Orders of the Day — Proceeds of Crime Bill

House of Commons, 18 July 2002.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

I must draw the attention of the House to the fact that privilege is involved in Lords amendments Nos. 9, 47, 78, 166 and 276, which are to be considered today. If the House agrees to those Lords amendments, I shall ensure that the appropriate entry be made in the Journal.

Clause 1 — The Agency and its Director

Bob Ainsworth (Labour, Coventry North East)

I beg to move, That this House agrees with the Lords in the said amendment.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to consider Lords amendments Nos. 2, 3, 34 to 37, 101 to 104, 178, 259, 260, 273 to 277, 317, 318 and 320.

Bob Ainsworth (Labour, Coventry North East)

These amendments make detailed technical changes to the provisions that establish the Assets Recovery Agency. They also respond to concerns expressed by the Select Committee on Northern Ireland Affairs about the personal safety of staff working in this area.

Lords amendments Nos. 1 and 273 to 277 make some minor amendments to clause 1 and schedule 1. Those confirm the agency's status as a non-ministerial department and the director of the agency as a civil servant of the state.

Lords amendments Nos. 2, 3, 34 to 37, 101 to 104 and 320 clarify the provisions on the accreditation of financial investigators who will have access to the restraint powers under parts 2 and 4 and the investigative powers under part 8. The amendments put it beyond doubt that the director can provide different classes of accreditation for different purposes, rather than a single all-encompassing award.

Lords amendments Nos. 178, 317 and 318 will ensure that police officers can be seconded to the new agency on normal central service terms. Such officers will, however, be prohibited from exercising the functions of the director in relation to part 5.

Lords amendments Nos. 259 and 260 respond to the helpful comments of the Northern Ireland Affairs Committee about the importance of protecting those working for the new agency and those undertaking similar work in Scotland. The amendments will enable relevant staff to use pseudonyms to protect their identities.

Michael Mates (Conservative, East Hampshire)

At the risk of this becoming a bit of a love-in, I thank the Minister for listening to what the Northern Ireland Affairs Committee said. We examined the matter carefully. It is one of the all too rare examples of Government listening to Parliament, for which the whole of my Committee is grateful.

Bob Ainsworth (Labour, Coventry North East)

I thank the hon. Gentleman for his thanks. He came to the House, put his point of view and argued his case well. I said at that time that we would take on board the points that had been made and try to respond to them. He had a concern. I am pleased that we have been able to do exactly that and that he is satisfied with the outcome.

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

Can the Minister give me an assurance that these are all genuine improvements and that he has not gone all soft and soggy on us?

Bob Ainsworth (Labour, Coventry North East)

As I have said, the overwhelming majority of the amendments are technical. I hope my hon. Friend would accept that there is a specific issue—the safety of people working in the environment of Northern Ireland. The ability of people to maintain some anonymity by the use of pseudonyms will help both to recruit people to the agency and to make it more effective. I would have thought that there was no way that could be interpreted as being soft and soggy.

Martin Smyth (UUP, Belfast South)

As the Minister will be aware, we appreciate his response to the Northern Ireland Affairs Committee, but may I press him again on the numbers? In our judgment, unless this goes off with a real bang—I do not mean the bangs that we have been used to for far too long—we will be in difficulties. We are looking forward to the recruitment increase not all being around London: we hope that there will be more than 15 extra staff in Northern Ireland. There is a less difficult problem in the Republic, where over 100 staff are involved. We must have the number of people in post to deal with the problem now, rather than hoping that the number will grow and thereby losing the momentum.

Bob Ainsworth (Labour, Coventry North East)

I agree with the hon. Gentleman that it is important that we try to get the agency off to a flying start and that there is a step change in this area of law enforcement. Obviously, that has particular resonance in the environment of Northern Ireland, but it applies across the country. I ask him to accept that we are not wholly relying on the agency to achieve that step change: we need to step up our activity and capability with regard to confiscation across the piece. We have been able to do many things without the legislation. For example, we have substantially increased the number of financial investigators to police forces. Our asset recovery strategy is already starting to show some results. The amount of assets recovered from criminal activity has increased over time.

We are looking to the agency to provide the sort of expertise that will be necessary to use some of the powers, to take over the complicated confiscation cases that will be too much for individual crown prosecution services or other law enforcement agencies, and to operate civil recovery and other powers which will be exclusive to the agency.

The hon. Gentleman is right. If the staff of the agency are the only people involved in the step change—the culture change that is needed on confiscation of criminal assets and the proceeds of crime—we will not get to where we badly need to be. A lot more people from all kinds of agencies must be involved. We are working on getting the assets recovery strategy up and running ahead of the agency's establishment, to ensure that we have a substantial start and are not seen to be ineffective for any period.

I hope that I have been able to satisfy hon. Members. I am extremely grateful for the support for what we have been able to do in Northern Ireland. I am sure that the debate on the number of officers in the Northern Ireland Office will continue and remain under scrutiny by everyone who is involved in work in the Province. Obviously, we will listen to that continuing debate.

Nick Hawkins (Conservative, Surrey Heath)

As the Minister has said, this group of amendments covers a fair number of issues but many are not major issues. I have a couple of specific questions, but Conservative Members greatly welcome the constructive way in which the Minister and his former Front-Bench colleague, the right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), approached the matter through many weeks in Committee. We welcome the Under-Secretary of State, Scotland Office, who has taken over from the right hon. Gentleman.

Can the Minister indicate whether there is any specific significance in the addition of amendment No. 320 relating to the Financial Services and Markets Act 2000, and whether the fact that, under a couple of amendments in this group, everything will be referred to the Minister for the civil service has any particular significance? I wondered whether that was as a result of any disagreement among Ministers and whether the Minister for the civil service felt frozen out. No doubt the Minister will say that it is all part of joined-up government.

My hon. Friend the Member for East Hampshire (Mr. Mates) has already referred to the work of the Northern Ireland Affairs Committee. I am glad that, in line with the spirit that has characterised our debates in Committee, the Minister paid tribute to the work of the Committee. I hope that he will also pay tribute to Lord Brooke of Sutton Mandeville, a distinguished former Secretary of State for Northern Ireland, formerly the right hon. Member for Cities of London and Westminster. As the Minister will be aware, the Government amendments dealing with pseudonyms were based on amendments originally tabled by Lord Brooke of Sutton Mandeville, as it were on behalf of the Select Committee. I hope that the Minister will try to reflect the tenor of the debates between my noble Friend Lord Brooke and his noble Friend Lord Rooker in another place.

The debate on this group of amendments will be relatively short. Some substantial questions will arise on later groups, and I do not want to delay the House now, but may I ask the Minister, in line with the constructive spirit in which we have approached the Bill, to confirm that the Prime Minister must have been misinformed when he suggested yesterday that the Conservative party had opposed it? I ask him to refer specifically to what my right hon. Friend the Member for West Dorset (Mr. Letwin) said when the Bill started its progress many months ago:

"We on the Conservative Benches share the Government's desire to deprive people who profit hugely from very evil acts, but who cannot directly be related to some of those evil acts, of the ill-gotten gains on which they subsist. I suspect that that is common ground among members of all parties . . . I shall not recommend that my hon. Friends oppose the Bill."—[Official Report, 30 October 2001; Vol. 373, c. 767.]

I hope that the Minister will be able to confirm that that has been the position of the Conservative party on the Bill throughout.

Bob Ainsworth (Labour, Coventry North East)

On the substance of the amendments, the hon. Member for Surrey Heath (Mr. Hawkins) will know that the Bill is very complex and has many strands, so many Departments are involved in different ways. He should not be surprised or look for little arguments that do not exist. The blunt answer to him is yes, he is right: this is about joined-up government. That is what we believe in, and that is what we try to carry out, although we do not always do so successfully; I should have thought that his party, too, had tried to do so when it was in power.

The Financial Services and Markets Act 2000 has to be amended to assure the funding for accredited financial investigators working for the Financial Services Authority. The role for the Minister for the civil service flows directly from the change of status, because the director comes under a non-ministerial department rather than receiving his funding directly from the Home Secretary. There is no issue here that the hon. Gentleman should not be able to understand, and he should not surmise that someone's nose has been put out of joint or that that has subsequently had to be put right. He is far too suspicious.

As for the hon. Gentleman's concerns about what the Prime Minister said yesterday, let me read the Hansard report to him so that he can hear exactly what was said—[Interruption.] I am glad that the hon. Gentleman has it with him, but for the sake of the record I shall read it out:

"However, if he is serious in his commitment to the fight against crime, there is the Proceeds of Crime Bill that is now before the other House. According to the police, that measure is essential to deal with drug dealers and others who can secrete there assets. I ask him now to reverse the position of the Conservative party and to support what is an essential measure in the fight against crime.—[Official Report, 17 July 2002; Vol. 389, c. 279.]

Dominic Grieve (Conservative, Beaconsfield)

rose—

Bob Ainsworth (Labour, Coventry North East)

Will the hon. Gentleman remain in his seat for a minute?

We shall see in the course of this afternoon what the Conservatives will do. Three substantive groups of amendments will come before the House today, and we shall see whether the Leader of the Opposition and his right hon. and hon. Friends do what the Prime Minister asked. We shall see what happens between now and 7 o'clock—and I hope that we will be pleasantly surprised.

Dominic Grieve (Conservative, Beaconsfield)

If that had been the only occasion on which the Prime Minister had brought forth such bizarre utterances, which showed a cognitive deficit on his part, I would not be too troubled. But there has been a series of repetitions over a number of Prime Minister's Question Times. As the hon. Gentleman knows, we indicated our support for the measure on Second and Third Reading—but this afternoon we shall continue our task as an Opposition, which is to try to improve the Bill.

Bob Ainsworth (Labour, Coventry North East)

Throughout the passage of the Bill I have paid tribute to the hon. Gentleman for some of the helpful and constructive comments that he has made about it—but not all his comments fell into that category. Between now and 7 o'clock we have to consider three sets of wrecking amendments, which would do substantial damage to the Bill, and which were moved and supported by the hon. Gentleman's colleagues in another place. Within the next couple of hours we shall see whether the Conservative party will respond to the Prime Minister's request, support the Bill, and give the forces of law and order an effective tool to use.

Lords amendment agreed to.

Lords amendments Nos. 2 and 3 agreed to.

Clause 6 — Making of order

Bob Ainsworth (Labour, Coventry North East)

I beg to move, That this House disagrees with the Lords in the said amendment.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this we may take Lords amendments Nos. 43 and 73 and the Government motions to disagree thereto.

Bob Ainsworth (Labour, Coventry North East)

We now come to the first serious test of whether the Conservatives are trying to do serious damage to the Bill, or whether they intend to support the measures needed to combat crime and remove its profits. I look forward to that.

This group of amendments returns us to a theme that will by now be familiar to the House—the question of mandatory versus discretionary confiscation procedures. It has been discussed at length in Committee in both Houses and on Report in another place; I refer the House to the Hansard reports for 4 December 2001, and 22 April and 25 June 2002.

It is not clear to us what the exact effect of this group of Opposition amendments would be—[Interruption.] The amendments would do serious damage, as I shall explain, and would reverse the direction in which policy in this area has been travelling for a long time, including under the guidance of Conservative Governments.

There are two schools of thought about what is being proposed. The first is that the amendments would give the courts the discretion not to mount a confiscation hearing at all. The second is that the amendments would require the court to confiscate the benefit from the defendant's particular criminal conduct, at the request of the director or the prosecutor, but would empower it not to confiscate the benefit of the defendant's general criminal conduct.

Either way, we are wholly opposed to these amendments. Replacing a mandatory procedure with a discretionary procedure would drive a coach and horses through the basic policy in the Bill. The amendments would reverse a gradual historical development in the direction of an increasingly mandatory regime, not a less mandatory one.

Confiscation in England and Wales has always had a strong mandatory element. Under the Drug Trafficking Offences Act 1986 the court was required to make a confiscation order in every case. The assumptions procedure under the Act was discretionary, but was replaced with a mandatory assumptions procedure by the Criminal Justice Act 1993.

The non-drug confiscation legislation was originally discretionary—

Douglas Hogg (Conservative, Sleaford and North Hykeham)

rose—

Bob Ainsworth (Labour, Coventry North East)

I shall give way to the right hon. and learned Gentleman in a moment.

That was changed, and the procedure was made mandatory by the Proceeds of Crime Act 1995.

To emphasise the direction in which policy has been travelling, and before I give way to the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), I shall read what Lord Hurd, as he now is, said during the passage of the 1986 Act:

"the Crown court will in future be required to determine, in the case of every person convicted of a drug trafficking offence, whether he has benefited from drug trafficking and, if he has, to impose a confiscation order to deprive him of the entire proceeds of that trafficking . . . Therefore, we propose in clause 2 that courts should be able to assume that the whole of an offender's property, together with any assets which have passed through his hands in the previous five years, represent the proceeds of trafficking, except in so far as he shows otherwise."—[Official Report, 21 January 1986; Vol. 90, c. 243.]

That shows the intention of the then Minister, way back in 1986.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Will the Under-Secretary give way?

Bob Ainsworth (Labour, Coventry North East)

I shall give way to the right hon. and learned Gentleman in a moment, as I said I would.

