Proceeds of Crime Bill

Public Bill Committee, 5 February 2002.

Standing Committee B

Proceeds of Crime Bill

Roger Gale (Conservative, North Thanet)

Good morning, ladies and gentlemen. On my way here I was musing whether we should perhaps have arranged home visits for some members of the Committee—but some things are beyond the power of even the Chairman. There is light at the end of the tunnel, however, and if hon. Members keep digging, they should break out at the appropriate time tonight.

Nick Hawkins (Conservative, Surrey Heath)

On a point of order, Mr. Gale. The only question in our minds is whether the light at the end of the tunnel will be that of an approaching train about to run us over.

Roger Gale (Conservative, North Thanet)

Happily, that is not a question for the Chair, but the hon. Gentleman may wish to consider it on Report.Clause 428 Enforcement in different parts of the United Kingdom

Clause 428 - Enforcement in different parts of

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 640, in page 249, line 37, leave out subsection (4).

We now come to part 11, which is about co-operation, and deals with several important provisions that the Committee needs to consider. Clause 428 provides for enforcement in different parts of the United Kingdom. There is no dispute about the fact that it will be desirable for Orders in Council to make provision for enforcement from one part of the United Kingdom to another. When reading the clause, however, I was struck to note that, under subsection (4),

An Order under this section may—

(a) amend an enactment;

(b) apply an enactment (with or without modifications).

I should be grateful if the Minister would enlighten the Committee about what is envisaged there, because enabling enactments to be amended by an Order in Council is a broad power. I also note that such a procedure will be subject only to negative resolution. I shall be grateful to receive an explanation, so that the Committee can consider whether such a power is required.

Nick Hawkins (Conservative, Surrey Heath)

I wish to add to what my hon. Friend has just said. I was also surprised by the broad terms of subsection (4), and I wonder whether such stark terms have been used in other Bills. Given that the negative procedure will be used, such a provision gives enormously sweeping powers for the enactment of secondary legislation. When the Minister responds to my hon. Friend, will he cite an example of recent legislation that contains such stark words? If the

Government intend to use such provisions as standard practice, it is deeply worrying. They would be wise not to draft such powers, so that we will know their intentions not only under this Bill, but concerning other matters.

David Wilshire (Conservative, Spelthorne)

On a personal note, Mr. Gale, may I say that when you spoke, you sounded as bunged up as I feel this morning. I apologise in advance if I have a sneezing fit.

Most of the issues that I want to raise about the clause are better suited to being discussed under clause stand part. As my hon. Friend the Member for Beaconsfield (Mr. Grieve) said, this part of the Bill is about co-operation. However, subsection (4) does not sound much like co-operation. It sounds like the Government dictating what they want to do, without reference to Parliament other than through an Order in Council. I would be anxious even if the provision said:

An Order under this section may—

(a) amend this enactment.

but it does not say ''this enactment''; it says ''an enactment''.

My hon. Friends have already asked some questions, and there are some more questions to which I would like an answer. We have spent what seems like four years—although I suspect that it is only four months—discussing what provisions are required, and whether there are too many or too few. After all that time, why are the Government giving themselves powers to change an enactment by Order in Council? That is extraordinary.

After four months, I can see a glimmer of what goes on in lawyers' minds and I have learned to look at every word carefully. A provision to ''amend an enactment'' presumably covers any Act that is still on the statute book and affects any part of the United Kingdom. Why, then, do we need Bills at all? Why do we need to discuss Bills on Second Reading and in Committee? There seems little point, if the Government can say, ''In future, you can talk as long as you like in Committee. You can talk for weeks, months or years, but at the end of it all, there will be an order-making process that allows the Government to change anything they like.''

The power to change an enactment under an Order in Council does not even have to relate to the proceeds of crime. It could be used to change any enactment—an enactment about the national lottery, for example. Perhaps the Minister will tell us what enactment he has in mind.

Subsection (4) states:

An Order under this section may . . .

(b) apply an enactment (with or without modifications).

Members of Parliament have spent years in the Chamber and in Committee debating and voting on which measures should come into force when. That will no longer matter, because a Government will be able to bring into effect any Act of Parliament that they like—at any time and for any reason—by using the Order in Council procedure set up under the Proceeds of Crime Bill. It is amazing that the

Government are seeking that power in respect not only of the Bill, but of other legislation throughout the country.

Paul Stinchcombe (Labour, Wellingborough)

I understand the force of the hon. Gentleman's comments, and I will listen carefully to what the Minister has to say about the breadth of the power. However, the power will not be as broad as the hon. Gentleman is arguing, because the words

An Order under this section

mean that the order would still have to be made under clause 428, and be for the purposes of that provision.

David Wilshire (Conservative, Spelthorne)

I find that interesting; it is always useful when a lawyer comes to my rescue and educates me further, and I am grateful for it. However, I still do not understand why an Order in Council under the subsection will give general powers. It does not say under the subsection that an Order in Council may amend an enactment that has something to do with the provisions of the Bill. It just says ''an enactment''. I have learned to have a great deal of respect for lawyers, and it will not be beyond the wit of the Government's lawyers to realise that under that provision, they can do anything. I will be fascinated to hear how the Minister wriggles out of that.

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

I am pleased to be moving—

Dominic Grieve (Conservative, Beaconsfield)

At last.

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

Yes, at last, and right at the end of our deliberations. In this case, I am responding to the amendment. Last night, I was consorting with the hon. Member for Surrey Heath (Mr. Hawkins) over a glass of beer. He was pining for my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson), who has gone off somewhere else, and was in such desperate need of company last night that he even spoke to me. He has now asked a perceptive question—which I did not plant on him last night. It is a pity, however, that I did not meet the hon. Member for Spelthorne (Mr. Wilshire) as well, because as usual, not content with going off at one tangent, he has gone off at quite a few different tangents.

The effect of the amendment would be that an Order in Council made under the clause could not be used to amend or to apply, with or without modifications, any other enactment. The provision that the amendment would delete already exists in previous legislation. I draw the Committee's attention to section 37(4) of the Drug Trafficking Act 1994—I wonder who was in government when that Act was passed; perhaps you recall, Mr. Gale.

The hon. Gentleman's question is perceptive, but the provision is not unique or new, and it has not suddenly been drawn out of the hat. There are good reasons for including it. Its purpose is to support powers related to the territorial enforcement of orders, warrants or postholders' functions. I hope that hon. Members will agree that it is important for such orders to be enforced throughout the United Kingdom, so that there can be no hiding place for drug barons.

Dominic Grieve (Conservative, Beaconsfield)

I agree that most of the clause refers to that, so the measure seems to be mainly procedural. However, subsection (3)(a) refers to

provision conferring and imposing functions on the prosecutor and the Director.

Does it not, therefore, go slightly further than the mere process of registering and enforcing in different parts of the United Kingdom? The clause seems to extend to altering, or adding to or subtracting from, the powers that we have already discussed extensively.

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

We may come to that point under clause stand part, rather than dealing with on the amendment—and that will give me more time to think about it, too.

Subsection (1) deals with orders and warrants issued in confiscation proceedings and investigations under part 8. Subsection (2) deals with the functions of a receiver or, in Scotland, an administrator in confiscation proceedings. It will almost certainly be necessary to amend or apply other enactments to ensure cross-border enforcement of orders and warrants made under part 8.

It might help the Committee if I give an example; I always find it easier to envisage things when a practical example is provided. An Order in Council was made in 1988 under the now repealed Drug Trafficking Offences Act 1986. It was entitled the Drug Trafficking Offences (Enforcement in England and Wales) Order 1988, (S.I., 1988, No. 593). That statutory instrument dealt with the enforcement in England and Wales of drug-related restraint orders made in Scotland. It applied the Land Charges Act 1972 and the Land Registration Act 1925, which both relate to England and Wales. That allowed for the protection in England and Wales, by registration under those measures, of restraint orders made in Scotland by the Court of Session under the Criminal Justice (Scotland) Act 1987. That Act is the relevant Scottish measure for the confiscation of the proceeds of drug trafficking.

David Wilshire (Conservative, Spelthorne)

The Minister suggests that I go off at tangents, but he prefers to do U-turns. In response to my earlier intervention, he said that the provision could not be used for any other enactment; I made a note of that. He did not say why. Will he tell me why he said that it could not be used for any other enactment, and then gave us examples of how things have been used for other enactments? He cannot have it both ways.

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

With respect, I do not think that I was trying to have it both ways. The hon. Gentleman may have misunderstood what I said. It was logical, and his hon. Friends the legal experts did not jump up and down and challenge me.

Talking of legal experts, I shall now deal with the question asked by the hon. Member for Beaconsfield. The clause is drafted in such a way that we can confer functions on prosecutors only for the specific purpose of cross-border enforcement. The example that I gave shows the benefit of such a provision, and the sense in having it. In the example, specific provisions were

taken from general land law and applied solely to the provisions that relate to the registration of a Scottish restraint order by an English court. There was no need for a more general application because the situation to which that applies is very narrow. In a parallel situation, it could have been of benefit to allow for the modification of the provisions imported, or to amend the primary legislation, as necessary, to achieve the purpose of the clause, which is enforcement in different parts of the United Kingdom.

Although the Orders in Council may amend legislation, and subsection (4) may at first sight seem, as the hon. Member for Spelthorne thought, to be a wide power, that is not the case because subsections (1) and (3) specifically restrict the scope of what may be included in the order. I hope that that reassures Conservative Members, particularly the hon. Member for Spelthorne.

Nick Hawkins (Conservative, Surrey Heath)

The Minister's response was, as always, thorough and witty. I enjoyed his company over a glass of beer last night, and he may be right to imply that we should have been discussing the Bill, rather than such happy matters as rugby and beer. However, he is wrong to say that Conservative Members are happy with his response just because he pointed to a couple of examples in other legislation. I am grateful for his examples, but does he understand that our worry about the breadth of the power remains?

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

May I say in passing that if the hon. Gentleman thinks that after Saturday, talking about rugby is pleasant for a Scotsman, he has another think coming? It is all right for him.

I was not relying on the example alone. I also said that although the power may seem wide at first sight, it is not. Subsections (1) and (3) specifically restrict the scope of what may be included. The example was not my only argument; I used it to illustrate the situation. In reality the power is not wide, although I accept that it may look as if it is. In the light of my explanation, I hope that the hon. Member for Beaconsfield will feel it appropriate to withdraw the amendment.

David Wilshire (Conservative, Spelthorne)

I am grateful to the Minister for responding to my questions, but unfortunately, he did not address all of them. I too consorted with him last night but, for reasons that I cannot fathom, he did not buy me a beer—perhaps now I understand why. I had assumed that the hon. Member for Glasgow, Pollok was recovering from Saturday, which might have explained his absence.

Roger Gale (Conservative, North Thanet)

Order. There is a limit to which this Chairman is prepared to allow any member of the Committee to intrude on private grief.

David Wilshire (Conservative, Spelthorne)

I could not follow that even if I were allowed to, but I understand what you mean, Mr. Gale.

My worry remains, because I have not received an adequate explanation. Hansard will record that the Minister said that the power could not be used for any other enactment. It was disturbing that that was simply offered to me as a comment. Apparently I should not worry, and should accept the

Government's word, because they have said that the power cannot be used. I have not received a satisfactory justification for that assertion.

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

What I said was, ''The effect of the amendment would be that an Order in Council made under the clause could not be used to amend or apply, with or without modifications, any other enactment.'' I was merely trying to help the Committee by outlining the effect of the amendment.

David Wilshire (Conservative, Spelthorne)

We are gradually teasing out an answer from the Minister, and putting more flesh on the argument. He has said before, and said again today, that I tend to go off at several tangents. I make no apologies for that. I know how much money has been made in Texas by drilling lots of holes until oil came out of one of them. I have always applied that principle to my political debates. There are issues at stake, although some may not be as relevant as others, and I do not apologise for scrutinising the Bill and asking all sorts of questions in the hope that the hon. Gentleman will answer them.

I still do not understand the Minister's argument. Even if there are safeguards, and even if he can persuade us that the powers apply only to cross-border arrangements, why is it necessary to do things by order rather than under the Bill? The Minister moved away from my narrow point to discuss some more general points. Other issues in the clause need to be debated, but for the moment I shall confine myself to the issue under discussion. Will he have one more go at explaining how, if the provision will not affect other legislation, he can give examples of how such provisions have done just that in the past?

Paul Stinchcombe (Labour, Wellingborough)

I have some concerns about subsection (4), but they are not the same as those of the hon. Member for Spelthorne, because it seems absolutely clear that the power under the subsection is restricted by the rest of the clause, so that the order can be made only for certain purposes. Those purposes are adequately restricted under the clause.

It worries me that we are creating a power to amend primary legislation by delegated legislation. That raises a question of principle, because ordinarily the tail does not wag the dog, and ordinarily we amend and pass primary legislation only through the proper procedures of the House. I understand that the procedures extend far enough to enable us to do that by order, but that is an unusual route, and I wonder why it has been chosen in this case.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I was interested to hear the analogy that the hon. Member for Spelthorne drew between his approach and that of Texan oil men. I had long suspected that the hon. Gentleman thought that if he bored for long enough, he might get somewhere.

I agree more with the hon. Member for Wellingborough (Mr. Stinchcombe). I accept what the Minister says about the narrow application of the orders that can be made under subsection (4), but we are dealing with an important principle. It is wrong for us to seek to amend primary legislation by means of secondary legislation, and I do not understand how the provision would affect the implementation or

enforcement of orders obtained in a different part of the United Kingdom. Nothing that the Minister has said, not even about the narrow application envisaged under subsection (4), has assuaged my doubts.

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

I shall try once again. [Interruption.] I am sure that I will not convince hon. Members if they do not listen. I hope that even the hon. Member for The Spectator agrees that in order to be convinced, it is necessary for hon. Members to listen to the arguments rather than to engage in badinage—to use one of the Committee's favourite words—with those sitting next to them.

The provision is not new. As I have said, it was previously necessary under property law.

David Wilshire (Conservative, Spelthorne)

I am sure that the Minister does not want us accept the argument that the fact that we have done something wrong in the past justifies repeating the mistake.

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

I did not that; I said that we were not doing anything new. What we propose has been done before and already exists in legislation. Nobody, least of all the hon. Member for Spelthorne, has drawn any problems to the attention of this Government or previous Governments. If such a provision had been causing trouble, people would have been chapping—that means knocking—at our doors telling us of the immense trouble that it had caused. That has not happened.

We cannot possibly know at this stage what consequential amendments will be needed to related legislation, but they would need to be within the scope of subsections (1) to (3). That is the safeguard sought by Opposition Members, and I can tell my hon. Friend the Member for Wellingborough that if only a narrow confine is affected, that should be sufficient safeguard. I hope that Opposition Members will not press their amendment.

David Wilshire (Conservative, Spelthorne)

I am grateful to the Minister. However, he may be sorry that he asked me to listen to him, because one of his justifications for getting us to withdraw the amendment is that it will not do any harm to leave things as they are. He then said, ''We do not know what we might want to use it for.'' Surely the Government cannot have it both ways.

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

With respect, the hon. Gentleman's paraphrase of what I allegedly said is incorrect. Indeed, it is a travesty. I did not say that the provision would not do any harm. If he is listening, he should listen more carefully. The degree of detail required would be far too great to include in the Bill. Surely it is better to provide flexibility so that the system works properly.

