§ Sir John Hannam
I beg to move amendment No. 1, in page 3, line 22, leave out 'four' and insert 'two'.
The clause, which is the cutting edge of the Bill, was examined carefully in Committee. As a result of that detailed scrutiny, I undertook to reconsider whether the first trigger in new section 72AA(1)(c)(i), which requires four convictions on qualifying offences in the same proceedings, should be lowered.
This is an important issue because the trigger enables a court to apply the assumptions provided for in the clause. I remind the House that the Bill would empower the courts to assume that all property that had passed through a defendant's hands during the past six years had come from crime.
In accordance with my undertaking in Committee, I have given the matter careful consideration. The amendment would enable a court to make the assumptions contained in the clause when the defendant stands convicted of two convictions in the same proceedings. Hon. Members will recognise that this amendment is identical to the amendment tabled in Committee by my hon. Friend the Member for Harborough (Mr. Gamier), which we discussed at some length. I am pleased to be able to respond favourably today.
As I said on Second Reading, great concern is expressed by my constituents—and, I am sure, by the constituents of other hon. Members—about the enormous profits made by those who indulge in a criminal life style. The law already provides tough measures against drug traffickers and terrorists, so it would be most unfortunate if other sorts of criminals, such as those we have discussed this morning, were able to continue to enjoy their profits because we had not set the trigger at the right level.
Obviously, we would not want the new powers to be used unfairly or in unviable cases, but hon. Members will note that they are discretionary. I am sure that we can rely on the discretion of the prosecutors and the courts to bring the powers to bear only where it would be proper to do so.
I believe that there is sufficient justification to change the first trigger from four qualifying offences in the same proceedings to two such offences. I hope that the change will find favour on both sides of the House.
§ Mrs. Roche
The hon. Member for Exeter has tabled an important amendment, which goes to the crux of the Bill. It is a difficult judgment to make. There were extensive discussions on the matter in Committee—perhaps rather deliberately overlong. Both the Minister and the hon. Member for Exeter felt that there was a difficult balancing act in deciding precisely how to phrase the triggering mechanism.
It is absolutely right that we are keen to catch those people who have cleverly evaded the law for some considerable time. We know that many serious criminals 1319 who are involved in organised crime may not have any previous convictions, and that those who do have previous convictions that go back some years. They probably do not have many convictions when it comes to the "successful" period of their organised crime. It is important, therefore, to consider the triggering mechanism. It is also right, however, that when we consider the balance, we are fair and reasonable, as the hon. Member for Exeter said.
During our deliberations, the hon. Member for Exeter said that he was anxious that assumptions should not be made in trivial cases because he did not want the new powers on forfeiture to fall into disrepute. I would echo those remarks. In general, if the Bill tightens up the law and catches that class of criminal, that will be considered seriously by Labour Members.
I should like to issue a little warning note and probe the matter in some detail. At the end of what I hope will be a short debate, perhaps the hon. Gentleman and the Minister will give us an assurance about the nature of the discretion. How will that discretion operate? What will the guidelines be? How will they be made? We are concerned to get the legislation right. It is important that opportunities exist for monitoring and review, so that we can be absolutely assured that the Act is working well, that any changes work well and that the people involved in serious crime, whom hon. Members on both sides of the House want the law to catch, will be caught. At the same time, however, we do not want to catch people in the net who have no place there. My hon. Friends and I look forward to hearing those assurances from the Minister and from the hon. Member for Exeter.
§ Mr. John Greenway
For the second time this morning, I find myself passing on apology to you, Madam Deputy Speaker, from one of my hon. Friends—on this occasion, my hon. Friend the Member for Harborough (Mr. Gamier). As has been mentioned, he skilfully moved an identical amendment in Committee. I confess that, when I went to the Committee sitting that morning, I had not given a great deal of thought to his amendment, but the more I listened to his arguments, the more convinced I became that it was an important amendment and one that we should make to the Bill.
As my hon. Friend the Member for Harborough could not be here to do it himself, I was determined to table the amendment. When I saw the published amendments, I was delighted to find that the amendment that I had tabled had at its head the name of my hon. Friend the Member for Exeter rather than mine. That clearly showed that he had done what he had promised to do in Committee, which was to go away, talk to Home Office officials, think about the matter and come back on Report and give his verdict. I am delighted that his verdict is that we should make the change.
My hon. Friend the Member for Harborough put his finger on the issue right at the start of his speech in Committee when he asked, "Why is four the magic number?" It seemed a good question. If you, Madam Deputy Speaker, think this matter through yourself, I shall imagine this scenario. A real villain goes before a court and the opportunity exists to seize the proceeds of crime—which is the matter at the heart of the Bill. The jury decides that not enough evidence exists to convict 1320 him of all the charges on the long list before it, and it might decide to convict him of one, two, possibly three, but not four. The measure, therefore, seems sensible.