Some six years later, in making amendments, the Minister said:

"During the six years in which the legislation has been in force, the courts have declined to apply the assumptions in a number of major cases, thereby placing the prosecution in the impossible position of being expected to prove matters in relation to the offender's property which are solely within his knowledge."—[Official Report, Standing Committee B, 8 June 1993; c. 76-77.]

That shows clearly—

Douglas Hogg (Conservative, Sleaford and North Hykeham)

rose—

Bob Ainsworth (Labour, Coventry North East)

The right hon. and learned Gentleman is very impatient.

Those comments show clearly that the Conservative party recognised the need for a move towards a mandatory scheme. There is no evidence since that time of a huge abuse of power or of miscarriages of justice—quite the reverse. All the evidence shows that, despite such efforts, confiscation has been used a lot less than it ought to be. Given the problems that we face, there is therefore no reason for us to start heading in the opposite direction by softening the regime rather than toughening it up, which, in effect, is what the amendment proposes.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The Under-Secretary criticises the Opposition for championing a discretionary power. Would he be good enough to look at clause 6(3)(b)? On doing so, he will discover that his own Bill gives the court discretionary power. If the prosecutor or the director does not make an application to the court, it will be for the court to decide. That is a discretionary power.

Bob Ainsworth (Labour, Coventry North East)

Exactly. We believe that the Bill as it stands contains sufficient safeguards to allow for the avoidance of injustices. Yes, it is for the prosecutor to decide whether it is appropriate to make an application, and if he thinks it inappropriate, he should not do so. Yes, in terms of the risk of a serious injustice, the court can effectively prevent an action from taking place. However, the existing mandatory system should continue, and should be toughened rather than loosened. We do not need to retreat from the direction in which we are travelling, given the continued existence of a very real problem.

Perhaps Opposition Members think that the impact of such legislation has been profound up to now, or perhaps they can give instances of its being so draconian that it has led to injustices. However, I have seen no such evidence, and nor has such evidence been presented to the House during the Bill's passage.

In effect, mandatory assumptions have been tested in court, so even if concerns exist about the Human Rights Act 1998 or the European convention on human rights, there is no particular reason why we should retreat from our current direction. In considering the mandatory application of assumptions in drug trafficking cases such as the Phillips v. United Kingdom case, which was decided on 5 July 2001, the Strasbourg court found that such applications are consistent with the convention. So I am not persuaded that there is a problem, or that the amendments would improve the Bill's effectiveness.

Without the amendments, the Bill gives a clear definition of a criminal lifestyle. When criminals commit offences, they will know exactly what they are exposing themselves to in confiscation terms. The amendments would remove certainty, turn confiscation hearings into a lottery, and reverse the trend towards a mandatory regime that has continued for some time under both Labour and Conservative Governments. I do not believe that there is any justification for the amendments; indeed, they would do considerable damage to the Bill. I therefore ask the House to oppose them.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Under-Secretary for his kind remarks. He pointed out that we sought to improve the Bill in Committee and on Report, and I note with great pleasure that many of the tabled Lords amendments have in fact arisen from discussions in Committee that involved all parties, and which the Government undertook to look into further. I am pleased to have this opportunity to express my gratitude to the Under-Secretary for taking those discussions on board.

However, on this matter I fear that there may be a continuing difference between us. In saying that, I should make clear my support for the Bill's confiscation provisions. Given that the Under-Secretary raised the issue earlier, I should also point out that, as an Opposition, it is our job to scrutinise legislation. That process, which we hope will lead to the best possible legislation, comes to a conclusion when Royal Assent is given. We do not have to suspend our judgment or our debate and get into a happy-clappy, mutually self-congratulatory moment before that happens. I shall welcome the Bill when it receives Royal Assent, but until then I shall continue a dialogue with the Under-Secretary and other Government members on how to ensure that it is in the best possible condition.

We have indeed already discussed the question of whether there should be a discretionary or a mandatory component in initiating the confiscation procedure. As the Under-Secretary will remember, one intriguing point about the Bill was that, when it was first considered in Committee, it contained a discretionary regime for Scotland, but not for England and Wales. Apparently, that was due to an historical fact—but not one, I am bound to say, that appeared ever to have interfered whatsoever with the operation of previous Scottish legislation.

The Under-Secretary has gone on at some length this afternoon about the previous regime under previous legislation. I accept that, but the point is that that legislation was in no way as wide ranging and draconian in its powers and consequences as this Bill.

Tom Harris (Labour, Glasgow Cathcart)

Is the hon. Gentleman aware that, under the discretionary regime, a mere £750,000 of drug dealers' assets were confiscated in Scotland in the past year? That is an indictment of the discretionary regime.

Dominic Grieve (Conservative, Beaconsfield)

The hon. Gentleman asks me to comment on an individual decision, but I cannot do so. What is clear—the Under-Secretary and I agreed on this point in Committee, in the light of the evidence—is that earlier regimes showed signs of having started with massive confiscations, only for them to tail off rapidly. I suspect that that is far more a reflection of a lack of will on the part of those concerned rather than of a lack of means. If it was possible to make such confiscations when the system was introduced, I find it difficult to understand why it stopped being possible.

As the hon. Member for Glasgow, Cathcart (Mr. Harris) may know, I was involved with drug trafficking cases in my professional capacity, and I remember that there were some successes on the regime's introduction. However, one problem was that orders for confiscation were being made that proved impossible to enforce. The orders were there, but as it turned out, the amounts that the courts estimated as capable of being confiscated were simply never found. I do not know whether that was because they were secreted away, or because they never existed in the first place. However, in my view they have nothing to do with the question of having a mandatory or a discretionary regime.

The discussion in the other place took place between extremely reasonable people, and I commend the reading of the report of the proceedings to the Minister and other hon. Members. What was envisaged was as small a final stopgap—to ensure that injustice did not occur—as could be devised, and that was the phrase "exceptional circumstances". What might constitute exceptional circumstances? It appears that one could become liable to a confiscation order for acts that, as the Minister knows, any right-thinking person would be amazed to learn came within the legislation. One example is the conviction on several occasions for not having a rear light on a pedal cycle. That would not normally be the signal to scrutinise someone for signs of a criminal lifestyle.

However, it is because of such examples, and the absence of other safeguards—the Minister might wish to consider what other safeguards might be possible—that a residual right for a judge to stop the initiation of the process seems eminently sensible, and compatible with all our principles of justice and of common sense.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

If it is right to give the court power to initiate the process, it is also—almost by definition—right to give the court power not to proceed with the process.

Dominic Grieve (Conservative, Beaconsfield)

My right hon. and learned Friend is right, and that very point was made by Lord Carlisle of Bucklow in the other place. He expressed astonishment that given that the court had the discretion to initiate the process—and the Minister seemed apologetic when he had to accept that that existed—it should not have a residual power to stop it. The Minister clearly envisages that a judge might on occasion—notwithstanding the fact that a prosecutor did not wish to initiate the confiscation process—consider the case and say, "This is outrageous. The interests of justice demand confiscation." He is content to give judges that power. That is why it is bizarre that he has such distrust of the same judges to whom he is prepared to give that power that he will not give them the discretion to say that circumstances do not warrant initiating the confiscation process. That is the point at issue between us.

In the other place, Lord Goldsmith said that the legislation would apply only to "inherently acquisitive offences". I am sure that that is the intention and I assume that, because prosecutors are people of integrity, good standing, benevolence and propriety, that is what will happen. However, the House must always have regard to the possibility that power may be abused. When we give power to bureaucrats, however well intentioned they appear, it is right to consider what safeguards we can introduce to ensure that abuse does not occur. The normal safeguard that a sensible Parliament introduces is a judicial discretion. I do not share the Minister's sudden distrust of judicial discretion, especially when, as in this case, it would be so circumscribed and limited.

The Minister claimed that the amendment would wreck the purpose of the Bill. We will consider some amendments later that pose real difficulties, and I acknowledge that, but in this case the Minister is descending—I regret to say—to the sort of comments that the Prime Minister made. I do not know whether the Prime Minister was programmed by his spin doctors to make those comments—

Tom Harris (Labour, Glasgow Cathcart)

That is a stupid thing to say.

Dominic Grieve (Conservative, Beaconsfield)

The hon. Gentleman appears to be so well programmed that he tried to raise the issue as a bogus point of order yesterday. I greatly regretted that. I hope that we can continue to have a sensible discussion about the issue, and I hope that the Minister will accept the sincerity of our views. I am confident that the Bill would survive the amendment and operate perfectly, but it would do so with the safeguard that the amendment would provide against possible abuse.

Hugh Bayley (Labour, City of York)

I am concerned that the amendment could be used to give protection not only to people who fail to illuminate the rear light of their bicycles, but to people convicted of much more serious crimes. The Minister will be aware that I would like to see the confiscation and restraint orders applied to people charged with, or convicted of, the new offences of international bribery and corruption in the Anti-Terrorism, Crime and Security Act 2001. I have written to him on that point.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I may have misunderstood or misheard the hon. Gentleman, but did he say that the provisions should apply to someone charged but not convicted?

Hugh Bayley (Labour, City of York)

The provision for confiscation applies only to those who are convicted, but the restraint orders can be applied at an earlier stage.

If a UK citizen or company obtains a contract abroad as result of bribery, it is a crime under British law. Therefore, the benefits of that crime—the income derived from the contract—are the proceeds of crime and should be subject to restraint at the point of charging, or confiscation on conviction. If the House decides to disagree with the Lords amendment, is it the Government's intention that the Bill should be used in that way against those either charged or convicted of the new offences of international bribery and corruption?

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

Here we are again, going over well trodden ground. If the debate so far is any indication, it is not even very fertile ground. The words of the Minister filled me with sadness and disappointment in him. I had acquired tremendous respect for him in Committee, and on Report and Third Reading. To hear him describe the Lords amendment as a wrecking amendment beggars belief.

Tom Harris (Labour, Glasgow Cathcart)

It is a wrecking amendment.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

Simply repeating that untruth does not make it true. It is an exceptionally modest amendment that is limited to exceptional circumstances. It would not give a general power of discretion to the court. The discretion would also only be exercised in circumstances in which a trial of some sort had occurred and the judge or sheriff in question was already familiar with the circumstances. In the event that the discretion was abused in the way warned of by Labour Members, it would be open to the prosecutor to remedy that on appeal. What constitutes exceptional circumstances would be easily capable of judicial definition.

The hon. Member for Glasgow, Cathcart (Mr. Harris) earlier intervened to criticise the discretionary regime that has existed hitherto in Scotland. He said that it produced only a few cases, but he did not make it clear that no case that has been subject to the discretionary scheme in Scotland has been refused. He risks misrepresenting the position, and misleading the House, when he suggests that the discretionary system is the reason that few cases are brought in Scotland. He should consider instead the way in which the Crown Office has traditionally been structured and how it has operated, and the resources devoted to that office and to the police. He would improve the debate immensely if he concentrated on such matters instead of trying to misrepresent the current position.

Regrettably, a recurring theme in the discussion of this Bill has been the fact that the Government have said that they will not trust the judges. That is very depressing, if true. Why have the Government said that? I accept that there are faults with the judiciary, but the proposals in the Bill are not the way to tackle the problems. They would be better addressed by looking at the way in which judges are appointed, and at how people who are not members of the Faculty of Advocates can work in the Court of Session as senators of the College of Justice. We should also bear in mind the people who are entering university to study law and begin the journey to judicial appointment. Picking away piecemeal at judicial discretion is no substitute for a proper and comprehensive overhaul.

The Government may say that a degree of discretion is given already to the prosecutor in Scotland and to the director in England. I remind the House that both are arms of the Executive. Any discretion given to the Executive requires that a counter-balancing discretion be given to the judiciary. Power exercised by the Executive is always open to abuse. If proceedings are raised that are oppressive—and I defy the Minister to say that that cannot happen—it is surely vital that some balancing discretion is given to the judiciary to redress the matter.

Rob Marris (Labour, Wolverhampton South West)

I note with interest what the hon. Gentleman has said about placing checks and balances on the power of the Executive, but is not judicial review precisely that? It is designed to redress any irrational or unreasonable exercise of discretion by the Executive.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

My understanding is that the decision could not be reviewed. In Scotland, the decision to initiate proceedings would not be open to judicial review. However, I welcome the hon. Gentleman's suggestion that it is important that the judiciary should be able to place a check on the powers exercised by the forces of the state.

If the Government reject the Lords amendments, a dangerous precedent will be set. The powers given to the different parts of the criminal justice system will be out of balance. My experience is that the system works best when people concentrate on their own jobs and do not try to second guess what others are going to do. Each part of the system must exercise an appropriate and responsible measure of power, but the power has to be given in the first place, and that is what the amendment would do.

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

This is a key debate on a key amendment. For the first time, the Tories are boldly attempting to water down some of the Bill's proposals. They endorse the Lords amendment, the effect of which would be to allow some criminals to keep their assets, who otherwise would have those assets seized.

Dominic Grieve (Conservative, Beaconsfield)

The amendment would do no such thing. Its purpose is to ensure that proceedings are not brought against people who have no assets that could be seized, and that they are not put through the process in the first place.

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

I accept what my hon. Friend the Minister said—that the Bill already contains enough safeguards to make sure that that did not happen. I shall say more about the danger posed by the amendment in a moment.

