Bribery Bill [Lords]

Public Bill Committee, 16 March 2010.

Nicholas Winterton (Conservative, Macclesfield)

Before we begin, my co-Chair, Joan Walley, is sat on my right and will remain as long as she wishes during this sitting, but she will chair the Committee this afternoon. Before we begin our formal business, may I make one or two preliminary announcements? Many members of the Committee will have heard them before from other Chairs. Members may, if they wish, remove their jackets during Committee sittings. In future, if they wish to do so they do not have to look to me to give permission. I am very happy that they should be as comfortable as they want to be during our deliberations. Will all Committee members please ensure that all electronic devices—mobile phones, pagers and so on—are turned off or switched to silent mode during Committee sittings? I should like, too, to remind hon. Members that adequate notice should be given of amendments. As a general rule, I and my fellow Chair do not intend to call starred amendments, including any starred amendments that may be reached during an afternoon sitting of the Committee.

This will probably be the last Committee that I shall chair in my parliamentary career.

Peter Kilfoyle (Labour, Liverpool, Walton)

A terrible shame!

Nicholas Winterton (Conservative, Macclesfield)

Thank you very much. This Committee is one of the first that my co-Chair is taking, and I have a sense that it will be a very agreeable and constructive one. I am confident that members of the Committee will not let me down on my initial instinct.

We now move on to matters relating to the programme motion, which is on the amendment paper. I remind the Committee that debate on the motion is limited to half an hour. We will then proceed to a motion to report written evidence, which we can hopefully take formally. Therefore, without further ado, I ask the Under-Secretary to move the programme motion.

Claire Ward (Labour, Watford)

I beg to move,

That—

(1) the Committee shall (in addition to its first meeting at 10.30 am on Tuesday16 March) meet—

(a) at 4.00 pm on Tuesday 16 March;

(b) at 9.30 am and 1.00 pm on Thursday 18 March;

(c) at 10.30 am and 4.00 pm on Tuesday 23 March;

(d) at 9.30 am and 1.00 pm on Thursday 25 March;

(2) the proceedings shall be taken in the following order: Clauses 1 to 17; Schedules 1 and 2; Clauses 18 to 20; new Clauses; new Schedules; remaining proceedings on the Bill;

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 25 March.

I welcome you, Sir Nicholas, to the Chair. I note that this may be your last Committee before the impending general election. No doubt you will face new and different challenges. I am sure that you and your co-Chair, Mrs. Walley, will ensure that our proceedings are conducted fairly and that we have proper scrutiny of this very important Bill.

The programme motion provides for up to eight sittings, which I trust hon. Members will agree will prove more than adequate to ensure that the Bill is properly scrutinised. Whether we will need all eight sittings remains, of course, to be seen, but I look forward to a constructive debate. I commend the programme motion to the Committee.

Jonathan Djanogly (Conservative, Huntingdon)

Good morning, Sir Nicholas. May I join the Under-Secretary in saying how much we look forward to serving under your chairmanship and, indeed, the chairmanship of Mrs. Walley? I believe that this is her first Committee, so I welcome her. I have served under your chairmanship on many occasions, Sir Nicholas, and I have every expectation that you will do as good a job on this Committee as you have always done on previous occasions.

We believe that the time allocated is broadly correct, given the serious changes to the law that the Bill involves and its dramatic implications for British business. I have one further point on programming, Sir Nicholas. Yesterday, my office received a number of e-mails and calls from a variety of organisations that have been making serious and often important contributions to issues associated with the Bill. However, those organisations have a concern, which came back to me via a national newspaper: that we should curtail these proceedings because a number of today’s amendments have previously been debated by their Lordships in the other place.

I am not going to name those organisations, but they were lucky that I was out of the office when they called yesterday. To talk about curtailing the programming of this debate is to subvert the democratic process in an unacceptable way. We have reviewed the debates in the other place and have noted a number of issues on which such debate needs to continue. It is unacceptable that so-called anti-corruption and pro-civil rights organisations should suggest that we curtail democratic debate on an issue of such importance to the anti-corruption movement and British business. Shame on the Liberal Democrat spokesman, the hon. Member for Cambridge, for his comments to the Financial Times yesterday. He said:

“It’s very disappointing and disturbing to see these kinds of issues being raised again...One suspects it’s an attempt to prevent the bill getting through in this parliament, which would be a disaster for this country’s reputation.”

I would like him to confirm and to address those comments, which I find despicable and undemocratic.

This House and the upper House have every right to debate these issues, and we intend to do that over the next two weeks. As I spelled out clearly in my letter to the Financial Times last week, we share the frustration of those organisations and we have been calling for the Bill to be brought forward for the past three years. Just because the Government have left the Bill to the dying days of this Parliament, that does not mean we are prepared to say that this Committee is irrelevant. Those organisations, which I am not going to name today, are warned to leave the programming of this Committee to Parliament.

David Howarth (Liberal Democrat, Cambridge)

May I say how sad I am, Sir Nicholas, that this is your last Committee? It is also my last Committee, unless some other Bill appears between now and Dissolution, which I doubt. It has been a pleasure to serve under your chairmanship on all the Bills we have considered together. Your view of how a Committee should progress, to ensure that the issues are debated properly but promptly, is a model of how a Committee should be chaired in this House. I hope that your successor in the House, and mine, have an opportunity to learn those lessons.

I am content with the programme motion, although I agree with the Under-Secretary that we should not need all the time put down for our deliberations. I am also content with the order of consideration that she proposes. Our one major concern is with clause 13, which exempts from the scope of the offence certain public officials: members of the defence forces and intelligence services. We will require some time to discuss that.

The issues associated with the Bill have been discussed extensively, not just in the other place but in the Joint Committee that considered the drafting. There have been numerous consultation exercises involving august bodies such as the Law Commission, and not just the non-governmental organisations to which the hon. Member for Huntingdon referred. It would be unfortunate if our debates were simple repetitions. I am perfectly happy to discuss new and important points as they arise, but I think the hon. Gentleman doth protest too much. The issue he raises will be judged by the Committee, and by those outside, by what he does, not just by what he says now.

Oliver Heald (Conservative, North East Hertfordshire)

I did not want to lose this opportunity to say how much I have enjoyed being chaired by you over the years, Sir Nicholas, and making contributions in debates with you over such a long time. It will be rather nice to be on your Committee swan-song. I certainly look forward to you chairing it with your usual aplomb.

As for the hon. Member for Cambridge, he and I were spokesmen on constitutional affairs for a period and battled away against the Government’s ideas on legislative and regulatory reform, quite successfully in the end. He will be missed, but I do not think we will feel too sorry for him because he is going back to be a reader at Cambridge university by the gently lapping waters of the Cam. That is no doubt a pleasant life in its own way.

There are two issues that concern me. The first is this modern idea that it is always better to find a new word to describe what the public, lawyers and all of us have understood as being the crime. There are not many people who do not know what bribery and corruption are. As far as I am aware, the public have never had any difficulty in recognising a corrupt act or an act of bribery—a backhander in ordinary parlance.

Equally, when it comes to our forces trying to civilise an area after a conflict, it is useful if they can have money available for good purposes.

Nicholas Winterton (Conservative, Macclesfield)

Order. I hesitate to interrupt the hon. Gentleman as he is always so agreeable, but he is going slightly wide of the matter we are debating. If he can relate his remarks to the programme motion I shall be happy for him to continue, but I suspect he wants to bring his remarks to an end.

Oliver Heald (Conservative, North East Hertfordshire)

I just wanted to make the point—I was setting it in context and, as ever, at perhaps at too great a length—that I hope we have sufficient time to discuss these two important issues. It seems part of a trend to start calling a shovel something else, and our forces need a certain amount of discretion in how they use funds when they are trying to civilise a difficult situation after a conflict. Those were the two issues I wanted to be sure we had time for.

Nicholas Winterton (Conservative, Macclesfield)

I am sure the Committee and both Chairs will commit time to ensuring that both those matters can be debated. If there are no further contributions on the programme motion, I will put the question.

Nicholas Winterton (Conservative, Macclesfield)

Let me advise the Committee that copies of any memorandums it receives will be made available in the Committee Room.

Clause 1

Jonathan Djanogly (Conservative, Huntingdon)

I beg to move amendment 1, in clause 1, page 1, line 3, after ‘if’, insert ‘acting with corrupt intent’.

Nicholas Winterton (Conservative, Macclesfield)

With this it will be convenient to discuss the following:

Amendment 2, in clause 1, page 1, line 3, after ‘if’, insert ‘acting with dishonesty’.

Amendment 3, in clause 2, page 2, line 2, after ‘if’, insert ‘acting with corrupt intent’.

Amendment 4, in clause 2, page 2, line 2, after ‘if’, insert ‘acting with dishonesty’.

Amendment 5, in clause 4, page 3, line 10, after ‘expectation’, insert ‘with corrupt intent’.

Amendment 6, in clause 4, page 3, line 13, at end insert ‘and demonstrates corrupt intent’.

Amendment 7, in clause 6, page 3, line 42, after ‘to’, insert ‘improperly’.

Amendment 8, in clause 6, page 3, line 42, after ‘to’, insert ‘corruptly’.

Amendment 9, in clause 6, page 4, line 3, after ‘an’, insert ‘undue’.

Amendment 10, in clause 6, page 4, line 5, at end insert ‘improper’.

Jonathan Djanogly (Conservative, Huntingdon)

The grouping of so many amendments means that a large number of issues will be debated together. These can be split into two broad strands: clauses 1 to 3, and clause 6. Given that many of the concepts we will discuss are interlinked, I can understand why they were put together in this grouping. Clauses 1 to 3 are in many ways the core of the Bill. These probing amendments question the founding premise of how the law is being changed from the 19th-century concept that currently prevails.

I will begin by explaining the rationale for amendment 1. The Bill has a core of four offences: to promise or offer a bribe; to request or agree to receive or accept a bribe; a new and bespoke offence of bribing a foreign public official in order “to obtain or retain” a business advantage; and failure by a commercial organisation to prevent bribery. That quartet of offences goes significantly further than previous legislation. On the one hand, it codifies the previous common-law offences, and on the other it supplements them with new offences that seek to deal with the threat of bribery to the increasingly globalised business world. They are all serious offences, and the penalties attached to them have been increased to reflect that. The current maximum penalty of seven years will be increased to 10 years for an individual, while a commercial organisation convicted on indictment of an offence under the Bill will be liable to an unlimited fine.

We all wish to ensure that the offences are applied in a proportionate and easily comprehensible fashion to make certain that the threshold for criminality is defined with clarity and common understanding. It also needs to be made certain that, by introducing new terminology to this area of the law, the Government will not force us to undertake a further redrafting exercise down the line.

Clause 1 defines the offence of bribery as it applies to the person who

“offers, promises or gives a financial or other advantage to another person”,

and it sets out two specific examples of behaviour. The first relates to cases in which the advantage is intended to bring about an improper performance by another person of a relevant function or activity, or to reward such improper performance. The second relates to cases in which a person knows or believes that the acceptance of the advantage offered, promised or given constitutes in itself the improper performance of a function or activity, as further defined in clause 3.

Clause 2 defines the offence of bribery as it applies to the recipient or potential recipient of the bribe, and distinguishes four separate instances. Cases 3, 4 and 5 require that the individual

“requests, agrees to receive or accepts”

an advantage. It does not matter whether he actually receives it, but the requirement must be linked to the improper performance of a relevant function or activity by the individual, or someone else, receiving the benefit. Case 6 requires improper performance by an individual or another person where the individual in question requests it, assents to it, or acquiesces in it in anticipation or in consequence of a request, agreement to receive, or acceptance of an advantage.

Clause 6 creates a separate offence of bribery of a foreign public official. Unlike the aforementioned clauses, clause 6 covers only the offering, promising or giving of bribes, and not the acceptance of them. The person giving the bribe must intend to influence the recipient in the performance of his functions as a public official, and must intend to obtain or retain business, or a business advantage.

Clause 7 creates an offence of failure of a commercial organisation to prevent bribery. The offence will occur when a person associated with a commercial organisation bribes another person with the intention of obtaining or retaining business for, or an advantage in the conduct of the business of, the commercial organisation. The clause provides for a defence where the commercial organisation can show that it had adequate procedures in place to prevent such associated persons from committing bribery offences.

That overview is necessary because, when considering the amendments, it is important for members of the Committee to have at the forefront of their minds the breadth of the new offences. The debate in the other place on our proposed amendments was extensive but inconclusive. Much is owed to the noble and learned Lord Lyell, a distinguished former Attorney-General, for the comprehensives of his speeches on the issue. Through my following arguments, I am looking to move the debate on from the point reached in the other place.

My amendments are designed to initiate debate and consideration of the criminality threshold required for the new offences under the Bill. The Government’s response in the other place lacked, to my mind, absolute persuasiveness, so I tabled the amendments to elicit from the Under-Secretary a refinement to the justification for the use of “impropriety” over “corruption”. “Russell on Crime”, a leading text on the criminal law, defines bribery as

“the receiving or offering of any undue reward by or to any person whatsoever, in a public office, in order to influence his behaviour in office, and incline him to act contrary to the known rules of honesty and integrity”.

The “Compact Oxford English Dictionary” defines “to bribe” as to

“dishonestly persuade (someone) to act in one’s favour by paying them or giving other inducement.”

However, the draft Bill received from the Law Commission and the Bill we have now use merely the concept of impropriety as the benchmark for the offences.

Oliver Heald (Conservative, North East Hertfordshire)

My concern is that without the words that my hon. Friend is proposing, which import the idea of corrupt intent, we are left with the rather vague terms of “improper” or “impropriety”. I looked in a dictionary and “improper” means indecent, irregular or incorrect, whereas “impropriety” means unsuitable or slightly improper behaviour. Given how seriously we have always viewed corruption and bribery, to have words with such weak connotations risks widening out the category so that all manner of civil wrongs are potentially included; however, they do not get to the nub of the criminal behaviour that people have traditionally associated with bribery and corruption.

Jonathan Djanogly (Conservative, Huntingdon)

My hon. Friend makes a very important point, which I shall come to. What he says is important not only in itself, but in terms of the practical application. One of the reasons why it is so important to continue the debate on this issue is that, although the Joint Committee examined the law relating to it in great detail, as we pointed out in our report, we did not have time to look at how that law should be applied. I have tabled new clauses, and amendments to later clauses, that give specific instances that will enable us to examine the problems of criminality that my hon. Friend has rightly mentioned.

John Howell (Conservative, Henley)

I totally agree with my hon. Friend that the use of “improper” in the Bill brings in—

Nicholas Winterton (Conservative, Macclesfield)

Order. I should have said, “I call John Howell”—I apologise. The Chair does not often apologise.

John Howell (Conservative, Henley)

Thank you, Sir Nicholas; I am grateful to be making history in your last Committee.

I was saying that I agree with my hon. Friend that one of the difficulties with “improper” is that it brings civil cases within the remit. Is it not also nonsense that, as I understand from the Joint Committee, for “improper” to have a proper place in the legislation we will need a whole lot of guidance to explain it?

Jonathan Djanogly (Conservative, Huntingdon)

My hon. Friend makes a very important point on a matter that the Joint Committee reviewed, and it agreed with his position. We will be debating the vital need for guidance—the need to explain to companies not just the law, but how it will be applied in practice. That will be a key issue, and we will return to it in later debates.

Jeremy Wright (Conservative, Rugby and Kenilworth)

It is also right that we recognise that, whether or not impropriety is the right measure of behaviour here, it describes the behaviour of the person receiving the bribe, and my hon. Friend’s amendments rightly consider whether we should qualify the behaviour of the person giving the bribe.

Jonathan Djanogly (Conservative, Huntingdon)

Yes—my hon. Friend makes a good point. To some minds, inherent in the offence of bribery, as clearly indicated by the definitions my hon. Friend the Member for North-East Hertfordshire read out earlier, is an element of criminality greater than impropriety. That issue was debated at some length in the other place, and we can review it in this House. A constituent element of such actions must be that they are committed in a manner that is dishonest and/or corrupt. Much evidence was heard before the Joint Committee and in the other place showing that the concept of corruption in current law is in disarray and that the case law is conflicting.

Such case law spans more than 150 years, with the earliest decision being in Cooper v. Slade in 1858 right through to the 1999 case of the Crown v. Harvey, and reflects the fact that the concepts required to establish the criminality involved in corruption offences are much more complex and consequently more difficult to express than those in, say, an assault case. Yet I suspect that the layman would consider that lawyers were splitting hairs over terminology and syntax, and that underpinning all such activities is an element of dishonesty that will be self-evident when present in a case in a court of law.

Judicial interpretation has defined “corrupt” in the following ways. In Cooper v. Slade, which concerned bribery at elections, “corruptly” did not mean dishonestly but

“purposely doing an act which the law forbids as tending to corrupt voters”.

In the Bradford election case in 1869—it is surprising that all these bribery cases seem to concern elections—it was held that “corruptly” was not otiose and had to be given some meaning that was akin to an evil mind. In the Lindley case of 1957, which concerned bribery of company employees, “corruptly” was held to mean

“to weaken the loyalty of the servants to their master and to transfer that loyalty from the master to the giver”.

David Howarth (Liberal Democrat, Cambridge)

Is not the case law the hon. Gentleman refers to exactly that which makes it clear that the word “corruptly” should not be put on to the statute book?

Jonathan Djanogly (Conservative, Huntingdon)

Arguably, the answer is no. I think it fair to review how the word “corruptly” developed to see what the existing law is and to decide whether we should change it. If the hon. Gentleman disagrees I shall be pleased to take another intervention.

Oliver Heald (Conservative, North East Hertfordshire)

But surely the word “corrupt” is the proper term to be used. The cases show that on some occasions, courts have decided there is an element of dishonesty and corruption; on others, they have decided that it is more an act of unfaithfulness. However, it is clear from all the research that “corrupt” is a term that people understand. It can have one connotation in some instances, and another in others, but “corrupt” is a British word that is understood by British people.

Jonathan Djanogly (Conservative, Huntingdon)

My hon. Friend makes a fair point, which we will look at in a bit more detail. He mentioned that others have different views of the word “corrupt”. The other place did not look at that issue, but I have and I will examine how other countries have dealt with it.

In the Calland case of 1967, “corruptly” meant

“dishonestly trying to wheedle an agent away from his loyalty to his employer”,

so if the defendant’s actions amounted to “sharp practice” and not “dishonesty”—something to be borne in mind when considering the definition of “improper”—he was not guilty of corruption. In the Smith case of 1960, in which

“the Court of Appeal approved the dictum of Willes J in Cooper v. Slade”,

Lord Parker held that

“‘corruptly’...denotes that the person making the offer does so deliberately and with the intention that the person to whom it is addressed should enter into a corrupt bargain.”

In the Wellburn case of 1979,

“the Court of Appeal again approved the words of Willes J, taking the view that ‘corruptly’ was an ‘ordinary word’, the meaning of which would cause a jury little difficulty.”

I think that that was the point my hon. Friend the Member for North-East Hertfordshire just made.