Even in the absence of my hon. Friend the Member for Glasgow, Pollok, I sometimes wonder whether Opposition Members really want the Bill to be effective. We do, and we believe that cross-border implementation is vital. Concerns have been expressed to me—as they will have been to the hon. Member for Orkney and Shetland (Mr. Carmichael)—about the frustration of law enforcement agencies when someone

slips from Scotland to England, or vice versa, to avoid being brought to book. I hope that hon. Members will accept that.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I absolutely agree. I have first-hand experience of the importance of cross-border co-operation in the enforcement of warrants and orders, and I commend the Government on introducing subsections (1), (2) and (3), which I believe will bring that about. However, is the Minister telling us that legislation will be amended retrospectively by statutory instrument? If the loophole exists, it will be plugged only for future cases, not for any problems that may be highlighted.

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

As I understand it, the purpose of the order is not to be retrospective, but to give flexibility. That is sensible, so that we do not have to return time and again for more primary legislation. A degree of flexibility is important. The purpose of the Bill is to provide strong legislation that is as effective as possible. Legislation will not be amended retrospectively. We need to see how the new system introduced by the Bill beds down. I hope that that will convince some Opposition Members.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

Why, then, should future amendments to legislation not be subject to the sort of scrutiny that we have endured through the past 39 sittings of this Committee?

Steve McCabe (Labour, Birmingham, Hall Green)

Mercy.

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

I understand that the hon. Member for Spelthorne thinks that I do not do any work in this Parliament, and wants to abolish me. Having gone through 39 sittings, doing the occasional bit of work, I am not sure that our successors should have to exercise such scrutiny unless it is necessary. If primary legislation is necessary we should consider it, but a degree of flexibility—with strict constraints in relation to subsections (1) to (3), which would severely limit any power—is also necessary.

Dominic Grieve (Conservative, Beaconsfield)

The debate has been interesting, and I am grateful to the Minister for having provided an illustration of how the powers were used under legislation in the 1980s. The purpose of the clause is commendable: there must be a mechanism by which Orders in Council can be made to ensure that rules apply in all parts of the United Kingdom. I also accept that the example of the use of the power that the Minister offered made the idea of the orders under subsection (4)—which our amendment seeks to delete—seem innocuous and reasonable.

However, I have concerns. As the hon. Member for Wellingborough pointed out, the power is sweeping, even if it is confined to the circumstances covered by the clause, because it allows for the amendment of other legislation by Order in Council. That may indeed have been done before—but I have frequently expressed dismay about the extent to which previous Governments have eroded Parliament's role. That erosion has been increasing exponentially over the past 40 or 50 years. The present Government are responsible for a stratospheric quantum leap in the

rate of erosion, but I am also prepared to blame previous Conservative Governments. What appears to be tidy and simple for the purposes of the Government is not necessarily beneficial for legislative scrutiny. This is a Committee of the House of Commons, and it ought to be concerned about that. That is why I have an objection in principle to subsection (4).

As I have said to the Minister—and I suspect that we will return to the subject on clause stand part—the subsection is about more than merely orders for enforcement, because issues concerning the powers and functions of individuals are linked with that. I accept that they are linked with enforcement, rather than with the more general powers, but there is an issue at stake that goes beyond the mere administrative convenience of mutual enforcement in different jurisdictions within the UK.

Although I do not expect to persuade the Committee to agree to the amendment, I am inclined to press it to a Division, because an issue needs to be flagged up. We will discuss affirmative and negative resolutions shortly, and it appears that this extensive power will be dealt with by negative resolution procedure. That concerns me. To anticipate the arguments that I will put forward later, I can say that if the measure were subject to an affirmative resolution, that would go some way towards dealing with the issue. That is a possible third way.

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

A third way!

David Wilshire (Conservative, Spelthorne)

We shall get to the wreckers in a moment.

Dominic Grieve (Conservative, Beaconsfield)

I will press the amendment to a Division, because I will support it until I am persuaded that the provision can operate correctly, and that we have put in as many safeguards as possible. As a matter of principle, I dislike provisions that give power to the Executive, by Order in Council, to amend any piece of primary legislation that has been passed by the House.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 11.

Roger Gale (Conservative, North Thanet)

Because of the leniency of the Chair, the Committee has already discussed subsections (1), (2), (3) and (4) of clause 428 on the amendment, but if any hon. Member is ingenious enough to find something that we have not already discussed, I am willing to entertain the idea of a stand part debate.

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

Dominic Grieve (Conservative, Beaconsfield)

I should be grateful for a more ample explanation. I deliberately refrained from going into too much detail on the amendment about the one power under the clause that gave me slight cause for concern. It was about conferring and imposing functions on the prosecutor and director. I am sure that the Minister can reassure me, but those functions could be exercised only in the context of enforcement under subsections (1) and (2). It would be helpful if the hon. Gentleman spelled that out in Committee; otherwise, the clause could enable new and separate functions, which we have not debated, to be conferred on the prosecutor and the director. The Minister said that he would return to such matters, but if he can provide guidance to the Committee now I shall be grateful.

David Wilshire (Conservative, Spelthorne)

One or two matters have not been touched on, the first of which arises from the fact that, unlike the lawyers in the Committee, I have not been round the course before. Can the Minister explain why Orders in Council are the preferred route to writing such powers into the Bill? For example, when discussing part 2, we spent a long time talking about confiscation in England and Wales. As a layman, I am mystified about why there was not a provision saying that what was decided about England and Wales under part 2 could be enforced in Scotland and Northern Ireland. That seems by far the simplest route. I am sure that others who have been far more involved in the details of legislation and the working of the courts may have a simple answer to the problem, and I should like to hear it. The same applies to subsection (1)(b), (c), (d) and (e) of clause 428.

My arguments also apply to the powers of the receiver and administrator in subsection (2). Surely when the Bill set up such posts in various parts of the United Kingdom it could have stated that although they are acting in one part of the UK, their powers can be exercised elsewhere. Again, I should like an explanation. My hon. Friend the Member for Beaconsfield referred to subsection (3), and it would be helpful to have in the Hansard record the fact that such functions relate to enforcement. However, I should prefer that to be stated in the Bill, so that there could be no doubt about it and we would not have to refer back to previous sittings.

We have spent an enormous amount of time discussing the functions of the prosecutor.

Ian Lucas (Labour, Wrexham)

With due respect to the hon. Gentleman, may I point out that the clause is headed, ''Enforcement in different parts of the United Kingdom'', so enforcement is referred to in the Bill?

David Wilshire (Conservative, Spelthorne)

That may well appear somewhere, but I can only go on what subsection (3) says, which is:

An Order under this section may include . . . provision conferring and imposing functions on the prosecutor and the Director.

We spent a lot of time discussing what the functions and powers should be, but after getting this far down the track, we find that we must have a procedure by which we may add to them. That is peculiar, and I would be grateful for an explanation.

My other worry is about subsection (3)(c), which says that an order may include a

provision allowing directions to be given in one part of the United Kingdom about the enforcement there of an order made or warrant issued in another part.

That seems to invite a court in one part of the United Kingdom to interpret what a court in another part of the country intended. It is unwise to allow that. If there is doubt about what must be done, the matter should be referred back to the court or jurisdiction in which the original order was made. It is a mystery why a court in one part of the country will have its say if something is done in another part of the country. Will the Minister tell us why he wants that process rather than a reference back in the case of any doubt?

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

May I first address the question asked by the hon. Member for Beaconsfield? He is right to say that we should underline exactly what we mean by conferring the functions on the prosecutor. I am grateful to my hon. Friend the Member for Wrexham (Ian Lucas), who pointed out that the heading clearly spells out that the clause is about ''Enforcement in different parts of the United Kingdom''.

I confirm that that is our intention. The clause is drafted in such a way that we may confer functions on prosecutors only for cross-border enforcement. I hope that that reassures the hon. Members for Beaconsfield and for Spelthorne.

The hon. Member for Spelthorne asked about subsection (3). All it means is that we will be able to make provision to give the director the power to enforce Scottish and Northern Ireland confiscation orders.

The hon. Gentleman also raised an important question about the use of Orders in Council. We propose that arrangements for the enforcement of one jurisdiction's orders or warrants in another should be made by Order in Council. Our experience of producing similar orders under current legislation suggests that for cross-border enforcement, very detailed procedures would be required. Of necessity, those would be highly technical, and they are liable to be of significant length. Therefore, the use of secondary legislation is most appropriate for such an exercise.

The hon. Gentleman also asked about the negative procedure. By virtue of clause 441(4)(c) and (5)(b), orders made under clause 428 will be subject to the negative procedure unless they relate solely to the enforcement of orders and warrants in Scotland. In those cases, they will be subject to annulment in pursuance of a resolution of the Scottish Parliament.

David Wilshire (Conservative, Spelthorne)

I am grateful for the Minister's helpful explanation. He said that the provisions would be of significant length. With respect, I must point out that the Bill, too, is of significant length. It would not make a great of difference to add a bit more to it. If so much detail must be set out, even if it is not in the Bill, it still has to be set out somewhere. Neither the length nor the detail is a justification for not writing the provision into the Bill. Better scrutiny

occurs in a Committee such as this than during consideration even of an affirmative resolution, for which a Committee's debating time is greatly curtailed.

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

We have already had 39 sittings—

David Wilshire (Conservative, Spelthorne)

Only 38.

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

Only 38—and we have considered more than 400 clauses.The Bill is technical in nature, and very complicated. A lot of explanation and consideration is required—as the Committee has discovered. To spell out in primary legislation what will be in the Orders in Council would be far more difficult and complex than the course of action that we have chosen. Our experience has taught us that Orders in Council are the best way of dealing with such complicated arrangements. I hope that I have now dealt with the points that Opposition Members raised.

Question put and agreed to.

Clause 428 ordered to stand part of the Bill.

Clause 429 - External requests and orders

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 641, in page 249, line 43, at end insert—

'from a designated country'.

Roger Gale (Conservative, North Thanet)

With this we may consider amendment. No. 643, in clause 432, page 251, line 37, leave out 'an' and insert 'a designated'.

Dominic Grieve (Conservative, Beaconsfield)

The legislation is intended to form a part of an international regime for seizing the proceeds of crime—and I have no disagreement with that. It must provide for international co-operation, including the ability to enforce in this country orders that might been made abroad—and I do not object to that.

However, as I have stated in previous discussions, I am concerned that the legislation might not be acceptable if people who were being pursued by a foreign Government argued that that Government's standards of investigation and proof, or motives, fell short of what would be regarded as acceptable norms and standards in the United Kingdom.

Every Government have experienced that problem in a variety of circumstances; extradition is a classic example. Governments have been unwilling to extradite people unless they were totally satisfied that they would receive a fair trial in the country to which they were being extradited, and that the crime with which they were charged was comparable with a similar crime in the United Kingdom.

The legislation does not provide a list of designated countries with which, because the Government hold the view that those countries apply acceptable standards with regard to the investigation and seizure of the proceeds of crime, it is deemed acceptable to co-operate. In failing to provide such a list, it differs from its predecessor legislation. My amendments do not provide a designated list, because I have not sought to widen the discussion to address that subject, but it might be right to debate it on Report.

However, before the Bill leaves the Committee, we should discuss how the Government foresee the external request and orders regime working. If there is not to be a list of designated countries, what criteria will the Government apply in making decisions about which countries' requests are acceptable and which are not?

If we do not get that right, the international co-operation aspects of the Bill will bring the entire regime into disrepute. An endless series of Human Rights Act applications would come before our courts, with individuals claiming that orders should not be enforced because of the manner in which they were originally obtained, or the motives of the foreign Government—or enforcement authorities—seeking them.

The amendments are probing, and the references to designated countries are intended to stimulate discussion in the Committee—and a response from the Government—about how to ensure that the problems that I have described do not arise.

Paul Stinchcombe (Labour, Wellingborough)

I do not follow the textual change proposed in amendment No. 643. I cannot find the words that it would delete in the line to which it refers.

Nick Hawkins (Conservative, Surrey Heath)

On a point of order, Mr. Gale. I, too, would have been puzzled by the amendment as it now appears, but I imagine that there has been a printing error. I think that the amendment relates not to line 37 but to line 36, and it should possibly have proposed the deletion of the word ''another'', because I am not sure that it is possible to delete only the first two letters of a word. The amendment was designed to replace the word ''another'' with the words ''a designated'' in line 36. I hope that, if I am correct, that will solve the hon. Gentleman's puzzle.

Roger Gale (Conservative, North Thanet)

That is probably a matter for the Chair. A typographical error has clearly been made, and we shall endeavour to unravel it while debate on the amendments continues.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the hon. Member for Wellingborough for having brought the matter to my attention. I confess that I had missed it. In my draft, the point at which I made the mark on the paper was in line 36, not line 37. In view of the nature of the amendment and the discussion that I am trying to stimulate, I hope that that will not prevent us from debating the principle, which is plainly enshrined in the first of the two amendments, No. 641.

I should be grateful for the Committee's and the Minister's view of how the provision will work. I am sure that the Minister will acknowledge that the merit of the old system was that the designated list could be discussed and scrutinised if lawyers, Members of Parliament or the House of Lords considered that circumstances were changing in a country, so that whereas previously its presence on the designated list was desirable, things were going wrong and it could not longer be relied on to operate a judicial and investigative system worthy of our respect, credence and enforcement.

Nick Hawkins (Conservative, Surrey Heath)

What my hon. Friend the Member for Beaconsfield says about a designated list strikes me

as important in the context of the Home Secretary's certification that the Bill is compatible with the Human Rights Act 1998. As my hon. Friend said, there could be countries that no Committee member would regard as having acceptable codes of law and criminal justice—or, in the terminology often used in human rights law, acceptable norms and standards of justice.

I have no doubt that the Minister will try to reassure the Committee that the Government will not want to be hampered in their dealings with those who might be involved in money laundering, especially in relation to drugs, but equally, that they will not want to use the provisions against people whose human rights have been ignored in countries often now referred to as rogue, or failed, states. Unless a list, or another mechanism for dealing with my hon. Friend's point, is incorporated, we might have severe worries about whether the Home Secretary was right to certify that the Bill complies with the provisions of the Human Rights Act.

I am worried about an undifferentiated position whereby any other country, regardless of its human rights record, is regarded as appropriate. There are many countries that all of us, regardless of the party that we represent, would say did not look after the human rights of their citizens. We could all give our own list. I do not believe that it would be a profitable use of the Committee's time to do so, but we all know what the concern is.

David Wilshire (Conservative, Spelthorne)

Not only is it important to have a discussion about designated countries, we should extend the list to include designated crimes with regard to particular countries. It is possible to express concerns about the standards of justice in a range of countries, and I certainly support what my hon. Friends have said. It is necessary to have a list of acceptable countries, but I fully accept that it would be unhelpful to write it into the Bill, because today's rogue state could be tomorrow's model of democracy and justice. It would therefore be better to have a definition of an unacceptable country.

It might be helpful to designate countries by the sorts of crimes that we would be prepared to consider. For example, none of us would dispute that we would do our level best to ensure that any provision we made to catch criminals involved in drug dealing applied to those doing the same in another country. Despite any reservations about the judicial system of that country, we would try to be as helpful as possible.

There are a couple of crimes that provide us with a way to make a list of designated countries. Corruption is a crime, and there are vast proceeds from corruption. Suppose the judiciary of Nigeria—if such a thing exists in a country like that—asked us about the proceeds of crime. What the Nigerians consider corruption may not be what we consider corruption, and vice versa. I would not put it past some countries to try to use their judicial system for corruption, and to get their hands on the proceeds of some crime or other. That would be a crime in itself. One would have to consider the honesty and integrity of a country's regime when deciding whether to designate it as a country with which we could do business.

