Proceeds of Crime Bill

Public Bill Committee, 8 January 2002.

Standing Committee B

Proceeds of Crime Bill

Roger Gale (Conservative, North Thanet)

Good afternoon, and a very good new year to those hon. Members whom I have not already seen. By way of a few housekeeping notes, I remind hon. Members that those who are brave enough may remove their jackets—but only while I occupy the Chair. It is up to other Chairmen to decide how they want to proceed in that regard.

We have endeavoured to do something about the heating, and so far we have failed, but I am reliably informed that an engineer is on his way, and even that may make hon. Members feel warmer.

Clause 288 - Searches

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 449, in page 167, line 7, leave out from 'property' to 'and' in line 8.

Roger Gale (Conservative, North Thanet)

With this we may take the following amendments: No. 450, in page 167, line 13, leave out from 'property' to 'and' in line 14.

No. 455, in clause 293, page 170, line 14, leave out paragraph (b).

Dominic Grieve (Conservative, Beaconsfield)

I wish you and the Committee a happy new year, Mr. Gale.

We now come to the recovery of cash in summary proceedings. Amendment No. 449 concerns what can be searched for by a Customs officer or constable who is on premises lawfully. It is important at the outset for the Committee to appreciate the novel aspect of the power in question. As I understand it—and the Minister will correct me if I am wrong—the power under the clause provides for action by an officer who is lawfully on premises for any of a variety of reasons, such as a search of premises under some other warrant or even simply because he has been invited in: ''Excuse me, Mr. Bloggs, may I come in and have a word with you?'' Having got in, and with no other invitation—we shall reach that issue on clause stand part—he might decide that he wants to carry out a search for cash.

The clause sets out two categories of what can be searched for. The first is recoverable property—a concept with which we are familiar. The second is property

''intended by any person for use in unlawful conduct''.

It seems to me that that must mean money intended to be paid to someone in furtherance of unlawful action. Reciting the matter in those terms—and I wait to hear from the Minister that I have got things wrong—appears to highlight the difficulty of proving the concept. After all, if I had in a box in my house £150

in cash, which I intended to use the following week to purchase cocaine from a dealer round the corner, without external evidence it would be very difficult to form a reasonable suspicion of my intentions. By contrast, if recoverable property were involved, there might already be independent evidence to suggest that I was in possession of such property.

What bothers me about the clause and about the fact that it applies to money intended by any person for use in unlawful conduct is the risk that it is a blanket invitation to the police to confiscate any cash from premises. I should like clarification by example of the circumstances in which, otherwise, a police officer would have reasonable grounds to suspect that cash on premises was intended for use in unlawful conduct. I can admittedly think of one or two rather far-fetched examples. I suppose that if the police had evidence from a telephone interception, in which the person occupying the premises said, ''I've got £25,000 in cash in a box in my house ready for the deal,'' it is possible to understand how that instance would fit into the category. Other than that, I foresee a difficulty. I hope that that we can explore my anxiety about the scope of the power and the way in which it will be used. It could simply be used as a blanket excuse for the confiscation of any cash that is found on anyone's premises.

Amendment No. 450 also applies to searches. Subsection (2) states:

''If a customs officer or constable has reasonable grounds for suspecting that a person...is carrying cash which—

(a) is recoverable property or is intended by any person for use in unlawful conduct . . .

he may exercise the following powers.''

The clause then says that the Customs officer or constable may search that person. Again, I should be grateful to receive clarification from the Under-Secretary about what ''reasonable grounds for suspecting'' would mean in practice. Otherwise, stop and search powers will be granted not to stop and search for stolen property or for the proceeds of crime, but to seize money that is held lawfully by individuals who happen to be carrying it about their person. Such a power means invasion of a person's property and the searching of a person who is carrying money.

Amendment No. 455 refers to Scotland and is formed on the same basis as the other two amendments. I should be grateful to receive a full explanation from the Minister of how he envisages the provisions working in practice.

Bob Ainsworth (Labour, Coventry North East)

Happy new year to you, Mr. Gale, and to members of the Committee. I am sure that everyone has been looking forward to seeing more of the outrageous ties of the hon. Member for Spelthorne (Mr. Wilshire) and hearing about visits to the drawing rooms of council houses in Pollok. Such thoughts certainly excited me during the holiday period.

The amendment would remove the ability to search for and seize cash that is suspected to be intended for use in unlawful conduct. The recovery of cash scheme would therefore be limited to cash that is recoverable property and the proceeds of unlawful conduct.

Amendments Nos. 449 and 450 relate to the search provisions under clause 288. Amendment No. 455 covers the search provisions under clause 293.

The existing legislation relating to drugs and terrorism allows for the seizure of cash that is intended for use in those crimes. The drugs-related scheme was introduced under the Criminal Justice (International Co-operation) Act 1990. Its provisions have proved to be successful and resulted in the forfeiture of £4.5 million in 2000. The Government can see no operational or theoretical reason for the Bill's cash recovery scheme to be different from the existing schemes, especially as the Bill's scheme builds on and replaces the existing scheme under the Drug Trafficking Act 1994.

Cash seized under the drugs scheme has illustrated the difficulty in distinguishing between the proceeds of and the funds for drug trafficking. On many occasions, it is just a matter of the time at which the intended transaction is intercepted—whether it is before it has taken place, or after. If the amendments were accepted, those that were intercepted after it had taken place would be forfeit, and those that were intercepted but the timing was slightly wrong—although there is a pile of illegal drugs, and it can be proved to the civil standard that the cash was intended to purchase those drugs—would not be forfeit.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I may be missing something, but would the Minister not have power under section 23 of the Misuse of Drugs Act 1971 to pursue that anyway?

Bob Ainsworth (Labour, Coventry North East)

The Bill builds on that legislation, which, as I said, has been effective. I cannot see why only the proceeds of crime after the crime has been committed should be forfeit.

Nick Hawkins (Conservative, Surrey Heath)

I understand entirely what the Minister is getting at when he says that the existing legislation has been successful. As he understands, my hon. Friend the Member for Beaconsfield (Mr. Grieve) and I are not trying to water it down. However, we are slightly concerned about whether the wording of the existing legislation is the same. As my hon. Friend just said to me, the concept under discussion is rather more diffuse. I am worried that the way in which the existing legislation has worked successfully could be spoiled by wording that is too wide. I have a genuine concern about that, having been involved in such cases in the past.

Bob Ainsworth (Labour, Coventry North East)

With respect to the hon. Gentleman, this has been a well-trodden path over the past couple of months. On each and every one of those occasions, the justification tends to be to deny that it is an attempt to water down the provisions, and to suggest that because the powers are broader, they need to be narrower. In some circumstances, that may be appropriate—

Dominic Grieve (Conservative, Beaconsfield)

What has been going on over the past two months is a reluctance to let legislation go through on the nod.

Bob Ainsworth (Labour, Coventry North East)

I understand and appreciate some of the points that have been exposed in Committee. I have no problem with that, and I hope that, because of some of the issues that have been raised, we shall wind up with a slightly more workable and better Bill, which will achieve something. Separately, however, amendments have been tabled repeatedly and continually, whether or not they are pressed to the vote—some of them have been—that would indeed water down current provisions. Despite the protestations of the hon. Member for Surrey Heath (Mr. Hawkins) the amendment does exactly that. Albeit that the current legislation is narrower—this was a well-trodden path at the back end of last year—the existing legislation provided that not only would cash that was the proceeds of crime be forfeit, but cash that was intended for use in crime. We are not changing the concept but broadening the use to give an inland provision. I accept that and I do not apologise for it. We are not introducing a new concept. The concept has worked, and has resulted in considerable forfeiture under the existing legislation.

Dominic Grieve (Conservative, Beaconsfield)

I take the Minister's point, but there is a slight difference between someone who is about to board a plane to go to the Caribbean being searched and having large quantities of cash confiscated, which has happened, and someone who has invited a policeman into his home to discuss parking problems in the street finding that his premises are suddenly being searched, or someone who finds himself being stopped in the street and searched for cash.

Bob Ainsworth (Labour, Coventry North East)

I hope that we are not going to get too silly in the new year. That is not the intended use of the power, which is meant to be intelligence-led. That is not the intended use of the power, which is meant to be intelligence-led. I have circulated a draft code of conduct—I do not know whether hon. Members have received it. It was dated 19 December and was issued soon after that day, if not on it, by the Home Office. It is just a draft, and if hon. Members have suggestions for its improvement, we would be happy to hear them. The draft states:

''In order to exercise the search power, an officer must have reasonable grounds for suspecting that cash meeting the conditions set out will be found.

Whether there are reasonable grounds for suspicion will depend upon the circumstances in each case. There must be some objective basis for that suspicion based on facts, information and/or intelligence. The officer should take into account such factors as how the individual or the premises were identified, previous intelligence on persons or premises, previous involvement with the persons or premises, and suspected links with other criminal activity, whether here or overseas.''

I quote the draft code to give an idea of how the powers are meant to be used. We did not intend that they should be used in speculation. There must be reasonable grounds to suspect that a considerable amount of money is on the premises.

There is a raft of safeguards in other clauses in part 5 to ensure that, whenever appropriate, the constable has prior judicial approval for exercising the powers. If he believes that he can justify not being able to get

prior judicial approval, he must get a senior officer's approval for the search. If he has reasonable suspicions that there is a cache of the sort of amount that we are considering, he can mount a search, but only if he can show afterwards that there was no prospect of getting prior approval.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Minister, and thank him for issuing the code. I saw it only in the past few days, but that is my fault. I expect that it arrived earlier than that, but I received it by a circuitous path via my secretary.

Subsection (1) states that a constable must be ''lawfully'' on any premises. That has a much wider meaning than getting prior authorisation and could, at a push, include an officer who is invited into premises to discuss parking problems in the street. If someone terminates that officer's right to be on the premises by asking him to leave, presumably the search would have to stop. Perhaps the Minister would confirm that.

Bob Ainsworth (Labour, Coventry North East)

Just because the officer is lawfully on the premises, it does not mean that he has the right to discount the fact that he must have reasonable grounds to believe that there is cash on the premises. The provision prevents him from using the powers in the Bill to gain access to the premises; he must lawfully be there for some other reason in order to gain access to the powers in the Bill, not the other way round. That fact precludes the officer who is invited in for a cup of tea, in the hon. Gentleman's example, from deciding without reason to conduct a search. That is not possible.

