Proceeds of Crime Bill

Public Bill Committee, 10 January 2002.

Standing Committee B

Proceeds of Crime Bill

Bill O'Brien (Labour, Normanton)

Good morning, everyone. The next clause is clause 292. If no hon. Member wishes to speak on it, I shall put the Question.

Clause 292 ordered to stand part of the Bill.

Clause 293 - Seizure of cash

Bob Ainsworth (Labour, Coventry North East)

I beg to move amendment No. 325, in page 170, line 14, at end insert—

'(1A) A customs officer or constable may also seize cash part of which he has reasonable grounds for suspecting to be—

(a) recoverable property, or

(b) intended by any person for use in unlawful conduct,

if it is not reasonably practicable to seize only that part.'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to take Government amendments Nos. 444 to 447.

Bob Ainsworth (Labour, Coventry North East)

Amendment No. 325 permits the seizure of cash of which only part is suspected of being related to crime, if it is not reasonably practicable to seize only the suspect part of the cash. When notes and coins are involved, there will usually be no difficulty in separating the suspect part from the non-suspect part and seizing only the part of the cash that is under suspicion.

However, when the cash takes the form of a monetary instrument, such as a cheque or a banker's draft, separation may not always be practicable at the point of seizure. We therefore propose that the whole instrument should be capable of seizure, provided that the non-suspect part is returned as soon as the money has been paid into an account. An example of that would be a single cheque to the value of £50,000 when, say, it is suspected that half represents the proceeds of unlawful conduct and the other half is not under suspicion.

In such a situation, the cheque would be seized and converted quickly into a divisible form, and the part of the money not under suspicion would be released. The provision is required to ensure that mixing suspect cash with clean money cannot circumvent the seizure of tainted cash. The amendment follows the approach taken under schedule 1 of the Anti-terrorism, Crime and Security Act 2001 in relation to the seizure of suspected terrorist cash.

Amendments Nos. 444 to 447 are required to ensure that proper provision is made at all stages of the process for cases when only part of the money is liable to forfeiture.

Dominic Grieve (Conservative, Beaconsfield)

The amendment is not one to which I, nor, I suspect, any member of the

Committee, can have great objection. If a sum of money cannot be split conveniently, it is desirable that the whole of it should be seized, otherwise there would be a risk that substantial amounts of money that were thought to be the proceeds of crime, or associated with criminal conduct, could not be touched.

Will the Under-Secretary amplify his explanation a little and tell us about the mechanisms that would exist to ensure that the splitting of the money can take place as quickly as possible? I ask him to do that because we shall soon be discussing the detention of seized cash. As matters stand, it is possible for seized cash to be detained for a substantial time. What procedures does the hon. Gentleman envisage being operated to ensure, for example, that if there is a substantial cheque, the part of its value that represents money that is not considered to be recoverable property can be returned to the person who is entitled to it, without waiting for the completion of the whole process?

Bob Ainsworth (Labour, Coventry North East)

I am not sure that the matter is so complicated. There is a requirement in the Bill that all money is to be paid into interest-bearing accounts within 48 hours. Obviously we are talking about a cheque or a banker's draft that represents mixed property, and which should be paid into an account for the purpose of being split. The part identified as not being either the proceeds of crime or intended for criminal purposes, should be returned immediately to the person from whom it has been seized. There does not need to be a lengthy or complicated procedure, which might cause difficulty.

Dominic Grieve (Conservative, Beaconsfield)

The Minister may be right. With regard to cash, there is no difficulty. I raised the matter because I wanted to ascertain whether any of the instruments on the list—unfortunately I do not have it in front of me—might be of a type that were not immediately payable into a bank account. Clearly, if the instruments are payable into a bank account they can be split up and sorted out. That is my only caveat.

Bob Ainsworth (Labour, Coventry North East)

The instruments that we are discussing are immediately payable into bank accounts. There are, of course, clearance procedures and deadlines applied by banks. It will not be possible to pay back a proportion of the money until the cheque—if it is a cheque—has been cleared by the banking system and found to be valid. There is likely to be some delay, due to the clearance procedures of the financial institutions, but none other than that.

David Wilshire (Conservative, Spelthorne)

My hon. Friend said that the money would be paid back immediately. Where in the Bill is the word ''immediately''? Where does it say that there is a time limit within which the money must be paid back?

Bob Ainsworth (Labour, Coventry North East)

The Bill does not say ''immediately''. The money is not forfeit. If it is kept, it will be subject to compensatory interest. Thus there is no incentive for anyone to detain for any length of time cash that is not suspect and is not forfeit. It imposes a liability on those who detain it. In exceptional circumstances, compensation may be payable above an interest rate. It would be in everyone's interests to return the non-tainted part of the money to its rightful owner as soon as is practical.

David Wilshire (Conservative, Spelthorne)

I am not satisfied. The hon. Gentleman responds to my question about the word ''immediate'' by saying that compensation may be payable. That is a potentially serious issue. Let us suppose that there are reasonable grounds for suspicion—and it must be remembered that that is reasonable suspicion that has not been proven—that some of the seized money is connected with crime. A person who has been charged with a crime of that type may later be cleared, but some of the money seized that was not connected with the crime may have been held for some time. The Minister gives assurances that interest is payable, and that action will be taken as soon as is practical. However, although interest may be payable, the money that earns the interest has been seized. No one is penalised by the fact that in the end that person will receive the interest from the money that has been seized and invested. Handing back the money plus the interest does not achieve anything.

It has been suggested that compensation may be payable. That idea, presumably, would give rise to a claim. In turn, that might result in a court case, which would drag out the matter even further. Irrespective of what we might think about being hard or soft on criminals or suspected criminals, we must keep our eyes on natural justice. If there were no suspicion that the money was connected with criminal activity and if it were accepted that there was no claim on it, it would be unsatisfactory to leave the matter to people's best endeavours; to deal with it ''as soon as is practical'' is inadequate.

I support what the Minister wants to achieve. I see the loophole and know that it needs to be closed. However, it should be stated under the Bill that such money will be dealt with within X hours, and that if it is not, there will be specific penalties—not just interest—for seizing money that no one has any reasonable grounds for believing should have been seized.

Bob Ainsworth (Labour, Coventry North East)

I apologise if I have not been clear. It is early in the morning. There is a requirement that the money be released. It is a requirement under the Bill that all the money seized, whether part tainted or otherwise, be paid into an interest-bearing account within 48 hours. We see no reason why that should not be done within 48 hours.

I draw the hon. Gentleman's attention to amendment No. 446, on which I did not expand in moving the lead amendment. Amendment No. 446 states:

''In the case of cash detained under section 294 which was seized under section 293(1A), the customs officer or constable must, on paying it into the account, release the part of the cash to which the suspicion does not relate''.

Under the Bill, it is a requirement to pay money seized into an interest-bearing account within 48 hours. Under the amendment, it would be a requirement to pay out the part that is not tainted immediately on paying the money into the account. The only justified delay that I can foresee might occur if moneys were paid into the account in the form of a cheque and the cheque could not be immediately cleared. Financial institutions place restrictions on the time within which they are prepared to clear cheques. However, as soon

as the cheque has been cleared, recognised as bona fide money and accepted by the financial institution involved, the money should be returned to its rightful owner.

David Wilshire (Conservative, Spelthorne)

I thank the Minister for drawing my attention to amendment No. 446. However, it merely says that the money must be released, not that it must be released immediately. That could be interpreted as meaning that it will be released when the person involved gets round to it.

Bob Ainsworth (Labour, Coventry North East)

The amendment provides that the person involved must,

''on paying it into the account, release the part of the cash to which the suspicion does not relate''.

David Wilshire (Conservative, Spelthorne)

In that case, why wait until the cheque has cleared? No power is provided to meet that assurance and say that the cheque must clear first. It must be one or the other. If the Minister is suggesting that the moment the money is paid in it must be given back, how will he meet the requirement that it must be cleared first?

Bob Ainsworth (Labour, Coventry North East)

We cannot accept that the money has been paid into and accepted by the account until it has been cleared by the financial institution involved. The intention is not to allow the forces of law and order to delay the return of non-tainted money to its rightful owner. Surely the hon. Gentleman accepts that procedures must be followed to ensure that real money, rather than a dud cheque, has been seized.

David Wilshire (Conservative, Spelthorne)

The matter is becoming further confused. The Minister now refers to the money being paid in and accepted. However, the provision does not state ''and accepted''. If the Minister wants it to state ''paid in and cleared'', he should introduce another amendment so that it says what he believes that it should.

Bob Ainsworth (Labour, Coventry North East)

I think that it is obvious that the money must be cleared before it can be returned. It is not possible to return money that has not been seized. I shall check whether there is a problem with the wording of the Bill and ensure that that problem does not arise. The substantive issue is that the hon. Gentleman does not want the customs officer or constable to be able to keep money unnecessarily, and cause a delay in its return. That is not the intention.

Dominic Grieve (Conservative, Beaconsfield)

I have now had a chance to look at what we incorporated into the Bill on Tuesday, and the instruments include bearer bonds and bearer shares. I am no great expert on those, but it strikes me that they may have a fluctuating value. They have no fixed monetary value. If those were involved, what would happen in terms of identifying the person's share that is not the recoverable property? As the bearer share had been realised, there might be a subsequent loss. If it had been retained, it might have increased in value. Should we consider that?

Bob Ainsworth (Labour, Coventry North East)

Such property has been identified in this part of the Bill because it is exchangeable. The Bill provides that the money be taken into an interest-bearing account. In most normal circumstances, provision for compensation that might arise—either for a person whose property is subsequently found not

to be forfeit or for someone who is recognised to be a part-owner of the property that has been seized, but who was never under suspicion—relates to interest, because the products are exchangeable. Only in exceptional circumstances should compensation be paid above the level of interest. I suppose that someone could, through their legal representative, say that they had incurred exceptional losses because of the way in which the money was placed—and the Bill allows such cases to be heard. However, the change is not necessary, because in exceptional circumstances, compensation can be paid above the level of interest.

Like the hon. Gentleman, I am not an expert on bearer bonds, but I am told that they are exchangeable, and it is therefore appropriate to deal with them as cash. It would be best to pay them into an interest-bearing account, so that if they are forfeited to the state, there is no loss of accrual of value, and if they are returned to the person, there is no unnecessary loss of value.

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

Thank you for calling me, Mr. O'Brien. It is a pleasure to see you again. I hope that you enjoyed the break for Christmas and the new year. I hope that the Minister had an agreeable break, too; he seems extremely agreeable—perhaps unduly so—towards the Opposition today.

The first line of amendment No. 325 states:

''A customs officer or constable may''.

Why does it not say ''must''? If the officer has ''reasonable grounds for suspecting'', surely he would be negligent if he did not seize the assets. I do not understand why the amendment uses the word ''may'', rather than the word ''must''. That also applies to subsection (1), although perhaps that is a matter for the stand part debate. I raise the matter now, however, because it arises in the amendment, too.

I would like clarification of the Minister's view, and the view that he believes should be taken by the legal authorities, of the habit of carrying huge amounts of money. Perhaps I am from a particularly sheltered environment, but I am not aware that my constituents are in the habit of wandering around carrying huge amounts of money. That is what banks are for—and goodness knows, they rip people off enough for using them. There are credit cards and all sorts of means of transferring money.

I believe that it is suspicious to carry huge amounts of money. The assumption should be that anyone found carrying huge amounts of money is to be looked on with scepticism. [Interruption.] I missed that remark by the hon. Member for Orkney and Shetland (Mr. Carmichael), who has just joined us here on the mainland.

I should like clarification on the subject of ''unmixing'' money. If someone carrying an enormous amount of money, far more than any of us might envisage carrying on any occasion, says that it is his wife's or his children's money, what steps will be taken to clarify the fact that the money is not a tainted gift, and was honestly earned by the wife or the family? I am concerned, and I hope that the Minister will row back from the ''agreeability''—if such a word

exists—that he has shown towards the Opposition on the question of penalties.

The Opposition's attitude to penalties for inappropriate seizure is presumably designed to deter those who can seize from doing so. It is deliberately designed to make seizures less likely. That is yet another manifestation of the Opposition's enthusiasm for protecting criminals, would-be criminals and former criminals. Gosh, I feel fired up, even this early in the morning, for the first time in many sittings. I hope that the Minister can satisfy me on all the points that I have made, otherwise I may have to table an amendment for Report stage.

David Wilshire (Conservative, Spelthorne)

I cannot possibly let that remark go unchallenged—

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

Yes, you can.

David Wilshire (Conservative, Spelthorne)

I am sorry if I introduce a note of less than good humour. It is being suggested that someone minding their own business is suspect just because they choose to carry money. That strikes at the heart of the presumption of innocence, at natural justice and at the idea that people can do as they choose. It might be eccentric and stupid, but if someone wants to do that, thereby running the risk of being mugged, all hon. Members should defend their right to do so.

John Robertson (Labour, Glasgow Anniesland)

Is the hon. Gentleman saying that someone who carries £25,000—a sum that was mentioned in a previous sitting—is not suspicious? Would it not be necessary to ask that person why he was carrying £25,000? Is the hon. Gentleman saying that such a person is just an eccentric?

David Wilshire (Conservative, Spelthorne)

I am saying exactly that. If somebody has that kind of money—sometimes I wish that I did—because they have just come out of a betting shop, won the lottery, or acquired it in some other way, I am amazed that some Committee members are not prepared to defend that person's right to carry it if they are stupid enough to do so, given that they could be mugged. What sort of a society are we trying to build if anybody who carries money in his pocket is assumed to be a shady character?

The suggestion that anybody who speaks up for the principle that someone is innocent until proved guilty is somehow trying to defend the criminal is extraordinary. I consider that monstrously stupid, unfair and unreasonable. Until such people are convicted, and while there is no reason to have suspicions about the money, why should there not be penalties for taking money away from people when they are entitled to have it? It is not a question of being soft on them. At some stage in the future, they may be found innocent of all charges.

Bob Ainsworth (Labour, Coventry North East)

At 2.30 this afternoon I shall remind my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson) how fired up he was at 9.10 this morning.

Anne McGuire (Labour, Stirling)

Five o'clock this afternoon.

Bob Ainsworth (Labour, Coventry North East)

Five o'clock, then. Clearly my hon. Friend has led a sheltered life in the drawing rooms of

Pollok. There are people whose practices he does not understand.

Changing ''may'' to ''must'' would not make any difference. Effectively, we are empowering the constable or customs officer to seize cash, part of which he has reasonable grounds for suspecting is connected with crime. Using the word ''may'' gives him that power. Using the word ''must'' would not add to those powers.