None of those cases deviates significantly from the idea that there is a core element of criminality that is greater than mere impropriety. However, they appear to show that there is a standard definition of corruption that would also be testing. I respectfully echo Lord Lyell’s assertion that juries understand well—I think that this is the assertion made by my hon. Friend—what is meant by “dishonesty” and by “corrupt” and that, regardless of the wording of the Bill, they will be reluctant to convict an individual unless they are satisfied that the underlying conduct was dishonest or corrupt.

The fear, though, is that we may, with the proposed test of “impropriety” in the Bill, have pushed the boundaries of the offence too wide and at the same time provided no more clarity for juries than the current law does. I strongly support the view of Lord Lyell when he stated that

“provided the prosecution can marshal and present the basic facts, the dishonesty or corruption of the conduct usually sticks out like a sore thumb.”—[Official Report, House of Lords, 9 December 2009; Vol. 715, c. 1102.]

When the Bill is enacted and first falls on to the desk of practitioners outside the walls of this place, their primary source of statutory interpretation will be the natural and ordinary meaning of the words that we, in Parliament, have chosen to include in the Bill. The words were are considering here are principally “corruption” and “improper” or “impropriety”. I trust that hon. Members will agree that, to determine the ordinary meaning of those words, “Shorter Oxford English Dictionary” is as appropriate a source as any. The word “corruption” in the area of criminality when viewed as a verb gives us the definition

“to induce to act dishonestly or unfaithfully...to bribe.”

If we compare that with the definition of “improper” from the same edition of the dictionary, the difference in breadth between the two concepts is significant. “Improper”, as defined in the “Shorter Oxford English Dictionary”, has three meanings.

David Howarth (Liberal Democrat, Cambridge)

Before the hon. Gentleman gets into the meaning of the word “improper” as defined by the dictionary, why does he not take up the meaning of the word “improper” as defined by clauses 4 and 5? It is not a problem that we have to refer to the dictionary, when it is in the Bill.

Jonathan Djanogly (Conservative, Huntingdon)

As I said, the interpretation of the Bill will be dependent on previous case law and what juries have done in the past. We cannot detach it from what has happened in the past.

Oliver Heald (Conservative, North East Hertfordshire)

But does my hon. Friend accept that if one were a member of a jury and somebody said that “improper performance” was defined as a relevant function that

“is performed improperly if it is performed in breach of a relevant expectation, and is to be treated as being performed improperly if there is a failure to perform the function or activity and that failure is itself a breach of the relevant expectation”,

that could be slightly tricky?

Jonathan Djanogly (Conservative, Huntingdon)

My hon. Friend has nailed the point as well as I ever could. Back to the definition in the “Shorter Oxford English Dictionary”, which, given my hon. Friend’s intervention, may actually be something that people will want to look at. It has three meanings:

“incorrect, inaccurate, irregular, wrong...unsuitable, inappropriate”

and

“unbecoming, unseemly, indecorous.”

A simple comparison of the plain English meaning of the two words shows, therefore, a very broad gap between the two groups of behaviour that would be caught by the different constructions. As it stands—it is important that we understand this—we could be criminalising behaviour that may simply be unbecoming or unseemly, the so-called sharp practice that the judgment in Calland specifically distinguished from dishonesty. I suggest to hon. Members that such behaviour may, in certain circumstances, be a far cry from what a lot of people currently understand to be bribery. On the other hand, to cite Lord Lyell, the Law Commission reports that the meaning of “corrupt” is understood by 95 per cent. of the population. Jurors are quick to see the backhander and are quite ready to convict. Has the Minister had the opportunity to read the letter to the Committee from the Director of Public Prosecutions, which was referred to by Lord Lyell? It states that in the last 15 years, the concept of corruption has not caused jurors a problem, yet in at least 10 of those years, bribery has been a major concern for the DPP.

Returning to my previous comments on the differences in judicial interpretation of the term “corruption” in reported case law, it is a matter of concern that we are in danger of perpetuating in the Bill an academic legal point that in reality does not cause jurors any problems or hinder prosecutions. The Earl of Onslow concisely summarised the basis of jurors’ ease with the terminology when discussing facilitation fees in the other place. He said that

“it is an area which slides. You know it when it is there, but it is very difficult to define a boundary.”—[Official Report, House of Lords, 7 January 2010; Vol. 716, c. GC32.]

The question is whether the concept of impropriety, as currently drafted, significantly detracts from the inherent understanding of what bribery is, and could instead impose on jurors a more opaque and confusing term that ultimately runs counter to the Bill’s intention.

These are probing amendments. I do not seek to do away with the test that was so ably drafted by our parliamentary draftsmen, or to undermine the work of the Law Commission, which needs be recognised because it did a magnificent job. Instead, I hope that hon. Members will see this debate as a way to strengthen the offences under the Bill and to provide workable legislation by giving the Minister the chance to offer added clarity and practicality in relation to the use of the word “improper”. I have explained to some extent that that word has not yet been explained to the desired degree.

Lord Lyell touched, both in the House of Lords Grand Committee debate and on Report in the other place, on the legal position on criminalising bribery in other common law jurisdictions in the world. The issue, however, was not addressed to any great extent in the other place, so I would like to explore it in more detail. I am thankful for the minutes of evidence provided to the Joint Committee on the original Corruption Bill in 2003. Having reviewed the Hansard record of the debates in the other place, I do not think that sufficient consideration was given to the issue in the Government’s response. By giving such consideration, I hope that we will be able to demonstrate the fact that, in legal systems that are directly aligned with our own, a need for dishonesty or corruption was thought crucial. The Government asserted in the other place that the concept of acting corruptly is

“a vague and unhelpful construct that has spawned a number of different and often inconsistent interpretations from the courts.”—[Official Report, House of Lords, 2 February 2010; Vol. 717, c. 121.]

However, it seems that every other legal system aligned with the English system has seen fit to add an element of dishonesty or corruption and has not been put off by concerns about clarity or the deductive powers of jurors.

The statutory provisions in Australia, for instance, apply only to the bribery of public officials. Sections 141.1 and 142.1 of the schedule to the Criminal Code Act 1995 make it an offence to give a bribe or corrupting benefit to a Commonwealth public official, and for a Commonwealth public official to receive a bribe or corrupting benefit. Under sections 141.1(1) and 142.1(1), a person is guilty of an offence of giving a bribe or corrupting benefit to a Commonwealth public official if he or she dishonestly provides a benefit, causes a benefit to be provided, or

“causes an offer of the provision of a benefit, or a promise of the provision of a benefit, to be made”.

In addition, the person must do that with the intention of influencing a Commonwealth public official in the exercise of his or her duties. The maximum penalty for the bribery offence is 10 years’ imprisonment, and that for the corrupting benefit offence is five years.

Furthermore, sections 141.1(3) and 142.1(3) state that a Commonwealth public official is guilty of receiving a bribe or corrupting benefit if he or she dishonestly

“(i) asks for a benefit for himself, herself or another person; or

(ii) receives or obtains a benefit for himself, herself or another person; or

(iii) agrees to receive or obtain a benefit for himself, herself or another person”.

In addition, the public official must do that with the intention that the exercise of his or her duties will be influenced, or the intention of inducing, fostering or sustaining a belief that his or her duties will be influenced. The maximum penalty for the bribery offence is 10 years’ imprisonment.

In Canada, the offence relates to public officials. Section 119(1)(a) of the Canadian criminal code makes it an offence for a holder of a judicial office, or a Member of Parliament or of the legislature, to receive a bribe. It provides that an offence will be committed if an official corruptly accepts, obtains, agrees to accept, or attempts to obtain any benefit for himself or herself or another person in respect of anything done or omitted to be done by him or her in his or her official capacity. Section 119(1)(b) of that code makes it an offence for a person to bribe a holder of judicial office, or a Member of Parliament or of the legislature. It provides that an offence will be committed if a person corruptly gives or offers any benefit in respect of anything done or omitted, or to be done or omitted by him or her in his or her official capacity, for himself or herself or another person.

In South Africa, the Prevention and Combating of Corrupt Activities Act 2004 criminalises corruption in both the public and private sectors, including by foreign officials. Section 3 contains a general offence of corruption that makes it an offence for any person directly or indirectly to accept, agree, give, or offer to give to any other person, any gratification—whether for his or her own benefit or not—in order to act personally, or by influencing another to so act, in a way that amounts to an illegal, dishonest, unauthorised, incomplete or biased exercise of any powers, duties or functions arising out of an obligation; a misuse or selling of information or material acquired in the course of the exercise of any powers, duties or functions arising out of an obligation; the abuse of a position of authority; a breach of trust; or the violation of a legal duty or set of rules; or in a manner that is designed to achieve an unjustified result, or that amounts to any other unauthorised or improper inducement to do or not to do anything.

John Howell (Conservative, Henley)

My hon. Friend has, for obvious reasons, cited three English law jurisdictions, but is not the problem with the Bill that one of its major influences is the Organisation for Economic Co-operation and Development, a body that deals not just with English law jurisdiction but a whole range of jurisdictions, including some that have sui generis types of legal establishments? Therefore, we are seeing an attempt to compromise between a whole number of different legal systems, some of which take a radically different and incompatible line with English law.

Jonathan Djanogly (Conservative, Huntingdon)

My hon. Friend makes a good point. I would pick him up on one thing: I would not say that the Australian or Canadian systems were subject to English jurisdiction. He probably meant to say English common law practice. On that, he would be absolutely right.

John Howell (Conservative, Henley)

Just to confirm, I have not gone back to a period of longing for the British empire once more to rule Australia and Canada.

Nicholas Winterton (Conservative, Macclesfield)

More is the pity!

Jonathan Djanogly (Conservative, Huntingdon)

I thank my hon. Friend for that important clarification. On the OECD and his broader argument, he makes a fair point. The OECD came out with a set of constructs that we bought into by treaty, with which the Conservative party agreed. We have spent the past year, since the signing of that treaty, calling on the Government to bring forward this Bill, in order not least to comply with our international obligations, which we have not done recently. That it is now being brought forward is welcome.

My hon. Friend is right that ultimately the construct of the OECD formula is not going to tie in with every national route towards dealing with bribery. To some extent, that means there is give and take. There are problem areas—not least in relation to the role of the Attorney-General—where some very English concepts have stood the test of time, and we will reach an important debate on them later. To answer his question specifically, yes, there will be areas where we will want to pick up on our position regarding the OECD and where we feel that a compromise has not yet been reached in the right manner.

To get back to the subject of foreign jurisdictions, will the Minister clarify why the UK proposes to put on the statute book a criminal offence that, in its current form, has no requirement for a guilty mind? As every undergraduate law student can recount, a core premise of English criminal law is the requirement for both mens rea and actus reus. Although I accept that there are crimes that are strict liability, we need clarification of why we require a law that will make someone a criminal without a guilty mind? Might there be a danger that we will misguidedly alter that basic tenet of English law in an attempt to dumb down the law to help jurors? More than that, will we make things easier in reality by using the concept of improper conduct? I will be interested to hear why the Minister believes that the concept of impropriety is any less complex for the average lay juror than corruption.

David Howarth (Liberal Democrat, Cambridge)

I am a civil, not a criminal lawyer, so I am no expert on this, but clause 1 includes the notion of intent, as do clauses 2 and 6. I do not understand why the hon. Gentleman says that the Bill misses out the concept of mens rea.

Jonathan Djanogly (Conservative, Huntingdon)

Well, it does not include it to the degree that the offence of corruption implies—it is a different level of offence.

I would like to address some of the responses that the Government offered when they opposed such amendments in the other place. Their objections may be summarised as having two distinct veins: first, that prosecutorial discretion will serve to mitigate any disproportionality that arises as a consequence of the breadth of the new requirement of impropriety to criminalise acts that would previously not have been an offence; and, secondly, that the concept of “corrupt” is more complex and vague than impropriety.

I shall begin a review of proportionality with a consideration of the example cited by Lord Lyell on Second Reading and Report in the other place, which was supported by Lord Williamson in Grand Committee. I would struggle to provide a better or more concise example of the problem so, if you will permit, Sir Nicholas, I will quote directly from Hansard. Lord Lyell said:

“the hypothetical example that I give is of someone who has bought an aeroplane ticket. He arrives at the gate and is asked for a bribe in order to get his boarding pass. He is absolutely entitled to get the pass—he has paid for it and would expect to get it as a matter of course—but he finds that he cannot get on to the aircraft without handing over a bribe. He has a choice. He can say to the chap who is demanding the bribe, ‘This is utterly wrong. You shouldn’t do it. If you won't let me on to the aircraft I shall go and report you at once’, or he can pay over the money demanded, get on to the aircraft and, one hopes, report the person when he lands, or perhaps even report the person to the cabin crew.”

The noble Lord went on to highlight the problem that such an individual would face under the Bill:

“The difficulty is that under the Bill as drafted the offence is committed by the payer of the bribe—the person from whom the bribe has been wrongly and corruptly demanded by the official standing at the boarding gate. Simply by handing over the money, he is giving the bribe. Of course, it would depend on the detailed facts of a case but I think that, if the Bill were drafted so as to require a guilty mind, a jury would be very reluctant to convict someone in those circumstances. On the wording of the statute the jury would be obliged to convict, although it may be reluctant to do so as juries do not like a sense of injustice in any event...The person’s protection—this is how the Government have put it so far—lies in the sensible discretion of the prosecutor not to prosecute in those circumstances as there would be strong mitigation.” —[Official Report, House of Lords, 2 February 2010; Vol. 717, c. 118.]

I can confidently say that I suspect a British businessman or tourist somewhere around the world is experiencing a similar situation as we speak.

Robert Syms (Conservative, Poole)

I am sorry to interrupt my hon. Friend’s introductory remarks, but what would happen if a business was asked to pay a ransom for men whom were working for it abroad but were taken hostage? Presumably that would count as a bribe, even though the individuals to whom the company had a responsibility were in difficulty.

Jonathan Djanogly (Conservative, Huntingdon)

The Minister might wish to respond to my hon. Friend but, as I interpret the Bill, that would constitute a bribe and would be subject to prosecution. I have tabled an amendment to exclude extortion so that we can have a debate about that very subject.

David Howarth (Liberal Democrat, Cambridge)

How would that example come within clause 3(2)?

Jonathan Djanogly (Conservative, Huntingdon)

Perhaps the hon. Gentleman could explain how it would not.

David Howarth (Liberal Democrat, Cambridge)

Presumably, those who kidnap others are not engaged in a function of a public nature. I do not think it would be called business or employment, or even activity performed on behalf of a body of persons.

Jonathan Djanogly (Conservative, Huntingdon)

To be honest I do not know. My hon. Friend the Member for Poole did not go into the circumstances in that amount of detail. That might or might not apply.

I do not condone such behaviour; I am simply giving a statement of fact. My concern is that the Bill could criminalise individuals who are at the mercy of such petty tyrants across the globe in one broad stroke. There are a multitude of situations that one can imagine in which such actions may occur without the “corrupt” element of the offence that is currently required by law, but changing the test to impropriety would see such individuals liable to imprisonment.

The Government’s position, as stated in the other place, is that these situations can safely be left to the prosecutor and that proportionality will win through. I have considerable respect for prosecutors, but I am reluctant to allow Parliament to wash its hands of this issue and to leave it to the prosecutors alone, not least because not only does that leave the law open to differing applications, but it unnecessarily increases prosecutors’ work load.

One of the aims of this Bill is to provide certainty but, as it stands, the idea of prosecutorial discretion on which the Government rely to counter arguments that impropriety represents an unworkable test flies in the face of that. The difficulty for businesses is obvious. It cannot be correct that businesses instruct employees that a certain course of action, although theoretically falling foul of the legislation, may nevertheless proceed because prosecution is unlikely.

Such ambiguity and uncertainty will inevitably lead to problems as a two-tier system develops involving actions that will be caught and prosecuted, and acts that individually are too small to be prosecuted. When taken collectively, the attitude that bribes are acceptable, as long as they are below a certain de minimis level, could be corrosive to the very foundations of the Bill and one of its central aims.

To avoid that situation, the Government face two options: first to accept that an inherent element of the offence must be corruption rather than impropriety, thus ensuring that the mens rea element of a guilty mind is central to the offence; or, secondly, to go for the American and, I believe, OECD-approved route and provide for a specific exclusion for so-called facilitation payments in the Bill. This is not the last that the Committee will hear from us on facilitation payments, but for now I wish to move on and consider one further difficulty with the Government’s position.

The inherent problem with prosecuting offences of bribery and corruption is not that juries are reluctant to convict or incapable of understanding the offence, but that the activities that give rise to these cases happen in the shadows, and the great difficulty is getting the evidence in the first place. It is sometimes forgotten that there are two requirements before one can prosecute in any case: sufficient evidence to give rise to a realistic prospect of conviction before a jury; and that it is in the public interest to prosecute, which will depend on a large number of factors but might relate to the trivial nature of the offence or the person committing the offence.

Tipping someone to do something slightly out of the ordinary, such as having a doorman hail a cab in the rain while one waits inside, might be improper behaviour, but do we really wish to criminalise such activity? The argument goes that if the word “corruptly” was inserted, such behaviour would not be a criminal offence. That was noted in the other place, where it was said that the behaviour of a person

“who gives a tenner just to get personal advantage is not attractive. It is rather improper: I would not like to be seen doing it. But is it the offence of corruption? Is that what we are dealing with here? That needs to be clear in the Bill and not simply left to prosecutorial discretion.”—[Official Report, House of Lords, 7 January 2010; Vol. 716, c. GC26.]

I understand that the Government’s reliance on prosecutorial discretion plays a role at the public interest stage, but it skews the consideration of whether an act is a crime, which is more fundamental than any issue of proportionality. We must not forget that the Joint Committee was presented with evidence that prosecutions fail not as a result of confusion over the law, but because of a failure to meet the first limb of the test—because of a lack of evidence. In its evidence to the Joint Committee, the law firm Herbert Smith succinctly summarised the problem by saying:

“We fail to see why public policy should require that an individual’s actions be criminalised and for the individual then to rely on a prosecutor's discretion, on whether with hindsight, the public interest requires a prosecution.”

On Second Reading and in the other place, the Government rightly relied heavily on the Joint Committee’s report. However, I would be interested to hear from the Minister why they have been selective and ignored the recommendation in paragraph 36 of that report, which states:

“We do, however, acknowledge the concern that conduct which ought to be viewed as a civil wrong may, in future, be criminalised. The limited time for completing our inquiry has prevented us from exploring possible solutions to this problem, although we note the potential for developing an effective ‘avoidance of doubt’ provision. The Government must address this issue before introducing the Bill into Parliament in order to minimise the need for reliance on prosecutorial discretion and maximise certainty for all those who will be asked to comply with, and enforce, the new law.”

Will the Minister please explain the Government’s decision to rely so heavily on prosecutorial discretion in the context of concerns that the concept of impropriety allows for so-called offence creep, and given that the Joint Committee was so emphatic about its concerns and the need for an alternative? Why have the Government not produced an alternative in the Bill?

