Drug Trafficking Offences Bill

HL Deb 04 March 1986 vol 472 cc108-27

4.20 p.m.

Debate on Second Reading resumed.

Lord Hooson

My Lords, on Northern Ireland the Government were asked to think carefully about their next step. I hope and trust that the Government think carefully about their next step on every issue including the Drug Trafficking Offences Bill with which we are now concerned. It is very easy for people to use their rhetoric to describe the abominations of drug trafficking. It is a very difficult trade with which to deal, in the main because it is organised internationally. The main perpetrators put themselves outside the scope of the law in that they are either geographically outside the scope of our law or they have sufficient men between them, and actual fieldmen who carry out their dirty trade, to make themselves virtually outside the scope of our law.

In our political life over the past few years we have heard a great deal about supply and demand and the efficacy of market forces in relation to legitimate trades. The efficacy of market forces applies equally to an illegitimate trade such as drugs. There are two aspects of the drug trade—quite apart from the international connotations to which I have already adverted—and they are supply and demand. I happen to believe that the reduction of demand is much more important in the long run. I believe that this country must spend a great deal more on education and publicity than it does at present.

I have considerable admiration for the Minister of State at the Home Office, and his efforts to deal with the drug problem. We have an enormous problem with our younger population, in particular, in the schools. In a debate last week I adverted to the fact that, on the one hand, we have a very important profession—the police—which should have access to our schools when dealing with the problem, but, on the other hand, we have a demoralised teaching profession which has as important a part to play. Although it is not directly related to the Bill, I regard the demand side of the trade as very important.

In the Bill we are, of course, dealing with the supply side of the trade. Equally important as reducing demand is containing supply. We should not be under any illusions that while the demand exists there will always be supplies coming into this country. The most that we can hope for is to blunt the supply and make it very difficult. All of us in the legal profession, at least, are aware that it is terribly difficult for the law to put its hands on the main manipulators and perpetrators of this difficult trade. At most one can hope to catch the second and third tiers, but usually, I suspect, we are catching the fourth and fifth tiers. We must bear that very much in mind.

With that background, we who on these Benches have a great tradition of being concerned with civil liberties realise that the Bill contains draconian measures. When the noble Lord the Minister said that we were dealing with novel measures, he was using a euphemism to describe what are really draconian measures. We should not be contemplating such measures to deal with a normal trade. We are contemplating draconian measures because of the sinister implications and our total abomination of the trade. We on these Benches are prepared to go along with the proposals because we believe that it is important that we recognise the tremendous duty that we owe to the younger generation, in particular, to ensure that the trade is contained and reduced within this country.

Having said that, I think it is important to recognise that, just as with the Prevention of Terrorism (Temporary Provisions) Act 1976 we recognised highly unusual circumstances, so with this Bill we are dealing with exceptional circumstances. There is a duty upon your Lordships' House to ensure that the powers are no greater than necessary and that we include in the Bill as many safeguards as possible.

While giving general support to the Bill's principle, I wish to sound a few doubts and express a few fears because it is important that your Lordships' House should do that. First, I think that the Bill is too widely drawn. We paint as a scenario and justification for the Bill what I established in my preamble—the terrible consequences and the terrible profits that are made from the trade.

We have in our minds—do we not?—a picture of tremendous, international drug traffickers controlling the trade from a distance in a large way. We can see the consequences for the young people of this country. Those consequences lead to a living death, or often death itself. That is the picture that justifies exceptional measures. And yet when we consider the Bill we should realise that most of those traffickers will never be brought before the court unless there is effective international action, nor will their profits or proceeds be confiscated.

What I have in mind on that point—I give this only as an example of the matters at which your Lordships' House should be looking when we consider the Bill—is Clause 26: In section 116(2) of the Police and Criminal Evidence Act 1984 (arrestable offences that are always serious) after paragraph (a) there is inserted— (aa) any of the offences mentioned in paragraphs (a) to (c) of the definition of 'drug trafficking offence' in section 28 (1) of the Drug Trafficking Offences Act 1986' ". What does that mean? It means that in the Police and Criminal Evidence Act 1984, which went through your Lordships' House less than two years ago, we provided certain exceptional powers for the police in certain circumstances—for serious arrestable offences. Within a very short time those powers have been extended in the Bill by a sidewind, as it were, so that if, for example, a school boy who was taking cannabis had a small amount of cannabis in his possession and admitted in an interview with the police that he was going to share it with other boys, all the powers available in the Bill could be used in relation to that offence.

That is not what the House has in mind. It is not what the other place had in mind. All I am suggesting to honourable Members—I mean, to noble Lords' I forgot my forum for a moment—is that we should take care to ensure that the Bill's provisions are suitably circumscribed. We want to ensure that, whenever we deal with hard drugs, the Bill applies but that when we deal with cannabis, for example, there should be a limit relating to the weight or the value of the drug.

I make it clear to your Lordships that I have no sympathy for those who argue that the use of cannabis should be legalised. I am completely against that. I have not known anyone who has gone on to hard drugs who did not graduate from cannabis. But there is a considerable difference between the use of hard drugs and the use of cannabis; we must recognise that fact. No one would try to justify the powers contained in the Bill if they related to cannabis alone. I suggest that in Committee we should see whether it is possible to circumscribe some of the Bill's provisions.