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

I am astonished by the Minister's response. He is making exactly the argument that we rejected when we debated the use of the word ''must'' rather than the word ''may'' before. We were not happy with the idea that those who ran the system should have discretionary power, and we wanted to send a clear instruction that exercising the power was a must. Surely the pendulum should swing much more towards the idea of ''must seize cash'', to give a clear indication that we do not approve of people carrying around huge amounts of cash without excuse. That is suspicious in itself, especially in an area such as Glasgow, Pollok, where few people have enough money to put down at the bookies to win £25,000, never mind acquiring it from another source.

Nick Hawkins (Conservative, Surrey Heath)

Will the hon. Gentleman give way?

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

It is difficult for me to give way, as I am intervening myself, but if Mr. O'Brien is prepared to allow it, I am happy to give way.

Bill O'Brien (Labour, Normanton)

I call the Minister.

Bob Ainsworth (Labour, Coventry North East)

My hon. Friend must accept that just because the word ''must'' might be appropriate in one sentence, it is not necessarily appropriate in every sentence. He is now extending his total lack of confidence in the courts, the judiciary and lawyers to constables and customs officers, too.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I wonder whether the hon. Member for Glasgow, Pollok is being slightly disingenuous. He must be aware that there would be occasional operational reasons why an obligation to seize cash could jeopardise a more significant police operation. If he wishes to draw attention away from the bigger issues via the back door, he is soft on criminals.

Bob Ainsworth (Labour, Coventry North East)

It is indeed possible that serious criminals could be protected by a seizure of cash that prevented an on-going investigation.

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

I am glad that the hon. Member for Orkney and Shetland raised that point, because that is a valid reason why cash could not be seized. If the Minister accepts that that is the only reason, I am happy. However, the assumption must be that unless there are exceptionally good reasons for not seizing the cash, it should be seized. I hope that the Minister accepts that.

Bob Ainsworth (Labour, Coventry North East)

I do not disagree. I accept that the hon. Member for Orkney and Shetland gave a good reason not to seize cash in some circumstances. We do not intend that powers should be introduced to seize automatically any cash found in the possession of

suspicious characters throughout the land. We intend to give powers to constables and Customs officers to use appropriately when they encounter suspicious cash while performing other duties. We do not share the attitude that my hon. Friend the Member for Glasgow, Pollok displayed.

A further point was covered by the hon. Member for Spelthorne (Mr. Wilshire), and I shall continue to cause annoyance by agreeing with the Opposition. There are people who are strange indeed, and their strangeness is not a reason for the forfeiture of their property to the forces of law and order. That is not a line that the Government propose in this Bill or plan to propose elsewhere.

Dominic Grieve (Conservative, Beaconsfield)

Perhaps for the benefit of the hon. Member for Glasgow, Pollok, I should tell the Committee that I noted in yesterday's Glasgow edition of The Herald that the Minister was quoted as describing me as the shadow Home Secretary's sidekick. I assumed that he had thereby vented his spleen regarding the Committee's proceedings, and I am delighted that he agrees with the Opposition today.

Bob Ainsworth (Labour, Coventry North East)

On this matter.

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

That is quite scary.

Amendment agreed to.

Amendment made: No. 444, in page 170, line 15, after 'cash' insert

'if it or, as the case may be, the part to which his suspicion relates, is'.—[Mr. Bob Ainsworth.]

Clause 293, as amended, ordered to stand part of the Bill.

Clause 294 - Detention of seized cash

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 456, in page 170, line 24, leave out 'three months' and insert 'one month'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to take amendment No. 457, in page 170, line 27, leave out 'two years' and insert 'six months'.

Dominic Grieve (Conservative, Beaconsfield)

Clause 294 provides that once the initial period of detention of the seized cash has been accomplished, there is a period during which one may apply to the court to retain the cash for a further period. The Bill provides for two periods. The first period lasts for three months, and a further order under the clause could provide for up to two years. That is a long time. One would have thought that if there were such a seizure of cash, especially if it was led by intelligence, it would be possible, within the period in question, for steps to be taken to recover that cash, and to establish the basis on which it was seized. Therefore, I am troubled by the duration of the periods specified.

I will listen carefully to the Minister's explanation of why these periods have been selected, and why they are so long. I am prepared to be persuaded by him, which is why the amendments that I have tabled are probing amendments—although I am not saying that I will not press the matter to a Division. My amendments provide for shorter periods of one

month and six months—which is a particularly appropriate period because, for instance, in summary proceedings in court, a summons must be served within six months of an offence.

The Minister might provide cogent reasons why the periods proposed are necessary, but two years is a long time for cash to be detained without the issues surrounding it having been resolved. It suggests that money can be seized in the manner of a fishing expedition—one seizes it, and then one ferrets around to find a justification for the seizure.

Bob Ainsworth (Labour, Coventry North East)

This is where I stop trying to defend the hon. Gentleman and his hon. Friends from the onslaught of my hon. Friend the Member for Glasgow, Pollok and revert to the accusation that the hon. Gentleman is the sidekick of the hon. Member for Surrey Heath (Mr. Hawkins), and has gone soft on crime and soft on the causes of crime. [Interruption.] I am trying to buy back the position that I lost a few minutes ago, as I wish to regain some support from my Back Benches.

Existing legislation relating to drugs and terrorism—as contained in the Terrorism Act 2000—allows for the same detention periods for cash as are set out in clause 294. These are maximum time limits, and it is for the court to decide whether to authorise the detention of cash for such periods. We are not aware that there has been any suggestion that the existing time limits are unreasonable.

It is, of course, for the courts to decide whether the conditions for continued detention are met. No detention can be authorised—whether for the maximum period allowed, or any other period—if a magistrates court, or a sheriff, is not satisfied that one of the detention conditions set out in clause 294 is met.

In addition to those protections, an application for the release of detained cash can be made by the person from whom the cash was seized—or a victim—at any time while cash is detained under clause 294. If the court is satisfied that the detention conditions are no longer met, or that the cash belongs to a victim as provided for in new clause 9, the court will have discretion to release the cash.

Dominic Grieve (Conservative, Beaconsfield)

The Minister is right: the explanations are provided in clause 294. However, they reinforce my concern about fishing expeditions.

The Minister has been talking about such cash seizures being based on substantial intelligence, and being well targeted, but it is envisaged that the cash may be retained for up to two years

''while its derivation is further investigated or consideration is given to bringing . . . proceedings against any person for an offence in respect of the unlawful conduct with which it is connected''.

I can just about see the point of the lengthy detention period for the cash with regard to bringing proceedings against

''any person for an offence in respect of the unlawful conduct with which it is connected'',

but I find it harder to understand why such a lengthy period is legitimate simply to make further investigations of its derivation. That is a fishing expedition.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman is being a little exclusive in his choice of bits to read out. He attempts to suggest an ability to hold cash for two years. That is the case only after repeated extensions allowed by the magistrate or sheriff and justified on each occasion, as he knows.

Customs officers who have operated the cash recovery scheme under the Drug Trafficking Act 1994 tell us that in practice, cases are unlikely to result in successful forfeiture. It is unusual for them to be dealt with so quickly, and money returned. It is extremely rare that cases taken on by customs officers can substantively be dealt with in six months. That is the advice from the people currently operating the scheme, who say that it is more usual for cases to take 12 to 18 months, with some going the full distance allowed within the current law. The reasons for that include the time taken for financial investigation and to make foreign inquiries. In many cases, the party from whom the cash was seized will seek to delay the forfeiture. Experience therefore suggests that the existing time limits are appropriate to operational requirements.

Any requirement for more regular detention hearings will also have serious resource implications. Even without the extension of the workload that the Bill will impose, the customs unit at Heathrow currently has 80 to 90 cases on hand. Inland, however, cases are not as concentrated as those at the border, which fall disproportionately on particular courts. Officers are attending court on an almost daily basis for extended detention hearings—even with a three-month maximum. If the time span were reduced to one month, there would clearly be serious problems in maintaining that schedule. There would also be an impact on the courts that would be required to hold additional hearings.

We fully accept the need for independent scrutiny and on-going authorisation of any continued detention. However, judicial involvement and the detention of cash must be tailored to the circumstances. Courts can decide not to allow continued detention for the whole three-month period. If courts feel it appropriate, they can decide to say, ''You must come back before the end of the three-month period.'' However, there is a maximum period of three months, after which people must return to court and seek a renewed period of detention.

Cutting the overall maximum down to six months would not be operationally viable, and going to court every month for detentions would be over-burdensome and costly. I ask the hon. Gentleman to take that into consideration and withdraw his amendment.

Dominic Grieve (Conservative, Beaconsfield)

As I said, having vented his spleen yesterday, the Minister has become even more reasonable. His most compelling argument was that it is proving difficult for the proceedings to be concluded within a shorter time than the periods set down in the legislation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nick Hawkins (Conservative, Surrey Heath)

I beg to move amendment No. 411, in page 170, line 33, leave out 'a procurator fiscal' and insert 'the Scottish Ministers'.

My hon. Friends and I tabled this amendment, and some amendments in subsequent groups, because when our proceedings in Committee were already well under way, I received a detailed e-mail from Anne Keenan, the deputy director of the Law Society of Scotland, who suggested various constructive improvements to the Bill. She sought not to water it down, but to make it more effective. I spoke to Mrs. Keenan a few minutes ago, and I shall receive further information that applies to later parts of the Bill to which we have also tabled amendments. Because of the Law Society of Scotland's involvement with anti-terrorism provisions, it has compiled a briefing note in the past few days, and I shall soon be receiving a copy of it—I thought it would be helpful to inform the Under-Secretary of that.

When we consider later groups of amendments to the clause, it may be helpful if we, the Minister and the Law Society of Scotland are working on the same lines. For example, the Government have tabled amendment No. 327, which, in part, would have the same effect as our amendment No. 415. I hope that that confirms things for sceptical Labour Members, although the most sceptical of all—the hon. Member for Glasgow, Pollok—is not in Committee at present. I may have to repeat what I said when he returns to the Room, so that he does not suspect me of being involved in a dark plot to water down our proceedings. I hope that the hon. Member for Orkney and Shetland—being a Scottish lawyer—can shed more light on the precise significance of the later amendments. However, as for the amendment under discussion, the Law Society of Scotland suggested that it would be more helpful if Scottish Ministers made the decisions rather than the procurators fiscal.

Ian Lucas (Labour, Wrexham)

Will the hon. Gentleman clarify why he considers that Scottish Ministers should be involved in individual applications to the court?

Nick Hawkins (Conservative, Surrey Heath)

There have been many changes in Scottish law as a result of devolution. The amendment is a probing amendment on behalf of the Law Society of Scotland. I am not a member of that, but if it feels sufficiently strongly to say to the official Opposition that it thinks that such matters are worth exploring, it is reasonable for such a professional body to be taken seriously.

Paul Stinchcombe (Labour, Wellingborough)

Will the hon. Gentleman explain why the Law Society of Scotland is in favour of the amendment?

Nick Hawkins (Conservative, Surrey Heath)

I am not a Scots lawyer. I can do no more than probe into such matters on behalf of the Law Society of Scotland. If I were an expert on Scots law, I might be able to give the hon. Gentleman a better answer than that. He and I are both English barristers, and we have had some arcane disputes on matters of principle in respect of English law. I have explained the basis of the amendment, but it is slightly difficult for me to pretend to have expertise in Scots law. The fact that the Government have matched some of the other amendments to the clause proposed by the

Law Society of Scotland suggests that the society may be on to a good point. I shall listen with interest to the Minister, who will have been advised by his officials, who would, in turn, have talked to Scottish lawyers. The hon. Gentleman and his officials may themselves have talked to the Law Society of Scotland. The hon. Member for Orkney and Shetland may have views on the matter, so I shall end my remarks now.

Bob Ainsworth (Labour, Coventry North East)

Clause 294 deals with the detention of seized suspect cash. It provides that cash can be held initially for 48 hours by a customs officer or a constable if reasonable grounds for the suspicion that justified the seizure of the cash remain. If cash is to be detained for longer than 48 hours, an application must be made for judicial authorisation for that continued detention. As for Scotland, the Bill provides that the application for continued detention is to be made by the procurator fiscal for a period of up to three months in the first instance. In England and Wales, a constable or an officer of Her Majesty's Customs and Excise would make the application.

The main purpose of the provision as it is drafted in relation to Scotland is to give the procurator fiscal time in which to investigate further the derivation of the cash.

Mr. Carmichael rose—

Bob Ainsworth (Labour, Coventry North East)

It may help the hon. Gentleman if I continue. Things that I say may impact on the burden of his arguments, because other issues arise in this case.

We will give the procurator fiscal time in which to investigate further the derivation of the cash and to consider whether criminal proceedings should be brought against a person for an offence with which the cash is connected. Amendment No. 411 would provide that Scottish Ministers, rather than the procurator fiscal, would apply to the court for the cash to be detained in the first instance and at all future detention hearings.

Clause 294 is modelled on the provisions in section 42 of the Drug Trafficking Act 1994, which deal with the seizure and detention of suspect cash on import or export. Under the Act, the local procurator fiscal makes the application to the sheriff for the detention of cash. The reason for that is that the case must be referred to the procurator fiscal in the first instance because he will consider, on the basis of evidence, whether a criminal prosecution would be appropriate, rather than the cash detention and forfeiture procedure.

The need to consider whether criminal prosecution is appropriate will apply equally to the new cash seizure provisions in the Bill. It is essential that the case be referred initially to the procurator fiscal. His role cannot be usurped. Prosecution must always be considered first. That is consistent with the proposed hierarchical operation of the legislation: criminal confiscation and criminal action comes before we encounter seizure, forfeiture or civil cases under part 5. It would be inappropriate to pass that responsibility to Scottish Ministers as the amendment proposes.

If the procurator fiscal decides to pursue a prosecution, clause 294 makes provision for the cash to be held pending the conclusion of the criminal proceedings. If the procurator fiscal concludes that a criminal prosecution is not feasible, the matter passes to Scottish Ministers who, under clause 297(1), would be responsible for applying to the sheriff for the forfeiture of the cash when that was appropriate. That is because the forfeiture of seized cash is a civil procedure, and it is appropriate for Scottish Ministers, rather than the procurator fiscal, to pursue that.

However, one point must be addressed. If the procurator fiscal decides that criminal proceedings are inappropriate, it may be necessary for Scottish Ministers to undertake further investigation of the derivation of the cash before making an application for forfeiture. In such circumstances, it would be appropriate for any application for further detention to be made by Scottish Ministers because the procurator fiscal would no longer be involved in the case. That situation does not arise in England, Wales or Northern Ireland because the police or customs officers undertake the proceedings at all stages. We plan to table an amendment on Report to address that point.