There must be grounds to believe that there is cash on the premises, and the officer must be prepared to demonstrate those grounds before the search is carried out, or at least to justify the search afterwards. If he is asked to leave, he obviously cannot conduct the search. He must be lawfully on the premises in order to use the powers that will be granted.

We are introducing a power for the use of constables or Customs officers that we intend to be used in situations in which there are clear grounds for suspicion. In the main, it will be used for intelligence-led operations that allow the seizure of cash. The power is not meant to allow speculative searches in circumstances in which there is no justification. The current wording of the clause and the safeguards that exist in this part of the Bill ensure that the power cannot be used in that way.

The hon. Gentleman's grounds for concern are not founded. I ask him to accept that premise and withdraw the amendment.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Minister for his cogent explanations. He provided me with much reassurance. Philosophically, he and I approach the Bill from opposite directions. He has the underlying assumption that the powers that the Bill will confer will be properly exercised by virtue of the regulatory framework and the rules that are drawn up. As a Conservative, I believe that if one gives a person a power, at some point it is likely to be abused. One must examine the power from that angle as well as from that of a person who will exercise discretion properly.

A considerable power is being extended. Above all, I am reassured by the Minister's comments in respect to the draft rules with which he provided the Committee. In such circumstances, I do not hesitate to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 451, in page 167, line 29, at end insert—

'(c) are exercisable by a constable in relation to subsections (2) and (3) only if he has reasonable grounds for suspecting that an offence has been committed.'.

The amendment addresses the searching of a person, rather than premises. A question arises about whether a search of a person carrying cash should be allowed unless there is a suspicion that an offence has been committed. As the Minister may acknowledge, because of the way in which the whole Bill is drafted, it is possible for a person to possess recoverable property or—perhaps less so—property intended for use in unlawful conduct if no criminal offence has been committed or is likely to be committed. I accept that it is more likely that a criminal offence would be contemplated if the cash were intended to be used in the course of unlawful conduct.

The insertion of paragraph (c) would provide reassurance that people who are not criminals would not be subject to searches. Unfortunately—or perhaps fortunately—the Government's intention is for the Bill to widen the net beyond people who are criminals or suspected criminals.

I should be grateful to hear the Minister's comments on the amendment, and I ask him to give careful consideration to whether it would provide protection from what could otherwise develop into an arbitrary power. However, in saying that, I am mindful of his comments about the draft rules with which he provided us.

Bob Ainsworth (Labour, Coventry North East)

The amendment would require a constable to have reasonable suspicion that an offence had been committed before he could exercise his powers to search a person for cash under clause 288. There would be no such limitation in relation to the search of a property and the limitation would not apply to a Customs officer. The ability for a constable to search a person using the power in clause 288 may currently be exercised when he has reasonable grounds for suspecting that a person is carrying cash that is recoverable property, or that any person intends to use it in unlawful conduct. In addition, the amount of cash must reasonably be suspected to be not less than the minimum amount.

The same conditions apply to Customs officers. However, subsection (5) currently provides that they may exercise the search power only if the unlawful conduct in question relates to a matter that is within their remit. The purpose of that is to make it clear that Customs officers are not being given a remit to involve themselves in other kinds of unlawful conduct.

With regard to constables, the amendment would require that the search power would be exercisable only if the officer has reasonable grounds for suspecting that an offence has been committed. In the

case of cash that is suspected of being recoverable property, that must always be the case, as property is recoverable only if it was obtained through unlawful conduct, as set out in clause 246. There can be no suspicion of recoverable property without the suspicion that conduct unlawful under the criminal law is taking place.

In the case of cash that is suspected of being intended for use in unlawful conduct, an offence may have been committed in the past to generate that cash. However, the purpose of the provision is to focus on the use to which the cash is to be put, rather than on its history.

As I tried to explain in my comments on the previous amendment, the forfeiture of cash that is intended for use in unlawful conduct is an integral part of the cash recovery scheme. The amendment does not require that an officer has reasonable grounds for suspecting that a particular offence has been committed. However, if the intention is that the officer should have grounds to suspect that a specific criminal offence has been committed, that would not fit within the compass of the cash recovery scheme. Indeed, clause 247 makes it clear that property—including cash—that has been obtained through unlawful conduct does not have to be linked to a specific offence. It is not necessary to show that the cash was obtained through a particular act of unlawful conduct, so long as it can be shown to have been obtained through unlawful conduct of one kind or another.

Dominic Grieve (Conservative, Beaconsfield)

That is very helpful.

While listening to the Minister, I have realised that I could have drafted the amendment more precisely. I am concerned that this power might be used to stop an individual against whom no offence has been imputed, because I take on board the point that the cash, if it is recoverable property, is going to have an origin in an offence—although that could have been committed abroad, as much as at home. However, I am sure that he will acknowledge that the power under discussion is a parallel power to the civil recovery proceedings, which can be used against an individual who has a great stash of cash. The power under discussion provides a sort of summary way for police officers to lay their hands on that particular asset at the outset. I am worried that an innocent person—a person who has potentially recoverable property, in cash, in their possession—might be submitted to search procedures, when there is an alternative civil procedure recovery method that could perfectly well be adopted, thereby avoiding submitting them to such an indignity.

Bob Ainsworth (Labour, Coventry North East)

I am now struggling to understand what the hon. Gentleman is concerned about. He is right that, at the end of the day, for the cash to be forfeit, it must be proven, to the same level of proof that is required in chapter 2 of part 5, that it is the proceeds of crime or is intended for use in crime. The key fact is that cash is instantly movable; that is the only reason why it is necessary to introduce the power to take possession of it immediately.

Safeguards are in place. When it comes to searching an individual, just as with searching a premises, reasonable grounds must exist to suspect that the cash in question is the proceeds of crime or is intended for use in crime. The minimum amount and the other safeguards are designed to prevent exactly what the hon. Gentleman is worried about—the indiscriminate use of the power to search and harass people without due cause. I am satisfied that by including a raft of safeguards for prior scrutiny, and post scrutiny in cases where prior scrutiny is not possible, as well as a minimum amount of which there must be suspicion, we will ensure that there is no doubt that the power is not to be used willy-nilly without due cause or appropriate suspicion.

Dominic Grieve (Conservative, Beaconsfield)

Perhaps our approach is from a civil law angle. If I have a right of civil recovery of assets such as cash or some other instrument, and I discover that a person is innocently in possession of that instrument, I cannot go out into the street and say, ''Stop, I want to search your pockets,'' and remove the items in question—I have to go to court and get an order. In the Bill, the state is taking a much wider power, which could, for example, be used against a courier who is acting perfectly legitimately in carrying instruments that constitute cash. Such a courier could be stopped and have those instruments seized. In this country there is a traditional principle that people should not be stopped and searched without good reason. Any such cause is normally linked to allegations of their own criminality. As a point of principle, I am concerned about a power that has the potential to allow innocent people to be stopped and searched in a way that goes against that tradition.

Bob Ainsworth (Labour, Coventry North East)

The power is not intended to be used in the wide manner that the hon. Gentleman fears. He finished off his previous remarks by asking what was wrong with the existing power under the civil recovery procedure. The problem is that under that procedure the director has to go to court and provide a good, arguable case that the property is the proceeds of crime in order to get it frozen in the first place. In order to seize the property, he must then go on to prove that, on the balance of probabilities, it is the proceeds of crime. If he were to try to do that with cash, there would be nothing to seize. The hon. Gentleman must know that that is the case.

It may be that in some circumstances—if we studied the matter for long enough, we would be able to come up with some—cash could be seized under the civil recovery procedure. I am not suggesting that that is not possible. However, cash, by its very nature, and the other instruments such as tradable bonds and cheques included in the subsection, are easily movable and would not in most circumstances be recoverable under the normal civil recovery procedures.

Dominic Grieve (Conservative, Beaconsfield)

I am interested in what the Minister said. He may be able to give me clarification on the point, but I would have assumed that, for the purposes of civil recovery proceedings, cash is no different in

quality or content from a painting on one's wall. If such a painting can be frozen in civil recovery proceedings, and I see no reason why it cannot, I can see no reason why cash cannot be frozen in the same way and have to be handed in to the court.

Bob Ainsworth (Labour, Coventry North East)

The essential difference, as I have said, lies in the mobility of cash, which can easily be disposed of without trace. In civil recovery, the director conducts an investigation with a view to going to court to get assets frozen. He takes his investigation to the point where he is able to satisfy the court that those assets are the proceeds of crime and get an initial freezing order made on those goods. In the case of cash, an intelligence-led operation may trace a drugs deal, but the situation could have changed entirely by the time that the director can put together a case for the court.

The situation is fluid. We are told—this was exposed in the performance and innovation unit report—that in the course of other investigations, Customs officers and constables sometimes come across large amounts of cash that are obviously the proceeds of crime or intended for criminal use, but under current legislation, they can do nothing. By the time they can act with any power and take the money away, it is long gone.

The question is whether we want a power to be introduced that would enable action to be taken in such circumstances, without allowing individual members of the public to be harassed when there are not reasonable grounds to suspect that they are, have been or are about to be involved in crime. The hon. Gentleman seems to be arguing that such a power is unnecessary and that the potential for abuse is a price that is not worth paying, although we have managed to expose the fact that large amounts of cash are beyond the reach of the forces of law and order.

Boris Johnson (Conservative, Henley)

Will the Minister help me with one point that I cannot understand? I am sure that there is an easy answer, but I cannot see it. If a constable in a suspected criminal's house sees a pint pot on the mantelpiece full of £5 notes, how can the constable demonstrate that the money might be used for criminal purposes? How is it envisaged that one could show that the cash was intended for the purposes of crime? I do not understand how such a provision would work.

Bob Ainsworth (Labour, Coventry North East)

In those circumstances, I doubt whether the constable would be able to satisfy anyone that he had reasonable grounds to suspect that the cash was the proceeds of crime or was intended for criminal use, but if he had entered the premises with a search warrant, properly verified by the court, looking for drugs, or found evidence that something had taken place on those premises and then found a large amount of money—where a drugs deal was about to take place or where known drugs dealers were known to exist—he might be able to persuade the court, on the balance of probabilities, that the money was intended for use in drug trafficking. It is no good his seizing cash if he will have to give it back and pay compensation and interest on it. He must be able to go to court and satisfy

the magistrate that the money was intended for use in crime or was the proceeds of crime. I would argue that he would not attempt to do that in the circumstances described by the hon. Gentleman.