Another reason exists as to why the figure should be two. Clause 2 tries to establish a pattern of offending. May we just remind ourselves of what, in effect, the clause says and the general arrangement? The question of whether four or two offences are taken into account arises only if it is the first conviction of the person concerned. If, however, he has been convicted previously, only one offence is needed to trigger the measure. Whether one offence triggers it on two occasions, or whether two offences trigger it on one occasion, the principle is the same. That speaks for itself. It is a common-sense approach to establish that pattern.
Another reason exists, however, as to why the amendment is right. As was clear from the earlier debate on new clause 1, we are dealing with an attempt to target the serious professional organised criminal. We have just had a statement about the Serious Fraud Office. The matter involves that organisation as well. The police service and the Crown Prosecution Service have a difficult enough job securing convictions. Organised criminals are not the sort of people who put their hands up in court and say, "Okay, guvnor, it's a fair cop. You've got me bang to rights. I plead guilty and don't be too hard on me because I've got my mum and three kids at home to support." We are dealing not with such people but with people who run criminal operations as a business. They will undoubtedly be trying to ensure that they are not convicted of anything.
§ Mrs. Roche
I take the hon. Gentleman's argument. Clearly, we are dealing with the sort of people who, to use the expression that was used when I practised at the Bar, would not put their hands up and admit to the crime straight away. We are talking about a trigger of two offences rather than four. However, a defendant who might have pleaded guilty to both offences may decide, because of the trigger, to plead not guilty to avoid confiscation coming into effect. That is a slight concern. I would welcome the hon. Gentleman's reassurances on that point.
§ Mr. Greenway
The hon. Lady makes a good point, but the answer to that is that four offences are worse than two. The danger is that a defendant would plead guilty to two offences but not to four or five. We must give the courts and the criminal justice agencies all the flexibility that they need to deal with any eventuality.
For organised criminals to be convicted at all is a huge mountain for the system to climb. It is illogical that we should say that there must be four mountains. I accept the point that two offences are laid down in the measure to establish a pattern. One offence may trigger the measure on two separate occasions or two offences could trigger it on one occasion.
I must explain why I am not especially worried that there might be abuse. We can legislate all we want, but, at the end of the day, it is the courts that will implement the law. I have no doubt that judges will need a great deal of persuading that it would be right to use the provisions in the Bill every time some Johnny-come-lately appears in court having at long last been convicted of a couple of offences and they are asked to make an order to confiscate every penny in his bank account. I think that the courts 1321 could be very cautious in the use of these provisions and would want to be sure that there were good grounds for making the type of orders provided for in the Bill.
It must be right, however, that we give the courts the necessary flexibility and choice. I think that we can rely on the judgment of the courts in every case to use the powers sensibly, but, unless the relevant number of offences is two rather than four, few opportunities will arise for the powers to be used.
I support the amendment and I am delighted that my hon. Friend the Member for Exeter was successful in persuading the Minister that it should be accepted.
§ Mr. Merchant
I, too, see no rationale for making it a requirement that four convictions rather than two offences should be the trigger. Even now, I do not really understand how or why the figure was arrived at.
On a superficial level, one might be tempted to suggest that one conviction alone should be sufficient. After all, the intention should be to confiscate the assets of anyone who is involved in criminal activity and who has profited from it. However, I understand that the Bill is aimed specifically at those who build their lives on crime and who are involved in long-standing and often complex crimes. For that reason, I accept that a trigger of one offence would be too restrictive and that we should insist on a requirement that shows a continuity of crime, as it were. In that sense, two would be the minimum number, so I think that the amendment has got it right.
It is often clear to a court that a person convicted of a crime has been involved in criminal activity for a long time. That may not be obvious at first in the charge or even in the hearing, but it will emerge during the case itself, especially when examination reveals that the person has large assets behind him that could not come from anything other than crime.
Drugs are an example in point. People are often charged with a drugs offence which may be small in cash terms. However, when their entire background is examined, it may be found that they have accumulated huge reserves of money resulting from their involvement in crime for many years. The Bill aims specifically at those sorts of people—those involved in continual crime. For that reason, I think that two offences should be ample.
For various technical reasons, a person may be charged with one or two specimen offences even though it is clear that he has carried out a number of identical crimes. It is important that he should not escape the Bill's provisions simply because there were only two specimen charges and the trigger was four offences.
I welcome the fact that the hon. Member for Hornsey and Wood Green (Mrs. Roche) supports the amendment. Having read the report of the proceedings in Committee, I do not quite understand why she complains that the debate on what she has admitted is an important matter lasted 45 minutes or why the hon. Member for Cardiff, South and Penarth (Mr. Michael) objected at the time.
§ Mrs. Roche
If the hon. Gentleman reads the account of the first morning of the Committee stage and the following week's deliberations, he will realise that there was a deliberate attempt to filibuster, which we consider to be a great pity. Some Conservatives did not want another private Member's Bill to be debated. That was a shame, especially as the Bill was so warmly welcomed by all parties.
§ Mr. Merchant
I shall certainly not get drawn into that. I was saying that I welcome the Opposition's support for the amendment and was questioning why the hon. Member for Hornsey and Wood Green suggested that a 45-minute debate was excessive for what she admitted is an important principle. I hope that the House will support the amendment.