Some would argue that confiscating or taking over land or property is a crime against the laws of their country, against the nature of their state. For example, it would be easy for this country, if it was not careful, to get bogged down in disputes between the Cypriots as to who owned what, and whether it was criminal for Turkish or Greek Cypriots to take over someone's land. Cypriots might argue that it was. If we were asked to use the powers in the Bill in a territorial dispute, I would be worried. As I understand this part of the Bill, it would be possible for a regime to try to involve us.

Vera Baird (Labour, Redcar)

Is the hon. Gentleman not forgetting clause 432(6), which defines criminal conduct? For the purposes of initiating the procedures, ''criminal conduct'' is what constitutes an offence in this country—or rather, what would constitute an offence if it had been committed in this country. Is that not enough to put the hon. Gentleman's mind at rest on that point?

David Wilshire (Conservative, Spelthorne)

I do not think so. If that definition is specific to the provisions, it should say so in clause 429. None the less, I am grateful to the hon. Lady; she has given some reassurance, but not enough.

Nick Hawkins (Conservative, Surrey Heath)

Is not the answer to the hon. Member for Redcar (Vera Baird) that, to take my hon. Friend's analogy, any Greek Cypriot could say that the invasion that led to Turkish Cypriots taking over a great deal of land belonging to Greek Cypriots in 1974 would have constituted an offence if it had occurred in this country? I think that my hon. Friend has given a good example, and clause 432(6) does not deal with it.

David Wilshire (Conservative, Spelthorne)

I have not had the opportunity to consider clause 432 in that context, but my hon. Friend has, and I am grateful for his explanation, which I shall put alongside that offered by the hon. Lady. It reinforces my worry, because while much of our debate has been about drug dealing and money laundering, the Bill goes much wider than those particular crimes. We are presenting a blank cheque to foreign Governments who say, ''We are doing this within our jurisdiction, so would you please help us out?'' That is dangerous. It gives Secretaries of State in this country the power to choose whether they will allow that to happen. A list should be drawn up and kept up to date.

Nick Hawkins (Conservative, Surrey Heath)

A thought has just occurred to me. There is a dangerous parallel with another recent provision with which my hon. Friend the Member for Henley (Mr. Johnson) and I were heavily involved when we argued with the Under-Secretary about the European arrest warrant. We said that an overseas court could make a decision that might not be recognised in this country, but that British police and the prosecution authorities would be instructed to arrest a British citizen, who would have no right to protest or have the matter investigated. The decision of the authorities overseas would be enough. The same problem would arise under this provision, and it is even more worrying because it would extend not only within the European Union but throughout the world.

Roger Gale (Conservative, North Thanet)

Order. That was a very long intervention. I appreciate that such issues are complex, but we are beginning to stray from the detail of the amendment.

David Wilshire (Conservative, Spelthorne)

I am grateful for that ruling, Mr. Gale. At the outset of our proceedings I promised myself that I would not discuss the European Union or the euro. This is the 38th sitting, and so far I have resisted the temptation. I was about to say that although my hon. Friend the Member for Surrey Heath has made an interesting point about European arrest warrants, I would not rise to the bait. Even if I wanted to respond, I would not wish to spoil my good record.

The issue raised by my hon. Friend the Member for Surrey Heath is a general one, whether we think of it in terms of the European Union or not. I am sure that there are similar examples of different types of legal procedure in other parts of the world. I do not see it as a point about Europe. It is an issue of co-operation, and if we went down that route, severe difficulties about human rights could be involved.

The clause also raises other issues, which I would like to talk about later. However, for the purposes of our discussion of amendment No. 641, my hon. Friend the Member for Beaconsfield has made an important point. Safeguards are necessary, and designating particular countries would be one way of achieving them. I unhesitatingly support my hon. Friend, and will be fascinated to hear what the Minister has to say.

Roger Gale (Conservative, North Thanet)

Order. Before we move on, I must tell the Committee that I have had the opportunity to study the manuscript amendment that was originally handed in. It confirms that—although we may not need the exact details as it has not yet been moved—amendment No. 643 should read:

in clause 432, page 251, line 36, leave out ''an'' and insert ''a designated''.

That is now a matter of record.

Boris Johnson (Conservative, Henley)

I am inspired by my hon. Friend the Member for Spelthorne, and by the wisdom of the amendment. While reading the clause and the amendment, an idea popped into my head. The provision could relate not only to drugs crime and all the rest of it, but to artefacts and other such objects, which in other countries may be deemed to be the proceeds of crime, although we had thought that they were not. I will not mention the Elgin marbles, Mr. Gale, but it is clear that many things that are legitimately traded in London will be judged by the Governments of other countries, such as Iraq, to be the proceeds of crime. I can imagine that the Iraqi Government—I am sure that they study the text of our Bills in detail—will realise that they can make an external request.

Let us suppose that a posh dealer in Bond street—or Pollok, or anywhere else—has an effigy of the great Babylonian lawgiver, Hammurabi, who, hon. Members will remember, instructed the ancient peoples of Sumeria in public law, rather as the hon. Member for Wellingborough instructs us. Hammurabi

was the Solon of his day, a Mosaic figure like the hon. Gentleman—who, I am sorry to say, has shaved off his Hammurabiesque beard. Let us imagine that such an effigy was the subject of an external request from the Iraqi Government. They might say, ''This is the proceeds of crime. It was looted by Agatha Christie's husband''—or someone else—''back in the old days. Now it is in Bond street, and there should be a prohibition on dealing in that property.''

The Government would probably say that it was open to them to decide whether to accede to the Iraqi request and make an Order in Council forbidding dealing in such property. The Foreign and Commonwealth Office, always eager to propitiate this or that interest throughout the world, and seeking to make new inroads and alliances, might lean on the official responsible for the decision and make a dreadful utilitarian calculation. It might be decided that it was in the interests of the Government to accede to the Iraqi request and forbid the dealer from trading in the effigy of Hammurabi—or, indeed, of the hon. Member for Wellingborough. That would be a sad infringement of the dealer's human rights.

We should ensure that, as my hon. Friend the Member for Beaconsfield suggests, the Bill is amended. There should be designated countries from which we would view all such requests with scepticism. It is highly appropriate for us to ensure that some countries do not have an automatic right to make such requests. I shall be interested to hear the Minister's comments on this sensible and judicious amendment.

Mr. Ainsworth rose—

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

Follow that.

Bob Ainsworth (Labour, Coventry North East)

I cannot imagine how I can emulate either Hammurabi or my hon. Friend the Member for Wellingborough.

On a serious point, it is true that the current legislation requires the Secretary of State to designate countries for the purposes of co-operation concerning external requests and orders. The way in which part 11 is drafted intentionally removes the current requirement for countries with which co-operation is permitted to be designated by Order in Council.

Under the Criminal Justice Act 1988 and the Criminal Justice and Public Order Act 1994, assistance in seizing property and enforcing overseas confiscation orders may be granted only to countries and territories that have been ''designated'' for the purpose. That has meant that every time the United Kingdom has concluded an asset recovery agreement with a new country, or a new country has become a party to an international convention to which we belong and which includes asset recovery obligations, it has been necessary to table an Order in Council. When parliamentary time has proved difficult to find, the United Kingdom has been dilatory in putting itself in a position to honour its obligations.

Additionally, the designation procedure under the 1988 and 1994 Acts is outdated and anomalous. For example, it contrasts with the absence of any designation procedure in the Criminal Justice (International Co-operation) Act 1990, under which

applications can be made to our courts for search warrants and other coercive evidential measures at the request of foreign jurisdictions. Therefore, the Bill dispenses with the need for designation.

We have discussed this before, but just because a previous Government did something, there is no need for us to continue it. I continue to be amused by Conservative Members who find their conscience in opposition—it appeared to be lacking while they were in government.

Nick Hawkins (Conservative, Surrey Heath)

Shame.

Dominic Grieve (Conservative, Beaconsfield)

I am not sure that I follow the Minister's argument. We established that the Bill's predecessor had a designation requirement. Although the Minister's example of non-designation might be questionable, it referred to obtaining evidential material, not to enforcing what might be substantial confiscatory penalties by confiscating the assets of an individual residing in this country.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman is right. The provision does not do that, but it does include the ability to undertake coercive investigation, which he was exercised about when we discussed previous clauses. However, it now seems that that is of no consequence for foreign jurisdiction, although confiscation is.

There are other practical matters that we must consider. I ask the hon. Gentleman to accept and reflect on the international nature of crime. I have mentioned repeatedly that the international dispersal of criminal assets is growing considerably, and the number of orders is not increasing to reflect that trend, because of the cumbersome nature of several of the arrangements. The Government—this is not a party political point, as I hope that any party in government would take this position—have played the role of trying to drive through higher international standards to address criminal assets and money laundering. We have encouraged other nations to increase their attack on criminal assets and actively fostered greater international co-operation in investigating and recovering criminal assets.

The hon. Gentleman asked for reassurance about how we would do that, and some of his colleagues gave examples of potential problems. As my hon. Friend the Member for Redcar spelled out, we are discussing how domestic provisions may apply to areas of co-operation with other countries. We are discussing definitions of criminality that apply in the United Kingdom but not in Iraq or Nigeria. We must be satisfied that such criminality is based on what would be a crime in this country. We would have to have a bilateral agreement or be party to a convention to which the requesting country was also a party. We would also want to consider case by case whether action was appropriate.

I ask the hon. Members for Henley and for Spelthorne, because one provoked the other's intervention, whether designation by country would deal with the issues that they raised. For example, is it not likely, at present—let us not try to prejudge the situation—that Iraq would not be a designated country? Therefore, the issues of Hammurabi images

might not arise. However, it would be likely that Greece would be a designated country, so issues of the Elgin marbles would arise, if they were covered. Designation would not deal in itself with the points that the hon. Gentlemen raised. As I said, there must be case-by-case consideration of the partner country's requests.

David Wilshire (Conservative, Spelthorne)

I ask the Minister to clarify two things. He said that countries would have to be part of a convention. Will he give us examples of such conventions that he has in mind?

When I made my comments about designation, I suggested that I fully supported my hon. Friend the Member for Beaconsfield, but I also mentioned designated crimes. Although we may not want to designate Greece an alien country whose jurisdiction should not be trusted, we might want to exclude, for example, the Elgin marbles and the things that my hon. Friend the Member for Henley mentioned.

Bob Ainsworth (Labour, Coventry North East)

I do not know what designations of crimes the hon. Gentleman has in mind, but the Bill clearly states that such activities would have to be criminal in the context of the UK. Perhaps he wants to draw a lesser line and state that in the case of some UK crimes we should not co-operate with foreign jurisdictions but in the case of others it is okay for us to do so. We should stick with the definition that the activity must be criminal in the UK in order to trigger such co-operation.

The hon. Gentleman asks for an idea of the conventions involved. The Council of Europe convention on laundering, search, seizure and confiscation of the proceeds of crime, and the United Nations convention of 1998 against illicit drugs and psychotropic substances are among the international obligations to which other countries have signed up and on which they are prepared to co-operate with us. We have been at the forefront, as I hope we would continue to be, regardless of which party was in government, of seeking further international co-operation in such matters.

Boris Johnson (Conservative, Henley)

I am grateful to the hon. Member for Redcar for her elucidation of the point that the activity would have to constitute a criminal offence in the UK. The Iraqi Government would assert that theft of an effigy of Hammurabi would be criminal in any context, and that it was tantamount to taking Nelson from his column. I therefore do not believe that the Minister answered the point. The Iraqis would assert that such conduct was criminal in any context.

Bob Ainsworth (Labour, Coventry North East)

I hope that the hon. Gentleman did not misconstrue what I said. I was trying to say that designation of countries would not necessarily save us from that. As I said, Iraq would almost certainly not be designated, but the Greek Government, which the hon. Member for Spelthorne mentioned, almost certainly would. The amendment would not save us from such dilemmas.

The powers that we intend to operate in the UK under the Bill extend our ability to co-operate with others. The only way of guarding against that is case-by-case consideration of whether co-operation is appropriate. The Secretary of State will have to consider that, taking into account issues such as the public interest, national security and—the issue to which we return time and again in considering the Bill—ECHR compliance.

The hon. Member for Lewes (Norman Baker) wants spelled out in each clause the way in which it is ECHR compliant, but we may derive some benefits from having incorporated the ECHR into UK law. We can state that the Bill, like other measures, and ministerial considerations will have to be ECHR compliant.

An arrangement will have to be reached, whether through a multilateral convention or a bilateral agreement, and there will be case-by-case consideration of whether the particular co-operation being asked for fits in with the Bill and our domestic considerations and is appropriate in the circumstances.

Dominic Grieve (Conservative, Beaconsfield)

If I understand correctly the process that the Government will go through, they will not allow enforcement unless there is a bilateral agreement or a signatory to the convention is involved, and the standards are satisfied. Surely when that general satisfaction was arrived at, creating a designated list would not place a great burden on the Government or the enforcement system. It would simply ensure that the public were aware of which countries are so designated and which are not. That would allow the opportunity for public debate. I am ignorant about all the countries with which we have bilateral agreements, as I suspect are most members of the Committee. Designation provides an openness that otherwise we shall not have.

Bob Ainsworth (Labour, Coventry North East)

I accept in principle the hon. Gentleman's point, but I do not want a cumbersome procedure whereby we are dilatory in carrying out our international obligations, and rather than being a driving force for change and improvement, we could be seen as a drag anchor because of the bureaucracy that we have imposed on ourselves.

The hon. Gentleman is right in so far that if we have such arrangements, be they bilateral or involving parties to conventions, there is no reason in principle why there should not be openness with those countries. I accept what he is saying and I shall reflect on whether that issue is currently covered. Treaties are laid before Parliament and parties to conventions are also made public by the Council of Europe and the United Nations. I do not know whether that is sufficient or if there is a way of drawing that process together to improve scrutiny of such arrangements without causing the bureaucratic procedures to which I referred. I am happy to give the matter some further thought.

David Wilshire (Conservative, Spelthorne)

The Minister tried to reassure me that designation was not necessary by reference to conventions, which is why I asked him for examples. Unfortunately for him, one of his examples was a Council of Europe initiative. It is also unfortunate for

him that, until the previous election, I was a member of the delegation to the Assembly of the Council of Europe so I know a little about such matters. He may wish that I had stayed part of that delegation, which would have spared him some tedium. To say that a Council of Europe convention is an adequate argument for not wanting a designated country list does not stand up. I am well aware of some of the countries that sign up to Council of Europe conventions and I would be disturbed if being a signatory to a convention was an adequate justification for saying that the powers under the Bill could be used in favour of a foreign jurisdiction.

Let us take an example. Azerbaijan and Armenia are members of the Council of Europe and are signatories to all sorts of things. They are deeply involved in the disputes to which I have referred. It would be dangerous to say that, just because they had signed a convention, we could trade with them in such a way. Having been to Azerbaijan, I am not at all sure that I would wish to be involved in its court process. I have no confidence in it. I sincerely hope that we would not be using the powers of the British courts and those under the Bill to assist in disputes in that country.

Another example is territorial disputes and the confiscation, seizure and stealing of land. Cyprus may be among the list of countries that may be able to use the Council of Europe convention as an argument for allowing it to use our courts to further what are, in my judgment, political disagreements. The legislation is intended to stamp down on crime. We must guard against its being dragged into political or territorial disputes.

Bob Ainsworth (Labour, Coventry North East)

I acknowledge the hon. Gentleman's concerns about Azerbaijan. However, if someone similar to Abacha—who ripped off the state and laundered the money through British banks—were to rise to power in that country, surely the hon. Gentleman would want us to co-operate to deal with that? That would suggest the need not for designation but for examination case by case. Moreover, Azerbaijan would almost definitely be designated, so designation would not get around the problem that he raises, as I have tried to point out.