We should remember that this is not an arcane or abstruse debate between lawyers. We are discussing how our decisions affect real people in the real community outside the House. We are talking about crime and drug abuse, about people making millions out of selling drugs to their victims, and about communities and lives being wrecked. We must make sure that that is at the forefront of our minds.

It struck me that Conservative Members were protesting somewhat too much about their good intentions. It is clear that, as so often, the words of my right hon. Friend the Prime Minister struck them to the heart. What he said was absolutely true—and I am not slow to criticise my right hon. Friend when he disagrees with me and gets things wrong. However, what he said on this matter was absolutely correct, and I enjoyed seeing the Tories squirm.

We were not far short of the mark when we described the Tories as the criminals' friends. They have consistently acted to water down the Bill, in a way that would allow some people to escape justice who otherwise would not. The only people in the Standing Committee less supportive of the police and criminal authorities were the nationalists, and that was because they did not attend, as they did not apply for membership of the Committee. Liberal Democrat, Tory and Labour Members were there for hours and hours, week after week, but not one nationalist took part.

Annabelle Ewing (Scottish National Party, Perth)

rose—

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

I am glad to see one bob up now.

Annabelle Ewing (Scottish National Party, Perth)

I thank the hon. Gentleman for giving way. He is probably not surprised that I should want to intervene on this fascinating matter, on which I think he is wasting the House's precious time. The hon. Gentleman should note that only three Labour Back Benchers from Scotland are participating in this important debate.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. I have heard equal views on this matter, which is outside the scope of the amendment.

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

Having noted the absence of nationalists from the Standing Committee, I shall not refer to it again in this contribution.

There is a difference between mandatory and discretionary powers, and there is a danger that giving courts the discretion to apply the measures set out in the Bill will result in something resembling a plea-bargaining process. A recent murder case in my constituency was downgraded to culpable homicide, and it is clear that that was part of a plea-bargaining process. Giving courts the discretion proposed in the amendment would lead to plea bargaining about whether sanctions such as confiscation should be applied.

I do not want that to happen. It is true that some of us have less confidence than we should have in the judicial system, and that we want to restrict the judiciary's flexibility in these matters.

I listened to the points made by the hon. Member for Orkney and Shetland (Mr. Carmichael) about reform of the judicial system, university admissions and all the rest of it—the doctrine of the unripe time: we should not change the system now; we should do it at some other time in some other way. Discussing access to university law studies as a means of reforming the judiciary seems too long term, even for the Liberals. We might have a Liberal Government in power by that time, but I doubt it. My constituents and I want action now on these matters. The clearest message that we can send is that we want to fetter the discretion of the judiciary; we want mandatory provisions.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I take the hon. Gentleman back to the parallel that he drew with plea bargaining. That has no bearing on the judiciary having a measure of discretion. Under the Bill, it is open to the prosecutor to decide not to take confiscation proceedings. That is where any plea bargaining between the prosecutor and the defence would come in. There is no safeguard against that, as the Bill stands.

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

I understand that, but we ought not to remove all discretion from the prosecutor. There is some merit in what the hon. Gentleman says, but I do not want to extend the discretion, lest it waters down the mandatory aspect.

This is not an arcane debate about the law. It is about how the law impacts on real people, real lives and real communities, which we are sent to this place to represent. We are talking not about Jeffrey Archer or Jonathan Aitken, but about major league criminals. [Interruption.] All right, I concede that former Conservative Members were in a more major league than I have given them credit for.

We can discuss whether the terms of the Bill should have applied to Jeffrey Archer, Jonathan Aitken or any other Conservative MP, present or future, who comes into that category, but we should bear in mind that we are dealing with major issues—life and death for our communities. I should like to see some stiffening and some support for the Bill from the Conservative Benches, rather than the mealy-mouthed self-justification that we have heard up to now.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I rise to try to ensure that the House addresses the real possibility of an injustice. Unlike, I suspect, any other Member, I have been involved in litigation arising out of legislation such as the Bill. In the Republic of Ireland, the Criminal Assets Bureau legislation contains powers very similar to those contemplated in the Bill, and I have acted in the courts of Dublin on behalf of people who have been the subject of procedures against them, so I have a certain amount of professional experience of what can happen in such cases.

That makes me cautious and anxious to identify areas where we can reinforce legal and civil rights. We should welcome the amendment from the other place. The Under-Secretary said that there were two interpretations of the effect of the amendment. The second one might be theoretically possible, but the first one is clearly the intended one, which is to give to the court the power to disapply the procedure in a limited number of circumstances.

Ian Lucas (Labour, Wrexham)

Does the right hon. and learned Gentleman accept that the Bill as it stands, without the amendment, already gives the court a great deal of discretion—the very point that he made earlier in the debate?

Douglas Hogg (Conservative, Sleaford and North Hykeham)

That is true, as far as it goes.

I am in favour of giving the court the power to disapply the process. That is consistent with the framework of this part of the Bill. A careful analysis of clause 6 indicates that there are two areas in which the court already has an important discretion. The first is the one that I drew to the attention of the Under-Secretary.

The initiating process provided under, I think, clause 6(3) arises in one of two circumstances. Either the Crown or the prosecutor applies for the process to start, or the Crown or the prosecutor does not and the court has an initiating power. At that point, the court has a discretion.

But the court has a discretion otherwise in this part of the Bill. Under clause 6(6), in certain circumstances—for example, if a victim is taking recovery procedure—the obligation to take action under subsection (5) becomes not a duty, but a discretion. So already, within this part of the Bill, one finds two clear examples where the court has a discretion.

If it be right to provide the court a discretion in the two circumstances that the Bill provides, what is the objection in principle to providing the court with a discretion in those circumstances where the Crown or the prosecutor applies to institute the process, but the court, for one reason or another, thinks it unfair to proceed?

There are two points that reinforce in my mind the importance of that. Let us be clear that the decision of the Crown or the prosecutor to initiate the process might well be made at a very junior level. The House must not assume that such decisions will be made by the Director of Public Prosecutions in person, Mr. Calvert-Smith. They will not. They will probably be made by a relatively junior official. It is important that the court should have the power to put restrictions on a decision made at a fairly junior level, if the court considers that appropriate.

The second point is that the process that arrives at the conclusion that a confiscation order is made is on the low standard of proof—the civil standard of proof, not the criminal standard of proof.

Tom Harris (Labour, Glasgow Cathcart)

The right hon. and learned Gentleman said that a court should be able to decide "for one reason or another" not to proceed. That phrase strikes fear and terror into my heart and it is one of the reasons that the amendment is wrong.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

In fact, I was advocating a looser power than that provided for in the Lords amendment. The Lords amendment confines the judicial discretion to exceptional circumstances. I have many criticisms to make of the judiciary from time to time; none the less, in this case I would give the judiciary a wider discretion than that contemplated in the Lords amendment.

Bob Ainsworth (Labour, Coventry North East)

The right hon. and learned Gentleman is right to say that he has a great deal of experience in practising in the courts. He has another kind of experience as well: he was a member of the previous Government in various capacities. It is perturbing that it has been said that the present Government fear the discretion of the judges. The right hon. and learned Gentleman will know that mandatory assumptions were applied not by this Government, but a long time ago. Can he can give us an insight into why it was considered necessary for those mandatory assumptions to be applied by the Government of which he was a member some years ago? Can he, because of his wide experience, give us any indication where an injustice has occurred since those mandatory assumptions have been in place?

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Basically, I am against mandatory sentences. Yesterday, I put to the Home Secretary a proposal that judges in murder cases should have the right to impose determinate sentences, not life sentences. I have always been extremely cautious about mandatory sentences, because I believe that they do not address the particular circumstances of individual cases.

That general point, however, goes rather outwith the narrow point that I am making today, which is that in an area where the standard of proof is the relatively low one, and where the decision to trigger the process can be made at a relatively low level, the court should, in exceptional circumstances, have a power to stop the procedure. That seems to be consistent, not inconsistent, with the present framework of clause 6, and I very much hope that my hon. Friend the Member for Beaconsfield (Mr. Grieve) will press this matter to a Division.

Tom Harris (Labour, Glasgow Cathcart)

I start by disagreeing with my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson). I do not believe that the hon. Members for Beaconsfield (Mr. Grieve) or for Orkney and Shetland (Mr. Carmichael) can be described as friends of the criminal. I accept that, coming from legal backgrounds, they genuinely want to improve the Bill. I do not doubt their personal sincerity on that score.

When the hon. Member for Beaconsfield intervened on my hon. Friend the Member for Glasgow, Pollok, he used the word "intention". He has used that word frequently in the House and in Committee. He has made clear his intention time and again in supporting various amendments, but he has not explained the effect of the amendments. I accept that his intentions are true, but he has to accept, whether he likes it or not, that the effect of the Lords amendment will be to undermine the purpose of the Bill.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the hon. Gentleman for his comments, but the intention of the Lords amendment is to introduce a safeguard that I would expect to be used extremely rarely and only in clear cases where it is apparent to the judge that a decision by the prosecutor to seek to initiate proceedings is plainly wrong, and that is it. That is the intention.

Tom Harris (Labour, Glasgow Cathcart)

The hon. Gentleman has, once again, proved my point. I accept that that is his intention. We agree on that, but I have to disagree about the effect, which will be to follow the path of previous legislation by being far too cautious and not achieving the intended aim.

The right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) said yesterday in talking about the Bill:

"we supported that legislation . . . we voted in favour of the confiscation of assets from criminals, particularly drug dealers."—[Official Report, 17 July 2002; Vol. 389, c. 279.]

Why was there not an asterisk at that point in Hansard, leading to a footnote saying, "Subject to the following conditions"? There is no point in saying one thing and doing another.

Nick Hawkins (Conservative, Surrey Heath)

When Members say that they support legislation, it does not mean that they support every dot and comma in the Government's proposals. If the Conservative party did not vote against a Bill on Second Reading, Third Reading or in another place, but simply wished to scrutinise it, to improve it and propose amendments that affected only small parts of it, it is entirely right for my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) to say that we supported it. That has always been the practice of the House in such matters.

Tom Harris (Labour, Glasgow Cathcart)

The hon. Gentleman obviously has a lot more experience in the House than I do. I bow to his greater experience, but I find it slightly unfair that the Conservative party can say, "Yes, of course we support the Bill. We believe in confiscating criminals' assets", and issue a press release saying as much, while in Committee voting time and again against the very heart of the Bill. Conservative Members tabled many amendments, and on every possible occasion they forced a vote on any measure to emasculate the Bill.

The hon. Gentleman may or may not admit this, but the original point of the Bill was not to emulate previous legislation, but to introduce a brand new principle into English and Scots law. So, whether he likes it or not, discretion, which is what we need, will be available to courts. He has every right to disagree with that view, but that is what the Bill is about. He cannot say that he supports it, and then try to undermine the very heart of it.

In Committee, the Conservative party moved a very similar amendment to clause 6, and it was pressed to a Division. The amendment has returned from the Lords in a slightly different form, but it will achieve the same. The Conservative party has lost the vote once already, and it should respect the democracy of the House and accept that we have already made up our minds. I hope that it will not press this issue to the vote.

Boris Johnson (Conservative, Henley)

Can the hon. Gentleman imagine a single circumstance in which a judge who sees a low-life drug dealer of the kind described by the hon. Member for Glasgow, Pollok (Mr. Davidson) and who has the opportunity to confiscate the assets of that criminal might decide not to proceed to do so unless he felt that an injustice might occur?

Tom Harris (Labour, Glasgow Cathcart)

That is an excellent question, and the answer is no. I cannot imagine any judge looking at a down-and-out drug dealer from Glasgow and saying, "No, I'm not going to confiscate your assets." What I can imagine is a judge seeing a well-to-do business man standing before him in the dock and suddenly thinking, "There is a respectable gent. Surely he can't possibly be involved in drugs." That is the point of the Bill. I am sorry, but the hon. Gentleman has to do a wee bit better than that if he is to justify his party's position.

Ian Lucas (Labour, Wrexham)

Can my hon. Friend also imagine that an exceptional body of case law would develop on what precisely could be defined as exceptional circumstances? There would be many cases of doubt about that phrase, and many people who made money from death in their communities would benefit from the Lords amendment.

Tom Harris (Labour, Glasgow Cathcart)

I completely agree with my hon. Friend, who also has a legal background, although I certainly would not hold that against him. The point about the phrase "exceptional circumstances" is very similar to the point made by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). How can we define that phrase, other than through many years of legislation? Certain people in our society hope that that phrase will be inserted into the Bill. Let us make no mistake about the fact that certain people working in this country's criminal undergrowth are desperate for the Lord amendments to remain in the Bill.

The hon. Member for Beaconsfield made a very good point during our very interesting debates in Committee. He said that previous Governments—Conservative and Labour—had tried time and again to introduce effective legislation to deal with drug dealers once and for all. Obviously, they wanted to use such legislation to fight the drugs menace. He said in his contribution that none of the Acts had been as effective as the Government of the day had intended. He was absolutely right. If the Lords amendment stays in the Bill, exactly that fate will befall this legislation.

Frankly, having been involved in 39 Standing Committee sittings, I will not suddenly change my mind and want the Bill to be enacted without the powers to do what desperately needs to be done for the sake of this country, my constituency, those of my hon. Friends and, I hope, those of Opposition Members.

