mr. McWilliam. I apologise for breaking that rule. However, I have difficulty obeying it, because I use the word ''you'' rhetorically, and it is frequently used in that way in the Chamber. The alternative is to use ''one'' all the time, which is rather ponderous. That is why I use ''you'' when I am not addressing you personally. If the ruling is that we cannot use the word ''you'' rhetorically, I will seek to abide by that.

John McWilliam (Labour, Blaydon)

The ruling is exactly that. The fact that the enforcement of it in the Chamber has become relaxed does not alter the original ruling, which is that one uses the third person.

Norman Baker (Liberal Democrat, Lewes)

Further to that point of order, Mr. McWilliam. If one is required to avoid the use of the word ''you'', there is an stronger case for reforming the House of Commons than we had previously thought.

John McWilliam (Labour, Blaydon)

That is one reform that I would not oppose.

Norman Baker (Liberal Democrat, Lewes)

I am delighted that we have found some common ground, Mr. McWilliam.

I understand why the hon. Member for Beaconsfield (Mr. Grieve) tabled amendment No. 270. It is an important amendment. I look forward to the Minister's explanation of why the catch-all is required, when he has already given an indication of the sorts of offences that would be covered.

As the debate has progressed, and positions have been staked out, many hon. Members' views on the legislation have become more entrenched. That is certainly so in my case. The Government have the laudable objective of ensuring that nobody can escape from the legislation—that all those who have proceeds of crime are caught and have no way out. Who can argue with that concept? My difficulty is that sometimes I feel that the method employed to ensure that the doors are bolted, the lock is on, and there is an armed guard outside to make certain that no one escapes may mean that the innocent will be caught up or, more likely, those who have been guilty of minor offences will be swept up into the same category as those whom the Government and the rest of us really want to catch. That is a worry.

I was not entirely filled with confidence by the intervention from the hon. Member for Glasgow, Pollok, who seemed to articulate again that he has

little confidence in the judiciary, and that it should be excluded as far as possible from an unfettered opportunity to express its views on how the law should be interpreted. As a matter of principle, that is a worrying development. I do not want to reiterate arguments in relation to previous amendments, but trying to exclude the judiciary from processes is not the right way to deal with legislation in this country.

In respect of amendment No. 270, it would be helpful if the Minister were to explain why the relevant provision is necessary. It would also be helpful if he were to explain what safeguards there are to ensure that it is not abused. We do not hear the word ''safeguards'' being used much on the Government Benches, which worries me. The Minister may say that he, his colleagues and the Home Secretary intend to use the provision only in line with the views of the Committee and Parliament, in an entirely proper way that will command public support, and I tend to think that that is probably true. I have every faith that that is how he wants to approach the legislation. However, if we write into legislation such wide catch-all phrases, what will happen when we have a Home Secretary or a Government who do not want to respect the views of Members of Parliament or the way in which the Committee has formulated its opinions?

What will happen if a future Home Secretary says, ''I want to pull the levers that I have as far as they can go,'' and asks his civil servants and officials, ''How far can I go?'' When the answer comes back, ''You can go a great distance because, although they have not been used, huge powers are available,'' that Home Secretary will say, ''Great. Let's do it.'' If the Minister is in opposition, it will be difficult for him to criticise such a Home Secretary because he will have piloted through those powers in this Bill. If the Minister were to pay more attention to safeguards, I would have rather more confidence in the way in which the Government are proceeding. I am not criticising the intention of the legislation, which I support, or the intention of the clause, which I also support—it is absolutely right that people who are drug trafficking, money laundering, pursuing gain from prostitution and so on should have their assets seized—but we must ensure that innocent people and those who are guilty of only minor crimes are not caught up.

I merely want to seek the Minister's comments on amendment No. 279—I do not intend to push it too far. I accept that there may be a useful category of offence that is committed over a six-month period and that may not be caught by paragraphs (a) to (d), although it may be caught by paragraph (c) if it remains in place. What category of offence would be caught only by subsection (2)(e)? Why is it necessary? If it is covered by paragraphs (a) to (d), paragraph (e) is, by definition, superfluous. I am also concerned that subsection (2)(e) might, on occasions, enable minor criminal activity to be swept up into the same categories as major criminal activity.

Let us suppose that a person fiddles the office expenses or a local councillor claims for travelling from his house to the town hall over a period of six or seven months, and it transpires that he has been making false claims. The sum may amount to pennies, but such action would be caught by subsection (2)(e). I do not think that the Minister is interested in catching such people, but will they be caught? Should there not be a safeguard to ensure that the weight of the law is not brought down on them?

Ian Lucas (Labour, Wrexham)

In those circumstances, the councillor would be liable only for the benefit that he obtained as a result of his criminal activity and that would limit the extent to which he was liable.

Norman Baker (Liberal Democrat, Lewes)

I hope that that is the case, but I seek clarification from the Minister about the effect of subsection (2)(e). In the Government's laudable intention to ensure that no one escapes the consequences, other people will be swept up by the provisions.

The hon. Member for Beaconsfield referred to amendment No. 280. It and a subsequent amendment are attempts to ensure that a de minimis arrangement applies. If the Minister wants to ensure that those who hitherto escaped justice are caught—something that the Liberal Democrats support—and wants to catch the Mr. Bigs, the pillars of society who have managed to evade justice because they employ accountants, lawyers and other paraphernalia that enable them to get round the law, he should have no objection to a de minimis level of £5,000. After all, the Mr. Bigs of this world are not interested in figures of less than that. That provision is an alternative to amendment No. 271, which uses slightly different terminology.

What is the objection to a de minimis level? The Bill is surely concerned with catching big criminals. To date, the Minister has not convinced me that such a provision is not required. He wants to make the provisions as wide as possible in the event that in circumstances that he cannot foresee someone may gain a sum of less than £5,000—a level 1 offence—and be swept up by the Bill. That is not good enough. I seek justification why a de minimis level is not appropriate.

Bob Ainsworth (Labour, Coventry North East)

Before I refer to the amendments and the clause, I wish to respond to the hon. Members for Beaconsfield and for Lewes. The underlying accusation that is thrown at us time and again is that we are not interested in safeguards in what is a complicated Bill with much cross-referencing. I remind the Committee that safeguards are in the Bill. I am willing to discuss whether they are adequate, but I want to stop the allegation that there are none.

There are two clear safeguards for the courts to use under the confiscation procedure. If there is a serious risk of injustice, assumptions should not be made. On the balance of probabilities—because we resisted attempts by the Opposition to lift the level of proof required —it is for the defendant to show that the cash or property concerned is not the proceeds of crime.

There are safeguards in the Bill. Let us have no nonsense about claims that there are none. Let us frame the allegations to ask whether those safeguards are adequate, because I find myself considering issues that are raised repeatedly on every clause, and many of the amendments and propositions that we have considered are attempts to supply not a safeguard but repeated safeguards.

Sometimes it seems that when Opposition Members raise issues about safeguards, they do not want belt and braces: they want belt and braces, locks, chains and chastity belts to ensure that the Bill is safe. I wonder whether they genuinely want the legislation to be effective.

Norman Baker (Liberal Democrat, Lewes)

For the record, I am not in favour of chastity belts. I did not say that there were no safeguards in the Bill—the Minister may check the Hansard record. I said that he does not talk much about safeguards, and that I would have more confidence if he did. I am delighted that he is now doing so.

Bob Ainsworth (Labour, Coventry North East)

Some of us wear our hearts on our sleeves, and some of us choose not to. There are safeguards in the Bill. We have discussed them, and any member of the Committee who has followed its proceedings knows what those safeguards are. I fear that if we gave into some of the proposals that are made repeatedly as we go through the Bill, we would wind up with a Bill that contains so many safeguards, and so many hoops through which any prosecuting authority must jump, as to be unworkable.

Nick Hawkins (Conservative, Surrey Heath)

I appreciate that in the Minister's points about safeguards he was referring to the hon. Member for Lewes, but my hon. Friend for Beaconsfield and I—and other Opposition Members—are more concerned about the unfettered powers that subsection (2)(c) gives to the Home Secretary. I hope that he will deal with that separate point, which is not a safeguards point.

Bob Ainsworth (Labour, Coventry North East)

I certainly shall.

Annette Brooke (Liberal Democrat, Mid Dorset and North Poole)

I want to return to the point about safeguards. Clearly, they are a matter of balance. I do not think that discussion on the subject should be confrontational. We have had a long debate about whether the word ''serious'' should be linked to ''risk of injustice''. Concerns about safeguards stand if there is a serious risk of injustice. That is probably what causes concerns. There are degrees of injustice that would be considered under the safeguards. Would the Minister like to comment on that?

Bob Ainsworth (Labour, Coventry North East)

The hon. Lady is absolutely right to say that we have had such a discussion. I am concerned that as we consider different issues in the Bill, hon. Members repeatedly try to build in safeguards. I think that I have adequately described my worries on that subject. If we provided a safeguard that was a very high hurdle for prosecuting authorities to get over,

that would have the same effect. That was the nature of our discussion about whether we should remove the word ''serious'' and say just ''risk of injustice''.

The courts are capable of considering the two safeguards in the Bill and making certain that confiscation does not occur if there is a serious risk of injustice or if the defendant shows that, on the balance of probabilities, his property is not the proceeds of crime. I have said that in previous conversations, and cannot say it differently or make it any clearer.

Dominic Grieve (Conservative, Beaconsfield)

Perhaps I have never put the matter to the Minister in this form: I think that he agrees that the Bill excludes certain types of criminal offences—amazingly, I sometimes think, in the light of his comments. A single stealing offence, for instance, would not be sufficient to trigger the confiscation provisions. The Government must have had a reason for deciding that certain categories of offences should be excluded completely. We are not talking about safeguards but about whether we should widen the scope of the categories of offences that should be excluded completely. The Minister has surrendered the principle, because at present the Bill excludes such offences.

Bob Ainsworth (Labour, Coventry North East)

I do not really understand the hon. Gentleman's point. The Bill is fairly clear. Certain kinds of offences, some of which are in previous legislation, some of which we can readily identify now, and some of which we may not be able to identify now but may become apparent later, should, at the first occurrence, be considered to be an indication of a criminal lifestyle. I do not see any reason why Committee members cannot accept that arms trafficking, for instance, is an indication of a criminal lifestlyle. The Bill should include no requirement for the prosecution to be able to show that that arms trafficking has gone on over a six-month period or that there have been three or four different incidents of arms trafficking in order to accept that it is an indication of a criminal lifestyle.

Helen Clark (Labour, Peterborough)

I would like to take us back to the list that all Committee members received, which the hon. Member for Beaconsfield read out to us today, of the items that could trigger the definition of a criminal lifestyle. I would like to feel that officials would return to that list and extend it. In relation to child pornography, it is clearly right that that should be listed, but other aspects of pornography are equally criminal: snuff movies, bestiality and so on.

Bob Ainsworth (Labour, Coventry North East)

My hon. Friend is absolutely right. The reasons for giving the Committee the list were twofold. One was to try to reassure the Committee that we did not intend to include offences such as speeding as criminal lifestyle crimes, triggering the assumption on the first offence. The other was to enable the Committee to suggest possible omissions. I would welcome hon. Members' thoughts about crimes that should be added to the list. We are talking not necessarily about the seriousness of crimes but about the proceeds of acquisitive crime, so very serious

crimes that are not acquisitive should, rightly, not be included in the list. That does not detract from their seriousness.