David Wilshire (Conservative, Spelthorne)

There is a difference between our trying to get hold of money in another country, and another country trying to get hold of property in this country. The Minister also cited the United Nations convention. It is often thought that every nation state on the planet is a member of the UN, which is not the case, and that every country signs up to such conventions, which is also not the case. At the last count, the Vatican City was not a signatory to the UN charter—although I am unsure whether that is still the case. Do we wish to exclude the Vatican City, while including some of the signatories from parts of the world where dictators reign supreme?

For a long while, Switzerland chose not to join the UN, on grounds of neutrality. I have not checked whether that is still the case, but if it is, a weird situation would arise with regard to money laundering, as we would have dealings with some of the countries that belong to the UN, but not with some of the

countries that do not, even if many of the largest banks in the world are based there.

Dominic Grieve (Conservative, Beaconsfield)

The discussion has been interesting. I take on board the Minister's remarks on the procedure that exists with regard to bilateral agreements and conventions, but I still have anxieties.

I am not greatly concerned about whether something is a crime in a foreign country, because the criminal conduct provision in clause 432 should ensure that that problem does not arise. I am more concerned about the standard of the legal system in foreign countries.

The Committee has debated at great length whether the legislation could be used in an oppressive way in the United Kingdom. I have considerable faith in our legislative system, but we know from some Court of Appeal decisions that things can go wrong. We all hope that, at the end of the day, justice is done, but all systems of justice are human, and therefore fallible. Mistakes can be made. A system that allows assets to be confiscated from individuals who have not necessarily been found to have previously committed a criminal offence, but who have, on a lesser standard, been considered to have been acting in a criminal manner, or to have a criminal lifestyle, could be open to monumental abuse.

Every country will adopt a slightly different regime. There is no reason why other regimes should be identical to ours, but I can easily understand that the system that is applied in some jurisdictions might give cause for serious concern in this country. As we are dealing with external requests for orders, we will have to be willing to enforce them. We may be asked—although I hope not—to enforce orders of which we are critical.

Of course, some of those criticisms may not be justified. I believe that criticisms of foreign legal systems are sometimes misplaced and show parochialism on our part. However, sometimes they are spot on. Those issues must be considered and debated openly if injustice is to be avoided; otherwise, we run the risk of being the executive arm of a foreign Government that has taken against a person. One can well imagine how easily that could happen.

To take a recent example with ramifications close to home, two British citizens of Indian origin—they may have had dual nationality—fell foul of the Indian Government. The consequences included the disappearance of a UK Secretary of State, because of certain telephone calls and other matters. The two alleged that, in India, they were the objects of a victimisation campaign, and they claimed that they had not received bribes in armaments deals. I give that example to show how the subject could become extremely contentious. Were an attempt made in India to confiscate their assets held here, huge issues would doubtless be raised. There would be applications under the Human Rights Act 1998, which I accept provides some safeguards for standards. My example illustrates how awkward the issues can be.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman is suggesting a solution that will not help the problem. He raises difficulties and concerns to do with a case in India. India may be party to many of the conventions to which we have signed up and may therefore have committed its judicial system to complying with minimum standards. I do not think that he is suggesting that we should not designate India, or in no circumstances co-operate with India on the return of criminal assets. I know that he does not believe that, and he is raising a genuine problem that will not be solved by the amendment. Such problems can be solved only by a case-by-case consideration of the issues.

Dominic Grieve (Conservative, Beaconsfield)

The Minister makes a good point, but it worries me that Parliament—and after all, it is we who will enact the Bill—is marginalised from the system. I understand his logic. He envisages that the Government will first consider whether countries are signatories to an international convention. However, anyone can sign up to an international convention—we all know that the Soviet Union signed up to all sorts of human rights conventions and heaven knows what else, but that does not mean that it ever observed one jot of them.

The nature of the bilateral agreement is clearly important, too. When drawing up such an agreement, it is likely that our Government and another would have much official discussion to highlight areas of concern, and help in deciding exactly what is needed to achieve conformity with our standards. The foreign Government are likely to know what will be required if they want to proceed with the process.

There is a problem with bilateral agreements: by their nature, they involve potential advantage to both countries. I do mean to be critical of our, or any, Government, but once an agreement is in operation there is inevitably a slight tendency for the Government to think, ''If we don't honour this application to seize assets, we won't get the benefit of all the work we did to get it going, and it will die; and when we apply for something similar, they will get stroppy with us,'' because bilateralism implies give and take. I venture to suggest that that sometimes puts pressure on the Government to say, ''Well, we're not 100 per cent. happy with this, but we're 95 per cent. happy, so we'll go along with it.''

None of that process involves parliamentary scrutiny. If there was a designated list, Parliament would be able to examine it, and perhaps change it. Although I acknowledge that that may be cumbersome, and that the Minister is right to say that it could involve a delay that reflects badly on this country, that is a problem of this Parliament spending too much time doing things on which it should spend less time.

Bob Ainsworth (Labour, Coventry North East)

Listening to the hon. Member for Spelthorne, for example.

Dominic Grieve (Conservative, Beaconsfield)

I hope that we will have an opportunity to examine one or two of the general principles before the Committee ends this afternoon.

Sometimes, our time is not used to best advantage, although I believe that that is curable. However, none of those opportunities for scrutiny will occur.

It would be possible for the Government to produce a designated list. Everybody would know about it and Parliament could stamp it and say, ''We're happy.'' The Government would not have to go along with every request because they could still exercise their discretion on odd requests by countries on the designated list. If one or two such requests were made, the Government could return to Parliament to remove the country from the list because they were dissatisfied. The Government have decided to do without that safeguard.

I appreciate what the Minister said about history and background. However, the matter is not about going off and gathering evidence at even the cost of getting a warrant and breaking into a person's house. Evidence is evidence: it is tangible material. We are discussing seizing people's assets and repatriating them back to a foreign Government at their behest.

We should have a designated list. I am grateful for the Minister's willingness to consider another option that does not involve parliamentary scrutiny but would ensure that there is a list to inform the public and to allow discussion in Parliament, if people were unhappy with the list. That goes someway towards allaying my concern, but it does not go far enough.

I shall press the amendment to a vote to put down a marker. We should have a designated list, because it would allow discussion and scrutiny to occur here. After all, parliamentarians have a duty to do that, rather than leaving it to the Executive.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 12.

David Wilshire (Conservative, Spelthorne)

Several other matters should be considered. Subsection (1)(b) states that an order may

make provision for the realisation of property for the purpose of giving effect to an external order.

Given the reservations that we discussed—the Minister kindly said that he would consider some of the points made in the previous debate—there are clearly grounds for concern about the validity or fairness of external orders. We cannot return to that and debate it, but we can point out that anxiety has been expressed, and the possibilities of miscarriages of justice in foreign jurisdictions might be a great deal

higher than the chances of that happening in this country.

Subsection (1)(b) provides the power to make an order for the disposal, or ''realisation'', which I assume in layman's language means selling, of property in this country in order to satisfy an external order. Opposition Members expressed anxiety about the power to sell in this country, let alone abroad. If property is disposed of in this country in order to satisfy an external order, the proceeds of the sale—the money realised—will presumably follow the order and go abroad.

When we debated what would happen in this country if on appeal or subsequently the order was overturned and the person charged was ultimately found not to be involved, we had long discussions about how to ensure that justice is done and that the proceeds of the sale are refunded to the person involved.

In the event of an external order and a request to realise £1 million from the sale of something, as I understand the clause, that is realised and handed over to the external jurisdiction to say, ''There you are—we have done what you asked.'' We therefore lose control of the matter.

As we described when we discussed the matter in relation to this country, the order might be overturned on appeal or the person charged might be held to be the wrong person. The property seized in this country may have other, tangential owners. What guarantee have we under the provision that money sent abroad as a result of the sale of the property can ever be got back? My guess is that some jurisdictions would not give it back. In such circumstances, where is the provision for a remedy in the British system for the person who has suffered an injustice because the money has gone abroad? Where is the remedy in our jurisdiction for someone to say, ''You sold something of mine worth £1 million and sent it to some basket case abroad that now won't give it back. I am £1 million short, and I shouldn't have been, but it was the British courts that did it.'' Where will that money come from?

Moreover, some things might be disposed of in satisfaction of such an order that have more than a cash value. They may have heirloom value to the family involved or be irreplaceable. The person who owned the thing worth £1 million may have owned it partly because it was the only one in the world, and the £1 million in itself would not make that good. Does the Minister feel that some safeguards should be provided in this part of the Bill?

Subsection (2) states:

An Order under this section may include,

and goes on to list some provisions. It then states:

except Chapter 3.

I am curious why, given all those provisions, it is held to be necessary specifically to exclude chapter 3. Curiosity leads me to ask why that should be excluded. Why not exclude other things? Why list only some? I am concerned by that exclusion.

I am also concerned by subsection (3). Subsection (3)(e) appears to offer a safeguard for someone who is caught up in this process, in which things happen externally, by allowing them to make representations to a British court to find out what is going on, and to challenge the request for the order.

It is interesting that that safeguard is offered in clause 429, but not in clause 428. Clause 429(3) deals with authentication functions and the like. Clause 428 also deals with such matters. Why does the Minister consider the provision in subsection (3)(e) to be necessary in clause 429, but not in clause 428. What is it about clause 429 that so worries the Minister that he wishes to include in it a specific safeguard of this sort?

I also wish to know why someone who is caught up in this process can test or object to it only via a British court? I guess that that is because if one is in the United Kingdom, one can only go to a British court. However, some of the issues that will arise will be matters for a foreign jurisdiction. Therefore, how is a person in this country, who is offered the opportunity to address only a British court before a decision is taken, to get any sort of justice if he first needs to go to a court in a foreign jurisdiction to get evidence? If he does not do that, he will have to rely on what the British court tells him that it has discovered about the foreign request. That is a second-hand safeguard, rather than a direct one.

Those are important points. They raise issues about the functions of the Secretary of State, which the Committee has debated before, and I expect that the response that was given then will be given again now.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman is concerned that we are, potentially, confiscating money—and an obligation to hand it back in its entirety—to a foreign jurisdiction, because that is where the request initially came from. We will act in exactly the same way in response to an external request, as we would in response to the internal workings of the Bill. Therefore, any money that is confiscated or realised as a result of civil proceedings under part 5 will be paid, through the appropriate route, into the Consolidated Fund.

Any repatriation of money to a foreign country will be agreed between this country and the country concerned, within the framework of either the bilateral agreement or the convention under which it is being operated. There will not be automatic repatriation of every penny that has been seized: issues such as the costs of carrying out the proceedings in this country will have to be considered beforehand, and representations will be made before repatriation takes place, if anyone feels that an inappropriate amount has been seized. With regard to that, the same procedures would be followed as within the main body of the Bill. That person would have an opportunity to make representations that a certain item was not realisable or confiscatable.

David Wilshire (Conservative, Spelthorne)

Those are helpful comments. Will safeguards and issues such as cost be considered at a later date, or will they form part of the Order in

Council? In the latter case, will Parliament have an opportunity to consider those safeguards, or do we have to take the hon. Gentleman's word for it that it would be an administrative decision?

Bob Ainsworth (Labour, Coventry North East)

They are not part of the Bill. The Bill gives us the power to use the procedures in response to an external request. They do not govern the international agreements between this country and others for the repatriation of all or part of the proceeds. The issue is not relevant to our deliberations. The provisions give us the ability to co-operate with external requests in exactly the same way as we would in respect of the internal workings of the Bill.

Chapter 3 of part 5 deals with summary confiscation of cash and that does not involve international co-operation. If a person is carrying a large amount of cash in this country, and that cash is either the proceeds of crime or intended for use in crime, it could be seized under chapter 3 of part 5. We do not presume that there will be an international dimension to those powers.

David Wilshire (Conservative, Spelthorne)

I am puzzled by that answer, and wonder whether the Minister will reflect on it. If a statue or a picture is the proceeds of crime, it may be seized and sold, and the money sent abroad. Is he saying that, if a person has cash that is the proceeds of crime, it cannot be seized by a foreign jurisdiction? That is extraordinary, because cash, not a statue or a picture, is the most portable and obvious way in which to take the proceeds of crime from one country to another.

Bob Ainsworth (Labour, Coventry North East)

I understand what the hon. Gentleman is saying, but let me try to satisfy him. We need powers to respond to an external request in, say, chapter 2 of part 5. If there are considerable assets in this country that may be subject to civil recovery proceedings in, for example, the United States of America, an external request may be made, and we should be prepared to seize those assets. The issue of cash will be effectively dealt with, because cash that is discovered by a Customs and Excise officer or a police officer will be subject to the provisions under chapter 3 of part 5 and may be subject to court proceedings and civil recovery under part 3. That does not preclude the authorities in the United States of America from saying to the British Government at any time that the cash discovered at Heathrow airport belongs to that country and that we ought to consider whether any of it is recoverable.

We do not need powers under the Bill to be able to give that consideration. The powers are needed so that action can be taken against the person carrying the cash that is intended for use in crime, or is the proceeds of crime, under our bilateral arrangements with the USA. Whether some of the money is theirs or ours does not require to be established under the Bill.

David Wilshire (Conservative, Spelthorne)

I am becoming more worried, not less. Let us take the example of cash at Heathrow airport. I have seen Customs officers opening suitcases full of cash, but no crime has been committed because

there are no restrictions on the amount of cash that can be brought into the United Kingdom. The provision is of no help if cash can be seized only when it is being brought into the country. Establishing whether a person should be subject to an external order will take some time—it cannot be done the moment that he has stepped off an aircraft at Heathrow with a suitcase full of $100 bills.

Bob Ainsworth (Labour, Coventry North East)

Despite the hon. Gentleman tempting me, I have no intention of reopening the safeguards and the circumstances in which cash can be seized in this country, which we discussed when dealing with chapter 3 of part 5. We do not envisage cash being seized or the need for a power to seize cash in response to an external request. That does not cut across an external request being made to this country to say that cash that had been seized was the property of that country.

The hon. Gentleman asked why the provisions under subsection (3)(e) are not needed under clause 428. I remind him that that clause is about internal cross-border co-operation within the United Kingdom and that clause 429 deals with people having the right to be heard in a British court in response to requests being made by a foreign country. Those circumstances are different. There is a need for subsection (3)(e) under clause 429 to protect people's right, but not under clause 428.

Question put and agreed to.

Clause 429 ordered to stand part of the Bill.

Clause 430 - External investigations

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 642, in page 250, line 27, leave out paragraph (b).

In this clause, further provision is made for external investigations. Subsection (1) states:

Her Majesty may be Order in Council make—

(a) provisions to enable orders equivalent to those under Part 8 to be made, and warrants equivalent to those under Part 8 to be issued, for the purposes of an external investigations.

I have no trouble with that, but subsection (1)(b) refers to a

provision creating offences in relation to external investigations.

We are being asked to approve a provision that allows the creation of criminal offences in relation to external investigations. It will be made by Order in Council under the negative resolution procedure.

It is noteworthy that the penalties and criminal offences are not limited. It is not a matter of creating offences in relation to external investigations that are limited to or identical to the offences in relation to domestic investigations, although that may be what is intended. However, the way in which the provision is worded allows for the creation of criminal offences of an unlimited character for the purposes of external investigations. For reasons with which the Minister and the Committee may be familiar, that procedure does not commend itself to me as a way of legislating. It is a fairly unfettered power and I shall need a great deal of persuasion to go along with it.

