§ Lords amendment: No. 1, in page 2, line 15, after "him" insert "on reasonable grounds"
§ 4.2 pm
§ The Minister of State, Home Office (Mr. David Mellor)
I beg to move, That this House doth agree with the Lords in the said amendment.
§ Mr. Mellor
The Bill comes back to us in a somewhat different form from that in which it left us, as I am sure that those of us who sat through 36 sittings of the Committee will ruefully have to concede. I am glad that the other place was prepared to consider, in the time available, the very important provisions of part I, dealing with serious fraud, which have always commanded the support of all parties in the House. We properly had lively debates in both Chambers and in Committee about the precise nature of, and the demarcation lines appropriate to, the powers, duties and responsibilities of the Serious Fraud Office.
Clearly, a number of significant provisions in the Bill will not now become law during the lifetime of this Parliament; for example, the important changes to the laws of extradition and the arrangements for child witnesses to give evidence by video link as well as other significant changes to the laws of evidence, changes in penalties and important improvements in the law on confiscation. I hope and expect that those provisions will come back at an early stage of the new Parliament. I trust that they will then be considered with the seriousness of purpose and in the spirit of co-operation that characterised our debates in Committee.
The amendments mainly serve to make explicit assumptions that we believe to be implicit. Amendment No. 1 makes it clear, for example, that the director of the Serious Fraud Office may involve himself in a case only on reasonable grounds. Under amendments Nos. 2 and 3 the admissibility of prior inconsistent statements in the court when the defendant chooses to give evidence is placed beyond doubt. In the other place Lord Roskill called forcefully for the deletion of clause 2(8) on the ground that the financial and companies legislation on which the Serious Fraud Office powers are modelled expressly allow evidence obtained by the investigative powers to be adduced in court against those who provided the information.
We undertook to reflect further on that matter, and naturally gave great weight to the fact that the point was made to us by Lord Roskill, who, with others, had been charged with the duty of considering the matter and bringing forward the report upon which the present changes are based. Nevertheless, we concluded that the traditional safeguards in criminal proceedings should 427 remain. Those who served on the Committee will remember that I relied heavily on those safeguards when defending the extension into the criminal field from the more limited field of the regulation of companies the power to require compulsory answer.
Under the rule about previous inconsistent statements, it is generally understood that if the defendant chooses to give evidence in court and his statement is inconsistent with a statement made on a previous occasion he can be cross-examined on the inconsistency, because it is part of the prosecution's duty to test the credibility of the witness. Amendments Nos. 2 and 3 put it beyond doubt that that rule will apply to statements made to the Serious Fraud Office, but do not otherwise touch on the points that were exhaustively considered in Committee.
This very important matter concerns the safeguard of the normal rules of criminal procedure, and balances it against the requirement, which most of us believe to be necessary, to allow investigators, using powers that have been used for many years in another context, to require answers when they are essential to the proper pursuit of investigation through a maze of interlinked companies or of financial transactions involving several accounts and perhaps around several countries.
I am sorry to have taken up a little of the House's time on this matter, but we think that the Bill is improved by the clarification that resulted from cross-party consideration in another place.
§ Mr. Chris Smith (Islington, South and Finsbury)
The Minister referred to the 36 sittings of the Standing Committee. Opposition Members believe that the Bill has emerged from the other place in much better shape than it was in when it left this place. We are especially pleased that the clause that would have removed the defence's right to peremptory challenge has disappeared. There are, of course, items which, I suspect, will shortly be deleted, and which we shall be sad to lose. Examples include the ability to ensure that children can give evidence by video link rather than directly in awesome and sometimes frightening circumstances before a court, especially in cases involving violence or sexual abuse.
A further part which we support and would certainly wish to see enshrined in legislation under the Labour Government who will take office on 12 June is the increase in compensation for victims of crime and the establishment for the first time of a statutory body to ensure that they can receive compensation. We were disappointed at the Government's lack of generosity in excluding about 28 per cent. of potential victims from the provisions of their Bill and that is something that we shall put right in a new Bill under the Labour Government.
There is much that we are happy to see going down the drain and it would be foolish to pretend otherwise. The provision on peremptory challenge is one, and is the most important of the provisions that we are happy to see disappear.
We are glad that the provision to establish the Serious Fraud Office, to which the Lords amendments refer, will remain, as we have consistently supported it. We had detailed arguments in Committee about the precise mechanisms under which the Serious Fraud Office should work, and we still have some reservations about the Government's intentions in relation to its funding. We 428 wish to ensure that it is properly funded, especially in the light of the establishment of the Crown Prosecution Service, which hitherto has been inadequately funded.
We support the establishment of the Serious Fraud Office and we are particularly pleased that Lords amendment No. I inserts a test of reasonability on the director of the Serious Fraud Office in deciding what to investigate. It seems sensible that that provision should be included and we support the amendment. We have no major differences with the Government over the other amendments and we are happy to agree that they should be included in the Bill.
§ Mr. Gerald Bermingham (St. Helens, South)
I am pleased that the Serious Fraud Office has been saved, and I entirely endorse much of what my hon Friend the Member for Islington, South and Finsbury (Mr. Smith) said. Some parts of the Bill, such as those dealing with extradition laws and certain matters of sentencing, have much merit in them and I am sure that my hon. Friend and his colleagues will bring them before the House after 12 June. If the worst comes to the worst and we must again face the Minister, they will also no doubt come back.
In the intervening period perhaps the Government and my hon. Friends will consider the views expressed by professional and other bodies on other parts of the Bill. The debate goes on, and perhaps we can use the time well by learning from those views. In the light of recent events, the extradition laws, for example, should be considered even more carefully so that we get them absolutely right.