The second fear that I should like to express is that the Bill fails to provide sufficiently for the exercise of judicial discretion. I am a great believer in allowing the judge a good deal of judicial discretion. He can, as it were, spot the difference between the wolf and the sheep. It is necessary with this Bill, which contains mandatory powers in so many of its provisions, to allow a great deal more judicial discretion than applies as it is now drafted.

The third fear I wish to express has already been referred to by the noble Lord, Lord Mishcon. It is that the Bill fails to provide adequate protection for the innocent third party. It was in fact my colleague and successor as Member for Montgomery in another place, Alex Carlile, who actually raised the question to which the noble Lord, Lord Mishcon, referred—and he would be horrified to be described as a supporter of the Government! However, that does not make any difference to the power of his point, which is that if one goes back over five or six years, or whatever the provision is, one can have the case of a totally innocent person who has bought a property. The example was given of somebody who sold in a hurry and who sold the property for much less than its value. The innocent purchaser is then faced with the prospect, perhaps, of long litigation to try to maintain his bona fide purchase. I do not think the provisions in this Bill are adequate to protect an innocent third party under the present provisions of Clause 5.

The fourth doubt or fear that I want to express is that the evidential provisions of this Bill are not sufficiently tightly drawn. There are many of them. There is the reversal of the onus of proof in certain respects. I am not at all convinced that this particular reversal of the onus of proof in Clause 2 does not offend against Article 6(2) of the European Convention on Human Rights, because whereas the point has been made that under the provisions of this Bill we are not concerned with proving guilt or innocence but with the consequence of a finding of guilt, nevertheless I do not think that the criminality that is involved in the confiscation provisions is necessarily the same as the criminality involved in the actual charge on which the man has been found guilty. It may be, therefore, that this would offend against Article 6(2) of the European Convention on Human Rights.

There are many other things to look at within this Bill. In particular, I think we need to look at the "laundering" offence, which the Minister suggested in another place should be looked at more closely when the Bill came here, and at the external orders that could be made. This situation demands unusual and tough measures, and we are prepared to accept them provided that this House has done all it can to make sure that we have provided every reasonable safeguard for the innocent and that the Bill is scrutinised in such a way—and the onus upon us is an extremely heavy one—as to ensure that its draconian powers are properly circumscribed.

4.33 p.m.

Lord Denning

My Lords, I should like to congratulate the Government on bringing forward this important Bill and my noble friend Lord Glenarthur on the way he has expounded it. I would have no hesitations or doubts. I would not call it draconian: I do not like that word at all. I would like to call it a strong and determined effort to deal with one of the biggest menaces to our society in our time. It is very welcome to see that the real people who are behind it—the drug traffickers—are not only caught but are deprived of all their ill-gotten gains.

How different it was before this Bill. Perhaps I may tell your Lordships the background. In 1978 there was an operation called Operation Julie and three men were convicted at Bristol Crown Court before Mr. Justice Park of conspiring together against the Misuse of Drugs Act. In fact, they used to manufacture and sell LSD and it was proved before the judge, and traced to them, that they had amassed themselves three-quarters of a million pounds. They had salted it away in cash, deposits of money and securities in unnumbered accounts in Switzerland and France.

The judge thought he had power, and he made an order under the Misuse of Drugs Act to confiscate that three-quarters of a million pounds. The Court of Appeal upheld his decision but unfortunately this House in Queen v. Cuthbertson in 1981, Appeal Cases 470, said that the judge in the Court of Appeal had no power to do it. The power under the Act was only power to confiscate for an offence under this Act, whereas the men had been charged with conspiracy to break the law. I am afraid the House went by the technical wording, Lord Diplock saying that you had to go strictly by the words of the statute and you could not extend it so far.

That was the position, and it was that failure to confiscate the three-quarters of a million pounds which led to the hardening of penal reform and the request to Mr. Justice Hodgson and with him Mr. Justice Staughton—two judges and a good committee—to look into the law about the profits of crime and their recovery. And what a good report it is. In spite of what my noble friend Lord Mishcon said, I think a lot of it may well be applied not only to all these drug trafficking moneys but to all the millions which are obtained by bank robbers, bullion robbers and the like. The thing is to get hold of them. You punish a man when you get hold of the money he has amassed. He does not mind spending a few years in prison so long as he can keep his ill-gotten gains. That is what this Bill—

Lord Mishcson

My Lords, I wonder whether the noble and learned Lord will forgive me. Are his remarks, which are always listened to with such deep respect, meant to mean that in those cases and in others he would want the onus of proof shifted? It is not a question of whether the funds are confiscated but of whether the onus of proof should be shifted.