I shall now directly address the Government’s argument that the concept of corruption is too complex and vague for juries to understand or apply. I have touched on that at various points in my remarks, but I would like to add two further points that are central to the Government’s consideration of the issue. In the other place, Lord Bach stated that the Government argued that the concept of acting corruptly

“has proved to be a vague and inherently difficult concept. Courts have expressed differing opinions on whether it involves dishonesty or ‘doing an act which the law forbids as tending to corrupt’.”—[Official Report, House of Lords, 7 January 2010; Vol. 716, c. GC34.]

However, the evidence from the Director of Public Prosecutions, and from many of those who have held positions as Law Officers over the past three decades in the other place, suggests that no prosecution has failed and no conviction has been quashed on the basis of whether dishonesty ought to be included. The Government have relied heavily on the Law Commission’s report to justify a change to a test of impropriety, but I found no evidence in that report that the definition of corruption was ever a practical problem for prosecutors or jurors. I would be interested to hear whether the Minister has any empirical evidence that did not make it into the Law Commission’s report.

Secondly, the Government have suggested that jurors find the concept of corruption, which has been in the current bribery law—in common law and in statute—for over a century, too difficult to fathom and to apply to the facts of a given case. I find that view of the deductive power of jurors somewhat confusing and contradictory, especially when the Government, through Lord Bach in the other place, have stated:

“Juries are perfectly capable of dealing with concepts such as ‘good faith’, ‘impartiality’ and ‘position of trust’ when considering them in the context of a particular case, so these terms do not require definition”.

Will the Minister explain how those terms differ from, or are easier for a jury to interpret than, the word “corruption”?

I have been responding to some of the Government’s prior arguments against such amendments, but I shall leave the last word to Lord Lyell, whose erudite and diligent work in the other place has provided such a solid bedrock for much of my work on this issue. He said:

“It is often said in academic discussions and by the Law Commission, for which I have great respect, that there have been inconsistent decisions on this. I have looked at all the cases and think that that is rather overstated. The DPP has told us in writing that this has caused no practical problems in the past 15 years and I believe that has been so for much longer. The Minister has explained that it is all down to prosecutorial discretion. My point, which I will not press now, is that that is not good enough. This is a serious offence.”—[Official Report, House of Lords, 2 February 2010; Vol. 717, c. 121-123.]

I have spoken at some length on this issue. I am grateful to you, Sir Nicholas, and to the members of the Committee for hearing me out on a serious issue that is core to the essence of the Bill. I hope not only that I have been comprehensive, but that I have encouraged the Minister to look a little bit harder at the issue. The word “corruption” has been much debated in academic legal circles, but it has been a requirement in common law and all forms of this offence to date. There is no evidence to suggest that the concept causes jurors any particular difficulty. In fact, the DPP has written to confirm that no case has failed in the past 15 years as a result of confusion over the concept.

We have heard from the Government in previous debates about this issue that the problems that we have outlined are not problems, because the consensus decision of the Law Commission and the Joint Committee—on which I hasten to add I was proud to serve—upheld the idea of impropriety. However, the Joint Committee was extremely pushed for time and failed to consider the Bill as fully as it would have liked. Even in that tight time frame, however, we managed to express concerns that impropriety was so broad a concept that it captured tortious wrongs and criminalised actions that would not previously have been considered as bribery. The Joint Committee warned against that situation when it said:

“The Government must address this issue before introducing the Bill in Parliament in order to minimise the need for reliance on prosecutorial discretion and maximise certainty for all those who will be asked to comply with, and enforce, the new law”.

Will the Minister explain why so much store has been put on the Joint Committee’s support for “impropriety”, when its advice, which appeared as I have just cited, has been overlooked? Furthermore, it would seem as though corruption or dishonesty is a requirement for such an offence in every common law jurisdiction in the world, with the possible exception of the federal law in one state of Australia—Victoria. Canada, Australia, South Africa, New Zealand and the United States, however, have the “guilty mind” element. Will the Minister justify how it can be appropriate to buck that trend when unifying international standards on bribery is central to the Bill’s rationale?

I will now move on to clause 6 and the offence of bribing a foreign public official. The aim of amendments 7 to 10, which are probing amendments, is to focus on the intention of a paying person, P, and the nature of the payment as a criminalising aspect of the offence, and by so doing to consider that it might be easier to retain the concept of proportionality in prosecutions. Further, that could provide a clear benchmark against which an individual can judge their behaviour in foreign lands. I have used a number of differing terminologies to convey what I hope is the same point in a manner that avoids the problems already discussed on the use of “corrupt” or “improper”. In effect, I suggest that if the use of the word “corrupt” is not acceptable for clauses 1 to 3 then, as an alternative, consistency should be applied by including the word “improper” in clause 6.

Clause 6 turns on the question raised by subsection (3)(b). Whether a payment by person P to foreign official F constitutes a bribe will depend on whether F was permitted or required by written law—the written law of the country in which the bribe takes place—to accept a payment. There is no question of what motivated P or what his intention was, beyond securing himself a business advantage. The amendments would change the clause so that the offence was applicable when a bribe of improper financial or other advantage was intended corruptly to influence a foreign public official to obtain an undue business advantage. As it stands, the intention of P, the payer of the alleged bribe, does not matter, but our amendments suggest that it ought to matter.

The concern is that it is not enough to say that all that P must have intended was to secure some business or business advantage, and that whether he is guilty of bribery rests on the interpretation of local written law. No question is asked about whether P was acting improperly, but merely whether the recipient official went against what was permitted or required by written law. The Government have put forward the principle that P’s ignorance of the local law should not be a defence. However, will it always be possible to say whether a local law was broken? In essence, the amendment would circumvent much of the ongoing debate on issues such as facilitation payments, the knowledge of foreign laws and the possibility that a written provision simply might not exist in the jurisdiction to cover the custom or practice.

Yesterday, the CBI sent a briefing on the Bill stating that the wording of the clause 6 offence

“omits the notion of corruption, dishonesty or impropriety. This should be required as part of the new offence. Failure to do so would mean that criminal liability would arise even in circumstances where the activity is on any view perfectly proper. It cannot be fair to criminalise honest company behaviour. A response that relies on prosecutorial discretion under the current wording of Clause 6 would not, we believe, be enough to address this particular shortcoming.

This has two key implications. Firstly, businesses either have to commit to no promotional expenditure, which is clearly unsustainable, or openly condone criminal acts by their staff on the basis that they probably will not be prosecuted, which is also unsustainable. Secondly, any proper promotional expenditure would, irrespective of prosecutorial discretion under the Bribery Bill, be a breach of s328 of the Proceeds of Crime Act unless companies obtain consent to make each payment from the Serious Organised Crime Agency. This is plainly unworkable.”

Clearly the CBI has a serious issue with clause 6.

In all other common law jurisdictions, corruption law requires an element of corruption or dishonesty in relation to the bribery of public officials. I have explained the positions in Australia, Canada and South Africa.

Robert Syms (Conservative, Poole)

The British Broadcasting Corporation and many other public corporations have many people abroad. There are occasions in the third world when some kind of payment has to be made to unblock things. Would the director-general or the head of news be prosecuted in such circumstances? Have we received any information from journalists from the BBC, ITN or other organisations who, when abroad, might occasionally make payments to secure a particular objective?

Jonathan Djanogly (Conservative, Huntingdon)

I have not been advised of any such situations, but one hears stories about what happens on the ground from business and media people. Facilitation payments, which are usually small sums—let us call it grease money—can be handed over to make something happen.

Robert Syms (Conservative, Poole)

Many journalists who were deployed in Bosnia had to make payments to get through checkpoints, whether they were manned by irregular forces or police officers, or were part of a particular state. Presumably, in future, BBC journalists will be the only ones who are not able to get through such checkpoints.

Jonathan Djanogly (Conservative, Huntingdon)

I certainly think that organisations such as the BBC will have to consider carefully the situations in which their staff can provide facilitation payments, because they will be illegal under the Bill. They will rely on prosecutorial discretion, which is why—as we shall come to later—the question of the guidance given to companies is vital. I thank my hon. Friend for raising that important issue.

Our primary concern is that the Bill in its current form will put us in danger of disadvantaging British businesses. The questions that were posed about that in the other place went unanswered by the Minister. For example, Lord Henley said:

“Have the Government made an assessment of any impact that Clause 6 might have on British companies operating abroad? Will it, for example, disadvantage them in cases where other OECD nations operate according to local custom while their UK counterparts must strictly observe the local written laws?”—[Official Report, House of Lords, 7 January 2010; Vol. 716, c. GC40.]

That is the key issue. For the act to be permissible, it has to be allowed by the local written laws in that country. Even when the habit of a country might be to allow facilitation payments, or even to encourage them, it is unlikely that that would be written into those countries’ legal systems, which shows the problem with the drafting. Will the Under-Secretary now address the question posed by my noble Friend Lord Henley?

Paragraph 34 of the explanatory notes states that the offence of bribing a foreign public official

“closely follows the requirements of the OECD’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.”

I will read to the Committee article 1 of the OECD convention, however, as it contains one important element:

“Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.”

The OECD’s guidance attached to the convention notes, at paragraph 5, a definition of “other improper advantage”. Of course, our amendments would insert such a provision. The guidance says that such an advantage

“refers to something to which the company concerned was not clearly entitled, for example, an operating permit for a factory which fails to meet the statutory requirements.”

Will the Under-Secretary explain why the Government saw fit not to copy this OECD requirement for impropriety to be relevant? We are concerned that—as is typical of many of the Government’s attitudes towards compliance with external legal obligations—the Government are gold-plating these OECD laws. By doing so, they are enacting a law that is at the most prohibitive end of the spectrum allowed under the relevant international agreements. They could be hamstringing UK businesses from operating on a fair playing field, which is an issue that the CBI and the ICC have also picked up.

Lord Tunnicliffe touched on that issue briefly in the other place when he said:

“However, we believe that the offence...fully achieves the purpose and effect of the offence in the convention as drafted.”—[Official Report, House of Lords, 7 January 2010; Vol. 716, c. GC42.]

I agree with him. If anything, the Government have gone further than the convention, and broadened the offence to catch behaviour beyond that originally intended. In so doing, they might put British business at a significant disadvantage. The Government have a tendency to take a myopic view when it comes to competition in the business world. I fear that the lack of time given to reviewing the practical application of the Bill is indicative that the Government would be happy to let British business pay the price for their discomfort over not properly engaging with the OECD’s convention and their subsequent over-zealous adherence to international legal commitments as an attempt to make amends. By my count, there are 34 other signatories to the convention. Through clause 6, are the Government opting to start British business in 35th place on the grid in the race for international business? How many of the other signatories to the convention have also done away with the improper element of the offence?

We will debate the Bill’s various implications later, and I will argue that given the toughness of its provisions for business, we will be at a huge disadvantage unless the Government raise their game, in terms of getting competitor countries to apply and enforce such laws. When similar amendments were debated in the other place, the debate centred on the issues of facilitation payments, having a carve-out, and what would be considered reasonable hospitality. I do not wish to go into those issues now; I will save them for the debate on my proposed new clauses. However, I wish to touch on one aspect that impinges on the matters and amendments under discussion.

For the sake of argument, let us suppose that the Bill was passed with no provision for facilitation payments. Clause 6(3)(b) makes explicit reference to “written law”, which means that the established custom and practice of a foreign country would not be taken into account when prosecuting. Lord Henley gave an example in the other place that illustrates the point that I would like to make. He said:

“if it is established practice for a ship’s captain to pay a harbourmaster in a foreign country what we might euphemistically call an ‘unofficial’ fee to dock and unload, I am sure that the Minister would agree that that would amount to a facilitation payment.”—[Official Report, House of Lords, 7 January 2010; Vol. 716, c. GC40.]

As the Bill stands, that captain would be guilty of an offence and liable to imprisonment. He would have to rely on prosecutorial discretion to save him from jail. How is the prosecutor to operate his discretion?

We have discussed in previous debates the need for two elements if a prosecution is to be successful: the evidence to prosecute and a public interest in the prosecution. The discretion of the prosecutor is limited only to whether he can argue that prosecution is not in the public interest. He may be able to do that, but the decision on where he draws the line, in terms of public interest, is too arbitrary for offences of the magnitude that we are talking about, and too dependent on subjective factors. One prosecutor’s line of public interest may not match another’s, particularly when different prosecuting agencies are making the call on whether to prosecute.

We will return to that issue when we debate how the role of the Attorney-General has been split between a variety of prosecutors, all of whom may have different positions on what is in the public interest and what should be prosecuted. That could lead to an inherent uncertainty and a fundamental problem for those operating in foreign lands. It cannot be ideal for the shipping business to instruct the captain that the paying of the fee, while theoretically falling foul of the legislation, may nevertheless proceed because prosecution is unlikely. What business wants is certainty.

The amendments endeavour to provide that certainty by focusing on the intention of P and the nature of the payment. In doing so, they provide the prosecutor with a greater opportunity to act proportionally and with a better publicised consistency. Furthermore, they shift the emphasis back on to the captain. If there is no impropriety or corrupt element to his motive, he can be more confident that he will not face prosecution.

The Government have suggested that that would add another element to the offence, which would make matters more difficult for prosecutors, but that is debatable. If anything, the amendments more properly reflect the wording and intention of the OECD convention. Furthermore, they would mean that British business might not be hamstrung from the outset and could compete, in the absence of a specific facilitation payment carve-out, on a similar footing to its international competitors without fear of breaking the law, or without looking over its shoulder constantly in fear of prosecution.

I have extensively reviewed the debate that took place on the amendments on Report in the other place. Towards the end of the debate, Lord Tunnicliffe responded to a question from Lord Lyell by stating that the Government intended to publish guidance. Will the Under-Secretary please elaborate on that? Will the guidance be separate from the corporate offence guidance, or will it be part of it, and when can we expect it to be available?

In the other place, the Government said that the offence was deliberately formulated so as to present a robust response commensurate with the gravity of the mischief towards which it is directed, namely bribery on the part of business interests in the developed world that are seeking lucrative public sector contracts in the developing world. The offence is therefore drafted to prevent all but the written law of the state concerned from being irrelevant to consideration of the legitimacy of the payment.

I accept that at the top end we are dealing with systemic bribery in some sectors and countries, and that the figures involved are extremely large. The law should come down hard on those perpetuating such behaviour. However, we could be using a sledgehammer to crack a nut, particularly in the much smaller-scale, grey area, where what is required, if anything, is a scalpel rather than a sledgehammer.

The Government argued that there are two reasons for the sledgehammer approach. To ensure that I get this right, I shall quote Lord Tunnicliffe’s speech in the other place:

“First, we wish to avoid local custom and practice being a relevant consideration. If our Bill is to make an effective contribution to the efforts at the national and international level to encourage the developing world to abandon the culture of toleration of bribery we need to provide a robust deterrent. This offence is designed to fulfil that need by, among other things, preventing local customs and practice from being prayed in aid as a defence. Secondly, and extremely importantly, the experience of prosecutors working with the current law is that it is extremely difficult to pinpoint with sufficient certainty what duties or expectations apply to any individual foreign public official. Local circumstances vary immensely.”—[Official Report, House of Lords, 2 February 2010; Vol. 717, c. 126.]

Our amendments do not run counter to either of those points. By refocusing the emphasis on P’s intention, the amendments could serve to strengthen the commitment to those ideas.

I have gone on at some length about the first 10 amendments, but I hope that I have explained to the Committee the importance of the amendments and the clauses to the Bill. They form the core of the Bill and of our approach to reforming the law of bribery.

David Howarth (Liberal Democrat, Cambridge)

About an hour ago the hon. Gentleman said that his amendments were probing, and he repeated that statement with regard to his later amendment to clause 6, which means that I can be very brief, as the purpose of probing amendments is to listen to what the Under-Secretary has to say about the meaning of the clauses and amendments in question. All I shall say is that if the amendments were serious, I would oppose them all. They fall into two groups. The first group adds adverbs to the statute and the second group adds adjectives. In neither case is that a good idea, because the statute already deals with the issues in question, and adding extra words to the clauses would simply add confusion.

I intervened on the hon. Gentleman on three or four occasions because there were, in essence, three points to his argument, and in each case he was wrong. First, case law on the meaning of “corruptly” demonstrates that the courts could not make up their mind about what it meant. That is precisely why it is not a good idea to put the word “corruptly” into statute. It would be better to use any word other than “corruptly”. To use the word “dishonestly” would be to introduce a panoply of legal decisions about the meaning of “dishonestly” or “theft”, so that is not a good idea either. That, presumably, is why “improper” has been chosen; it does not bring that baggage with it.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I understand the hon. Gentleman’s point about possible arguments over the definition of corruption, but he is not suggesting that the courts do not know what “dishonestly” means, is he?

David Howarth (Liberal Democrat, Cambridge)

No, I am not suggesting that, but the courts say that it is a jury question. After a long period of debate about the meaning, they ended up saying, “We don’t know what it means. Let a jury decide”, and we do not want that, either. [Hon. Members: “Why not?”] Conservative Members say, “Why not?”, which leads me to my second point.

We need a more accurate definition of the conditions under which the crime is committed, rather than simply leaving the matter to the jury. In fact, if the argument of the hon. Member for Huntingdon is that we need the law to be clearer, I say to him: the Bill is drafted as it is precisely so that the matter is not simply left to the jury. So, the second point concerns the meaning of the word “improper”. The whole point of the statute is that the meaning of the word “improper” is put into it. We do not have to go to a dictionary to find out the meaning, because clauses 3 to 5 define it. That is precisely how the statute works. There is no need to go any further. I will leave to the Under-Secretary the task of saying what clauses 3 to 5 mean, because her remarks on that have great authority and mine have none whatever.

The third point concerns mens rea. The hon. Member for Huntingdon seemed to be under the impression that mens rea in criminal law had to import some notion of evildoing. That has never been the case. Mens rea includes the notion of intention—of intentionally doing the actus reus. As far as I can tell—I am no great expert in criminal law—clauses 1, 2 and 6 include the notion of intention, so I do not think that that problem arises.

John Howell (Conservative, Henley)

May I draw the hon. Gentleman’s attention to clause 5(1)? It says:

“For the purposes of sections 3 and 4, the test of what is expected is a test of what a reasonable person...would expect”.

How is that not a jury question?

David Howarth (Liberal Democrat, Cambridge)

Of course all the elements of a criminal offence are a jury question. The question is how much guidance the law gives the jury in particular cases. By breaking down the elements in this way, we give the jury a better chance of getting to an accurate answer than if we simply leave things at large to the jury in the way proposed by the hon. Member for Huntingdon.

Oliver Heald (Conservative, North East Hertfordshire)

The concern about the word “improper” is that it is a weaker word—a less serious word—than “corrupt”, or indeed “bribery”. There is nothing in clause 4 that disabuses one of that notion. That is why it is proposed that the words “with corrupt intent” be added—to ensure that we do not bring all sorts of less serious acts into the criminal sphere. Historically—and, I think, rightly—we want to tackle corruption and bribery, not a wider range of actions.

David Howarth (Liberal Democrat, Cambridge)

The point is that clause 4, along with clauses 3 and 5, define what “improper” means, and that is what is put to the jury. What is not put to the jury is simply a decision at large about the meaning of the word “improper”. They will be told what the law is in terms. The law in terms is proposed to be what is in those clauses, so I do not think that is a problem. Adding an extra layer of complication would be a problem. As in one of the cases to which the hon. Member for Huntingdon referred, the court assumes that Parliament does not add surplusage to statutes. It assumes that words mean something. If we add the extra test, the courts will assume that that would add something over and above impropriety as defined in the statute.