§ Mr. Streeter
I must confess that I am not fully persuaded that the amendment is entirely right, and I look forward to my hon. Friend the Member for Exeter (Sir J. Hannam) or, indeed, the Minister, being able to reassure me. I am not against reducing the number of offences from four to two, but why is there a qualifying hurdle at all? I hope that I can be satisfied on that point.
It is right to give the courts the maximum power to confiscate the proceeds of crime. I am concerned about the cases involving a defendant who may have committed only one offence but where that offence may have been involved numerous acts of criminality over a long period. The example of conspiracy, which was mentioned in Committee, is the obvious one that comes to mind. The offence is technically one crime, but it will have involved a series of criminal acts over a long period. It is important that prosecutors are not prevented from opting to prosecute on a charge of conspiracy simply because it would not necessarily trigger the confiscation provisions—in other words, getting over the hurdle of the two offences being brought before the court.
I feel strongly that the balance of our criminal justice system must be weighted increasingly against criminals. There is concern that for too long—due no doubt to the liberal intellectual thinking of so many in the Home Office in the past 30 years—the balance has too often been weighted in favour of the criminal, especially the professional criminal. I suppose that I should declare an interest in that I am a partner in a law firm, although I have never practised criminal law. However, I know that the regular and persistent offender, as soon as he is tapped on the shoulder by Her Majesty's constabulary, will turn to his brief. There is nothing wrong with that, but every trick in the book is then employed to ensure that there is no conviction.
If there is any doubt about where to draw the line on the confiscation of the proceeds of crime, we should draw it in such a way as to allow the courts maximum discretion and flexibility. We have to show criminals that crime does not pay and we need to hit them where it hurts.
Some concern has been expressed about the impact on the families of criminals if we confiscate too much of the proceeds of crime. It has been said that the sins of the father should not be visited on the second and third generations. It is unrealistic none the less to attempt to insulate families of criminals from the consequences of their parents' acts. Often, families take the benefits. With lifestyle criminals, of which we have heard, families are quick enough to take the benefits such as swimming pools, Spanish villas and so on. We should not draw back from imposing on them too the burdens of their actions. It is an inalienable law of the universe that children benefit or suffer from their parents' actions. I hope that the line may be drawn in the right place so that we may give courts the maximum ability to confiscate the proceeds of crime.
1323 12 noon
None the less, I recognise that, in some instances, there needs to be an opportunity to spell out to a criminal that whereas in life everyone deserves one chance at least, on a second occasion, much more severe consequences would befall him. I am attracted to the system of sentencing which was introduced by the Republican governor in California, Pete Wilson, to which my hon. Friend the Member for Hertfordshire, North (Mr. Heald) referred, of three strikes and out. A criminal may get one chance and be sentenced for that crime and perhaps again on the second occasion the punishment fits the crime. But if that criminal re-offends to the extent that it is his third conviction, irrespective of the sort of crime, are not we entitled to draw the conclusion that the person is a persistent, habitual offender and should be punished ever so severely?
I am especially attracted to that proposition because I have learned that the police in Plymouth reckon that 80 per cent. of crime is caused by 1 per cent. of the population: persistent, hardened, professional offenders. We need to target those people in our fight against crime. That is what the Bill and the amendment is all about.
I welcome an approach to criminal enforcement that targets habitual, persistent offenders. To that extent, the amendment goes some way to satisfy me that we are moving the walls in on such people. I need to be reassured that we need such a qualification at all. Why not give courts the maximum flexibility to confiscate the proceeds of crime?
§ Lady Olga Maitland
I warmly support this amendment. My constituents in Sutton take a very tough attitude toward crime. They see no reason why anybody should get away with it, or why there should be any degree of soft treatment. Therefore, why do we need such a trigger mechanism? My hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) had a point. If we are too prescriptive, we could let the bad one get away with it. My instinct tells me that we entrust so much to the courts that the power of discretion is definitely worth considering because there is no evidence that it would be abused.
I read the Committee proceedings of the Bill and saw that my hon. Friend the Member for Harborough (Mr. Gamier) asked what was magical about four offences rather than two, to which we never really got an answer. I think that the court would quickly establish that evidence of two convictions would be sufficient for anyone to appreciate that there was something quite serious at fault. Moreover, you can bet your bottom dollar that for every crime committed by very sophisticated, hard criminals who specialise in organised crime, dozens more never come to light. Therefore those one or two convictions on his record are simply the tip of the iceberg. The pattern is well established.
In seriously considering this amendment, we should question why we should not go the whole way. Why have it at all? We want to put out a clear message to all the organised criminals that there is no safe haven and that they cannot try to protect themselves in technicalities of the law because the law in the end will get the better of them. The public will not stand for it. My constituents 1324 will not stand for it. They are mortified when they read stories of high-class, or what I call low-class criminals, leading a high life overseas on fat profits. We have an opportunity to get at those people, ensure that they do not escape and that in the end they serve a penalty which fits their crime.