David Wilshire (Conservative, Spelthorne)

I do not think that any of us would disagree that arms trafficking should be one of the crimes that is caught. However, I cannot see much difference between that and drug trafficking offences and money laundering offences, to which subsection (2)(a) and (b) refer specifically. If it is felt necessary to spell those out in the Bill rather than to do so by regulation, why is the Minister not willing to make specific reference to arms trafficking in the Bill?

Bob Ainsworth (Labour, Coventry North East)

I hope that the hon. Gentleman will accept that the burden of one of the amendments would be that, in order to define arms trafficking as a criminal lifestyle offence, wholly new primary legislation would be required. It would not allow such a crime to be defined by order, with parliamentary scrutiny, as a criminal lifestyle offence. I do not know whether he agrees with his Front Bench colleagues about the procedure that should be required in relation to such definition, but that certainly appears to be the suggestion.

Nick Hawkins (Conservative, Surrey Heath)

Front-Bench spokesmen are not always suggesting that.

It appears that the Minister has not fully taken on board the point of my hon. Friend the Member for Beaconsfield. We would be happy to allow everything in the Minister's guidance list to be included in the clause. Arms trafficking could be added to the list. It is as generic a category as drug trafficking and money laundering. They are not specific offences—they are categories. As it has been a principle that has been established in English law for at least 300 years that the citizen should know what the law is, that should be set out in the Bill.

Conservative Members dislike the fact that the Government have repeatedly ignored that principle, and that they have tried to give the Secretary of State a blanket discretion to add whatever he likes—because that means that the citizen does not know what the law is. That is a bad principle in legislation.

Bob Ainsworth (Labour, Coventry North East)

As we go through the Bill, we will be able to show that that is not the case. I recall the comments of the hon. Member for Beaconsfield about the retrospective nature of the Bill. However, amendments have been tabled that will allow the Committee to explore whether it is retrospective. I believe that the hon. Gentleman's comments were not justified.

I wish to plough through this group of amendments to raise the key issues, so that hon. Members can discuss them, as I have kicked the general principle around for a long while.

Dominic Grieve (Conservative, Beaconsfield)

The Minister said that we tabled an amendment that would make it impossible to bring arms trafficking within the category. That mystified me, and it would be helpful if he would explain why that amendment would have that effect.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman is saying that a definitive list must be drawn up now, and that there must not be any additions to it, so if it subsequently becomes obvious that a crime should be added, new primary legislation will be needed.

Until recently, it was not generally recognised that organised crime is heavily involved in people trafficking. However, we now know that it is heavily involved in the abuse of asylum, and that it shifts between drug trafficking and people trafficking, according to which activity is more profitable at any given time. The hon. Gentleman is suggesting that if such a situation were to arise again, new primary legislation would have to be introduced to deal with it, and that the Secretary of State should not be allowed, with Parliamentary scrutiny, to bring that within the compass of the regulations by order.

Nick Hawkins (Conservative, Surrey Heath)

That is incorrect. Assuming that what the Minister describes as people trafficking is a criminal offence, will he explain why that would not be covered by subsection (2)(d)? I appreciate that, before he answers that question, he may wish to receive advice from his officials. However, if the Home Secretary's blanket discretion as laid out in subsection (2)(c) is excised, subsection (2)(d) would still be included, as would subsection (2)(e)—unless amendment No. 279, which was tabled by Liberal Democrat Members and with which I have some sympathy, is made. This is not a matter of, ''You have to have all of them.'' With regard to the way that the Bill is drafted, any of them will do.

John McWilliam (Labour, Blaydon)

Order. I do not need any of them.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman knows—or he ought to know, if he has read the Bill, as, unlike me, he is legally trained—that, to trigger paragraph (d), there would be a requirement to show that the person was not only involved in people trafficking on one occasion but had been involved in other criminal activity on more than one occasion. That is the difference between subsection (2)(d) and the list that would be included with the Bill of those crimes that would automatically trigger the assumption of a criminal lifestyle. As the hon. Gentleman knows that, I think that we are playing games.

Paul Stinchcombe (Labour, Wellingborough)

I hope that I am not playing games. I wish to ask a question about the most obvious and serious criminal for gain, which is the hitman. Would a hitman fall within the definitions of the Bill or the list, if he were a hitman on only one occasion?

Bob Ainsworth (Labour, Coventry North East)

He certainly could be categorised as having committed an acquisitive crime, because I am sure that he would not have been a hitman merely for

the sake of hitting people—although, if that were the case, it would not be an acquisitive crime. If he were involved in a criminal gang that pursued profit, his activities would be associated with criminal gain and would therefore be within the definition of an acquisitive crime. I do not know whether a hitman would automatically trigger the assumptions. I will check that out and get back to my hon. Friend.

Mr. Grieve rose—

Bob Ainsworth (Labour, Coventry North East)

I am being hit by a hitman.

Dominic Grieve (Conservative, Beaconsfield)

As the regulations are drafted, the hitman would not trigger the assumptions. He would trigger them only if he committed two other offences, such as not owning a television licence, during the previous six years and thus had committed three acquisitive crimes for gain during the six-year period, or if the prosecutor could demonstrate from other extraneous evidence that he was not a newly arrived hitman but had been in the criminal fraternity for at least six months. That is an exact example of the fettering that I assumed that the Government had considered and decided was legitimate for the sake of not casting the net too wide for all offences.

Bob Ainsworth (Labour, Coventry North East)

I am enormously pleased by the hon. Gentleman's comments because, as a hitman, he appears to have shot himself in the foot by proving the need for an order-making power to allow addition to the list of offences that indicate a criminal lifestyle.

Let us move on, otherwise we will be here all day.

David Wilshire (Conservative, Spelthorne)

We will be here all day anyway.

Bob Ainsworth (Labour, Coventry North East)

Yes, but we would not be able to discuss other amendments, and we would be criticised for that by the hon. Gentleman, without his having to waste time.

Clause 75 sets out the criteria that govern whether a person has a criminal lifestyle. They are completely factual and therefore provide legal certainty. Under current legislation, drug trafficking, including drug money laundering, has always triggered assumptions. A conviction for any drug trafficking offence triggers an examination of the defendant's entire past drug trafficking and the mandatory application of assumptions.

Similarly, the Bill treats drug trafficking offences as conclusive of a criminal lifestyle and, in addition, subsection (2)(b) treats money laundering offences as offences that are always criminal lifestyle offences. Subsection (2)(c), as the hon. Member for Beaconsfield pointed out, enables the Secretary of State to specify by regulations other offences that are always criminal lifestyle offences. Such offences might include trafficking in arms. I have issued a list of offences but I do not understand how it can be conclusive, and that is why there is a need for paragraph (c).

Nick Hawkins (Conservative, Surrey Heath)

I am puzzled that the Minister read from his brief that clause 75 provides legal certainty. He said that paragraph (c) gives the Secretary of State the power that we described, and that makes our point for us. There is no legal certainty because the scope is

opened for a future Home Secretary to prescribe whatever he likes. Legal certainty would be provided by the incorporation in the Bill of the Minister's guidance list and anything further that he wishes to add.

Bob Ainsworth (Labour, Coventry North East)

There are other amendments that deal with the part of the Bill that is retrospective. The Government do not intend to introduce legislation that draws in these offences retrospectively and brings an action that was committed by an individual, which was not known to him at the time to be a crime and may be legal in the future, within a criminal category. We will be able to demonstrate that when we discuss that particular issue. The hon. Gentleman will have the opportunity to prove his case, or otherwise, because of the amendments that he has tabled.

Amendment No. 270 would remove from the Secretary of State the ability to specify new criminal lifestyle offences. In that case, the only offences that would automatically lead to the assumption of a criminal lifestyle would be drug trafficking and money laundering offences. Subsection (2)(c) recognises that there will be other criminal lifestyle offences that may not yet exist when the Bill is enacted. There should be provision for such offences to be added.

Dominic Grieve (Conservative, Beaconsfield)

That is a bad point. If we enact future legislation to create criminal offences, it would be easy to have a consequential amendment placing that particular category of offence within the confiscation provisions. It can be done routinely without any difficulty.

Bob Ainsworth (Labour, Coventry North East)

We are not doing anything out of the ordinary. The hon. Gentleman knows that certain principles should be laid out in primary legislation. There are certain order-making powers built into every Bill that enable Ministers to respond to changing circumstances. His suggestion that we are doing something extraordinary does not bear scrutiny. It should be clear from the list of conduct that I have circulated to members of the Committee that there is conduct other than drug trafficking and money laundering that is inherently indicative of a criminal lifestyle. Our initial consideration exposed a broad range of conduct that falls into that category. I am sure that the Committee will agree that arms trafficking, for example, is always indicative of a criminal lifestyle and should always expose the offender to a criminal lifestyle confiscation scheme without the need for further primary legislation. That is our reason for opposing the amendment.

Subsection (2)(e) states that a defendant has a criminal lifestyle if he has been convicted of any offence committed over a period of six months or more. It will thus be possible to confiscate the benefits from a defendant's entire past criminal conduct if he has been convicted of one offence of any nature. Unless the offence falls under subsection (2)(a) to (c), it must have been carried out over a period of six months or more. The removal of subsection (2)(e) would mean that a person who is charged with a single

offence of cheating the public revenue over a period of 10 years could not be treated as having a criminal lifestyle.

The hon. Member for Lewes talked about the individual who has fiddled his expenses over a period of six months and said that the proceeds of that conduct would amount to pennies, so those should not be the type of people whom we are trying to catch, but in many instances when a person has been involved in criminality for more than a six-month period, substantial amounts would be involved. In a case involving pennies, it is extremely doubtful that a prosecutor would wish to proceed. It would be easy for a defendant to show that there was a real risk of serious injustice. If the overwhelming majority of his property was legally gained, there would be no confiscation. The prosecutor would therefore know at the outset that he was about to waste a huge amount of resource pursuing something when he had absolutely no chance of gain.

Norman Baker (Liberal Democrat, Lewes)

That is helpful. The Minister has stated the aim that I believe to be appropriate: to pursue those who have secured a substantial sum over a long period. I have no wish to prevent that from happening, which is why I approached the amendment tentatively. He concedes that the provision to pursue people for pennies, although it would be unwise and unlikely to happen, will still be in the Bill. I therefore hope that he will consider the de minimis point, which I also raised.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman is right in theory. A prosecutor has the ability to pursue somebody for relatively small amounts gained by acquisitive crime if that crime has been committed over a six-month period. I do not regard that as a serious threat, for the reasons that I have just given, but it is possible in theory.

Our problem—I think that we have discussed this previously, and I am more than happy to listen to the hon. Gentleman's point of view—is how to build in a threshold that ensures that that does not happen, and satisfies Committee members that that will not happen, without providing a loophole through which the people whom we wish to capture can climb. If we genuinely want the legislation to be effective, we must make absolutely certain that the activities and capacity of the prosecuting agencies are not dissipated by chasing inappropriate people and inappropriate amounts. On that basis, we could consider how to build in some kind of threshold. However, I would need to be satisfied that we had not provided an easily exploitable loophole. Rest assured—the hon. Gentleman knows this—that there are lots of clever people in this world, who have clever representatives, who would climb through it without any hesitation whatever.