Jeremy Wright (Conservative, Rugby and Kenilworth)

But is not the issue of impropriety connected to the behaviour of the person receiving the bribe? That is a point that I made to my hon. Friend the Member for Huntingdon a littler earlier. The argument in favour of my hon. Friend’s amendment 1, or indeed his amendment 2, to clause 1 is that we are refining the description of the necessary behaviour for the person giving the bribe, and that is where the mens rea gap is, if there is one.

David Howarth (Liberal Democrat, Cambridge)

I do not accept that point, because if we take case 1, clause 1 says that a person is guilty of an offence where they offer the advantage, and that person

“intends the advantage...to induce a person to perform improperly”.

It is the defendant’s intention to induce improper behaviour that is the essence of the offence, so I do not think that the point arises.

The hon. Member for Huntingdon is correct to say that clause 6 takes a different approach from clauses 1 and 2 when it comes to how impropriety, corruption or undueness are dealt with. However, in essence, clause 6 has the same structure as the rest of the law. The reason why there is no need to put “undue” or any such word into the definition of the offence is that clause 6 defines the illegal aspect of the act in terms of the law of the state concerned.

If someone does something to induce a foreign official to act in a particular way because of an advantage being offered to them, we work out under the clause whether that is undue by looking at whether it is permitted or required by the law of that state. That is how it is done; that is why we do not need the word “undue” to be added to clause.

The statute might be drafted in a way that is too elegant, too effective and too economical for those who are used to a more grandiloquent style, but it strikes me as being perfectly adequate for the purposes that it is meant to fulfil. Better than that, it is statute that will be more effective because it is clearer than the current law, which is the point of the exercise. We want to ensure that bribery is prosecuted successfully in cases when it is happening and when the fact of its existence undermines not only our reputation in the world, but the economic interests of our businesses.

John Howell (Conservative, Henley)

I rise on the assumption that I am the only non-lawyer on the Opposition side of the Committee. The Committee might think that that is something to be praised, but I am looking at the Bill from the point of view of someone who, in the summer, will do jury service. Perhaps I can therefore bring the juror’s perspective to our proceedings.

I wish to start with the OECD background to the Bill. The great impetus on getting the Bill through the House seems to be that there is great international pressure for us to do so, and that it fits in with our obligations for the OECD convention. The commentary to the convention brings out several interesting points that amplify some of those that have already been made. It points out that the OECD convention has to span a wide universe, that its concepts are to apply to

“Common Law, Civil Law, Eastern European and Far Eastern legal systems”,

and that it must anticipate the future and possible newcomers to the OECD, such as

“China, India, Russia and South Africa”.

Obviously, it was written a little while ago.

The commentary goes on to say that liability is a matter

“where concepts diverge”

considerably in those countries. Since bribery is a legal construct very much in its development, the OECD negotiators, it says, opted

“for a very broad common denominator indeed”

in the convention.

The commentary also points out—the OECD convention itself makes this point—that there is a distinction between criminal and civil law aspects of bribery. The convention does not rule that out; it specifically accepts that that distinction is there. However, it rules out it being its job to intervene and decide which of those is more prominent or how they should be dealt with under individual legislation around the world.

The commentary also points out that the international trend is towards wrapping up civil and criminal activities into one for simplicity around criminal responsibility. To what extent have the Government been motivated by that trend? How are they reacting to it and to the inevitable simplification that the OECD convention achieves?

The convention makes the difference between criminal and civil less distinct. Paragraph 31 of the report produced by the Joint Committee on the draft Bribery Bill gives the example of

“the scenario of a senior banker being asked by a rival bank to induce his or her trading team to join that rival in return for increased remuneration”.

The answer from the UK Anti-Corruption Forum as to whether that would be caught by the Bill was that it would, but that in all other circumstances it would be best dealt with in the civil courts. Therefore, we have a good example of the extension of this along the lines that the OECD took, but only for convenience rather than for instruction.

The distinction is an important one to make. From a potential juror’s point of view, I have no difficulty in understanding what corruption means. However, I would have enormous difficulty, in this context, in understanding what “improper” meant. It could cover many different things, and I would need guidance on what should be considered improper. In my mind as a legislator and as a juror, the more legislation requires guidance, the less perfect it is.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I, too, welcome you to the Committee, Sir Nicholas. I recall serving on a Committee under your chairmanship last week, when you suggested that it might be your last Committee in the Chair. I am delighted to see that you were wrong then, but obviously saddened to think that you might be right in saying it this morning.

I also declare an interest as a non-practising barrister in the field of criminal law. To deal with the point that the hon. Member for Cambridge made earlier—much as I regret to do this, especially in his last Committee—I disagree with him on the drafting, particularly of clause 1. That is, I might add, an unwise thing to do generally, because he is an extremely accomplished lawyer, and he is usually right on the questions of legal drafting. However, I am not sure that he is this time, and I want to explain why I think that.

I support entirely amendments 1 and 2, tabled by my hon. Friend the Member for Huntingdon—or rather, I should say, amendment 1 or amendment 2, because it seems clear that the amendments are alternatives to each other. I am agnostic as to which drafting is preferable. One of the two is desirable, because it is important to refine the intent of the person alleged to have given a bribe—that is what clause 1 deals with.

There seems to be a scenario that we need to consider. The answer to it may be delivered by changing the drafting in the way that the amendments suggest, or it may, conceivably, be dealt with by the Minister reassuring me that that point is covered and by putting things on the record in Committee, which the courts will find of use when dealing with the point later.

My point of this: imagine a case where an individual is desperately waiting for the verdict of a public official, whether it be a planning official or a public official of some other type, whereby a decision one way would be a triumph, and a decision the other would mean disaster. The decision comes and it is in favour of that individual, who is understandably delighted and chooses to reward the public official in some way. It may be because the official is personally known to him or because of another set of circumstances that we cannot see at the moment. However, for whatever reason, a reward is given.

It later transpires that the decision taken by the official was the result of an improper performance of his duties as defined under the Bill. However, the individual did not know at the time that the performance was improper. In other words, the official took the decision for an improper reason that was completely unrelated to the behaviour of the person finding himself accused of allegedly giving a bribe.

David Howarth (Liberal Democrat, Cambridge)

The Minister will give a more authoritative answer, but my impression is that, in those circumstances, P would not have intended the advantage to reward the person for the improper performance, because there was no connection between the two.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I thought that the hon. Gentleman would say that. That is the bit that worries me. That might be the case, and it might well be what the Government intend. Paragraph 17 of the explanatory notes, on page 4, says:

“It is sufficient for the purposes of the offence that P intended to induce or reward impropriety”,

which is the point that he is making. However, clause 1(2)(b)(ii) deals with an allegation that someone has rewarded a person

“for the improper performance of such a function or activity.”

If, in the scenario that I described, the individual waiting for the decision from a public official rewarded the official and the official had carried out improper performance, the individual would be doing exactly what is described in that clause—rewarding a person for the improper performance—without knowing that it was improper performance. That is the bit that worries me.

As far as I can see, the individual would satisfy the clause as it stands as he would have rewarded an official for improper performance, but he would not know that the performance was improper. How could he, if the official’s decision was taken for reasons entirely outside his knowledge? That seems to be the issue.

Robert Syms (Conservative, Poole)

My hon. Friend is making a valid point. I refer to one difficulty. Somebody whose company had a factory in the midlands, for instance, and who was trying to sell goods to a country abroad might bring the officials who were part of the tendering process to the factory to show them what it could do, how it would be done and the work force. If that person paid their costs, either before the tender or after the contract was awarded, would that fall within the remit of the Bill? That might cause difficulties: somebody might be able to fly to Paris to see what the French could provide, but not be able to fly to Birmingham to see what the people there could provide.

Jeremy Wright (Conservative, Rugby and Kenilworth)

My hon. Friend might be right, but my question refers to inducements made before a decision is taken as much as to rewards after it. The issue that I am raising is whether, after a decision has been taken and someone decides to reward an official for taking it, they will at that point make themselves liable under the clause, without having any idea that the official’s performance in taking that decision was in fact improper, for reasons outside their knowledge. That is a real possibility. One way to avoid it arising would be to do precisely what my hon. Friend the Member for Huntingdon suggests and add to clause 1 the requirement that a person is guilty of an offence if they act either with corrupt intent or dishonestly in doing the things described in the clause.

I hope that the Minister will reassure me on that point, as it is a genuine difficulty with the clause. I very much hope that the hon. Member for Cambridge is right, as he usually is, but, on this rare occasion, he might not be. If he is not, we shall leave ourselves open, I would have thought, to the possibility of someone in the scenario that I have described leaving themselves open to criminal prosecution for something that I do not believe that we would wish to penalise in that way.

I hope that the Minister will either accept one of the amendments tabled by my hon. Friend the Member for Huntingdon or reassure us that they are not necessary and that the specific scenario that I have described is covered by the Bill.

Nicholas Winterton (Conservative, Macclesfield)

Before I call the Minister, I want to be helpful to the Committee. I understand that this is an important clause in an important Bill, and that the amendments selected for debate are critical, going as they do to the core of the legislation. I understand also that there is some concern that we are making rather slow progress, and that it is possible that the Government might wish to sit after 7 o’clock tonight.

My co-Chairman and I have spoken about that matter. There will be a Division in the House at 7 o’clock. We have reached the conclusion that, if the Government wish to continue the debate later today, it would be sensible to break for an hour at 7 o’clock and return at 8 o’clock. After that, the matter of how long the Committee sits is, to an extent, in the hands of the Government Whip. However, I think that it is helpful for members of the Committee to know how the Bill will be considered to enable them to plan their day. I give that due notice.

My co-Chairman Joan Walley and I have discussed the matter. We believe that that will be the best way for the debate to be taken today, if it is the wish of the Committee to sit after 7 o’clock. I hope that that is helpful. If there is any problem, I am sure that Members will come to the Chair and discuss it with us.

Claire Ward (Labour, Watford)

Thank you, Sir Nicholas. You have given us some interesting and helpful guidance. It is interesting to note that the hon. Member for Huntingdon, along with his colleagues, has taken nearly two hours to debate the offences of bribery, which many of us already understand. He has done so in the context of a Bill which supposedly has cross-party support and has been the subject of considerable discussion and debate both in another place and through a series of other measures. Indeed, the Law Commission and the Joint Committee, on which the hon. Gentleman and, I believe, the hon. Member for Rugby and Kenilworth also sat, agreed with the report and—

Jonathan Djanogly (Conservative, Huntingdon)

May I stop the Under-Secretary in mid-flow and ask her to explain which elements of the debate we have just had were unnecessary?

Claire Ward (Labour, Watford)

The debate is certainly necessary However, I question the hon. Gentleman’s commitment to the strong and robust Bill that we are seeking to get on to the statute book to stamp out bribery by business—

Jonathan Djanogly (Conservative, Huntingdon)

Will the Under-Secretary give way?

Claire Ward (Labour, Watford)

Perhaps the hon. Gentleman will let me finish. We have had a considerable amount of time to listen to him. It is important that I respond to the various points that he and his hon. Friends have raised this morning. In respect of the commitment of the Conservative party to this legislation, I trust that we will see the all-party support that he and his party have been keen to indulge in outside this place.

Jonathan Djanogly (Conservative, Huntingdon)

My hon. Friends and I rather resent the Under-Secretary questioning our commitment. For the last three years we have been committed to this Bill, calling for it on a regular basis, long before the Minister had anything to do with it. I personally have been calling for this Bill. For her to say today that we are not committed to this Bill when the Government are bringing it to Committee some three weeks before a general election, after it was first brought to the House in 1998, is outrageous.

Nicholas Winterton (Conservative, Macclesfield)

Order. I do not like to intervene, but I said at the beginning of this sitting that I hoped it would be agreeable and constructive. We do not want to trespass into Second Reading speeches. We need to deal with clause 1 and the amendments that I have selected for debate at this stage. I hope that the temper of the Committee can be kept at a constructive and low level.

Claire Ward (Labour, Watford)

I note, of course, your guidance, Sir Nicholas. I am sure that others outside the House will draw their own conclusion from the content of this morning’s discussion.

The amendments seek to reconstruct both the general bribery offences and the clause 6 offence of bribing a foreign public official. The amendments to the general bribery offences seek to introduce the requirement that the person must either be “acting with corrupt intent” or “acting with dishonesty” to commit the offence, while those to the clause 6 offence seek to introduce the concepts of “improper”, “corrupt” or “undue”. The amendments would have the effect of maintaining the current law’s unsatisfactory reliance on the concept of corrupt intent and undermine the effectiveness of the new offences.

The concept of “acting corruptly” is used in the existing outdated legislation, of which we heard much from the hon. Gentleman this morning, which we are seeking to replace—the Public Bodies Corrupt Practices Act 1889 and the Prevention of Corruption Act 1906.

John Howell (Conservative, Henley)

I now cannot remember the word the Minister used for the existing practice, but it was something like “unacceptable”. Will she therefore tell us why the Director of Public Prosecutions stated that the old test had worked adequately in practice?

Claire Ward (Labour, Watford)

We considered the views of the Law Commission on the matter. The term is not defined in those statutes and, as a result, the concept has proved to be vague and intrinsically difficult to apply in practice. That unhelpful construct has led to a number of different and often inconsistent interpretations from the courts on whether intending to corrupt involves dishonesty or committing an act that the law forbids. Furthermore, the Law Commission’s comprehensive research and consultation on the point concluded that the lack of clarity surrounding the concept of acting corruptly has weakened the effect of application of the law, and that offences based on the improper conduct model were the best option. Similarly, the Joint Committee on the draft Bribery Bill, on which the hon. Members for Huntingdon and for Rugby and Kenilworth sat, fully endorsed the improper performance test.

John Howell (Conservative, Henley)

I thank the Under-Secretary for giving way again—she has been generous—but I am sorry to return to the same point. She cited a lot of organisations that supported her case, but would she say therefore that the Director of Public Prosecutions is wrong to state that the test has worked adequately in practice?

Claire Ward (Labour, Watford)

I can cite rather more than simply organisations; I can cite the Conservatives’ own Front-Bench spokesman in the other place, Lord Henley, whom we heard little about from the hon. Member for Huntingdon in the earlier part of the debate—at one point, I thought that Lord Lyell was the spokesperson for the Conservative party. Lord Henley said of similar amendments tabled by Lord Lyell in another place:

“I have some sympathy, but regret that I cannot fully agree with him. In our earlier debates, the Minister argued that ‘acting corruptly’ is a vague and inherently difficult concept-I think that I quote him correctly. On this occasion, I agree with the Minister's argument over that of my noble and learned friend.”—[Official Report, House of Lords, 2 February 2010; Vol. 717, c. 120.]

At that important stage of the Bill’s transition through Parliament, that appears to have been the official view of the Conservative party. However, for other reasons, perhaps related to the impending general election and such considerations, the view of the Conservative Front Bench might have changed.

Under the improper performance model, an offence is committed if financial or other advantage is given to induce or reward impropriety in relation to a relevant function or activity. There must be expectation that the relevant function or activity is to be carried out in good faith or impartially, or that the person performing it is in a position of trust. With that in mind, clauses 1 and 2 of the Bill set out two active and four passive bribery cases, which describe the conduct of the payer or of the recipient that would constitute a bribery offence. Those cases can easily be understood and provide the necessary legal certainty.

The Joint Committee on the draft Bribery Bill endorsed the improper performance test and commented that

“the reliance on a reasonable person's expectation of ‘good faith’, ‘impartiality’ and ‘trust’ represents a careful balance between simplicity, certainty and effectiveness.”

Transparency International has been rather more forthright in its comments. Its briefing on similar amendments tabled in the other place said that they

“would take the law back to its vague and inadequate state of which such strong and consistent criticisms have been made since the Law Commission first reported in 1998.”

As for the amendments to clause 6, I recognise that they seek to address a view that the offence as currently drafted does not adequately describe what is properly regarded as corrupt conduct, because there is no requirement to prove impropriety or dishonesty on the part of the person offering the bribe. However, that criticism fails to recognise the overall formulation of the offence. Furthermore, amendments 7 and 8 fail to define what is meant by intending to influence “improperly” or “corruptly” the foreign public official. A prosecution could be opened up to legal arguments on subjective factors, such as defence awareness or knowledge of local laws, or the existence of local customs that tolerate bribery.

I hope that the hon. Member for Huntingdon agrees that we are seeking to put on the statute book legislation that is robust in its view of bribery and that sets out a clear message that bribery by British businesses and others across the globe is not acceptable. We do not want to do anything that might water down the offences or the clear message that we want to send out.

The same might be said of the proposed qualification in amendments 9 and 10 of undue or improper advantage. In the absence of a clear definition, it is unclear how the courts should draw the line between a financial or other advantage, and an improper financial or other advantage. The additional words would introduce an unnecessary, added complication. They represent additional matters for the prosecution to prove, which could undermine the value of the specific offence.

The clause 6 offence covers only the offer, promise or giving of a bribe to a foreign public official, not the acceptance of a bribe. Although the general offences are based on the concept of inducing improper performance of a relevant function or activity, clause 6 provides prosecutors with an alternative to the clause 1 offence, tailored to the particular complexities of prosecuting foreign bribery.

To prove the clause 6 offence, first, the person giving the bribe must intend to influence the recipient in the performance of their functions as a public official. Secondly, the bribe must be intended to obtain or retain business or a business advantage. Finally, the advantage, financial or otherwise, that is offered, promised or given to the foreign public official is defined as a bribe when the foreign official is neither permitted nor required to be influenced by the offer, promise or gift as determined by the written law applicable to the foreign public official. The offence is deliberately formulated so that the only relevant consideration regarding the legitimacy of a payment or other advantage will be the written law applicable to the foreign public official.

There are sound reasons for that approach. It provides legal certainty for those engaged in business overseas, contrary to the view of the hon. Member for Huntingdon, and avoids local custom or practice being a relevant consideration. It is not premised on impropriety because experience shows that such a requirement creates difficulties in achieving a successful prosecution in foreign bribery cases. Inserting a requirement for impropriety would negate the usefulness of having a specific foreign bribery offence.

The hon. Gentleman and his colleagues referred to facilitation payments and rightly said that the Committee will return to the issue when we come to his new clause. I do not want to go into much detail, because I will return to the matter, but a facilitation payment, whether it is called a small facilitation payment, a facilitation payment, or a large facilitation payment, is clearly a bribe. If the hon. Gentleman wants to ensure that outside the House, in the places that matter in the conduct of business, this Parliament sends a clear message that bribes are not acceptable, and that they damage business and British business, I trust that he accepts that facilitation payments, however he wishes to describe them, are simply a bribe in one form or another.

I know that the hon. Member for Huntingdon was a member of the Joint Committee, which backed the formulation of the offences in the Bill. He and his hon. Friend the Member for Rugby and Kenilworth are entitled to take a different view from that of the Joint Committee in its report, although I am not aware of significant views being expressed previously about how they disagreed with the Joint Committee, but I hope that he understands why we do not propose to change tack at this stage of the process.