I hope that the hon. Member for Surrey Heath will be satisfied with that explanation and will withdraw his amendment, and I hope that I have outlined the situation sufficiently to allow the hon. Member for Orkney and Shetland to make whatever points he wishes on the back of the amended intention of the Bill.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

The wonderful thing about the Law Society of Scotland—or indeed, the Law Society, as we in Scotland prefer to call it—is that the manner in which it acts is not immediately apparent to those of us who are not privy to its inner counsels. However, it does eventually become clear. The Minister's helpful explanation has made it clear why the Law Society might want to make the amendments. My concern is that his explanation strikes at many other confusions in the Bill, which are more fundamental than what is before us today.

My initial question was: why should the procurator fiscal be charged with executing functions under this passage in the Bill when the Lord Advocate, who is a Scottish Minister, is more widely empowered in part 5 and other parts? The Minister explains that that is because criminal proceedings might arise from the detention of cash. That is an inevitable consequence of the unhelpful confusion brought about by clause 293 (1)(b), which states that an officer may seize cash if he suspects that it is recoverable property or is

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

We have previously highlighted our concern that these are completely different species. It is not helpful to provide one power to deal with both.

I see the force of what the Minister says, but I am unhappy that the powers of the procurator fiscal in investigations of crime are being so profoundly confused with powers that relate to the forfeiture and confiscation of the proceeds of crime. In most

instances, the procurator fiscal would bring an application on behalf of the Lord Advocate in a sheriff court in any case. I cannot imagine, for example, that if an application were brought before the sheriff at Wick, or even Kirkwall or Lerwick, one of the Lord Advocate's solicitors from Edinburgh would go to the necessary court. The local procurator fiscal would bring it. I would argue that it would be more appropriate for him to bring it in the name of the Lord Advocate, a Scottish Minister.

All investigation of crime in Scotland is made on the instruction of the Lord Advocate. The Minister is concerned about whether the power to investigate crime would still be available if the applications were made to a Scottish Minister, or, more specifically, to the Lord Advocate, rather than the local procurator fiscal.

The Minister made a good point about the powers of Customs and Excise. However, I fear that those are not the most helpful of powers and they are probably wrongly drafted. Under the Scottish criminal justice system, Customs and Excise effectively acts as an investigating authority. It has no prosecution powers, and it reports to the procurator fiscal, who brings a prosecution. It would have been more appropriate if our predecessors in other Committees had given the power to Customs and Excise officials, rather than procurators fiscal.

I did not follow what the Minister said about forfeiture, and I wonder whether he meant forfeiture post-conviction—but that is of no great importance. The Law Society has drafted a useful probing amendment, and I hope that it will be given further consideration between now and Report.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman is raising issues that, I am told, are relevant only north of the border. Customs officers and constables have civil powers and responsibilities as well as criminal ones, so there is no impact in Wales and England, where they will exercise those powers. I think that his point may have been covered. However, I am certain that the Law Society of Scotland will examine my comments, and consider whether it is satisfied that it is appropriate for the procurator fiscal to be involved at that stage, because of the hierarchical nature of the Bill, and Scottish Ministers afterwards. If that is not the case, I am certain that it will make further representations, and, clearly, we will consider them.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I am not sure whether I am intervening on the Minister, or he was intervening on me.

Bob Ainsworth (Labour, Coventry North East)

You are intervening on me.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I take the point about the hierarchy. However, by virtue of the power in clause 293, the hierarchy has become confused. That is my concern. Mrs. Keenan, to whom reference has been made, is a former procurator fiscal.

Bob Ainsworth (Labour, Coventry North East)

I have responded to the point that has been made. I am sure that the hon. Member for Orkney and Shetland will have further discussions, and if those who follow our proceedings want to make further points, they will do so, and we shall take them

into account. Given my explanation, I hope that the hon. Member for Surrey Heath will withdraw the amendment, although he may wish to take further soundings, and we may return to the issue.

Ian Lucas (Labour, Wrexham)

I am somewhat puzzled as to why the director of the Assets Recovery Agency is not involved in this matter. It seems to me that he would be the obvious person to make the application, if it is necessary for an application to be made other than by a constable. Will the Minister explain that? Alternatively, will he consider the matter further?

Dominic Grieve (Conservative, Beaconsfield)

The hon. Gentleman has pre-empted the point that I was about to make. This is an interesting issue, which has developed as a result of our discussion about Scotland.

Clearly, when there are forfeiture proceedings, the thrust of the Bill is that the director of the Assets Recovery Agency has control. However, when one considers clause 297, as we shall do in a moment, the constable appears to be the initiator of those proceedings. Indeed, that runs through the procedure that we have considered under clauses 293 and 294. That may not matter, but one would expect the director of the Assets Recovery Agency to make those decisions. If he is making all the central decisions on civil forfeiture throughout the Bill, why is this a discrete area that is left to the police to determine? That raises an interesting issue, and I cannot help wondering whether it is because of the derivation of the Bill and its predecessors, and because the issue has not been focused on. As the Minister is aware, the Bill sets up an administrative law system, with an administrative officer—the director of the Assets Recovery Agency—who is supposed to be managing it. In this case, however, as the hon. Member for Wrexham (Ian Lucas) rightly says, a police constable will make the choices and decisions on the application.

Bob Ainsworth (Labour, Coventry North East)

The issue raised by the hon. Gentleman and my hon. Friend the Member for Wrexham does not impact on Scotland, because the director has no powers there. The point raised is a more fundamental one about the operation of the Bill. The hon. Gentleman is right that the Bill is derived from the existing provision, which is also successful in the border situation. It is worth reflecting that the director is not exclusively involved in part 2, but he can become involved; where it is felt appropriate, he can assist in complicated cases of criminal confiscation. With regard to the matters addressed in chapter 2 of part 5, the director is in charge, because that chapter deals with civil recovery in the High Court and the Court of Session, and it addresses investigative cases against people for the civil recovery of the proceeds of crime.

We are discussing the seizure of cash, and instruments that can be considered to be cash. That has operated at the border for a long while, and frequently to good effect. The performance and innovation unit's report revealed that the same circumstances often arise inland. In such cases, constables or—where customs powers are involved—customs officers initiate and conduct the

investigations, and get involved in the proceedings in the High Court or the magistrates court, because such cases deal with cash issues, so some of the complications that we have discussed at length with regard to property do not arise.

The hon. Gentleman has said that the director should never be excluded, but I do not understand that. The director will not be the initiator of such cases, and the overwhelming majority of them will not be very complex, so the police, or customs officers, will be capable of investigating them. There is no reason why the director should necessarily be involved. I hope that the hon. Gentleman can appreciate that point, as he raises an issue that might be worth examining when, instead, he asks, ''Why should the director not sometimes be involved?''

Dominic Grieve (Conservative, Beaconsfield)

The Minister has been helpful. When the legislation was drafted, it was decided to create a director of an Assets Recovery Agency, rather than to give such powers to the police. There were good reasons for taking that decision: one of them is that some of the aspects of the legislation are concerned with civil recovery proceedings, which the police would not usually deal with.

I take on board the Minister's point that a police constable will usually be the person who seizes the cash. However, as forfeiture is essentially a civil proceeding, one might have expected that decisions with regard to it would not be taken by the police—although I accept the Minister's statement that that has happened—but by the director of the Assets Recovery Agency, who is in charge of the totality of Government policy in relation to civil forfeiture of assets that are the proceeds of crime. There is a valid argument that forfeiture should be brought under that single umbrella. The Minister has hinted that that might be done by co-ordination, but that raises an anxiety in my mind—

Bill O'Brien (Labour, Normanton)

Order. This is an intervention. We should be discussing the amendment, but we are straying from that subject.

Dominic Grieve (Conservative, Beaconsfield)

I apologise, Mr. O'Brien.

It raises an anxiety about functions being split.

Bob Ainsworth (Labour, Coventry North East)

We are indeed straying considerably from that subject, Mr. O'Brien.

I wish to answer the points raised by the hon. Gentleman, and by my hon. Friend the Member for Wrexham. The hon. Gentleman's comments about the relationship between the concept of the legislation and the creation of the Assets Recovery Agency are incorrect. The concept of the legislation is broader than his remarks suggest. The legislation creates an Assets Recovery Agency to do specific things, but the intention is also to extend certain powers that exist in current legislation with regard to criminal confiscation, so that further categories of proceeds of crime are covered, and the powers apply inland. That group of powers has not been operated by constables, but mostly by customs officers, and I am told that they have civil powers as well as criminal powers. Therefore, there is no reason why it should not be extended to, and used by, them.

Dominic Grieve (Conservative, Beaconsfield)

The Minister is right. In the past, I have done civil work for the Customs and Excise relating to that type of work. Customs and Excise has extensive powers that extend to civil as well as criminal jurisdiction. The police do not usually have such powers. That is why the involvement of the police constable in forfeiture proceedings causes me some anxiety.

Bob Ainsworth (Labour, Coventry North East)

I think that I am happy with the way in which the measure is structured. In the overwhelming majority of cases, there is no practical necessity to involve the director in cash confiscation proceedings. The hon. Gentleman may reflect on that matter, which is valid, but it is not the subject of the amendment that we are discussing.

Boris Johnson (Conservative, Henley)

I am sorry to trouble the Minister. A sudden thought has flashed into my head that could save a great deal of money. Perhaps we have inadvertently stumbled across a brilliant way of economising. If it is possible for a constable not only to seize the cash but to hold on to it for two years, what is the purpose of the Assets Recovery Agency?

Bill O'Brien (Labour, Normanton)

Order. We are moving away from the basis of the amendment. It appears that we have exhausted the debate—[Hon. Members: ''Hear, hear.'']

Bob Ainsworth (Labour, Coventry North East)

The constable cannot seize cash and keep it for two years. He has the ability, when he has reasonable grounds, to seize cash and keep it for 48 hours. He must appear in front of a magistrate and justify the decision that he has taken. If he subsequently wishes to keep that cash, he must return to a magistrate every three months. The hon. Gentleman paints a caricature of the police powers. As you said, Mr. O'Brien, the issue has been exhausted. We should allow the hon. Member for Surrey Heath to consider whether he wishes to pursue the amendment.

Nick Hawkins (Conservative, Surrey Heath)

When I moved the probing amendment—originally drafted by the Law Society of Scotland—I did not anticipate such an interesting debate. What has emerged from the Minister's very helpful response—particularly when he said that he might propose further Government amendments to address the point—is that the Law Society of Scotland was right to encourage us to table the amendment. To begin with, the hon. Members for Wellingborough (Mr. Stinchcombe) and for Wrexham were puzzled about the involvement of the Scottish Ministers.

Paul Stinchcombe (Labour, Wellingborough)

I wanted to know why such an austere body as the Law Society of Scotland proposed the amendment. Unfortunately, the hon. Gentleman failed to give a reason.

Nick Hawkins (Conservative, Surrey Heath)

My point was that the Law Society of Scotland was right to draw attention to the Scottish Ministers. Initially, that puzzled all of us, but it has been clarified by the Minister's helpful response. As I anticipated when moving the amendment, the Minister and his officials have been talking to the Law Society of Scotland, and have realised that there was an important issue. The hon. Member for Wellingborough has received his answer, not from

me, but from his own Minister. That reflects the fact that the Minister can utilise the enormous resources of the civil service to explore those points more fully than Members on the Opposition Front Bench who are not Scots lawyers.

The importance of the relationship between Scottish Ministers and procurators fiscal, and the inherent dangers, was further expanded on by the hon. Member for Orkney and Shetland. The debate has been useful, and the object of probing has been achieved, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nick Hawkins (Conservative, Surrey Heath)

I beg to move amendment No. 412, in page 170, line 35, leave out 'either of'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to take the following: Amendment No. 413, in page 170, line 35, leave out 'conditions' and insert 'condition'.

Amendment No. 415, in page 170, line 36, leave out subsections (5) and (6).

Government amendments Nos. 326 and 327.

Amendment No. 416, in page 171, line 7, leave out 'second'.

Government amendments Nos. 328, 332 and 342.

Nick Hawkins (Conservative, Surrey Heath)

Again, these amendments were drafted by the Law Society of Scotland. Now that the hon. Member for Glasgow, Pollok has returned, I can stress to him—as I have to other members of the Committee—that the Law Society of Scotland intended for the amendments to clarify and improve the Bill. They are not intended to provide lawyers' loopholes through which the Mr. Bigs of Pollok and elsewhere may slip. Government amendment No. 327 would delete subsection (6), in a similar way to half the Law Society of Scotland's amendment No. 415. I hope that that reassures him that the society is again on to a sensible point.

Clearly, the Government have an alternative way of doing things, through the Government amendments, but I stress to the Minister and the Committee that the amendments are probing. I suspect that the Minister will tell us that following his officials' consultation with the Law Society of Scotland, his solution to clarify and improve the clause is better than the society's initial draft, which we have adopted. If he satisfies us that the Government have thought of a better way of dealing with the problem, I will take on board what I anticipate he will say. However, I hope that he will acknowledge that we and the Law Society of Scotland made a legitimate attempt to improve the Bill by clarifying it.

Ian Lucas (Labour, Wrexham)

Will the hon. Gentleman clarify whether he is suggesting that the only circumstances in which cash may be seized are when proceedings have been commenced? That seems to be the upshot of the amendment. Do I understand him correctly?

Nick Hawkins (Conservative, Surrey Heath)

Yes, I think that the hon. Gentleman understands me correctly. I cannot claim to be an expert on Scots law, but I believe that that is what the Law Society of Scotland was driving at. We agree with that, and I shall listen with interest to what the

Minister and the hon. Member for Orkney and Shetland say.

Bob Ainsworth (Labour, Coventry North East)

The purpose of the cash recovery scheme is to allow for the seizure, detention and forfeiture of cash that is either recoverable property—in other words the proceeds of crime—or intended for use in unlawful conduct, and is connected to any crime. That reflects exactly the existing similar schemes under the Drug Trafficking Act 1994 and the recent Anti-terrorism, Crime and Security Act 2001. Those Acts allow for the seizure, continued detention and forfeiture of cash that represents the proceeds of either drug trafficking or terrorism.

The cash recovery scheme that we are considering provides a straightforward means of recovering cash, whether it is the proceeds of unlawful conduct or intended for use in unlawful conduct.

The removal of recoverable cash from circulation is a crucial aspect of preventing crime. Recoverable cash is readily recycled—for example, to buy more drugs. It may also serve to allow a person to maintain an extravagant lifestyle that furnishes an undesirable role model for young people.

It would have been possible to include cash that is recoverable property in the civil recovery scheme set out in chapter 2. That will be the case where cash is part of a wider portfolio of property that the director of the Assets Recovery Agency or Scottish Ministers are seeking to recover in civil recovery proceedings.