Nick Hawkins (Conservative, Surrey Heath)

May I offer the Minister a way of doing that in a manner that is consistent with lots of other legislation? The kind of safeguard sought by the hon. Member for Lewes—with whom I agree on this matter—would be a provision whereby if the offence were purely summary only it would not fall within subsection (2)(e). That is a frequent feature of legislation, which does not provide a loophole—we are not seeking to water down the Bill—but does introduce a de minimis provision. I offer that to the Minister as the Hawkins amendment.

Bob Ainsworth (Labour, Coventry North East)

That presupposes that huge profits cannot be made by summary only offences, which we have also discussed previously. The severity of the offence is not necessarily an indication of the size of the profit that can be made. Whenever one starts to think of thresholds, those problems arise. I fully accept that Opposition Members' suggestions in relation to thresholds and de minimis amounts are for good and proper reasons, but they must bear it in mind that relatively minor offences can generate huge profits.

Dominic Grieve (Conservative, Beaconsfield)

This discussion has been illuminating. Although the Minister is almost moving away from this now, it seemed that, in introducing confiscation provisions, the Government accepted that being a criminal did not, on its own, mean that one should be subject to confiscation, because that is draconian and reverses the burden of proof. The Government therefore introduced triggers through the criminal lifestyle clause. However, the logic of his arguments is that the Government would have liked a formula whereby any criminal offence makes one liable to confiscation. The civil procedure would have had to be retained for people who have not committed any offences at all. One is therefore left with an unpleasant feeling that the Government have felt constrained not to widen the scope, but are now trying to ratchet it back through the statutory instrument framework that they are introducing.

Bob Ainsworth (Labour, Coventry North East)

I assure the hon. Gentleman that that is not the intention. I do not know whether he listened to my explanation, but he has got it wrong. It is right that any acquisitive criminal activity triggers confiscation, but it does not trigger assumptions. We do not desire or intend to extend the list to include every criminal activity. I have tried to reassure the Committee by telling hon. Members what kind of offences we have so far identified that should automatically, on a single offence, trigger the assumptions. The Government do not intend to include crimes that differ dramatically from that kind of offence. A single offence of drug trafficking, people trafficking, arms trafficking or money laundering should be enough to trigger the assumptions, because of the nature of those offences.

Nick Hawkins (Conservative, Surrey Heath)

I do not think that the Minister fully understands my hon. Friend's point. We have no difficulty with large-scale offences such as money laundering and drug trafficking. We have not sought to take out paragraphs (a) or (b). We have suggested

adding extra categories of more serious offences to those that he mentions. We are certainly not trying to water down the provisions.

The Minister cannot have it both ways. He may say that the draconian provisions are not intended to apply to anything other than serious crime. Summary offences, as has been decided in other legislation, are not serious crimes. I understand that large profits can be acquired through some summary offences, but it would be unusual for a summary offence to enable anyone to earn large profits. I hope that he understands our point. If he believes that the draconian provisions should automatically apply to only very serious crime, he should be prepared to insert a de minimis provision to restrict its application to summary offences.

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman is making an argument that we have already heard.

Bob Ainsworth (Labour, Coventry North East)

We have, Mr. McWilliam.

I can only try to reassure the hon. Gentleman by saying that we do not intend to extend the list, by order, to summary offences. Summary offences can be brought into proceedings, and can thereby trigger the assumptions, if it is shown that they are part of a repeat pattern of offending. It is not our intention that a person's first conviction for a summary offence should automatically trigger the assumptions.

The hon. Gentleman asks us to say that we should have a definitive list, and asks that the Bill contain no provision to extend that list. I resist that, because it may become apparent to everybody that a certain category of crime should have been included, and we would then have to introduce primary legislation in order to include it.

Norman Baker (Liberal Democrat, Lewes)

I understand why the Minister has made that point. I do not want to preclude him from suddenly identifying a serious offence that must be included—he would be absolutely right to include such an offence—but the Anti-Terrorism, Crime and Security Bill, which was debated in the House only the week before last, took a different approach. For example, it listed in a schedule all the chemicals that it would be an offence to hoard, but it also gave the Government the power to amend that schedule by secondary legislation. That is a slightly different approach. As a halfway house, could the Minister include a schedule to the Bill that reserved the power to amend the provision?

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman clearly has not read clause 441.

Bob Ainsworth (Labour, Coventry North East)

I am not surprised that he has not. I am staggeringly impressed that he is able to delve into anti-terrorism legislation while delving into this Bill and doing God knows how many other things. I have not noticed anything in the Bill that is out of kilter with the anti-terrorism legislation. I do not have the hon. Gentleman's capacities.

Boris Johnson (Conservative, Henley)

The Minister assures us that the Government do not intend to bring summary offences within the scope of the Bill, but how can he

reassure us that that will not be the intention of future Home Secretaries, who might be less benign than the present incumbent? When the Bill is on the statute book, will it be possible to fetter the Home Secretary in the way that my hon. Friend the Member for Beaconsfield described?

Bob Ainsworth (Labour, Coventry North East)

When the hon. Member for Lewes attempted to frighten me with the bogeyman of a future Tory Home Secretary I could, at least, see where he was coming from. When the hon. Member for Henley (Mr. Johnson) tries to frighten me with such a prospect, all kinds of considerations are thrown up.

The matter is not out of kilter with the way in which current legislation is structured. Subsection (2)(c) gives a future Home Secretary the power to add to the list, but he will be subject to parliamentary scrutiny. If a future Home Secretary of any political complexion tried to include an offence that was totally out of line with those that are included, that would become a public issue and he would have to justify his actions to Parliament and to the court of public opinion.

I give some reassurance to the hon. Member for Henley. As the Bill is drafted, the negative procedure would be used. Any addition to the list would have to be prayed against by Opposition parties. If there is a lot of worry about the matter, I will consider whether the affirmative procedure should be used. That may alleviate hon. Members' fears.

David Wilshire (Conservative, Spelthorne)

I, too, am worried, and I offer the Minister an alternative way in which to help my hon. Friend the Member for Henley. I accept that the Government do not intend to use the powers in the way that we are worried about. Will he consider introducing a provision to make paragraph (c) lapse when the next general election is held? That would be a real way to demonstrate his commitment to prevent misuse of the power by any future Government.

Bob Ainsworth (Labour, Coventry North East)

I have never known a sunset clause to lapse not after one or five years, but at the next election. Perhaps we should wait and see who wins the next election, so that we can ensure that the provision lapses if we wind up with a potentially non-benign Home Secretary. The only matter on which I agree with the hon. Gentleman is that we should all help the hon. Member for Henley.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

I suggest that the Minister considers seriously the point of the hon. Member for Spelthorne (Mr. Wilshire). I would like nothing more than to campaign during the next general election by saying that Labour will retain the list of specified crimes and that, presumably, the Tories favour its removal. I would be keen to say that the Tories are soft on crime and that we are determined to protect our people.

Bob Ainsworth (Labour, Coventry North East)

I do not think that I will go down that road.

Mark Field (Conservative, Cities of London and Westminster)

Clearly, clause 75 is of key importance. My hon. Friends the Members for Beaconsfield and for Surrey Heath (Mr. Hawkins) rightly said that the clause, as currently couched, adds an extra layer of uncertainty. Has consideration been given to reverting

subsection (2) to a list of offences that would not be caught? Would that be a more sensible way of proceeding? It would be easy, for example, to envisage the inversions of paragraphs (d) and (e). No doubt summary offences would be part and parcel of that. I hope that the Minister understands the genuine and principled concern of Conservative Members about a large and uncertain clause that could be added to on an ad hoc basis. Would the matter be easier if the clause was negative, rather than positive, listing the offences that would not be caught?

Bob Ainsworth (Labour, Coventry North East)

I know what the hon. Gentleman is trying to suggest, but it would be very difficult. We try to ensure that a positive list is comprehensive and argue about whether the Secretary of State should be able to extend that list. I hate to think how much time it would take to draw up a comprehensive negative list, how long and complex it would be, and how many worries would arise from it.

Norman Baker (Liberal Democrat, Lewes)

With great respect to the hon. Member for Cities of London and Westminster (Mr. Field), is that not rather a dangerous idea, as it would be easier to miss things off that list?

Bob Ainsworth (Labour, Coventry North East)

That is correct. Moreover, with regard to anything that was left off the list, the assumptions would be automatically triggered.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

While my hon. Friend is slapping down that proposal by the hon. Member for Cities of London and Westminster, will he also bear in mind another of the hon. Gentleman's suggestions—which I strongly support—that insider dealing should be included in the list of offences that would trigger the mechanism? That is a constructive suggestion—and who better to advise the Committee on the seriousness of insider dealing than the Member who represents the Cities of London and Westminster?When the hon. Gentleman next walks along the streets of London and Westminster, he will be applauded by his constituents, who have obviously impressed upon him the need to do something about insider dealing. I say to the Minister, ''Don't be a softy; accept the suggestion by the Opposition Member, and call it 'the Field amendment.'''

Bob Ainsworth (Labour, Coventry North East)

I cannot remember whether the hon. Member for Cities of London and Westminster actually made that suggestion; perhaps he has been misrepresented. However, if my hon. Friend is confident that he did say that, he should ensure that the hon. Gentleman's constituents are aware of it, so that they can take it into account when they consider whether he is representing them properly.

We are having a bit of fun, but we are also dealing with a serious clause, and now we must try to address its key issues. Amendment No. 280 would require a defendant to have benefited from the combined triggering offences to the tune of £5,000. Part IV of the Criminal Justice Act 1988 instituted a £10,000

threshold, below which confiscation could not be considered. The effect of that threshold was to reassure criminals that their ill-gotten gains would be safe from confiscation if they hid all but £9,999 of them. Amendment No. 280 would have a similar effect—albeit at a lower threshold. It would reassure repeat acquisitive offenders that a criminal lifestyle action could not be taken against them if the authorities were unable to prove that the benefit was more than £5,000.

I recognise why hon. Members are concerned, and what they are trying to achieve. If a way could be found to achieve their aim without providing loopholes for serious criminals to climb through, I would want to consider it. However, as our discussions both inside and outside the Committee have indicated, there is a real danger that loopholes will be created. I will continue to consider whether something can be done, but I have real fears—which some hon. Members are not taking as seriously as they should—that if a proposal for a threshold were not properly thought through, it would, in practice, be wide open to abuse.

Norman Baker (Liberal Democrat, Lewes)

I hear what the Minister says, but £5,000 is a low figure—it is even lower than the threshold in the previous provisions to which he referred.

Concerns have been expressed about summary offences. Does the Minister not agree that dealing with a set figure addresses the problem that summary offences can also involve large sums of money? The amendment, by defining a low sum, would be a cleaner way of dealing with that—and the Minister is clearly sympathetic to it.

Bob Ainsworth (Labour, Coventry North East)

I am always staggered by the affluence of other hon. Members. The hon. Gentleman has stated that £5,000 is a low figure. If I had obtained £5,000 by committing a crime, I would not consider it to be a low amount.

I shall not say any more, except that I acknowledge that hon. Members are genuinely attempting to steer the legislation in the right direction. However, I cannot see how we could do that without providing escape routes for serious criminals. That is why I am not minded to do it. I do not want to give members of the Committee the impression that I would take such action.