The amendments were fully debated in the other place, when the Conservative Front Bench took a sensible position in disagreeing with the amendments tabled by Lord Lyell. I do not seek to encourage the Committee to support the amendments; indeed, I ask the hon. Gentleman to withdraw his amendment.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I may have missed it, but I am not sure the Under-Secretary dealt with the point I raised about clause 1. I specifically asked if there is enough reassurance in the clause as drafted regarding whether or not someone who is offering a bribe

“to reward a person for the improper performance of such a function or activity”

is going to be caught if they are simply offering a reward for the performance of an activity that they did not at that stage know constituted improper performance.

Claire Ward (Labour, Watford)

The hon. Gentleman is looking at the mens rea aspect of the issue. It is clear that we share the view of the Law Commission—again, it was endorsed by the Joint Committee, which scrutinised this issue—that R’s knowledge and intent should be immaterial as to whether an offence has been committed in cases 4 to 6. To that end, subsection (7) makes that explicit. In cases 1 and 2 of the offence, if the payer intends the improper performance of a function, the offence is made out. That is quite simple. If they intend—case 1 refers to intention—improper performance, they have made that offence.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I think the Under-Secretary is answering my question in the way I hoped she would, but just to be absolutely clear, is she saying that the intention relates to the improper performance, not simply to the process of rewarding? I suspect that that is where the potential confusion lies in the current drafting, which is why it would be helpful if she clarified the position.

Claire Ward (Labour, Watford)

I am happy to come back to the hon. Gentleman if there is any misunderstanding or doubt about what I have said, which is that, as in clause 1(2), if the payer intends the improper performance of the function, that offence is made out. If there is any misunderstanding about that, I am happy to write to the hon. Gentleman.

I believe I have answered all the relevant issues raised in the earlier part of the debate. I once again encourage the hon. Member for Huntingdon to withdraw his amendment.

Jonathan Djanogly (Conservative, Huntingdon)

This has been a full debate—I hope my hon. Friend the Member for Henley has not been put off his jury service as a result. The debate was required to provide the Commons with the opportunity to discuss serious issues and a serious change in the law. I am pleased that we had this debate and had we not done so—as I think the hon. Member for Cambridge wanted—that would have been wrong. I am not going to talk about our commitment to the Bill because I have mentioned that previously, but I point out that by lunch on the first day, we will have covered at least 10 of the approximately 30 amendments that have been tabled. To suggest in any way that we are trying to hold back progress is ridiculous.

Jeremy Wright (Conservative, Rugby and Kenilworth)

While my hon. Friend is at it, will he also observe that the Government’s programme motion, with which we have all agreed, allows what the Government consider to be an appropriate amount of time for the Bill. As he rightly points out, we are making steady, if not swift, progress.

Jonathan Djanogly (Conservative, Huntingdon)

The spokesman for the Lib Dems, the hon. Member for Cambridge, said that the definition of corruption is a question for the jury and that that should be separated from the concept of “proper,” which is clearly defined in the Bill, and therefore everything will be fine.

David Howarth (Liberal Democrat, Cambridge)

I did not say that at all.

Jonathan Djanogly (Conservative, Huntingdon)

Let me say that what the hon. Gentleman did say was slightly unrealistic. The question of what is improper will also, in practice, have to be put to the jury. The hon. Gentleman needs to appreciate that we are creating new law here that is a dramatic change from the previous law. The definition of “improper” will be heavily debated in court. The courts will have to give significant guidance that will be a patchwork of what the Government will come out with, and, inasmuch as they have had debates over the years about what “corruption” means, they will debate over the years what “improper” means. As my hon. Friend the Member for Rugby and Kenilworth said, if we are concerned about the scope of the word “improper”, even if we accept it in the Bill, we need to appreciate that the courts will have to spend some time looking at it again at some future point. I will leave it at that.

I make no apology for wanting to cover all the bases in the Bill. The Under-Secretary answered the questions on its legal aspects to some degree, and I will consider what she said in preparation for Report stage. However, I should like to make a few points on the Bill’s practical applications. She rightly said that we will debate facilitation payments on another occasion, but I am proposing in my amendments a way of avoiding that debate. Without these proposals, which admittedly we are advancing in the form of probing amendments, we would still have to deal with the question of facilitation payments, which would not otherwise be dealt with now.

Claire Ward (Labour, Watford)

Does the hon. Gentleman accept that a facilitation payment is a bribe?

Jonathan Djanogly (Conservative, Huntingdon)

A facilitation payment is a bribe. However, the Under-Secretary needs to recognise that in certain jurisdictions carve-outs are made for facilitation payments under strict guidelines. For instance, the United States has a specific exemption for what it calls “facilitation payments”. We are moving from differentiating between what is, in effect, a tip and a bribe. Yes, differences are made up and I accept that, under the Bill, those payments are bribes.

There are dangers associated with facilitation payments that the Under-Secretary did not mention. It is not only a matter of the law of our country looking at facilitation payments. If there is a carve-out—we will debate this later and I will make this point—the fact that someone is bribing under the law of the country where the facilitation payment is made means that the business man making that payment would still be liable for prosecution in that country in any event. That is often forgotten. That is a debating point, and we suggest that the amendments would get round having to have that debate at all.

The Under-Secretary did not mention various practical aspects, such as whether the Government have assessed the impact of clause 6 on British companies, which are concerned about that. On clause 6, has she looked at which other signatories to the convention have also done away with the “improper” element?

Claire Ward (Labour, Watford)

The OECD has endorsed the Bill and has suggested that it presents a best practice model. Although the hon. Gentleman speaks about the practice of facilitation payments in rather flowery language, I note that he endorses the fact that they are indeed a bribe. The purpose of the Bill, and our intended purpose as a Government, is to set out clearly that bribes are not acceptable. I hope he agrees with that.

Jonathan Djanogly (Conservative, Huntingdon)

I do not think anybody is arguing that the Bill is unnecessary or that we do not need to crack down on bribery. The question is the extent to which there should be prosecutions and exemptions under the law in particular circumstances. The Under-Secretary did not answer my question, which was, in the context of the clause 6 offence, to what extent other signatories to the convention have done away with the “improper” element of the offence.

I take the Under-Secretary’s point that we will have the gold standard in anti-bribery law among the OECD countries, and probably in the world. We not only recognise but support that. However, we must ensure that our companies are prepared for that challenge. I do not think she answered my question about publishing guidance. Will guidance on clause 6 be merged with the other guidance on the Bill that is being published, or will it be done separately? When can we expect it to be published?

Nicholas Winterton (Conservative, Macclesfield)

Does the Under-Secretary wish to intervene?

Claire Ward (Labour, Watford)

I will accept the invitation. With all due respect, Sir Nicholas, the issue of guidance will be dealt with in our debates on clauses 7 and 9. I think it appropriate to reserve my comments until that point.

Jonathan Djanogly (Conservative, Huntingdon)

When the Under-Secretary addresses the question of guidance on other aspects of the Bill, I ask her to ensure that she includes the Government’s position on clause 6. On the basis that we can consider what the Under-Secretary has to say on other aspects of the Bill, which all merge together and will have to be considered as a whole when we move towards Report stage, I beg to ask leave to withdraw the amendment.

Nicholas Winterton (Conservative, Macclesfield)

I congratulate the Committee on the speed with which it has debated up to clause 6.

Clause 6

Jonathan Djanogly (Conservative, Huntingdon)

I beg to move amendment 11, in clause 6, page 4, line 12, at end insert—

‘(3A) It shall be a defence if P reasonably believed at the time of the alleged offence that F or the third party to whom the financial or other advantage was given was required or permitted to accept it under the domestic law of the jurisdiction in which F or the third party operates.’.

As you have explained, Sir Nicholas, we have covered about a quarter of the Bill by lunch. If anyone thinks we have been holding up proceedings, I ask them to think again.

This probing amendment would insert a defence of reasonable belief into the offence of bribing a foreign official. The reasonable belief relates directly to the defendant’s knowledge of the laws of the foreign country.

As before, presumably, the Government will counter with the argument that prosecutorial discretion will cure any of the failings in the offence. We question how they can be sure of that. Is it sufficient to rely on that discretion as a cure-all to what are fundamental problems with the structure of the offences as they stand? We have already debated the need for a change to the test of impropriety, and this amendment is in similar vein.

There is an important point concerning the circumstances in which different countries or cultures have different laws or cultural norms, and whether those laws or norms should be taken into account when considering the criminality of an individual’s actions. A report from the Law Commission in 2008 noted that standards of conduct in the UK and Europe were not “universally recognised” within Europe, let alone within a wider global context.

The Law Commission proposed a defence for any person who mistakenly but reasonably believed that a foreign official was required or permitted to accept an advantage under the official’s local law. However, the Government have decided not to include that defence in the Bill and I would be grateful if the Minister explained the reasoning behind its exclusion. I understand that the majority of respondents to the Law Commission report, which included the Serious Fraud Office and the Association of Council Secretaries and Solicitors, were in favour of such a defence.

I must make a brief aside, for the purposes of clarification. We are seeking this amendment and the proposed defence in relation to the discrete offence of bribery of a foreign official, not in relation to the general offence of bribery. The distinguishing advantage is that the focus of the general offence is on the propriety of the offending individual’s conduct, not on the supposed legal propriety of the advantage. The offence is founded on a hybrid “influence or improper conduct” model, rather than on the “influence or undue payment” model, which forms the basis for the discrete offence of bribing a foreign public official.

I concede that bribery is subject to almost universal prohibition across the globe. However, that prohibition does not solve the problem of whether particular payments or other advantages are bribes, or could reasonably be seen as being bribes. “Taxes”, “fees”, “administration payments” and so forth may all be legally required or permitted in certain circumstances. Quite understandably, those paying them may believe that they are legal requirements, or that they are legally permitted in particular circumstances—for example, when the administration involved is time-consuming.

The Bill makes no provision for the carve-out of “facilitation payments”, but the defence recommended in the amendment would provide some protection for so-called innocents abroad. There is the potential for flexibility in the application of the defence, as there is between individuals and commercial organisations. The threshold of reasonableness for the latter would be much higher; they would be required to prove far higher diligence than an individual. For instance, the Law Commission suggested that

“companies seeking to make use of the defence should have to show, as part of their business strategy for dealing with the officials in question, that they took appropriate steps to discover whether any payments requested would indeed be required or permitted by law”.

One of the key arguments against the Law Commission’s recommendation for a defence was the suggestion from the High Court judges that a core principle of English law is, “Ignorance of the law is not a defence.” However, that was tempered with the judges’ suggestion that it might be preferable to build into the offence a fault element, so that the accused must have acted “dishonestly”. I do not wish to rehash the earlier debate on the issue, other than to flag up that endorsement for our earlier proposals.

In evidence to the Joint Committee and to the Law Commission in its original report, Professor Horder highlighted the fact that not all English authorities support a completely unyielding adherence to the maxim that “ignorance of the law is not a defence” and the leading case law is not entirely consistent in its application of the maxim. Members should contrast Cambridgeshire and Isle of Ely county council v. Rust with Postermobile plc v. Brent borough council as proof of that.

Canada, which is another common-law jurisdiction and also a signatory to the OECD convention, takes a more generous approach, at least where the error was induced by an official. Where the law in question, of which the defendant was ignorant, is not English law but the law of another jurisdiction, the case for adhering strictly to the maxim seems even less persuasive, as the Law Commission sensibly suggested. Professor Horder also reiterated that distinguishing element and suggested that a mistake of foreign law may legitimately be treated differently from a mistake of domestic law.

Furthermore, strictly speaking it is not ignorance of the law that is the basis of the defence proposed in the amendment, in so far as that implies that a mere absence of knowledge of the law would, in and of itself, amount to an excuse. The defence would require a positive and adequately grounded belief that a payment was required or permitted by law, which would be sufficiently flexible to allow for a proportional application of the defence. A test of reasonableness is not something that has traditionally proven difficult for jurors in the English court system to apply.

The International Chamber of Commerce supported a defence as

“a useful addition to the written law”

test, since juries are

“much more suited to find whether a reasonable attempt to ascertain law had been made rather than to decide upon the law itself”.

Professor Horder alluded to that in evidence:

“In practice this defence would not run very often, but when it was it”

would be

“perfectly reasonable for a firm to say, ‘Well, look, the biggest law firm in the world has given us this advice that it is perfectly lawful to make this payment, what can we do? We can only rely on that’. That is important because we are talking about convicting someone of a pretty serious offence. The taint of corruption is pretty significant.”

He was not alone in that view, as many of those providing evidence to the Joint Committee reiterated that sentiment.

Major global law firms Herbert Smith LLP and Clifford Chance both supported the idea of a clear defence and suggested that a dearth of legal authorities in some countries can lead to advice being heavily qualified, leaving quick decisions to be made on a “best guess” basis. The Director of Public Prosecutions also preferred the option of adding a statutory offence in the interests of “transparency and accountability”. Considering that weight of evidence in favour of a defence in the manner proposed by the amendment, will the Minister please let me know why the Government decided not to include it in the draft Bill?

The Government’s response paper to the Joint Committee’s report is noticeably light in that regard when discussing the defence, despite the Joint Committee’s concerns. Much emphasis seems to be placed on appeasing the OECD. Paragraph 69 of the Joint Committee’s report states:

“The Government’s decision to drop the defence followed objections from the OECD. Its Working Group considered that such a defence would be open to abuse and would contradict the general stance of the UK legal system, under which mistake of the law is no excuse.”

I would be interested to know from the Minister why such weight was afforded to the objections of the OECD but not to the arguments put forward by the DPP, Professor Horder, the ICC and 19 other members of the Law Commission’s consultation who voted in favour of a defence being drafted into the Bill.

In evidence to the Joint Committee, the Secretary of State for Justice stated that not having a defence in the Bill struck the “correct balance” and placed reliance once again on prosecutorial discretion. However, two paragraphs earlier, in paragraph 68, the DPP is recorded as saying that he preferred the option of adding a statutory defence in the interests of “transparency and accountability”. Is the Minister not concerned that the prosecutor, whose discretion he is relying so heavily upon to moderate the effect of the offence, has publicly asked for a statutory offence? That concerns us, which is why we tabled the amendment.

David Howarth (Liberal Democrat, Cambridge)

I want to be fair to the hon. Gentleman, as I think that that point, unlike those we discussed at length this morning, needs to be discussed, and I will be interested to hear the Government’s responses to his questions. My view is that what the Government have done is probably right, but I will listen to the Minister’s reply with interest.

The point, as the hon. Member for Huntingdon said, is of course that the OECD did not like the idea of that extra defence. To paraphrase an OECD official, the reason it did not like it was that it is all too easy to obtain bad legal advice if one wants it. That might be a cynical point of view, but given the history of corporate behaviour in this area, I do not think it unrealistic.

A point to add is that proving foreign law is a matter of fact in our courts. The process of proving what the foreign law was would be for the court to decide on, as a matter of fact. As to the notion that a defendant might say that foreign law was x, and the prosecution that it was y, I do not think that that will become an issue. It would be too difficult for the prosecution to prove. The onus would be on the prosecution to prove that foreign law was not what was claimed.

Jonathan Djanogly (Conservative, Huntingdon)

I totally agree—the Bill makes it clear that it is not only foreign law but written foreign law that is relevant. There will not be any debate about that, but the question is how to deal with the fallout when it is not applied justly.

David Howarth (Liberal Democrat, Cambridge)

I do not think that that will arise at all in practice, because it would be for the prosecution to prove that foreign law was not what the defendant believed it to be. I just do not see that happening in the way that the hon. Gentleman supposes. I suppose that there might be circumstances in which a case that occurred in the foreign jurisdiction showed that the law was different from what it was thought to be at the time, but that is a very low-probability event.

Jonathan Djanogly (Conservative, Huntingdon)

I spent many years practising as a corporate lawyer advising companies working in far-away places, and often having to look for local legal opinions. Sometimes they are almost impossible to find; sometimes transactions happen fast and there is not a year to find out—an opinion is needed in a few days. There might be one expert in the whole country on a given matter, particularly in ex-Soviet countries—perhaps not so much now, but certainly a few years ago when they did not have a very developed corporate law. There were very few lawyers who could interpret, and often their interpretations were not of the standard that one might have expected in our country. That can sometimes be an issue in real life.

David Howarth (Liberal Democrat, Cambridge)

I fully accept that point with regard to trying to find out what the courts of a particular country would do. However, my fundamental point is that we are talking about what the courts here would do about foreign law, and it seems to me to be an issue of fact that the prosecution would have to prove beyond reasonable doubt, so I do not think that the issue the hon. Gentleman raises would be a problem in practice.

Claire Ward (Labour, Watford)

The amendment would create a defence in circumstances where P reasonably believed that F or a third party was permitted or required to accept the advantage by the applicable domestic law. I appreciate that, as has already been explained, the Law Commission originally proposed such a defence in its report. We considered the matter seriously and took into account the representations and views of the OECD. We came to the conclusion that a specific defence of the kind set out in the amendment would not be appropriate.

The reason for our view is that, as has been mentioned, businesses are engaged in transactions and business across the world, and have a responsibility to understand the law of the countries in which they operate. If necessary, they should have access to legal advice on the legitimacy of payments to foreign public officials. It is not acceptable to plead ignorance of the law as a defence in this country, and it is not acceptable in the circumstances set out in the clause to plead ignorance of the law in another country where one is doing business.

Joan Walley (Labour, Stoke-on-Trent North)

Before the adjournment, my co-Chair, Sir Nicholas Winterton, made it clear that the Committee Room would be locked and that papers could be left here. I have, however, been made aware that papers have been removed. We will endeavour to discover what has happened and ensure that it does not happen again.

Claire Ward (Labour, Watford)

It is a great pleasure to serve under your chairmanship, Ms Walley. I believe that this is your first sitting as Chair of a Public Bill Committee, so congratulations. I hope that we can make it an interesting and enjoyable experience for you.

Before the lunch break, we were discussing amendment 11 in relation to the clause 6 offence of bribing a foreign public official. I explained that, although the Law Commission originally proposed a defence similar to that proposed by the amendment, we carefully considered representations and took the view that it was important that companies engaging in activities overseas should not be able to rely on a defence of ignorance of the law. That would not be acceptable. In the exceptional case of a genuine mistake where an individual in unfamiliar surroundings was faced with plausible demands that in fact amounted to a low-level bribe, it would be for prosecutors to decide whether it was in the public interest to pursue a prosecution.

The offence is intended to send a powerful message that those involved in international business should think twice before offering, promising or giving payments or other advantages to foreign public officials. The introduction of a reasonable belief defence would detract from that powerful message and undermine the policy aims of the offence to combat foreign bribery. The Joint Committee agreed with the Government’s decision to reject the reasonable belief defence and commented that the proposed offence

“represents an important step in putting the United Kingdom’s compliance with its international obligations beyond doubt.”