Lord Denning

My Lords, I am coming to that in a minute or two. I have given the background. Let me just follow up what my noble friend said about the Daily Express this morning. I have the news item from The Times and, quite rightly, it says: A young mother who used to spend up to £160 a day on heroin yesterday praised the Princess of Wales, who had spoken to her.She said, 'The Princess was very courageous coming to a place like this'— that is, a hospital for drug addicts. 'A lot of people would rather forget about people like us'. I want to re-emphasise the £160 a day that young woman was spending. The Lord Chief Justice estimated £20 a day, but if you go up to £160 a day and if you trace that money through there will be treasury notes, bank notes, and they go to a dealer. No doubt the peddler gets his bit out of it. And then from there they go to the wholesaler and then to the importer. You have the usual mercantile train of buyer and seller all the way through, each taking his cut out of it. What happens to the £160? It is put together with a lot of other £160s in a suitcase and is perhaps taken to the bank, if you please, or to other places. Perhaps it is taken across to France or other countries, because you want to get rid of it if you can.

Then—and this is a new phrase in our law—it is "laundered". An attempt is made to make that dirty money clean by passing it through innocent hands so that it comes out in some foreign bank account apparently clean. It is laundered by a whole lot of intermediaries so that it can never be discovered. That is the evil. Of course, in regard to stolen goods it was always said that if there were no receivers there would be no thieves. And so if there were no drug traffickers I venture to think there would be very few addicts because they would not be able to get their drugs. We must strike at the drug addicts.

What are the main provisions of this Bill? First, after the man is convicted his proceeds can be confiscated—not only what he has in his hand at the moment of sentence but also what has passed through his hands in the previous six years. He may have transferred assets to his wife. Anything he has transferred at less than the full value can be traced and got at. Then the judge can say, "There it is. I am going to assume that all your fortune which we have traced is the product of your drug trafficking".

The Bill says so, but then gives him this get-out. If he can prove that that is not correct he does not have to pay it at all. When a drug trafficker is before the court and is being sentenced, and is found to have acquired masses of money, why should you not say, "It's up to you to prove that you have acquired it all correctly"? I would say that, although it is unusual in our law, it is a very good thing to have this burden of proof put on the drug trafficker himself. That is the case of the confiscation after the man has been convicted.

But the Bill has to deal with another matter. So many of these people, if they get to know that the police or others are on their track, will shift their money from the bank account abroad or whatever it may be. Then this Bill draws in aid a procedure which we started in the civil courts of the Court of Appeal in 1975. It is what we call a Mareva injunction. My first case, the Nippon case, involved the big Japanese shipowners who were owed some money for the hire of their ship by some Greek brothers. The Greek brothers did not pay their hire. They disappeared to New York and so forth. The Japanese owners came to us and said, "These people have a lot of money in the bank in England. Won't you give us an order to restrain them from using that bank?" The argument was put to us that it had never been done before and that no English Court had ever given such an order before judgment was obtained.

So in 1975 we started what is called the Mareva injunction, one of the most important decisions of our civil law, whereby if a debtor has money or owes money and he has it in the bank or wherever it may be, before we even get judgment against him, we can go to the judge before the debtor has had any notice of it—we go what is called ex parte—and say, "This man has all that money in the bank. He is going to abscond. If he takes this money away his creditors will never see a penny of it". So before the man is even given any notice the court can make an order against him, and the bank is told and the bank obeys it—if the bank disobeyed it would be guilty of contempt of court. So the Mareva injunction has been most important to our commercial community in the City of London. We do not let debtors get away with their money by taking it overseas and the like if we can stop them in time.

That civil procedure has been adopted in the Bill by the Government taking it into criminal cases where it did not apply before. You go to a High Court judge; you do not go to a Crown Court. You apply to a High Court judge for a restraint order to stop the drug trafficker from moving his proceeds away. You go to the judge before you tell him anything about it; you get your order from the judge and then you notify the bank. It is a very good thing. One gets this restraint order which stops him from moving his assets away. You can get a charging order and you can get a receiver. That second machinery, what I call the Mareva injunction machinery, is an excellent new introduction in this Bill, from the civil law into our criminal law, to stop the drug trafficker making away with his proceeds.

The other important position which is quite near is to do with the launderers. These people—it may be in regard to the bank—help the drug trafficker by assisting him to shift his money from one place to another, from one bank to another or from one suitcase to another, and to get it overseas if he can and get it away from England so that others cannot get at it. Those people launder the dirty money and pretend it is clean. All the launderers—all those who assist—are going to be equally guilty of a drug offence. Is it not a good thing too!

The last thing I would mention is in a way another good thing. Supposing you want to know whether one of these drug traffickers has money at the bank in the name of this person or that person. How are you going to find out? Is the bank bound to answer your questions? There is an obligation of confidence between the bank and its customer. It is not allowed as a rule to disclose anything about a customer's accounts. Thank goodness that under this Bill the police officers can get an order. They can go to a circuit judge and get an order to get the necessary information.

I see in a note in The Times today that the bankers are a little worried about this. If they have a suspicion that one of the people who bank at their premises is a drug trafficker, are they to keep quiet about it? I would say, regardless of anything in the Bill at the moment, that our law says there is no confidence against the disclosure of iniquity. If funds are obtained iniquitously, or there is a reasonable suspicion of it, I see no reason whatever why the bank should not tell the authorities—in fact it might be wise to do so—that it thinks that the funds are probably the proceeds of drug trafficking. That again concerns this matter of disclosure.