Annabelle Ewing (Scottish National Party, Perth)

I rise to speak to these Lords amendments in so far as they apply to Scotland. I believe that an important constitutional issue is raised because, as we have heard, the Lords amendment would reintroduce an element of discretion in making confiscation orders in Scotland. Although there is a valid debate to be had about mandatory versus discretionary powers of sheriff or High Court judge in making such confiscation orders, the fact is that Westminster is not the appropriate forum in which to discuss that matter because jurisdiction over Scots law is devolved to the Scots Parliament.

Tom Harris (Labour, Glasgow Cathcart)

rose—

Anne McGuire (Labour, Stirling)

Will the hon. Lady give way?

Annabelle Ewing (Scottish National Party, Perth)

May I continue for a moment; I shall give way later.

The Scots Parliament voted to refer the Bill to Westminster under a Sewel motion on 24 October last year. The Scottish National party supported that move, but if one reads the report of the debate in the Scots Parliament—

Mark Lazarowicz (Labour/Co-operative, Edinburgh North and Leith)

Will the hon. Lady give way?

Annabelle Ewing (Scottish National Party, Perth)

I shall give way in a moment.

The key point is that the Bill has undergone substantial and major changes in relation to its provisions that are applicable to Scotland. In particular, the original Bill did not propose any amendment to the current and traditional discretionary powers of the sheriff or High Court judge. Even the right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), the then Minister in the Scotland Office, speaking to the Scottish Affairs Committee on 7 November last year, agreed that there would be a political imperative to refer the Bill back were there substantial or major changes. Unfortunately, the then Minister seems subsequently to have changed his view. When the SNP group called a Division on Report on an amendment that would have secured the referral of part 3 of the Bill—which includes this grouping of amendments—back to the Scots Parliament, although we managed to gain support from all parties in the House amounting to 172 votes, we received no votes whatever from new Labour Members.

Mark Lazarowicz (Labour/Co-operative, Edinburgh North and Leith)

rose—

Anne McGuire (Labour, Stirling)

rose—

Annabelle Ewing (Scottish National Party, Perth)

I shall give way to the Under-Secretary.

Anne McGuire (Labour, Stirling)

Will the hon. Lady please explain the inconsistency in her argument given that the Scottish Parliament gave the power under the Sewel motion to legislate in this area? As far as I and, I am sure, every Member of the House is aware, it has not asked for that Bill to be sent back. It must be happy with what is happening.

Annabelle Ewing (Scottish National Party, Perth)

I fear that the Under-Secretary has not been listening to what I said. The key point is that a substantial change has been made to the Bill. The right hon. Member for Carrick, Cumnock and Doon Valley agreed that there would be a political imperative to refer the Bill back to the Scottish Parliament if there had been substantial changes to it. Perhaps the Under-Secretary does not agree with the right hon. Gentleman.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. We cannot have a substantive debate on this matter. I was prepared to allow the hon. Lady to refer to it as a prologue to anything that she might wish to say about the substance of the amendment. The question of whether it is a proper matter for the House, however, has already been decided.

Annabelle Ewing (Scottish National Party, Perth)

I thank you, Mr. Deputy Speaker. I will be guided by your remarks.

I want to conclude by stating that I support the Bill. It is a very important piece of legislation. I supported it on Third Reading, and it is clear that it will go a great way to deal with the evil of drugs barons who are a blight on communities the length and breadth of Scotland. My support has not changed, but I feel that the spirit and the provisions of the Scotland Act 1998 should none the less be respected.

Martin Smyth (UUP, Belfast South)

I support the Bill, and I am very glad to see it moving forward, but some of the extravagant language that has been used, both for and against the Bill, has left me wondering. The heart of the Bill would be torpedoed. I do not believe that the effects would even be of the order of the injury to David Beckham's foot, and he recovered in time for the World cup.

We must be realistic. When the Minister referred to mandatory provisions to avoid plea bargaining, my mind went back to the early 1970s when the then Northern Ireland Government set a mandatory six-month sentence for those who were involved in disorderly behaviour. A young man walking down the Antrim road, whistling, suddenly discovered that he was in a riot situation. He was scooped up, brought before the magistrates court, and a charge of drunk and disorderly was read out, at which point, he was asked, "How do you plead?" He replied, "Not guilty, I don't drink." The solicitor asked whether he could approach his client. He came over to the young man, and said, "I can get you off on drunk and disorderly. A six-month sentence is mandatory for disorderly behaviour." The young man got off, but he now has a record of being drunk and disorderly.

My point is that I started out as sympathetic to the position manifested in the Bill. I have come to wonder, however, whether we are losing the thread of the argument because we are introducing aspects that are wrong. At least an understanding should be given that the court might make a judgment, in the light of the evidence in front of it, as to whether, at that stage, to proceed accordingly.

Bob Ainsworth (Labour, Coventry North East)

We may have got off to a bad start in this debate. The Opposition are clearly so upset at the allegations made by my right hon. Friend the Prime Minister that, subsequently, they are desperate to suggest that the amendment is of no significance. I do not believe that it is; and I do not believe that the records shows that. It is an issue, as some of my hon. Friends have said, that caused considerable lively debate in Committee. No matter how much anybody tries to dress it up, the Lords amendment is of great significance. It moves us back in the direction of a discretionary scheme in which more discretion is granted to the courts in relation to whether they ought to get into the area of confiscation.

I asked a couple of questions of the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). Those who listened will recognise that I received an answer to neither of them. I asked him whether he could shed some light on why the previous Government, of whom he was a part, felt that there was a need to introduce mandatory powers in this regard.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Will the Under-Secretary give way?

Bob Ainsworth (Labour, Coventry North East)

I shall do so in a minute, when I have completed referring to the right hon. and learned Gentleman. I also asked him, based on his considerable experience, which I do not have, whether he has any knowledge of any great injustice that has occurred since that date—he has great knowledge of what happens in the courts, and I am sure that he has contacts who would tell him. Again, I received no answer. Mandatory powers in this regard were introduced by the last Government about 10 years ago, as I described. I received an answer to neither of my questions, and I wonder why.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

In fact, I did give the Under-Secretary an answer. The answer is that I am against mandatory powers, and I always have been. I illustrated that by saying to you, Mr. Deputy Speaker, yesterday, that the mandatory life sentence for murder should be done away with, and that judges should be given the option of imposing a determinate sentence. I am against mandatory sentences.

Bob Ainsworth (Labour, Coventry North East)

The right hon. and learned Gentleman is absolutely right. He did say that, and I heard him say it, but it was not an answer to the question that I asked. He knows that. I asked him whether he could shed any light on the decision that was taken. All I have to refer to is Hansard, which I have read to the House. The Minister, who is now in another place, referred to the fact that, over the previous six years, the courts had not been prepared to use confiscation as was envisaged, and that there was a need to go down the mandatory route. All I have to refer to is the public position of the Government; the right hon. and learned Gentleman has the inside story. He could give us an insight into why it was felt that a mandatory route should be followed. He has not done so; he has chosen to answer another question.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

rose—

Bob Ainsworth (Labour, Coventry North East)

Many other Members—one of whom is trying to intervene now—have experience of practising in the courts. I do not know how long the hon. Member for Orkney and Shetland (Mr. Carmichael) has practised in the courts, but he and others could give us examples of how the mandatory nature of confiscation has led to the kind of injustices that people are saying will arise now. I have not heard such an example. What I have said consistently in Committee and on the Floor of the House is that all the evidence suggests that confiscation is under-used in this country. The powers need to be improved and built on; they do not need to be retreated from. If the hon. Gentleman can give an example of an injustice having occurred, we would all be grateful to listen to it.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

The Minister is well aware that whenever power is given to the Executive, that power is open to abuse. It is therefore necessary to provide protections so that that does not happening. However, does it not cause him even the merest flicker of embarrassment to stand at the Dispatch Box as a Labour Minister justifying his Government's actions by saying, "We're doing exactly the same thing as the Tories"?

Bob Ainsworth (Labour, Coventry North East)

Despite the fact that the hon. Gentleman has experience in the court, once again my question was not answered in the affirmative or the negative. He could give no example of any injustice to show that there is a problem.

Norman Baker (Liberal Democrat, Lewes)

My hon. Friend is relying on the Minister for an answer.

Bob Ainsworth (Labour, Coventry North East)

The hon. Member for Orkney and Shetland is entitled to bring his knowledge and experience to the debate. He asks whether I am embarrassed that the Bill is based on legislation introduced by a Conservative Government. If he reads the relevant Hansard, he will find that my party supported confiscation. The difference is that we are trying to be effective.

I told the hon. Gentleman in Committee that I had hoped that we would be able to climb over the politics. We cannot allow more than a generation of British people to go without effective measures against the profits of crime. If we fail to deliver, we will cause disquiet about our ability to do what they know needs to be done. I had hoped that hon. Members would join us in trying to be effective.

Vera Baird (Labour, Redcar)

Is not the argument just an invention by the Opposition? The director is a public authority. He will have to act in all respects in ways that are compatible with the Human Rights Act 1998 and all convention rights on the ownership of property and fair trials. If he does not, the victim could bring a freestanding course of action. Their argument is utter nonsense.

Bob Ainsworth (Labour, Coventry North East)

My hon. and learned Friend brings considerable expertise to the debate and she is absolutely right. Opposition Members know that the safeguards are in place.

The hon. Member for Beaconsfield (Mr. Grieve) suggested that previous regimes were more draconian and less broad. He is right in the latter regard. However, on whether they are more draconian, I read out Hansard from 1986 in which it is stated that the assets of an individual

"that have passed through his hands in the previous five years, represent the proceeds of"

crime

"except in so far as he shows otherwise."—[Official Report, 21 January 1986; Vol. 90, c. 243-44.]

That hardly indicates that we are introducing something that is intended to be less draconian. We supported the proposition at the time. We support it now. We want to be effective. All parties thought at the time that the measure was needed.

Dominic Grieve (Conservative, Beaconsfield)

I agree with the Minister. I think he accepts that the breadth of the scope of the legislation means that it is possible to attach confiscation proceedings to individuals who have committed crimes that were not contemplated in earlier legislation which an ordinary person, looking in from the outside, would not necessarily have associated with money laundering or the possession of criminal assets. That is why we think that the extra safeguard is sensible. The Minister may also agree that if there is a power of judicial review, it might be sensible to allow the judge who decides the matter to carry out the review himself.

Bob Ainsworth (Labour, Coventry North East)

The Lords amendments reintroduce the concept of discretion. We could never be certain how that would be used because courts would apply it differently. The hon. Gentleman's party did not support that idea when it was in government. We do not support it now. The system incorporates safeguard that can be relied on. Confiscation hearings are instigated only by the court itself or on the application of the director, the agency or the prosecuting authorities. The director and the prosecuting authorities are under a duty to act reasonably and will not mount hearings for inappropriate cases.

Furthermore, the court has the power in criminal lifestyle cases not to make the assumptions if there is a serious risk of injustice. The only valid arguments that I have heard relate to events that would constitute a serious risk of injustice. The safeguards are in place. Opposition Members know that. There is no need to return to the idea of discretion, with all the inconsistencies and uncertainties that it implies.

Boris Johnson (Conservative, Henley)

Why might a judge choose to exercise his discretion against confiscating assets unless he thought that there was a serious risk of injustice? Can the Minister give any substantive reasons why a judge might so act?

Bob Ainsworth (Labour, Coventry North East)

I do not believe that it is necessary to go backwards. Quite the reverse. We have a serious problem with organised crime which is built largely around drugs. The hon. Gentleman knows that and it is widely recognised by all hon. Members. This is not the time to go backwards and water down proposals.

Safeguards are available to cover serious injustices. We do not need more safeguards. If hon. Members want to be effective against drug dealers and organised crime they will support us in the Lobby to reject the Lords amendments.

Clause 7 — Time for making order

Anne McGuire (Labour, Stirling)

I beg to move, That this House agrees with the Lords in the said amendment.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to consider Lords amendments Nos. 11 to 13, 16, 17, 26, 27, 44, 49 to 51, 54, 55, 74, 80 to 82, 85, 86, 95 and 96.

Anne McGuire (Labour, Stirling)

This group of Government amendments on the subject of postponement has two basic purposes, and I trust that we can move forward on the basis of consensus. First, the amendments take account of the criticism of the original version of clause 7 that was made in Committee. Clause 7 originally stated that a confiscation order must be made before sentence. Although the clause was qualified by the postponement provisions in clauses 15 and 16, we agreed that it was somewhat too categorical. In practice, more often than not confiscation orders are postponed. Clause 7 and its equivalents in parts 3 and 4 have therefore been removed, and clause 15(1) and its part 3 and 4 equivalents now leave it open as to whether the court postpones the confiscation hearings.

Secondly, we have added a provision that will prevent a confiscation order from being quashed merely because of a procedural error in the court's application of the postponement provisions. We are most concerned that that sort of thing should not happen to confiscation orders under the Bill. The main purpose of postponement provisions is to enable defendants to be sentenced quickly and to give the court time to deal with the confiscation issues. We do not wish them to be grounds for appeals on technicalities, and the amendments will prevent that from happening.

The amendments will improve the practical operation of the Bill, and I commend them to the House.