I should also like to clarify some of the other issues raised during this morning’s debate. The hon. Member for Huntingdon asked why we are not following the preferences expressed by the Director of Public Prosecutions in his evidence to the Joint Committee. Of course, we value the views of the DPP, as we do those of all stakeholders and parties that are interested in the issue. We took those views into account and considered them carefully, but we have to achieve a balance and make a judgment. In doing so, we believe that we have come to the right conclusion. That does not mean, however, that we do not value the contributions that have been made to the debate.

I was also asked about the publication of guidance. For clarification, I assure the Committee and the hon. Gentleman that, as is usual practice, we will make guidance available on the Bill’s contents as part of an explanatory circular, which will cover the clause 6 offence, as well as other aspects of the Bill. The guidance to which clause 9 refers relates to the offence under clause 7 and the procedures that commercial organisations can put in place to prevent bribery by persons associated with them. That guidance will therefore touch on the offence in clause 6 only to the extent that it is relevant to the commission of an offence under clause 7 and the procedures that a commercial organisation can put in place to prevent bribery by those associated with it.

For those reasons, I invite the hon. Gentleman to withdraw his amendment.

Jonathan Djanogly (Conservative, Huntingdon)

First, I wish to address the remarks, which I slightly blurringly remember, of the hon. Member for Cambridge. His core point was that, in practice, the amendment is not a problem in so far as it will not hinder a prosecution. To that extent I agree that it is not a problem to mount the prosecution. The clause is very clearly drafted and there will be very little wriggle room; I am not disputing that. The concern is whether it will be applied in a way that will stop business operating. I was grateful to hear from the Under-Secretary that the clarification of the guidance will accompany clause 6.

David Howarth (Liberal Democrat, Cambridge)

I think I now remember what my point was. It was actually in the opposite direction; the situation where a company or person accused of bribery is said to have got the foreign law wrong, which I think was the case that the hon. Gentleman was raising. The issue then is: under what conditions is that organisation or person guilty of bribery? My point was simply this: it would be for the prosecution to prove what the foreign law was, as a fact. The burden of proof would be on the prosecution to prove beyond reasonable doubt that the foreign law was not as the defendant thought it was. That is the reason why I thought that many of the problems that he raised would not be problems for the defendant, so much as problems for the prosecution.

Jonathan Djanogly (Conservative, Huntingdon)

I thank the hon. Gentleman for that clarification. We discussed that this morning, certainly to the extent that the company seeking the advice receives advice overseas on the written law of that country. The concern is that if that advice is wrong, they still may be liable for prosecution. That is the potential issue and concern.

The Under-Secretary spoke about the amendment undermining the policy aims of the Bill. That is a pretty broad-brush statement and I do not think that that can necessarily be applied. As to where we have reached on this for the moment, I beg to ask leave to withdraw the amendment.

Oliver Heald (Conservative, North East Hertfordshire)

I just wanted to mention the CBI position. The CBI briefing to the Committee expressed concerns about clause 6 generally. Of course, it is right to have proper protection against bribery, corruption and extortion. It is in the British interest, as a law-abiding country and law-abiding trader, to have that situation. It is a bad thing for Britain if other countries are able to bribe officials or act in an improper way when we are trying to trade ethically.

In the briefing, the CBI says that it strongly supports the Government’s objectives, as I do. It is important to recollect that as long ago as 1995, the Committee on Standards in Public Life said that it was important to codify our law in the field of corruption and bribery, and that that is a reputational issue for the UK. However, it is also important to take account of the concerns of one of our major large business organisations, when it says that it is very concerned that legitimate business promotional expenditure and proportionate use of corporate hospitality will be caught by clause 6, because the offence does not adequately incorporate a concept of dishonesty or impropriety.

It would be useful to hear the Under-Secretary’s thoughts on the CBI’s concerns. The CBI went on to raise the idea that the notion of corruption and dishonesty or impropriety is something that is recognised internationally. It is a mistake for a new offence of this sort, involving the bribery of foreign public officials, not to have that concept at its centre. The Law Commission and the Joint Committee have produced a workable draft Bill, but the point discussed this morning is important and the CBI’s concern needs to be addressed.

The CBI says:

“It cannot be fair to criminalise honest company behaviour. A response that relies on prosecutorial discretion”

is not adequate. It makes the point that there are implications:

“Businesses either have to commit to no promotional expenditure, which is clearly unsustainable, or openly condone criminal acts by their staff.”

They do not want to be in that position. The CBI says that any proper promotional expenditure should be made without the fear that it would only be proper under prosecutorial discretion. It raises the question of section 328 of the Proceeds of Crime Act 2002.

I am interested to see whether the Minister wants to comment more generally about the clause, as it is worth responding when a large business organisation raises such concerns.

David Howarth (Liberal Democrat, Cambridge)

I received the same briefing as the hon. Gentleman but did not follow his point about section 328 of the Proceeds of Crime Act. That is a very difficult Act to construe. That section is about money-laundering. My understanding is that the underlying offences have to be shown; that there cannot be a money-laundering requirement or offence where there is no underlying offence for the proceeds provisions to latch on to.

In general, in the proceeds of crime area, it is only in a situation where somebody thinks someone else is doing something bad that he or she has to make a submission to the Serious Organised Crime Agency. The concern raised by the CBI does not seem to be in line with my understanding of how the system works. Perhaps the hon. Gentleman understands it better than I do.

Oliver Heald (Conservative, North East Hertfordshire)

I would not be so outrageously arrogant as to make that suggestion. I did not read the sentence fully. I thought a little shorthand was probably adequate for the hon. Gentleman, given his detailed knowledge of the law. The point that I and the CBI have been making is that

“any proper promotional expenditure would, irrespective of the prosecutorial discretion under the Bill, be a breach of section 328, unless companies obtain consent”

to make each payment from SOCA. The CBI believes that is an unworkable proposition.

David Howarth (Liberal Democrat, Cambridge)

That is what I do not understand, because I do not think it is a breach of section 328, unless it is already illegal in some other way. That was the point I was trying to make.

Claire Ward (Labour, Watford)

The offence is clear and there are good reasons why we have incorporated it into the proposed legislation. We believe that it sends a strong message about what is acceptable conduct. It requires the prosecution to prove that the person offering the advantage intended to influence the official in his or her official capacity, and intended to obtain or retain business or an advantage in the conduct of business.

The offence is deliberately structured so that, where an advantage is offered, it will only fall outside the offence where the public official is permitted or required by the written law applicable to the official to be influenced by the advantage. That avoids any question of what is customary in the foreign jurisdiction concerned. Where any doubt exists, prosecutorial discretion will remain an important safeguard against legitimate activities being penalised.

The hon. Member for—

Oliver Heald (Conservative, North East Hertfordshire)

North-East Hertfordshire.

Claire Ward (Labour, Watford)

I should know that well but always get the precise description wrong. I know the areas it covers, though. The hon. Member for North-East Hertfordshire raises the concerns of the CBI. The CBI is one of the organisations with which we have had ongoing discussions about the Bill. We continue to have discussions to ensure that in practice businesses are able to comply in due course with the offences under the proposed legislation.

The hon. Gentleman raises the prospect of promotional expenditure or other forms of hospitality being caught under clause 6. We all know that for many companies, promotional expenditure is an important part of modern business practice, and the Government do not seek to restrict appropriate expenditure of that kind. Whether promotional expenditure will amount to an offence under the clause will depend on the facts.

It is possible that clause 6 would catch some promotional expenditure. When such expenditure is designed to explain, and to inform potential buyers about, a commercial organisation’s products, it would not necessarily involve the transfer of any advantages as mentioned in clause 6. However, if benefits that might be regarded as hospitality were included within promotional expenditure, such expenditure could be an offence under the clause if the local law did not expressly permit or require the receipt of such benefits by officials. Whether such a case would proceed would be a matter of prosecutorial discretion.

We believe that in marginal cases of bribery such as those that I have outlined, prosecutors would try to provide the right balance when determining whether it would be in the public interest to proceed with a prosecution. It is not our intention to drag a series of companies through the courts on the basis of promotional expenditure that does not seek simply to bribe a public official.

Oliver Heald (Conservative, North East Hertfordshire)

Suppose that a company is trying to break into a new market in a country that is perhaps not brilliantly familiar to Britain, or vice versa—it is good to encourage businesses to do that but it is not easy to achieve. If the product being sold was something uniquely British that we would understand fully but that would not be understood elsewhere, the business might want to bring an official of a company, and perhaps a local planning official, over to this country to see what its plant looks like and what it produces for the purpose of information. In the process, the officials might visit London and perhaps take in a show. In such circumstances, would that be a bribe?

Claire Ward (Labour, Watford)

We would have to look at the extent of the hospitality and the purpose for which the business was undertaking those activities. The prosecutors would consider the facts to determine whether to proceed with a prosecution. Providing information about a business and promoting it to ensure that it has the opportunity to compete on equal terms with other businesses is different from providing a foreign public official, his family and various others with a five-star holiday and other additional benefits not specifically related to the promotional work of the business. The case would be about the facts, and then it would be for the prosecution to determine whether it was in the public interest to proceed with prosecution.

Jonathan Djanogly (Conservative, Huntingdon)

The Under-Secretary’s reply has sparked my memory of our exchanges on facilitation payments during which, if I recall rightly, she questioned me about whether any facilitation payment whatsoever was bribery. It was suggested that the fact that I could see certain circumstances in which there should be an exception—as has arisen in the United States—was basically outside the remit of the Bill, and she was somewhat on her high horse on the matter. Given her comments about hospitality, it seems to me that slipping a small note into a passport as a facilitation payment would be out of the question but that—depending on the circumstances, as she said—taking in a show in London might be acceptable. That not entirely consistent approach makes me think that there is something more to this than what she has been saying.

Oliver Heald (Conservative, North East Hertfordshire)

In general I welcome the Bill and think that it is well structured, but it seems to drag in some low-level activity and elements of business practice that one would not traditionally have described as corruption or bribery, such as showing the client the product, where it is made and perhaps including some hospitality. That is, I would have thought, fairly normal business practice when trying to break into a new market overseas. If someone working for a company is worrying all the time that if they bring people over to show them the product and the plant and then go out for a meal, they might be in trouble with the Minister and perhaps be prosecuted, it will cause them to pause for thought.

It is clearly a good thing for serious incidents to be dealt with by the courts, and it is good that we have a new Bill, but I am worried that low-level activity that would not normally be thought to be criminal in any way will be criminalised. The CBI is also worried, and I normally take it seriously because it is the big business organisation. I hope that the Minister will think again. If we are going to have an export-led recovery, is this approach wise?

Robert Syms (Conservative, Poole)

In the example that my hon. Friend cited, showing people a company’s wares would be sensible business. If those people happened to see part of British culture too, I do not think that there would be a problem. However, as the onus is on the prosecution authorities, if I were a French company and knew that my competitor had brought three people over to look at its plant, I would simply write to the prosecutors and say that the competitor was being corrupt. Some companies are willing to do such things when they are in competition. One or two of our airlines have had some quite vicious fights. The problem is the focus on the prosecuting authorities. We might get complaints that are an attempt to disrupt business.

Oliver Heald (Conservative, North East Hertfordshire)

I had not thought that there might be a vindictive competitor, but I suppose that is possible. The alternative danger is that the French operator decides that it will do even better and takes those people to the south of France, and then we get into heavy expenditure. It is important that there are limits but, at the same time, I worry about the way in which the proposal is pitched.

During this morning’s sitting, we examined provisions that contained nothing about behaviour being corruption or bribery in terms of intent, and now we are looking at a provision that has implications for exports when we want to stop bribery and corruption, but we do not want to stop legitimate business expenditure on the promotion of products.

John Howell (Conservative, Henley)

During the late ’90s I did a lot of work alongside UK Trade & Investment and its predecessor organisations to encourage exports, particularly to the newly opening central and eastern European countries from where very few people had come to the UK. It was the advice of successive Governments that when people were brought over to look at the product, that should also be an opportunity for them to see the UK and get a feeling for British culture. That was sound advice because of the impact of the practice on promoting UK plc. Does my hon. Friend agree that the Bill will put at risk precisely that sort of good advice?

Oliver Heald (Conservative, North East Hertfordshire)

Yes. Part of the sales pitch for those missions, which were often led by Ministers, was saying, “If you don’t understand how this service or product operates, come and have a look.” People would then come here. I believe that that still happens, and I would not be at all surprised if Ministers in the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office were giving the same advice at this very moment. However, the CBI, which is the business organisation that should be seen as very important to the whole process, is saying, “Yes, but you’re making promotional activities difficult for us.”

Jeremy Wright (Conservative, Rugby and Kenilworth)

Does my hon. Friend agree that another difficulty—perhaps it is a two-fold difficulty—is that our embassies provide a great deal of hospitality and also support the activities of businessmen in attracting trade to the UK, as do our armed forces. For example, there are often cocktail parties on the decks of navel ships. Such issues are worth considering in this context.

Oliver Heald (Conservative, North East Hertfordshire)

Of course UK plc, as it is called, goes into bat to get our products sold internationally. It carries out its promotion legitimately, but that involves expenditure and, from time to time, not only company officials but Government officials. In a lot of countries, the view of the local official determines whether somebody is allowed to build a factory and make products, or even to import a quantity of material. In some countries, it might even be a political party figure, as the local official and the party representative, who decides what imports may take place.

It is easy to see that persuading a client that a company has a good product and showing them how it works involves promotional expense and exposure to officials. We want an assurance from the Under-Secretary that people carrying out such activities will not fall foul of the law. It should not be just a matter of begging the prosecutor not to prosecute. If people behave legitimately, the fact that they are not guilty should be a right. If the Under-Secretary cannot give that assurance, and it is simply a matter of saying, “Oh well, I hope that the head of the British Transport Police, a prosecutions department, the Director of Public Prosecutions or a Crown prosecutor in some place will let me off,” I do not think that our business men will be reassured.

Peter Kilfoyle (Labour, Liverpool, Walton)

I am sure that we are all extremely pleased to hear Her Majesty’s loyal Opposition defending companies that could end up under the cosh of the Bill’s provisions. Whether it is facilitation payments, or that a company’s efforts to promote its cause in some exotic place are misconstrued—

Oliver Heald (Conservative, North East Hertfordshire)

Will the hon. Gentleman give way?

Peter Kilfoyle (Labour, Liverpool, Walton)

I have not got to my point yet. I was particularly taken with the Under-Secretary’s comment that she had consulted the CBI. Obviously, we are all gratified that there is such a doughty defender of civil and human rights in this country, never mind elsewhere. During her consultations, did she consult SOCA to determine its view on the Bill, and especially on clause 6?

Jeremy Wright (Conservative, Rugby and Kenilworth)

May I take this opportunity to welcome you to the Chair, Ms Walley?

I shall simple raise one issue that is, I think, relevant to clause 6. It has been raised many times by the Under-Secretary in response to points made by Conservative Members and to amendments tabled by my hon. Friend the Member for Huntingdon. The issue is prosecutorial discretion, and it will arise regularly, especially when we are dealing with the bribery of foreign and public officials, so it is sensible to explore it a little now.

Three things concern me. First, I am concerned about clarity. As other hon. Members on the Committee have observed, we are creating new law, which, in some ways, is radical. Business and industry in this country will have to get used to it very quickly or find themselves with the possibility of a criminal conviction. The one thing I am sure business and industry will require of us is a good deal of clarity regarding what law they are expected to comply with. We will go on, of course, to talk about guidance. The Minister has already referred to that, and it will be a large part, one hopes, of the clarity that they will seek. However, what undermines clarity is the suggestion that the answer to every potential problem with the Bill is that there is no need to worry because the prosecutors have a discretion and might decide not to prosecute at all.

Most business people in this country will legitimately be concerned, thinking “That’s all very well, but how do I know whether they will exercise discretion in my favour before I decide to do whatever I decide to do?” That is why we, as best practice, seek good, sensible, clear laws, whenever they can be made.

Robert Syms (Conservative, Poole)

I was on the Finance Bill Committee, and Her Majesty’s Revenue and Customs has a system by which if some kind of tax avoidance scheme is wanted it is possible to explain what it is, and it either approves it in advance or does not approve it. Clearly, if a company is doing business and wants to entertain, or bring people in for training, or whatever, there should, if one is to go down the route in question, be a way to ask whether that is appropriate or not. We all know that there are some grey areas, but that is the problem. If it is a matter for the prosecuting authorities, will it be necessary to write to the Director of Public Prosecutions every time a company wants to bring people in and entertain them in some modest way?

Jeremy Wright (Conservative, Rugby and Kenilworth)

My hon. Friend makes a reasonable point. We can go further than that, in fact. The situation will undoubtedly arise in which people with a huge variety of businesses and types of business interest, and who do business in different parts of the world, will want such advice. They may also, while we are about it, seek advice from the same source as to what exactly the local law is in the places in question—dealing with the point that was raised earlier. I think that that is a sensible argument.

The second point that worries me is linked to the first, and it concerns consistency. If there is to be wide prosecutorial discretion there is a danger that different decisions made in different cases will not give a clear and consistent idea of law enforcement in this context. It is important that if we are to give British industry the necessary signal—the signal that the Under-Secretary has today clearly outlined, with which the entire Committee agrees: that this country does not tolerate bribery and that those who engage in it will be properly punished—there must be not only clarity but consistency in the minds of all the relevant businesses about what will happen to them if they engage in certain activities. If, as I have said, the Under-Secretary’s answer to every proposed defence or clarification on the part of my hon. Friend the Member for Huntingdon, is “You don’t need to worry, because the prosecutors have discretion,” we shall not necessarily get consistency.

The third point is my response to the Under-Secretary’s argument about setting an example not just for British industry but globally. She has referred to the Bill as a global gold standard, and I am sure that we would all want that. The danger is that we tend to undermine the gold standard if there is a good deal more flexibility in the implementation of the law than appears from the statute. If, again, the answer to every question seeking clarification and every question about defences is, “You don’t need to worry because the prosecutor has a discretion,” how does that look to those to whom we say, the Bill is a global gold standard?

The answer is that there is a danger that people elsewhere in the world—the OECD and others—will say, “I understand the Government’s intent; they have spoken many fine words about bribery and the law looks good, but it seems from listening to the Under-Secretary in Committee that there is an awful lot of wriggle room, because prosecutors might be able to say in any given case, ‘We have a discretion and perhaps on this occasion we will choose not to prosecute.’

The moral authority that we have as a result of talking about a global gold standard, as we should all want to do, is somewhat undermined if we do not have clarity, consistency and an absence of wriggle room; that will undermine the principle. That is the danger we need to consider, and I raise it because a pattern seems to be emerging. The Under-Secretary responds in the way I have described to all our amendments. This is a live issue for the stand part debate and I hope she can deal with the point directly.

Jonathan Djanogly (Conservative, Huntingdon)

Listening to my hon. Friends and to the Under-Secretary’s remarks so far, I am starting to wonder how apprised she is of the needs of business in the context of the Bill—and perhaps in other contexts. Although everyone wants to stamp out bribery, I acknowledge the rather poor attempt we have been making at it over recent years. However, the rationale of a Justice Minister is, of course, slightly different from that of, for example, a BIS Minister. Given some of the Under-Secretary’s comments, I am not sure how absolutely aware she is of the realities of international business. The days when I expected any joined-up thinking from the current Administration are long gone, but will she explain to what extent she has discussed these clauses, the Bill generally and the CBI’s concerns, as expressed by my hon. Friend the Member for North-East Hertfordshire, with her colleagues in BIS?