I have traced through for your Lordships the main provisions of the Bill. It is a very important Bill. In some of these cases, as in the case of a man who has laundered the money, the burden of proof is on the accused to show that he knew nothing about it. The usual burden of proof is reversed here. But if we are going to stop this trafficking, these are very desirable, strong, determined measures, and I would support the Bill wholeheartedly in all that it proposes.

4.48 p.m.

Lord Rodney

My Lords, perhaps I may start by expressing my diffidence at having to follow no fewer than three noble and learned Lords. That is a rather daunting task. I have not had the same experience as other noble Lords of very frequently standing on my feet addressing the House. But I am confident that this Bill will receive the same degree of support in your Lordships' House as it did in another place. I should like to take this opportunity to congratulate my honourable friend the Under-Secretary of State on this Bill and also to commend the speed with which it has been brought before Parliament following the report of the Home Affairs Select Committee.

I was honoured to have been instrumental in bringing before your Lordships' House last year the Controlled Drugs (Penalties) Bill. The Bill before us today is just another brick in the wall against traffickers. Nobody seriously contends that these two Bills will halt the trafficking of drugs, but surely anything that can be done to make the task of these traders in misery more difficult and less rewarding is worth doing. As my noble friend the Minister has said, in 1985 some £107 million of drugs were seized and some 70 drug rings were uncovered. One may say that those figures are imposing, and I understand that they show a considerable increase over 1984. However, my Lords, are we winning the battle? Unfortunately, all the indications say no. The purity of heroin is as high as ever. The price of heroin is stable and may even have fallen slightly. What was once primarily a London problem is now a country-wide problem.

The interception of drugs may be increasing but I fear that imports are increasing at an ever-greater rate. I make those observations not in any way as a form of criticism but to stress the importance of any measures that we can take to combat the situation. Regrettably, as long as there is a demand for drugs, there will always be criminals willing and able to satisfy that demand. It is therefore essential that hand in hand with efforts to control supplies must go efforts to reduce the demand. I find myself agreeing totally with what was said by the noble Lord, Lord Hooson, on that question of demand. Of the two, I personally believe that probably the more important is the latter. If there is no demand for the product, be it drugs or popcorn, then the supply will dry up.

The Government, through advertising, television documentaries, leaflets for parents and schools, and through many other promotional efforts, have made strides to bring home to the public the seriousness of the situation. However, in the end it is the public themselves—you and I, my Lords—who must implement and support a national campaign to convince particularly young people that drug abuse is self-destructive and brings no rewards.

If I may return to the Bill itself, I have said already that it is just one more brick in the wall against traffickers. One hopes that it will serve as a disincentive to habitual criminals from turning to drug dealing. There have been some indications that that is happening because the rewards are very substantial and the risks of apprehension are comparatively small. It is to be hoped that with the threat of long prison sentences plus sequestration of assets, at least some criminals will think twice before entering the field of drug trafficking.

I am sure that all noble Lords who have read the Bill and have studied the speeches in another place realise that the Bill's prime target is the large operators—the Mr. Bigs, as some people call them. They are the people we are really after. Many of them are probably foreign nationals who may not even live in this country—which goes to emphasise the international nature of the problem and the need for close co-operation between governments.

If the seizure of the assets of such criminals is to be effective, it is essential that seizure orders enacted in this country can be enforced overseas. I am certain that we were all reassured to hear that Her Majesty's Government are already holding talks with certain overseas countries with a view to establishing bilateral agreements—and that in addition, the United Nations is seeking to establish a convention on drug trafficking. In fact, my honourable friend the Under-Secretary recently stated that if such a convention was not forthcoming from the United Nations, then the Council of Europe would consider establishing its own convention for its members.

As I have said, the prime target of this Bill is the large international operators. However, there are also the smaller intermediary pushers and the user-dealers, who are part of the overall drug scene. Those two categories are, for the most part, based in this country and are thus somewhat easier to apprehend. Nonetheless, they are contributors to an evil trade.

There is a certain sympathy for the user-dealer. I have even heard the opinion expressed that the user-dealer should not be subject to this Bill. Here I come to my diffidence on the legal question that the noble Lord, Lord Hooson, covered to some extent. I had understood that the courts would have discretionary powers. If that is not the case then I agree with the noble Lord that this is a matter that should be dealt with at the Committee stage. I hope that it is unlikely that a small time user-dealer would be rendered destitute by the strict application of the Bill. I may add that I have always been of the opinion that drug abusers should be treated as sick people and not as criminals; and that they should be compelled to attend rehabilitation centres rather than be put in prison.

There has been no overall opposition to this Bill, except perhaps from the drug traffickers themselves—but, happily, they do not have a voice in Parliament.

Lord Mishcon

One hopes not, my Lords!

Lord Rodney

My Lords, possibly the only element of the Bill that has caused some disquiet is that of reversing the onus of proof to the accused to show which of his assets do not derive from drug trafficking. I have heard that some people think that that provision is rather un-British because in this country we are innocent until proved guilty. I feel sure however that I do not need to remind your Lordships of the type of persons with whom we are dealing; wholly without conscience or concern for the suffering they are spreading among the young people of this country, they are vultures growing fat on the misery of others. I suggest that we must do all we can to make the punishment fit the crime. We must ensure that there is no easy hiding place for traffickers, their moneys or their assets. I give this Bill my unreserved support.