However, the scheme that is provided for in chapter 3 of part 5 is a rather different one. It is more appropriate to cases where cash is detained after coming to the attention of the police or Customs officers in the normal course of their work. Pure cash is quick and simple, and there is little room for the complex arguments that arose in our roving debates on the previous amendment. The existing pure cash schemes before the magistrates court illustrate the effectiveness of such arrangements. In 2000, £4.5 million of drugs-related cash was forfeited under the Drug Trafficking Act 1994. The scheme is successful and fully understood and has stood the test of time.

The amendments would withdraw the ability to detain cash under the scheme for more than 48 hours if it is suspected of being the proceeds of crime. Under the legislation, such cash can continue to be detained if its derivation is being further investigated or if it is connected to criminal proceedings that are being contemplated or have begun. The amendments would remove the ability to detain such cash beyond 48 hours even if forfeiture proceedings were initiated during that period. Cash that was seized on the basis that it was recoverable property would therefore be detainable for only 48 hours, even if the case for making an application for forfeiture were made at that early stage. That is not desirable, nor would there be any point in detaining cash in those circumstances.

Dominic Grieve (Conservative, Beaconsfield)

Presumably, if the 48-hour period were to exist, that would be enough time for the director of the Assets Recovery Agency to start such proceedings,

if he wished to deal with the matter under his other powers.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman expects that the director could involve himself in every case and satisfy the court that there is a good, arguable case, as required under chapter 2 of part 5, to transfer seized cash in effect to that part of the Bill and to continue with detection under civil forfeiture. That would be difficult to ensure in every case. He is suggesting that we dismantle something that has worked well in its context, which I accept that we are broadening, and replace it with something else. We would do so at great risk of losing that effectiveness and allowing those moneys to continue in circulation. I ask him to reflect on what he is asking us to do. We should not dismantle something that has worked well, which his Government introduced in 1994, and we certainly do not intend to go down that route.

It would be complicated to expect the director to respond to every request in any part of the country from the police who have managed to obtain cash, and make a good, arguable case in civil recovery and take it to court all within 48 hours, or give the money back to the individuals concerned. That would be detrimental.

Under the amendments, cash that was seized on the basis that it was recoverable property could be detained for only 48 hours. If prosecution were contemplated, an application for restraint would be possible, but even in those circumstances the cash would have to be released until a restraint order had been obtained. The cash would remain in the control of the individual concerned rather than in detention and could fairly easily go missing.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I wonder whether this matter is unnecessarily complicated. If a physical sum of cash is identified as possibly having been the subject of unlawful conduct—the commission of a crime—the police already have the power to hold it as a production and they will routinely do so.

Bob Ainsworth (Labour, Coventry North East)

I am sorry, but I missed the hon. Gentleman's point. Could he repeat it?

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

The Minister is talking about the holding of a physical sum of money in relation to a criminal proceeding. He seems to be suggesting that the money would have to be released before a restraining order could be obtained. We are talking about the investigation of crime. Let us suppose that the police come across a large sum of money and say, ''What's this, then? It looks a bit fishy and we're going to investigate.'' If they are pursuing a reasonable suspicion, they already have the power to take that money to be a production—I think that the term used in England is ''exhibit''—and to hold it under the powers in the Police (Scotland) Act 1967.

Bob Ainsworth (Labour, Coventry North East)

Not necessarily. The hon. Gentleman is talking about criminal proceedings under part 2; the hon. Member for Beaconsfield talked about the use of civil proceedings under chapter 2 of part 5. Under that part of the Bill, a criminal act does not need to be proven. For part 2 to

kick in—the hierarchy suggests that that should be the case when appropriate—there will have to be the chance of a prosecution for criminality. That is the test that will apply. Chapter 2 of part 5, on civil recovery, is not intended to be used in cash-only cases. To suggest otherwise would mean having to rewrite almost the entire Bill. Chapter 3 is a straightforward extension of what is currently operated by Customs and Excise at the border, and in inland situations the power is extended to constables.

I struggle to understand the hon. Gentlemen's concerns. They are effectively saying that criminality must be proven at the relevant point or the cash released in relation to part 2 kicking in, which will not always be the case, or that cash be included in the civil recovery case. However, obtaining a restraint order under chapter 2 of part 5 within 48 hours would be difficult.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I think that I understand the position—perhaps the Minister will correct me if I have misunderstood his scenario. Money is seized within 48 hours, and it becomes apparent that it will be the subject of a criminal investigation. If I misrepresent the Minister, I apologise, but he then seemed to suggest that it would be necessary to obtain a restraining order in order to hold on to the money. That is unnecessary, because the police's existing powers entitle them to hold the money as part of their investigation.

Bob Ainsworth (Labour, Coventry North East)

But we shall not always be able to bring criminal investigations. We are discussing a civil proceeding for moneys intended for use in crime, or the proceeds of crime.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

If the money is intended for use in crime, it is part of a criminal investigation, and the police have the power to hold it, surely.

Bob Ainsworth (Labour, Coventry North East)

Possibly, but not exclusively, and certainly not in the case of the proceeds of crime. The hon. Gentleman suggests that moneys that are the proceeds of crime would have to be released. I do not know whether I have satisfied him—I seem to have confused him. A point that may have an impact on his anxieties is that, once criminal proceedings are initiated, the power to hold on to the money applies only if it is required as evidence. That is a narrower power than is currently available to Customs officers at the border and would be provided by the extension envisaged under the Bill. In some circumstances, the money would have to be released.

Nick Hawkins (Conservative, Surrey Heath)

Of course, the issue of hanging on to the cash when it is required as evidence will crop up under clause 295, which we shall discuss in a moment. I hope that the Minister will be aware that, on behalf of the Law Society of Scotland, and for good reasons with which we agree, my hon. Friends and I have tabled amendment No. 417, which would delete clause 295(2). I do not want to anticipate that debate, because that is a separate amendment, but that issue is involved, and we shall debate it.

Bob Ainsworth (Labour, Coventry North East)

Don't do it, then.

I think that the hon. Member for Orkney and Shetland accepts that the power to hold on to money

that can be shown to be required as evidence will in some circumstances be far narrower than that which we are providing in the Bill. In some circumstances, the cash will need to be released.

Dominic Grieve (Conservative, Beaconsfield)

If the cash were believed to be the direct fruits of crime or stolen property, there would be no problem holding on to it, irrespective of whether it was needed for evidence in criminal proceedings. If the police recover money that they believe might be the property of another person, I understand that, under their current powers, they would have no difficulty in holding on to it.

Bob Ainsworth (Labour, Coventry North East)

That is not so. If it were, we would not be introducing the Bill. We are told that, as the performance and innovation unit report exposed, police and Customs officers operating inland sometimes come across cash that is clearly derived from crime and that they believe they can show to be derived from crime, or intended for use in crime, that they have no powers to detain, although they do have them at borders. It was at their instigation, not as a result of some great plan on the part of the Home Secretary, the Prime Minister or another politician, that the Bill was introduced. The problem was brought to our attention, and it is that problem that the Bill is intended to tackle. The hon. Gentleman seems to suggest that there is no problem, and that we were deceived about the extent to which moneys remain unseizable.

Dominic Grieve (Conservative, Beaconsfield)

The Minister may have misunderstood my question. I am sure that he would agree that the police have the power to detain cash that they believe to be stolen property. They do not require any of the powers that we are discussing. They have had that power for about as long as that of recovering stolen property. The police frequently hold on to cash in the course of criminal investigations if they have a reasonable suspicion that it might be stolen property.

Bob Ainsworth (Labour, Coventry North East)

The police have to be satisfied that they can show that the property is stolen. On occasion, in the course of their duties, the police come across money that they have to let go, because they cannot hold on to it as they do not currently have that power. We are discussing a civil procedure, and the standard of proof is therefore lower than in criminal procedures, in which the case must be proved beyond all reasonable doubt.

Provisions under similar schemes in drug and terrorism legislation allow for the continued detention of the proceeds of crime. They also allow cash to be detained for the same period as cash that is suspected of being intended for use in crimes. That allows for the continued detention of cash if criminal proceedings are contemplated or on-going. We can see no reason, operationally or theoretically, to distinguish the scheme from equivalent ones. I hope that, in light of my comments, the Opposition amendments will not be pressed to a vote.

The Government amendments cover some of the same issues. Amendment No. 326 is a minor drafting amendment to ensure consistency between paragraphs (a) and (b) of subsection (5). Amendment No. 328 makes the language in subsection (7) consistent with

that in subsection (5), as there is no reason for the two subsections to differ. Subsection (7) sets out conditions for detaining cash suspected of being intended for use in unlawful conduct. Subsection (5) sets out conditions for detaining cash suspected of being recoverable property because it has been obtained through unlawful conduct. The two sets of conditions should be more closely aligned.

Subsection (7) currently permits the detention of cash suspected of being intended for use in unlawful conduct while its intended use is further investigated. Amendment No. 328 allows for continued detention of the cash while consideration is given to the criminal proceedings for an offence with which the cash is connected, or pending the conclusion of such proceedings. That is similar to subsection (5), which allows cash that is suspected of having been derived through unlawful conduct to be detained while its derivation is investigated, or while consideration is given to bringing criminal proceedings for an offence with which it is connected.

Amendment No. 328 reflects the fact that an intention to commit unlawful conduct may lead to criminal proceedings in, for example, a charge of conspiracy. It is right that cash intended for such use should be detained while a charge is considered or pending the conclusion of criminal proceedings. A similar approach has been taken in paragraph (3)(6) of schedule 1 to the Anti-terrorism, Crime and Security Act 2001 for the detention of terrorist cash.

Amendments Nos. 327, 332 and 342 are purely drafting amendments and make no substantive change. Amendment No. 342 provides a single, general interpretation of what is meant in part 5 by the conclusion of criminal proceedings.

Dominic Grieve (Conservative, Beaconsfield)

I come back to an issue that has exercised the Committee. The hon. Member for Orkney and Shetland has commented on it, and it was first raised by the Law Society of Scotland. Amendments on the issue were moved by my hon. Friend the Member for Surrey Heath. Perhaps lawyers have tidy minds. We are considering a new structure that is being set up by the Government. It includes a confiscation system and a civil recovery system. In the passage dealing with civil recovery procedure, there is a section on the recovery of cash in summary proceedings.

As the Minister so rightly explained—he almost, unintentionally I think, let the cat out of the bag—the recovery of cash in the summary proceedings part had been prompted by representations from Customs and Excise and other law enforcement authorities. He has put in the middle of the civil recovery proceedings a pre-existing power that had previously been given to Customs and Excise and, at its request, has expanded it. There is nothing wrong in that. He said that the system is tried and tested, and that the Government will make it possible to be implemented by police constables in inland situations. It also applies to Scotland. The Law Society of Scotland considered the

matter and found it a little odd. It seems to the society—it is, indeed, a valid point—that the mixing of the civil recovery provisions with other powers is not conducive to clarity.

That ties in very much with our comments on an earlier amendment about the lack of involvement of the director of the Assets Recovery Agency in the forfeiture that may follow upon the recovery of cash. I am mindful of what the Minister said about such matters. I accept that the powers of Customs and Excise have been tried and tested. What is proposed will be a substantial alteration of a pre-existing situation.

Equally, the Minister must accept that the Bill is introducing a new regime. It is perfectly legitimate for the Government to say that they will create new powers, but they say that there may be occasions when existing powers can be done away with or altered because those new powers have been brought into operation. I accept the Government's reassurances about what are, as the Minister has acknowledged, fairly draconian provisions designed to target the proceeds of crime. Provisions in respect of the confiscation of people's assets in civil proceedings, even if they have not committed a criminal offence, have not existed in this country before. However, it is important that the public are reassured that a consistent system will be implemented by an individual who will be answerable for his actions. We know that the director of the Assets Recovery Agency will be answerable for his actions and reports. We do not want a position in which there are parallel powers unless it is absolutely essential that that must be so.

The Law Society of Scotland has a good point, and it applies equally to England and Wales. The Minister is allowing a situation to occur in which cash is separated from other assets for the purposes of civil and criminal recovery. Under the clause, it will be entrusted in its civil context, not to the civil recovery authority that the Government have set up but to Customs and Excise, and the power will be widened to include the police. The Law Society of Scotland has tried to remove that power, so that it is made clear that the director of the Assets Recovery Agency will call the shots the moment that civil forfeiture, not criminal proceedings, is being dealt with.

I am open to persuasion, and I also accept that, until it was flagged up by the Law Society of Scotland, I failed to focus on the issue. Like the Minister, I went along with the view that there was a previous tried and tested procedure, which is being slightly widened. However, some interesting issues of principle are involved. We may have to return to this issue on Report, when we will have had more time to consider it more carefully, but when the seizure of cash leads, effectively, to civil forfeiture, albeit in short form, I find it difficult to understand why the director of the Assets Recovery Agency is not involved, as he is answerable for the system.

Historically, a previous Conservative Government gave extra powers to the organisations that enforce the criminal law, thereby extending their jurisdiction to bringing cases for confiscation on the balance of

probabilities in order to deter crime. I was not a Member of Parliament at the time but I understand exactly why it was done. I also suspect that if one looks at Hansard for that time—I remember doing so at some point—one will see that civil liberties issues were raised, because the power was novel. Given that we are creating a completely new structure, and the Minister is eager to provide reassurance that people's civil liberties will not be trampled on, there might have been an opportunity to separate civil and criminal jurisdictions and put the director of the Assets Recovery Agency in control of civil proceedings. I do not know the extent to which he wishes to comment further on that, but it is an absolutely valid point.

We may be in danger, unnecessarily, of setting up a hybrid system in which the channels of accountability are blurred. I do not know whether the seizure of cash will form a major part of asset recovery—it may remain tiny—but if it does, and it is done on the civil basis, it would be highly desirable for the director of the Assets Recovery Agency to be answerable for the steps that are taken. Under the amendments, as has been highlighted, the police could seize the asset, hold it for 48 hours, ring up the director of the Assets Recovery Agency, and say, ''Look, we've no interest in this in respect of criminal proceedings, but £25,000 was found on this person. Are you interested?'' If the director said yes, he could do something about it. That might even be an argument for extending the 48-hour detention period to, say, five days, which would give him that opportunity. The ball would still be in his court, rather than the police officer's.

The Minister seems to think that this is a simple matter: that cash is a simple issue, and that the constable can deal with it. That may be so, but it might become complex in certain circumstances. During the past 12 months, a racehorse trainer was found with £55,000 as he left Heathrow airport. The money was seized, but it was returned to him when he was able to establish clearly that it was neither the proceeds of crime nor intended for the furtherance of criminal activities. Will the Minister consider whether the Law Society of Scotland has done us a good service by trying to highlight what may be a mistake in the Bill?

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I shall be brief, because the hon. Gentleman has said nothing with which I can disagree. The debate reminds me why I thought that life as a politician might be more agreeable than life as a lawyer. Parliament makes life unnecessarily complicated for lawyers.