Claire Ward (Labour, Watford)

How interesting! One moment we hear the Opposition call for flexibility in legislation to make sure that we respond to the needs of businesses, and in the next breath they are telling us that we cannot afford to have any wriggle room. It will be interesting to see where we get to with this debate.

Jeremy Wright (Conservative, Rugby and Kenilworth)

Will the Under-Secretary give way?

Claire Ward (Labour, Watford)

Perhaps I can proceed a little further first. The reality is that the clause needs to be put into context. First, the measure concerns foreign public officials and relates to where such officials are involved. Bringing other companies from other parts of the world over is not appropriate or important in this respect; it relates to the transfer of an advantage to the individual. That may not be the case if we are talking simply about promotional expenditure and whether that foreign public official is getting an advantage as a result of promotional expenditure. Perhaps where hospitality is involved and the local law does not permit it, the prosecuting authorities are quite capable of distinguishing between what is excessive conduct and what is routine.

The Bill is supported across government and has the support of my colleagues in BIS. They have attended events, meetings and discussions with business as part of the discussion on the Bill and the clauses. They are well aware of the implications of the clauses and we make absolutely no apology for setting a high standard—a gold standard. We are sending out a very strong message to businesses that bribery is not acceptable in this country and it is certainly not acceptable in respect of foreign officials.

Jeremy Wright (Conservative, Rugby and Kenilworth)

Based on what the Under-Secretary has just said and her somewhat over-broad opening statement, there is a fundamental misunderstanding. There is a difference between applying the needs of business and being willing to listen and be flexible when the law is being drawn up, and doing so once the law is in existence. When the law is in existence, what business needs above all else is clarity, so that those involved know where they stand. It is not an answer to the question of whether the needs of business have been thought about to say, “We will think about the needs of business at the level of prosecutorial discretion.” That is the point we have been making, and that is what the Under-Secretary needs to address.

Claire Ward (Labour, Watford)

I am already saying to the hon. Gentleman and his colleagues that business is not an after-thought in this matter. Business has been involved in the discussions on the Bill for a considerable time, and it continues to be part of our discussions, particularly in respect of guidance for clause 7. We welcome the opportunity to discuss the measure with business. There are already a whole range of appropriate guidance and standard procedures in place within companies, because they deal with international business. Those companies operate effectively and appropriately. Of course, we recognise that hospitality can and sometimes does form a very important part of international businesses. However, it is clear that there are circumstances in which such expenditure could amount to a bribe, if it is excessive and designed to influence the foreign public official, irrespective of the merits of what might be the company’s promotional expenditure. On that basis, it is appropriate that the prosecuting authorities should have an opportunity to consider such matters.

Oliver Heald (Conservative, North East Hertfordshire)

Obviously, the purpose of a promotional activity, such as bringing a foreign official who will have a say in whether the contract is awarded to a company to see the plant and the product, is to influence his decision, but it is not an improper motive. A lot of what will be done will be to show him the reality of the product and the plant. There is no element of corrupt intent. However, there is a worry that in such a situation the company might be prosecuted.

First, does the Under-Secretary accept the proposition that often in business—exporting and so on—it is necessary to talk to officials as well as companies to get the requisite permissions to export? Secondly, does she accept that it is proper to show the official, if necessary, the details of how the business works here, although the expenditure involved in bringing the official to Britain would arguably be to his advantage—he may never have visited before—and the visit is designed to influence him by showing him what the real product is like and educating him about it, and so on?

Joan Walley (Labour, Stoke-on-Trent North)

Order. This is a long intervention; I hope it is coming to an end shortly.

Oliver Heald (Conservative, North East Hertfordshire)

It is over.

Claire Ward (Labour, Watford)

I think I understand the point the hon. Gentleman is trying to make, but I do not see the advantage to the foreign public official in those circumstances. As the hon. Gentleman describes it, the company is promoting its business in respect of a potential contract. The offence is in respect of the foreign public official. I am not clear where he thinks the advantage to the foreign public official might be.

Oliver Heald (Conservative, North East Hertfordshire)

If he is brought here and put up in a hotel while visiting the plant and the various products, for example.

Claire Ward (Labour, Watford)

It then becomes a matter of degree, surely. It is a question of the foreign public official seeing the circumstances in which the business operates as a legitimate business activity, as distinct from an opportunity for the foreign public official to have a three-week stay in a five-star hotel with his family. The hon. Gentleman may be alluding to a distinction between the two sets of circumstances. That is the point at which the prosecuting authorities will consider what the intention was behind what people were trying to do, and what they were seeking to achieve.

David Howarth (Liberal Democrat, Cambridge)

For the hon. Gentleman’s scenario to work, the foreign official has to be in a position where they are neither permitted nor required to go on such trips or to accept hospitality. The hon. Gentleman is piling unlikelihood on unlikelihood.

Claire Ward (Labour, Watford)

Hence our saying that we set a high standard for business. We make it clear that it is for businesses to consider what they are doing and whether such activities would amount to bribery of a foreign public official. We set that high standard because it is appropriate to do so to send a clear message that it is not acceptable for bribery to take place around the world or in this country, as mentioned under other clauses.

In most cases, businesses have more sense than the hon. Member for North-East Hertfordshire suggests they might have in respect of understanding the difference between providing promotional activities and information in the course of their business, and seeking to bribe a foreign public official.

Oliver Heald (Conservative, North East Hertfordshire)

I understand that the Under-Secretary is saying, “You, Heald of North-East Hertfordshire, have come up with this idea.” If that were so, it would be a fair point. But I am not saying that: the CBI, which represents the big businesses of Britain, is saying that, and it is concerned. The hon. Member for Cambridge might be right to say that companies do enough research to be absolutely clear about what a foreign official can do when making overseas visits, but it concerns me that the CBI is worried that legitimate business promotion expenditure could be caught.

Claire Ward (Labour, Watford)

The CBI is perfectly entitled to express concerns on behalf of its members. We seek to explain circumstances in which there might be an issue but, ultimately, the Bill cannot provide every type and detail of corporate hospitality or promotional expenditure that would fall one side of the line or the other. The matter is one for prosecutorial discretion. I expect that businesses are more than capable of determining what is appropriate behaviour to ensure that they are not engaging in bribery.

Jonathan Djanogly (Conservative, Huntingdon)

Has the Under-Secretary discussed the clause, as asked earlier, with her counterparts in the Department for Business, Innovation and Skills?

Claire Ward (Labour, Watford)

As I have already said, representatives from BIS have been part of our discussions. The matter has had broad support across the whole of government, which includes what is related to business.

Jonathan Djanogly (Conservative, Huntingdon)

I do not think that the Under-Secretary understood my question, which was whether she had met Ministers in BIS to discuss the implications of the clause for British business.

Claire Ward (Labour, Watford)

My colleagues in BIS have given their support to the Bill.

I have covered the issues raised in clause 6 extensively. I encourage the Committee to approve clause stand part.

Clause 7

Jonathan Djanogly (Conservative, Huntingdon)

I beg to move amendment 12, in clause 7, page 5, line 8, leave out ‘adequate’ and insert ‘reasonable’.

The amendment seeks to replace the current defence of “adequate procedures” and tighten the language to provide business with a practical and workable defence that can easily be assessed by prosecutors and jurors. Our hope in amending the clause is to save costs for business and for prosecutors by providing a more readily understandable defence.

Clause 7 creates the offence of commercial organisations’ failure to prevent bribery and, as drafted, it is a strict liability offence, a successful conviction for which could lead to an unlimited fine. The “Compact Oxford English Dictionary” defines “adequate” as “satisfactory or acceptable”. The first recourse of business owners or legal practitioners when putting in place or accessing anti-bribery guidelines will be the plain English meaning of the words chosen by Parliament when drafting the Bill. As it stands, I must confess, that I am not sure about a formulation that requires such guidelines to be only satisfactory or acceptable.

Such a definition gives rise to inherent inconsistencies or concerns. First, to whom are the guidelines satisfactory or acceptable? If a commercial entity has to rely on the subsection as a defence against alleged bribery, surely the measures in place to prevent bribery could not have been adequate. If the measures had been adequate, the bribery would not have occurred in the first place.

Lord Henley, in the other place, summarised the problem quite well:

“Who is to judge what is adequate and what is not? If a company has stringent rules in place, checks on its employees, has transparent accounting and so on, but a determined associate of that company still manages to bribe another, were those procedures adequate? They did not, after all, prevent the offence of bribery taking place. What about a company with weak procedures in place which nevertheless managed, perhaps more by chance than anything else, to stop an embryonic plan to commit bribery?”—[Official Report, House of Lords, 7 January 2010; Vol. 716, c. GC45.]

My amendment seeks to change the wording from “adequate” to “reasonable”. The “Compact Oxford English Dictionary” defines reasonable as “fair and sensible. As much as is appropriate or fair”. I trust that the Government do not seek to impose a blanket requirement for all businesses, from the smallest family business right up to the global giant corporate monolith, to follow the same procedures? Those concepts of fair and appropriate have not been watchwords of this Government in imposing regulations on businesses.

David Howarth (Liberal Democrat, Cambridge)

Until that point, I was following what the hon. Gentleman was saying. It occurs to me that although there are some exceptions, when the courts discuss the meaning of “reasonableness” in general law, they do not take into account the resources available to the defendant. An overall cost-benefit analysis applies the objective to everyone; it is not done according to the defendant’s wealth or ability to make payments.

Jonathan Djanogly (Conservative, Huntingdon)

No, but in a corporate sense the hon. Gentleman surely appreciates that what is reasonable for a small family business may not be so for a huge company, with its procedures and HR departments. That is common sense.

David Howarth (Liberal Democrat, Cambridge)

The hon. Gentleman is a lawyer, like me, and knows that the law is not necessarily common sense. I am pointing out to him how the courts often interpret “reasonable”.

Jonathan Djanogly (Conservative, Huntingdon)

As I have seen in practice, and as the hon. Gentleman has said, the consideration of “reasonable” will involve a review of the various issues involved in the case.

Jeremy Wright (Conservative, Rugby and Kenilworth)

On the argument that my hon. Friend is having with the hon. Member for Cambridge, would it assist if we looked at the rest of subsection (2)? If my hon. Friend’s amendment were to be adopted, that subsection would read:

“to prove that C had in place reasonable procedures designed to prevent persons associated with C from undertaking such conduct.”

In other words, in a smaller enterprise there would be fewer people than in a large organisation, and in that context “reasonable” may be different.

Jonathan Djanogly (Conservative, Huntingdon)

I thank my hon. Friend for pointing that out—a good spot. It is often forgotten that the burden of regulation is disproportionately carried by smaller businesses. That is the reality of corporate life, and we need to move away from it. It is often small businesses that are hit hardest by the global economic problems and face the steepest uphill road back to prosperity, and that is why we believe that amending the wording to “reasonable” has a threefold advantage. First, by its very nature, the term imports objectivity; secondly, courts and jurors are well acquainted with the concept of reasonableness and the so-called reasonable man test; and, thirdly, it provides for a proportionality of assessment that is otherwise absent. Reasonable procedures can be considered in the light of the circumstances and facts of the case giving rise to the alleged offence, for instance the size of the company, its sphere of operations from both a geographical and a product perspective, and its history of offences. I would be interested to hear from the Minister examples of where “adequacy” has been used in statute. That might make an interesting comparison.

We agree in principle with the need for corporate liability in the Bill, but our concern is to strike the right balance. There was near unanimous agreement in the evidence presented to the Joint Committee that the meaning of “adequate procedures” would require amplification through guidance. The OECD was anxious that there should be greater clarity over what it meant:

“There is a case for saying that, even if it reaches the statute book, this clause should not be brought into force until some work has been done with the CBI, other business representatives, anti-corruption experts, and others, to hammer out some basic standards and procedures.”

Oliver Heald (Conservative, North East Hertfordshire)

Is my hon. Friend suggesting that that there needs to be a handbook or guide that explains what adequate procedures would be, perhaps saying what they would be for small, medium and large enterprise in certain scenarios—whether they were big exporters, for example?

Jonathan Djanogly (Conservative, Huntingdon)

The answer is yes, and I will come on to describe precisely what I am getting at in that regard.

That quote was hardly a ringing endorsement from the body that has pushed so hard for reform of the bribery legislation in the UK. There is a widely held concern among commercial organisations about the lack of certainty over what would be considered adequate procedures. It is acknowledged that the Bill would create, in effect, a large range of organisations, making it difficult for the Government to produce comprehensive guidance. The scales seem to be weighed in favour of using “reasonable”, a term with which companies and courts alike are familiar, rather than introducing a new concept of adequacy.

There are a number of examples in English law of criminal liability being imposed on companies, subject to a defence such as due diligence on the part of the legal person in question. One thinks, for example, of section 21(1) of the Food Safety Act 1990, section 34 of the Weights and Measures Act 1985, section 141A of the Criminal Justice Act 1988 and section 24 of the Trade Descriptions Act 1968. Such a defence may operate even when the offence to which it relates has a fault element and is not one of strict liability. In such a case, the defendant, according to the Law Commission, is saying:

“There may have been fault on this occasion, but that it is not a reflection of the way that I run my affairs generally. Indeed, my business is run with systems in place whose aim it is to prevent this kind of incident.”

The UK is not alone in the policy of imposing criminal liability on corporate entities. It is a global trend that can be seen from Scandinavia to Japan. The UK system tends to concentrate on the regulatory area of criminalisation, which broadly speaking is concerned with imposing liability as an incentive to good practice in a particular area. Such structures often focus on health and safety issues, broadly construed.

The rationale behind the due diligence or adequate systems defence was considered in some detail by the Law Commission in its 2008 report. In essence, a company should not be liable for a serious offence, such as a failure to prevent bribery, on the basis of a single instance of carelessness if it can show that it had robust management systems in place to prevent bribery from taking place.

The criminal liability in the Bill is imposed on the basis of the lack of supervision rule, which, for the classicists on the Committee, is “culpa in eligendo, instruendo, et custodiendo”. In other words, the offence is committed by a person, be they an agent or employee of the company, as a consequence of the company’s failure properly to supervise them.

The defence recognises that the control of some behaviour is out of the hands of the company. The Law Commission provided examples of two such instances, the first of which reads:

“An English company, C, that has anti-bribery policies of which employees are periodically reminded, takes over a company (YCo) based in a country where bribery by companies is common. Immediately following the take-over, a former employee of YCo (now an employee of C) bribes an official to secure a contract. The employee’s supervisor (also a former employee of YCo) says that he or she was still coming to terms with C’s new ways of operating, and had not fully appreciated the wholly categorical nature of the new policy. C is charged with negligently failing to prevent bribery by the employee.”

The second example reads:

“An English company, C, wishes to do business in Blueland. C employs an agent (X) living in Blueland to establish business contacts on C’s behalf with Government officials in Blueland. X bribes those officials to place contracts with C. C can show that it gave Y, their regional manager, the task of ensuring that all foreign agents complied with the company’s anti-bribery policy. Y had failed in her task, as she was busy looking for a job with a rival company.”

In both examples, the individual failings of particular members of staff do not necessarily illustrate systematic failures in the way in which C has sought to prevent the commission of bribery. As such, C would have a good defence to the offence under clause 7 if it can show that it had in place reasonable procedures designed to prevent bribery.

I would like to draw the Committee’s attention to a point that was made in the General Counsel 100 group’s submissions to the Joint Committee. GC100 is the body the represents the general counsels of leading companies. The point was made in relation to whether a negligent element should be included in the offence, but I believe that it is also of use to our discussion. GC100 stated:

“Unlimited fines and debarment from tendering for public contracts are real consequences of the new offence. As a basis for criminal liability, negligence is not generally sufficient to establish liability for serious offences. The only offence for which negligence is arguably sufficient is public nuisance, and the most recent corporate offence which is analogous is corporate manslaughter, where ‘gross negligence’ is the required threshold...The appropriate test in this case should be that of ‘gross negligence’. That would apply where the standards of behaviour fall well below what could reasonably be expected, and is a more realistic test for an offence with such serious consequences.”

The use of negligence as the basis for the offence was widely criticised by non-business witnesses. The point that I want to make about the amendment, however, can be drawn out relatively easily. What is proposed in the Bill has the potential to have devastating consequences for business. Unlimited fines and debarment might prove fatal, not least for small and medium-sized enterprises.

We are not so concerned in this context—although we are concerned—about a large global corporate that employs a 200-strong team of compliance officers to formulate, implement and monitor a bespoke anti-bribery procedure across the company. Our concern is mainly with the small business that, for instance, has just won a contract to supply specialist medical equipment to a foreign state.

Let us suppose that such a company employs 25 people in making, marketing and selling those highly specialised pieces of equipment. It will have a staff handbook and some guidelines on its internal computer network to deal with anti-bribery. It will even have given one of its salesmen the title of anti-bribery overseer, and all suspected cases of corruption will be reported to him. Employees will be able to go to him for confidential advice about certain business practices about which they are concerned. Our anti-bribery overseer will attend a two-day course every other year to be updated on the latest trends in the area of bribery.

That company, however, will never have fulfilled contracts abroad before, so it will be sailing into the unknown. A manager could be dispatched with the order of machines but be informed on arrival by customs officers that he is over his allowance of imported electronic goods if he brings the goods into the country and that his documentation has not been completed properly. A “fine” would be payable or the consignment will be confiscated, and he would be required to pay an “administration fee” to have his documentation corrected. The machines would be deliverable on that day, on a trial basis, and successful shipping would result in repeat business, but if they were confiscated, or there was an appeal, the consignment would be impounded for 90 days.

Under the Bill, if that manager were to pay the fine and the administration fee, he and the company would be liable to imprisonment and an unlimited fine. Furthermore, the company would be barred from procurement processes for major health care contracts throughout Europe. The anti-bribery procedures in place in that instance would not be adequate because they did not deal with the bribery of foreign officials. My example concerns a company undertaking work abroad for the first time, but the defence in clause 7 would not protect it. It is arguable whether that response in the Bill is proportionate.

Robert Syms (Conservative, Poole)

Such a scenario would probably be more relevant with a perishable product such as a foodstuff or something that would go off if it was not moved quickly to a secure or cold area. We all know that people sometimes hold up goods whose value diminishes if they do not clear the docks quickly.

Jonathan Djanogly (Conservative, Huntingdon)

That good example was given in the Joint Committee and in the other place, so it is appropriate that my hon. Friend has brought it up.

The alternative, under our amendment, would be that the procedures would have to be reasonable. I put it to the Minister that a reasonable man might have looked at the provisions that the company had in place, when considering the facts of the case, and decided that they were reasonable—not adequate, because they would have required consideration to be given to foreign officials—because of the company’s size and usual sphere of operation.

I do not want to go on much longer about this issue, but I would be grateful if the Under-Secretary would inform hon. Members of the Government’s plans to issue guidance, and explain how consultation is being established with business. I should also be grateful if she would confirm that the clause will not become effective until such guidance has been issued.