4.57 p.m.

Baroness Macleod of Borve

My Lords, this afternoon I am so very pleased to be placed at the end of the list and to follow my noble friend Lord Rodney, who has done a very great deal behind the scenes to draw to the attention of your Lordships and another place the problems of drugs and drug trafficking. This is a very important Bill. It has been called draconian—quite rightly in my view, because it should be draconian. We face a very serious problem within our country today.

Before starting on my few words, I should like to thank very sincerely my noble friend the Minister for the way in which he introduced the Second Reading of this Bill to your Lordships' House. It is not an easy Bill to follow, with its many clauses, but he put the end product before your Lordships very helpfully.

In that the Bill is designed to plug loopholes, there are many new offences that needed to be made in the particular area with which we are dealing. The noble and learned Lord, Lord Denning, stole a great deal of what I intended to say. I am amazed that I had the temerity to think of the same words as the noble and learned Lord. The noble and learned Lord began by mentioning Operation Julie in 1978, when at least three-quarters of a million pounds were salted away. I am so very grateful to the noble and learned Lord for taking us through what happened to the people concerned.

As a result of the Operation Julie saga, the Hodgson Committee was established, and as a result of that, we are here today debating the Second Reading of this Bill. I should like to thank all its members, including Mr. Justice Hodgson, for the work that they did on this Bill.

Those of us who have tried to do something about drugs have realised that the escalation not only of trafficking but of the taking of drugs in this country is proving very difficult to contain. That is why I feel that this Bill which aims at punishing the traffickers—those who supply and are second only to the actual growers—is to be welcomed. That is the most important part of it. However, we must ask ourselves what does deter. I doubt very much if any of us, let alone Her Majesty's Government, can really say what does deter the trafficker. They are people without our ken in society. Whether they be people from our country or from abroad, they are evil men out to do the greatest possible damage, without thought, to those mostly young people in our society. However, now when they are caught they will forfeit all their ill-gotten gains and if they do not pay the forfeiture they will have a maximum of 10 years in prison.

I am pleased to see that the international aspect is covered by this Bill and that in future an order made in British courts will be enforceable against assets overseas. I think that is the first time that such an order has been made enforceable. It is very important because we realise how quickly some of these people can move their assets—that is, the money they have made—and salt it away overseas. We are only too pleased that the courts will be able to follow them and sequestrate those assets.

The Home Secretary and the Minister have been 100 per cent. behind all the measures which have been encouraged by Private Member's Bills in another place. Until now the penalty for trafficking has been a maximum of 14 years' imprisonment and this will now be life imprisonment. One vaguely wonders whether life imprisonment might now deter some of the traffickers. Surely in our society the fear of being caught is one of the greatest deterrents. Therefore, when caught traffickers might fear losing their liberty for life and losing all their money, and I hope that that will have a long term impact on the drug scene. As a result of the Bill one hopes that fewer traffickers will operate, and therefore that fewer young people in our society will be maimed, probably permanently, or, as often happens, lose their lives from taking drugs.

5.3 p.m.

Lord Harris of Greenwich

My Lords, like everyone who has spoken in this debate, I welcome this Bill. It is an appropriate course of action for the Government to have taken following the decision of the Appellate Committee of your Lordships' House on the Operation Julie case to which the noble and learned Lord, Lord Denning, referred.

At the time of the conviction of those involved in that particular series of grave offences I was a Minister of State in the Home Office, responsible for the police. At the end of that complicated criminal investigation which had brought together a large number of police officers from different forces in the South and West of England and Wales, I went with the then Chief Inspector of Constabulary to the headquarters of the Avon and Somerset Constabulary to congratulate the team of investigating officers who had brought these dangerous criminals to justice. On that occasion I read to them, at his request, a letter from a retired senior Air Force officer about what had happened to two of his children who had consumed LSD. One of those boys had jumped out of a window believing, given the condition he was in, that he would bounce back again. He killed himself. Tragically, not long afterwards, the second boy did exactly the same thing.

After episodes of that kind it would be ridiculous for us to have any, not just sympathy, but sentimental feelings, about people who are responsible for organising the traffic of LSD and now, the even more worrying problem which has grown alarmingly over the past six years, that of heroin and cocaine. Therefore, I give this Bill an unreserved welcome in so far as it deals with the issue thrown up by the decision of the Appellate Committee of your Lordships' House.

However, I am bound to say that I think the Bill will have, at best only fairly limited effects. I propose to explain why that is so. First, it deals only with drug traffickers. Many will say, as the noble Lord, Lord Mishcon, would say and my noble friend Lord Hooson, and many others might do, how right it is that this should be so and that this is a special type of crime and that it should be treated quite differently from any others. I wonder whether that is going to be possible. The noble Lord, Lord Mishcon, read out a very interesting passage from the Home Secretary's speech in another place. I think that it will be increasingly difficult in future years—not immediately, but ever the next five or 10 years—to put a ringed fence around drug offenders and treat them differently to any others. We should be aware of this now rather than in the future.