§ Mr. Maclean
I am grateful to my hon. Friend the Member for Exeter (Sir J. Hannam) for tabling the amendment which, as we have discussed this morning, would change the first trigger in clause 2 from four to two convictions in the same proceedings. I point out that it is changing one of the triggers in the Bill because we do not want the message to go out from the House that there are two strikes before one is bankrupt. That is not the case. This trigger mechanism—if the House agrees—will be amended from four offences to two, but the other mechanism in the clause means that the lifestyle proceeds of a criminal can be taken from him if he is up in court on one offence and convicted and has been previously convicted in the former qualifying period.
I also pay tribute to my hon. Friends for making some pretty forceful speeches in Committee. My hon. Friend the Member for Harborough (Mr. Gamier) has been mentioned. If I remember correctly, my hon. Friend the Member for Hertfordshire, North (Mr. Heald) also made an important and telling speech in which he invoked the great train robbers.
§ Mr. Maclean
I apologise. My hon. Friend the Member for Ryedale (Mr. Greenway) invoked the great train robbers, and perhaps my hon. Friend the Member for Hertfordshire, North built on the idea. To be fair, Opposition Members also asked us to look at the issue. My hon. Friends pointed out in powerful speeches the anomalies that may arise when a conviction of four relevant offences in the same proceedings is required before the assumptions are applied. My hon. Friend the Member for Exeter discussed with me whether we had the right level. As my hon. Friend the Member for Exeter and I said in Committee, it was a matter of judgment. My hon. Friend thought that the figure of four was relevant, so did the Government, but my hon. Friend has pressed us to consider another level.
Why did we arrive at the figure of four? We arrived at it because we thought committing four offences had to be indicative of a continuing course of criminal conduct. I have listened carefully to what my hon. Friends the Members for Sutton and for Sutton and Cheam have said this morning. There must be something in the water in places called Sutton to make my hon. Friends so robust in their attitude toward criminals, which I welcome.
My hon. Friends asked why we should not get rid of the trigger mechanism and why we should not take it down from two to one? I think that they may have thought, although they did not say—perhaps some other hon. Members may be under this misapprehension—that a criminal can be allowed to burgle or steal once and hang on to the goodies and that it is not until he is convicted a second time that the courts may confiscate anything. That is not the case. At the moment, the law allows us quite rightly to take back the goodies from burglary, robbery and theft. We can confiscate assets to the value of the goods which have been stolen for a single offence.
1325 In this Bill, we are considering a new power to say that in addition to taking back the goods stolen or the value of the assets stolen or defrauded or whatever, we shall apply an assumption in law that everything else that the criminal has—the cars, the swimming pools, the house, the money in the bank account—are also ill-gotten gains.
One needs to show a pattern of offending behaviour before, in all fairness, one can apply those assumptions. It is no good saying that someone who has been convicted of one crime was probably responsible for others. We cannot go on gut feelings that someone may have been a criminal; we must rely on the convictions before the court. If someone is convicted of only one offence, it is right to take back from him the value of the goods involved in the theft or crime, but it is not right to apply an assumption and to say, "In addition, chummy, we are going to take everything else you own because you probably got that from theft as well." That would be unfair. That is the counterbalance to the argument that four is too high a level. I believe that one is too low a level. I agree with my hon. Friend the Member for Exeter in setting the trigger at two. It is, of course, only one of the two triggers in the Bill.
The amendment will provide the prosecutors and the courts with additional flexibility and additional discretion about which cases are pursued; that discretion is important. Obviously, there will be cases in which it is not appropriate to apply the assumption. That is taken into account by the proposal's discretionary nature.
The Home Office intends to be closely involved with the Crown Prosecution Service in the formulation of guidelines. We shall ask the prosecuting authorities to monitor, over a set period, the kinds of cases that are being dealt with under clause 2. Clearly, we expect the powers to be used when police inquiries show evidence of persistent offending. We should, however, bear it in mind that the powers cannot be used just at the whim of the police or at the whim of the CPS. The assumption in the Bill can be triggered only by notice by the prosecution. After the prosecution has given notice, the courts have the final say on whether the assumption will apply in a particular case.
We do not want the powers to be used in trivial cases. There may be various ethical and moral reasons for that; there are also some pretty sound financial reasons. Much as it might please me, my hon. Friends and, perhaps, the victims of burglary to believe that we could clean out the video and the telly from the home of the burglar who stole them from us, there would be little tactical point in doing so. We would be cutting the taxpayer's nose to spite our faces if we had to spend a few thousand pounds on CPS fees, lawyers' fees, accountants' fees and court fees. Inevitably, there will be a cost in going after the assets of lifestyle criminals. I see no merit in spending £5,000 or £6,000 in such costs just to get a few hundred pounds back, although it might give us pleasure to think that the criminal was paying a proper penalty.
The way in which to deal with such criminals is through the fines, penalties or imprisonment they face. I want the powers in the Bill to be used where there is a net return for the taxpayer. I want the powers to be used when we get much more back than the money we spend on going for the lifestyle criminal's proceeds. That is a sound investment for the Treasury and for all involved in fighting crime.