David Tredinnick (Conservative, Bosworth)

As Chairman of the Joint Committee on Statutory Instruments, I always view with some concern what could be brought into law through primary legislation that is presented to Committees in such a way. I am pleased that my hon. Friend is pursuing the matter, because it makes members of the Committee aware of an important principle. I hope that the Minister will bear that in mind.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to my hon. Friend. He has great experience. I served with him on that Committee during the previous Parliament and I know of the frequent problems that arise about unusual use of powers.

If the Minister wants, for the sake of simplification, to have similar offences of obstructing an external investigation to those of obstructing an internal investigation, the sensible action to take, if he wishes to proceed by Order in Council, is to spell that out. However, the Government have taken a short cut that could allow penalties and criminal offences to be created by an Order in Council that could be different to and wider than those that apply to the internal regime. I am sure that the Government do not intend that and that the Minister will reassure the Committee about the intention. However, good intention and good drafting are not necessarily the same thing. I am always prepared to give him brownie points for good intentions, but the drafting of the clause is deficient because the power is far too wide to be spelled out in this way.

David Wilshire (Conservative, Spelthorne)

I listened with care to my hon. Friend because, for the reasons that he mentioned, this provision alarms me the most of all those that we have considered today.

If I, as a layman, understand the clause correctly—I am always willing to receive free advice from lawyers about my misunderstandings—it states what my hon. Friend said: an offence may be created by order. That is very strange, and it is stranger because the creation of an offence would relate to something that happened abroad, rather than in this country. I could be mollified to a point if I were told that the provision is necessary for things that happen in this country, but it is strange for such a draconian arrangement to be made for something that occurs abroad. As far as I know, the Bill does not grant that power for something that happens in the United Kingdom.

I can assume that the power is needed only because if something happened abroad that was not classed as an adequate offence in that jurisdiction, the order could make that an offence in this jurisdiction. We could be taking on the burdens of the rest of the world's sloppy draftsmanship, or allowing the Government to help the regimes and jurisdictions that we expressed grave worry about in previous debates. I do not understand why the power is necessary, and I hope that the Minister can reassure me.

Earlier, I was told that I should not have several of my worries because actions must be a crime in this country. I was told that the clause would satisfy my

worries. Following that, my hon. Friend the Member for Henley has probably gone to check that the Elgin marbles are still where they should be. I was told that a statute of limitations—I think that I understand that—would be relevant to something that was nicked from Athens a long time ago, as the Greeks would see it.

I was told not to worry, because the alleged theft of the Elgin marbles happened so long ago that it would not be a crime in this country. However, we are considering a provision that says that if it suits a purpose, we may create an offence of stealing the Elgin marbles several hundred years ago. If necessary, the Government could make anything a crime if it suits their purpose to help a person abroad. That is very strange.

My hon. Friend the Member for Beaconsfield is a kind, generous and gentle man. He says that he is always sure that the Government's intentions are for the best. I come from a different brand of politics and I am not so certain that the Government's intentions are benign on all occasions. I need great reassurance to explain why their intentions will be adequate. If the Minister tells us that there is no intention to misuse the power, it should be written in the Bill. That must be on the record so that courts that are faced with a decision of a high-handed bureaucracy may see that the Government said that they did not intend to use the power in that way.

I would be grateful to know what sort of issues the Government have in mind, because in a previous debate, the Minister of State, Scotland Office, told us that we were not to worry, as the issues were not substantial. We never discovered what they were. I hope that the Under-Secretary will not simply say, ''Don't worry, it's all right, this is fairly minor and will not cause any great upset.'' That will not do. He must say in what sort of circumstances he wishes to invoke the power.

Nick Hawkins (Conservative, Surrey Heath)

I should like to reinforce what my hon. Friends the Members for Beaconsfield and for Spelthorne have said, but I also add a further point. We will listen carefully to what the Minister says, particularly in response to the points made by my hon. Friend the Member for Spelthorne about the Government's intentions. As we know, the Minister's response can be relied on in court because of Pepper v. Hart. However, I believe that we should have more than the reassuring words that he may utter about the intentions. We should include the safeguards in the Bill.

I share the scepticism of my hon. Friend the Member for Spelthorne about the intentions of Governments. I am not making a party political point: whenever a Government give themselves sweeping powers under legislation, we must be cautious about how those powers could be misused by a present or future Government.

David Tredinnick (Conservative, Bosworth)

Is my hon. Friend satisfied that the phrase ''external investigations'' has been defined sufficiently? It seems a wide term.

Nick Hawkins (Conservative, Surrey Heath)

My hon. Friend is absolutely right. The words ''external investigations'' in subsection (1)(b) are probably deliberately drafted as

an extremely wide catch-all. I think that the term is too wide, and it would be helpful to have a much clearer definition of what is contemplated, as my hon. Friends have rightly said.

Roger Gale (Conservative, North Thanet)

Order. The definition that the hon. Gentleman is looking for is included in clause 432, although it is not certain that we shall get that far this morning, or that the matter will be debated.

Nick Hawkins (Conservative, Surrey Heath)

Thank you, Mr. Gale.

David Tredinnick (Conservative, Bosworth)

You have come to the rescue, as is often the way with Chairmen, Mr. Gale. I was going to suggest to my hon. Friend that a list might be appropriate, and that we should debate that.

Nick Hawkins (Conservative, Surrey Heath)

As my hon. Friend points out, that may be a subject for debate when, or if, we have a stand part debate on clause 432. I shall not trespass on your good will or the Committee's time, Mr. Gale, but this is a serious matter, and I look forward to hearing whether the Minister offers any reassurance. I am far from satisfied with the drafting.

Bob Ainsworth (Labour, Coventry North East)

I am not certain, but it seems that we are accused not of making unnecessary, draconian, wide powers, but of poor draftsmanship. We shall see as the debate goes on.

The clause provides for investigative powers to be made for overseas investigation. We intend to provide a scheme broadly similar to that provided for domestic investigation in part 8. In mirroring that part, we intend to replicate the offences of non-compliance with disclosure orders and of prejudicing an investigation. I hope that I have explained the Government's intention, and have fully clarified the need for creating offences as permitted by subsection (1)(b).

It was considered necessary that disclosure orders and customer information orders should oblige people or institutions to comply with certain requirements, and therefore it is appropriate to create sanctions to compel such compliance.

David Wilshire (Conservative, Spelthorne)

That is helpful, if the Minister is telling us that the provision could be used in cases of non-compliance or hindering an investigation. However, if that is what he has in mind, why does it not say so in the Bill?

Bob Ainsworth (Labour, Coventry North East)

It does say so—as you pointed out, Mr. Gale—if the Bill is read in its entirety, and if we do not follow the hon. Member for Beaconsfield, as the hon. Member for Spelthorne did. Perhaps the former has wider vision than the latter.

We should not look at subsection (1)(b) in isolation. Under clause 430(1), we can make Orders in Council. Subsection (2) covers areas that may be included and subsection (3) deals with the specific exclusion of disclosure orders. For the definition of ''external investigation'', we will need to turn to clause 432(3). We have no intention of taking the wide remit of which the hon. Gentleman is fearful.

Dominic Grieve (Conservative, Beaconsfield)

I always understood that subsection (1)(b) was governed by the other provisions of the clause, although not necessarily by

only those under subsection (1)(a). One way of looking at the matter is to say that that relates only to offences under part 8, but another approach is to say that it refers to all the provisions about the functions and evidence under part 8. I am not sure that they create criminal offences, but one way of dealing with my objection would be to refer to provisions that create equivalent offences in relation to external investigations. The Minister can see that, worded as it is, the provision could be capable of being widely interpreted.

Bob Ainsworth (Labour, Coventry North East)

I think that the hon. Gentleman is arguing about drafting. I wish to reassure him about the substantive issues. We expect the same to be applied to external requests as is available under internal investigation powers. It is expected that the offence of prejudicing an investigation as set out under clause 331 will be applied to external requests. We cannot see why there should be a substantive diversion between domestic and external investigations. The same outcome should be achieved. The offence framework that facilitates that should apply equally to domestic and external investigations.

Paul Stinchcombe (Labour, Wellingborough)

I wonder whether the Minister can clarify statutory interpretation? I may have made a mistake, but is he saying that subsection (1)(b) is qualified by the remaining parts of the clause? An alternative interpretation could be that it is not qualified by subsection (1)(a), because that is discrete, nor by subsection (2),m because that is inclusive and says what may be included within subsections (1)(a) or (b). However, the clause does not state what may be included under subsection (1), but not under subsection (2). How is subsection (1)(b) limited by the remaining parts of the clause?

Bob Ainsworth (Labour, Coventry North East)

My hon. Friend is making the same point that the hon. Member for Beaconsfield made. I want first to satisfy members of the Committee that it is not our intention to create a power for external investigations that is substantially different from that for domestic investigations. Having said that, I wilt under the lawyerly gaze of my hon. Friends and Opposition Members, so I agree to reconsider the drafting to ensure that the hon. Gentleman's fears, reinforced by my hon. Friend, are misplaced. However, if they are founded, I agree to table the necessary amendment.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful for the debate and for the contributions of the hon. Member for Wellingborough. I do not believe that there is a difference in the Committee about what is intended. Reading the provision, even I appreciated that the Government intended that the Order in Council would enable them to create in relation to an external investigation offences that are identical to those created in relation to internal investigations, such as obstruction. I would therefore expect the offences to be identical in scope, wording and penalties. I assume that the intention is not to inflict life imprisonment for a breach of an external investigation, although the fine may be on level 5 on the standard scale in the case of a domestic one.

Bob Ainsworth (Labour, Coventry North East)

I assure the hon. Gentleman that the intention was not that the penalties should be different from those for the domestic provision.

Dominic Grieve (Conservative, Beaconsfield)

We are on the same lines. I accept the issue of principle. Although it might be argued that Parliament is foolish to give powers to the Executive to create criminal offences—a blanket statement—an argument of convenience might suggest that, as we have already discussed penalties for internal offences, we should not object to the same penalties and offences being created for external offences. However, we have had no opportunity to reassure ourselves about whether some elements of external investigations might be different from internal ones, which would affect the criminalisation of certain activities. I hope that the Minister understands my point. We have had no chance to focus on that.

That said, if that is the intention, the wording is defective. First, subsection (1)(b) does not restrict external investigation offences and penalties to the same as apply in an internal investigation. Secondly, as the hon. Member for Wellingborough cogently argued, both he and I have a similar doubt about the extent to which subsection (1)(b) is restricted by subsection (1)(a) or any other provision in the clause.

Paul Stinchcombe (Labour, Wellingborough)

In fact, I have very little doubt. The provision seems completely unqualified by the other provisions.

Dominic Grieve (Conservative, Beaconsfield)

The hon. Gentleman has an area of expertise that I have been trying to acquire during our proceedings on the Bill and that I would not pretend to have had before. I was satisfied in my mind that paragraph (b) was not restricted by paragraph (a), but I had open in my mind whether it might be restricted by the totality of the clause. The fact that he thinks that it is not is a compelling argument that that is a further area of defect that needs to be examined.

I am left in a bit of a quandary. The Minister has, I think, undertaken to reconsider the matter. In a conciliatory spirit, that should be a good argument for withdrawing the amendment. Equally, however, I sometimes have slight anxieties that I may be conceding too much and failing to highlight criticism of what is defective.

Mr. Wilshire rose—

Bob Ainsworth (Labour, Coventry North East)

You'll get your instructions now.

David Wilshire (Conservative, Spelthorne)

I have come this far without giving instructions to anyone, and I have not the slightest intention of doing so now. I was merely going to suggest to my hon. Friend that, although I had been persuaded by him that it was absolutely right to let the Minister get on with it, if the hon. Member for Wellingborough is saying that the provision is even worse that we thought, I wonder what might happen on Report if we do not put down a marker now. If the Minister were to come back and say that it is not sloppy or draconian, and that he is not going to do anything about it, will we have missed the opportunity to make it clear that we do not accept it?

Dominic Grieve (Conservative, Beaconsfield)

I will press the amendment to a Division.

Paul Stinchcombe (Labour, Wellingborough)

I urge the hon. Gentleman to accept the Minister's offer. The matter must be carefully examined, and the Minister has undertaken to do that. I do not want my off-the-cuff legal analysis to be taken as gospel. Given the Minister's good will, his offer should be accepted.

Dominic Grieve (Conservative, Beaconsfield)

The Minister should not withdraw his good will if I decide to press the amendment to a Division. I will press it to a Division, as that will establish the Opposition's point of view, until he returns with a rectification. If he fails to amend the provision, I will table further amendments that will seek, not to repeat this amendment, but to put right what is wrong with the clause.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 10.

David Wilshire (Conservative, Spelthorne)

With regard to subsection (2)(b) in particular, the issue of the functions of the Secretary of State is raised again. I will not discuss it yet again, although I am not satisfied with the responses that have been given.

If I understand subsection (1)(a) correctly, it is intended to make our warrants usable in respect of foreign activities. It allows for the making of,

provisions to enable orders equivalent to those under Part 8 to be made, and warrants equivalent to those under Part 8 to be issued, for the purposes of an external investigation.

It appears to deal with a foreign jurisdiction's defective powers. I would normally expect a foreign jurisdiction to seek to extradite someone, if it wished to arrest him. Subsection (1) appears to address situations in which a foreign jurisdiction does not have sufficient evidence to extradite people, by allowing our warrants to be made exercisable, so that we can arrest them in this country, and keep them on remand for as long as we choose—in respect of something that has happened abroad.

If that is the case—if we are now being asked to approve arrest powers to back up foreign jurisdictions of the dodgy variety—that is another reason why this entire part of the Bill concerns me. The Government usually try to reassure me with the ''Don't worry'' argument, but I wish to know why they imagine that they need those powers. What situation will we be in when it is necessary to have an order pertaining to arrest warrants and keeping people in custody in this country for a foreign purpose? Why do we need a power to help other people?

I am worried about subsection (3). It is extraordinary, and I am disappointed that the hon. Member for Glasgow, Pollok is not here, because he would have put the argument far more eloquently than I can. I hope that he has recovered from the nasty thrashing that his country's rugby team suffered.

Nick Hawkins (Conservative, Surrey Heath)

I should defend the honour of my fellow rugby player. Although the Minister has been discreet, I must reveal that the hon. Member for Glasgow, Pollok is representing Parliament in Japan this week.

David Wilshire (Conservative, Spelthorne)

I am not sure what to make of that. If a person has to go that far away to get over the defeat, the match must have been a bad blow to his morale and pride. If the hon. Gentleman were here, I imagine that he would have similar thoughts to mine. He has always argued that we should not be soft on the drug dealers or the money launderers. They should be the real targets. They do huge damage to his constituency and elsewhere.

The provision states:

But an Order under this section must not provide for a disclosure order to be made for the purposes of an external investigation into whether a money laundering offence has been committed.

If ever there were an offence that ought to be subject to external co-operation, it is money laundering. Our debates have been about whether a person should carry £25,000 in his pocket. I have been told repeatedly that the time to remove the proceeds of crime from such serious criminals is at the money laundering stage. That is the point at which the money goes from being illegal to legitimate. For the past 38 sittings, money laundering has been at the heart of our debate. However, subsection (3) provides a specific exclusion, and the one thing that matters most to the hon. Member for Glasgow, Pollok cannot be the subject of international co-operation. The provision is extraordinary. I look forward with great enthusiasm to hearing the Minister's explanation.

Bob Ainsworth (Labour, Coventry North East)

On the hon. Gentleman's first point, I remind him that we are discussing the Proceeds of Crime Bill, not a crime Bill. We are talking not about extradition or court cases for criminality in other countries but about the investigation of the proceeds

of crime in response to external requests. We are not discussing anything else.