Nick Hawkins (Conservative, Surrey Heath)

Just before the Minister responded to the excellent intervention of my hon. Friend the Member for Henley (Mr. Johnson), he was relying in what he said on the findings of the performance and innovation unit, so I was asking my hon. Friend the Member for Beaconsfield whether the Committee had seen the full text of that report. I do not think that we have. If I am right that the full text is not in the public domain, it would be helpful for us to see it, given that the Minister is relying on it directly.

Bob Ainsworth (Labour, Coventry North East)

It is not a private document. It has been around for a long time. We published the draft Bill that referred extensively to it, so I apologise if I have not personally provided the hon. Gentleman with a copy of it, but I have no intention of keeping it secret. It has been referred to repeatedly as justification for the introduction of these measures.

Nick Hawkins (Conservative, Surrey Heath)

It may be my fault, because I might have been able to request a copy from the Vote Office, but I raise the subject now because the Minister referred in detail to a specific passage of the report in relation to the clause. Because he relied on it so specifically, I thought that it would be helpful to know exactly the terms. Perhaps I can find them out myself without troubling him.

Bob Ainsworth (Labour, Coventry North East)

Perhaps I can continue with my argument against the amendment.

Existing legislation on drugs and terrorism does not require any link to be made between the cash under suspicion and a specific offence. We can see no reason for the cash recovery scheme under the Bill to be different from existing ones.

I accept that the power to search a person provided for in clause 288 is intrusive, but the Bill provides a raft of safeguards to limit use of the power. The seizing officer will be required to have a reasonable suspicion that there is more than the minimum sum in cash or recoverable property that is intended for use in unlawful conduct. We would not expect that requirement to be satisfied in many cases. Even if the test were met in the opinion of the officer, subsequent provisions put in place additional safeguards. That includes the need for prior approval of the provision, the requirement for a statutory code of practice and the creation of the role of an appointed person.

In the circumstances, I ask the hon. Member for Beaconsfield to think that those are the safeguards on which we can rely to ensure that the powers are used in a targeted fashion to back up intelligence-led operations. They will not be sweeping powers to allow constables to harass individuals when there is no just cause for them to do so, as he suggested.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

The Minister appears to say that the provisions are in line with existing law. Up to a point, that is true. However, surely they expand current law, which exclusively relates to the power to

search individuals if they are suspected of having committed an imprisonable offence. The Bill refers to ''unlawful conduct'', which is a much wider definition.

Bob Ainsworth (Labour, Coventry North East)

Under the current law, the powers apply only to seizing cash at ports, so I do not deny that there is a considerable extension. We are not only expanding the law from specific offences such as drug trafficking to cover all crime, but expanding inland from the borders the area in which the powers can be used. The powers are a lot wider than those in current law. However, they are based on current law. At present, provisions allow for the seizure of proceeds of crime and cash intended for crime. They have been successful, and we have had no feedback to suggest that they have created a problem in that more limited situation.

The Committee is right: we are extending the powers. Many months ago, I wanted to satisfy myself that there would be adequate safeguards to ensure that we did not create problems such as those that the hon. Member for Beaconsfield flagged up. We do not want indiscriminate powers to be used by constables on people whom they bump into on the streets.

If the constable is required to have prior judicial approval—he may have just reason not to have to obtain it—and can show that he cannot obtain it, he must seek the approval of a senior officer. Only if he can show that he can obtain neither and yet still has to find post-approval can he use the powers. The code of guidance clearly spells out that he has to have reasonable grounds to suspect not only that moneys concerned are the proceeds of crime or intended for use in crime, but that they are above a significant threshold figure.

We have hemmed in the provision in so many ways that it can be used only as part of operations that are intelligence-led or proceed on the basis of information. We are not providing powers that can be used in an indiscriminate fashion. I share the desire to ensure that it can be used only in such circumstances, and not in the wider way that the hon. Gentleman suggests. The safeguards that we have put in will ensure that the powers will not be so used. I therefore ask him to withdraw the amendment.

Dominic Grieve (Conservative, Beaconsfield)

I find myself in two minds on the issue. I have no difficulty accepting what is intended by the Minister—I accept that there is a problem concerning large amounts of cash. I have been involved in cases in which £250,000 was found in a safe deposit box and £25,000 in a cardboard box at the back of the wardrobe of a man in Southend. His explanation was that he was looking after it for Mr. X, who was going to use it to pay his next quarter's VAT bill. I have seen them all. I am fully alive to the interesting explanations that have been advanced. On the whole, I also accept that in this age of banking facilities, it is unusual for most of us to contemplate keeping £25,000 in cash in a box at the back of a wardrobe. That is not something that I would habitually recommend anyone to do, and

I would think it surprising if I had such a sum in cash. However, there is—and it is important in a democratic and free society—a presumption of innocence. If somebody cares to keep £3 million in cash in his wardrobe, he is entitled to do so—one does hear of large sums of cash being found in knickers in the wardrobes of elderly people who have died. I have come across that in inheritance cases, where the sums have totalled in excess of £10,000.

I have a difficulty when it comes to expanding existing powers to give police officers the right on paper—albeit hedged in with the safeguards that the Minister has outlined and the rules that have been issued—to stop somebody who has not committed or is not suspected of having committed any offence, in a public place anywhere in the country and to insist on the right to search him and to confiscate his cash. I am not concerned about ports where Customs officers exercise their existing powers. I think that most people understand that slightly different rules apply there because people are entering and leaving the jurisdiction of the country.

Moreover—and I shall not stray too far, as we shall come to this later—what is remarkable about the powers conferred under this part of the Bill is how long the cash can be held on to while somebody goes away and considers whether a tainted provenance can be found for it. It will not be detained for five minutes; it could potentially be kept for a very long time.

Bob Ainsworth (Labour, Coventry North East)

I do not want to stray down the road that the hon. Gentleman says he will follow later. However, he keeps saying that the money can be seized from somebody when there are no grounds for suspecting that that person has been involved in criminality. In narrow terms, he is right. We are concerned with the cash, not the person. There must be grounds to suspect that the cash is the proceeds of crime, or is intended for use in crime. He tries to make out that this is a power that a constable might use where no grounds exist. It is not. I ask him to accept that that is not so.

Dominic Grieve (Conservative, Beaconsfield)

Of course I accept what the Minister says, but one problem of having ''reasonable grounds for suspecting'' is that it is a wide term. At a later stage of the Bill, we find that constables are immune from any form of civil or criminal proceedings as a result of these seizures—the Bill provides them with protection. Traditionally, ''reasonable grounds for suspecting'' has been seen as giving a wide discretion to police officers for the specific purpose of preventing crime. The term exists frequently in criminal law.

Nick Hawkins (Conservative, Surrey Heath)

I do not know whether what I am going to say will assist my hon. Friend's argument, but I hope that it might assist the Minister. My hon. Friend and I have had experience of a constable being regarded by the court as having reasonable grounds for suspicion, although it turns out that the suspicion was wrong, despite those reasonable grounds. The person against whom there were reasonable grounds to suspect may nevertheless turn out to be innocent.

I remember a case from many years ago that involved large amounts of cash and, allegedly, dishonestly acquired videos. The case involved interpleader proceedings, and the police tried in the end to decide to whom, of three entirely innocent people, a large sum of cash belonged.

Dominic Grieve (Conservative, Beaconsfield)

My hon. Friend has given a good illustration. An officer may have reasonable grounds for suspicion, but it may turn out that the person is innocent. As a society, we have always accepted that possibility, for the purpose of apprehending criminals in criminal acts.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman said that the hon. Member for Surrey Heath had given a good illustration, but the amendment says that the individual involved must be suspected of criminality.

Let us imagine that someone unknowingly carries large amounts of cash on behalf of someone else and that the operation has been tracked for ages. The person who carries the suitcase full of money, which is intended for a cocaine deal, is not part of the operation. The hon. Gentleman suggests that because the individual carrying the cash is not part of it, the cash should not be forfeit, although it can be proved that the cash is an element in a criminal conspiracy. He must see that we are discussing a question of property, not the person, and that there is a requirement to be able to show that there are reasonable grounds to suspect that the cash is either an element in a criminal act that is about to happen or the proceeds of a criminal act.

Dominic Grieve (Conservative, Beaconsfield)

We come to the nub of the area of philosophical disagreement between the Minister and myself. I would expect the police officer in those circumstances to approach the person involved and say, ''I'm terribly sorry to trouble you, but I think you may have in your possession £2 million that you are intending to take to an individual who intends to use it as part of a cocaine transaction. Would you assist us?'' It is well that society should proceed on the assumption that those who are innocent of wrongdoing should be willing to assist the authorities in preventing it.

The Minister has given the state wide powers, in the person of police constables—and of Customs officers, but we shall leave them out of the argument as they already have the powers—to stop innocent people who are not suspected of any wrongdoing, because there are reasonable grounds for suspecting that they have large quantities of cash that may be recoverable property or intended for use in unlawful conduct. I understand the Minister's thinking, but that is a wide extension of existing powers.

Bob Ainsworth (Labour, Coventry North East)

I know that the hon. Gentleman has only bumped into his secretary, that we have just come back from the Christmas break and that he has not had time to consider the guidance. However, what he suggests is laid out in the guidance—that police officers should inform individuals when they have reasonable grounds for suspecting that they have cash on their person worth more than £10,000 that is recoverable

property or intended for use in unlawful conduct. Only after police officers have satisfied themselves that the person is not prepared to co-operate do constables have the power of search.

Dominic Grieve (Conservative, Beaconsfield)

I, too, have read the guidelines—I may have seen them only this morning, but I read them before I came into the Committee. Of course, I understand the Minister's point, but the question remains whether we should give the power of search against the person who is not suspected of committing an offence. There will always come a point when one has to decide what are the limits of the state's powers against individuals. Against people who are committing criminal offences, we have consistently widened those powers over the past 50 years, but the crime rate has gone up. It does not seem to have had the desired effect, yet we are now being asked to extend those powers against people who have not committed criminal offences rather than, as I suggest, going for the alternative, but doubtless more ponderous and bureaucratic method.