The people who are involved in major criminal conspiracies of this kind do not simply specialise in one type of crime. They do not deal just with heroin or just with cocaine. They move in and out of both and in and out of forgery, long-term fraud, and armed robbery. That is the reality of the issue and that is what the House should recognise when discussing this Bill.

Secondly, I believe that the Bill is far too limited. I very much agree with the noble and learned Lord, Lord Denning, about money laundering. It is absolutely central to the issue which we are debating today but, bluntly, this Bill does not deal even remotely adequately with it. The noble Lord, Lord Glenarthur, will not be surprised to hear me ask today—as I asked him when speaking on the gracious Speech—why we do not have an obligation, as they do in the United States, for financial institutions to report major cash transactions over the bank counter.

I am bound to say to the noble Lord—and I realise that he does not carry the day-to-day responsibility for this area of Home Office work—that I did not find his reply altogether convincing. I think we have to look at a country that has similar legal traditions to our own and which has a great deal of experience with this problem; namely, the United States.

In its report in October 1984 to the President and the United States Attorney-General the President's Commission on Organised Crime says: The principal tool now utilised to detect, measure and punish money laundering is the Bank Secrecy Act". That Act requires that a currency transaction report must be filed by a financial institution whenever a currency transaction takes place involving more than 10,000 United States dollars. As the House will probably be aware, under the terms of that Act there have been a substantial number of criminal prosecutions brought against some of the largest banks in the United States over the past two or three years because of their failure to obey that legislation.

I should like to give an illustration of what I mean by that. I quote again from the report of the President's Commission on Organised Crime which gives this particular example: In the Great American Bank case officers and employees of the bank received a fee for processing large amounts of cash without filing the required CTRs"— that is, the currency transaction reports to which I have already referred— More than 94 million dollars was laundered by the Bank from December 1982 through April 1984 for the depositors—three narcotics organisations". That is just one illustration of the size of this market—one American bank and over 90 million dollars involved over a period of less than two years.

Yet that framework of legislation, which is regarded as absolutely essential by the United States Government, is totally ignored so far as this piece of legislation is concerned. I think we are entitled to ask why. There will be increasing concern about this particular matter, all the more so because we have to recognise that large sums of money are now swimming around in this country as a result of the traffic in narcotics.

In the debate which we had last week I gave some figures, which were not challenged by anybody, which indicated that in 1984 (the last year for which we have complete figures) heroin with a street value of probably somewhere in the region of £350 million was imported illegally into the United Kingdom. The figure is even greater for last year, 1985. Quite apart from that, as we know there is a growing traffic in cocaine because the American market has now been deluged with cocaine, primarily from Colombia and other countries in South America. As a result of that the criminal entrepreneurs who are responsible for this traffic have now identified Western Europe as their next objective.

In the light of that situation and the evidence which exists that some unusally large cash sums have been crossing bank counters in London without at any stage being reported to the police, it seems to me to be a matter of considerable seriousness as to whether this situation should not be dealt with at this time when we are considering this piece of legislation.

Finally, perhaps I may just conclude the matter by quoting the views of the present Attorney-General of the United States, Mr. Edwin Meese. When announcing that the Department of Justice and the Department of the Treasury were seeking a new comprehensive money laundering Bill which would strengthen still further the existing powers of the Bank Secrecy Act he said: Professional money launderers play a key role for any criminal enterprise, whether it is an organised crime family or a narcotics ring. They are functionally equal to a fence used by a burglar. They provide a service to the thieves to hide or conceal illegal money. It takes a professional, a lawyer, an accountant, or a banker, with all the trappings of respectability, to manipulate these sophisticated schemes". That is the position as described by the Attorney-General of the United States and directly concerns the issue which we are now discussing.

As I have indicated, I find it deeply disappointing that there is no recognition within this Bill of the central importance of this particular issue. I do not suggest for one moment that by itself, or if we introduce similar provisions in this Bill, it would deal overnight with the whole of the heroin and cocaine problem. Of course it would not. But in my view it would add very substantially to the powers which are available to the authorities for dealing with this extremely important problem.

I do not wish again to embark on issues which we discussed only on Wednesday last week—and I am sure that the noble Lord, Lord Glenarthur, will agree with me at least on this point—but I think it is only right to say that I agree very much with what the noble Lord, Lord Rodney, said at the conclusion of his speech. We have to recognise two things. First, this problem is the most serious single problem facing us at the moment in the area of criminal justice policy. There is widespread public anxiety, to which the noble Baroness, Lady Phillips, referred last week. More and more members of the public are filled with concern that their children may be infected by either heroin or cocaine. Desirable though this legislation certainly is, we must ask ourselves whether at the moment we have deployed anything approaching adequate resources to deal with this problem.

At the beginning of his speech the noble Lord said that he hoped that as a result of this legislation some of the drug traffickers would think better of whether they would continue with their unlawful conduct. I very much hope that some of them will think better of it; but I am a little sceptical whether in fact that is a likely scenario. We must recognise the fact that many of them never come within range of our jurisdiction. Many of them are operating in Bolivia, Colombia or the United States. Nevertheless, while this is not in any way a complaint about the character of the Bill, it demonstrates the reality of the problems which face us. We have to ask ourselves whether in fact we are deploying adequate resources.