As for the unavailability of a disclosure order, the hon. Gentleman said that money laundering was at the heart of our discussions during the past 38 sittings. It was not. It is a specific part of the Bill. He may recall that we have put an exclusive ring around the use of disclosure orders and the only person who has them as a tool is the director of the agency. He is not involved in the investigation of money laundering. Disclosure orders are not available in the investigation of money laundering domestically, and thus are not appropriate for use in the investigation of money laundering in response to an external request.

Question put and agreed to.

Clause 430 ordered to stand part of the Bill.

Clause 431 ordered to stand part of the Bill.

Clause 432 - Interpretation

Bob Ainsworth (Labour, Coventry North East)

I beg to move amendment No. 301, in page 251, line 16, at end insert—

'(4A) Property is obtained by a person if he obtains an interest in it.

(4B) References to an interest, in relation to property other than land, include references to a right (including a right to possession).'.

The amendment is purely technical. Its purpose is to simplify and clarify what is meant by property under part 11.

Nick Hawkins (Conservative, Surrey Heath)

We need a little more—

It being One o'clock, The Chairman proceeded, pursuant to Sessional Order D [30 October 2001] and the Orders of the Committee [22 and 29 January 2002] to put forthwith the Question already proposed from the Chair.

Amendment agreed to.

The Chairman then proceeded to put forthwith the Question necessary to dispose of the business to be concluded at that time.

Clause 432, as amended, ordered to stand part of the Bill.

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

Standing Committee B

Clause 433 - Tax

John McWilliam (Labour, Blaydon)

May I point out to the Committee that the clause is incredibly narrow?

Dominic Grieve (Conservative, Beaconsfield)

Indeed, Mr. McWilliam. I was simply going to ask whether the clause is necessary. It is extremely oddly worded. It is headed, ''Tax'', and says:

Schedule 7 contains provisions about tax.

I do not understand why clause 433 has to tell us that.

Bob Ainsworth (Labour, Coventry North East)

I understand that that is necessary because there cannot be a schedule without a clause to introduce it. Given the contents of the schedule, the clause could hardly be shorter, and I cannot understand how the hon. Gentleman could object to it.

Dominic Grieve (Conservative, Beaconsfield)

I was not objecting to the clause itself. It is so short that I thought I should say something about it before we move on to other matters.

Question put and agreed to.

Clause 433 ordered to stand part of the Bill.

Schedule 7 - Tax

Bob Ainsworth (Labour, Coventry North East)

I beg to move amendment No. 650, in page 267, line 12, leave out from '203' to end of line 15 on page 269 and insert—

'(d) an interim receiver appointed under section 251;

(e) an interim administrator appointed under section 259.

Part 2

Provisions relating to Part 5

Introductory

2 (1) The vesting of property in the trustee for civil recovery or any other person by a recovery order is referred to as a Part 5 transfer.

(2) The person who holds the property immediately before the vesting is referred to as the transferor; and the person in whom the property is vested is referred to as the transferee.

(3) Any amount paid in respect of the transfer by the trustee for civil recovery, or another, to a person who holds the property immediately before the vesting is referred to (in relation to that person) as a compensating payment.

(4) If the recovery order provides for the creation of any interest in favour of a person who holds the property immediately before the vesting, he is to be treated instead as receiving (in addition to any payment referred to in sub-paragraph (3)) a compensating payment of an amount equal to the value of the interest.

(5) Where the property belongs to joint tenants immediately before the vesting and a compensating payment is made to one or

more (but not both or all) of the joint tenants, this Part has effect separately in relation to each joint tenant.

(6) Expressions used in this paragraph have the same meaning as in Part 5 of this Act.

(7) ''The Taxes Act 1988'' means the Income and Corporation Taxes Act 1988 (c. 1), and ''the Allowances Act 2001'' means the Capital Allowances Act 2001 (c. 2).

(8) This paragraph applies for the purposes of this Part.

Capital Gains Tax

3 (1) If a gain attributable to a Part 5 transfer accrues to the transferor, it is not a chargeable gain.

(2) But if a compensating payment is made to the transferor—

(a) sub-paragraph (1) does not apply, and

(b) the consideration for the transfer is the amount of the compensating payment.

(3) If a gain attributable to the forfeiture under section 297 of property consisting of

(a) notes or coins in any currency other than sterling,

(b) anything mentioned in section 288(6)(b) to (d), if expressed in any currency other than sterling, or

(c) bearer bonds or bearer shares,

accrues to the person who holds the property immediately before the forfeiture, it is not a chargeable gain.

(4) This paragraph has effect as if it were included in Chapter 1 of Part 2 of the Taxation of Chargeable Gains Act 1992 (c.12).

Income Tax and Corporation Tax

Accrued income scheme

4 If a Part 5 transfer is a transfer of securities within the meaning of sections 711 to 728 of the Taxes Act 1988 (transfers with or without accrued interest), sections 713(2) and (3) and 716 of that Act do not apply to the transfer.

Discounted securities

5 In the case of a Part 5 transfer of property consisting of a relevant discounted security (within the meaning of Schedule 13 to the Finance Act 1996 (c.8)), it is not to be treated as a transfer for the purposes of that Schedule.

Rights to receive amounts stated in certificates of deposit etc.

6 In the case of a Part 5 transfer of property consisting of a right to which section 56(2) of the Taxes Act 1988 applies, or a right mentioned in section 56A(1) of that Act (rights stated in certificates of deposit etc.), it is not to be treated as a disposal of the right for the purposes of section 56(2) of that Act.

Non-qualifying offshore funds

7 In the case of a Part 5 transfer of property consisting of an asset mentioned in section 757(1)(a) or (b) of the Taxes Act 1988 (interests in non-qualifying offshore funds etc.), it is not to be treated as a disposal for the purposes of that section.

Futures and options

8 In the case of a Part 5 transfer of property consisting of futures or options (within the meaning of paragraph 4 of Schedule 5AA to the Taxes Act 1988), it is not to be treated as a disposal of the futures or options for the purposes of that Schedule.

Loan relationships

9 (1) Sub-paragraph (2) applies if, apart from this paragraph, a Part 5 transfer would be a related transaction for the purposes of section 84 of the Finance Act 1996 (c.8) (debits and credits brought into account for the purpose of taxing loan relationships under Chapter 2 of Part 4 of that Act).

(2) The Part 5 transfer is to be disregarded for the purposes of that Chapter, except for the purpose of identifying any person in whose case any debit or credit not relating to the transaction is to be brought into account.

Exception from paragraphs 4 to 9

10 Paragraphs 4 to 9 do not apply if a compensating payment is made to the transferor.

Trading stock

11 (1) Sub-paragraph (2) applies, in the case of a Part 5 transfer of property consisting of the trading stock of a trade, for the purpose of computing any profits of the trade for tax purposes.

(2) If, because of the transfer, the trading stock is to be treated for that purpose as if it had been sold in the course of the trade, the amount realised on the sale is to be treated for that purpose as equal to its acquisition cost.

(3) Sub-paragraph (2) has effect in spite of anything in section 100 of the Taxes Act 1988 (valuation of trading stock at discontinuance).

(4) In this paragraph, trading stock and trade have the same meaning as in that section.

Capital Allowances

Plant and machinery

12 (1) If there is a Part 5 transfer of plant or machinery, Part 2 of the Allowances Act 2001 is to have effect as if a transferor who has incurred qualifying expenditure were required to bring the disposal value of the plant or machinery into account in accordance with section 61 of that Act for the chargeable period in which the transfer occurs.

(2) But the Part 5 transfer is not to be treated as a disposal event for the purposes of Part 2 of that Act other than by virtue of sub-paragraph (1).

13 (1) If a compensating payment is made to the transferor, the disposal value to be brought into account is the amount of the payment

(2) Otherwise, the disposal value to be brought into account is the amount which would give rise neither to a balancing allowance nor to a balancing charge.

14 (1) Paragraph 13(2) does not apply if the qualifying expenditure has been allocated to the main pool or a class pool.

(2) Instead, the disposal value to be brought into account is the notional written-down value of the qualifying expenditure incurred by the transferor on the provision of the plant or machinery.

(3) The notional written-down value is—

QE–A

where—

QE is the qualifying expenditure incurred by the transferor on the provision of the plant or machinery,

A is the total of all allowances which could have been made to the transferor in respect of the expenditure if—

(a) that expenditure had been the only expenditure that had ever been taken into account in determining his available qualifying expenditure, and

(b) all allowances had been made in full.

(4) But if—

(a) the Part 5 transfer of the plant or machinery occurs in the same chargeable period as that in which the qualifying expenditure is incurred, and

(b) a first-year allowance is made in respect of an amount of the expenditure,

the disposal value to be brought into account is that which is equal to the balance left after deducting the first year allowance.

15 (1) Paragraph 13 does not apply if—

(a) a qualifying activity is carried on in partnership,

(b) the Part 5 transfer is a transfer of plant or machinery which is partnership property, and

(c) compensating payments are made to one or more, but not both or all, of the partners.

(2) Instead, the disposal value to be brought into account is the sum of—

(a) any compensating payments made to any of the partners, and

(b) in the case of each partner to whom a compensating payment has not been made, his share of the tax-neutral amount.

(3) A partner's share of the tax-neutral amount is to be determined according to the profit-sharing arrangements for the twelve months ending immediately before the date of the Part 5 transfer.

16 (1) Paragraph 13 does not apply if—

(a) a qualifying activity is carried on in partnership,

(b) the Part 5 transfer is a transfer of plant or machinery which is not partnership property but is owned by two or more of the partners (''the owners''),

(c) the plant or machinery is used for the purposes of the qualifying activity, and

(d) compensating payments are made to one or more, but not both or all, of the owners.

(2) Instead, the disposal value to be brought into account is the sum of—

(a) any compensating payments made to any of the owners, and

(b) in the case of each owner to whom a compensating payment has not been made, his share of the tax-neutral amount.

(3) An owner's share of the tax-neutral amount is to be determined in proportion to the value of his interest in the plant or machinery.

17 (1) Paragraphs 12 to 16 have effect as if they were included in section 61 of the Allowances Act 2001.

(2) In paragraphs 15 and 16, the tax-neutral amount is the amount that would be brought into account as the disposal value under paragraph 13(2) or (as the case may be) 14 if the provision in question were not disapplied.

Industrial buildings

18 (1) If there is a Part 5 transfer of a relevant interest in an industrial building, Part 3 of the Allowances Act 2001 is to have effect as if the transfer were a balancing event within section 315(1) of that Act.

(2) But the Part 5 transfer is not to be treated as a balancing event for the purposes of Part 3 of that Act other than by virtue of sub-paragraph (1).

19 (1) If a compensating payment is made to the transferor, the proceeds from the balancing event are the amount of the payment.

(2) Otherwise—

(a) the proceeds from the balancing event are the amount which is equal to the residue of qualifying expenditure immediately before the transfer, and

(b) no balancing adjustment is to be made as a result of the event under section 319 of the Allowances Act 2001.

20 (1) Paragraph 19 does not apply to determine the proceeds from the balancing event if—

(a) the relevant interest in the industrial building is partnership property, and

(b) compensating payments are made to one or more, but not both or all, of the partners.

(2) Instead, the proceeds from the balancing event is the sum of—

(a) any compensating payments made to any of the partners, and

(b) in the case of each partner to whom a compensating payment has not been made, his share of the amount which is equal to the residue of qualifying expenditure immediately before the Part 5 transfer.

(3) A partner's share of that amount is to be determined according to the profit-sharing arrangements for the twelve months ending immediately before the date of the Part 5 transfer.

21 Paragraphs 18 to 20 have effect as if they were included in Part 3 of the Allowances Act 2001.

Flat conversion

22 (1) If there is a Part 5 transfer of a relevant interest in a flat, Part 4A of the Allowances Act 2001 is to have effect as if the transfer were a balancing event within section 393N of that Act.

(2) But the Part 5 transfer is not to be treated as a balancing event for the purposes of Part 4A of that Act other than by virtue of sub-paragraph (1).

23 (1) If a compensating payment is made to the transferor, the proceeds from the balancing event are the amount of the payment.

(2) Otherwise, the proceeds from the balancing event are the amount which is equal to the residue of qualifying expenditure immediately before the transfer.

24 (1) Paragraph 23 does not apply to determine the proceeds from the balancing event if—

(a) the relevant interest in the flat is partnership property, and

(b) compensating payments are made to one or more, but not both or all, of the partners.

(2) Instead, the proceeds from the balancing event are the sum of—

(a) any compensating payments made to any of the partners, and

(b) in the case of each partner to whom a compensating payment has not been made, his share of the amount which is equal to the residue of qualifying expenditure immediately before the transfer.

(3) A partner's share of that amount is to be determined according to the profit-sharing arrangements for the twelve months ending immediately before the date of the transfer.

25 Paragraphs 22 to 24 have effect as if they were included in Part 4A of the Allowances Act 2001.

Research and development

26 If there is a Part 5 transfer of an asset representing qualifying expenditure incurred by a person, the disposal value he is required to bring into account under section 443(1) of the Allowances Act 2001 for any chargeable period is to be determined as follows (and not in accordance with subsection (4) of that section).

27 (1) If a compensating payment is made to the transferor, the disposal value he is required to bring into account is the amount of the payment.

(2) Otherwise, the disposal value he is required to bring into account is nil.

28 (1) Paragraph 27 does not apply to determine the disposal value to be brought into account if—

(a) the asset is partnership property, and

(b) compensating payments are made to one or more, but not both or all, of the partners.

(2) Instead, the disposal value to be brought into account is equal to the sum of any compensating payments.

29 Paragraphs 26 to 28 have effect as if they were included in Part 6 of the Allowances Act 2001.

Employee etc. Share Schemes

Share options

30 Section 135(6) of the Taxes Act 1988 (gains by directors and employees) does not make any person chargeable to tax in respect of any gain realised by the trustee for civil recovery.

Conditional acquisition of shares

31 Section 140A(4) of the Taxes Act 1988 (disposal etc. of shares) does not make the transferor chargeable to income tax in respect of a Part 5 transfer of shares or an interest in shares.

Shares acquired at an undervalue

32 Section 162(5) of the Taxes Act 1988 (employee shareholdings) does not make the transferor chargeable to income tax in respect of a Part 5 transfer of shares.

Shares in dependent subsidiaries

33 Section 79 of the Finance Act 1988 (c.39) (charge on increase in value of shares) does not make the transferor chargeable to income tax in respect of a Part 5 transfer of shares or an interest in shares.'.

The amendment would replace part 2 of schedule 7 with a new part 2 that contains revised provisions. It would not make a fundamental change to the underlying principle of that part of the schedule. The

amended version merely sets out the provisions in more detail and clarifies the operation of the schedule.

Part 2 of the schedule provides for the changes that are necessary to the tax rules to prevent a charge to income tax, capital gains tax or corporation tax arising on the transferor when assets vest in the trustee for civil recovery, or in another person, under part 5 of the Bill.

The provisions are, by nature, technical tax points. Generally, the provisions in part 2 of the schedule would apply when property vests in a trustee under civil recovery proceedings or is forfeited under clause 297. Without these special provisions, such vesting or forfeiture would count for capital gains purposes as disposal at market value, and any resulting gains would be chargeable. Income tax charges may also arise instead of a capital gains charge on the disposal of certain assets.

It would be inappropriate for tax to be charged in that way. It is intended that recovery or forfeiture will recover the full amount of the proceeds of unlawful conduct, and nothing would be left with the transferor to cover any extra charge as tax. However, if property owned in part by a third party is recovered or forfeited, normal tax rules will apply to any compensating payment made to them under clause 272.