Bob Ainsworth (Labour, Coventry North East)

Less effective, too.

Dominic Grieve (Conservative, Beaconsfield)

Doubtless so. It is all about the balance of civil liberties.

I do not wish to continue my peroration for too long, as I said at the outset that I was conscious that the amendment could have been better drafted, in order to narrow down the persons whom I want to protect. For that reason—not necessarily that reason alone, as I am not wholly adverse to the Minister's intentions—I shall ask the Committee's leave to withdraw the amendment while reserving to myself the opportunity of considering the matter further on Report. I think that a significant civil liberties issue is involved. It is important that Parliament should consider that.

Nick Hawkins (Conservative, Surrey Heath)

In light of the Minister's helpful reference to the guidance, which is one of the factors that is influencing my hon. Friend somewhat conditionally to withdraw the amendment in its current form, I wonder whether to observe that a better way to approach the problem would be for the Minister to contemplate writing into the Bill the sort of safeguards that are currently available only in guidance.

Dominic Grieve (Conservative, Beaconsfield)

My hon. Friend makes a good point. The Minister has been kind enough to give us the list that was produced by his officials of the things that he has agreed to think about, which I read over the Christmas recess. I do not know whether other members of the Committee have seen it, but it was quite long. It might add to the burden placed on him and his officials, but this might be another sensible matter on which to consider inserting something into the Bill. It would cover specifically the position of the innocent third party who happens to be in possession of a large quantity of money that is suspected—only suspected—of being recoverable property or property intended by another person to be used in unlawful conduct.

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

On the question of civil liberties, will the hon. Gentleman turn his thoughts to the position in my constituency and in Glasgow generally, where lots of people are dying as a result of drug money being allowed to flow through? I would rather that 49 people were stopped and searched in order to catch one guilty person than to have no search. I am sure that the vast majority of my constituents, and those of my hon. Friends, would be quite prepared to undergo a large number of fruitless searches rather than have the police and other authorities constrained by unduly restrictive proposals. It seems that the hon. Gentleman is out of touch with the real feeling in the country. Again, he is acting as the criminal's friend.

Dominic Grieve (Conservative, Beaconsfield)

I understand the hon. Gentleman's sentiments, but after almost 50 years of a continually rising crime rate and a deteriorating social situation, particularly in connection with drugs—this Parliament has been backwards and forwards over the criminal law and, in this case, a parallel administrative law code, designed to suppress and reduce that criminality—the profound irony is that most of our efforts have proved to be completely unsuccessful. I wish the Bill well, as the Minister knows, but over the past 50 years we have been eroding our civil liberties. From time to time, it is worth pausing to ask whether a change is likely to produce such an obvious benefit that it is worth losing some civil liberties for.

As civil liberties are eroded by parliamentary decisions so, I suspect, will people's self-respect and their respect for the law. We will live in a society in which, instead of people saying freely that there are good reasons for being law-abiding, a position will be reached where it will be us and them, and that will contribute ultimately to the social disintegration that is such a problem not only in the hon. Gentleman's constituency but in mine.

An important issue is at stake. If, for the next four weeks, I am jumping up and down in Committee picking up on such points—as I have been doing for the past two months—it is because I have a fundamental anxiety about such measures. Furthermore, I have those worries while genuinely wishing the Bill success. The last action that the Under-Secretary wants to take is to introduce a Bill that interferes with people's civil liberties while producing none of the benefits that were intended. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Roger Gale (Conservative, North Thanet)

Before we proceed, I remind members of the Committee that interventions must be interventions. I appreciate that complex legal matters sometimes require a greater level of explanation than other matters, but if hon. Members wish to make speeches, they must catch my eye in the usual fashion.

Bob Ainsworth (Labour, Coventry North East)

I beg to move amendment No. 321, in page 167, line 32, leave out paragraph (b) and insert—

'(b) postal orders,

(c) cheques of any kind, including travellers' cheques,

(d) bankers' drafts,

(e) bearer bonds and bearer shares'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take Government amendments Nos. 322 and 340.

Bob Ainsworth (Labour, Coventry North East)

The amendment extends the definition of cash to include postal orders, cheques, bankers' drafts, bearer bonds and bearer shares. It mirrors the definition under paragraph 1(2) of schedule 1 to the Anti-terrorism, Crime and Security Act 2001, which has a scheme for seizure, detention and forfeiture of terrorist cash. It is desirable that the definitions of cash under the Bill and the Act are consistent.

Moreover, such instruments share with other forms of cash the property that they have monetary value, that they are easily transported and that they can be readily converted. That means that they can also be paid into an account for the purposes of clause 295 and then divided to ensure that, if only some of the cash is under suspicion, the other part can be released.

Amendment No. 322 transfers from the Treasury to the Secretary of State the proposed power to make an order extending the definition of cash. On reflection, it became clear that the decision about which monetary instruments should be subject to the cash recovery scheme is a matter of Home Office policy. It is therefore more appropriate for the Home Secretary, not the Treasury, to make the order. Officials in the Home Office and in the Treasury will liaise closely about its terms. However, as that is a matter over which the Home Office has responsibility, the order-making power should rest ultimately with the Secretary of State. A similar order-making power is provided under paragraph 1(3) of schedule 1 to the Anti-terrorism, Crime and Security Act 2001.

We propose that the Secretary of State should be required to consult Scottish Ministers as the addition of a further monetary instrument to the definition of cash will extend the search powers of Scottish constables. The same approach is taken with the minimum amount order under clause 301, on which Scottish Ministers will also be consulted.

Nick Hawkins (Conservative, Surrey Heath)

I hope that I am not perceiving a hidden agenda under amendment No. 322, but is there any significance in the phrase

''any kind of monetary instrument which is found at any place in the United Kingdom''?

For example, if the Government were to succeed in their plot to replace our currency with the euro, are we giving powers such that that would be covered?

Bob Ainsworth (Labour, Coventry North East)

I am sure that the provision would cover foreign currency as well as pounds sterling. The hon. Gentleman is right in that regard. It is euro-neutral, and there is no need for him to get too upset at this point.

David Wilshire (Conservative, Spelthorne)

This is a separate issue that was prodded by the Minister's reference to foreign currency. I see that the wording of the Bill refers to

''notes and coins in any currency''.

Does that go beyond legal tender? I have in mind such things as krugerrands, which are probably not legal tender but are cash. Does the matter need to be revisited in order to avoid doubt and to clarify that the Bill refers to legal tender and any other coinage?

Bob Ainsworth (Labour, Coventry North East)

It is intended that the provision covers cash and instruments that are the equivalent of that in the way that they may be moved and traded. That is why we have included bonds that are not easily traceable after they have moved from those situations. The Bill would cover foreign currency, krugerrands, euros and any other form of cash.

David Wilshire (Conservative, Spelthorne)

I am sorry to press the point. As a non-lawyer, I have a sense that cash means something that is legal tender. However, such things as krugerrands are not legal tender. In order to avoid doubt, it would be useful for the Bill to contain a phrase such as ''notes or coins whether currently legal tender or not''. That would make it clear that a person could not offer a defence that notes or coins would not be covered by the Bill because they are not legal tender.

Bob Ainsworth (Labour, Coventry North East)

I am beginning to suspect an ulterior motive.

David Wilshire (Conservative, Spelthorne)

I am just trying to be helpful.

Bob Ainsworth (Labour, Coventry North East)

I know. I understand the hon. Gentleman exactly. I wonder when we will get round to an amendment that mentions ''foreign currency like the euro''.

I am fairly certain that the situation is covered, although I will check that it is, because it should be. The provision must cover not only cash that is legal tender in this country, but foreign currency that is not legal tender in this country.

Steve McCabe (Labour, Birmingham, Hall Green)

Does my hon. Friend believe that only Tory sympathisers and British criminals would refuse to use the euro? Should there be a special provision for that?

Bob Ainsworth (Labour, Coventry North East)

I do not know whether the hon. Member for Spelthorne would be willing to give up moneys that came to him in euros because he is not prepared to become tainted by the stuff.

David Wilshire (Conservative, Spelthorne)

I simply thank the Minister for saying that he will consider the matter. There is no ulterior motive behind the question. It is a genuine search for clarification to try to ensure that the Bill is not soft on people by offering loopholes.

Bob Ainsworth (Labour, Coventry North East)

I would not overextend what I said. I am pretty certain that foreign currency and currency that is not legal tender is covered. I shall make absolutely certain that that is the case.

Nick Hawkins (Conservative, Surrey Heath)

A thought occurs to me while we discuss things of potential monetary value. Would the article by my hon. Friend the Member for Henley that offers £10 to any reader of The Daily Telegraph if Britain enters the euro be regarded as legal tender?

Bob Ainsworth (Labour, Coventry North East)

Who would be prepared to pay for that? Labour Members mentioned that we were prepared to pay for signed copies of the book by the hon. Member for Henley before Christmas so perhaps the article is highly valuable and easily tradable property. I am not sure what category it would fall within, although I doubt that it would fall within the category of cash forfeiture. However, it may well do so. That depends on his credibility.

Amendment No. 322 also removes the requirement in subsection (7) that additional monetary instruments may be specified only if the Treasury thinks that they ''may be realised in the form of notes or coins...without the consent or assistance of any other person.'' The provision was intended to ensure that cash could be converted into a form that could be paid into an account or released in part if it could not be forfeited. However, on further inspection, we feel that it is implicit in clause 295 that cash must be in a form that may be paid into an interest-bearing account because the clause states that cash is to be held in such an account unless it is required as evidence in proceedings. Furthermore, some monetary instruments can be paid into, and released from, an interest-bearing account without the need for conversion into notes and coins. Therefore, we are satisfied that subsection (7), in its existing form, is unnecessary and unduly restrictive.

Dominic Grieve (Conservative, Beaconsfield)

That brings another point to mind, although raising it risks causing further muddle. At some point over the next couple of months, I will carry out a rigorous search of my house for the francs that have been accumulated during 150 years of Anglo-French family life, and I will take them to France to have them realised. I am sure that I will find many coins. After February, it will not be possible to pay them into an account—and it will certainly not be possible for an officer to do that. They will be

''notes and coins in any currency,''

but they will not be that in a form that can be realised.