The Minister must give some serious consideration between now and Report stage to the points made by the hon. Member for Beaconsfield about the separation of civil and criminal jurisdictions. I return to the plea about not lumping together the powers concerning confiscation or forfeiture on the one hand, and the investigation of crime on the other, because it unnecessarily confuses the matter and is unhelpful.

Bob Ainsworth (Labour, Coventry North East)

With regard to letting the cat out of the bag, nobody should be under any illusions. We consulted people on the provisions in the Bill. Practitioners of the current scheme were part of that consultation and their views were taken into account, so to what extent did I let the cat out of the bag? There

has been no representation from Customs officers to say, ''Wait a minute. We have certain powers at the border but we sometimes come across similar situations that are not at the border and we can't touch the stuff.''

Dominic Grieve (Conservative, Beaconsfield)

I did not make my comment pejoratively. The Minister has been honest and forthcoming with the Committee and has often had to suffer bombardment throughout the weeks that we have been sitting. I am grateful to him, but when he said, ''Well, that was their idea, and that's why we've put it in,'' it made me wonder whether the totality of the picture had been examined when the course of action was embarked on.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman and the hon. Member for Orkney and Shetland want me to consider a major rewrite of the Bill. The hon. Gentleman knows that the logistics would be horrendous and the issues raised would be of concern to the Committee. As he has said, we would have to extend the two-day period considerably and there would be a great deal of bureaucracy.

The Assets Recovery Agency is meant to be an agency that provides the necessary expertise for serious investigations of civil recovery under chapter 2 and the expertise to back up the confiscation procedures. I have not the faintest idea about the size of the agency, but for it to be able not only to perform those functions but to take over from Customs and Excise and constables, I suggest to Opposition Members that we are talking about considerable growth in a new institution over and above that which is currently envisaged.

Customs and Excise currently operates the scheme. We would not be removing the police, as the hon. Gentleman recognises, from involvement in the procedures. As he says, they were brought in under previous Governments and that was extended by the current Government. The police operate antisocial behaviour orders, which are civil procedures, so we would not be separating out some great principle in moving to what he suggests.

We have a workable scheme. It is considered by the police and Customs officers to be extendable in a workable fashion. That is how the Bill is currently read and I cannot give the hon. Gentleman a commitment that I will consider a total rewrite of all responsibilities for the director of the agency.

Nick Hawkins (Conservative, Surrey Heath)

Once again, as the Minister has fairly acknowledged, the Law Society of Scotland's drafts have opened an interesting debate. Despite his dismissive comment that he is not prepared to consider a complete rewrite of the Bill, I have no doubt that, having heard the debate, his officials will consider a rewrite and we may see a change of heart in due course.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman is trying to foment rebellion.

Nick Hawkins (Conservative, Surrey Heath)

I do not know whether I am inciting rebellion, but during my parliamentary career it has not been unknown for Ministers of both Labour and

Conservative Governments to be dismissive about prospects for further change when on their feet but for there to be a subsequent change of heart.

The Minister should consider seriously the wise words of the hon. Member for Orkney and Shetland about how he decided to stand for Parliament because it made life more difficult for lawyers. That was also part of my motivation to stand. After wrestling with arcane statutory drafting in the courts while in practice at the Bar, I thought to myself that there must be a better way of doing things and perhaps I should get inside the system and try to improve the drafting to ensure that we have workable laws. I am sure that even the hon. Member for Glasgow, Pollok and I would unite to believe that we should have laws that actually work and hit the Mr. Bigs at whom we aim.

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

It is astonishing that the hon. Members for Surrey Heath and for Orkney and Shetland admitted that they came to Parliament to make life easier for lawyers. Here is simple me, who came to Parliament to try to overthrow capitalism.

Nick Hawkins (Conservative, Surrey Heath)

The hon. Gentleman may certainly have had a different motivation. We shall have to see which of us will be the more disappointed.

Bill O'Brien (Labour, Normanton)

Order. Whether hon. Members came to Parliament to help lawyers or to get social justice, they should stick to the amendment.

Nick Hawkins (Conservative, Surrey Heath)

The point that I make is that we want laws that work, which reinforces the point that was made by the hon. Member for Orkney and Shetland.

The Law Society of Scotland did the Committee a service by raising the serious point that the way in which the clause is drafted may not provide the most effective way of dealing with matters. Opposition Members think that the society may have come up with improvements. I am sure that the Government will consider the matter further.

I shall not press the amendments to a vote. There are Government amendments that draw on some of the spirit that the Law Society of Scotland got at. However, the procedure is not finished, and the Government may wish to consider further improvements on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nick Hawkins (Conservative, Surrey Heath)

I beg to move amendment No. 414, in page 170, line 35, at end insert—

'(4A) Before making an order under this section, the court must take into account any representations made to it by any person whom the court thinks is likely to be affected by the order.

(4B) In making representations to the court under subsection (4A), any person whom the court thinks is likely to be affected by the order shall be entitled to appear before the court.'.

This is a matter of considerable substance. I do not move the amendment as a probing amendment, unlike the previous ones. Again, my hon. Friend the Member for Beaconsfield, myself and other Conservative Members are indebted to the Law Society of Scotland for drafting the precise wording of the amendment.

Again, we are worried about the possibility of the seizure of cash that may be entirely innocent. Other parts of the Bill make express provision to allow interested parties to make representations to the court. Clause 94 gives that power to those affected by the making of the confiscation order and clause 136 gives the power for the protection of a person who is affected by action taken by any administrator. Given the potential impact of the making of an order under this clause, a similar power to make representations should be incorporated.

I appreciate that the Government have tabled new clause 9, which relates specifically to victims. We will debate the new clause later, but the amendment provides a better way of paralleling what the Government have already included in clauses 94 and 136, and I cannot think of a good reason why there should not be a parallel power in this part of the Bill.

I am sure that the hon. Member for Orkney and Shetland will, once again, give the Committee the benefit of his experience of how such matters are usually dealt with in Scotland.

The Minister might not be prepared immediately to accept the amendment, as drafted, but I hope that he will be willing to reconsider the serious point that I have raised—perhaps on Report, or in another place.

Bob Ainsworth (Labour, Coventry North East)

The amendment would allow anyone who appears to be affected by the continued detention of the cash to make representations, in person, at the initial detention hearing, and at any subsequent hearing. As the Bill is currently drafted, those affected by a detention order must be given notice of it under subsection (8). We intend to make rules of court to the effect that such people must be notified of hearings—other than the initial one—and that they must have a right to be heard before the court. They will have the right to make representations at all hearings except the first one.

An exception is made for the first hearing because it is unlikely to be practicable for those affected by the detention of the cash to be notified in time for them to attend a hearing that must be held within 48 hours of the seizure. We agree that those affected by a detention order should have a right to make representations. That will be provided for—other than in respect of the initial hearing,

The hon. Gentleman and I have no substantive disagreement. I hope that he will accept that my proposals represent the right way to address the matter, and that, in the light of my assurances, he will withdraw the amendment.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

The Minister's comments have some force, but I want him to explain why affected parties should be excluded from being present in person or represented at the initial hearing. It might be true that it would be difficult to notify such parties—that is often the case in interdict proceedings, for example—but if, through their own volition or otherwise, they are aware of the proceedings, I can see no reason why they should not be entitled to appear at the first hearing. The amendment would give them that entitlement, and that is sensible.

Dominic Grieve (Conservative, Beaconsfield)

I share the hon. Gentleman's view. I accept that the only person present at the first hearing might be the person from whom the cash was seized. However, in some cases, another person might be able to provide a rapid and easy explanation about the cash—for example, he might have entrusted it to the person from whom it was seized to effect a transaction.

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

Ha.

Dominic Grieve (Conservative, Beaconsfield)

The hon. Gentleman wants to ask who hands £35,000 to somebody to go and carry out a transaction. Before he does so, I remind him that instruments that are in common commercial use are covered by this measure, such as cheques, banker's drafts and bearer bonds.

A bearer bond might be worth a substantial sum, and a first person might hand it to a second person to complete a transaction: if that has happened, it seems odd that the first person might not be allowed to make a representation at the earliest possible stage. It could be argued that that person could equally easily contact the police, or Customs and Excise, and say, ''Here is the documentation to prove that that is my money.'' We must allow for the fact that Customs and Excise and the police sometimes get it wrong. Otherwise, there would be no need for any form of judicial reviewing of their decision making. It is difficult to see why the provision should not be included and I hope that the Minister will consider it.

Mark Field (Conservative, Cities of London and Westminster)

I entirely endorse the comments made by my hon. Friends the Members for Surrey Heath and for Beaconsfield, and the sensible suggestion of the hon. Member for Orkney and Shetland.

Our worry is that the provision is rather strict. It provides no opportunity for a third party to give an explanation. I appreciate that—given the narrow time frame and the nature of the bureaucracy that will inevitably surround such a system—it would be difficult to oblige the authorities to ensure that every person who may have been affected is contacted. However, when moneys have been seized, it is probable that any third party will be put on the back foot. To counter an initial court hearing, that third party then has to try and prove the case in an entirely different way.

I am interested to hear how the Minister envisages the system working. A third party who has a good explanation stands to lose significant sums in the way that my hon. Friend the Member for Beaconsfield described. A person who passed on a bearer bond or a banker's draft may find that a prolonged delay puts him in a position of financial embarrassment. If such an individual would not have any locus standi at the initial investigation, how does the Minister envisage the system working?

Bob Ainsworth (Labour, Coventry North East)

I am a little worried that I am arguing against a pre-determined decision to vote on the matter. There is no issue of substance between us. We do not intend to provoke people and bring in the rules of court to prevent them from making representations at the initial hearing. We will not insist that the court gives the right to every person affected at the initial hearing because, logistically, that

is not possible. A person will have the right to make representations to the initial hearing. He will also have the right to make representations to the Customs or police officer prior to that hearing. We intend to insist that all those affected are given notification and have the right to make representations at all subsequent hearings.

As I have said, there is not an issue of substance between us. We are talking about a methodology in terms of whether the provision is written into the Bill or included in the rules of court. The only other issue is that of logistics. I think that hon. Gentlemen accept that it is not logistically possible for the court to notify every affected person within the 48-hour period.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

That point is accepted. However, can the Minister show me the part in the proposed new subsections (4A) and (4B) that would require the court to do that?

Bob Ainsworth (Labour, Coventry North East)

No, I cannot. As I said, we intend to include such a provision in the rules of court to ensure that everyone has the right to make representations at all subsequent hearings and not to exclude that right at the initial hearing.

Nick Hawkins (Conservative, Surrey Heath)

The Minister is right. There is a dispute between us in terms of methodology, but he may have slightly misunderstood the hon. Member for Orkney and Shetland. The amendment would not oblige the court to try to find people. It states that, if a person is aware, he should have the right to make representations. We are saying that that provision should be written into the Bill, not merely in the rules of court.

Bob Ainsworth (Labour, Coventry North East)

Perhaps I have misread the amendment, and if that is the case, I will make the hon. Gentleman aware of it. However, with my stated intention as to how the provision will apply, I hope that he does not see a necessity to push it to a Division now.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

The hon. Member for Surrey Heath put his finger on an important point about what the Minister said about making provision and rules of court. In Scotland, that will be done by Ministers through Acts of Sederunt promulgated by the president of the Court of Session. I believe that it is a matter of sufficient importance. It is a fundamental principle that when someone is and is not entitled to appear should be specified in the Bill, not by statutory instrument.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman makes a point on which it is worth reflecting, and I assure him that I shall reflect on it.

Nick Hawkins (Conservative, Surrey Heath)

I appreciate that the Minister will reflect on the matter, but I believe that he has genuinely—I make no accusation—misunderstood our intention in proposing new subsections (4A) and (4B). To reinforce his intention to consider the matter further, I should like to press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 12.

Clause 295 - Interest

Nick Hawkins (Conservative, Surrey Heath)

I beg to move amendment No. 417, in page 171, line 18, leave out subsection (2).

The purpose of the amendment, which was, once again, helpfully drafted by the Law Society of Scotland, is to explore with the Minister the purpose of the exception in subsection (2). I appreciate that banknotes might have fingerprints on them and might be required as exhibits in a court case. Perhaps that is the reason for subsection (2)—the Minister will tell us in a moment. If it is not, we would be concerned that there should be any other reason why any cash, even if it is involved in another case, should not bear interest.

We agree with the main provision of subsection (1).

We believe that it is right to put such cash in interest-bearing accounts so that interest is added if the cash is subsequently released. I am not merely probing, and I should like to hear what the Minister says on the subject.

Bob Ainsworth (Labour, Coventry North East)

I shall apply my non-lawyer's untidy mind to the hon. Gentleman's question.

The amendment would require the police and Customs to pay all cash seized under clause 293 into an interest-bearing account. That would result in the original cash being lost in every case. In most circumstances, the cash will be paid into an interest-bearing account, thus accruing interest as compensation for cash that is released and not ultimately forfeited. The Government recognise that that is an important protective measure. However, we do not accept that the provision should override the powers provided under the Police and Criminal Evidence Act 1984, which allows material that has evidential value to be retained for an investigation or trial.

The same principle should apply if cash is needed as evidence in detention and forfeiture proceedings brought under chapter 3 of part 5. It is not difficult to foresee circumstances in which seized cash will have evidential value. In such cases, the cash will need to be retained for that purpose. Indeed, PACE requires as much for material seized under that legislation. The most obvious example is one in which traces of drugs—or fingerprints, as the hon. Gentleman said—are present on the cash. In such circumstances, the police and Customs will need to retain the cash as evidence.

The cash may be needed as evidence in proceedings under the scheme. For example, the amount and the form of the cash may be disputed. In such circumstances, the court may require the cash as evidence on that point. The same approach is taken in the equivalent scheme for terrorist cash in paragraph 4(3) of schedule 1 to the Anti-terrorism, Crime and Security Act 2001.

If the cash is not ultimately forfeited, compensation to the value of the lost interest—and more, in exceptional circumstances—will still be available under clause 300. The hon. Gentleman may have misunderstood that. I have tabled a Government amendment to clause 300 to make that explicit. There is a safeguard for the cash, even if it is not paid into an interest-bearing account because it is retained as evidence. In light of that, I hope that he will withdraw the amendment.

Nick Hawkins (Conservative, Surrey Heath)

The Minister satisfied me by mentioning banknotes that might have traces of drugs on them. That was the point to which I was referring. If banknotes are to be retained as exhibits in a trial, there is reason to have them available.