The amendment would have a harmful impact on the practical effectiveness of confiscation. The sort of offender at whom confiscation is targeted often makes a small amount from an individual offence, but huge profits from repeat offences, such as selling pornographic videos. The offender's profit from a single offence of producing a video may be only £10, but he may have produced and distributed a quarter of a million videos in a month or six months and made substantial profits. Under the amendment, it would be possible to take into account only the offences on the charge sheet, or a single offence in the present proceedings and one offence on two previous occasions. Such a measure would go nowhere near the

£5,000 limit and we would have put the ill-gotten gains of wide range of offenders beyond the reach of confiscation.

Amendments Nos. 271 and 272 bring us back to last week's debate on clause 70. Under amendment No. 271, a repeat offender would not be deemed to have a criminal lifestyle if any of the offences of which he or she had been convicted was a level 1 offence that did not attract a term of imprisonment. Amendment No. 272 is related to amendment No. 271, and would mean that particular criminal conduct would not include any level 1 conduct that did not attract a term of imprisonment. The principle underlying the Bill is that a criminal lifestyle may be shown by repeat offending from which the offender has benefited. If we moved away from that principle, we would create difficulties.

I think that I have covered the points raised by the amendments and clause stand part. We cannot accept the amendments. They would provide unnecessary safeguards. Such practice would not be triggered and has not been so triggered under current legislation. The hon. Member for Beaconsfield says that we are widening the provisions, and I accept that we must think seriously about such points. However, I ask hon. Gentlemen to withdraw their amendments; if they do not, I shall ask my hon. Friends to vote against them.

David Wilshire (Conservative, Spelthorne)

I have listened carefully to the Minister. I hope that he can reassure me about our underlying concerns raised on the amendments and clause stand part. I do not want to lengthen the debate for the sake of it—I never do that. I accept that the hon. Gentleman has tried to be as helpful as he can, but sadly, he has not responded to my worries about the clause. The main point in his response was that there are safeguards in the Bill and our amendments would provide loopholes for the potential criminal. I accept that such thoughts are fashionable, but the more I have listened to the debate, the more I have reached the conclusion that the clause puts loopholes into the Bill for the benefit of the prosecution, not the defence.

I shall explain why. The Minister has made much of the fact that there are two overarching safeguards. He has repeatedly drawn our attention to the idea that there is a serious risk of injustice. That is helpful, except the provision already concerns a serious risk of injustice. I take it from that that the hon. Gentleman is happy to contemplate minor risks of injustice. I see this clause as providing loopholes so that the prosecution can say, ''This will catch that person, and the amount of injustice will not be serious; it will be minor.''

John McWilliam (Labour, Blaydon)

Order. We have already had that debate.

David Wilshire (Conservative, Spelthorne)

I appreciate that, Mr. McWilliam, and I accept your ruling. However, it is relevant to put my concerns into the context of what the Minister has regularly said are the arguments against them.

I hoped that the Minister would respond to one other general consideration, which arose out of the debate on amendment No. 270. The hon. Member for Glasgow, Pollok made an intervention with which I

hoped that the Minister would deal. He suggested that subsection (2)(c) could safely remain, so that the Executive and the legislature could make their meaning crystal clear to the courts, and the courts would do precisely what they were told, irrespective of whether the legislation was drafted correctly or whether they interpreted it right. The Minister should have addressed such a fundamental point. The fact that he did not do so leads me to wonder whether the amendments need to be taken a great deal more seriously than the Minister appears to have taken them. The hon. Member for Glasgow, Pollok sought to undermine the key safeguard of the liberties of the British subject—the rule of law, for which he would substitute the diktat of Parliament, or of the Executive. If that is the purpose of the provision, it is wrong; it is not only bad legislation, but wrong.

Are we moving towards saying, ''The Home Secretary of the day will decide that the courts are wrong. Hard luck.'' If so, I do not mind which political party provides the Home Secretary—this is not an attack on a Labour Home Secretary, and I hope that I would have the guts to stand up and say exactly the same thing if my party were to give that kind of power to a Conservative Home Secretary—it should not be allowed. However much the Government say that they do not intend to misuse the power, it undermines the rule of law. I accept exactly what the Minister says, and I offered him a way of dealing with the matter—to say that the provision would be for the duration of this Parliament, or for as long as his party provides the Home Secretary. If you read your history books, Mr. McWilliam, I am sure that you will agree that history teaches us that if there is a power that somebody can abuse, sooner or later somebody will abuse it.

John McWilliam (Labour, Blaydon)

Order. I can reassure the hon. Gentleman that when I moved from Scotland to England 25 years ago, I did read my history books, because the kind of history that I was taught in Scotland is rather different from the kind of history that one is taught in England.

David Wilshire (Conservative, Spelthorne)

Yes, Mr. McWilliam, that is right. I would not claim to be a student of Scottish history, but I am sure that you would accept that it is not sufficient to say that because we are English or Scottish—or British—we would never do what other countries do and abuse the powers given to the Government of the day. We would be foolish to assume that we would never go down that route. It is therefore entirely wrong for the Bill to include a clause that says, in effect, ''This Act can mean whatever the Home Secretary says it means.'' Either the list that the Minister provided is included in the Bill as a further list of offences, or it does not ultimately mean anything. The Minister can give us all the assurances that he likes, but he could be replaced by somebody who will have no obligation whatever to stand by those assurances. He is wrong to reject amendment No. 270. I urge him to accept that more thought should be given, on Report or in another place, to extending the list of the items that are to be caught, so that the potential need to return to primary legislation is reduced to an absolute minimum. It is no

argument to say that we cannot afford to run the risk of needing primary legislation to close a loophole. Only last week, it was reported that human fertilisation and embryology were not covered by legislation. That was a rarity; in my 14 years in Parliament, that has not happened often—and the events of last week demonstrated that if something of that sort cropped up, we could deal with it.

If the list in the clause is sufficiently long and robust, there is only a small risk that Parliament will need to close a loophole through primary legislation. It would be worth taking that risk in order to counter the point made by the hon. Member for Glasgow, Pollok, who said that we were giving the Home Secretary the power to run the country by diktat.

The Minister did not respond to the question that he was repeatedly asked: why does the Home Secretary need this power, unless it applies only to legislation? We asked the Minister to tell us whether there was any other reason why the Home Secretary should have that power.

The Minister asked whether there were other ways to alleviate our concerns. I think that there are. If the Minister is determined to dragoon his Back Benchers into voting against the amendment, he should restrict the type of offence that the Home Secretary can introduce by diktat. We could specify that the Home Secretary's powers should cover only offences that carry a specified minimum term of imprisonment, or a fine of a specified minimum level. That is an alternative way of stopping the Home Secretary from catching whatever he likes.

I think that it was the Minister who said that the severity of the crime does not necessarily equate to the benefit derived from it. Clearly, he has thought about the fact that simple minor crimes could be used, but that is precisely what he suggests will not happen in this case.

George Foulkes (Labour/Co-operative, Carrick, Cumnock and Doon Valley)

Why does the Opposition Whip feel that he must intervene at such length? Does he believe that the Opposition's excellent spokesperson has not challenged the Government adequately? I think that the Opposition spokesperson is very good, and the hon. Gentleman should have more faith in him.

David Wilshire (Conservative, Spelthorne)

I would never presume to suggest how the Government should organise their business, and I hope that the Government will not tell us how to organise ours.

Mr. Foulkes rose—

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman's previous intervention was not related to the clause, so far as I could detect.

George Foulkes (Labour/Co-operative, Carrick, Cumnock and Doon Valley)

Being a man of erudition and intelligence, Mr. McWilliam, you will be able to testify that I did not tell the Opposition what to do. It was a very gentle inquiry, by my standards.

David Wilshire (Conservative, Spelthorne)

And it was a very gentle reply, by my standards. There are six Opposition Members in the Committee. We work as a team and divide up the work. All Opposition Members are content with that; if the Government are not, that is their problem, not mine.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

Does that mean that the intervention made by the hon. Member for Cities of London and Westminster about adding insider dealing to the list was the unanimous view of the Opposition team? If that is the case, I very much welcome it.

David Wilshire (Conservative, Spelthorne)

When the issue of insider share dealing was first raised, I wondered whether I should raise a point of order—but I took the comment light-heartedly, and thought that I should let the matter run. Now that the issue has been raised again, I must say that I felt that the original intervention was perilously close to suggesting that my hon. Friend might somehow be involved in insider dealing. If that is the case, that suggestion should be rebutted.

John McWilliam (Labour, Blaydon)

Order. I, too, thought that there might be a point of order on that subject—and I almost raised it myself, because I got the impression that the constituents of the hon. Member for Cities of London and Westminster were being accused of insider dealing. Given that I still appear on the electoral roll for Cities of London and Westminster, it went through my mind that the hon. Member for Glasgow, Pollok might not be treating the Chair with the deference to which I am entitled.

David Wilshire (Conservative, Spelthorne)

I hear what you say, Mr. McWilliam. It is not only when we say ''you'' that you feel got at, but when we refer to certain issues. That is another good reason why the matter should be left alone. You can now sleep peacefully in your bed in the constituency of Cities of London and Westminster.

Subsection (2) states:

''The condition is that the offence (or any of the offences) concerned satisfies any of these tests''.

I take that to mean any one of the tests. It is important that that matter is clarified because it would give substance to some of the issues that flow from it. The clause refers to an offence having been

''committed over a period of at least six months''

Let us suppose that that was the only test.

Bob Ainsworth (Labour, Coventry North East)

Any test means any one test.

David Wilshire (Conservative, Spelthorne)

I am sure that the English language aspect of the clause does not need to be clarified, but we need to know whether any one of the tests will be sufficient. The matter may seem trivial, but it puts in the frame someone who has been driving a car for more than six months with one of the brake lights not working, which had not been noticed by the police.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

Or the tachograph.

David Wilshire (Conservative, Spelthorne)

Yes, there are plenty of examples of the provision being a catch-all. That is why it is right to worry that it may provide loopholes for the prosecution rather than for the defence. Any minor activity that has been going on for six months is

sufficient to be caught by the Bill. I suggest to the Minister that some thought ought to be given to specifying the severity of the activity that has been going on for six months, so that we do not have to worry. Some may say that by raising such trivial points, I am lowering the debate to an absurd level—[Hon. Members: ''Hear, hear.''] I am grateful to Labour Members for confirming that, because it reinforces my worry.

If we give the Home Secretary power to do what he wants by diktat, and a provision allows him to catch rear lights or tachographs, there will come a day when a Home Secretary—who may not be Labour, Conservative, or even Liberal Democrat; who knows?—may use such a trivial point to tip the balance of justice so far in favour of the prosecution that serious, not minor, injustice is done by diktat. I ask the Minister to consider such matters.

Subsection (2)(d) refers to an offence that

''constitutes conduct forming part of a course of criminal activity''.

Will the Minister clarify whether the provision refers to a course of criminal activity in which convictions for each of the items of conduct are considered, or to a course of criminal activity about which the prosecution makes assumptions and says that because the person is a criminal, it should be assumed that his conduct was criminal activity? The critical question is whether that means conduct of which someone has been convicted, or conduct that someone is assumed to have been involved in.