I apologise for raising that point with the Minister, but I wonder whether something has been missed with regard to it.

Bob Ainsworth (Labour, Coventry North East)

I do not think that we have hit on a point that is of huge significance for the working of the Bill.

Perhaps the hon. Gentleman has raised a significant issue about old coins of value that might not be tradable, and about whether they should be considered as cash, rather than property, in all circumstances—I am thinking about Elizabethan or Victorian coins, for example. The point might need to be examined, to discover whether such coins should be covered by cash forfeiture, or by civil forfeiture, which is laid down in a previous part of the Bill. I will have to study that matter, to try to ensure that there is not an ambiguity.

A note has whizzed to me that says that, after February, French francs will have no value, and that they therefore do not fall within the scheme. If we are totally satisfied that they have no value and do not fall within the scheme, we will have covered the point. However, it might need to be further examined.

Dominic Grieve (Conservative, Beaconsfield)

I do not think that the Minister is right. In the recent past, I took French francs that date from 1967, in banknotes, to the Bank of France. Notes like that are very large, with ''X thousands of francs'' written on them, and when a customer presents them, they are given a few pence in return, because it is necessary to subtract all the noughts. However, they are tradable.

If people take French francs to the Bank of France at any time after February—although there may be a cut-off date—and they say, ''Here are the francs,'' the cashier will give them the equivalent sum in euros—although if someone has found, in a box, three or four franc notes that date from the early 1960s, they will not get very much for them.

Bob Ainsworth (Labour, Coventry North East)

That is not my understanding of the situation, although I do not pretend to be an expert on the matter.

However, I take on board the hon. Gentleman's point about whether antique coins—that are, nonetheless, coins—should be treated as cash or property. That is an issue that might need to be looked at, and I am happy to do so.

David Wilshire (Conservative, Spelthorne)

I again promise, Mr. Gale, that I am not planning to make any sort of political point about Europe.

Even if the situation in France is as the Minister describes it, my understanding is that the situation regarding the trading in of former currencies varies between each of the 12 countries that have adopted the euro. Therefore, we would have to check out the situation not only in France but in the other 11 countries.

In any event, the situation could be much more serious than my hon. Friend the Member for Beaconsfield has suggested, because the proceeds of crime often end up in cash that the villains are reluctant to trade in at the time, because that would draw attention to them, and there could be considerable sums of such money in old currency.

Bob Ainsworth (Labour, Coventry North East)

I understand, however, that such sums have, effectively, become valueless. Great fear was felt by the forces of law and order about the conversions that have recently taken place, but there were also, perhaps, great opportunities for them to catch up with people who were trying to launder money that they had kept illegally for a long time.

Fundamentally, if something has no value, it is not covered by chapter 3 of part 5, and if it has value, it is covered. There are issues with regard to antique coins that might need to be looked at. My prejudice is that they are property rather than cash, but we must check to ensure that there is no ambiguity.

Nick Hawkins (Conservative, Surrey Heath)

My hon. Friend the Member for Spelthorne is right. There was a table showing the cut-off points for various different countries. The Minister is mistaken in thinking that the introduction of the euro is a great opportunity for the forces of law and order. In Italy, for example, stashes of previously undeclared ill-gotten gains were rushed across the borders into the non-euro zone country of Switzerland in order to be deposited there. The forces of law and order in Italy found it impossible to track funds that were moved across the border.

Bob Ainsworth (Labour, Coventry North East)

That is fascinating stuff. I do not know how relevant it is to the amendment, but it is wonderful to see that the hon. Gentleman is tracing the methods used by criminals to protect their ill-gotten gains in the transfer to the euro.

The amendments are clear and justified. My opinion on antique coins has been reinforced: we do not intend to cover them under the scheme. However, they would count as property and would therefore be potentially forfeit under civil forfeiture. I ask the Committee to accept the amendment.

Mrs. Annette L. Brooke (Mid-Dorset and North Poole) rose—

Roger Gale (Conservative, North Thanet)

I call Mr. Grieve. If the hon. Lady wishes to catch my eye, I am sure that she will be able to do so.

Dominic Grieve (Conservative, Beaconsfield)

I have no difficulty with the amendment or those grouped with it.

I wish to discuss the power to specify which monetary instruments fall under the provisions of subsection (6)(b). I accept that the power to specify should be left to ministerial discretion, but would the Government use affirmative procedure or merely negative procedure to specify the monetary instruments?

Bob Ainsworth (Labour, Coventry North East)

I think that we were considering negative procedure.

Dominic Grieve (Conservative, Beaconsfield)

I always consider the darkest possibilities. The power could be used to extend the specified instruments far more widely than Parliament intends. I wonder whether affirmative procedure should be used to decide the instruments. A Committee would take only a few minutes, as is generally the case, to decide by affirmative procedure.

My interventions on the subject of old currencies were made with some frivolity, on the back of my recollections of spending part of Christmas sifting through boxes of old French, Italian and other coins and deciding when I would take them abroad and either put them in a charity box or take them to a bank to get the money back before they lose their value.

An important issue arose in the course of the discussion. Substantial amounts of European currencies must not yet have been converted into euros. One reason for that, as the Minister has rightly said, is that people are reluctant to convert money because the switch to the euro has caused money

launderers major problems in realising their assets. There has been a lot of comment in the French press about the problem that the euro poses to the large amounts of illegitimate cash in France and other European countries.

It will be possible for that money to be converted at the central banks of the countries concerned—my recollection from reading the newspapers is that there are differential periods, and some countries have said that they will exchange the bank notes till kingdom come while others have said that there are cut-offs of one year, two years, four years and the like. I would not be at all surprised if Customs officers and police constables did not find stashes of that money in banknotes for some time to come, especially as cashing it will be dependent on cashing only limited amounts at one time without questions being asked. In France, for instance, FF100,000 can be cashed without providing an explanation of origin. For once, thought should be given to whether that money could be seized. There may be a lot of it around, and it may be the proceeds of crime.

The Minister and his officials may want to consider whether there is a loophole, and I am encouraging them to plug it. Although the money is not payable into an account, it is realisable in substantial sums. I may be wrong about that—the Minister's officials may be able to reassure him that it will be covered as another instrument. However, there must be millions of pounds in foreign currencies that have just been demonetised but can still have their value realised if presented at central banks on the continent. Some of that money is likely to be proceeds of crime.

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

I want to ask a question, although it might be naive. In the broadest sense, any item can be counted as cash, in so far as it can be part of transactions, yet there are final definitions of legal tender within the country, which would not include Scottish euros and so on. Is it not a case of being able to define whether something is cash or property after seizure? I shall give an example. A hoard of gold sovereigns would be easy to use for transactions—far easier than old francs—but I imagine that they would be classified as property rather than money, although they could perform the function of cash in our society. Is the definition of what is cash and what is property tied in to the legislation in that way, so that the item will be caught either way?

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I do not intend to engage with this point in relation to amendment No. 321, as I fear that we are back with the angels on the head of what must now be a rather blunt pin, but I have one query about amendment No. 322. I admit that it is esoteric and, in practical terms, is not likely to constitute a massive problem, but will the Minister explain why, if there is a separate enforcement procedure and structure for Scotland, orders to be made under new subsection (7) must be made by a Minister of this House, albeit in consultation with a Minister of the Scottish Parliament? If a Scottish Minister, especially the Lord Advocate, felt that it was necessary to specify some

manner of monetary instrument as cash, power should be given to that Minister to do so without having to come cap in hand here first.

Bob Ainsworth (Labour, Coventry North East)

On the negative-positive issue, the hon. Member for Beaconsfield would have to persuade me that abuse of the power was possible in the way that he suggests before I would agree that we should move to the negative. The problem is about definitions of cash. I cannot see that there is scope for the power to be used as he suggests.

I do not want to appear complacent about the point made by the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke), and I shall cover the point made by the hon. Member for Orkney and Shetland (Mr. Carmichael) as well. We are not dealing with cash and legal tender alone. We are trying to deal with items that have instantly tradeable value, such as building society cheques, banker's drafts, foreign currency and so on. We think that the definition is right, and that we have covered what we needed to.

The hon. Member for Beaconsfield, who has obviously followed the matter more closely than me, says that the phased-out currencies still have value. I am advised that while they do, they are still covered by the scheme. I do not want to be complacent, but if the franc has a tradeable value for a period, it will be covered by the scheme. Turning to the point of the blunt pin, I cannot see too many criminals being able to pull drug deals, or anything else, with francs by the time the Bill gets on the statute book. None the less, it is a possibility that I believe has been covered.

David Wilshire (Conservative, Spelthorne)

The hon. Member for Mid-Dorset and North Poole has raised a point that the Minister should consider further in relation to sovereigns. I did not refer to sovereigns when I mentioned krugerrands. My understanding of sovereigns is that they are legal tender, but worth much more than their face value, as are crowns. If the administrator has to sell seized property to pay his expenses—we dealt with that subject previously—and tries to sell coins of that sort, what value does he attribute to them? Does he regard a sovereign as having a face value of £1, or as property worth whatever price he can get for it at auction?

Bob Ainsworth (Labour, Coventry North East)

We are getting to the subject of what is cash and what is tradeable. Items that clearly have a face value, are tradeable at that face value and can be paid into an account, and on which interest can be calculated, are money, whether they take the form of a building society cheque, a banker's draft or cash itself. When we move on to antique coins, gold coins and other such items, there is no clear value. At that point, such items become property, and are not necessarily subject to the provision.

David Wilshire (Conservative, Spelthorne)

With respect, I suggest that the Minister checks on the status of the sovereign. Sovereigns are still issued with a face value of £1 and are legal tender. They can be considered to be worth £1, but the value of the gold is much higher than £1. The Minister must clear the matter up. Will he treat that coin as having its face value of £1, or its real value?

Bob Ainsworth (Labour, Coventry North East)

I think that it is to be treated as having its real value, and would be classed as property. If I am wrong I shall inform the hon. Gentleman, but I am not aware that there are many organised crimes paid for and funded by stashes of sovereigns. I may be being naive. Something with a value well above its face value is property, not cash.

On the point made by the hon. Member for Orkney and Shetland about Scotland, I wish that my hon. Friend the Minister of State, Scotland Office were here. I honestly do not know the answer. The Scottish Parliament has given us the ability to bring in the legislation, and if orders affect the legislation that applies to Scottish constables, it will want to be consulted. I shall clarify that with the hon. Gentleman as soon as I am able.