1326 I welcome this short debate; I am glad that it has been shorter than the debate in Committee, although the points made then were valid and sensible. The hon. Member for Hornsey and Wood Green (Mrs. Roche) is right. This issue goes to the heart of the Bill. Our short debate this morning has been terribly important. I welcome the amendment and I welcome the support it has on both sides. I commend it to the House because I believe that it strengthens the Bill significantly and it enjoys the Government's full support. I look forward, when the Bill has gone safely through another place without amendment, to giving maximum publicity and attention to these provisions. I hope that we may not have to use them in some cases; I hope that they will scare lifestyle criminals witless. They will know that they will not profit from their ill-gotten gains. They will realise that it is not just the money that they have stolen, but all the rest of their property and goods which could be taken back unless they can prove that they have got them honestly.
§ Sir John Hannam
I am grateful for the support for the amendment shown by hon. Members on both sides of the House. My hon. Friend the Minister has covered most of the points raised by hon. Members. We are toughening up the Bill, which was the desire of the Committee. In answer to the point made by the hon. Member for Hornsey and Wood Green (Mrs. Roche), we are dealing with the triggering of assumptions. Other clauses provide details of the various protections built into the proceedings.
We have dwelt pretty constantly on the major criminal who is, obviously, our main target, but we must not forget the smaller lifestyle criminals whose operations affect our constituents. They are often on the receiving, or rather the giving, end of smaller, but hurtful crimes committed against them. They are anxious that our legislation also deals with such criminals. We are after those perpetrators of remunerative crime as well as the major criminals.
We have removed the £10,000 qualification figure. The court will be allowed, on occasions when it feels it to be necessary, to take action and to confiscate the proceeds of smaller crimes. That is the balance that we have been seeking to achieve. I hope that the House will see the amendment in that light and that it will accept it.
§ Amendment agreed to.
§ Sir John Hannam
I beg to move amendment No. 3, in page 3, line 29, leave out 'both' and insert 'all'.
§ Madam Deputy Speaker
With this, it will be convenient to discuss also the following amendments: No. 4, in line 32, leave out 'and' and insert—'( ) it is an offence which was committed after the commencement of section 2 of the Proceeds of Crime Act 1995; and'.
No. 14, in clause 16, page 23, line 7, leave out subsections (5) to (7) and insert—
'(5) Section 1 above shall not apply in the case of any proceedings against any person where that person is convicted in those proceedings of an offence which was committed before the commencement of that section.
(6) Sections 8(1) and 9 above shall not apply where the offence, or any of the offences, in respect of which the confiscation order was made was committed before the commencement of section 1 above.'
§ Sir John Hannam
The amendments deal with an important point. They are intended to secure the Bill 1327 against a possible challenge under article 7 of the European convention on human rights which prohibits the imposition of a heavier criminal penalty than could have been imposed when the offences took place. The amendments take account of the recent judgments of the European Court of Human Rights in the case of Peter Welch. It was held that the confiscation order under drug trafficking legislation was a heavier penalty.
The amendments provide that the enhanced confiscation orders envisaged under the Bill will apply only when the offences in respect of which such orders are made are committed after commencement. I am sure that hon. Members will understand that it has been necessary to consult widely and closely with the Government on the implications for the Bill of the recent judgment by the European Court of Human Rights in the case of the convicted drug trafficker, Peter Welch. It would be appropriate for me to look to my hon. Friend the Minister to inform the House about the detailed background to the case of Mr. Welch.
In general terms, however, the amendments are intended to ensure that the provisions are, as far as possible, protected against an application similar to that made by Mr. Welch under article 7 of the European convention. In other words, the intention is to ensure that the Bill, when it comes into force, will not impose a penalty on the defendant that is heavier than that which could have been applied before the Act came into force. That was the key element of the European judgment. I commend the amendments to the House.
§ Mrs. Roche
As the hon. Member for Exeter has stated, the amendments are intended to take into account the Welch case. As I am sure hon. Members will recall, Welch won and Britain, unfortunately, lost the case in the European Court of Human Rights on what I consider to be a technicality. Britain was ruled to have penalised Welch, who was convicted of serious drugs offences, by making a confiscation order under the Drug Trafficking Offences Act 1986 despite the fact that his crimes were committed before the Act came into force. Article 7 of the European convention on human rights provides that no one convicted of a crime shall suffer a higher penalty than one applicable at the time the offence was committed.
Britain argued, rightly in my view and in that of my hon. Friends, that a confiscation order was a method of recovering ill-gotten gains, not a penalty and, therefore, that the law could be applied retrospectively. Unfortunately, that line of argument did not gain favour with the court.
I pay tribute to my hon. Friend the Member for Warwickshire, North (Mr. O'Brien), who pointed out in Committee that the Bill might fall foul of the court's decision. He was right, and it is also right that the hon. Member for Exeter has gone away, consulted and come back with the amendments.
I regard the European Court of Human Right's ruling as extremely bad and unfortunate. As the shadow Home Secretary, my hon. Friend the Member for Blackburn (Mr. Straw), said at the time, the decision was alarming. He said:This decision is a bad one, which the British public will find almost impossible to understand. It is entirely right that those who profit from drugs ought to be hit in their pockets.1328 The amendments are necessary to ensure that once this important Bill is enacted, as we hope it will be, it is not challenged, but we should continue to point out that we are talking not about penalties—much though some of our language, when we talk about the life-style criminal, may imply that—but about recovery of assets. We ought to continue talking in that vein, because that is what the Bill is all about.