The noble Lord, Lord Glenarthur, said that we were not doing too badly and that we had strengthened our Customs squads—I think that is the phrase he used. That is a truth. It is not the whole truth, as he will be aware. In fact what has happened is that there has indeed been an increase in the number of plain clothes officers of Customs and Excise who are targeted to deal with the drug situation. But of course there has actually been an overall reduction in the number of Customs officers and not an increase during the lifetime of the present Government, notwithstanding the fact that there has been a sevenfold increase in the seriousness of the heroin situation in the United Kingdom. Ministers constantly go around saying, "Look how wonderfully we are doing. We have cut the number of civil servants". Unfortunately, some of the civil servants whom they have cut happened to work for Customs and Excise. There has been a reduction in the uniformed branch of Customs of over 20 per cent; there has been an increase in the plain-clothes investigation branch, but an absolute and significant net reduction in the overall strength of the Customs and Excise. That is a great pity. I hope that that policy will be put into reverse.

Secondly, as I indicated last week, it is now necessary to have a quick statement from the Home Secretary on what he proposes to do about the situation which is probably at its worst in London. As my noble friends and I said last week, it is urgently necessary to have an increase in the establishment of the Metropolitan Police. They are dangerously under-provided for. The noble Lord was right in saying last week that there has been an increase of over 4,000 in strength, but he did not tell us that as a result of overtime restrictions introduced by the present Government there has been an effective reduction of 3,200 within the overall figure. The gravity of the issue has been constantly stated in reports by the commissioner of police for the metropolis and by many others, and I hope that the Government can give us an early indication that action will be taken.

I repeat that I believe that in many homes in this country there is real fear about what is happening. Illegal drug importation is increasing, as the noble Lord, Lord Rodney, indicated. Unless as a society we provide adequate resources to deal with it, the price that we shall have to pay will be very high indeed.

5.21 p.m.

Lord Glenarthur

My Lords, we have had an interesting and useful debate. Two things have emerged clearly from all the speeches. First, there is concern on all sides of the House about the problems of drug misuse, and towards the end of the debate my noble friends Lady Macleod and Lord Rodney dwelt on that. Secondly, there is the determination of your Lordships to support whatever steps can reasonably be set in hand to tackle the problem. We all seem to be agreed on the need for urgent and effective action on all aspects of drug misuse, and an essential part of that strategy is a comprehensive attack on those who engage in the illegal trafficking of drugs.

The noble Lord, Lord Hams, tempts me to go further than the debate on this Bill by referring to the question of Customs officers and police resources. I hope that he will understand that, although I cannot accept all that he said, it would be wrong of me to widen the scope of the debate to a general debate on drugs.

Lord Harris of Greenwich

My Lords, the noble Lord is right; I have no objection. But does he realise that he raised the question of the strength of the Customs and Excise and not I?

Lord Glenarthur

In that case, my Lords, perhaps I may say that the Customs is concentrating in a big way on detecting drug smuggling. It is a top priority. Increasing emphasis is being placed on the use of risk assessment, intelligence and information, as he suggested, both in supplying routine controls and in carrying out special exercises. Since 1979 we have more than doubled the number of specialist drug investigators. I could go on, but I shall let the noble Lord have further information in writing.

I share many of the concerns of the noble Lord, Lord Hooson, about the demand side of the drug issue. I assure him that considerable effort is spent on education, training and rehabilitation. Indeed, I referred to many of those in the debate of the noble Lord, Lord Harris, last week. But it is a theme which is again somewhat wide of the scope of the Bill.

In saying that, I do not intend to detract from its importance. The reduction of the demand for drugs is a key part of our overall strategy against drug misuse. Up to £8 million has been set aside for our national publicity campaign and prevention initiatives in schools in every education authority in the country. Our publicity campaign, which involves TV advertising, posters and leaflets, is being independently evaluated. The initial results have been encouraging. They suggest that the campaign has hardened young people's attitudes to heroin and other drugs and increased awareness of their harmful effects. It has done that without encouraging experimentation. We intend that our action in schools should be similarly effective.

One theme that was concentrated on, particularly by the noble Lords, Lord Mishcon and Lord Hooson, was safeguards, particularly for third parties. Although the powers contained in the Bill are intentionally designed to hit the trafficker hard, we have also built in a system of safeguards to ensure that the rights of innocent individuals will not be jeopardised. The new powers of tracing, restraint and confiscation all require the authorisation of senior judges. They will have to be satisfied that the stringent conditions set out in the Bill are met.

In the case of orders and warrants requiring the disclosure of information by banks and others, the circuit judge will have to be satisfied that there are reasonable grounds for suspecting the person being investigated of involvement in drug trafficking, that the information sought is likely to be of substantial value to the investigation and that it is in the public interest that the information should be disclosed. There is therefore no question of that power being used to justify what are commonly called "fishing expeditions", and the circuit judge will ensure that normal rules of confidentiality are breached only when the circumstances warrant it.