The Minister has reassured me about the aim of the provision. It might have been made clearer if subsection (2) had mentioned using cash as exhibits. Perhaps he will consider the matter. I have looked at the Government amendment to clause 300, and as he rightly says, it provides a further safeguard. I ask him

to reconsider whether the wording would be clearer if exhibits were mentioned as an example of—although not as the exclusive reason—why cash might be retained. We may return to the issue, and the Government should consider tabling a further amendment. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 446, in page 171, line 17, at end insert—

'( ) In the case of cash detained under section 294 which was seized under section 293(1A), the customs officer or constable must, on paying it into the account, release the part of the cash to which the suspicion does not relate'.

No. 447, in page 171, line 18, after 'cash' insert

'or, as the case may be, the part to which the suspicion relates'.—[Mr. Bob Ainsworth.]

Clause 295, as amended, ordered to stand part of the Bill.

Clause 296 - Release of detained cash

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 458, in page 171, line 25, after 'seized', insert

'or by a person claiming ownership of the cash and without objection from the person from whom the cash was seized'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to take the following:

Government amendments Nos. 331 and 333

Amendment No. 419, in clause 297, page 172, line 17, leave out 'other than' and insert 'including'.

Amendment No. 461, in clause 298, page 172, line 35, after 'cash', insert

'or any person claiming that any cash detained under section 294 belongs to him'.

Government amendment No. 336.

Government new clause 9—Victims.

Dominic Grieve (Conservative, Beaconsfield)

We are still on the subject of who can make application for the release of cash. Clause 296 provides that while cash is detained under clause 294, it is possible to make application to the court for the release of that money. Under clause 296(3),

''The condition is that the court or sheriff is satisfied, on an application by the person from whom the cash was seized, that the cash to be released—

(a) is not recoverable property, and

(b) is not intended by any person for use in unlawful conduct.''

I was puzzled by that, although I understand the background to it, as the one thing that the court will not want to get involved in at such a stage is the question of who owns the property. Otherwise, a situation might arise in which it would have to decide to whom it should release the money. However, there might be circumstances in which the person in possession of the cash when it was seized would have no objection to another individual making the application, because he was claiming no proprietorial interest in that cash whatever.

The amendment would allow the owner of the money, with the consent and agreement of the person

from whom it was seized, to make the application. I hope that that might commend itself to the Minister, and I shall be grateful for his comments. It seems to me that it is a minor alteration that might simplify the process.

Amendment No. 419 relates to clause 297, and deals with the question of forfeiture. Under clause 297, while cash is detained under clause 294, an application for forfeiture may be made. Subsection (4) provides that

''Before making an order under subsection (2) in respect of any cash, the court or sheriff must give any person (other than the person from whom the cash was seized) who claims that it belongs to him an opportunity to be heard.''

I suspect that the Minister and I are working along identical lines. However, I hope that he will forgive me if I find the wording of the clause slightly odd. I would have thought that the provision should include the person from whom the cash was seized, and the Law Society of Scotland came to exactly the same conclusion. Will he clarify the matter?

I think that the reason why the clause is so worded is that it is the person other than the person from whom the cash was seized who claims that it belongs to him. Otherwise, an assumption will be made that the person from whom the cash was seized is the person to whom it belongs. I wonder whether the amendment would improve that wording.

Amendment No. 461 relates to clause 298 and appeal against forfeiture. Currently, the clause states:

''Any party to proceedings in which an order is made under section 297 for the forfeiture of cash who is aggrieved by the order may appeal''.

The amendment would make it clear that that includes a person who claims that cash detained under clause 294 belongs to him. Again, it would ensure that a person who claims to own the cash has an opportunity to appeal, as well as the person who was found in possession of it.

I am mindful that the Minister wishes to amend clause 296, which may cause a new interrelationship between my amendments and his. However, the points that I made are valid and I hope that he will respond to them positively.

Bob Ainsworth (Labour, Coventry North East)

Amendments Nos. 458 and 461 would make provision for a person who claims ownership of the cash, but who is not the person from whom the cash was seized, to make an application for the release of the cash under clause 296. Such a person would also have the right to appeal to a Crown court against a forfeiture order. The clause currently provides that only the person from whom the cash was seized may apply for its release. That will remain the case if the Government amendments are accepted.

New clause 9 will provide that a person who claims that some or all of the cash seized under clause 293 rightfully belongs to him and that he was deprived of it through unlawful conduct may also apply for the release of the cash. However, there would be no explicit provision, even after amendment, for a person who claims to be the rightful owner of the cash and who is neither a victim nor the person from whom the

cash was seized to make an application. The Bill limits the right of appeal to those who were party to the forfeiture procedures. That would include a victim who made an application under new clause 9 if he were joined as a party to the proceedings and the person from whom the cash was seized. However, it would not include a claimed true owner or a victim who did not make an application under new clause 9.

The cash recovery scheme is designed to allow forfeiture of cash that a court is satisfied is either recoverable property or intended for use by any person for unlawful conduct. The scheme will take the cash out of circulation and disrupt the unlawful conduct with which it was connected. The purpose of the proceedings is not to identify the ownership of the cash but to decide whether the cash is the result of unlawful conduct or intended to be used for unlawful conduct. The scheme has been designed in such a way that the magistrates court or sheriff should not generally be involved—the hon. Gentleman indicated that he was aware of what we were trying to avoid—in arguments about the ownership of the cash. The only exception to that general position is the specific provision that is made for victims.

The amendment is, of course, carefully worded and makes it clear that a claimed true owner has the right to make an application only if the person from whom the cash was seized does not object to that person applying for the release of the cash. The fact that the person from whom the cash was seized does not object does not guarantee that there is no dispute about the ownership. It guarantees simply that there is no dispute about the ownership between the person from whom the cash was seized and the claimant. For example, there may be more than one claimant. The intention was not to require the court to become entangled in such considerations of ownership.

The equivalent cash recovery scheme under the recent Anti-terrorism, Crime and Security Act 2001 has no provision for claimed true owners to make an application for the release of cash. There is no reason why the provisions under the Bill should be different from those under that Act. If the person from whom the cash was seized was transporting it for another person, it would be open to the person from whom it was seized to make an application on the latter's behalf. The true claimed owner would also be able to make representations at a detention hearing by virtue of clause 294.

It would also be open to anyone to approach the seizing officer to make representations outside the court process. If there were a true owner and the cash was not forfeitable, neither the police nor Customs and Excise has any interest in detaining it. If it was not forfeited, any claimed owner could seek compensation under clause 300, which includes the right to compensation for persons covered under the amendments. The court is focused on whether the

cash is recoverable property or intended for use in unlawful conduct.

New clause 9 provides a specific exemption in respect of victims of unlawful conduct who claim rightful ownership of the cash. Amendment No. 461 would allow a person who claimed that the cash forfeited under clause 297 was their property to appeal against the decision of the primary decision-making body. That would be regardless of whether that person had previously been a party to the proceedings. It would be highly unusual to give a right of appeal to a person who was not party to the proceedings that had given rise to a decision that is subject to appeal. If amendment No. 458 were accepted, there would be the potential for such a person to have become a party to the proceedings and to have the right to appeal if the application had been made. However, in those circumstances, amendment No. 461 would not be required.

I ask hon. Members not to press amendment No. 461 to a Division. With respect to amendment No. 458, I shall review the position of the claimed owner's ability to apply for the release of cash and to become party to the proceedings in light of the arguments that the hon. Gentleman has advanced today. If appropriate, I shall table an amendment on Report.

Amendment No. 419 would allow a person from whom cash was seized to make representations to a court during the course of a forfeiture hearing that the cash belongs to him. That would have an odd effect, because the point of subsection (4) is to make provision for the court to return cash to a victim who had been deprived of it by unlawful conduct, when it is determined that the money is liable to forfeiture.

Government amendments Nos. 333 and 334 and new clause 9 will make it clear that a person who claims to be a victim can apply for the release of the cash at any time during the proceedings, rather than having the right to be heard only at a forfeiture hearing.

The amendment would not have a sensible effect, but I understand the concern that may lie behind it, in that all parties in the proceedings should have the right to make representations and to be heard. The person from whom the cash was seized will be a party to the proceedings, and as such will be guaranteed an opportunity to make representations at the forfeiture hearing. That will be achieved by rules of court that will apply section 53(2) of the Magistrates' Courts Act 1980, which provides that the court—after hearing the evidence—and the parties will make the order for which the complaint is made, or dismiss—

It being twenty-five minutes past Eleven o'clock, the Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee B

Clause 296 - Release of detained cash

John McWilliam (Labour, Blaydon)

I wish hon. Members a happy new year, and remind the Committee that with amendment No. 458 we are taking the following: Government amendments Nos. 331 and 333.

Amendment No.419, in page 172, line 17, leave out 'other than' and insert 'including'.

Amendment No. 461, in page 172, line 35, after 'cash', insert

'or any person claiming that any cash detained under section 294 belongs to him'.

Government amendment No. 336.

Government new clause 9—Victims.

Bob Ainsworth (Labour, Coventry North East)

It is good to see you, Mr. McWilliam. I see that you get all the best shifts—Thursday afternoons when there is a one-line Whip. I am sure that you are as pleased about that as we are.

John McWilliam (Labour, Blaydon)

Order. One of the responsibilities of being the senior Chairman on a Standing Committee is to take the rotten shifts.

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

With the rotten Ministers.

John McWilliam (Labour, Blaydon)

Order. Sedentary interventions are to be deplored at all times.

Bob Ainsworth (Labour, Coventry North East)

You can see, Mr. McWilliam, from the way that I have managed to garner support from my own Back Benches that we follow a long and weary route on this Bill.

When we broke for lunch we were talking about amendments grouped with amendment No. 458. I indicated a preparedness to examine the situation with regard to amendment No. 458 about the position of a claimed owner's ability to apply for the release of cash or to become a party to the proceedings in the light of arguments put forward. I suggested that if I found a case for that, having listened to the arguments, I would table an amendment on Report. I said that I was not prepared to accept amendment No. 461.

On amendment No. 419, I said that it was our intention to allow a person from whom cash was

seized to be a party to the proceedings and to be guaranteed an opportunity to make representations at a forfeiture hearing. That would be achieved by rules of court that apply under section 53(2) of the Magistrates' Court Act 1980, which provides that the court—after hearing the evidence—and the party shall make the order for which the complaint is made or dismiss the complaint. The rules of court will provide that an application for forfeiture is to be regulated in the same manner as a complaint. The amendment is, therefore, unnecessary.

The person from whom the cash was seized will additionally have the right to apply for the release of detained cash at any time. If he can establish that it is neither recoverable property nor intended for use by any person in unlawful conduct, the court or sheriff may order the release of the cash. In the light of that assurance, I hope that the hon. Gentleman will withdraw the amendment.

As for the Government amendments, new clause 9 replaces in an extended form the protection afforded by subsections (4) and (5) of clause 297 for victims of unlawful conduct who claim entitlement to cash where forfeiture is being sought by a constable or customs officer. It applies to persons who claim that some or all of the cash seized under clause 293 rightfully belongs to them and they were deprived of it, albeit through unlawful conduct. Cash may be released to the victim even when criminal proceedings with which the cash is connected will be commenced and have not been concluded. It will be for the court to decide whether that would be appropriate.

New clause 9 follows the same policy as the provisions in paragraph 9 of schedule 1 of the Anti-terrorism, Crime and Security Act 2001, in relation to cash that is suspected of being linked to terrorism. It does not enable the release of cash that is retained under any other legislation, for instance under section 22 of the Police and Criminal Evidence Act 1984, or any other part of this Bill, for instance under a restraint order in part 2.

Amendments Nos. 331, 333 and 336 are consequential amendments.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Minister for his comments on my amendments. We were right to focus on amendment No. 458, and I am particularly pleased that it appears that the Minister has provided an assurance that he will consider the issue that that amendment raises. I am also grateful to the Minister for saying that the amendment was carefully worded. I gave it a lot of thought, because I was aware that there was a potential problem and I could see why the rights of potential owners were not explicitly stated in the clause.

The amendment refers to a matter that should be examined. Given the Minister's assurance and his remarks on the other two amendments, on the questions and on the rules of court, I am content to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Bob Ainsworth (Labour, Coventry North East)

I beg to move amendment No. 330, in page 171, line 25, leave out from second 'the' to end of line 27 and insert

'conditions in section 294 for the detention of the cash are no longer met in relation to the cash to be released'.

Clause 296 deals with the release of detained cash. It sets out conditions under which the court may release cash, on application by the person from whom it was seized. The effect of the amendment is to apply the same test for the release hearing as is used in applications for continued detention under clause 294.

The tests that the court applies to detention and release applications should be the same, as the issue is the same: namely, should the cash continue to be detained? The only material difference between detention and release applications is that, under the latter, the burden of proof rests on the person from whom the cash was seized, rather than on the seizing officer.

The amendment makes it slightly easier for an applicant to secure the release of the cash. Instead of satisfying the court that the cash is not recoverable property, or that it was not intended for use in unlawful conduct, he need only satisfy it that the set of conditions in clause 294 for detention is no longer fully met. Those conditions are that there are reasonable grounds for suspecting that the cash is derived from, or intended for use in, unlawful conduct and that its detention is justified pending further investigation, or that it is connected with an offence for which criminal proceedings are being considered or are under way.

The amendment follows the approach taken at paragraph 5 of schedule 1 of the Anti-terrorism, Crime and Security Act 2001, with regard to persons challenging the detention of cash that is suspected of being linked to terrorism.

Nick Hawkins (Conservative, Surrey Heath)

I agree with the Government that the amendment is sensible, and my party is happy to go agree to it. I ought to add that the Government's decision to amend the earlier part of clause 296 in this amendment also helps the argument that I am about to advance for my party's amendment, which is listed next. However, I will not anticipate that debate.

Amendment agreed to.

Amendment made: No. 331, in page 171, line 33, leave out from 'forfeiture' to 'until' and insert

'under section 297, or for its release under section [Victims], is made'.—[Mr. Bob Ainsworth.]

Nick Hawkins (Conservative, Surrey Heath)

I beg to move amendment No. 418, in page 171, line 36, leave out paragraph (b).

As I said, we argue that the amendment goes in the same direction as Government amendment No. 330. We felt that clause 296 as originally drafted went too wide. Working along the same lines as the Government have in amendment No. 330, we suggest that it would be helpful to delete paragraph (b) of subsection (5).

Subsection (5) states that cash is not to be released if in the United Kingdom or elsewhere

''proceedings are started against any person for an offence''

—which means any offence—

''with which the cash is connected, until the proceedings are concluded.''

That seems to us to be an extremely wide exclusion. We understand why subsection (5)(a) should be included. There is clearly a good reason for it. However, we are reinforced in our belief that paragraph (b) takes the matter too wide. Once again the Law Society of Scotland takes the same view as my hon. Friends and I and has suggested the amendment to delete paragraph (b). I shall listen with interest to the Minister's comments, but I feel bolstered not only by the Law Society of Scotland but by the fact that the Government, on further reflection, had already decided that the clause as originally drafted was too draconian, as the Minister said in moving the previous amendment.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman shall be deprived of the opportunity of listening with interest to my comments. We should thank the Law Society of Scotland for its amendment, and we should thank him for having moved it and for his assistance in improving the Bill. We accept the amendment and urge our hon. Friends to support it.