Dominic Grieve (Conservative, Beaconsfield)

I can confirm to the hon. Lady that there is agreement on the amendments. I am grateful to the Government for having taken on board what was said during one of the constructive episodes in Committee in which we were pleased to participate. This illustrates the necessity of a dialogue between Opposition Members, Ministers and their Back Benchers to try to improve a Bill. I am delighted that the hon. Lady has been able to achieve that.

Lords amendment agreed to.

Clause 9 — Defendant's benefit

Anne McGuire (Labour, Stirling)

I beg to move, That this House agrees with the Lords in the said amendment.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to consider Lords amendments Nos. 7, 8, 10, 14, 15, 31 to 33, 45, 46, 48, 52, 53, 67, 75 to 77, 79, 83, 84, 100 and 324.

Anne McGuire (Labour, Stirling)

This is a mixed group of Government amendments. Some of them are fine tuning, but as a whole they are important to the operation of the Bill.

Amendments Nos. 6 to 8, 10, 45, 46, 48, 75 to 77 and 79 deal with a technical problem affecting certain cases where a previous confiscation order has been made against the defendant. That will ensure that any benefit taken into account for the purposes of a previous confiscation order is also taken into account when the court comes to make a new order against the same person.

Amendments Nos. 14, 15, 52, 53, 83 and 84 respond to Opposition concerns about clause 19, which empowers the court to order the defendant to provide information.

First, we have inserted a protection against self-incrimination for defendants. Secondly, we have made it clear that a failure to comply with the court's order exposes the defendant to contempt proceedings. That is necessary because the court has an explicit power under the clause to draw adverse inferences from such a failure. In the absence of a clear statement to the contrary, that explicit power could be misconstrued as preventing the court from exercising its contempt powers. The amendments put it beyond doubt that that is not the case.

Amendment No. 31 would make hearsay evidence admissible in restraint proceedings in England and Wales. It is needed because hearsay is not normally admissible in the Crown court, and restraint proceedings rely heavily on it in practice.

Amendments Nos. 32, 33 and 324 simply take note of the enactment of the Land Registration Act 2002. Amendment No. 67 would bring the legislative steer in clause 134 on the powers of the court and administrator in Scotland into line with those in England, Wales and Northern Ireland.

Amendment No. 100 is technical, and would bring clause 212, which relates to the protection of receivers in Northern Ireland, into line with its equivalents for the other two jurisdictions.

Nick Hawkins (Conservative, Surrey Heath)

We welcome the Under-Secretary's acknowledgement of many matters that we raised in Committee. I also welcome her transformation from being a Whip, in which role she also helped the Committee. It is a shame that the hon. Members for Glasgow, Cathcart (Mr. Harris) and for Glasgow, Pollok (Mr. Davidson), who served on the Committee and claimed in the previous debate that the Opposition were trying to wreck the Bill, are no longer present to hear her acknowledge that the Government are responding to the constructive points that we made to improve the measure. At least her fellow Under-Secretary is here and, whatever he says, he knows in his heart that the time in Committee was well spent and that it improved the Bill.

We want to make two small points. First, I want to consider the new provision about hearsay evidence, which was not debated in Committee but was introduced by Lord Bassam of Brighton on 22 April 2002. As Lord Goodhart said:

"It is obvious that any introduction of hearsay evidence into criminal proceedings . . . where it was not available before is a matter that needs to be looked at very carefully."

He went on to say that its introduction

"is solely in relation to restraint orders."—[Official Report, House of Lords, 22 April 2002; Vol. 634, c. 115.]

He did not therefore object to it. Will the Under-Secretary confirm on the record that the Government do not intend the provision to be the thin end of any wedge, or plan to introduce new provisions to use hearsay when it has previously been inadmissible?

Will the Under-Secretary of State confirm that she and her officials will try to ensure that all those who try the cases that involve the new use of hearsay have specific extra training? We are considering a new approach, which, as the Government rightly said, broadens powers. I should be grateful if the Under-Secretary would confirm that the work of the Judicial Studies Board and the preparation of judges to deal with the novel factors will take account of that.

The Under-Secretary referred to another matter that I wanted to raise: the importance of the privilege not to self-incriminate. We welcome the Government's response to Opposition Members' anxieties in another place and in Committee about that.

The hon. Lady was right to say that our debates, which led to the Government amendments, greatly improved the Bill. We do not therefore oppose the amendments.

Anne McGuire (Labour, Stirling)

I thank the hon. Gentleman for his comments. Although we have criticisms of the Opposition, much of the discussion in Committee was constructive and I am grateful to him for recognising that we responded to that.

I confirm that the provision on hearsay does not constitute the thin end of any wedge. It does not change the procedure and is simply a consequence of moving restraint from the High Court to the Crown court. Although I accept that introducing hearsay may be a new departure in some circumstances, we give a commitment to additional training. The Judicial Studies Board will ensure that that is done. In view of those assurances, I trust that we shall have consensus on the amendments.

Lords amendment agreed to.

Lords amendments Nos. 7 and 8 agreed to.

New Clause

Bob Ainsworth (Labour, Coventry North East)

I beg to move, That this House disagrees with the Lords in the said amendment.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this it will be convenient to consider Lords amendments Nos. 30, 47, 66, 78, 99 and 166 and the Government motions to disagree thereto.

Bob Ainsworth (Labour, Coventry North East)

In moving on to compensation for creditors with regard to the confiscation system, I should like to make it clear to the House that, in discussing Lords amendment No. 4 and the associated group of amendments, I hope that I said nothing to detract from the understanding that confiscation applies to a very wide range of offenders—far wider than that which was covered previously. My hon. Friend the Member for City of York (Hugh Bayley) raised an issue in respect of international bribery and corruption, about which I know he is concerned. I am sure that he will be pleased to hear me confirm that the Bill enables criminal confiscation orders to be made in relation to such offences and allows restraint of assets that are the proceeds of such offences.

The amendments cover a territory that should be very familiar to the House. We discussed the issue with which they deal at considerable length in Committee on 20 November last year. I should also make it clear to the House that the provisions that the amendments would overturn have been a settled feature of the tough confiscation legislation that the Conservative party introduced in 1986 and 1988. The hon. Member for Orkney and Shetland (Mr. Carmichael) is not present, but I am not the slightest bit embarrassed to say that we are trying to build on that tough legislation.

Given the degree of earlier discussion about the issues, I should like briefly to describe the amendments, which all relate to the position of unsecured creditors who have outstanding loans. The effect of amendments Nos. 9, 47 and 78 would be to make the enforcement authorities liable to pay the unsecured debts of any person whom the defendant was unable to repay because of the making of a confiscation order. Amendments Nos. 30, 66 and 99 would allow restrained assets to be used to pay any debts of the defendant that were incurred before the restraint order was made. Amendment No. 166 would have a similar effect in relation to part 5 as amendments Nos. 9, 47 and 78. It would empower to court to require the enforcement authority to pay compensation to any person whom the respondent was unable to pay because of the making of a civil recovery order. The requirement could be placed on the enforcement authority if the debt was incurred for full consideration and the debtor had no reason to expect that the recovery order could be made against the respondent.

I shall speak first to the amendments affecting parts 2, 3 and 4. The amendments would undermine the confiscation scheme so completely as to render it inoperable. As I indicated, they would make the enforcement authorities liable to pay any unsecured creditor of the defendant at the time when the confiscation order was made.

The amendments state that such payments would be a matter for the courts; the creditor would make an application to the court and it would be for the court to decide who should pay. This raises the question of how such applications would be defended. The defendant to the action would be the enforcement authority involved in obtaining the confiscation order—it might be the Crown Prosecution Service, Her Majesty's Customs and Excise, or the director of the Assets Recovery Agency. It would fall to those authorities to defend such actions. I would personally prefer the CPS, Customs and the director of the agency that we envisage arising from the Bill to spend their time carrying out their proper functions, rather than defending actions against them in the courts from persons claiming to be the unsecured creditors of criminals.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Will the Minister be good enough to tell the House the difference in principle between protecting under clause 310 an innocent purchaser for value of what would otherwise be recoverable property and a bona fide supplier of goods such as the local plumber?

Bob Ainsworth (Labour, Coventry North East)

I think that it is quite clear what the difference is. The powers in the Bill give us various abilities to trace the proceeds of crime or that which has come to represent the proceeds of crime. To do that, we need to be able to trace it through the many transactions that might take place, some of which will be the quite genuine transactions that people enter into throughout their lives, while others will be transactions designed to hide the proceeds of crime.

Norman Baker (Liberal Democrat, Lewes)

rose—

Bob Ainsworth (Labour, Coventry North East)

I have to tell the hon. Gentleman that I cannot respond to two Members at once.

In giving the powers to trace the eventual representation of the proceeds of crime, we need to protect the genuine, bona fide purchaser for value, but I do not believe that the state needs to take on the responsibility for compensating the unsecured creditors of criminals. I am not sure that the right hon. and learned Gentleman has ever argued that position in the past, and he should think very seriously about some of the results that might flow from that proposition.

Norman Baker (Liberal Democrat, Lewes)

The Minister said, if am not misquoting him, that he believed that the Lords amendments would undermine the confiscation procedures. Is it not the case, however, that those who have ill-gotten gains will still lose them, and that the only questions are: what will happen to those ill-gotten gains, and should genuine creditors be able to reclaim their money?

Bob Ainsworth (Labour, Coventry North East)

If I thought that that was the case, I would give serious consideration to the amendments. I do not believe, however, that members of the criminal fraternity are so naive that—if we put these proposals into the Bill—they would not be able to conjure up situations in which they owed all sorts of people money, to ensure that, if a confiscation order were made against them, they would have no effective assets that were not owed to whoever—their wife, perhaps, or Joe up the road. In that way, they would make sure that the state could not get its hands on the proceeds of crime.

Norman Baker (Liberal Democrat, Lewes)

I understand the Minister's argument. Does he accept, however, that there will be many occasions on which innocent tradesmen and others—many of whom will be adversely affected by the provisions in the Bill—will be genuinely innocent victims? Is he saying that, if such people have to suffer, that is a price that must be paid for the greater good?

Bob Ainsworth (Labour, Coventry North East)

There will be such occasions, but I ask the hon. Gentleman to consider this argument. When people become unsecured creditors of other individuals, it is a decision that they take for themselves, and a risk that they take upon themselves. There are many circumstances in which they effectively forfeit what they have loaned to the individual concerned. If someone owed tax, for example, and had no other means, would the hon. Gentleman suggest that the Inland Revenue should not collect the tax, and that the unsecured creditors should be paid instead, coming ahead of the tax man?

Would the hon. Gentleman suggest that, if a fine were imposed by the court on someone as a result of his criminality, the payment of the fine ought to come lower down the list than the payment of an unsecured creditor in relation to the call on that person's assets?

There are lots of circumstances in bankruptcy, court and other proceedings in which people do not come at the top of the list because they are unsecured creditors. I see no reason for their coming top of the list with regard to confiscation. My real problem—I hope that the hon. Gentleman accepts this—is that the scope for abuse is absolutely phenomenal—to the point where it would render confiscation inoperable.

Mark Field (Conservative, Cities of London and Westminster)

I appreciate that there is scope for abuse, and the Minister is right to refer to it. Equally, there is the issue of commercial certainty and common sense. In answering the hon. Member for Lewes (Norman Baker), the Minister referred to the real point on insolvency. However, does he not appreciate that there is an inconsistency between the Government's position in that regard and the new Enterprise Bill, under which, of course, the Crown preference is being done away with? It is therefore now understood that the Crown—be it some tax authority or other—would not necessarily have preference in such circumstances when an insolvency occurred.

Bob Ainsworth (Labour, Coventry North East)

Let me continue with the notes that I had planned to read to the House. Insolvency will be picked up and, I hope, dealt with satisfactorily. If not, we may wind up differing on the issue.

As I was saying, the enforcement authorities would be in the front line of implementing the amendments, so I asked my officials to ask them what they think. [Interruption.] The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) has evidently lost all interest in the Bill.

We asked those who would wind up defending such arrangements—Customs and the CPS, for example—what the practical effect of the amendments would be. They told us that it would be highly detrimental to the operation of an effective confiscation system. They consider, as we have always argued, that the amendments would provoke a flood of bogus applications from alleged creditors, who are often the criminal's associates, based on spurious documents purporting to show that debts occurred before the relevant date, when in reality they did not.

The amendments would also encourage defendants to defeat the confiscation process by running up legitimate debts, safe in the knowledge that the authorities would be left out of pocket at the end of any confiscation proceedings. That would deter the authorities from taking on cases in the first place.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

rose—

Bob Ainsworth (Labour, Coventry North East)

Now that the right hon. and learned Gentleman has decided to pay attention to the proceedings, I give way to him.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I know that the Minister is concerned about the position of employees. Will he please tell the House the answer to this question? If a bona fide person is employed by the person against whom the confiscation order is made and the effect of the confiscation order is to prevent the person against whom it is made from paying his employees, will the employee have any claim as a secured creditor, or is he simply out of pocket?

Bob Ainsworth (Labour, Coventry North East)

Let me ask the right hon. and learned Gentleman to think about the issue that he raises. I do not know whether he is suggesting that, because somebody is an employer, that protects them against the power to confiscate the proceeds of crime.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Employee protection.