Amendment agreed to.

Amendment made: No. 322, in page 167, line 35, leave out subsection (7) and insert—

'(7) Cash also includes any kind of monetary instrument which is found at any place inthe United Kingdom, if the instrument is specified by the Secretary of State by an order made after consultation with the Scottish Ministers'.—[Mr. Ainsworth.]

Clause 288, as amended, ordered to stand part of the Bill.

Clause 289 - Prior approval

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 452, in page 168, line 3, leave out from 'approval' to end of line 4.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following:

Amendment No. 408, in page 168, line 5, leave out from 'officer' to the end of line 6.

Amendment No. 409, in page 168, line 11, leave out subsections (4) to (9).

Government amendments Nos. 443 and 323.

Dominic Grieve (Conservative, Beaconsfield)

The amendment relates to powers in respect of prior approval, which we touched on when we discussed clause 288. Then, the Minister explained that the powers in that clause could be exercised only with the prior approval of a judicial officer or, if that was not practicable, the approval of a senior officer. Failing that, there are certain other provisions relating to reports on the exercise of powers.

The amendment would require the appropriate approval to be given by no one other than a judicial officer. Thus amendment No. 452 would delete the words

''unless . . . it is not practicable to obtain that approval before exercising the power.''

Amendment No. 408 would restrict the power of giving approval to a judicial officer, and amendment No. 409 would delete the definition of a senior officer and the reference to the reporting procedure that would apply if approval were not given by a judicial officer.

I do not want to dwell on these issues because we have touched on them already, but we would do well to consider one point. If the searches are carried out in the planned way envisaged in the rules and guidelines, one would expect there to be no difficulty in obtaining the approval of a judicial officer, because the searches would be systematic, targeted and intelligence-led, rather than random. If that is the case, why should provision be made for an emergency procedure?

I ask that particularly because, as has already been said, in exercising pre-existing powers to search individuals or premises, the police or customs officers may come across money that they believe falls within the appropriate category. In those circumstances, one would expect them to be able to lay their hands on that money, at least temporarily, until they could obtain the necessary approval of a judicial officer, because the original intention in seizing the money was to investigate a crime. Therefore I question whether the power needs to be so widely drafted. If the Minister is right, there will not be many circumstances in which it is necessary to exercise the power where there is not ample opportunity for a judicial officer to give the appropriate authority.

Bob Ainsworth (Labour, Coventry North East)

The Opposition amendments would require judicial approval to be obtained before any search could be conducted under clause 288. The Bill establishes that a senior officer will be able to give that approval if it is not practicable to obtain judicial approval, and recognises that in some circumstances, it may not be practicable to obtain prior approval.

The mandatory requirement to obtain judicial approval would render unnecessary the provisions applying to approval by a senior officer and render obsolete the post of an appointed person and the related provisions. The two Government amendments are minor drafting amendments. As the Bill is drafted, there is a recognition that it will not always be possible for prior approval to be obtained from a judicial officer, or even from a senior officer, before a search is undertaken. There will be occasions on which the circumstances lead an officer to want to search for cash almost immediately. It is important that that officer should be able to conduct that search without prior judicial approval.

It is an unfortunate reality that organising and obtaining judicial approval is a time-consuming exercise. The Government recognise that the search provisions are a significant and intrusive power. The creation of the appointed person to oversee all unsuccessful searches that have been conducted without prior judicial approval is a safeguard to make such searches more transparent and subject to independent scrutiny. If, for example, a customs officer were in a hotel room to seize drugs and suspected that the person present was the seller of those drugs, he might want to search that person and the hotel room for connected cash.

The hon. Gentleman is asking us to encourage the forces of law and order—constables—to try to guess all the circumstances that might arise in any operation in which they are going to be involved, and to obtain prior judicial approval for those circumstances. I ask

him to accept that that is not reasonable. Either it will be ineffective, or in the course of an operation cash will be found that should be forfeited, but the seizure will not have been given prior approval, so the cash will go unseized, if the amendment is accepted. Alternatively, we shall burden both the police and the judicial authorities with countless prior approvals that subsequently prove not to be necessary.

We hope that, in the overwhelming majority of cases, the proposed structure will mean that prior judicial approval will be the route down which the constable or customs officer goes. However, we should not ask such officers to foresee every single opportunity and render them unable to seize cash when it has not been possible to obtain prior judicial authority. Will the hon. Member for Beaconsfield accept that that is the sensible way to create a balance between imposing over-burdensome procedure and allowing cash that should be forfeit to go unseized?

There is an obligation for the constable or customs officer to obtain prior judicial authority whenever it is practical to do so. He will have to justify the fact that he did not, either when the forfeiture gets to court within the two days—if he takes the matter straight to court—or, if the cash is forfeit and handed back, to the appointed person who is to report to Parliament. That should have the effect of discouraging searches that have not been given prior judicial authority, except those that are clearly justified.

Of the Government amendments, No. 443 is a minor drafting amendment. Subsection (4) makes provision as to who qualifies as a senior officer for the purposes of giving prior approval for searches under clause 288. In the case of customs, the clause currently provides that the commissioners are to designate a rank of customs officer equivalent to that of a senior police officer, subsequently defined as an officer of at least the rank of inspector. Although in the context the commissioners could only meaningfully be the commissioners of Customs and Excise, the amendment will ensure that there is no room for doubt on that point. It will also ensure consistency with clause 294, where the full title is already used.

Amendment No. 323 is another minor drafting amendment. Subsection (6) of clause 289 in certain circumstances requires the officer or constable who carries out a search without prior judicial approval to give a written report to the appointed person. Amendment No. 323 will put it beyond doubt that the officer referred to is a customs officer. I commend the Government amendments to the Committee.

I ask the hon. Gentleman to consider his amendments and to accept that they would mean on the one hand the inability to act, and on the other the imposition of unnecessary burdens with regard to prior judicial approval. For those reasons I ask him to withdraw his amendment.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I have noted down beside the three Conservative amendments, ''No'', ''Yes'' and ''Partly''.

Nick Hawkins (Conservative, Surrey Heath)

The hon. Gentleman seems to have encapsulated in one sentence the whole history of his party's approach to matters in Parliament.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I shall not favour the Committee with my views on what the hon. Gentleman thinks about my party, fun though that might be. Amendment No. 452 would be unduly and unworkably restrictive in requiring the involvement of a higher judicial authority in every instance. However, I am not persuaded that it would be either necessary or desirable to involve senior officers of the police or Customs and Excise, as the Government appear to wish to do in relation to subsection (2). I am aware that that practice has been prevalent south of the border as a result of the Police and Criminal Evidence Act 1984. There are others here better qualified than I am to comment on whether that has worked well. However, it has not hitherto been a feature of the Scottish criminal justice system and I can see no particular merit in introducing it in this way.

Amendment No. 408, which restricts the definition of appropriate approval to that granted by a judicial officer, has considerable force. In passing, I wondered why the definition of a judicial officer in England, Wales and Northern Ireland included a justice of the peace, whereas in Scotland it was restricted to a sheriff. The practice in the Scottish criminal justice system at present is to seek warrants from a justice of the peace whenever possible, rather than to go through the sheriff.

The practice until two or three years ago was that warrant applications, which, broadly, is what we are discussing, would normally be dealt with by a sheriff, and only in exceptional circumstances by a justice of the peace. However, because of the volume of work involved, things have now gone the other way. Warrant applications are now routinely made to justices of the peace, and only for the most serious cases are they made to the sheriff. I would be interested to know what the Government's thinking on that is.

If one does not accept Amendment No. 452, certain parts of amendment No. 409 become unnecessary. The inclusion in subsection (9) of the provisions regarding the appointed person is a necessary and welcome safeguard.

Bob Ainsworth (Labour, Coventry North East)

May I clarify the position—although I am not sure about the involvement of the sheriff, and I may return to the hon. Gentleman on that matter.

The hon. Gentleman seemed to suggest that the involvement of a senior officer was an undesirable step that should not be taken, because he did not want the prior approval of such an officer to be considered relevant. I do not know whether I misunderstood him, but people are not relieved from the necessity for post-approval just because a senior officer has been involved. It is a secondary step, which is meant to ensure that the powers are not used unnecessarily by junior customs officers or constables on the street. If the prior approval of a senior officer is gained, and the case goes to court and is effectively given judicial approval within the 48 hours, or if the case is reported

to the appointed person, the fact that the senior officer was involved prior to the seizure does not preclude the requirement to give a report afterwards. It is an additional safeguard; it does not remove the further safeguard that comes after a case.

Dominic Grieve (Conservative, Beaconsfield)

The Minister has put forward a cogent and sensible argument. Although I have an anxiety about the exercise of the power other than by judicial authority, I am reassured by the reporting procedure that will allow Parliament to monitor the use of that power. Slightly reluctantly, I am prepared to concede that circumstances might arise in which it may be difficult to get judicial authorisation, and that that would justify the power being authorised by a senior officer, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 443, in page 168, line 13, after 'Commissioners' insert 'of Customs and Excise'.

No. 323, in page 168, line 22, after first 'the', insert 'customs'.—[Mr. Bob Ainsworth.]

Clause 289, as amended, ordered to stand part of the Bill.

Clause 290 - Report on exercise of powers

Bob Ainsworth (Labour, Coventry North East)

I beg to move amendment No. 324, in page 169, line 2, leave out from 'exercised' to end of line 3 and insert

'in cases where the customs officer or constable who exercised them is required to give a report under section 289(6)'.

The amendment is proposed in order to achieve a more accurate consistency between clauses 290 and 289. Clause 289 requires a customs officer or constable who carries out a search for tainted cash under clause 288 to give a written report to an independent person, who is to be appointed for this purpose by the Secretary of State or Scottish Ministers. Such reports must be made when an officer or constable has exercised the power of search without obtaining judicial prior approval and the case has not proceeded to a judicial detention hearing under clause 294.

Clause 290 requires the appointed person to make an annual report on how the search power is being used. Subsection (2) at present requires him to report on all searches carried out without prior judicial approval, even though, under the provisions of clause 289, only some of these searches have to be reported to him. However, it is obvious that the appointed person can report only on the cases that are reported to him. Amendment no. 324 therefore makes clear that the appointed person's annual report should be concerned with the use of the search power only in those cases.