Nick Hawkins (Conservative, Surrey Heath)

I am delighted. We have already had the Grieve amendment; perhaps I can claim that this one should be called the Hawkins amendment.

Mark Field (Conservative, Cities of London and Westminster)

Or possibly the MacHawkins amendment.

Amendment agreed to.

Amendment made: No. 332, in page 171, line 39, leave out subsection (6).—[Mr. Bob Ainsworth.]

Clause 296, as amended, ordered to stand part of the Bill.

Clause 297 - Forfeiture

Bob Ainsworth (Labour, Coventry North East)

I beg to move amendment No. 334, in page 172, line 29, leave out subsection (6).

This is a drafting amendment. On reflection, it is clear that subsection (6) is unnecessary. If the court considers that cash is not recoverable property, it cannot forfeit it under subsection (2) and must, therefore, release it. Amendment No. 334 deletes a redundant provision.

Amendment agreed to.

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

Norman Baker (Liberal Democrat, Lewes)

Subsection (1)(b) relates to forfeiture in Scotland. I understand that the procurator fiscal detains the cash under clause 294, and Scottish Ministers can then order forfeiture of the money. Why are the two handled separately? Why do Scottish Ministers not undertake both detention and forfeiture of cash?

Bob Ainsworth (Labour, Coventry North East)

There needs to be some co-ordination. It is no good the hon. Gentleman turning

up late on a Thursday afternoon and trying to replace the hon. Member for Orkney and Shetland (Mr. Carmichael). I am being unfair.

In the first instance, there is always the question of criminal pursuit, so that is obviously an issue. I do not wish to go over what we discussed this morning. The procurator fiscal is involved because criminal pursuit is possible. We need to amend the Bill, which was accepted when we considered the matter this morning. I intend to do that to provide that when the procurator fiscal has dropped out of proceedings because the chance of criminal pursuit has been considered and does not apply, Scottish Ministers should deal with a subsequent case because it would be a civil matter. We discussed that in greater detail this morning. I am sorry that the hon. Gentleman could not be present, but that is the reason why two sets of people are involved.

Norman Baker (Liberal Democrat, Lewes)

I am grateful to the Minister and wish him a happy new year also. I discussed the matter with my hon. Friend the Member for Orkney and Shetland, who attended this morning's sitting. He was unhappy with the explanation that was given and asked me to pursue the point this afternoon. There is co-ordination among members of the Committee.

I am sure that if I had raised a point that was out of order, you, Mr. McWilliam, would have told me so.

John McWilliam (Labour, Blaydon)

Order. The point was not out of order. I am advised that the matter was discussed at length this morning, so should not be discussed again. I am sorry that the hon. Member for Lewes (Norman Baker) could not be present this morning, but that does not excuse him from raising a matter that was discussed at length.

Question put and agreed to.

Clause 297, as amended, ordered to stand part of the Bill.

Clauses 298 and 299 ordered to stand part of the Bill.

Clause 300 - Compensation

Bob Ainsworth (Labour, Coventry North East)

I beg to move amendment No. 335, in page 173, line 20, leave out subsections (2) and (3) and insert—

'(1A) If, for any period after the initial detention of the cash for 48 hours, the cash was not held in an interest-bearing account while detained, the court or sheriff may order an amount of compensation to be paid to the applicant.

(1B) The amount of compensation to be paid under subsection (1A) is the amount the court or sheriff thinks would have been earned in interest in the period in question if the cash had been held in an interest-bearing account.

(1C) If the court or sheriff is satisfied that, taking account of any interest to be paid under section 295 or any amount to be paid under subsection (1A), the applicant has suffered loss as a result of the detention of the cash and that the circumstances are exceptional, the court or sheriff may order compensation (or additional compensation) to be paid to him.

(1D) The amount of compensation to be paid under subsection (1C) is the amount the court or sheriff thinks reasonable, having regard to the loss suffered and any other relevant circumstances'.

John McWilliam (Labour, Blaydon)

With this it will be convenient to take amendment No. 420, in page 173, line 21, leave out 'exceptional' and insert

'such that the court or sheriff considers them reasonable'.

Bob Ainsworth (Labour, Coventry North East)

Amendment No. 335 will ensure that the court has discretion to pay compensation in lieu of interest when cash is not paid into an interest-bearing account under clause 295. In most cases cash will be paid into such an account, but there are circumstances in which it will not, for example, if the physical cash is required as evidence in criminal proceedings. In such circumstances, the safeguard of the interest-bearing account that provides financial recompense would be lost.

Subsection (1B) of the amendment provides that the amount of compensation to be paid in such circumstances is the amount of interest that the court considers would have been earned if the cash were paid into an interest-bearing account. Subsections (1C) and (1D) make consequential amendments to clause 300 to take subsections (1A) and (1B) into account. Clause 300 already makes provision for compensation to be paid over and above interest payments in exceptional circumstances. Subsections (1C) and (1D) extend that to allow compensation to be paid over and above the money paid in lieu of interest under subsections (1A) and (1B) in exceptional circumstances. Additional compensation will be awarded in only exceptional circumstances because, in most cases, the accrued interest or sum equivalent to such interest should be sufficient compensation.

An example of a case in which additional compensation might be awarded under subsection (1C) would be one in which the claimant satisfied the court that the detention of the cash had prevented him from concluding a business deal and that the deal would have earned him a sum exceeding that earned through interest. If the court is satisfied by the facts, it might be reasonable to consider those to be exceptional circumstances, particularly if the person concerned was not wealthy. That is only an illustration. In every case, the court will decide based on the circumstances. The same approach to compensation was taken in paragraph 10 of schedule 1 to the Anti-terrorism, Crime and Security Act 2001, which received Royal Assent before Christmas.

Amendment No. 420 would lessen the test that the court must apply when an application for compensation is made. That test would then be whether the court or sheriff were satisfied that loss was suffered as a result of the detention and whether the court or sheriff considered the circumstances reasonable. For compensation for a sum greater than the amount of interest that would have accrued, the test is that loss has been suffered and that the circumstances are exceptional.

Government amendment No. 335 would amplify the original compensation provisions in clause 300. Under the revised clause, it is made clear that if the cash is not held in an interest-bearing bank account during its detention, the amount of compensation will be the interest that would have been paid had the money been held in such an account. The general

principle is that the payment of interest should be sufficient compensation.

Dominic Grieve (Conservative, Beaconsfield)

In most cases, the payment of the interest is likely to be sufficient, but in some circumstances, the person concerned may be able to show that the money would have been used in a particular way, and that a loss has therefore occurred. Does that fall into the ''exceptional'' category? It would be helpful if the Minister could tell us what the word ''exceptional'' means, because it is on that issue, and the anxiety that ''exceptional'' may be too high a test, that amendment No. 420 hangs.

Bob Ainsworth (Labour, Coventry North East)

I do not think that I can spell that out. People will have to make the case that exceptional circumstances apply. The hon. Gentleman is right to say that such a case may be made if the money would have been used to realise profits far greater than the interest that would accrue from a bank account. The court should consider those circumstances, and we have made provision for that. We are talking about cash and items that are transferable for cash. We believe that, in the overwhelming majority of cases, interest alone will be the appropriate compensation, but the court should be allowed to hear such a case.

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

Will the Minister clarify what would happen if someone swore blind that they were heading to the bookies to put £25,000 or £500,000 at odds of 20 to one on a horse that subsequently won? Are those exceptional circumstances? If someone alleges that they were about to make a transaction that would have resulted in substantial profit, would that be accepted? We must watch that we do not open the door to conspiracies against the public purse.

Bob Ainsworth (Labour, Coventry North East)

My hon. Friend makes a fair point. That would be a matter for the court to decide. If the court considered the case once the horse had already won, it would be difficult for the person to prove their intentions for the cash.

In some circumstances, the person may be able to persuade the court—and witnesses may be able to assist him in this—that he was on his way to conduct a transaction that would have made a substantial profit. If he could prove that, it would be only right for the court to consider the loss imposed on him. Such a person would have had his cash detained, although he was going about his lawful business. I know that my hon. Friend thinks that people who wander around his constituency or elsewhere with large amounts of cash are strange, but strangeness is not grounds for bringing proceedings. Therefore, if the person can show the court that he had such an opportunity and that the unfair activities of the customs officer or the constable deprived him of profit, surely it is only right that the court should be allowed to consider the matter.

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

I assure the Minister that if a person in my constituency—and in other areas of Glasgow—were able to wander around with substantial amounts of money in their pocket, it would not be difficult for him to produce witnesses who would say that he was about to undertake a deal that was going to make him

a huge amount of profit. Does not my hon. Friend recognise that there are substantial dangers in the Government's action? I accept that there are problems for a person who has had his money seized, but we must be careful not to leave the door open to abusive claims.

Bob Ainsworth (Labour, Coventry North East)

Obviously there are dangers, but there are also deterrents, such as perjury, that give people pause for thought before they lie in court about what was intended. The alternative is to say that under no circumstances should a person be compensated over and above the interest that is available from an interest-bearing bank account. Grave injustices could arise from such a decision. That is why we intend that, when exceptional circumstances have been satisfactorily proven, the court may consider compensation above that level.

There is no need to discuss the matter further and I ask the hon. Member for Beaconsfield to think about the matter. He is, in effect, proposing to lower the threshold at which the court must consider exceptional circumstances. Most cases would involve cash, and the appropriate level of interest is the right amount of compensation. Only in exceptional circumstances should a greater amount be considered.

Nick Hawkins (Conservative, Surrey Heath)

The Minister thought that, because my hon. Friend the Member for Beaconsfield intervened, he would pursue amendment No. 420, but we agreed that I should move the amendment. The Law Society of Scotland suggested the provision and we strongly support it. It must not be forgotten that we are talking about innocent people. That issue underpins clause 300. From the way in which he responded to his hon. Friend the Member for Glasgow, Pollok (Mr. Davidson), I know that the Minister recognises that.

John McWilliam (Labour, Blaydon)

Order. Amendment No. 420 cannot be subject to a separate Division, because if amendment No. 335 is accepted, the text that it amends would be withdrawn from the clause. Does the hon. Gentleman understand that?

Nick Hawkins (Conservative, Surrey Heath)

I understand that, but I believe that it is in order, Mr. McWilliam, to address the issue.

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman is perfectly in order. I am merely pointing out to him the implication of him saying that he would ''move'' the amendment. I am just explaining the situation.

Nick Hawkins (Conservative, Surrey Heath)

I am grateful to you, Mr. McWilliam. The point that my hon. Friend's intervention raised remains relevant. Before we read the Government amendment, the Law Society of Scotland queried—and we agreed with this—the use of ''exceptional'' in the Bill, which is why we tabled amendment No. 420. We want to propose, as the Minister has correctly set out, a wider test. The Minister's revised wording of the clause still contains that exceptional circumstances test.

Paul Stinchcombe (Labour, Wellingborough)

On a point of clarification. I am considering the wording that the hon. Gentleman advocates and the reasons behind it. Would it be preferable to replace ''them'' with ''it''? Otherwise, the amendment would not make

sense and would not catch the meaning that he is seeking to articulate. I will leave that with him. I make that suggestion simply so that I may understand the nature of his argument.

John McWilliam (Labour, Blaydon)

If I can be of assistance, let me explain. Because of the way in which amendment No. 420 is framed, the relevant words will disappear if Government amendment No. 335 is included in the Bill. The words reappear in the subsequent amendment. A way around that would be to attempt to amend the subsequent amendment at a later stage in the Bill.

In passing, I ask hon. Gentlemen who choose to grow a beard in the recess to let me know that they have done so, in order that I may recognise them. I also make that request of hon. Gentlemen who shave one off.

Nick Hawkins (Conservative, Surrey Heath)

In relation to the hon. Gentleman's intervention, we shall look again at the wording of our amendment to take account of the serious point that he makes. As you have reminded us, Mr. McWilliam, we may need to table further amendments to the Government's revision of the Bill at a later stage. Our basic point is that the provision should not apply only in exceptional circumstances. Starting from the premise that clause 300 deals with a situation in which someone's cash is taken, and no forfeiture order follows—because it turns out that they were not doing anything wrong, and they were not one of the Mr. Bigs that the hon. Member for Glasgow, Pollok wants to hit—it is not appropriate to have too high a threshold for the person to claim that he has suffered a loss. It should not only be in exceptional circumstances; the Law Society of Scotland is right to say that it should be what the court or sheriff considers reasonable. I am sure that it will be possible to return to the issue at a later stage or in another place and produce a further amendment to the revised Bill, which would introduce the concept of reasonableness and give the court or sheriff discretion.

Paul Stinchcombe (Labour, Wellingborough)

I now understand what the hon. Gentleman is suggesting. Will he confirm that he wants the Bill to allow compensation to be awarded if the court considers that it is reasonable to do so?

Nick Hawkins (Conservative, Surrey Heath)

Exactly. I am grateful to the hon. Gentleman.

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

I am grateful to have the opportunity to respond to the points made by the hon. Member for Surrey Heath (Mr. Hawkins) when he referred to my anxieties about a Mr. Big. He suggested that the circumstances provided for would not apply when it was a Mr. Big but would apply when it was an entirely innocent party. Unfortunately, he fails to recognise that a Mr. Big might be found innocent, or at least not found guilty, in certain circumstances. That does not necessarily mean that he is innocent. Therefore, rewarding him unduly by allowing him to produce witnesses who will assert that he was going to do this, that and the other, will not necessarily ease my anxieties.

Nick Hawkins (Conservative, Surrey Heath)

I hear what the hon. Gentleman says, but we must preserve the position whereby if somebody is innocent, and it seems that the forfeiture order should not properly have been made, the person should be compensated. That seems to be the purpose of the Government's rewriting of the clause. I see the Minister nodding assent. The hon. Member for Glasgow, Pollok talked about betting coups and people wandering around Glasgow claiming that horses were bound to win. I seem to remember, without intruding too much on a private grief, that there was a betting coup in relation to certain events that happened not a huge length of time ago in the Palace of Westminster. Certain hon. Members, who represent the relevant part of Scotland, were thought to have been betting on a certainty. I seem to remember that the hon. Member for Motherwell and Wishaw (Mr. Roy) had to resign a position as a result of accepting that he had bet on an outcome that he was influencing.

Mr. Davidson rose—

John McWilliam (Labour, Blaydon)

Order. Before we go too far down that road, the Committee should return to the effect of the amendments under consideration. With regard to the comments of the hon. Member for Glasgow, Pollok, I want to point out that when I worked in and around Pollok, turf accountants offices were not to be seen because they were unlawful in those days.