In general there is cross-party agreement because all of us wish to see the criminal law work effectively and the time of the courts saved by law becoming definitive and clear. I ask the Minister for an undertaking in respect of the Serious Fraud Office in the unfortunate event of his party being the Government after 12 June. I have already secured an undertaking on funding from my hon Friend and I declare a public interest as a practising barrister.
I am appalled at the way in which the Crown Prosecution Service has been starved of funds, facilities and support. Experienced lawyers of many years standing have become fed up with the bureaucratic nightmare of the Crown Prosecution Service and have left. Lawyers from the old county prosecuting solicitors' department who were transferred and promoted suddenly find within 12 months that people who were transferred as their deputies are promoted to the same level. No one objects to their having the same standing, but those who were promoted subsequently are often £2,000 or £3,000 a year better off than those who were transferred and promoted at the same time. Senior Crown prosecutors are leaving the service in droves and we cannot afford to lose them. I make no secret of the fact that a member of my family is employed in that service.
That concept, which both the Minister and I were in favour of, is being ruined by the short-sightedness of the mandarins at the Treasury. That is why I secured an undertaking from our Front Bench team that in the event of their forming the next Government they would ensure that the Serious Fraud Office was properly manned. Unless it is staffed with people of the highest calibre, we shall never successfully get at the rats and destroyers in the City who have creamed millions, if not billions, off the wealth of the nation through swindles at Lloyd's, share-dealing swindles in the City and a multitude of other 429 swindles from long-term fraud to bogus supplying. A bogus supplier begins by supplying vast quantities of products but fails to pay those supplying him. They are complex, difficult matters which require the employment of accountants and people with great knowledge of the financial world. We cannot buy those people cheaply; we must pay them salaries commensurate with what they can earn in private practice or in the City. If we want the best, we must pay for the best. If we want the best investigative service, we must provide support staff and the most experienced lawyers. In other words, we must invest.
By investing in the service and making it work properly we shall in the long run save the nation vast sums. If we can catch fraud early and prosecute fraudsters successfully, others will be deterred. But it takes willpower and effort, experience and expertise to prosecute them successfully. These fraudsters are no amateurs; they are professionals who set out deliberately to cream millions of pounds from our economy. To catch a villain in a modern, complex society, we must know as much as the villain, and to know as much as the villain we must use experts who understand the subject properly, and that costs money.
Will the Minister undertake to fund the Serious Fraud Office properly? I hope he accepts that I ask for it for the best possible reasons. I do not want to see the sadnesses of the Crown Prosecution Service repeated. They are causing considerable grief to many people who have a great interest in that area and who are greatly supportive of it. It was a brilliant idea and unless the tide can be reversed it risks being destroyed by underfunding. I do not blame the Minister for that, as he well knows; I blame a lack of foresight on the part of those who do not understand the service and how it needs to be funded.
Perhaps in the next four weeks we can send the mandarins at the Treasury on a crash course to learn how prosecution services work. If the mandarins could learn that, they might let loose enough pounds and pennies to enable that service, and the service we are helping to bring into existence today, to be funded so that it can work effectively and to ensure that the guilty are prosecuted to conviction. I wait to hear whether I get the undertaking from the Minister that I have already had from my hon. Friend.
§ Mr. Mellor
With the leave of the House, I shall respond briefly to the points that have been made.
I am grateful to the Member for Islington, South and Finsbury (Mr. Smith) for accepting the amendments, and I hope that the whole House will share his view. The answer to the hon. Member for St. Helens, South (Mr. Bermingham) is that the new office will have all the resources that it needs to do its job. There is no question about that. In defence of my right hon. Friend the Chief Secretary to the Treasury, who led the study within the Government from which the Serious Fraud Office emerged as our response to Lord Roskill's committee, I must say that he, as much as anyone, has a vested interest in the office running successfully and I know that he would fully endorse all that I have said.
I appreciate and have welcomed the interest of the hon. Member for Islington, South and Finsbury in Bills such as this over the lifetime of the Parliament. I acknowledge that no one was keener than he was on the Crown Prosecution Service. However, he has been unfair in his description of 430 its present state. It is not strictly relevant to the Bill, but I shall take just a few sentences to comment on it. My right hon. and learned Friend the Solicitor-General, who has taken charge of the Crown Prosecution Service at ministerial level, has made very clear the commitment of the Government to ensuring that it receives proper resources. There has been a marked increase in the resources made available, which has allowed the service to offer considerably higher salaries than were originally on offer, to the point where organisations such as the Justices Clerks Society—which springs to mind because it made the point at a recent function that I attended—have said that a number of justices clerks are now leaving that service to join the Crown Prosecution Service because of the salaries on offer.
Inevitably, when a major change is made there are bound to be teething troubles and difficulties. I do not think that any of us would have expected otherwise. The fact that we have achieved a nationwide service makes the crucial distinction. The Royal Commission established by the last Government, the views of which in other respects were carried into force by the Police and Criminal Evidence Act 1984, asserted that it was absolutely necessary to separate the processes of investigation from the processes of prosecution.
I have little doubt that in the fullness of time the idea will not only be proved to be a good one, but in practice will succeed in effecting improvements in our system, particularly if it can address what I believe is the real difficulty—the amount of expense and time taken, and the unnecessary trouble and fuss caused, when prosecutions that do not stand a great chance of success nevertheless limp through the court system and are terminated at a far later stage than need be the case if they had been scrutinised earlier.
I am grateful for the welcome the House has given to the amendments, and I further commend them to the House.
§ Amendment agreed to.
§ Lords amendments Nos. 2 to 4 agreed to.