Nick Hawkins (Conservative, Surrey Heath)

I do not think that I need to say much, but I shall paraphrase what I believe to be the reasons for the Government's change of mind. It seems that they want to make clearer in subsection (2) the link with clause 289(6), and only with that provision. If I understood the Minister correctly, the change would be a helpful clarification and we have no concerns about it. Am I right that that is what he wants to achieve?

Bob Ainsworth (Labour, Coventry North East)

I thought that I had made the position clear. That is certainly our intention.

David Wilshire (Conservative, Spelthorne)

I wonder, Mr. Gale, whether you would prefer general observations to be made during our debate on the amendment, or whether you would rather have a clause stand part debate?

Roger Gale (Conservative, North Thanet)

It would probably be better to have a brief clause stand part debate , if one is wanted.

Amendment agreed to.

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

David Wilshire (Conservative, Spelthorne)

I should be grateful if the Minister would say what sort of person that independent person should be, and what sort of selection process would lead to the point at which names were put to the Secretary of State. I am sure that others will be asked to go through the suggested names, rather than the Secretary of State having to do it himself. That is an important matter. The Minister used the phrase ''independent person'' but I believe that that person should be absolutely and transparently independent. Some guidance might reassure us on whether this is the right way to go. What sort of person are we talking about, and how will the selection process work?

When speaking to the amendment, the Minister said that it would be up to the independent person to say whether he was satisfied about the cases that were brought to his attention. What would happen if he found an explanation so poor that it was insupportable? Does the Minister intend to give the independent person powers to deal with individual abuses? I share the view expressed by my hon. Friend the Member for Beaconsfield that, with the best will in the world, such a power will sooner or later be misused, even if not deliberately, and that some sort of injustice could easily result. Will the independent person have the power to do anything about serious abuses of that sort? If he is to have that power, where are the provisions to be found that would allow some redress?

At the end of the year, the independent person has to make a general report. Will he be able to make recommendations in that report, or will it be a simple factual report of what had happened during the year in question? Such reports will be of use to Parliament only if conclusions are drawn and recommendations made.

The Bill says that the report should be laid before Parliament, but is it the Minister's intention that Parliament should be given the chance to debate it and,

if necessary, vote on it? If changes are needed, will the Minister undertake to make amendments so that the power cannot be abused in future years?

Nick Hawkins (Conservative, Surrey Heath)

I echo my hon. Friend's comments. Our amendment No. 410 was not selected, for the obvious reason that it seeks to delete the whole of the clause, but my hon. Friend has set out the reasons why it was tabled. It would have given us the chance to explore the need to allow proper consideration of the appointment of the independent person. It would have probed the whole question of who should be appointed, how that would be decided and by whom. Clearly, it is a good idea to have independent scrutiny of how the policy is working. We have no objection to that, but the tabling of such a ''probing deletion'' is a way of finding out how the system will work, who the person will be and how he or she will be appointed. I hope that the Under-Secretary will satisfy our concerns about such important issues and explain in detail what the Government have in mind.

I also hope that the Government may incorporate into the Bill some of what I anticipate that the hon. Gentleman will say. One of our misgivings about clause 290 is that it does not set out how independent people are chosen and appointed, as other recent Acts of Parliament have outlined. Although the Bill is large, I believe that it would benefit if the clause clarified such provisions further. Even if the Under-Secretary cannot provide us with an explanation today, I hope that the Government will consider tabling an amendment on Report or in another place.

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

When the Minister responds, will he clarify whether the appointed person will be instructed to accept that mistakes will inevitably be made? Mistakes, or seizures without successful results, should not be a cause for rebuke. Will the appointed person be guided to accept that it is far better—if necessary—for a considerable number of innocent people to be inconvenienced by searches either of their premises or their persons, rather than for those who consistently trade in death-dealing drugs to be allowed to go free?

As a Parliament, we should accept that even if most searches prove unsuccessful, the police should not be unnecessarily fettered. The nearest parallel is the current regular searches of young people in my area for knives. Most such searches are unsuccessful, but the knowledge that they are carried out regularly has had a major effect in reducing the percentage of youngsters who carry knives. The prospect of a search undoubtedly deters many youngsters from carrying knives, and the exercise of powers being unnecessarily criticised by an independent person would not be helpful. I hope that my hon. Friend can accept that.

Can my hon. Friend also assure me that the appointed person need not be a lawyer?

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

Although it is, of course, preferable that he should.

There is some force in the arguments of the hon. Members for Spelthorne and for Surrey Heath, in relation both to the appointment of the person—it would be of benefit if more details were set out in the Bill—and to the force behind the report and its

recommendations when it is laid before Parliament. Under the Bill, the appointed person can make any recommendation that he wants, but that is as far as it goes. Such matters simply disappear into the ether at that point. I would prefer some reference to be made in the clause to the idea that if a recommendation were not followed, a Minister should be obliged to give a reason for that refusal. That is not an unreasonable burden to place on a Minister. I can think of any number of reports containing cogent and well argued cases from the Law Commission and other bodies that land on Ministers' desks and stay there gathering dust. If the appointed person is to have power, that would be a fairly sensible way in which to ensure that it is exercised.

I observe in passing that the clause is not well drafted. For example, it states:

''The report must give his opinion''.

That is meaningless. Presumably, the report must give the opinion of the appointed person. That may sound picky, but the present drafting is inelegant.

Bob Ainsworth (Labour, Coventry North East)

Until the hon. Gentleman's last point, he was making a good case for the appointed person to be a lawyer—but his last point seemed to undermine it.

The powers are potentially intrusive and Parliament must satisfy itself that they will be used appropriately. The purpose of this procedure is to ensure that the powers and the manner in which they are used are subject to public scrutiny. We do not intend the individual to report on every case—I hope that I have not misled the Committee in that respect. He will require reports to be made to him when appropriate, and those reports will cover such issues as the reasons to suspect that cash was the proceeds of crime or was intended to be used for crime, in addition to the justification for conducting a search without prior judicial authority. We do not intend the individual's subsequent report to go into the details of every case, which was part of the point made by my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson). The individual should report to Parliament giving his opinions of the way in which the powers have been used, to allow us to check on an annual basis that they are not being abused, and to take action if they are.

As I said in response to the hon. Member for Spelthorne, the appointed person will be independent and assigned by Ministers to oversee the exercise of the search powers. There will be a separate individual for Scotland, who will be appointed by Scottish Ministers. The terms and conditions of those individuals are yet to be decided by the appointed Minister. We envisage that the post will be part-time, and it may be suitable for a person such as a retired judge.

My hon. Friend the Member for Glasgow, Pollok is probably right about what should and should not be included. However, if the appointed person is to be independent, it will be for him or her to decide how to structure the report. We do not want Ministers to tell the person what they will and will not report. That

person will examine how the powers are being used and will report on that, and on the trends of use, and will make recommendations if he or she has worries.

David Wilshire (Conservative, Spelthorne)

I can understand why the Minister has not yet undertaken detailed consideration of the terms and conditions of the independent person. Is he able and willing to consider the matter before Report? That is important because the process is a vital safeguard against the abuse of a major power. Will he give us further information on Report?

Bob Ainsworth (Labour, Coventry North East)

As I said, this is as far as we have gone at the moment. We want to move on as quickly as possible and give all hon. Members as much information as we can. However, I have mentioned the type of person that we are considering. We do not want to fetter the report. We want the appointed person to examine the way in which the powers will be used, to give his or her opinions and to make recommendations. We want to ensure that the recommendations are public. The hon. Member for Orkney and Shetland expressed concern that the process ends there and there is no requirement to act on the recommendations—but if a report is made and its recommendations are ignored, no Minister of the day will get away without commenting on those recommendations and giving reasons why they are rejected, or not acted upon. That is the nature of our parliamentary procedure, and I do not think that there will be a problem. If the report makes public recommendations, Ministers must respond to them.

David Wilshire (Conservative, Spelthorne)

I did not ask whether the Minister would give further thought to the independent person now. I asked whether he would be able to give us more information on Report. I repeat that: will he give us an undertaking to provide more details on Report?

Bob Ainsworth (Labour, Coventry North East)

If things have moved on, obviously I will. I am also prepared to listen to any suggestions that the hon. Gentleman has about the structure. If he wishes to feed those in, either now or on Report, I will be happy to listen to him. As I have tried to tell him, it is not our intention to be secretive. We do not think that a full-time post is justified, and we require someone with some judicial experience, so the post may be appropriate for a retired judge. If we clarify our thoughts before Report, I will give the hon. Gentleman the benefit of our decisions.

David Wilshire (Conservative, Spelthorne)

I am grateful to the Minister for inviting me to make suggestions. One comes to mind immediately: in order to stress the person's independence from the Executive, will the Minister consider making the appointment subject to the approval of Parliament?

Bob Ainsworth (Labour, Coventry North East)

No, I will not. We do not intend the person to be an employee of the Government, or anyone who cannot be deemed independent. The person will be someone with a legal and judicial background. The hon. Gentleman's fears are not justified.

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

I am grateful to the Minister for giving way to me on the question of whether the person's independence would be increased if he or she were approved by Parliament. I should think that a Parliamentary vote, with the Whips operating in all parties, is less likely to make the person appear independent—unless Government Whips, former Whips and Opposition Whips have decided, as a new year's resolution, to allow Members to make up their own minds. I doubt that they have.

Bob Ainsworth (Labour, Coventry North East)

My hon. Friend's comments about former Whips are getting very personal, and I shall not rise to the bait.

The scheme that we propose is similar to that currently provided under the Immigration and Asylum Act 1999, in which an appointed person produces an annual report on refusals for entry clearance. That system was first introduced under the Asylum and Immigration Appeals Act 1993. It provided independent scrutiny of the refusals of entry clearance applications presented to Parliament. That is the kind of system that we envisage in this case.

Clause 290, as amended, ordered to stand part of the Bill.

Clause 291 - Code of Practice

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 453, in page 169, line 26, leave out subsection (6).

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take amendment No. 454, in clause 292, page 170, line 4, leave out subsection (6).