Nick Hawkins (Conservative, Surrey Heath)

In the light of your ruling, Mr. McWilliam, I shall not pursue the matter. The Minister has helpfully rewritten the clause and we shall accept Government amendment No. 335. We ask him, however, to reconsider whether it may be better to import a concept of reasonableness into the provision later in our proceedings.

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

Given the present company, I wish to say that my hon. Friend the Minister is wonderful, as is our Whip, who has treated us harshly, yet fairly.

John McWilliam (Labour, Blaydon)

Order. I hope that the hon. Gentleman is not referring to anyone who is sitting beyond the Bar in the Room. That would be out of order.

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

Is there someone beyond the Bar? I had not noticed.

Mark Field (Conservative, Cities of London and Westminster)

I can see someone over here.

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

That is good. ''Mr. Holiday'' has just responded to me.

Will the Minister clarify the juxtaposition of clause 300(5)(b), under which a fine or penalty or compensation is to be paid by the police authority, with clause 299, under which any money seized or forfeited goes into the Scottish Consolidated Fund? That is a trifle unfair and unbalanced, given that the Scottish Consolidated Fund receives all the gains, yet the penalties fall on the individual police force.

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman should raise such matters under the clause stand part debate, not when the Committee is discussing an amendment.

Dominic Grieve (Conservative, Beaconsfield)

I want to touch on two matters, the first of which is in respect of the comments of the hon.

Member for Wellingborough (Mr. Stinchcombe). He is right that the amendment should read:

''such that the court or sheriff considers it reasonable''.

The word ''them'' under the amendment was probably a result of my drafting it late in the evening. I apologise and I am grateful to the hon. Gentleman for picking up the error.

I have a query about the Government's amendment. The Minister said that it would usually be the case that, when the cash was detained for more than 48 hours and was not in an interest-bearing account, compensation would be paid. It is right that there is a residual court discretion not to pay it. That is clearly implicit in the word ''may'', not in the word ''must''. The hon. Gentleman is looking a little quizzical, so I shall read out the relevant part. The amendment states:

''If, for any period after the initial detention of the cash for 48 hours, the cash was not held in an interest-bearing account while detained, the court or sheriff may order an amount of compensation to be paid to the applicant.''

The only inference that can be drawn from that form of words is that the Minister is envisaging circumstances in which the court should have the discretion not to award interest, even though the cash had not been placed in an interest-bearing account and the person was entitled, all along, to that money. I am interested why such a form of words is used. If the Minister wishes, in the ordinary course of events, for the money always to be paid and assessed under proposed subsection (1B), surely the word ''must'' should be used. If he has a cogent reason why the court should have the discretion not to award interest in those circumstances, I should be grateful to hear it. However, he has not touched on such a reason so far. I doubt if one has crossed his mind. I suggest respectfully to him that the amendment would be better drafted if ''must'' replaced ''may''.

Bob Ainsworth (Labour, Coventry North East)

It is possible that the hon. Gentleman has a point. We are discussing rare occurrences. As he is aware, there is a requirement under the Bill that the money be paid into an interest-bearing bank account. There will only be certain circumstances in which that will not happen. Therefore, interest will have accrued and the money will be repaid with that interest.

The word ''may'' is used if, for whatever reason, the money is not placed in an interest-bearing bank account. I cannot think of such circumstances. I have not discussed situations in which the money is not paid into an interest-bearing bank account, yet it is subsequently returned because it is not forfeit, and interest should not apply. However, such situations might arise, and perhaps we should address that possibility.

Stephen Hesford (Labour, Wirral West)

Would it not be possible for the court to come to the view that the applicant is at fault? The money might not have found its way into the interest-bearing account because the applicant did not respond or take part at the relevant

time. In such circumstances, the applicant would be partly culpable.

Bob Ainsworth (Labour, Coventry North East)

Those kinds of thoughts are going around inside my head. The main reason why money might not be paid into such an account is because it is required for evidential purposes, but, subsequently, the person from whom the money was removed might not be found to be blameworthy. I wish to reflect upon the matter, so that I can ensure that I can satisfy the Committee that the word ''may'' is appropriate, and so that, if that word is inappropriate, I can examine whether it ought to be changed.

There might be circumstances in which the court should not pay the interest. The money might not have been paid into an interest-bearing bank account, and—as my hon. Friend the Member for Wirral, West (Stephen Hesford) has pointed out—that might not be entirely the fault of the constable or the customs officer. The applicant might be at fault—although, at the moment, I cannot think why that might be the case.

Ian Lucas (Labour, Wrexham)

Clause 295(1), which deals with interest, might be of assistance. That subsection includes the statement that interest ''is to be added'' on forfeiture or release. That might address the concerns that have been raised by Opposition Members.

Bob Ainsworth (Labour, Coventry North East)

I am not sure that my hon. Friend is right about that. Clause 295(1) covers situations in which the money has been paid into the account and the interest has accrued. It provides that when the money is returned, the interest should be paid, along with the original capital amount. We are now discussing situations in which, for whatever reason, the money is not paid into the account within the required 48 hours, and I am not dead sure that that is covered by clause 295(1).

There might be situations in which the court might want to assert that it was not the fault of the customs officer or the constable that the money was not paid into the account. The court might wish to assert that the person from whom the money was seized was at fault, because they caused a delay in the payment of the money into the interest-bearing bank account, therefore they should not be compensated for the loss of that interest.

If such situations might arise, the word ''may'' is appropriate. If such situations will not arise, we ought to consider using the word ''must'', and I give an assurance so to do.

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

I am in favour of discretion for the court in such circumstances. People are not always found to be either innocent or guilty. Under Scottish law, a verdict of not proven is possible, in which case the court might be uncertain about what position to take. Therefore, it would be better to leave the court with some discretion.

Bob Ainsworth (Labour, Coventry North East)

As I have indicated, I wish to reflect upon the matter and to comment on it later.

Dominic Grieve (Conservative, Beaconsfield)

I agree with the Minister that it is important to examine whether circumstances might arise in which a court, properly exercising its discretion, would decide to deny payment of interest

because the person from whom the money was seized had committed some kind of misfeasance or misconduct. However, as the argument has developed, I am bound to tell the Minister that I find it difficult to see the exact circumstances in which that could happen. On the face of it, the money would have been taken and the purely administrative act of paying money into the account would not have been properly done. It is difficult to know how the blame could lie on the person concerned.

One could widen the argument and ask whether the person attracted the investigation on to themselves. However, that is dangerous ground when dealing with a situation in which there is an administrative requirement to carry out a simple action.

Bob Ainsworth (Labour, Coventry North East)

I agree with the hon. Gentleman. The requirement of the money as evidence would be the main reason why it would not be paid into the account. I am thinking of circumstances in which a person was aware of a fact that was not disclosed that required the money to be held as evidence rather than paid into the account. If it became apparent subsequently that the matter could have been cleared up and the money paid into the account, the failure to do that would be the person's fault. However, I agree with the hon. Gentleman, and I cannot think of a situation other than that.

Dominic Grieve (Conservative, Beaconsfield)

I am much obliged to the Minister and I am grateful for his undertaking to examine the matter further.

Amendment agreed to.

Amendment made: No. 336, in page 173, line 41, leave out '297(5)' and insert '[Victims]'.—[Mr. Bob Ainsworth.]

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

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

I will not repeat the point that I made because I am sure that the Minister understood it and was preparing a response. I was perhaps unduly and gratuitously constructive earlier, so I will clarify my position that the Minister is too soft and the Whip too hard.

I was impressed by your perspicacity, Mr. McWilliam, at spotting the growth of my one of my colleagues' facial hair. I had considered making a similar point about the fact that the hon. Member for Henley (Mr. Johnson) has had a haircut. This morning, he entered the Room freshly cut and combed. However, since then he has found a hedge to be dragged through backwards and his hair—such as it is—has regained its usual unruly state.

David Wilshire (Conservative, Spelthorne)

There is a bit of jealousy on that side.

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

Yes, indeed.

Over the Christmas and new year period—this is immediately relevant to our debate—I went to see ''The Lord of the Rings''. I do not know if you have seen the film, Mr. McWilliam, but if you see it, I suggest that you look closely at the hobbits and decide

whether they remind you of the hon. Member for Henley. I think that there is a very close similarity.

I ask the Minister about the imbalance between where the gains from seizures go and where the penalties for any mistakes come from. The structure runs the risk of inhibiting the police authority from encouraging officers to take action lest they discover that a number of cases go against them, causing considerable expense. In such circumstances, the police would not have the countervailing balance of sums fed elsewhere into the system on which to call automatically. I hope that money that entered the Scottish Consolidated Fund under the Bill would be redirected for such purposes, but there is no guarantee of that.

Will the Minister clarify that point? I have spoken about Scotland, but the same point applies to all police forces in England and Wales.

Nick Hawkins (Conservative, Surrey Heath)

It is a genuine pleasure to be able to agree with one of the hon. Gentleman's points. He waxed lyrical about the facial appearance of two members of the Committee, but while he was away getting bronzed before Christmas—I think that he was fortunate enough to be visiting warmer climes in Africa on parliamentary business—Conservative Members made an almost identical point to the one that he made about police authorities. He may not have appreciated that. We did not bother to table the same amendment for the matching Scottish provision, because we felt that we had already discussed the subject.

The hon. Gentleman may well agree—I hope that the Minister will respond to the point—that, when compensation is awarded against police authorities, a problem arises that could as easily have an adverse affect on his authority in Scotland as it could on mine in Surrey. When compensation is paid from a police authority budget, whether north or south of the border, the sum is not necessarily made up from central funds. Many of us who are concerned about the inadequate funding of our police authorities are concerned that extra expenditure may be taken from them.

When we debated the matching provision for England and Wales, I made the point that it is unfortunate that in all other provisions in the Bill for cases of misfeasance by those in public office, compensation is taken from central funds. The only case in which it comes from a defined budget is when it comes out of police authority funds. That is a problem, and I hope that the Government will think carefully about it. I seem to remember that the matter was one of many that the Minister said he was prepared to think about again—although I am not sure, as he said that about many subjects. Even if he did not, I urge him to do so.

We in Surrey have had grave problems with unexpected costs that have fallen on police authorities. The biggest bone of contention was the exceptional costs that fell on Surrey police when Senator Pinochet was under house arrest. That caused a great deal of local media interest and led to many meetings between Surrey MPs and Ministers,

including the right hon. Member for Norwich, South (Mr. Clarke), who was then a Home Office Minister. The Home Secretary promised on television that Surrey police would not lose out and that Surrey council tax payers would not face any additional burden. Despite that public promise, which I heard myself, Surrey police have been left out of pocket. Only £700,000 was reimbursed, although the total cost, as the chief constable has repeatedly made clear, was £1.1 million.

That shortfall is germane to our concern about extra, uncompensated costs that fall on police authorities. That is particularly the case as lots of other things will come out of central funds under the Bill. I am glad that the hon. Member for Glasgow, Pollok recognises that inconsistency. I hope that the Minister will take the matter further.

Bob Ainsworth (Labour, Coventry North East)

I have been distracted into trying to fathom how, other than by his unruly hair, the hon. Member for Henley resembles a hobbit. It is certainly not in size.

Boris Johnson (Conservative, Henley)

I hesitate to intervene on the Minister. I am at a loss to understand what either hobbits or my hairstyle have to do with the important amendments under discussion. If someone could explain that to me, I should be most grateful.

John McWilliam (Labour, Blaydon)

I totally agree with the hon. Gentleman: that troubled me, too. While we are on the subject, I have not seen the ''The Lord of the Rings''. My only contact with it was when I worked on an electronic telephone switch called a ''Gandalf'' years ago—although my grandson has plans for me this weekend.

Bob Ainsworth (Labour, Coventry North East)

Nothing at all, is the answer to the hon. Gentleman's admonishment. It was just too tempting an opportunity to get him to speak, as my hon. Friend the Member for Glasgow, Pollok tried and failed to do. I am pleased that my plan worked and that we heard that little outburst.

I freely accept that my memory is not all that I could wish it, but my recollection of our previous conversation on the subject is not the same as that of the hon. Member for Surrey Heath: it is quite the reverse, although I stand to be corrected. The Opposition have backed away from the position that they held in our earlier debate. When my hon. Friend the Member for Glasgow, Pollok puts it like that, it appears that there is an imbalance, but I hope that he and Opposition Members will reflect on the matter. If we want accountability for the way in which laws are enacted, compensation for cases in which they are not properly applied must be connected to some accountability. It is dangerous to remove that accountability entirely.

We should not remove from local police forces the burden of compensation for their actions. I am surprised if that is Opposition policy. Provisions are in place for compensation in exceptional circumstances—that is exceptional expenditure incurred by a police authority. It would be detrimental for central funds to accept the

consequences of compensation claims made against police forces. Equally, I am not sure that hon. Members have thought through the idea of telling Customs and Excise or police authorities, ''What you get, you keep.'' Our courts would not be properly used if we went down that route.

The Bill provides that money is paid into the Consolidated Fund, but that up to half is subsequently transferred into the asset recovery fund. That money is paid to develop further the policies and structures that we have discussed and to compensate the communities that suffer most from the activities of organised crime, drug trafficking and so forth. That is an appropriate way to achieve accountability for any misuse of powers, and to ensure that the powers that we give to the police are not misused through any direct gain from the pursuit of the proceeds of crime by a particular force.

David Wilshire (Conservative, Spelthorne)

I am grateful to be able to join in a discussion on the differences of opinion among Labour Members, but I am prompted to tell the Minister of my sympathy for his view on accountability. It makes sense to keep pressure on an individual police authority to conduct its business in such a way as to avoid compensation. However, if he is to pursue that argument, he should apply the same test to Customs and Excise. It is not simply that the hon. Member for Glasgow, Pollock is wrong and that the responsibility should stay with the police. The Minister should go on to say, ''Perhaps we should review the situation when a Customs and Excise officer is involved.'' From my limited knowledge of Customs and Excise arrangements, I readily accept that officers regard themselves as separate from the Inland Revenue and the general Exchequer—if that is the right phrase. Under most circumstances, if one said that their money is all part of the global tax take, they would answer that they are officers of the Crown and that they are collecting separate money. They may wish to sustain the argument that by penalising the Customs and Excise funds centrally, pressure is exerted on them because they are accountable for the money that they collect and pay out.

Bob Ainsworth (Labour, Coventry North East)

I am not aware that Customs and Excise gets to keep all the moneys that it seizes under its powers. Subsection (4) states:

''If the cash was seized by a customs officer, the compensation is to be paid by the Commissioners of Customs and Excise.''

We are already doing what the hon. Gentleman asks.

The rest of the debate is in Hansard.