There are no additional penalties; we are simply recovering ill-gotten gains from people who through their crimes have gained substantial amounts of money and property. That is what the legislation is all about, so it is right that we continue to stress that fact. However, we must make sure that the Bill is not open to challenge; therefore, the hon. Member for Exeter has the Opposition's full support for his amendments.
§ Mr. Maclean
I am grateful to my hon. Friend the Member for Exeter for tabling the amendments, and I shall certainly assist him by taking the opportunity to set out the Government's views. Like many of Her Majesty's subjects, and like the hon. Member for Hornsey and Wood Green and many other hon. Members, the Government learnt, with considerable dismay, of the decision of the European Court of Human Rights in Strasbourg in the Peter Welch case.
As the hon. Member for Hornsey and Wood Green said, the court came to the wrong judgment on a technicality. I can only conclude that it was a pretty cockeyed judgment. I assure the House that, although we support the amendments to ensure that the measures in the Bill do not fall foul of any potential similar judgment in future, that does not mean that we think that the Government were wrong originally.
The hon. Lady is right to insist that the powers to confiscate the ill-gotten gains of drug traffickers do not constitute a financial penalty. If I wanted to penalise them, I would say that they should spend their lives in prison; that would be the penalty. But taking back their ill-gotten gains would not be part of it. In our view, confiscation is not a penalty. However, the European Court of Human Rights came to a different conclusion, and that is why it is now sensible to amend the Bill.
As hon. Members will know, the Government have introduced legislation promptly since 1986 to enable the courts effectively to confiscate the proceeds from those who traffic in drugs. Our legislation has been praised by other countries, and has often been used or adapted as a model for other countries' drug trafficking laws. Our laws are tough, and deliberately so. It is therefore most unfortunate that the European Court of Human Rights did not feel able to accept the United Kingdom's reasons as to why a contravention of article 7 of the European convention on human rights had not occurred in the Welch case.
With your permission, Madam Deputy Speaker, I shall explain the background to the case in some detail so that there can be no misconceptions by those outside or those who report our proceedings today. The power to make a confiscation order under part VI of the Criminal Justice Act 1988 is based in some respects on the Drug Trafficking Offences Act 1986, now consolidated in the Drug Trafficking Act 1994. Both statutes enable a confiscation order to be imposed on anybody charged after commencement of the legislation, even where the offences that led to the charges were committed before the legislation came into force.
1329 The inevitable consequences of the present provisions in the Acts that I have mentioned are that a few—I stress that there are only a few—cases will have arisen in which a person was charged after the confiscation legislation came into force and a confiscation order was made on the basis of offences committed before commencement.
I understand that when the 1986 and the 1988 Acts were introduced, my predecessors were mindful of the provisions of article 7, and had no desire to violate it. However, the view was taken that the purpose of the confiscation order is not to punish offenders but to deprive them of the property that they should never have had in the first place.
In that light, it was considered that the confiscation legislation did not involve the imposition of a retrospective criminal penalty, and that its propositions accorded fully with article 7. I am grateful to the hon. Member for Hornsey and Wood Green for stating that the Opposition entirely agree with that. I am always slightly nervous when I find the Opposition in agreement with me, and myself welcoming the Opposition's agreement, but on this occasion our unity is strength.
For the reasons that I have explained, we did not believe that confiscation of ill-gotten gains was a retrospective criminal penalty. That was reasonably considered by the European Court of Human Rights at Strasbourg. Welch committed drug trafficking offences in 1986, before commencement of the Drug Trafficking Offences Act 1986. Some of the charges against him were not laid until 1987, however, by which time the legislation had come into force, with the result that when he was convicted in 1988 the court rightly proceeded to make a confiscation order against him.
The European Court of Human Rights considered that in the particular circumstances of Welch's case the confiscation order imposed on him in 1988 was a penalty, and that that penalty was heavier than was available when the offences were committed in 1986. As a result, according to the court, there had been a violation of article 7 of the convention.
In reaching that conclusion the European Court emphasised four principal characteristics of a confiscation order in England and Wales, which, in its opinion, tended to point to the penal nature of the measure. Those four characteristics were: the assumptions provided for by the legislation as to the illicit origin of the offender's property; the fact that confiscation orders are calculated according to gross proceeds, as opposed to net profits; the role of imprisonment in default in enforcement of confiscation orders; and proportionality—the possibility of a relationship between the extent of the order and the degree of the offender's guilt.
Some of those characteristics apply also to confiscation orders under part VI of the Criminal Justice Act 1988, both in its original form and as amended by the Bill. I have reached the conclusion that a confiscation order under part VI of that Act might also be regarded by the European Court of Human Rights as a penalty. Consequently, the new provisions in the Bill may result in the creation of a heavier penalty than is available at present.