Dominic Grieve (Conservative, Beaconsfield)

In subsection (6) of clause 291, which deals with the code of practice, there is a rather curious reference that also features in the Scottish clause. It says:

''A failure by a customs officer or constable to comply with a provision of the code does not of itself make him liable to criminal or civil proceedings.''

That is followed by subsection (7), which states:

''The code is admissible in evidence in criminal or civil proceedings and is to be taken into account by a court or tribunal in any case in which it appears to the court or tribunal to be relevant.''

I find the inclusion of subsection (6) mystifying. Clearly, we do not intend to create a specific offence of failure to comply with the code. If we were to do that, we would have to pass specific legislation. I ask myself why subsection (6) is included. As subsection (7) is also present, it is apparent that a person could bring a civil action for accepted and existing torts, and include within that a claim, based on evidence, of failure to comply with the code. Similarly, it might be possible to bring a criminal charge against a customs officer or constable that would include, as part of the evidence, a failure to comply with the code.

What is subsection (6) trying to achieve? I need to be persuaded that its inclusion will not provide some form of statutory protection. If that is not the reason

for it, I do not know why it is included. If it were removed, no damage would be done, and I find its presence odd.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I am not minded to support the amendment, but I share many of the concerns of the hon. Member for Beaconsfield.

I wonder whether the Government have got the drafting of the clause the wrong way round. It should, perhaps, have stated something along the following lines:

''Where a failure by a constable to comply with a provision of the code is wilful or malicious, he will be subject to criminal or civil proceedings.''

I am making a point about tone; as the clause is currently drafted, the liability to criminal or civil proceedings is implied, and I would prefer stronger terms to be employed.

Bob Ainsworth (Labour, Coventry North East)

The provision in subsection (6) of both clause 291 and clause 292 is a standard provision in legislation of this type. It mirrors section 67(10) of the Police and Criminal Evidence Act 1984—which is also mirrored in relevant provisions of the Terrorism Act 2000.

The Government believe that establishing codes of practice for the law enforcement agencies provides an important safeguard for people who come into contact with those agencies. The assumption is that those covered by a code of practice will be trained in its provisions, and will abide by its terms. That is the clear expectation.

It is, therefore, common provision that codes of practice are admissible in evidence in criminal and civil proceedings, and can be taken into account. Failure to abide by a provision in the code can therefore prejudice a case brought by the prosecuting authorities. Failure to comply with a provision of the code might also,.depending on the circumstances, render an officer liable to internal disciplinary proceedings.

We do not, however, believe that customs officers or constables should be liable to criminal or civil proceedings solely because they have not complied with a provision of a code of practice. In some cases, such a failure may constitute part of a wider pattern of behaviour that involves criminal or civil liability, but that need not be the case.

As I mentioned at the outset, removing subsection (6) would not, of itself, render any officer liable to criminal or civil proceedings, in the absence of specific provision to that effect. However, given the obstacles and difficulties that face our law enforcement officers, we believe that it is important to signal to them that there is no question of such a liability. Given that provision to that effect is made in other, similar, circumstances, if we were to remove it, that could be taken to suggest that the position is different in this instance.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

As it currently stands, the clause reads that the failure

''does not of itself make him liable to criminal or civil proceedings.''

I infer from that that there are circumstances when a customs officer or constable can be liable, particularly to criminal proceedings. What would be the crime?

Bob Ainsworth (Labour, Coventry North East)

As I said to the hon. Gentleman, the fact that the officer failed to comply with the code could be taken into account in criminal proceedings and disciplinary matters as well as in civil proceedings. What we do not want to do— and what the removal of subsection (6) clearly would do—is give an impression that the liability existed in one case that did not exist in other cases. That would not be helpful.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

Perhaps I did not make myself clear. I cannot get away from the fact that the inclusion of the words ''of itself'' means that in some circumstances an offence can be committed that amounts to a failure to comply with the code of practice. Given that no such offence is created under the Bill, the clause does not make sense.

Bob Ainsworth (Labour, Coventry North East)

Of course the clause makes sense. The code of practice is concerned with how someone should behave when conducting a search under the Bill. Someone could suggest that action had been taken against him inappropriately. Such a person would be able to say, as part of his case, that the constable or the customs officer did not comply with the code of conduct. A case may be brought against a particular officer that is based on far wider issues of misconduct, and a failure to comply with the code of conduct could be part of that case. The position is clear. I do not accept that there is a problem. All that subsection (6) says is that, of itself, non-compliance does not render the officer liable to prosecution.

Dominic Grieve (Conservative, Beaconsfield)

I accept that the Minister may have a problem. He is labouring under a previous practice that has been imported into the Bill. I do not understand subsection (6) because there is no existing specific tort of not following the code of practice under the Proceeds of Crime Bill. There is no criminal offence of not following that code of practice. In such circumstances, I do not understand why subsection (6) has to be in the Bill. It makes me suspicious that it is there to provide a check or fetter on the ability of people in the ordinary course of events to bring civil or criminal proceedings that may arise in connection with actions of the officer under the proceeds of crime search powers. That brings me to subsection (7). I do not understand it. It reinforces my view that there is no need for subsection (6).

Bob Ainsworth (Labour, Coventry North East)

I honestly do not understand the hon. Gentleman's worries. We are introducing a code of practice, and we want it to apply to those who will operate under the Bill. We expect them to be trained and to conduct themselves within the code of practice. We accept that other codes of practice apply to people in similar circumstances, and the provision is made under that remit. Under subsection (6), a failure to comply with the code of conduct will not in itself render the person liable to criminal or civil proceedings. Subsection (7) makes it clear that, despite

that fact, the code can be taken into account as part of another criminal, civil or internal disciplinary case. I cannot see a problem. The provision is there with regard to other codes of conduct. If we remove it, we shall signal that something different applies in this case. It does not and it should not—and I cannot understand the hon. Gentleman's problem.

Dominic Grieve (Conservative, Beaconsfield)

As I said, I have some sympathy with the Minister. What is being reproduced here appears to be similar to provisions in relation to other codes of practice. I was not in Parliament at the time when those codes of practice came up for scrutiny. If I had been, I should have made exactly the same point about them as I raise about this.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

But the hon. Gentleman would have been on the Government side then.

Dominic Grieve (Conservative, Beaconsfield)

I might well have been raising the point from the Government Back Benches, but I would still have raised it. I do not like subsection (6). It is difficult to understand why it is there. The code of practice is important and it is important that it should be followed. The Minister has placed great reliance upon it. I am doing my best to explore what is behind the subsection, the most likely explanation seems to be that it is designed to prevent the emergence of what would be a common-law tort of not following the code of practice. I cannot think of anything else. No specific statute-based breach can be devised to prevent somebody, relying solely on the breach of a code of practice, from bringing a civil claim under some other head. I am not happy with that. Although it might have appeared in previous codes, I cannot see why it should appear in this one.

Paul Stinchcombe (Labour, Wellingborough)

Does the hon. Gentleman believe that there should be a tort of failing to comply with the code?

Dominic Grieve (Conservative, Beaconsfield)

No, I do not think that there should be such a tort in itself.

Paul Stinchcombe (Labour, Wellingborough)

Will the hon. Gentleman give way again?

Dominic Grieve (Conservative, Beaconsfield)

Just let me finish. However, it should be open for a person bringing a claim in tort to rely upon the breach of the code in itself as the basis for doing that. I can see circumstances in which that could be done, although I suspect that the case would have to touch on the officer's reasonable grounds for belief. I would simply like to leave the possibility open, as in some cases it might be relevant to rely solely on the breach of the code by the officer.

Paul Stinchcombe (Labour, Wellingborough)

As the Bill stands, the clause declares that the breach would be admissible in evidence where another tort could be established.

Dominic Grieve (Conservative, Beaconsfield)

Yes.

Paul Stinchcombe (Labour, Wellingborough)

However, it declares also, in conformity with existing law, that a failure to comply with the code would not, of itself, amount to that tort.

To withdraw the latter declaration would automatically open up the possibility of the creation of a further tort—the breach of the code of itself. That is exactly what the hon. Gentleman said that he did not want to do.

Dominic Grieve (Conservative, Beaconsfield)

The hon. Gentleman and I are gradually working along similar lines, although we might come to a different conclusion. I am not in favour of the specific creation of a tort of failing to follow the code of practice. However, we have an evolutionary legal system, and I would like to leave open the possibility that there might be circumstances in which one of the general torts that somebody could impute to an officer was based on a breach of the code of practice because of all the surrounding circumstances. That is what subsection (6) prevents, or is trying to prevent. There is a difference of degree between that and openly spelling out that breach of the code shall be a tort. I can think of examples in the general law of tort where it depends on the facts of an individual case whether something is tortious or not.

Paul Stinchcombe (Labour, Wellingborough)

We seem to be witnessing one of the quicker U-turns. In my first intervention, I asked the hon. Gentleman whether he thought that there should be such a tort. He said no. He is now expressly saying that he would like to delete the provision in order to allow for the opportunity to create exactly that tort.

Dominic Grieve (Conservative, Beaconsfield)

I think that the hon. Gentleman and I are still slightly at cross purposes. If one were to specify the existence of a tort based solely on a breach of observance of the code, it would be necessary to consider specifying statutory exceptions and the precise circumstances in which that tort could be established. That is why I am not in favour of going down that road, and I do not suggest it. However, I do suggest that it ought to be possible, when a breach of the code by an officer has been sufficiently flagrant—and possibly with motives underlying it—for a person to bring civil proceedings based upon a failure to observe the code. That is what subsection (6) is trying to exclude. Because I believe in a flexible legal system, I do not see why we should do that.

Paul Stinchcombe (Labour, Wellingborough)

The circumstances that the hon. Gentleman describes would surely amount to misfeasance in public office, in respect of which breach of the code would be admissible in evidence under subsection (7).

Dominic Grieve (Conservative, Beaconsfield)

I agree. Suppose that the hon. Gentleman wished to bring a claim, on behalf of a client or for himself, against an officer for misfeasance in public office, it would be possible—if I understand the wording of the clause, although I do find it a rather

odd argument—to say that one of the things that he had done had been to breach the code. However, that on its own would not be sufficient to found a course of action. Other things done by the officer would have to be identified in order to maintain the claim. I do not see why subsection (6) needs to be there at all. That is why I invite the Committee to vote for its deletion, and I do not intend to withdraw the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 13.