I draw the Minister's attention to subsection (3)—[Interruption.]

George Foulkes (Labour/Co-operative, Carrick, Cumnock and Doon Valley)

Now the hon. Member for Henley is in trouble.

David Wilshire (Conservative, Spelthorne)

I did not notice the cause of the entertainment.

John McWilliam (Labour, Blaydon)

Order. It is not in order for a member of the Committee to refer to anything happening beyond the Floor of the Committee. Anything beyond the barrier does not exist.

David Wilshire (Conservative, Spelthorne)

As far as I knew, nothing did exist there, Mr. McWilliam, because I did not notice what was happening.

Subsection (3) refers to a person who benefits from certain conduct. I assume that the Government mean financial benefit, but it would help to have that clarified, for two reasons. If they mean financial benefit, we could argument for a de minimis figure—although whether the hon. Member for Lewes is correct to suggest £5,000 is not an argument that I wish to enter. We should specify a level below which a court will not waste its time by chasing the money, because—even for the Minister—a point is reached at which a sum becomes trivial. I accept that the sum is not £5,000 in the Minister's case—and probably not in mine, either.

We should be clear whether the Bill means benefit in kind rather than financial benefit. I shall give the Minister an example, which is not trivial and raises questions about how we should proceed. Last week, I raised on the Floor of the House a matter involving crimes of religious hatred. I will not debate that again, but the example involved an allegedly Christian cult that was involved in pornography and paedophilia. The cult's literature is prosecutable, and at the time of my investigations, the printer of the material was known. The police were not able to make a case, but it was clear that the printer in the midlands was not being rewarded financially. The material that he printed was prosecutable, so the crime was substantial. However, the printer, as a paedophile, was provided with young children from the sect to satisfy him in his base activities. Money did not change hands, but he received a benefit. The organisation owned large amounts of money.

Will the Minister explain whether ''benefited'' means benefited financially? If it means benefiting in kind as well, that should be in the Bill, to avoid doubt and to ensure that people who indulge in such disgusting activities, for whatever reason, know that they will be caught.

Subsection (3)(a) refers to other offences, and states that a person must have committed three such offences. My hon. Friend the Member for Beaconsfield said that that would exclude a single motoring offence. In my constituency, I am blessed—or otherwise—with the part of the M25 that is subject to compulsory speed limits. A person can drive on the M25 from home to Heathrow airport—quite possibly in order to indulge in substantial criminal activity—and, depending on the severity of the traffic, commit three motoring offences on the same morning by passing three separate speed cameras. That is a further reason to specify the minimum offence and to exclude speeding offences. Otherwise, we hand the prosecution a loophole it may be tempted to use against a person on whom a charge cannot be made to stick in any other way.

Subsection (3)(b) refers to convictions on two separate occasions. I mentioned the example of someone going to Heathrow airport to indulge in major criminal activity—after all, drug trafficking, money laundering and so on often takes place at that airport. That could occur on two separate occasions, and a person could rattle up three offences in one morning, go to Heathrow airport twice in the same week, and thus satisfy the conditions that the Minister tells us he does not intend to be a loophole to undermine the safeguards. The Minister did not address those genuine points the first time he spoke, so I invite him to do so when he responds now. If he does not, I hope that my hon. Friend will press the amendments.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

I wish to speak on this matter, but I will refrain from making several points that I would have liked to make because I—unlike, I suspect, several other hon. Members—do not wish to avoid debating later clauses.

Several other offences should be included in the published list, in particular fraud and a variety of other white-collar crimes. The Minister should also include reset and its English and Welsh equivalents—and he should take more seriously the suggestion made by the hon. Member for Cities of London and Westminster, to which I shall return.

Nick Hawkins (Conservative, Surrey Heath)

Does the hon. Gentleman agree with my party—rather than the Minister—that the provision would be more effective if there were a more comprehensive list? That is the implication of what he is saying. He is asking the Minister to add more offences; that is precisely what we are arguing for—and what the Minister is resisting.

The hon. Gentleman mentioned a term in Scots law that I have heard of, and its English and Welsh equivalents. It would be helpful to my hon. Friend the Member for Beaconsfield and me—and perhaps to other Committee members, too—if the hon. Gentleman would expand, in layman's terms, on how that offence is described and used in the Scots court.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

I want the list to be expanded to include several offences that might otherwise be omitted. As for explaining terms in Scots law, I hold to the same view as the hon. Member for Surrey Heath, when he quotes Latin phrases—that people should find out for themselves.

I return to the proposal by the hon. Member for Cities of London and Westminster about insider dealing. I detect that there is a majority in the Committee in favour of the inclusion of that offence. We are certainly not suggesting that it is an offence committed by you, Mr. McWilliam, but given that it occurs most often in London and Westminster—although not necessarily committed by the constituents who live there—who better than the hon. Gentleman who represents that constituency to bring it to our attention?

The ''Field amendment'' should be included in the Bill. A helpful observation has been made by the hon. Member for somewhere or other, the Opposition Whip—[Interruption.] It was the hon. Member for Spelthorne. He said that Conservative Members were operating as a unified team. It is therefore reasonable for the Committee to assume that the proposal to include insider dealing as an offence has the support of the Conservative party not only in the Committee, but in the House as a whole. If that is not the case, it would be helpful if an Opposition spokesman stood up and said that they were in favour of being soft on insider dealing. I take the fact that no one has done so as confirmation that there is a clear majority in the Committee in favour of including that offence on the list.

Dominic Grieve (Conservative, Beaconsfield)

Will the hon. Gentleman give way?

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

It would be a pleasure.

Dominic Grieve (Conservative, Beaconsfield)

The hon. Gentleman has clearly not been listening to the debate. I said in my opening remarks that the Minister had helpfully produced a list, and that I did not challenge anything on it. That list includes insider dealing.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

It is helpful that that has been confirmed. Given that Conservative Members have raised the subject again, I hope that it will be promoted to the top of the list. I do not know whether it is in order to propose amendments to the order of the items on the list, but the Field amendment would lift insider dealing higher up the list.

Norman Baker (Liberal Democrat, Lewes)

I am keen to support the hon. Gentleman's crackdown on insider dealing. Does he agree that, to ensure that the Minister does not forget about the matter, it would be wise if that crime, and others, were included in a schedule to the Bill?

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

That is an interesting suggestion, but I am prepared to allow the Minister to consider further. I—and, I suspect, several other hon. Members—have been slightly deceived by the Minister's approach. The mere fact that he was previously a Whip led me to believe that he was nothing more than a thug—but that is undoubtedly not the case.

John McWilliam (Labour, Blaydon)

Order. There are a number of us in the Committee who have been, or still are, Whips.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

I rest my case, Mr. McWilliam.

We have been joined for the moment by the hon. Member for Henley, so I am tempted to suggest that appearing on light entertainment programmes and making an arse of yourself might be considered an offence—but that is a technical expression, Mr. McWilliam.

John McWilliam (Labour, Blaydon)

Order. That is a disorderly phrase. The hon. Gentleman must withdraw that statement.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

I am prepared to withdraw any suggestion that it was entertainment.

John McWilliam (Labour, Blaydon)

Order.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

All right, I withdraw the whole phrase.

Boris Johnson (Conservative, Henley)

That shows how grave a risk the Bill causes of misapprehension by the courts of people who are guilty of nothing except appearing on a programme and legitimately claiming £1,000. A future Secretary of State might well outlaw such an activity—or, indeed, anything else. That shows how grossly widely the Bill is drawn, and how inimical it is to the interests of innocent people.

I want to rebut a point that this chap from Glasgow, Pollok continually asserts—that is the will of the Opposition to frustrate the law and side with criminals. That is not our intention. We wish to see justice done. It is scandalous that so many Labour MPs, who came into politics to stick up for the underdog, should be rushing through such a Bill, which risks injustice for the little man.

John McWilliam (Labour, Blaydon)

Order. That was far too long for an intervention.

Secondly, the correct way to address hon. Members is as the hon. or right hon. Member for whichever constituency they represent.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

Thank you, your majesty.

I have heard some sanctimonious bullshit in my time, but—

John McWilliam (Labour, Blaydon)

Order. That is disorderly as well—and it might be interesting if the hon. Gentleman would address the clause or the amendment occasionally .

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

Thank you; that is generous of you. Mr. McWilliam.

When including offences on the list, will the Minister consider whether it is possible—not having a legal background, I am not clear about this—to include being a lawyer or an accountant deemed to have helped criminals to hide their ill-gotten gains? It must be clear that those who help criminals hide their gains and find their way round the system, and who are found to have committed any offence, make all their own assets vulnerable. Many criminals, certainly those in my neck of the woods, could not survive and could not hide their assets, were they not receiving professional support from lawyers and accountants.

David Wilshire (Conservative, Spelthorne)

That raises a very serious point. Let us suppose that a professionally qualified person, be he an accountant or a lawyer—acting in his professional capacity and meeting all the requirements of integrity and honesty placed upon him by his profession—helps and advises a criminal or an alleged criminal who is then convicted. Is the hon. Gentleman seriously arguing that that professional, who is only doing his job, should put his livelihood at risk as well? If that what he is saying, it is monstrous.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

No, I am not suggesting that a lawyer or an accountant who meets all the professional standards should be deemed to commit an offence. I am not suggesting that for a moment. However, it is widely believed that there are lawyers and accountants who help criminals. They are therefore not meeting all the professional standards required, and their own professional bodies are not adequately policing them. The ability of criminals to hide the gains from their activities would be greatly diminished if all lawyers and accountants obeyed the highest professional standards as laid down by their professional organisations—but anybody who believes that that is happening is living in a dream world. I do not believe that it is happening; and it is a major cause of difficulty that needs to be addressed.

We should reflect on why we are pursuing this matter, and on the scale of the problems faced in some constituencies. In the area covered by Strathclyde police, the number of deaths per year from drug overdoses is greater than the number of Conservative Members in the House of Commons. If we add to that other deaths related to criminal activities, at one

remove, there are probably twice as many. If we remember that we are probably here for a five-year Parliament—

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman is now going far too wide of the debate. His points are more suitable for a Second Reading debate.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

I am prepared to accept that, Mr. McWilliam, but I thought that it was worth while to clarify why some hon. Members feel strongly about the matter.

To return to subsection (2)(c), we must take into account some of the offences that flow directly from drug dealing and associated activities. In many areas in my constituency, families cannot leave their homes unoccupied in case they are broken into, so they are unable to go on holiday. Burglars who break into those homes to seize assets to resell do so at the behest, effectively, of drug dealers. Consistent and aggravated burglary should therefore be included, along with reset—to clarify that term for the hon. Member for Surrey Heath, I should explain that it means the disposal of stolen property.

This is an essential part of the legislation, and I hope that the Minister, while resisting the temptation to specify every offence that would be caught, will none the less be prepared to expand the list to make it absolutely clear that the Government take a hard line on such matters, so as to protect the people whom we are elected to represent.

Dominic Grieve (Conservative, Beaconsfield)

This has been an interesting debate. I always listen carefully, especially to the comments of the hon. Member for Glasgow, Pollok, who raised some of the background issues relating to the introduction of this legislation—such as the desire to curb certain types of crime—and talked about the impact on his constituents. I am always mindful of that, especially when the Minister says that we must be careful not to introduce too many loopholes, as criminals will climb through them. That is a legitimate point. However, it might be helpful to remind hon. Members of some of the general principles, of which it is terribly easy to lose sight when we spend our time reading the detail of the Bill.