As it currently stands, the Bill contains the same commencement provision as earlier confiscation statutes and it gives courts the power specifically mentioned by the European Court of Human Rights to make the assumptions, which is not currently available under part 1330 VI of the Criminal Justice Act 1988. One cannot therefore exclude the possibility that certain provisions of the Bill will create a heavier penalty than would currently be imposed, and that that penalty may be imposed in a few cases where proceedings are instituted after the Bill comes into force but where the offences were committed beforehand.
My hon. Friend the Member for Exeter was right to table amendments to deal with the issue, and the Government support them. His amendments will ensure that any provisions in the Bill that might give rise to a heavier penalty will apply only where offences with which a person has been charged are committed after commencement. Amendment Nos. 2 and 3 specifically prevent the assumptions from being made unless all the qualifying offences for both triggers are committed after commencement.
Amendment No. 13 is directed at the provision abolishing the £10,000 limit. Hon. Members will recall that a confiscation order cannot be made at all at present under part VI of the Criminal Justice Act unless the defendant's benefit and the amount of realisable property available for confiscation both exceed £10,000. For the purposes of article 7 of the European convention, a confiscation order cannot be regarded as available in such cases at present. Therefore, the same risk of violation arises as with the triggering offences that attract the assumptions. The provisions of clause 1, which provide for the abolition of the £10,000 limit, will therefore apply only where a person has been convicted of offences committed after commencement.
Amendment No. 14, to clauses 8(1) and 9, relates to the provisions on imprisonment in default and the addition of interest to unpaid confiscation orders. A confiscation order will continue to be expunged by the service of imprisonment in default unless the offences in respect of which the order was made are committed after commencement. Similarly, interest will not be added to a confiscation order unless the offences leading to the order were committed after commencement.
I apologise for making such a lengthy intervention, but it is important that the Government's position on this matter is made clear. I thank the hon. Member for Hornsey and Wood Green for her support for the amendments, which will protect the Bill. Having heard the Government's views on the extraordinary judgment by the Strasbourg court, I hope that the House will my support hon. Friend's amendment.
§ Amendment agreed to.
Amendment made: No. 4, in page 3, line 32, leave out 'and' and insert—
'( ) it is an offence which was committed after the commencement of section 2 of the Proceeds of Crime Act 1995; and'.—[Mr. Maclean.]
§ Sir John Hannam
I beg to move amendment No. 5, in page 3, line 46, leave out from 'court' to 'in' in line 1 on page 4 and insert—
- '(i) to be held by the defendant at the date of conviction or at any time in the period between that date and the determination in question, or
- (ii) to have been transferred to him at any time since the beginning of the relevant period,
- was received by him, at the earliest time when he appears to the court to have held it, as a result of or'.
§ Mr. Deputy Speaker (Mr. Michael Morris)
With this, it will be convenient to discuss also the following amendments: No. 6, in page 4, line 3, leave out from 'his' to 'in' in line 4 and insert'since the beginning of the relevant period was met out of payments received by him as a result of or'.
No. 7, in page 4, line 35, after 'section', insert—
' "the date of conviction" means—
No. 8, in clause 5, page 8, line 10, after 'apply' insert
'(subject to subsection (8A) below)'.
No. 9, in line 13, at end insert—
'(8A) For the purposes of any determination to which section 72AA above applies by virtue of subsection (8) above, none of the assumptions specified in subsection (4) of that section shall be made in relation to any property unless it is property held by or transferred to the defendant before the time when he was sentenced or otherwise dealt with in the case in question.'
No. 10, in clause 6, page 9, line 47, after 'apply' insert
'(subject to subsection (6A) below)'.
No. 11, in line 50, at end insert—
'(6A) For the purposes of any determination under or for the purposes of subsection (3) above to which section 72AA above applies, none of the assumptions specified in subsection (4) of that section shall be made in relation to any property unless it is property held by or transferred to the defendant before the time when he was sentenced or otherwise dealt with in the case in question.'
No. 12, in clause 7, page 11, line 1, at beginning insert
'subject to subsection (3A) below,'.
No. 13, in line 18, at end insert—
§ Sir John Hannam
As the Bill stands at present, a court is permitted to assume that property that has passed through a defendant's hands in the past six years has come from crime. The purpose of the amendments is to permit a court to make a further assumption that property held by the defendant has also come from crime.
The amendment brings the assumptions in the Bill fully into line with those in the drug trafficking legislation. I should mention that the Bill as originally drafted reproduces three of the four assumptions provided for in 1332 the drug trafficking legislation. In so doing, it allows the court to look only at property that has been transferred to or spent by the defendant in the past six years.
The other assumption in the drug trafficking legislation—that property held by the defendant has come from crime—is presently omitted from this legislation on the principle that the existing assumptions are sufficient to allow the courts to confiscate the proceeds following a continuing course of criminal conduct. The courts should now have the power to make that fourth assumption provided for in the drug trafficking legislation.