David Wilshire (Conservative, Spelthorne)

I have been away for a few moments trying to ensure that things were under control in another Committee Room, but I thought that I should return and see that everything was under control here. If by any chance in the few moments that I was away I missed the answer to the questions that I am about to ask, I apologise. I am sure that you will remind me that had I been here, I would have heard the answers, Mr. McWilliam.

I have admitted many times that I am not a lawyer. I am not an accountant or a tax expert either, so it would be useful if some things were explained. Part 1 of the schedule says:

Sections 75 and 77 . . . shall not apply.

That is so that tax is not collectable, I assume, but I would be obliged if the Minister would say why those two sections should not apply.

I wish to consider paragraph 2(1)(b), in part 2. There have been other occasions when you have been in the Chair and references to the European Union and the euro have cropped up, Mr. McWilliam. I said this morning that I had got as far as the section—

John McWilliam (Labour, Blaydon)

Order. May I assist the hon. Gentleman? He is referring to the schedule as it is, not the amendment.

David Wilshire (Conservative, Spelthorne)

I was trying to save you a stand part debate, Mr. McWilliam, but if you would rather I kept my comments for later, I shall gladly do so.

John McWilliam (Labour, Blaydon)

Actually, the hon. Gentleman has spared us both some difficulty. The amendment is so wide that I have no intention of allowing a stand part debate.

David Wilshire (Conservative, Spelthorne)

In that case, Mr. McWilliam, I anticipated your thinking admirably, and I am impressed by my own judgment,

I was saying—before I was politely interrupted—that for 38 sittings and a few minutes I have avoided every temptation to enter a EU or euro debate. Indeed, you have demonstrated in the past that if I tried to do so, you would not let me, Mr. McWilliam. I preface my question with those remarks because I am not trying to start such a debate, but I notice that paragraph 2(1)(b) states that

property consisting of notes or coins in any currency—

John McWilliam (Labour, Blaydon)

Order. Although the hon. Gentleman is referring to paragraph 2(1)(b)—

Bob Ainsworth (Labour, Coventry North East)

Where is paragraph 2(1)(b)?

John McWilliam (Labour, Blaydon)

In the original schedule. The hon. Gentleman is referring to paragraph 2(1)(b), but the amendment would take that out.

David Wilshire (Conservative, Spelthorne)

Exactly.

John McWilliam (Labour, Blaydon)

- Although it may be fair to refer to the original schedule in a stand part debate, referring to words that are to be removed from it is out of order now.

David Wilshire (Conservative, Spelthorne)

Yes, I see that point, but although the amendment would take the provisions out, we may have to vote on that, and whether I vote to take them out or leave them in depends on my having the relevant information to enable me to make a judgment.

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman has not read the amendment. The provisions reappear.

Bob Ainsworth (Labour, Coventry North East)

But not in paragraph 2(1)(b).

David Wilshire (Conservative, Spelthorne)

I think that at this stage it is best to say that I give up on that one. I doubt whether I want to try your patience so early in the afternoon, Mr. McWilliam.

I wish to make a general comment—perhaps one that the hon. Member for Glasgow, Pollok (Mr. Davidson) would make, too, were he not still away licking his wounds from Scotland's defeat on Saturday afternoon. If I understood the Minister correctly, one of the reasons for the schedule, amended or not, is to leave money available to pay the tax bills of someone who has had the proceeds of his crime taken away. If that is what is being suggested, I find it quite surprising.

Property that is the proceeds of crime, whether it is cash, goods or anything else, should be confiscated. I think that the Committee is united in that belief. I am assuming that tax will not arise on the proceeds of crime, as I am not sure that the Inland Revenue is entitled to benefit from the proceeds of crime by taxing it. I find it extraordinary that the proceeds of crime could be used to pay a tax bill.

Nick Hawkins (Conservative, Surrey Heath)

I have waited for my hon. Friend to finish his second point, but I wanted to ask about his first point. The words that he was going to ask the Minister about in the original paragraph 2(1)(b) have reappeared in amendment No. 650, the Government's complicated replacement of new schedule 7. In the new part 2 of schedule 7 those words reappear in what—if the amendment is

accepted—will be paragraph 3 (3)(b). Now that I have directed my hon. Friend on that matter, perhaps he can, while staying within the Chairman's ruling, return to his original point.

David Wilshire (Conservative, Spelthorne)

I am grateful to my hon. Friend. I was ranting in my attempt to make that point, and I am not sure—even with his assistance—that I have the courage to return to it. I am sure that he can give a far better explanation of it than I could, so perhaps he will make a contribution later. I am grateful to him for trying to get me out of the hole into which I originally dug myself.

It is important that the thinking behind the provision be explained. Are we saying that money that is the proceeds of crime can be retained to pay other tax bills? It would be more sensible to confiscate the proceeds of crime, and if a person has tax bills, he should find the money to pay them in a way that does not involve the proceeds of crime. The Minister is being soft in a way that the hon. Member for Glasgow, Pollok would not approve of if he were present. I am being firm on his behalf, and I hope that the Minister will respond.

Nick Hawkins (Conservative, Surrey Heath)

In response to my hon. Friend's invitation, I am not sure that I will be able to alight—by osmosis, as it were—on his point about the original wording of paragraph 2(1)(b), which the amendment would replace with paragraph 3(3)(b).

John McWilliam (Labour, Blaydon)

I hope that the hon. Gentleman will not do that. He was not present to hear my ruling, but those words reappear in the amendment in a different place.

Nick Hawkins (Conservative, Surrey Heath)

That is what I was referring to. I was present to hear your ruling, Mr. McWilliam, and in my intervention on my hon. Friend the Member for Spelthorne (Mr. Wilshire), I said that the words reappear in amendment No. 650 in paragraph 3(3)(b) of schedule 7 in its new form. I see that you are assenting to that, Mr. McWilliam, so I am on the right track.

Some weeks ago, we discussed whether certain provisions needed to be added in respect of bearer bonds and bearer shares. I believe that earlier in our proceedings the Government tabled some amendments that dealt with currency other than sterling, and bearer bonds and bearer shares. No doubt the Minister will tell us whether schedule 7 had to be fully rewritten to make it fit logically with those earlier amendments. I suspect that that is the reason.

If I understood my hon. Friend the Member for Spelthorne correctly, he was worried about currency other than sterling. We want to hear a little more detail from the Minister—more than appears in proposed paragraph 3(3)(b) and (c). Will he say how currency other than sterling—or bearer bonds or bearer shares—will be used in practice?

David Wilshire (Conservative, Spelthorne)

I am grateful to my hon. Friend. I have been listening carefully, and now that he has explained what he thought I was trying to say, I am quite impressed with what I was saying.

Nick Hawkins (Conservative, Surrey Heath)

I will wait to hear the Minister's answer.

Bob Ainsworth (Labour, Coventry North East)

If the hon. Member for Spelthorne had any credibility with the Committee—I say that in a light-hearted way—he completely shot it through when he asked us to accept the idea that he had been into another Committee to see that things were in order, and had then returned to our proceedings to ensure that things were in order here. That is not the interpretation of his activities over our previous 38 sittings that many of my hon. Friends would have given—but perhaps that is unfair. When the hon. Gentleman told you that he was going to give up at this point, Mr. McWilliam, some Committee members might—very unfairly—have wished that he had given up a while ago, instead of waiting until the final sitting.

David Wilshire (Conservative, Spelthorne)

Things are getting better as the afternoon wears on. I sometimes wonder whether I get things right, but to be told that I have not been doing things as Labour Committee members would like me to is the biggest compliment that has been paid to me in our 38 sittings so far.

Bob Ainsworth (Labour, Coventry North East)

We always try to please. I was amused by the thought of the hon. Gentleman keeping things in order.

Dominic Grieve (Conservative, Beaconsfield)

I hesitate to say this, but when the Minister was explaining the amendments, I thought that I detected that he did not understand what the schedule was about any more than I did, and that that was why he brought his remarks to a speedy conclusion. If that is the case, is it not a little dangerous for him to criticise my hon. Friend for his intervention, because he might have been capable of shedding a little light on the matter?

Mr. Wilshire rose—

John McWilliam (Labour, Blaydon)

Order. The hon. Gentleman cannot intervene on an intervention.

Bob Ainsworth (Labour, Coventry North East)

Yes, we must now try to prevent the hon. Gentleman and his hon. Friend the Member for Beaconsfield from intervening. In the last sitting on this very long Bill, no one is going to get an admission from the Minister that he does not know what he is talking about—I wish to make it very clear to the hon. Member for Beaconsfield that I am not going to do that.

The substantive point that the hon. Member for Spelthorne lighted upon, after he gave up on his tussle with the Chair, was that he was worried that I was playing my usual role—of which I have often been accused by my hon. Friend the Member for Glasgow, Pollok—of being soft, by allowing people to get away with reneging on a tax liability.

The schedule does not do that. The rewritten part of it deals with the tax liability that would accrue on property that had been subject to civil recovery. The hon. Member for Spelthorne missed the start of my contribution to the debate.

David Wilshire (Conservative, Spelthorne)

That was probably the best bit.

Bob Ainsworth (Labour, Coventry North East)

When we had removed the entire proceeds of crime by the civil recovery process, it would be inappropriate for us to say, ''By the way, although we have taken all that away from you, a tax

liability remains, which you must now pay.'' If that is being soft, then I am guilty.

The hon. Gentleman is probably right that if my hon. Friend the Member for Glasgow, Pollok were present, he would be more than happy to inflict a double hit on the people concerned, not only by using civil recovery to take away from them 100 per cent. of the proceeds of their crime, but by charging them capital gains tax, income tax, inheritance tax and any other tax that he could think of. That is not the Government's policy. The schedule ensures that that will not happen, but I do not think that that is being soft.

I turn to how the schedule will work. As I thought I said in my introductory comments, our amendments will not make any substantive changes. We are merely spelling matters out in more detail.

I admit to the hon. Member for Surrey Heath (Mr. Hawkins) that we were under pressure to get the Bill ready. It is a long and complicated Bill, and it was necessary to rewrite it, tidy it up and make absolutely sure that the intentions were clear, and all the tax regulations that could otherwise be brought to bear in such circumstances were removed.

The main thrust of the schedule is designed to achieve tax neutrality in two ways. First, it turns off the tax charges that might otherwise arise on transferral or when assets have been forfeited or vested in a trustee for civil recovery. Secondly, it allows normal tax rules to apply when a payment has been made to an innocent third party for assets recovered by the trustee and effectively returned to their ownership. I hope that that is clear, and that the hon. Gentleman will agree to the schedule.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful for the Minister's explanation. If that is the aim of the schedule as amended, Opposition Members would not want to stand in the way of its being agreed to.

I may have an opportunity to return briefly to this subject at the end of our proceedings this afternoon, but may I say now that as a piece of text, the amendment is almost unintelligible? I mean that kindly to those who drafted it. Even as a lawyer, I was none the wiser or better informed at the end of reading it than at the beginning. That highlights the merit of explanatory notes, which we do not receive when an amendment of such a size and volume comes before us. I may be able to comment further at the end of our proceedings, but we are having to take a lot on trust from the Minister. In the absence of a tax expert among Committee members, it is difficult to disentangle whether the amendment will achieve what the Minister says is its objective.

John McWilliam (Labour, Blaydon)

Before I put the Question, it may be worth pointing out that I used to chair the Edinburgh tax commission.

Amendment agreed to.

Schedule 7, as amended, agreed to.

Clause 434 - Customs and Excise prosecutions

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I beg to move amendment No. 618, in page 252, line 14, after 'officer', insert

', unless the reason for his removal or discharge is connected with these proceedings.'.

May I clear up a point that arose this morning, Mr. McWilliam, when your colleague, Mr. Gale, was in the Chair? Members may recall that the Minister of State suggested earlier that we wanted him to be abolished. For the avoidance of doubt, I must stress that it is the office that he holds that I want abolished. If it were up to me, the hon. Gentleman himself would be preserved for the nation. [Interruption.]

Nick Hawkins (Conservative, Surrey Heath)

I wonder whether Hansard has recorded the sotto voce observation by my hon. Friend the Member for Spelthorne that if the Minister of State were to be preserved he should be stuffed and mounted.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

Neither of those are activities in which I would want to engage.

The amendment, which was drafted by my hon. Friend the Member for Lewes (Norman Baker), raises an interesting issue, which at the time of drafting was known only to him and to the Lord God Almighty—[Interruption.] The hon. Member for Spelthorne is obviously confusing one of those parties with my hon. Friend the Member for Southwark, North and Bermondsey (Simon Hughes). Now that I find myself before the Committee having to move the amendment, it is unfortunate that one of those two is not available, and the other is not returning my calls—hon. Members may make of that what they wish, according to their faith preferences.

The point that my hon. Friend the Member for Lewes was trying to make when he drafted the amendment was that it would be undesirable for the officer who subsequently brought proceedings to be connected with the earlier removal or discharge of his colleague. I would be the first to admit that that is not what the amendment says.

Paul Stinchcombe (Labour, Wellingborough)

Will the hon. Gentleman give way?

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

If the hon. Member for Wellingborough can cast any light on this, I should be happy to give way.

Paul Stinchcombe (Labour, Wellingborough)

It strikes me that the amendment has the curious effect that if someone is being investigated by an officer who commences proceedings and he endeavours to bribe that officer so that he is discharged, no proceedings can be continued by any other customs officer. That seems rather perverse.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I am glad that the hon. Gentleman has identified that my hon. Friend's amendment would have an effect; that was rather more than I could do when I first read it. Before I open up any more rifts between my Front-Bench colleagues and myself, I should be interested to hear what those briefing the Minister think about the amendment. If necessary I

will make a further contribution, before I inevitably withdraw the amendment.

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

I fear that we have made the dreadful mistake of treating the amendment seriously. We had to wait until our 39th sitting before a Member spoke on behalf of a colleague to move an amendment that he did not understand, the effect of which was not only opposite to the one intended but—as my hon. Friend the Member for Wellingborough pointed out—malign. To quote my late good friend Gregor Mackenzie, whose phrase has now been adopted by the hon. Member for Beaconsfield (Mr. Grieve), the introduction of the amendment by the hon. Member for Orkney and Shetland (Mr. Carmichael) was ''less than convincing''.

If the hon. Gentleman wants to abolish the position of Minister of State, he should think seriously about that. He has only been here for a few months. Perhaps when he begins better to understand the devolution settlement and what it means, he may see that there is an important job to be done. If I went into that in more detail I should be entirely out of order, Mr. McWilliam—so perhaps I will take him aside on another occasion, with my hon. Friend the Whip. Between us we will find one way or another of convincing him.

We oppose the amendment because it would be contrary to the interests of justice and of the public automatically to put an end to proceedings in a number of circumstances where an officer had been removed from a case for any reason, however legitimate, that was connected to the proceedings, but where the evidence was otherwise sufficient to secure a conviction for serious offences. Sometimes it may become apparent that witnesses or defendants had some remote connection with the case officer that was not apparent when the proceedings were brought. They could be a distant relative, a former school or university colleague—or, may I suggest to the hon. Member for Surrey Heath, a member of the same rugby team. Although there would be no suggestion of the officer colluding or being involved with witnesses, defendants or offences, it might nevertheless be expedient to remove him from the case to avoid any such allegations being made.

That is the sensible response to an introduction of the amendment that was not sensible. My hon. Friend the Member for Wellingborough has given a more effective response than I have, and that is an even more effective reason why the hon. Member for Orkney and Shetland should withdraw the amendment.

Bob Ainsworth (Labour, Coventry North East)

With a good grace.

Dominic Grieve (Conservative, Beaconsfield)

Although there has been a great deal of community of view between us and the Liberal Democrats during our deliberations in Committee, I am unable to support the hon. Member for Orkney and Shetland on this occasion.