One of the comments made earlier was about whether the hitman—or hitboy—who reached the age of 18 without having committed any offences, decided to become a hitman and committed one offence, might fall within the definition of having a criminal lifestyle. Under the Bill as drafted, unless the offence were included in regulations, the answer was no. I had the impression that one or two hon. Members were rather horrified by that. However, it is worth remembering that the Bill includes the power to confiscate in relation to ''particular criminal conduct''. The money that the hitman received for the hit would be confiscated under the clauses that relate to particular criminal conduct. It is not as though confiscation would not take place.

The Bill draws a distinction between particular criminal conduct and general criminal conduct. Under a consideration of general criminal conduct, the scope of the confiscation provision is massively widened. The court is then asked not to consider a defendant's

benefit from a crime, but to carry out a wide-ranging investigation of all his assets. Moreover, it must do so under a system in which assumptions can be made that reverse the burden of proof and impose on the defendant the fairly onerous task of proving that his assets are legitimate, and not wholly tainted with criminality.

The defendant may be able to show that some of his assets are his legitimate inheritance, but the burden to do so is placed on him. As the Bill covers such an extended period, he will not necessarily have records. In fairness to the Government, I must add that they plainly felt anxiety about the provision. Although there is a history for subsection (2)(a) and (b) on money laundering and drug trafficking, the provision is so wide-ranging that it raises issues about human rights and rights to property—matters that the Committee must consider carefully.

The Government's approach is founded on the procedure that was already available for two offences: drug trafficking and money laundering. That is why those offences feature in subsection (2)(a) and (b): they are simply repeated from earlier legislation, and we do not suggest that they should be removed from the Bill.

Two further categories of activity are listed in subsection (2)—I do not take issue with them, either. They include any offence that

''(d) ... constitutes conduct forming part of a course of criminal activity''

''(e) ... is an offence committed over a period of at least six months.''

That seems to cover what I would call the active criminal, rather than the one-off criminal. Those provisions enable us to catch many more criminals. In addition, subsection (3) defines

''a course of criminal activity''.

We have expressed anxiety about threshold offences, because one could cross the threshold by committing a minor offence. Perhaps we shall vote on that; I do not know whether the hon. Member for Lewes will press amendment No. 280.

That is already a wide net, but the Minister tells us that because of problems of definition, we must make it even wider by giving the Secretary of State power to introduce further categories of one-off offences—although possibly that will be by the affirmative rather than the negative procedure; I am grateful to the Minister for that concession.

I worry about the powers under subsection (2)(c). When we set out to scrutinise the Bill, there was a clear distinction between particular and general criminal conduct, which is in danger of becoming ever more blurred. I would far rather make an attempt at defining the offences than give the Secretary of State power to add further offences by statutory regulation. We must not allow progressive ratcheting, because that would allow any offence to lead to a general investigation using the assumptions about criminal lifestyle.

That was plainly not the Government's intention when they introduced the legislation, and Parliament should not take such a step. I have significant anxieties, especially because there is a civil recovery procedure later in the Bill, which is available against any person, be they criminal or non-criminal. I suspect that we will discuss that, but we do not have a philosophical objection because the burden of proof will remain on the prosecutor or director who brings the proceedings. I worry about reversing the burden of proof unless there are compelling reasons for doing so, such as because the evidence of criminality is so manifest. The danger of the procedure of adopting offences by statutory instrument is that crimes may be included in which the manifestation of general criminality ceases to be obvious to the public, or to us. Although I have listened carefully to the Minister—I am grateful to him, and I hope that he will indeed consider using the affirmative procedure—we are discussing an issue of principle that we intend to put to a vote.

Paul Stinchcombe (Labour, Wellingborough)

I want to put on the record a slight worry that I have, which is not about subsection (2)(c). I see forcefully the case for the Secretary of State to have the power to create a further list of offences by regulation in certain circumstances, because there are fads in criminal conduct and different acts may arise in the future that cause serious worry. It would be wrong for the Secretary of State to be hampered and inhibited; it is right that he be empowered to deal with such changes.

We already have a draft schedule of serious criminal offences that the Home Office anticipates will be included in regulations. We have also heard suggestions of further serious offences for gain that are excluded from both the Bill and the draft schedule, such as murder for gain, armed robbery and aggravated burglary. I do not understand why such offences cannot now be included within a schedule, to direct future Secretaries of State when further ministerial discretion must be exercised. I am not worried about the existence of subsection (2)(c), but about why the offences that should fall within the ambit of the regulations are not currently specified.

Bob Ainsworth (Labour, Coventry North East)

I do not argue in principle with what my hon. Friend has said. However, the schedule must define the conduct and we must relate that to the offences. Offences such as those that he raised may have to be included. I do not think that there is a point of principle at all; my hon. Friend is just worried that we are not further along with the process, and we do intend to move in the direction that he suggests.

The hon. Member for Beaconsfield struck at the heart of the matter. We differ fundamentally if he insists that we should remove the power to add further offences to the list. Despite the different powers in the Bill that he expounded, we need that fallback provision in case something arises after the Bill has been enacted. We should not have to return and make more primary legislation. The hon. Gentleman made his point eloquently and succinctly, but we will not be able to agree.

Norman Baker (Liberal Democrat, Lewes)

Will the Minister give way?

Bob Ainsworth (Labour, Coventry North East)

I do not see the point in responding to many of the other comments, which have been made for many reasons. My hon. Friend the Member for Glasgow, Pollok wanted to put his points on the record. I am not dead sure about the motives of the hon. Member for Spelthorne, but I did not detect anything new in anything that he said.

Norman Baker (Liberal Democrat, Lewes)

Before we move to a vote, can the Minister confirm that he is willing to consider inserting into the Bill a schedule to formalise the crimes that he identified on the list that he circulated? Furthermore, will he consider whether the de minimis provisions can be drawn up in a way that does not produce loopholes?

Bob Ainsworth (Labour, Coventry North East)

I am not giving the hon. Gentleman assurances about thresholds. I recognise the advantages in such a proposal, but I also recognise the potential for huge problems. I would have to be absolutely convinced that loopholes would not be exploited. I am not positively thinking of such measures. As for exactly how we deal with the list and its expansion, I do not know. I shall think about it and let the Committee know how best it can be dealt with. As my hon. Friend the Member for Wellingborough (Mr. Stinchcombe) said, even if we had such an expanded list, the ability to add to that list would not be removed from the Bill. That is a point of principle with the hon. Member for Beaconsfield, and it is one about which we shall have to disagree.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 10.

Clause 76 - Conduct and benefit

Norman Baker (Liberal Democrat, Lewes)

I beg to move amendment No. 281, in page 47, line 40, leave out from 'conduct' to end of line 2 on page 48.

I shall be brief, as we have just had rather a long discussion. The amendment is to some extent related to the previous clause, although, rightly, it has been grouped separately. Its purpose is to ensure that the Government put on the record a statement of their policy on retrospectivity in this legislation.

Many of us are concerned when retrospective provisions are inserted in any legislation. That is not a process that many of us like to see, and there has to be a very good reason for it, as is well set out in law. It is a principle of basic justice that a person should not be convicted of an offence if, when the offence was committed, it was not a criminal offence, or if the penalties applicable for that offence at the time were different from those that applied subsequently because of retrospective legislation.

Nick Hawkins (Conservative, Surrey Heath)

The hon. Gentleman is making a valuable point. Has he had an opportunity to discuss the Liberal Democrats' concerns about the European arrest warrant with the hon. Member for Southwark, North and Bermondsey (Simon Hughes), who, like the Minister and myself, is involved in considering the matter? Some of the concerns that he is currently expressing would be reamplified if the Government were to sign up to the European arrest warrant at the European Council at the end of this week.

Norman Baker (Liberal Democrat, Lewes)

I shall respond—briefly, Mr. McWilliam, as I notice the flick of your eyebrows. Suffice it to say that I have numerous and lengthy conversations with my hon. Friend the Member for Southwark, North and Bermondsey, normally at very unsocial hours such as 3 o'clock in the morning—although that is an exaggeration. He has discussed the European arrest warrant with me, and we have concerns about retrospectivity in that context, as we do in relation to this Bill, and as a general matter of principle if an activity is subsequently criminalised when previously it was legal, or if the penalties for a particular offence were previously relatively minor but a swathe of hard-hitting legislation—I shall not use the word ''draconian'', which is pejorative—has suddenly been introduced.

For instance, the Bill shifts the burden of proof on to the person accused of criminal activity or of benefiting from the proceeds of crime. It will require the person accused to prove that possessions have been legally obtained and are not the proceeds of crime. That person will therefore have to produce tax returns and bank statements going back quite a long way. Earlier, the Minister spoke against an amendment that I tabled to limit that process to six years, and against the idea that the prosecution should bear the onus of proof when events are more than six years ago. Despite the fact that hard-hitting measures have been agreed

earlier in the Bill, the Minister should at least give a full explanation of why such general retrospectivity needs to be included in the Bill.

Nick Hawkins (Conservative, Surrey Heath)

I share the general concern expressed by the hon. Member for Lewes on behalf of his party about retrospective legislation. It has always seemed to me an important principle of English law that Parliament should be sovereign, but that it should not be able to create, with the stroke of a pen, criminal offences out of activities that were not previously criminal. The Government will have to work extremely hard to convince not only the Opposition but the world outside that such a draconian extension of the law is justified. Although we want to hit the Mr. Bigs to whom the hon. Member for Glasgow, Pollok and other hon. Members have rightly repeatedly referred, we must make sure that the law appears to be fair and does not retrospectively criminalise. If the Bill is brought into force in anything like its current form, great swathes of conduct and property that were not the subject of the law beforehand should not be criminalized from the moment that it is enacted.

I mentioned to the hon. Member for Lewes that I was concerned about the European arrest warrant. Committee members might be aware—not least from today's press, following the fiasco of yesterday afternoon's European Standing Committee B on the European arrest warrant, which had to be abandoned after 50 minutes, and is due to be recommenced de novo on a date that we do not yet know—that great concern is being expressed about the possibility that the Government are about to say that people in this country can be at risk of arrest for things that are not an offence in this country, but which might be declared, under the generic title of ''swindling'' or ''xenophobia'', to be offences in another country.

The same concern applies in the present instance. That is why the two matters are related. People should not be at risk of arrest in this country for activities that are not offences in this country, and people should not be at risk of being dealt with by a new Act of Parliament for things that were not criminal before it was enacted.

Important principles are at stake. Although I do not expect that the debate will be lengthy, I hope that the Minister will address the matter seriously. I also hope that Government Back Benchers will contribute to the debate; many of them have a proud record, both in the House and in their previous careers, of standing up for the rights of the individual, of being public supporters of organisation such as Liberty and Justice, and of ensuring that our legislation is not too draconian.

Bob Ainsworth (Labour, Coventry North East)

I will be brief, as I do not wish to provoke you, Mr. McWilliam. However, it is apparent that the hon. Member for Surrey Heath believes that a German ought to be allowed to break the law in this country, if the offence that he commits is not an offence in Germany.