Bob Ainsworth (Labour, Coventry North East)

I am talking about the employer. I do not believe that employers should be put in any special position where they are protected because they are employers and allowed to continue to keep the profits of crime.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Employee protection.

Bob Ainsworth (Labour, Coventry North East)

Employees have statutory protection in many, many circumstances. I see no measures in the Bill that would decrease the protections given to employees in many circumstances in which they find themselves on the receiving end of the demise of their employer.

Nick Hawkins (Conservative, Surrey Heath)

Someone who is owed wages, but has not yet been paid, simply becomes yet another unsecured creditor—is that not true? The Minister may not fully understand the implications of his own legislation, but there is no doubt that owed wages would simply disappear if the confiscation order were made. Then there would be no security for the person who was owed.

Bob Ainsworth (Labour, Coventry North East)

As I think I have told the hon. Gentleman, I do not believe that because someone is an employer—

Nick Hawkins (Conservative, Surrey Heath)

That is not the point.

Bob Ainsworth (Labour, Coventry North East)

It is the point. Will the hon. Gentleman listen for just a minute? I do not believe that because someone is an employer and therefore has the responsibilities of an employer, a separate set of regulations should govern what that employer should get away with in terms of profits from crime. Furthermore, I do not think any measures in the Bill are detrimental to the statutory protections offered to employees in the many other circumstances in which their employer's demise may take place.

Rob Marris (Labour, Wolverhampton South West)

It appears that the Opposition want to put the employee of someone subject to such an order in a better position than the employee of a company that goes bust. In the latter case, the holders of fixed charges and floating charges would in many instances take all the money. The discharged employees would have recourse only to the Secretary of State's redundancy fund, which would apply following a restraint order against, say, a drug-dealing employer.

Bob Ainsworth (Labour, Coventry North East)

My hon. Friend is right. It is being suggested that employees of a criminal employer would enjoy greater protection than those of a legitimate business enterprise. I do not know whether Conservative Members believe that that ought to be the case, but if they want to advance such an argument they can wait until I sit down. It would certainly be interesting to hear what they had to say.

Annabelle Ewing (Scottish National Party, Perth)

I do not think such an instance will arise, but in what other circumstances—under Scotland, England and Wales or Northern Ireland law—are creditors put in such a preferential position?

Bob Ainsworth (Labour, Coventry North East)

I do not pretend to be an expert. I never come to the Dispatch Box and claim to be an expert on insolvency, contract law, commercial law or anything else of that nature. But I know of no circumstances in which people are given such preferential treatment, which is why I have raised the issue of tax that is owed and the issue of fines. In neither of those circumstances are creditors given preferential treatment in the case of unsecured loans, but that is now being proposed in relation to confiscation.

As I have said, the amendments would encourage defendants to defeat the confiscation process by running up legitimate debts, safe in the knowledge that the authorities would be left out of pocket at the end of the proceedings. That would strongly deter the authorities from initiating cases, and would put a significant weapon in the hands of criminals seeking to disrupt their activities. We also consider the amendments wrong in principle, for a number of reasons. As we said in Committee, they have implications for a wide range of other debts to the Crown, such as unpaid taxes and fines. Although it was argued in another place that it was possible to distinguish between such disposals, there is no difference between them: they are debts to the Crown.

We have yet to hear a satisfactory explanation of how that objection can be overcome. The logical consequence of the amendments, if they are accepted, is the Government's establishing a scheme to transfer unpaid taxes, fines and other obligations to the creditors of those with outstanding loans which, as a result of an obligation, the debtor is unable to repay. We feel that no Government would ever accept such a principle. Nor is it clear to us why the enforcement authorities should be liable for the debts, given that the defendant's liability for a private debt is unaffected by the making of a confiscation order. The defendant should be obliged to pay the confiscation order and to honour the debt, which is what the Bill provides for.

Dominic Grieve (Conservative, Beaconsfield)

It seemed that the Minister answered his own question as he went along. He mentioned taxes and fines, and said that we should not contemplate the idea of taxes and fines being paid to a creditor, but I am sure that he will agree that we are not concerned in this case with taxes and fines. This is a completely new regime. The money that is being taken by the state is not being taken either as a tax or a fine. Indeed, in the civil context, it is a novel concept.

Bob Ainsworth (Labour, Coventry North East)

The fact that it is a new concept hardly makes the hon. Gentleman's case. These are the proceeds of criminality. He appears to suggest that the proceeds of crime should be used to pay creditors. If someone were to steal my car, they should not use the proceeds to pay their debts, or be allowed to do so. Why on earth does he think that someone should be allowed to use the proceeds of crime to pay their debts?

Dominic Grieve (Conservative, Beaconsfield)

The Minister is being disingenuous. If his car is stolen and the money is used by a person, he will have a prior claim on that money. We have discussed this in Committee; we went round and round in circles. The point is that no one has a prior claim to a great many of the assets that are being confiscated. They are not a debt owing to the state. They are not a tax. They are not a fine. They are moneys that may have been acquired by a tremendous amount of sweat and labour by the person concerned. It just happens to have been tainted by criminality. That is the distinction. When implementing the new regime, we should have regard to the victims, who will be the unsecured creditors in this case.

Bob Ainsworth (Labour, Coventry North East)

As I have said, the problem, which I hope the hon. Gentleman acknowledges, is that it would be easy to fabricate such situations, but I am not suggesting that the creditors are criminal in those circumstances. We do not encourage people to thieve to pay their debts, so why on earth should we allow people to pay their debts from property that they have stolen? I simply do not see the point. That is my fundamental objection in principle.

If the hon. Gentleman is to persuade the House to support the amendments from the other place, he will have to explain in great detail how on earth we would guard against the kind of abuses that would inevitably arise, rendering confiscation ineffective. Here is a second opportunity for the Opposition to prove the Prime Minister wrong and to support the Government on these much needed measures, which go to the heart of the Bill.

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

I would be grateful if the Minister clarified what the effect of the Opposition proposals would be. Am I right in thinking that, if someone were charged but not detained on offences, and they would be likely to know whether they were guilty, they could easily decline to pay any credit card bills that they had outstanding and incur all sorts of expenditure? If the Lords amendment were passed, would that expenditure be met out of assets that would otherwise be seized? Is that the way in which the provision would operate? Surely there would be a perverse incentive to waste money—to spend money on meals and drink?

Rob Marris (Labour, Wolverhampton South West)

These people could buy a Rolls-Royce.

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

If they bought a Rolls-Royce, the Rolls-Royce would then be an asset that could be seized, but it would be difficult to get a meal or drink back. It is difficult to get a drink out of some of my colleagues at the best of times. After it had been consumed, it would be even more difficult.

Bob Ainsworth (Labour, Coventry North East)

I do not know whether my hon. Friend falls into this category, but there are people who, for many different reasons, live constantly in a state of credit and debt.

There would be so many ways round the legislation if we accepted the amendments. If, because of the activities that they knew they were involved in, people had any suspicion that they might be threatened with a restraint order, they could ensure that their debts were always more than their assets, and so be free from any threat of confiscation. Alternatively, they could manufacture unsecured creditors after the fact, and it would be extremely difficult and massively time-consuming to prove that those creditors were not bona fide.

Earlier in the debate hon. Members complained that the Assets Recovery Agency ought to be two or three times the size that we envisage, and Members from Northern Ireland want there to be a substantial office over there. Is this what we want the Assets Recovery Agency to do? Do we want it to spend half its time trying to prove in court that creditors are not bona fide, or do we want it to get on with confiscating the proceeds of crime? I suggest the latter, so I ask hon. Members to vote against the Lords amendments.

Nick Hawkins (Conservative, Surrey Heath)

We on the Conservative Benches feel that in part the Minister and his colleagues genuinely misunderstand the purpose of the Lords amendments, and in part, as we heard in the later part of the Minister's speech, they are overstating their response. May I make it clear, especially to Government Back Benchers, that the purpose of the amendments is only to prevent the creation of more entirely innocent victims of the Bill? To those who are worried about the idea of protecting the innocent little man, I shall quote from what Lord Goodhart said in response to the Minister in another place:

"As the Minister says, the Bill protects the rights of secured creditors. That means banks and building societies. They are the big boys, who always come out well on this sort of occasion. However, the small people—the unsecured creditors—lose out."

In an extraordinary exchange between the Minister in another place—Lord Falconer of Thoroton—and the Opposition spokesmen there, the Minister suggested that innocent people could protect themselves from the legislation by "getting security", and putting themselves in the position of secured creditors. To his credit, the Under-Secretary has not argued that this afternoon. Both my noble Friend Baroness Buscombe and Lord Goodhart pointed out that it was ridiculous to expect small builders or plumbers to get security.

We are talking about the entirely innocent bona fide person with no knowledge that the small amount of building or plumbing work that he is doing might be for somebody who, although they appeared legitimate, later turned out to be on the receiving end of a confiscation order.

When these matters were being debated in another place—the amendments were eventually carried by a substantial majority—Lord Goodhart said:

"Obviously, we do not wish to enable bogus debts and artificially created debts to be used, as I have said, to extract money. So the existence of full consideration provided by the creditor must be shown. Thirdly, the creditor must have no reason to believe that a confiscation order or a civil recovery order is likely to be made so that if the creditor is aware of the possibility of an order then he is on notice of the existence of the risk. We accept that in those circumstances it is proper that he should bear that risk".—[Official Report, House of Lords, 25 June 2002; Vol. 636, c. 1231-37.]

We accept entirely the Minister's case against the creation of bogus debts, but if he consults those who advise him, he should accept that the courts are well used to analysing whether debts are bogus. If it is made clear, as was the intention when the amendments were agreed to in another place, that their purpose is only to protect the entirely innocent, such as the small builder or small plumber that I have talked about—

Douglas Hogg (Conservative, Sleaford and North Hykeham)

My hon. Friend points out that the courts have experience in determining whether or not a claimant is bogus. Will he also point out to the Under-Secretary that clause 310 and related clauses make provision for exactly that process?

Nick Hawkins (Conservative, Surrey Heath)

As my right hon. and learned Friend points out, certain other parts of the Bill are inconsistent with this one. In our lengthy debates in Committee, we tried very hard to ensure that, so far as other aspects of the Bill were concerned, those who are bona fide are protected. The Government have accepted our argument in other parts of the Bill and in their own provisions, and we find it difficult to understand why they have not accepted the same logic here.

Stephen Hesford (Labour, Wirral West)

Will the hon. Gentleman address the point that was made earlier? The principal reason why Labour Members will reject the amendments is that sham creditors could be put forward by drug dealers, for example, and it would take for ever to get the compensation orders through the courts. The hon. Gentleman has not mentioned that point, and he should deal with it.

Nick Hawkins (Conservative, Surrey Heath)

The hon. Gentleman is mistaken—that is precisely what I have been talking about. Indeed, I quoted Lord Goodhart, who explained that the purpose of the amendments is to prevent the creation of bogus debts. The hon. Gentleman should know from his own professional expertise that in bankruptcy cases, courts frequently have to deal with supposedly legitimate debts that turn out to be bogus. Courts therefore have enormous expertise in such matters.

We are talking about trying to prevent entirely innocent people from being caught by these provisions as a side wind. It is a question of introducing not loopholes for employers, but protection for employees and small traders.

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

rose—

Stephen Hesford (Labour, Wirral West)

For the benefit of the House, will the hon. Gentleman explain what will happen if drug dealers know that they can gum up the works? My hon. Friend the Minister mentioned staffing the agency in respect of Northern Ireland and other places. If drug dealers know that they can gum up the works with all this nonsense, they will do so, and the Assets Recovery Agency will spend its time gazing at its own navel.

Nick Hawkins (Conservative, Surrey Heath)

My point is that the works would not be gummed up because the courts have great expertise in showing easily what is bogus and what is not; indeed, that process is already commonplace in insolvency cases. These amendments were put forward in another place on the basis of making it clear, specifically and in terms, that there is no intention of opening a loophole for bogus claims.

Tom Harris (Labour, Glasgow Cathcart)

Perhaps the hon. Gentleman can deal with a specific example of what Labour Members are worried might happen if the amendment were accepted. What if it emerged that a suspected drug dealer who is appearing before the courts owes hundreds of thousands of pounds to, for example, the much maligned sauna parlour or tanning shop? Indeed, we discussed such an example at length in Committee. Such premises are often owned by relatives or friends of drug dealers. With a good accountant, it would be very easy to wrap up such a process interminably—to the extent that such confiscation orders would mean absolutely nothing.

Nick Hawkins (Conservative, Surrey Heath)

I am afraid that the hon. Gentleman is mistaken in thinking that it is easy to wrap up these matters interminably. Given the existing expertise in our courts, I do not accept that it would be at all difficult to disentangle the bogus from the genuine. That happens all the time—day in, day out, week in, week out. It would not gum up the works.

Bob Ainsworth (Labour, Coventry North East)

The hon. Gentleman says that it happens all the time and that that is the reality of life, but let us consider that reality. He talks about trying to protect the little man, but he will surely accept that small business people have to protect themselves from default every single day of the week. When was the last time he managed to get a double glazing firm to fit windows without its receiving some money up front? How much work has he ever got a plumber to do without providing some kind of credit first? He is a Member of Parliament who is clearly not going to rush off, yet such people still seek to protect themselves. As he well knows, that is the reality of life as it affects the little man now.