We feel that there is a need for guidance on the offence as it is expressed to assist British business and prevent it from being disadvantaged on the world stage when competing with companies from many other states. Will the Minister therefore also explain how the guidance, once it is agreed, will be disseminated to companies? The difficulty with introducing comprehensive guidance is that many companies of many different sizes operate in the UK, in a multitude of business sectors and geographical regions. The Joint Committee acknowledged that when it recommended that appropriate bodies should be able to draft guidance that was tailored to specific sectors, and that the Government could approve to provide it with official status. That approach is supported by the Law Society, the Bar Council and one of the law firms that put its tuppenny-worth into the consultation.

We will return to the issue in more detail when we discuss my amendment 14, which relates to the guidance to be published by the Secretary of State, but I would appreciate the Minister’s comments on amendment 12 as well.

David Howarth (Liberal Democrat, Cambridge)

This is one of those issues on which I thought we all agreed about what to do. The meaning of the word “adequate” is at issue. It was debated in the other place, and we all came to the view that guidelines should be issued to help companies to ensure that they comply. Having reached that agreement, I am not sure why we are debating the underlying issues all over again. I do not want to spend much time on them; I just wonder why the hon. Member for Huntingdon has not kept to what I thought we all agreed was the heart of the problem.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I understand the point that the hon. Gentleman is making, but he will be aware that we do not have the guidance. Hypothetically, does he think that, in the absence of guidance, “reasonable” is better than “adequate”?

David Howarth (Liberal Democrat, Cambridge)

That question cannot really be answered because we do not have the guidance. It is entirely the case that extra information about the word “adequate” must be supplied to make it usable. However, there are problems with using the word “reasonable”, as the hon. Member for Huntingdon illustrated in his speech by using that word in a way that a court probably would not recognise. If we used the word “reasonable”, he would need to produce further guidance to explain its meaning to companies.

Hon. Members say that this is a strict liability offence, but that is not quite accurate. Somebody must commit the crime of bribery. The question then is whether that crime committed by an individual is attributed to a company. The law comes across that problem all the time. It is about vicarious liability, not the company’s direct liability. There is no offence unless some human has committed the actual offence of bribery. The attribution is not strict either, in the way that it would be strict in a normal negligence case. In a normal negligence case, there is no excuse at all. If the employee has committed a wrong in the course of employment, that is it—the employer is liable. In the Bill, employers have a get-out clause in the form of the adequacy defence, and that seems a generous starting point.

To answer the question asked by the hon. Member for Rugby and Kenilworth about the difference between “reasonable” and “adequate”, it seems to me that, in general terms, what “reasonable” means in law is a sort of cost-benefit analysis. When answering the question of whether reasonable steps have been taken, one asks whether the defendant has taken precautions against whatever it is that we are talking about—in this case, the commission of bribery by associated persons—to the point where imposing more costs on themselves would yield no proper return on those costs. The question is whether those precautions have gone to the point where incurring extra costs would produce no appropriate benefit.

Oliver Heald (Conservative, North East Hertfordshire)

The Bill talks about precautions that are adequate for the purpose of preventing

“persons associated with C from undertaking such conduct.”

Does the hon. Gentleman see room for a situation in which procedures are in place yet bribery occurs, but a defence can be mounted? My hon. Friend the Member for Huntingdon was expressing concern about a situation in which bribery has occurred, the procedure was inadequate for its purpose and, ipso facto, the defence did not run.

David Howarth (Liberal Democrat, Cambridge)

That is what we, in the academic world, call the ex post interpretation of the defence, which does not make any sense. It is an interpretation under which the defence could never apply because whenever a bribe is taking place, the measures taken by the employer could not possibly have been adequate in that sense, as otherwise the offence would not have taken place. Therefore, it cannot mean that; it must mean something else. There is then a question about what it means, and that is why it is right to have guidance.

Finally, to answer the question asked by the hon. Member for Rugby and Kenilworth in a roundabout way, if the statute simply said “adequate”, and there was no further guidance, a court might think that it was a causation defence, which is to say that the court would look for extraneous events that interfered with the defendant’s efforts to prevent bribery—perhaps an extraneous independent action by a third party. It might perhaps look for unforeseeable actions by third parties that made the precautions taken against the commission of bribery ineffective. Without further guidance, that is how things would look, and that is why guidance is important. However, as I said at the start, I thought we had come to a conclusion about what we were doing about this particular problem, and we should stick to it.

John Howell (Conservative, Henley)

Let me give my welcome for your time in the Chair, Ms Walley.

I think that this debate is necessary, particularly for those of us who were not members of the Joint Committee. It relates particularly to our discussion on guidance. We have heard a lot about the need for guidance, and I want to return to that subject in a moment.

First, I would like to address the practical questions that were asked by my hon. Friend the Member for Huntingdon about the fact that we do not need a one-size-fits-all system. In my business experience, I have worked for a large international partnership with branches in savoury and unsavoury parts of the world in which people do business. I have also run a small business that was active in different parts of the world, including the middle east.

What one can do with regard to putting systems in place differs between those two types of firms. In an international firm, its complexity, particularly in a large client-focused service company, means that it is difficult to see how one can get through the chain of the hierarchy of the company except by having values to which everyone is signed up—that was certainly the case in the firm that I worked for. It is different when it is one’s own business, however. When my business partner at the time and I were pitching for contracts in the middle east, it was easy to ensure that we did not enter a situation that put us in a position of either being bribed or wanting to be bribed because only the two of us were the principals of the business and we were able to undertake the contracts. Such a situation involves quite different burdens and restrictions.

I want to raise a question that has not yet been asked about those large service firms. Let us take a large accountancy firm that shares its clients. Typically, there will be one particular partnership that has the head office function of looking after a major client around the world. Each of the partnerships around the world will provide services for the company in its own area and add different bits. In such cases, are those partnerships around the world providing a service to the head office of the client company, or to the head office of the partnership? The situation under the Bill will differ depending on which one applies, so we need to understand that.

I was also interested by the mention of agents. In my experience with agencies, it is rare for businesses, and particularly small ones, to have their own agent, because agents tend to work on the basis of having a number of different clients, and one of the difficulties is making sure that their other clients are not one’s competitors. Those clients for an agent overseas will typically come from many different countries, so an agent acting for one’s UK company might also be acting for a Thai company in a particular part of the world. All those clients bring their different legislative bases and the different cultures that go with them.

I am a little concerned that there is no practical element of how that will work and how we will put in place the mechanism for controlling an agent, because, although the agent is providing services, one’s leverage over the agent is quite minimal in many cases.

There is also the question of the guidance. We have already reached a number of clauses that can be understood only with guidance. Effectively, two sets of guidance are required. The first is a vertical set of guidance on what is adequate or reasonable, if our amendment is accepted, for a large company, a medium company and a small company. There is some sense in having that.

It has also been suggested—Lord Henley suggested it in the Grand Committee and others have done so today—that we should have a vertical set of guidance that goes across industry-specific sectors. I can see some benefit in having that, but to understand the Bill when we go overseas we will have to take a briefcase full of guidance to ensure that we are doing the right thing. We are getting into a disastrous situation where we pass a Bill in this House that cannot be read on its own and where large amounts of the interpretation can vary significantly. Draft guidance has not even been produced for us while we are discussing the Bill, yet it could affect significantly the way in which British companies operate.

The other issue that we have not mentioned so far is one that the Joint Committee decided to park because it did not have time to deal with it—the role of subsidiaries and joint ventures. The difficulty is that we are between two stools. Do we want to capture the subsidiaries and the joint ventures, because it could lead to abuse if a company effectively allowed the bribery to take place through its subsidiary but it was argued that the subsidiary was not providing the service back to the company and so was not caught by the Bill? On the other hand, the last thing we want to do is to increase a network of obligations for subsidiaries that may not apply and that hold up the company dealing in the business.

That issue was parked. We were expecting a Law Commission conclusion that would inform a debate on the future of that. It would be nice to know when such a debate will take place and what the likely outcome will be. We need to understand how this will work in practice and what system will be put in place by companies to make sure that they can operate safely within the Bill.

Oliver Heald (Conservative, North East Hertfordshire)

There is just one matter about which I should like to ask the Minister. When the Joint Committee looked at this clause it referred to the impact assessment. On page 37, it stated that

“we note the ‘light-touch’ approach endorsed by the Impact Assessment for small firms in low risk sectors where it may be sufficient to demonstrate that ‘anti-bribery principles have been fully communicated to its work force’”

Will the Minister confirm that there will be a light-touch approach in the guidance on small firms in low-risk sectors? Clearly, that would be a help. It is eight months since the Joint Committee did its work, and I imagine that the Ministry of Justice will have done some work in the meantime. It would be interesting to have an update on where the Under-Secretary, her colleagues and staff have got to on the guidance and the light-touch approach for small businesses.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I want briefly to focus on one issue and return to the difference between reasonable and adequate. I understood what the hon. Member for Cambridge said. However, in the absence of guidance, which we do not have at the moment—I know that we will come on to discuss what guidance we will get and when we will get it—one of the questions that those in business and industry affected by the legislation—

Joan Walley (Labour, Stoke-on-Trent North)

Order. I seek clarification from the hon. Gentleman on whether we are moving to a clause stand part debate and having a discussion that is slightly wider than what is reasonable or adequate to the amendment.

Jeremy Wright (Conservative, Rugby and Kenilworth)

My point was specifically about the amendment because it replaces the word “adequate” with “reasonable”. Perhaps the Under-Secretary will be able to help the Committee on this matter. Assuming that we do not have full guidance—I will make that assumption for the moment, although we will come on to discuss guidance at a later stage—

Joan Walley (Labour, Stoke-on-Trent North)

Order. As we have already strayed into a wider clause stand part debate, it might be helpful if this contribution avoided the need for a clause stand part debate at a later stage. I am in the hands of the Committee.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I am perfectly content to make my point either in relation to the specific amendment or to the clause, but I appreciate that some other members of the Committee might not have made all their points, as they did not realise that this was their opportunity to do so.

Joan Walley (Labour, Stoke-on-Trent North)

Order. In that case, I shall assume that the hon. Gentleman’s comments relate to the amendment.

Jeremy Wright (Conservative, Rugby and Kenilworth)

I am grateful for that guidance, Ms Walley. My point is straightforward and relates to the type of advice, particularly legal advice, that those affected by the Bill are likely to seek. We will assume for the purpose of the debate that there is no detailed guidance, although I understand that we will move on to that. Assuming that there is no detailed guidance to provide specific answers to points that are raised, people are likely to seek legal advice on this part of the Bill. It occurs to me that the legal advice that people are likely to receive would be more helpful if the word in question were “reasonable” than if it were “adequate”, simply because the courts are far more familiar with “reasonable”. The hon. Member for Cambridge gave a helpful indication of how the courts are likely to regard the word “reasonable”, but it is more difficult to do that for “adequate”. It would be useful to know whether the Under-Secretary has received legal advice on the likelihood of people getting sensible legal advice on the definition of “adequate”, should guidance not be available to them when this part of the Bill becomes an Act.

Claire Ward (Labour, Watford)

I understand that your guidance, Ms Walley, is to continue with the debate on the amendment. However, many of the issues that have been raised are wider than that and relate to the clause stand part debate. I will touch briefly on those issues, and then, since hon. Members have indicated that they wish to return to a stand part debate, we can do so again. I do not wish to repeat the process.

The hon. Member for Cambridge worries me intensely. I find it difficult to agree with Liberal Democrats.

David Howarth (Liberal Democrat, Cambridge)

I am leaving soon.

Claire Ward (Labour, Watford)

In order to make me feel more comfortable it would have to be not only the hon. Gentleman who is leaving, but his whole party. Nevertheless, I agree with him on this matter. He is right to say that we had agreed in another place—which I understood to be a cross-party agreement—on the inclusion of the term “adequate”, and that the appropriate way to deal with that was to provide guidance.

I draw the Committee’s attention to a letter that has been placed on the Table for this afternoon’s sitting—indeed, I think it was also placed on hon. Members’ seats—that gives a draft outline of the guidance that might form part of the guidance available under clause 9. I am sure the hon. Gentleman will want to come back to that matter.

Jeremy Wright (Conservative, Rugby and Kenilworth)

One of my hon. Friends made the point from a sedentary position that it might help the Committee to know why we have received that document at 1 o’clock this afternoon. The Under-Secretary will have been fully aware that the guidance that was likely to be published in connection with the Bill would be an important part of the Committee debate. I suggest that to be handed that document when we are part way through debating the section of the Bill that is relevant to guidance is somewhat unsatisfactory. Given that the letter attached to the document is dated 11 March, it would not have been difficult to get it to us before 1 o’clock this afternoon. Will she tell us why that has not happened?

Claire Ward (Labour, Watford)

The hon. Gentleman will find that we thought the document would be helpful.

Oliver Heald (Conservative, North East Hertfordshire)

On a point of order, Ms Walley. It would be helpful to have a copy. I do not know whether there are any spare copies, but I have not got one and neither has my hon. Friend the Member for Poole.

Joan Walley (Labour, Stoke-on-Trent North)

On that principle, it would be extraordinarily helpful for all members of the Committee, including the Chairman, to have a copy.

Claire Ward (Labour, Watford)

I considered that it would be helpful, although, of course, it is not necessary to provide that information to the Committee at this stage, given that it is simply a draft outline of the issues we believe should be covered by the guidance. I felt it would be helpful to give hon. Members an opportunity to consider the document.

Jonathan Djanogly (Conservative, Huntingdon)

On a point of order, Ms Walley. To receive the guidance, which some hon. Members have not even got, in the middle of the debate to which it is pertinent is, frankly, totally unsatisfactory. I suggest that the Committee immediately suspend for half an hour, so we can be given the opportunity to read the documents, take them in and consider a key issue to the whole Bill.

Joan Walley (Labour, Stoke-on-Trent North)

This is entirely a matter for the Under-Secretary. I point out that there is still the opportunity for a clause stand part debate.

Jeremy Wright (Conservative, Rugby and Kenilworth)

Further to that point of order, Ms Walley. The difficulty with not adjourning the Committee is that we are all interested in participating in the ongoing debate on other clauses. Doing that while simultaneously reading the guidance is extremely difficult. That is the reason for the request for an adjournment.

Joan Walley (Labour, Stoke-on-Trent North)

I call the Under-Secretary to reply.

Claire Ward (Labour, Watford)

I felt it was helpful to the Committee to provide that information at this stage, but it was not necessary to do so. It is simply a draft outline of the issues that we have been considering and I thought it would be helpful. The hon. Gentleman asked why the letter is dated 11 March. If he really wants to know, it is because I had it in my weekend box and, unfortunately, because of the illness of my son I was not able to return it last night, so it came back this morning. That is why the Committee has it available today.

Jonathan Djanogly (Conservative, Huntingdon)

Will the Under-Secretary give way?

Claire Ward (Labour, Watford)

One moment. The hon. Gentleman may think he needs considerable time to consider the document. I propose to deal with the amendments he has tabled in respect of “adequate” and “reasonable” and the issues around that. This is an opportunity for him to consider the guidelines as we move into the next section of the debate: the clause stand part.

Jonathan Djanogly (Conservative, Huntingdon)

I am sorry to hear about the Under-Secretary’s personal circumstances, but I must remind her that it was her colleague the Minister in the other place who promised the guidance to Lord Henley, who I think called it the draft of the draft that was expected. I am afraid the situation is much more serious than it just being a case of the Under-Secretary not providing the guidance. Providing the guidance during the middle of the debate on the clause is unacceptable.

Claire Ward (Labour, Watford)

I am sorry to repeat the point, but we are under no duty to provide the guidance at this stage. I am simply seeking to help the Committee to understand this guidance, which is a draft outline. Despite the many protestations that the hon. Member for Huntingdon may wish to make, there has been plenty of opportunity for him to consider the detail of the guidance, because it has been available to him for the last hour and a half.

Jonathan Djanogly (Conservative, Huntingdon)

The Minister may not have noticed it, but I have been doing some other things over the past hour and a half.

Claire Ward (Labour, Watford)

Precisely, but there was an opportunity for the hon. Gentleman to look at this matter when it became available this afternoon. The documents are simply to inform the discussion and the debate of the Committee. I am not under any duty to provide guidance at this stage. The hon. Gentleman’s amendment proposes that we replace “adequate” with “reasonable”. Does he feel that companies should proceed on the basis that they have inadequate procedures in place, because that is the reality of the amendment?

Jonathan Djanogly (Conservative, Huntingdon)

As I said in my speech, there may be circumstances in which something that is inadequate is reasonable. That may be an unusual situation, but that could be the case.

Claire Ward (Labour, Watford)

A court will have an opportunity to consider all the factors. However, the hon. Gentleman is simply seeking to water down and to lower the threshold by replacing “adequate” with “reasonable”, and I cannot possibly accept the amendment on that basis.

Oliver Heald (Conservative, North East Hertfordshire)

On page 37 of the impact assessment, there is a reference to small business and the risk being low in certain sectors. In such circumstances, light touch regulation to ensure that staff are aware of bribery risk would be adequate. Is that dealt with at some point in the draft of the guidance? For example, is it dealt with under risk assessment and management, because small businesses do not seem to be mentioned anywhere?

Claire Ward (Labour, Watford)

Perhaps I can be even more helpful to the Committee and suggest that we deal with the guidance under clause 9, which is where the guidance should be discussed in detail. I am more than happy to come back to a discussion on that matter when we come to clause 9.

Jonathan Djanogly (Conservative, Huntingdon)

Are we going to have a break to look at it?

Claire Ward (Labour, Watford)

I am sure that the hon. Gentleman is reviewing the matter carefully as I speak.

Jonathan Djanogly (Conservative, Huntingdon)

I do not think that the Minister understands the importance of this issue. It was raised at every single stage by the Opposition in the other place and by the Liberal Democrats as well. Businesses consistently raised the matter. My hon. Friend has just read out what the CBI wrote today. The Minister is making a mockery of a very significant issue, and I am afraid that I want to put it on the record that her behaviour is unacceptable. She is suggesting that we discuss the matter when we get to clause 9, but, as she can see, all the amendments listed up until clause 9 are mine, which means that I will have no opportunity whatever to sit down and look at this, so her suggestion is totally unacceptable.

Claire Ward (Labour, Watford)

I do not accept the views of the hon. Gentleman. I have sought to be as helpful as possible to the Committee by providing some information on the basis of the discussions that we have already had with our stakeholders, companies, the CBI and other organisations. On that basis, I felt that it would be helpful to provide the Committee with some indication of where those discussions were going and the sort of issues that we may well be covering. I am sorry that the hon. Gentleman does not share that view on how helpful that guidance will be for many people.

Jeremy Wright (Conservative, Rugby and Kenilworth)

The Minister is slightly misrepresenting the position of my hon. Friend the Member for Huntingdon. I do not think he argued that the guidance is not helpful. He said that it would have been more helpful if it had been delivered earlier—even, frankly, if we had received it before the lunch adjournment or when the Committee rose—rather than when we all got back to our seats and went straight back into other Committee business.

The rest of the debate is in Hansard.