Nick Hawkins (Conservative, Surrey Heath)

No, I do not believe that. I do not want to get too deeply involved in a debate that we will resume at another date—which has yet to be fixed— with regard to another measure. However, to respond to the Minister's point, I must explain that we have always had proper extradition arrangements that address offences in each country, and examine where matters can be separately identified in each country's criminal law.

With regard to the European arrest warrant, the concern is about the generality of the descriptions. I am not speaking for my party alone on this subject. The same concerns have been expressed by many noble Lords, including Labour and Liberal Democrat Lords. When distinguished jurists such as Lord Lester of Herne Hill, and distinguished judges such as Lord Scott of Foscote, express themselves in terms as strong as those that they used on 19 November, when the matter was addressed in the other place, a serious issue is at stake.

We are currently addressing serious principles of a similar kind. Therefore, the hon. Member for Lewes is right to alert the Committee. I hope that we will hear from Government Back Benchers, because I hope that they will not simply ignore the seriousness of the point about retrospection, which concerns a fundamental principle in our law. I will be interested to hear how the Minister tries to defend this sweeping extension to our law.

Debate adjourned.—[Mrs. McGuire.]

Adjourned accordingly at seven minutes to One o'clock till this day at half-past Four o'clock.

Standing Committee B

Clause 76 - Conduct and benefit

Bob Ainsworth (Labour, Coventry North East)

It is good to see you in the Chair, Mr. O'Brien. I am sure that you have had withdrawal symptoms from our earlier proceedings and are pleased to be back.

The hon. Member for Lewes (Norman Baker) raised an important point. The issue should be announced with some retrospection. We must ensure that it is understood in the Bill and he may then, if he wishes, question the matter. The amendment would prevent the court from confiscating the benefits of general criminal conduct that took place before the Bill was enacted. He wants to explore the retrospective effect of part 2. To give some background, subsection (2) is based on the Drug Trafficking Act 1994. Much of that territory will be addressed in the order that commences the legislation and is not set out in detail in the Bill.

Before I turn specifically to the amendment, it may be helpful to explain how we intend to apply the relevant provisions. Article 7(1) of the European convention on human rights prohibits the imposition of a heavier penalty than the one that applied at the time when the offence was committed. That raises the question of what the heavier penalty is being applied to. The answer—which is reflected in the Strasbourg court's jurisprudence—is the offences for which the offender is being sentenced or otherwise dealt with in the present proceedings. The underlying principle of article 7 is, as the hon. Gentleman said, that an offender must know when he commits an offence what the consequences will be.

Bearing that principle in mind, we intend to provide that a confiscation order can be imposed under part 2 only when all offences that are the subject of the present proceedings have been committed after the Bill comes into force. That will include the triggering offences that determine a criminal lifestyle under clause 75(3)(a) and (b). The existing legislation will apply to offences committed before the Bill has been enacted. However, once that criterion is satisfied—that is, when the offences are committed after

enactment—a confiscation order can be imposed in respect of the benefit from conduct, however far back that benefit was derived.

That is fully compatible with the Strasbourg court's decision in the case of Ronald J. M. Taylor to uphold the use of assumptions. The court ruled that, when Taylor committed offences after the Drug Trafficking Offences Act 1986 came into force, he was aware that he was liable to a confiscation order that could have concerned earlier proceeds. As a result, the Commission considered that there had been no violation of article 7 of the European convention on human rights.

Confusion occasionally arises in this context. The assumptions relate to property passing through the defendant's hands at any time after six years before the commencement of proceedings, and before then if the property is still held. The assumptions will go back before the commencement of part 2. However, the confiscation order in respect of which they are made will be imposed for offences committed solely after the commencement.

The amendment would have a very harmful effect and would row back from existing legislation, which is consistent with the convention and has been tested against it. It would mean that everybody who was proceeded against under the Bill would receive an amnesty for any benefit derived from conduct before commencement—there would be no confiscation for any conduct before then. Practically, it would make the legislation inoperable. For example, the assumptions as currently drafted would be meaningless. In the week after commencement, they would read as if the defendant could be assumed to have received property from criminal conduct six years ago after commencement. That is impossible. Leaving that aside, the prosecutor and director would have the impossible task of proving whether conduct fell just before, or just after, commencement. He would have not only to prove his case but to show at what time the defendant derived the benefits of the proceeds of crime.

All offences that are taken into account will be after commencement. For example, when we track back for multiple offences, they must all have occurred after commencement. We will not be able to go back and count other offences that were committed previously. The commencement will be the trigger. The only retrospection will be the assumptions of the gain. That has been tested under the convention and does not contravene it in any way. I ask the hon. Member for Lewes to consider the consequences of the amendment.

Norman Baker (Liberal Democrat, Lewes)

I am grateful to the Minister for that long but helpful contribution. It is useful to have on the record how he thinks the Bill will be applied. As I understand what he said, offences for the purpose that we are currently discussing will be taken into account only if they are committed following Royal Assent, but other matters then kick in retrospectively.

Bob Ainsworth (Labour, Coventry North East)

Let us use the six-month period as an example. We will not be able to track back the fact that criminal activity had been occurring for six months until six months after the Bill's commencement.

Norman Baker (Liberal Democrat, Lewes)

I am very happy with that. I am grateful for the Minister's explanation and that he believes that the Bill is consistent with the European convention on human rights. That is a key element, and he explained why. Will he tell us now, or later, in addition to his helpful clarification, where the matter is implicit in this complex Bill, so that I can understand how the bits marry up and be assured that the understanding that he gave the Committee cannot subsequently be misunderstood by people who interpret the law?

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 273, in page 48, line 17, leave out subsection (6).

The amendment is, simply, probing. I read the clause, and I read and reread subsection (6). Although I think that I understand it, it makes little sense. Perhaps the Minister will be kind enough to tell me what it means. I shall read it to the Committee so that it is on the record:

''References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained both in that connection and some other.''

I await clarification of the provision.

Bob Ainsworth (Labour, Coventry North East)

I can tell the hon. Gentleman that he has missed out this time. My question marks are against adjacent clauses, not the one under discussion. It may contain a little contorted language, but it is fairly clear. The amendment would prevent the court from confiscating benefit from criminal conduct when it was received partly in connection with criminal conduct and partly in some other way. I shall cite an example of how subsection (7) works. An offender who obtains money from a fraud may invest it in stocks and shares and make a healthy profit. Clearly, the profits from that investment should be confiscated as well as the benefits of the original fraud. I am sure that the hon. Gentleman does not disagree with that principle.

If we accepted the amendment, a clever lawyer would immediately be able to argue that the profits from the investments could not be confiscated because they were obtained as a result of, or in connection with, the criminal's investment skills as opposed to the original criminal conduct. That is why it is necessary to cast the net sufficiently widely to ensure that all the benefits are caught. The pecuniary measure must be used to avoid the narrowing of the definition to the actual benefits of the crime.

Dominic Grieve (Conservative, Beaconsfield)

I understand exactly the Minister's point. On rereading subsection (6) in the light of his remarks, however, I am slightly anxious whether the net is being cast too wide. I fully agree that, if the proceeds of crime were invested, that and the profit

element should be confiscated. However, is there not a danger that the wording of subsection (6) could be taken to extend to any property that the defendant may have? That is not the intention, because that would defeat the whole purpose of the examination of assets to decide which were derived from criminal conduct and which were not.

Bob Ainsworth (Labour, Coventry North East)

Let us go away and make absolutely certain that such circumstances will not occur. Clearly, associated property should not be confiscated, but the whole of the property, not only the net value of the proceeds of crime, should be. The hon. Gentleman is not demurring from that principle.

Mark Field (Conservative, Cities of London and Westminster)

I want to clarify my hon. Friend's point. Let us suppose that an individual who was subsequently caught under the confiscation process had put £200,000 that had been earned legally and a further £100,000 that could clearly be identified as the proceeds of a large drugs deal into a property that cost £300,000, which doubled in value. How much money would be confiscated by the state and how much would remain the person's own money?

Bob Ainsworth (Labour, Coventry North East)

In principle, we would have to take the original proceeds of crime and any profit derived from that. If legitimate money became mixed with the proceeds of crime and was subsequently subject to a profit, it could not be considered to be the proceeds of crime. We would have to untangle that and decide what were the proceeds of crime, what gain was made with those proceeds and what was genuine money.

Mark Field (Conservative, Cities of London and Westminster)

Under my rough and ready example, my adversary the hon. Member for Glasgow, Pollok (Mr. Davidson) could reasonably argue that the state would be entitled to £400,000—in other words, the £100,000 that was put in initially, and the entirety of the increase in asset value. On the other hand, if one took the view that two thirds of the upfront money was paid legitimately, two thirds of the increased value could be thought of as legitimate money. That would amount to a £200,000 pot that the state could confiscate. The subsection does not make that clear, and that is why I wanted guidance on how it will operate.

Bob Ainsworth (Labour, Coventry North East)

Surely, it comes back to one of the two basic safeguards in the Bill. Property cannot be confiscated if it is shown not to be the proceeds of crime. It is for the courts to decide whether property is the proceeds of crime. If the defendant can show that assets are not the proceeds of crime, they are not confiscatable, but if they are, they most certainly are. Those are matters for the court to decide on hearing the case. The hon. Gentleman is reversing his previous position and saying that we should deprive the court of its discretion.

Mark Field (Conservative, Cities of London and Westminster)

I entirely accept that it is a matter for the court. That is why, at this juncture, we want to provide the correct guidance to the courts, and why it would be useful to clarify the situation. As the Minister is unable

to come to a decision on a relatively straightforward example, it would be unfair to put such a burden on the courts unless we know how the spoils will be split. I accept that the matter is difficult.

If the Minister had eyes in the back of his head he would know that the hon. Member for Glasgow, Pollok has been trying to attract his attention. He, no doubt, will have his own view, which I shall be interested to hear.

Bob Ainsworth (Labour, Coventry North East)

I rise fairly confident that my hon. Friend is provoked by the hon. Gentleman, and not by me.

We must bear it in mind that this interpretation is used in existing legislation. We have no desire—nor, I think, do Opposition Members—to narrow the current interpretation.

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

This is an important issue because, as the hon. Member for Cities of London and Westminster (Mr. Field) will appreciate, inside dealers and other villains and nefarious ne'er-do-wells in the Cities of London and Westminster are wondering how they will use their ill-gotten gains. If they mix those gains with legitimate money, will that penalise their financial well-being?

In the case of the Cities of London and Westminster, let us say that £1 million of relatively honest money and £2 million of corrupt money were invested together, and doubled in value. It seems fair to me that the investor should get back only £1 million, as that person would not have made any gain if the dishonest money had not been available to invest jointly with the honest money. When considering whether someone should get a proportion of the gain back, we should be as unhelpful as possible to those who, for the sake of argument, we could refer to as Fields. Those Fields, who have been investing—

Bill O'Brien (Labour, Normanton)

Order. This is too long an intervention.