Nick Hawkins (Conservative, Surrey Heath)

I do not accept that that is common practice for small firms. It is not easy to obtain security for small debts. Lord Falconer of Thoroton repeated the argument that that is the way of the world. However, in reply, Lord Goodhart said that

"even the most distinguished and successful of barristers sometimes has to appear to advance a totally indefensible argument. I must say that I have rarely, if ever, heard such an indefensible argument as that put forward by the noble and learned Lord this afternoon.

For a start, he said that the enforcement authority would be an agent paying off the unsecured debts of the criminal . . . he then said that what we are asking for would be 'stunning' protection. What is stunning about this is the Government's claim to take away an innocent person's property. That is, among other things, contrary to the first protocol of the European Convention on Human Rights.

In the case of the builder that we have suggested, the Government are claiming money twice because the state gets the improved value of the defendant's building without having to pay"

the trader

"for the cost of the improvement. That is clearly double counting."—[Official Report, House of Lords, 25 June 2002; Vol. 636, c. 1237.]

Vera Baird (Labour, Redcar)

I intervene in a genuine search for enlightenment. The point has already been made by several hon. Members, but all we are really concerned about is a situation in which someone is forced into bankruptcy or insolvency. If the director takes away part of that person's assets but he still has some left, he pays his own debts. If he is forced into bankruptcy or insolvency, the hon. Gentleman wants to protect the little man from that situation; but why should the little man in that situation be in any better position because the criminal has been forced into bankruptcy by this legislation as opposed to by the VAT man, the tax man, his mortgagees or anyone else? [Interruption.]

Nick Hawkins (Conservative, Surrey Heath)

The simplest answer—as my hon. Friend the Member for Beaconsfield (Mr. Grieve) has just pointed out from a sedentary position—is that in this situation there is no debt. That is what makes it different from the conventional bankruptcy. The hon. and learned Lady shakes her head, but I hope that the Minister will accept our good will. We are not trying to drive a coach and horses through the legislation: we are trying to protect entirely innocent people. The Minister knows that and we discussed the issue at length in Committee.

The debate will not improve by repetition, but when the Minister responds I hope that he will accept that when Baroness Buscombe and Lord Goodhart proposed the amendment in the other place, they were supported by many peers, of all parties and none, including Law Lords who understand the significance of the point that we are making. This is not simply a matter of removing the assets of the criminals: it is ensuring that no more innocent victims are accidentally caught in the side wind from the Bill.

Vera Baird (Labour, Redcar)

Much of what I intended to say has already been said, so I shall be brief. Unsecured creditors, by definition, do not have security for their debts. They are hostages to whatever befalls their debtor. He may run away and go overseas, and if they cannot get their money, that is hard luck. If the debtor becomes insolvent or bankrupt, again the creditors might not be able to get their money. That is not a new situation, nor is it unexpected. In business, that sort of thing needs to be taken in one's stride.

I do not accept the argument put vicariously by the hon. Member for Surrey Heath (Mr. Hawkins), for the hon. Member for Beaconsfield (Mr. Grieve), that the order does not constitute a debt to the state. Once an order has been made, there could be no more acute debt to the state. Why should particular protection be given in such cases?

Dominic Grieve (Conservative, Beaconsfield)

I disagree with the hon. and learned Lady. Generally speaking, in civil litigation or even in tax there is a legal obligation of money owing by one person to another. In this case, although I fully support the institution of the new regime, there will be no debt owing. The money will be taken not because it is owed as a legal debt, but because its origin is tainted. That is a distinct state of affairs and that is why it would be proper to look to the other victims of the offender, which would include the small creditors.

Vera Baird (Labour, Redcar)

That intervention does not make sense. Once the order has been made, there is a debt to the state. It is as simple as that, and no alternative argument can alter the matter. The order will push the defendant into bankruptcy, at which point the debt becomes a debt to the state. It is at that point that a person owed money by the defendant will get into difficulties.

Boris Johnson (Conservative, Henley)

The hon. and learned Lady may be right that, in her legalistic phrase, it is a debt to the state, but does not the state also owe a duty to the innocent people who will be caught up in this expropriation of money?

Vera Baird (Labour, Redcar)

That takes me neatly to my next point. I repeat that there is no justification for putting victims of bankruptcy caused by this Bill into a separate category from those who are victims of other types of bankruptcy.

No Conservative Member has offered a convincing argument for that. However, if such an argument had been made, there would need to be a value judgment about whether it was more important to protect unsecured creditors or to seize criminals' assets for the state's use. At least part of what is seized will be given to the local police force, for use on local policing needs such as the detection of crime and the prevention of future crime. The proceeds would be used to save people in my constituency and others like it from the disorder that wrecks their lives every day. My value judgment would place confiscation above the protection of unsecured creditors

Dominic Grieve (Conservative, Beaconsfield)

May I offer a couple of other examples? If a house is seized whose value has been improved by a local builder to the tune of £25,000, the state acquires the benefit but the builder does not get compensated for the money that he has put in. Again, what happens if a car that has not been fully paid for is seized? The state takes the car, but the person who sold the car is left with nothing because he is not secured. Surely that is the justification for the amendment that the hon. and learned Lady seeks?

Vera Baird (Labour, Redcar)

I repeat that that is exactly the same as what happens when a person goes bankrupt for any other reason. We are concerned not with what happens when a person has enough money to pay his debts, but with what happens when the order renders that person bankrupt. A bankrupt is bankrupt, regardless of who caused it, and a creditor should not be left in a better position because the bankrupt happens to be a criminal. There is no sense in that argument.

Mark Lazarowicz (Labour/Co-operative, Edinburgh North and Leith)

Does not my hon. and learned Friend agree that a creditor in this situation would enjoy a benefit that is not available to others? He would benefit from what is in effect a state guarantee service, which would pay the debt. No other type of creditor has access to such a service.

Vera Baird (Labour, Redcar)

Creditors in the situation that has been described would either get the cast-iron benefit of the state-backed guarantee company, or there would be intolerably long arguments in court about who owed what to whom, and about what was or was not a justifiable debt. I do not accept what the hon. Member for Surrey Heath said about courts arriving at quick and simple decisions.

Do Opposition Members really think that the courts should spend time deciding whether claims are bogus, when the only people with real information about that will be the parties to the claim—that is, the gangster and his best friend, or the gangster and some remote acquaintance arranged through that best friend? How will a court be able to get to the bottom of that puzzle simply and easily?

Moreover, a debt might be genuine but there could be a problem with the goods—how would the court deal with that? Let us say that the police find a computer supposedly worth £10,000 in a criminal's house, but discover that it is not fit for its purpose and does not work: is there then to be a long civil trial to determine whether the goods were defective and whether the debt is really owed? The proposal is guaranteed to gum up the works.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The hon. and learned Lady will be familiar with clause 310, where she knows full well the Bill provides that a property does not come within the class of recoverable property if it was disposed of in good faith and without notice. Those are precisely the issues that we are discussing. Is the hon. and learned Lady saying that the court cannot discharge the function under clause 310?

Vera Baird (Labour, Redcar)

No, I am not saying that. I am saying that what is suggested is a recipe for gumming up the works. It offers to the criminal an opportunity to do everything that he can, as soon as he feels the scent getting closer, to generate as much debt as possible.

It is likely, is it not, that such debts which are unsecured will be small ones? It will not necessarily be the normal case that seizing a criminal's assets under the Bill will make him go bankrupt or insolvent. We are speaking of a small number of small debts which the amendment would assist. The balance of opinion in all parts of the House is clearly against the amendment, which would open the floodgates to abuse.

Nick Hawkins (Conservative, Surrey Heath)

Will the hon. and learned Lady consider the possibility that if the Bill becomes law in its current form, a year or so after it has come into force she may be faced in her constituency surgery in Redcar one day by a small builder who comes along and says, "I want you to take this up. I am £1,000 out of pocket for work that I did in all good faith for somebody who I had no idea was a criminal, but who has been the subject of a confiscation order under the Act." Will the hon. and learned Lady say to her constituent the builder, "I am terribly sorry. My value judgment is that it is far more important that the state should grab the money than that the innocent builder should have his £1,000"?

Vera Baird (Labour, Redcar)

I have explained the realities of the position, which are not as the hon. Gentleman is, I fear, pretending that they are.

Norman Baker (Liberal Democrat, Lewes)

We heard from the Home Secretary this week how important it was that the victim should come first under the new criminal justice regime that the Government want to create. Great stress was put on that. We were told that for too long, the victims of crime had been neglected and the criminals had got away with it. Yet this afternoon, I hear many siren voices from the Government Benches clamouring to get hold of the guilty, and not very many who are keen to speak up for the innocent, and there are innocent people—

Tom Harris (Labour, Glasgow Cathcart)

rose—

Norman Baker (Liberal Democrat, Lewes)

I have barely started, so I shall wait until I have made some progress before I give way.

As the Minister was generous enough to accept when I intervened on him, some innocent people will be caught up and will suffer as a consequence of the Bill. For reasons that I entirely understand, the Minister fears that if the amendment were passed, it would open the floodgates to people gumming up the works—that is the phrase that has been used—and that the effect of the Bill would be diminished.

I understand that point, and we in the Opposition must address it. Equally, the Minister must address the point that innocent people will be caught up. It is not satisfactory to brush that aside and say, "If a few bystanders are caught up in the process, that's tough." In the House, if nowhere else, we must ensure that the innocent are protected. That is a basic point of justice, which we operate in our democracy. It is no good acting as though the innocent do not count; they do count.

How does the proposal differ from the existing situation? Let me deal with some of the points that Labour Members have made. The first difference is one of scale. The Minister said, in response to a comment from one of his colleagues, that confiscation will apply to a wide range of offenders. Indeed, the Bill is designed to be far reaching and to ensure that the proceeds of crime will be picked up wherever they can be found. Of course my colleagues and I support that principle, as do the Conservatives. So the scale of possible injustice will be greater because the scale of confiscation will be greater. That is the first point.

The second point is about predictability. The Minister said that small builders and others who enter into arrangements with other people ought to have their eyes open and be prepared for eventualities that are unhelpful to them, and they are to some degree. However, the difference is that it will be more difficult for the small builder or another individual to pick up the fact that a calamity is about to befall him and that the debt will somehow be unsecured because the very purpose of the legislation is to catch not simply the low-life drug dealers that the hon. Member for Henley (Mr. Johnson) talked about and whom people in the community may well know. [Interruption.] Did the hon. Gentleman say that there were such people in Henley?

Ian Lucas (Labour, Wrexham)

The hon. Gentleman said, "High life".

Norman Baker (Liberal Democrat, Lewes)

Oh, high life. The people who undertake tasks or perform services for those people probably know that they may well have question marks over their heads, that they are identified in the community and therefore that there is a risk. However, the Bill is designed to deal with the people whom the hon. Member for Glasgow, Pollok (Mr. Davidson) wants dealt with. They are the sort of people who are City business types, who are respectable types, who have a nice house in Esher and who appear to be the pinnacle of respectability. They are the kind of people who the hon. Gentleman wants to get at. They are the kind of people who may well have a criminal lifestyle, and they will be caught for the first time. It is very good that we catch those people, but how can a small builder have a suspicion when he undertakes a massive job for a landowner with a big house in Esher that suddenly, before his very eyes, all the money will be seized because, for the first time, we have a legislative framework that will allow that to happen? He will have no way of knowing that.

Annabelle Ewing (Scottish National Party, Perth)

I do not want to go over the same ground again, but the small builder in the hon. Gentleman's scenario would be at exactly the same risk as if he were to treat with a landowner whose assets were sequestrated. What is the difference?

Norman Baker (Liberal Democrat, Lewes)

I am trying to explain the difference, and I am running through a list of points that show the difference. I have dealt with two main differences so far—scale and predictability.

The third point is that the fact that the Minister sought to draw inappropriate parallels in responding to my intervention. He referred to the Inland Revenue and tax liabilities. He also referred to the possibility of imposing fines. I understand why he makes those points, but, with respect to the Minister, they are not appropriate analogies to make.

First, the Inland Revenue involves a debt. We are not talking about debts, except in the purely legalistic and slight odd way in which the hon. and learned Member for Redcar (Vera Baird) did so. What we are talking about is not the same as a tax debt. Indeed, I think that the hon. Member for Cities of London and Westminster (Mr. Field) intervened earlier to make to the point that the Enterprise Bill will diminish Crown preference, so the Government are doing away with the idea that the state can automatically grab something.

Except in extremely rare circumstances, fines are not of a magnitude to confiscate people's assets entirely. Fines involve an element of people's assets. It is an odd fine that says, "Pay over everything you have." We do not have such fines, but such confiscation may have that effect in law. So it is not fair to draw that parallel and to say that we are talking about fines.

It has been argued that those in the enforcement authorities would be distracted because dealing with such issues is not the main part of their job. I accept that there may well be a time consequence and that it may well be significant, but that is no reason to allow a few innocent people to suffer as a consequence. I do not recognise that equation as being in any way just or appropriate in a democracy. If the Minister wants to ensure justice, he should ensure that provision is made for justice. That is a red herring, and it is wholly inappropriate for the Minister to raise that issue.