David Wilshire (Conservative, Spelthorne)

I have an overwhelming need to be consistent, and during our proceedings I have felt it

necessary to chide the Labour party from time to time. Until now, I have not felt the need to chide the Liberal Democrats, but consistency demands that we consider what is before us. The drift of what the hon. Member for Orkney and Shetland said was that the amendment did not mean anything. Then—horror of horrors—we discovered that it does mean something. That was a nasty shock, but I suppose that we can draw our own conclusions about where it came from. We were told that it was malign and would wreck the intentions of this part of the Bill, so who are the wreckers now?

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

Despite that contribution by the hon. Member for Spelthorne, which almost persuaded me to press it to a Division, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 644, in page 252, line 36, leave out subsection (7).

This is a probing amendment. The clause was interesting to read, and perhaps even more so when I read the explanatory notes. They explain how the powers will deal with customs and excise offences. It is well known that those offences usually apply throughout the United Kingdom, albeit that different procedures may sometimes apply north and south of the border. Subsection (7) states:

This section does not apply to proceedings on indictment in Scotland.

That is all very useful, but those of us who are not versed in Scots law then looked at the explanatory notes, only to find that they say:

this section does not apply to proceedings on indictment in Scotland.

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

There is consistency, anyway.

Dominic Grieve (Conservative, Beaconsfield)

An explanation by the Minister would be helpful. I hope that I am not straying into a clause stand part debate. There are other examples in the explanatory notes of our being given a titbit of information, but the detail being withheld. For instance, the notes say:

The provision reflects that in existing legislation, except that the range of offences covered has been slightly increased.

When I read that, I smelt a rat. I therefore made complicated inquiries about comparisons between the old legislation and the Bill, to find out how the range has been increased. I shall come to that when we discuss clause stand part if the Minister cannot deal with it now. If the explanatory notes told us how such matters have been changed, time would be saved.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I am not persuaded that the amendment is appropriate, for the simple reason that the clause does not relate to Scotland. North of the border, criminal proceedings on indictment run in the name of Her Majesty's Advocate. There is no precedent for the commissioners of HM Customs and Excise or any other body to institute criminal proceedings in Scotland. At the risk of straying into the clause stand part debate, I must say that I would be interested to know why a named customs officer will institute some of the proceedings in Scotland. There is no good reason why officers of the procurator fiscal should not do that.

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

The question that the hon. Member for Beaconsfield asked reminds me again of the late Gregor Mackenzie, when he was asked a question at Scottish Question Time that floored him completely. He did not know the answer, so he said, ''The hon. Gentleman has asked a very good question—but not as good as the one that I am going to ask when I get back to Dover house.'' The officials got what they deserved.

However, I do have an answer to the hon. Gentleman's question. The clause deals with Customs and Excise prosecutions. In Scotland, all prosecutions on indictment run in the name of the Lord Advocate, as the hon. Member for Orkney and Shetland said. That explains the inclusion of subsection (7), which clarifies the fact that in Scotland, in line with the present position, Customs and Excise officials cannot bring a prosecution on indictment.

However, there is a statutory provision for Customs and Excise officers to bring summary prosecutions in Scotland. That is set out in section 34(1) of the Criminal Law (Consolidation)(Scotland) Act 1995, which states:

Summary proceedings for a specified offence may be instituted by order of the Commissioners and shall, if so instituted, be commenced in the name of an officer.

I understand that that provision is rarely, if ever, used and that most summary prosecutions run in the name of the procurator fiscal. With that explanation, I hope that the hon. Member for Beaconsfield will withdraw his amendment. The position is explicit and beyond any shadow of doubt.

Dominic Grieve (Conservative, Beaconsfield)

It was never my intention to sabotage the Bill or create a major constitutional crisis by deleting subsection (7). I wanted an explanation, and the Minister has provided it. I was waiting for the hon. Member for Orkney and Shetland to tell me that the Minister was wrong about summary proceedings. However, as he did not, I must take it that the Minister is right, even if the provision is not usually used.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I would merely advise the hon. Gentleman that during my substantial experience of summary criminal proceedings in a number of jurisdictions, I have never known that section to be invoked. I would be interested to know whether it ever has been invoked.

Dominic Grieve (Conservative, Beaconsfield)

I thank the hon. Gentleman, and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Dominic Grieve (Conservative, Beaconsfield)

I repeat my previous request to be informed of the way in which the range of offences has been ''slightly increased'' in comparison with the previous legislation. Will the Minister identify the areas in which that has occurred, and tell us what the offences are?

David Wilshire (Conservative, Spelthorne)

Questions will be asked at Dover house.

John McWilliam (Labour, Blaydon)

Order. I heard that sedentary intervention, and I must correct the Minister and the rest of the Committee. I do not wish to take part in proceedings, but I must point out that the right hon. Gregor Mackenzie was the Minister of State for Industry when he made the remark that has been quoted, so he would not have referred to Dover house.

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

I stand corrected—if not yet stuffed and mounted.

Nick Hawkins (Conservative, Surrey Heath)

Your point of order, Mr. McWilliam, allows me to ask the Minister whether the reason why he made that inadvertent slip could be related to the extraordinary publicity given to Dover house in this morning's edition of The Daily Telegraph. I read with fascination about the amount of free time that the Secretary of State for Scotland has. I do not know whether the Liberal Democrats had anything to do with leaking that information, but Dover house must be in the Minister's mind for some reason.

John McWilliam (Labour, Blaydon)

Order. I cannot see what the free time, or otherwise, of the Secretary of State for Scotland has to do with clause 434.

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

But it has given me more time to read my notes, for which I am deeply grateful to you, Mr. McWilliam, and to the hon. Member for Surrey Heath, whom I advise to not believe everything that he reads in the newspapers, especially The Daily Telegraph.

I turn to the question asked by the hon. Member for Beaconsfield. The explanatory notes state—[Interruption.] I am finding my brief difficult to read. The Secretary of State might be receiving French lessons, but someone should take some writing lessons. The explanatory notes state that the range of offences for which Customs and Excise can prosecute has been slightly extended: the offence of aiding and abetting the commission of a listed offence is now included.

Clause 434 ordered to stand part of the Bill.

Clause 435 - Crown servants and regulators

Dominic Grieve (Conservative, Beaconsfield)

I beg to move amendment No. 645, in page 253, line 4, leave out subsection (3).

John McWilliam (Labour, Blaydon)

With this it will be convenient to take amendment No. 646, in page 253, line 8, leave out subsection (4).

Dominic Grieve (Conservative, Beaconsfield)

The clause gives powers to the Secretary of State to provide that provisions apply to people who are in the public service of the Crown. That is an important provision and I support it, because such people could commit a money-laundering offence or prejudice investigations—although it would perhaps be surprising if that were to happen.

However, subsection (3) states:

The Secretary of State may by regulations provide that section 324 does not need to apply to persons who exercise functions—

(a) as or on behalf of supervisory authorities;

(b) as investigators.

Clause 324 addresses failures to disclose in the regulated sector.

Clarification is needed about the reasons for providing that power for the Secretary of State. What category of person would he seek to exempt, and why? I understand why he might wish to exempt investigators. However, the Committee should be concerned about exemptions for supervisory authorities. It might be suggested that the rules will be laxer in respect of them than in respect of other organisations, because although a supervisory authority might have a good reason for not wishing to make a disclosure, it might also make a disclosure in the usual way.

Nick Hawkins (Conservative, Surrey Heath)

I agree with my hon. Friend's points. They are important, and I hope that the Minister will respond to them.

I also wish the Minister to respond to a related point. The Government want to take a power for the Secretary of State to make regulations in the future, but would it not be simpler to declare in the Bill that the provisions will apply to Crown servants from the date that the Bill comes into force? Why wait until another stage? Why introduce subsequent regulations? Given that Opposition Members accept that there might be reasons why the provisions should cover Crown servants, why should they not cover them ab initio?

It makes me uncomfortable when Secretaries of State of any Government are given wide powers to do things at a later date—particularly if those regulations might be introduced by the negative resolution procedure. It would surely be better to specify in the Bill either that the regulations will apply from the beginning, or that they will be subject to the affirmative resolution procedure, so that the House can debate their exact terms properly.

David Wilshire (Conservative, Spelthorne)

The role of Crown servants is really a stand part issue, to which I should like to return to as a separate debate. The points that my hon. Friend the Member for Beaconsfield made are important and should be considered thoroughly. If I understand the explanatory notes correctly, we are being told that we can exclude the supervisory authorities because other legislation covers their conduct and makes it possible to take action against them.

John McWilliam (Labour, Blaydon)

May I help the hon. Gentleman? I am re-reading the amendments, and between them they cover the clause. Debating the amendments will cover the clause, so any Member who wants to make a stand part point must do so in the context of the amendments.

David Wilshire (Conservative, Spelthorne)

Thank you, Mr. McWilliam. In that case I shall almost certainly return to the other point that I mentioned when I have finished this one, which relates directly to subsection (3).

The argument used in the explanatory notes is that we do not need the power because the Money Laundering Regulations 1993 deal with the matter effectively. However, I am not persuaded that that is an effective argument that the Bill should not cover them. We have talked about making absolutely sure that we close every possible loophole, and do

everything possible to ensure that the intentions behind the Bill are put into effect. A regulator or supervisor might find a reason why the Money Laundering Regulations should not apply, or, if they did, why they did not cover the conduct for which the person is being criticised, or for which someone was contemplating taking action against the supervisor.

I cannot believe that applying the provisions would negate the opportunity to refer to the 1993 regulations if that were the preferred route. However, if that were to fail, and the Bill could cover for the failure of that route, action could be taken against people who had broken the law—yet we have excluded the possibility of using the Bill to deal with such matters.

Unless the Minister can persuade me that under the amendment action could not be taken, or that it would harm the authorities' ability to take action under the regulations, I believe that the amendment is right and that we should have the fail-safe mechanism of using the powers as well as, or instead of, the 1993 regulations. I therefore believe that this is more than a probing amendment. It is sensible, and unless it harms other routes, or the Minister can give me a reason for doing so, I cannot object to it.

My other point, which would have featured in a stand part debate, is that I am amazed to discover that Crown servants are not subject to the definition of criminal offences in exercising their duties as Crown servants. If that is the current state of play, perhaps I should have known that long ago. We are stating in this case that we should ensure that Crown servants can be proceeded against. Earlier, we debated order-making powers to extend legislation and to introduce new legislation. Perhaps this is an opportunity to introduce a provision to ensure that Crown servants are accountable under the law for everything that they do, not merely money laundering. Can we apply the laws that apply to the rest of us to Crown servants, too?

Bob Ainsworth (Labour, Coventry North East)

The order-making power in clause 435(3) enables the Secretary of State to make regulations to disapply the offence of failing to disclose that another person is engaged in money laundering under clause 324 to any supervisors in schedule 6. They include persons employed by the Financial Services Authority and the Bank of England.

The amendment has caused us to reconsider the rationale for clause 435(3) and (4). The provision is not new. It is also in section 36B(1) to (5) of the Drug Trafficking Offences Act 1986 and section 93G(1) of the Criminal Justice Act 1988. There are also the Drug Trafficking Offences Act 1986 (Crown Servants and Regulators etc.) Regulations 1994, which were statutory instrument No. 1757. Broadly, that regulation disapplied section 26B of the 1986 Act, which was inserted by the Criminal Justice Act 1993, from a list of supervisors. It was needed, and was used to place an obligation on the director of National Savings. The provision was disapplied in respect of appropriate people.

The principle underlying the present regulations is that there is already a separate requirement under

regulation 16 of the Money Laundering Regulations for supervisors to make disclosures to a constable. It was therefore appropriate that the offence of failing to report drug money laundering was not necessary. It was considered that it would be perverse to apply the offence to investigators who were also constables or persons authorised to undertake money-laundering investigations in the new law enforcement capacity.

The Money Laundering Regulations, which were amended last year, continue to place the same requirement on supervisors to report suspicions that another person is engaged in money laundering, so we can be satisfied that there is no loophole. It seems unlikely that a person falling within part 2 of schedule 6 who is acting in a supervisory capacity would be engaged in a business in the regulated sector, so clause 324 would not apply to such persons in any event.

That was a complicated run round all the existing legislation. In any event, there is some inconsistency in asking for reports to be made under regulation 16 of the Money Laundering Regulations and under the Anti-terrorism, Crime and Security Act 2001, but to exempt them under this clause by means of regulations.

As for investigators, where such officers know of or suspect money laundering, they may wish to act on that intelligence themselves, either through regulatory penalties or using their own prosecuting powers. In principle, however, the National Criminal Intelligence Service should still be apprised of such information, as it might be linked to other intelligence.

Having reconsidered the clause, I am not altogether convinced that there is a need to provide blanket immunity to law enforcement authorities in the way envisaged by the Bill. We are therefore grateful to the hon. Gentleman for giving us an opportunity to reconsider the clause, which raises several questions. The best that we can do is to offer to have further discussions with the supervisory authorities and NCIS to see whether the provision still serves a useful purpose. I thank the hon. Gentleman for moving the amendment, because he has highlighted a potential difficulty in the Bill. However, in the light of my comments about reconsidering the blanket exemption, I now ask him to withdraw it.

Dominic Grieve (Conservative, Beaconsfield)

I thank the Minister for his comments. I am glad that the matter has been highlighted and I will be happy to withdraw the amendment. When I first looked at the subsection, the thought that immediately came to mind was the old Latin tag, ''Quis custodiet ipsos custodes?''—who will guard the guards? On principle, I believe that exemptions are undesirable, although I am prepared to accept that there may be circumstances in which the situation would become absurd. I am glad that the matter will be considered further, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 435 ordered to stand part of the Bill.

Clause 436 - References to financial investigators

Nick Hawkins (Conservative, Surrey Heath)

When I looked at the terms of clause 436 I had a distinct feeling of déjà vu and thought back to the scripts of ''Yes, Minister'' and ''Yes, Prime Minister''. The wording appears, if not circular—a term that I have used about other parts of the Bill and for which I have been criticised by some Government Members—then certainly elliptical. It says:

The Secretary of State may by order provide that a specified reference in this Act to an accredited financial investigator is a reference to such an investigator who falls within a specified description . . . A description may be framed by reference to a grade designated by a specified person.

If the Plain English campaign examined clause 436, I do not think that it would be terribly happy. I always support that campaign, particularly on one of its recommendations, which is that there should always be an index to a Bill, with numbered footnotes to enable one to see exactly where else terms such as ''specified person'' and ''specified reference'' are referred to.

The current drafting means that it is difficult, particularly in a Bill as bulky as this one, to find out where the terms are defined. I can understand that categories of people must sometimes be referred to by reference to a grade, so I am less critical of subsection (2). However, subsection (1) should have been more tightly drafted to make it clear, even to a relatively experienced reader of such legislation, exactly what is meant. The clause will have to be pored over by experts in firms of tax advisers, accountants and solicitors who advise those in financial services. As I have said before, I used to examine legislation that affected the financial services industry to see how it affected the companies that I advised or worked for, and Parliament should be obliged to ensure that legislation is made clearer.

I could not see how to table an amendment that would not be considered a wrecking amendment, so I thought that it would be better to debate the principle of the drafting in the clause stand part debate. I hope that the Minister will be able to say that, as with his helpful response to my hon. Friend the Member for Beaconsfield on the last group of amendments, he will re-examine this clause in the same way, and see whether the school examiner's comment, ''Could do better'' could be applied to it, too. There may be a better way of drafting it, which would make it clearer to both the casual and the experienced reader, because it is not clear as it stands.

The rest of the debate is in Hansard.