If the provision is omitted, the result might be that proceeds evade confiscation. For example, there will be cases where property can easily be shown to be held by a defendant at the time described in the amendment where there will be no trace of transfers or expenditure by the defendant in the past six years. For example, a defendant may own a large manor house and estate yet have been technically unemployed for several years. The court can assume that that property has come from crime, unless the defendant can show to the court's satisfaction that he acquired that manor house legitimately. We anticipate that the court will use that assumption only in particularly serious cases.
Amendment Nos. 7 to 13 are technical amendments which are consequential on the new provisions. Their main purpose is to ensure that in the revaluation of cases provided for in clauses 5 to 7 the court assumes that property held by or transferred by the defendant came from crime only if that property was held or transferred before sentence. That is a sensible safeguard, arid I commend the amendments to the House.
§ Mrs. Roche
The amendment is in the nature of a tidying-up measure. It brings the Bill into line with the drug trafficking legislation. It seems entirely right that, if the prosecuting authorities can make assumptions that lead to certain conclusions about the habits of life-style criminals, they should not be stopped there but should be allowed to continue. The amendments would allow the court to assume that property held by a defendant at the time of his or her conviction or at any time up to the time of the court's final determination have indeed come from crime. I understand from the hon. Member for Exeter that that is the intention of this group of amendments. If that is so, they certainly have our full support.
We can all envisage circumstances in which proceedings take place and property is mysteriously disposed of during the trial, at the time of conviction or at the time of sentence. The property is no longer there. If it is a fairly complex matter, as some of these matters are, some time may elapse between the commencement of criminal proceedings and the court's final determination. It would surely be entirely wrong that the court could not look back at that period.
I have one question which may well be for the Minister to answer. Given that this is such an obvious measure, why was it not in the Bill in the first place? I accept that we live in an imperfect world and that we always have to consider human fallibility, but it seems that this is one measure that could have been taken in the first place as it brings the Bill into line with previous legislation.
§ Mr. Maclean
The amendments will strengthen the assumptions that the court can make about the illegal origin of the defendant's property. As the Bill stands, the court will be able to assume that only property that passed 1333 through the defendant's hands in the six years before the institution of proceedings came from crime. The amendments will enable the court to assume that property held by the defendant at the time of his conviction or at any time thereafter up to the time of the court's determination has also come from crime. The amendments bring the assumptions in the Proceeds of Crime Bill into line with the drug trafficking legislation.
The hon. Member for Hornsey and Wood Green asked me a pertinent point. She will be aware that the design of the Bill is slightly different from other legislation. The aim was to deal with life-style criminals. That is why we picked the trigger four rather than the trigger two or no trigger at all. When we made legislation dealing with a different type of criminal and sought to take the proceeds of life-style criminals, we made parts of it slightly different. That seemed appropriate at the time. I accept responsibility. Having looked at the matter again, I, along with my hon. Friend the Member for Exeter, take the credit for having the wisdom to bring the Bill more into line with the drug trafficking legislation. It is important that we make those changes.
I was impressed when I visited recently the south-east regional crime squad and met the fantastic police officers who work on serious crime. In one case, a person has now been convicted and awaits sentence. He last came to the attention of the police officially when he was released from prison for robbery in 1979. He came out of prison apparently without any assets and went back to a small council flat. Since then, he has had no convictions whatever. It looks as if, up to his conviction a few weeks ago for serious drug offences, his assets have increased to half a dozen mansions scattered over south-east England. I hope that, as it is drug trafficking legislation, even if he is charged with only one offence, which he has not been—I believe that he has been charged with a few—if the prosecution so wishes and the court makes the assumption, it will be possible to get at all his assets.
For some of these life-style robbers there is a very long gap between convictions. Some of my hon. Friends have pressed me to extend the six-year period to 10 or 15 years. Again, a judgment has to be made, and that might be going back a little too far.
Amendment No. 7 defines "the date of conviction" for the purpose of clause 2 and is necessary because the new assumption about property held by the defendant considers property held at the time of conviction or thereafter and not at the time that proceedings are instituted. Before the amendment, the Bill considered only property transferred to a defendant before the institution of proceedings or any expenditure in the relevant period.
The amendments to clauses 5, 6 and 7 are also technical and consequential on the new assumption that has been added to clause 2. That clause, as amended, could have an unfair effect in revaluation cases, since the court without a compensating amendment would be able to assume that property held by the defendant between conviction and the revaluation is the proceeds of crime. In revaluation cases, the intention is that the court should be able to make the assumptions in respect of property received by a defendant before conviction and should also be able to take into account property received by the defendant after conviction. Where property is received by the defendant after conviction, it must be demonstrated that the property 1334 in question was received from relevant criminal conduct carried out before conviction. The court should not simply be able to assume that it was.
As my hon. Friend the Member for Exeter explained, the amendments will bring the assumptions provided for in the Bill fully into line with those in the drug trafficking legislation and, for those reasons, his amendments have the Government's full support.
§ Amendment agreed to.
Amendments made: No. 6, in page 4, line 3, leave out from 'his' to 'in' in line 4 and insert
'since the beginning of the relevant period was met out of payments received by him as a result of or'.
No. 7, in line 35, after 'section', insert—
' "the date of conviction" means—