The Minister made a serious point. He and his hon. Friends are concerned that the Lords amendment will let criminals off the hook. Other bits and pieces around the edges have been mentioned so far, but that is the nub of his argument. If someone has their Rolls-Royce seized, it will still be seized. The argument about whether the state has the benefit of that Rolls-Royce or the builder who has undertaken the work has the benefit of it will take place afterwards. For the person whose assets have been seized, that Rolls-Royce still goes. There is no benefit to him from that arrangement. Those who benefit from the proceeds of crime will still lose those proceeds under the amendment.

It would also be possible, were the Under-Secretary concerned about the matter, to put in place a system that put an onus on the creditors to prove what was owed to them. Creditors would therefore have to bring forward to the court—were the Under-Secretary more comfortable with such an arrangement—proof that they are owed money. They would have to do that in any case, but some of the onus should be taken off the Assets Recovery Agency. They should at least have a chance, however, to say, "I have incurred work, I have put half my life over the last six months into this house", or whatever it happens to be. They should at least have a chance of saying in court or elsewhere, "I've just lost everything I had because of something that I knew nothing about. This guy has assets that you are not letting me get hold of."

If the Under-Secretary is not happy with the amendments in their current form because he feels that they will lead to criminals using their friends or their relatives, the onus should be changed. We could examine the hurdles, consider when the provision might kick in, and perhaps limit it to one-person businesses. Let us do something at least to ensure that those innocent victims—of which there will be some under this Bill—are not affected. It cannot be beyond the wit of the Under- Secretary and his officials to construct a scenario in which the criminal is not given gaping holes through which to walk, but in which, at the same time, the innocent are not persecuted and deprived of what is rightfully theirs.

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

I want to raise the question of whether this proposal is genuinely being put forward by the criminal's friends. We should judge that on the basis of whether, if the proposal were passed, criminals would be more or less likely to enjoy their ill-gotten assets, and whether they would be more or less likely to be able to hold on to some of them.

It seems perfectly clear that the thrust of the proposal would benefit the criminals whom we seek to pursue. I have been impressed by the way in which the lawyers among the Opposition have been able to find loopholes through which people can hide money away. That seems to be the role of the lawyer in these circumstances. As was indicated earlier, money could be hidden in a variety of ingenious ways, which are almost deliberately designed to clog up the machinery.

I heard from the Opposition some tears of grief for innocent tradesmen, which I had not thought was generally typical of them. Will they clarify what is a small creditor? We have heard no such definition. What worries me is that it is not just the man who is owed money for a couple of bottles of milk. We have already heard reference to building contractors; indeed, the hon. Member for Lewes (Norman Baker) commented on the possibility of massive building work being included. Clearly, the door that the Opposition are seeking to open for small creditors could easily be opened widely to encompass almost any creditor. The Opposition's case is greatly diminished by the lack of mention of a maximum figure. Nor have they mentioned or acknowledged the potential for abuse.

I accept that it is possible—

Ian Lucas (Labour, Wrexham)

rose—

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

I would prefer not to take interventions, as we have had two major statements this afternoon. We are therefore left without much time to debate these matters.

I accept that there is a difference between bogus and artificially created debts. It is entirely possible, however, for debts to be created that are not artificial and bogus but are the product of spending sprees undertaken by people who know that they are likely to be found guilty, and who know that they are likely to have all their assets seized. Those debts would be genuine, but, none the less, they are created in a way that is deliberately designed to thwart the means of this Bill.

As I said, it is a matter of going out on spending sprees, buying consumables and clothes and giving away presents. Some of those could be chased up at great personal expense, but none the less it gives a green light to abuses. Although some innocent people might be damaged by the measure, I cannot think of any other proposal that will not be abused by lawyers to clog up the machinery and to benefit the criminals. I hope that the House rejects the Lords amendment.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The fact that we are hurrying on with the debate and many of the amendments will not be discussed shows the evil associated with timetable motions.

My right hon. and hon. Friends are on the side of the victim this time. Yesterday the Home Secretary told us that the criminal justice system should be attuned to take account of the interests of the victim. That is what the Lords amendment would do and it is what my hon. Friends, supported by the Liberal Democrats, want to achieve. The question is where the loss should fall in the event of a confiscation order being made. We are being asked to prefer the interests of the state to the interests of the innocent supplier of goods and services. In all conscience, I cannot understand why the interests of the state should be preferred to the interests of the innocent supplier. Indeed, that protection is enshrined in the Bill and other legislation.

Clause 310 protects an innocent acquirer of property for value. The hon. and learned Member for Redcar (Vera Baird) asked why we should preserve the little person. The answer is that the innocent purchaser is preserved under clause 310. She also said—although I had difficulty understanding her argument, coming from an accomplished lawyer, as I am sure she is—that courts could not distinguish the bogus from the genuine. Yet the courts have to do that in a large number of cases. Indeed, they are expected to do that under clause 310 and its statutory predecessors.

Mark Lazarowicz (Labour/Co-operative, Edinburgh North and Leith)

Surely the point is the extent to which the state should protect the innocent or the bogus creditor when that individual would not obtain such assistance in any other respect from the state. If a confiscation order of, say, £10,000 is made against an accused and convicted person, the court might make compensation orders of perhaps £5,000 against that individual. If it transpires that the amount stipulated in the confiscation order cannot be collected, the state will end up paying out a greater sum in compensation than it recovers from confiscated assets. Does not that give those creditors an unfair advantage?

Douglas Hogg (Conservative, Sleaford and North Hykeham)

That point was covered when my hon. Friend the Member for Beaconsfield (Mr. Grieve) intervened on the hon. and learned Member for Redcar. What happens when a builder comes to the hon. Gentleman and says, "Look. I cannot recover the charges I want to make for repairing the plumbing because a compensation order has been made and there is no money available"? I do not suppose he will say, "Tough luck. I thought that decision was in the strategic interest of the country." Indeed, what he will say is, "I am extraordinarily sorry. I will write to the Minister and do what I can to help."

I can give another example that is little closer to the Labour party. My hon. Friend the Member for Henley (Mr. Johnson) referred to Maxwell's pensioners. He was right. Those pensioners could have claimed against Mr. Maxwell for fraud. A confiscation order could have been made against Mr. Maxwell which would have precluded him from paying the pensioners. I do not suppose that the Labour party would be saying to each and every one of the pensioners, "I am so sorry that you cannot be paid because all of the money has gone to the state." That would be the consequence of the amendment. We are saying that the little man should be protected against the state. Labour Members are saying that the state should be preferred to the little man. I know on which side I am.

Bob Ainsworth (Labour, Coventry North East)

The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) is obsessed with comparisons with clause 310. If he reads the Bill carefully, I hope that he will recognise that that clause deals with people who are already in possession of property that they bought for full value. I do not know whether in his dealings with the law he has ever come across a situation where people are seriously suggesting that unsecured creditors should be dealt with in the same way and given the same level of protection as the possessors of property. I do not know whether the right hon. and learned Gentleman has ever argued that in a court of law. However, that is not the position of unsecured creditors, and he knows that. His attempts to make comparisons with clause 310 are fallacious for that reason. The Bill protects victims, and it also protects the victims of crime. As hon. Members know, we changed the Bill so that we could pay compensation orders ahead of confiscation orders.

There is little doubt that there are two fundamental issues. The hon. Member for Surrey Heath (Mr. Hawkins) almost begs me to accept that his intentions are wholly honourable and that he is trying only to protect the innocent. Yet he failed entirely to deal with the issue, as did the hon. Member for Lewes (Norman Baker). The issue is how we protect ourselves from abuse. The creditor and the debtor would be able to collude in the fabrication of evidence that a debt existed. It would be in the interest of both of them to do so. Yet Opposition Members suggest that there is a simple way in which we could protect ourselves from that situation. There is not such a solution. It would be massively difficult so to protect ourselves. Confiscation proceedings would be rendered impossible to operate.

Let us say that the hon. Member for Surrey Heath loans me money. If I clear off to South Africa he will lose it, and that is all right. However, if it is proved that I am a serial criminal and the money is confiscated, it is being argued that the money should be returned to him. I do not see much difference between the two situations.

Opposition Members have failed to address fundamental difficulties. How could we protect ourselves from abuse? There are risks that unsecured creditors have to protect themselves from every working day of their lives.

Dominic Grieve (Conservative, Beaconsfield)

Is the Minister's only objection the practical one of fear of collusion? Is there not some further issue of principle, which seemed to be hinted at by the hon. and learned Member for Redcar (Vera Baird)? I understand the hon. Gentleman's point, but I did not understand the hon. and learned Lady's. For instance, in the Scottish provision, there is protection for wives, which the Government were happy to leave in the Bill. On that basis, I assume that the Minister did not have a philosophical objection. I found it extremely unpleasant that the state had to come first in such circumstances. Is that not in itself a recognition that we are not dealing with ordinary indebtedness, taxation or anything of the kind, but a completely new system? That is why the Government should listen on this issue.

Bob Ainsworth (Labour, Coventry North East)

I have made it clear that I have two objections. I fail to see that there is a fundamental difference that applies to many people in many circumstances. I say to the hon. Members for Surrey Heath and for Beaconsfield (Mr. Grieve), but not as eloquently as would my hon. and learned Friend the Member for Redcar (Vera Baird), that if they loan me money and I go to South Africa, they will not get their money back from me but they think that somebody else should cover the debt if I end up having it confiscated.

Boris Johnson (Conservative, Henley)

Will the Minister give way?

Bob Ainsworth (Labour, Coventry North East)

No. I will not give way again. The big problem—the Opposition know that this is the truth—is that their proposal would wreck this part of the Bill. It is therefore quite justifiable, despite the doe eyes that the hon. Member for Surrey Heath is making, to say that this is a wrecking amendment, and I ask my hon. Friends to reject it.

Clause 22 — Order made: reconsideration of benefit

Anne McGuire (Labour, Stirling)

I beg to move, That this House agrees with the Lords in the said amendment.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this we may discuss Lords amendments Nos. 19 to 25, 28, 29, 56 to 65, 87 to 94, 97 and 98.

Anne McGuire (Labour, Stirling)

The amendments tackle concerns about the reconsideration provisions that the Opposition expressed at an earlier stage in our proceedings.

As hon. Members may recall, two of the three reconsideration clauses allow the prosecutor and the director to apply for an increase in the confiscation order only when they have new evidence of the defendant's benefit. However, clauses 22, 108 and 174, which enable the prosecutor and the defendant to apply for an extension to a confiscation order that has already been made, originally contained no requirement for the evidence to be new. We accept that that is a fair point, and the amendments would make the necessary changes to the clauses.

When we considered the amendments, we noted that it might be possible to argue that the relevant clauses do not permit more than one re-evaluation of an earlier confiscation order.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. Conversations are breaking out throughout the Chamber. The House should listen to the Minister.

Anne McGuire (Labour, Stirling)

Thank you, Mr. Deputy Speaker.

The effect that I described was not our intention, and the amendments would therefore make it clear in the clauses that multiple re-evaluations of earlier confiscation orders are possible.

A similar argument—that multiple re-evaluations are not possible—could be used about clauses 23, 109 and 175, which apply when further realisable property comes to light. A similar amendment has therefore been tabled to those clauses.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful to the Minister for taking on board the comments made in Committee. The amendment is undoubtedly a considerable improvement to the Bill and removes the possibility of sloppy practice by the agency in deciding how to deal with the recovery and confiscation process. I hope that she can reassure me that the same applies to multiple re-evaluations, which are an extremely good idea. I assume that any such further re-evaluation must be undertaken on the basis of further evidence becoming available, and not simply on the basis of the agency not having done its job properly.

Anne McGuire (Labour, Stirling)

I can give the hon. Gentleman that assurance.

Lords amendment agreed to.

Lords amendments Nos. 19 to 29 agreed to.

Lords amendment No. 30 disagreed to.

Lords amendments Nos. 31 to 37 agreed to.

Clause 75 — Criminal lifestyle

Anne McGuire (Labour, Stirling)

I beg to move, That the House agrees with the Lords in the said amendment.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this, it will be convenient to consider Lords amendments Nos. 39 to 42, 68 to 72, 105 to 109, 261, 262, 265, 267, 268, 271, 278 to 280, 285 to 309, 314 to 316 and 319.

Anne McGuire (Labour, Stirling)

It has probably taken you longer to say that, Mr. Deputy Speaker, than it will take me to explain it.

The amendments respond to concerns expressed in the House that the offences attracting the criminal lifestyle regime were not set out in the Bill. As hon. Members will see, new schedules 2, 4 and 5 now set out a detailed list of such offences. We have approached the list by identifying offences that are inherently acquisitive and known to generate large profits. It is striking how many of the offences in the resulting list are serious, associated with organised crime or relate to matters of immediate public concern. That underlines once again how much of the criminal activity affecting our communities is driven by the profit motive.

It will be possible for the Secretary of State to add further offences to the list by order. In case there is any anxiety about that, I stress that the order-making power will be subject to the affirmative procedure. In addition, we have amended the test stating that a defendant who commits an offence lasting for six months or more has a criminal lifestyle. The test would theoretically have caught defendants convicted of offences from which they had not benefited. We would not wish that to be possible, because the criminal lifestyle regime is intended to catch only offenders who have been involved in acquisitive crime.

As a whole, the amendments represent a major improvement to the Bill, and I hope that the House will agree to them.

The rest of the debate is in Hansard.