Bob Ainsworth (Labour, Coventry North East)

I did say to the hon. Member for Cities of London and Westminster that he, and not I, had provoked my hon. Friend. That was shown to be the case. Although I am on my hon. Friend's side on the matter, it would be for the individual to show that the assets in question were not the proceeds of crime. I noticed the hon. Member for Lewes disagreeing as my hon. Friend spoke, but when a business has been set up, established and in part funded by the proceeds of crime, to what extent—even if legitimate money was going into it—do we want to render the profits of that business beyond the reach of confiscation? None of us wants to do that. We want to stick to the safeguard in the Bill, whereby if the defendant can show that the assets in question are not the proceeds of crime, they are not confiscatable.

Despite the contorted language, that is the interpretation in the current legislation, which appears to have been operated successfully by the courts up to now, and removing it would narrow the definition. The hon. Member for Beaconsfield (Mr. Grieve) knows better than I do how these things work, but I am advised that the criminal courts often use very narrow

definitions. If we went down that route, we would find ourselves rendering large sums beyond the reach of confiscation.

Norman Baker (Liberal Democrat, Lewes)

I agree with the Minister's analysis that it is a question of applying the general test in each case. It may be that a critical mass of money is required for an investment, in which case the hon. Member for Glasgow, Pollok is correct. On the other hand, if one invests £3 million in shares, the return may be no different from, or three times as much as what one would get if one invested £1 million in shares. Therefore, there is no advantage to having the extra money for that investment. It depends on the circumstances.

I have been wrestling with the subsection and trying to understand what it means—I also declare an interest in that I am not a lawyer and therefore look at things in plain English. Some of the Bill is in plain English: clause 79(2), for instance, is a clear statement. Clause 76(6), however, is not a clear statement. Will the Minister explain the relevance of the phrase ''and some other'' at the end of subsection (6)? What would be the implication if that phrase were not included?

Bob Ainsworth (Labour, Coventry North East)

It clearly relates to ''connection''. The subsection refers to proceeds obtained

''in that connection and some other''.

It is designed to give the court the ability to confiscate proceeds that were gained in connection with criminal activity. We discussed that under a previous clause and we are effectively having the same discussion now. The hon. Gentleman is right that the individual circumstances are relevant, and I would have thought that the whole Committee would be able to unite behind the concept that some businesses are funded in part or in whole by the proceeds of crime and are in a position to compete unfairly with other businesses—and effectively put them out of business in many cases.

We do not want to encourage that, and we want to be able to remove a pecuniary interest when it was clearly gained in connection with criminality. We need to give the courts the discretion to be able to decide what is the proceeds of crime, what was gained in connection with the proceeds of crime, and what is clearly not the proceeds of crime. If we deprive them of that ability, we narrow their capacity to deprive the criminal not only of what he gained in the first place but of what he has managed to make of it as a result.

Norman Baker (Liberal Democrat, Lewes)

The Minister and I are not at odds in any way in respect of the objectives that we want to be achieved. I agree with giving the courts discretion, and I have consistently argued for that throughout our proceedings. However, if subsection (6) were to finish with the words ''in that connection''—removing the word ''both'' before those words—that would refer back neatly to subsection (5). The two subsections would then seem to be self-contained. I do not understand the purpose of the phrase ''and some other'', which seems to be hanging loose.

Bob Ainsworth (Labour, Coventry North East)

I do not know whether the hon. Gentleman is hanging loose, or I am, or the words ''and some other''. I have tried to explain to him how

the words work, the reasons for them, and their origin in existing legislation. I agreed—and I will check it out—that they do not result in a widening, in response to what the hon. Member for Beaconsfield said. I do not think that I can satisfy the hon. Gentleman further at this point.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Minister, whose comments have been enlightening.

Before I ask leave of the Committee to withdraw the amendment, I wish to make two pleas. My first plea concerns plain English. The Minister has explained that the phrase ''some other'' is intended to refer to some other connection. With regard to plain English, the clause would not be spoiled—indeed, it would be greatly enhanced, despite the appearance of the word ''connection'' twice in one line—if the word ''other'' did not end the sentence and it referred to an

''advantage obtained both in that connection and some other connection.''

That is merely a matter of drafting practice. That form of words would be much clearer. I accept that the present wording has been inherited from a previous statute, which presumably nobody bothered to scrutinise properly.

My second plea is of more import, as the Minister is aware. I am reassured by what he has said, because I fully support the intention—we have no disagreement about the aim, which is to allow the court to look at pools of money that include mixed funds. He has also made it clear that mixed funds must be disentangled: I have no quarrel with that, although there are clear rules about how to approach mixed fund money—but that is not an area with which I am particularly familiar. I do not wish to go back over old ground, by saying that that is a matter that the Crown court will have to play around with—although I suspect that the Crown court is not very familiar with it either, and that the High Court, in its jurisdiction, would be much more familiar with how one deals with mixed fund moneys.

The intention is not that mixed funds should be confiscated in a quick and simple manner but that they should be disentangled. However, as it reads at present, the clause—even though it may always have been applied in ways that effect that disentanglement—gives the courts the power to confiscate mixed funds, including the proportion of them that did not come from the proceeds of crime and the criminal conduct. I do not think that that is what the Minister or the Department intended to achieve. I would be grateful if he would confer with his drafters and officials to see whether that cannot be more clearly spelled out without leading to the creation of a new loophole.

Bob Ainsworth (Labour, Coventry North East)

I want to explore whether the hon. Gentleman and I agree in principle. I am not saying—and I do not think that he is asking me to say—that mixed funds must be dealt with in the same way in every circumstance. Everything depends on the circumstances. A mixed fund might be able to be

unravelled simply; it might be possible to identify clearly the part of it that is the proceeds of crime, and the associated profits that arose from that, and the part of it that is not. However, funds might have been sunk into a business or an investment, in which case the matter would become more complex and detailed.

I do not think that the hon. Gentleman would want us not to be able to take the profits that arose from a business that was clearly put in an advantageous position as a result of the investment of criminal moneys. It would be for the court to decide what was or was not the proceeds of crime, and money associated with the proceeds of crime, and we should not lay down a firm methodology with regard to how it disentangles mixed funds.

If the hon. Gentleman wishes us to make the provision narrower, by backing away from that capability, a matter of principle is at stake. If he is merely seeking to make the Bill clear, we could perhaps look at other forms of words that do not make the provision narrower but make the clause more readable.

Dominic Grieve (Conservative, Beaconsfield)

I am very conscious of what the Minister said. I accept fully that there may be circumstances when it is inevitable that funds that could have come from outside would have to be confiscated because disentanglement could not take place. However, I note a contradiction between subsections (4) and (6). Subsection (4) clearly states:

''A person benefits from conduct if he obtains property as a result of or in connection with the conduct.''

We agree with the unequivocal statement under subsection (4), yet subsection (6) suddenly starts to muddy the waters and introduces a new element, which means every asset that the person has. If judicial discretion were not introduced, that could be anything.

Bob Ainsworth (Labour, Coventry North East)

It is not our intention to deprive the court of its ability to consider the issue. I accept what the hon. Gentleman says. I shall try to satisfy him. There is scope for confusion. I shall see whether others can wrap a towel round their heads and unravel it. We do not want to narrow the court's ability to confiscate the proceeds of crime. If all he wants is to make the provision clearer, I shall look into whether that can be done. I give him that assurance.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Minister for his reassurance. Having clarified such matters, however, he may find himself less in agreement with me. He will have been advised by his officials about how the system has worked in the past in that it is the practice of the High Court to deal with mixed property. The Crown court may well not have the training or be so well versed in such practices. That makes it all the more important that there should be clarity about what is intended. Although I fully accept that he is not intending to confiscate all property, I read subsection (6) as allowing for that to happen.

I presume that that was not intended originally under the old legislation, because we would have heard about it. There would have been complaints. The matter would have been flagged up. There would have been court cases and judicial interpretation. I assume that the measures have worked all right, but from a straight reading of subsection (6), especially juxtaposed with subsection (4), there is a contradiction. I worry that subsection (6) could open up much more than the Minister intends, although I am mindful of the fact that subsection (6) may have to be so worded to make sure that mixed property can be properly considered and judicial discretion applied. I hope that I have made myself clear.

Bob Ainsworth (Labour, Coventry North East)

There is no intention on my part to hide the policy. If the hon. Gentleman is right and there is something more profound between us, I want to expose that so that we can discuss it on Report.

Dominic Grieve (Conservative, Beaconsfield)

In fairness to the Minister, I suppose that it could be argued that if the phrase were to cover any property, it would have to read

''in that connection and any other connection''.

The word ''some'' had significance to the original draftsman, but it is opaque and the absence of the final ''connection'' does not help clarity.

I am grateful to the Minister for agreeing to reconsider the matter, and on that basis I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 76 ordered to stand part of the Bill.

Clause 77 ordered to stand part of the Bill.

Clause 78 - Gifts and their recipients

Dominic Grieve (Conservative, Beaconsfield)

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

Bill O'Brien (Labour, Normanton)

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

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

Clause stand part

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

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

New clause 5—Value of tainted gifts: variation—

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

Dominic Grieve (Conservative, Beaconsfield)

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

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

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

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

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

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

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

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

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

Paul Stinchcombe (Labour, Wellingborough)

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

Dominic Grieve (Conservative, Beaconsfield)

Subsection (1) says:

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

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

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

Bob Ainsworth (Labour, Coventry North East)

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

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

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

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

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

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

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

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

Bob Ainsworth (Labour, Coventry North East)

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

Dominic Grieve (Conservative, Beaconsfield)

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

Bob Ainsworth (Labour, Coventry North East)

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

Norman Baker (Liberal Democrat, Lewes)

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

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

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

Bob Ainsworth (Labour, Coventry North East)

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

Dominic Grieve (Conservative, Beaconsfield)

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

Paul Stinchcombe (Labour, Wellingborough)

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

Dominic Grieve (Conservative, Beaconsfield)

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

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

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

''shall be recoverable from the defendant''.

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

Paul Stinchcombe (Labour, Wellingborough)

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

Dominic Grieve (Conservative, Beaconsfield)

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

Paul Stinchcombe (Labour, Wellingborough)

I refer to the words:

''consideration whose value is significantly less''.

Dominic Grieve (Conservative, Beaconsfield)

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

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

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

Tom Harris (Labour, Glasgow Cathcart)

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

Dominic Grieve (Conservative, Beaconsfield)

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

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

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

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

Mark Field (Conservative, Cities of London and Westminster)

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

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

Dominic Grieve (Conservative, Beaconsfield)

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

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

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

Bob Ainsworth (Labour, Coventry North East)

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

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

Dominic Grieve (Conservative, Beaconsfield)

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

Bob Ainsworth (Labour, Coventry North East)

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

Dominic Grieve (Conservative, Beaconsfield)

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

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

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

Bill O'Brien (Labour, Normanton)

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

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

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

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

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

''Now as through this world I ramble

I see lots of funny men,

Some will rob you with a six-gun

And some with a fountain pen.''

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

David Wilshire (Conservative, Spelthorne)

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

Bill O'Brien (Labour, Normanton)

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

Ian Davidson (Labour/Co-operative, Glasgow Pollok)

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

Bob Ainsworth (Labour, Coventry North East)

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

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

Annette Brooke (Liberal Democrat, Mid Dorset and North Poole)

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

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

Bob Ainsworth (Labour, Coventry North East)

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

Mark Field (Conservative, Cities of London and Westminster)

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

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

Steve McCabe (Labour, Birmingham, Hall Green)

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

The rest of the debate is in Hansard.