The power to order the restraint of assets is subject to equally stringent safeguards. Clause 7 provides that an application for a restraint order can be made only after proceedings have been instituted against a person for a drug trafficking offence or where the High Court is satisfied that proceedings are to be instituted and where there is reasonable cause to believe that the person concerned has benefited from drug trafficking. If it wishes, the High Court will be able to specify conditions or exceptions, for example, to allow the defendant reasonable living expenses, and to appoint a receiver to manage the restrained property; and there is specific provision for the holder of restrained property, whether the defendant himself or a third party, to apply to the High Court if he wishes the order discharged or varied.

When it comes to enforcing a confiscation order, the Bill provides that the High Court and the receiver must exercise their powers with a view to ensuring that third parties who gave some consideration for property which is liable to confiscation are allowed to retain or recover that consideration. Specific provision is also made for persons holding an interest in property which is liable to confiscation to be given an opportunity to make representations to the court before that property can be realised. I think that those are substantial safeguards, but I shall certainly read carefully what both noble Lords have said.

Let me now answer a query raised by the noble Lord, Lord Mishcon, on the words "significantly less" in Clause 5. If he looks at Clause 28(7) he will see that the definition that I think he looks for, in words which I must confess were rather unusual to me, meets the concern that he expressed, particularly paragraph (b). I agree that it is a Committee point, and he may wish to return to it.

The noble Lord, Lord Hooson, asked whether the confiscation powers should apply where someone was charged with an offence involving only a small amount of cannabis. We have limited confiscation powers to the Crown Court which tries the more serious drug offences. People charged with dealing in small amounts may well be tried by the magistrates' courts, which will not have those powers available. That provides a limitation in practice of the sort that the noble Lord seeks, I believe.

The noble Lord also referred to Article 6 of the European Convention on Human Rights. We do not want the Bill to fall foul of the safeguards provided in the convention. The convention provides that no one should be subject to a more severe penalty than would have been available at the time he committed the offence. We do not believe that as a result of the Bill we shall be. The offender's sentence will be determined by the judge in the normal way. Confiscation is not an additional or alternative penalty but merely a means to ensure that the offender does not continue to enjoy the benefit of money that he ought never to have had. But if the noble Lord has any other worries about the convention I shall certainly be ready to look at them.

Lord Hooson

My Lords, I am most grateful to the noble Lord for dealing with this point. What worries me is the provision of a penalty if the confiscation is not fulfilled. It is up to 10 years, as the noble Lord pointed out. It seems to me that the European Court might interpret this as an additional penalty.

Lord Glenarthur

My Lords, I shall certainly study that point with great care. As to Clause 26 and serious arrestable offences, to which the noble Lord, Lord Hooson also referred, that clause provides that most drug trafficking offences are to be regarded as serious offences for the purposes of the Police and Criminal Evidence Act 1984. The 1984 Act contains certain special powers that are available only in relation to the investigation of serious arrestable offences. The purpose of Clause 26 is to ensure, for the avoidance of doubt, that these powers are always available in drugs cases. In fact, many drug trafficking offences would already be brought within the definition of serious arrestable offences, as I am sure the noble Lord will appreciate, by reason of the likelihood that they will result in substantial financial gain. Here, I am referring, of course, to Section 116 of the Police and Criminal Evidence Act.

The noble Lord, Lord Mishcon, was particularly concerned about the reversing of the burden of proof, if I may so summarise it. I should emphasise that there is no question of a person accused of a drug trafficking offence having to prove his innocence. The burden will remain on the prosecution in the usual way, as I said at the beginning, to prove beyond reasonable doubt that the defendant is guilty of the offence with which he is charged. Only after conviction will the onus be placed on the offender to show which, if any, of his assets were legitimately acquired. There was unanimous agreement at all stages in another place that a provision of this sort is essential if we are serious about depriving a convicted trafficker of the proceeds of his crime. In many cases, it will never be possible for the prosecution to establish with certainty how much of a wealthy trafficker's life-style was financed by his criminal activities. To insist on doing so would frequently allow the trafficker to retain much of his illegal gains. The offender is the only person who knows exactly what his legitimate income has been, if any, and which of his assets were legitimately acquired. It is right that the burden should be upon him to establish these facts to the satisfaction of the court.

Lord Mishcon

My Lords, I hope that the Minister, if only in order to make my position abundantly clear, will allow me to intervene. I emphasised the points about the onus in regard to innocence or guilt. I said that this did not apply, obviously. I also said that I was in favour of the provision in this Bill for the change of onus on penalties. I merely sounded a warning note, having regard to his right honourable friend's comments in the other place on Second Reading, that this is not to be deemed a precedent. We have regarded this as a very exceptional case, and rightly so.

Lord Glenarthur

My Lords, I am grateful to the noble Lord. That is a point upon which I was about to comment. I realise the force of the noble Lord's argument. The whole question of reversing the burden of proof in this instance is important and goes slightly wider perhaps than Lord Mishcon's comments. I recognise the noble Lord's concern about the issue to which he has again referred.

I should perhaps point out that the statute book already contains several examples of criminal offences which place the burden of proof on the defendant in relation to an ingredient of the offence with which he is charged. This goes well beyond the limited extent to which, in this Bill, we propose to place the onus of proof on the convicted offender. Among examples of such offences are the presumption of corruption where a public servant accepts any money or gift from a person seeking to obtain a public contract and the burden placed upon a person in possession of an offensive weapon to establish lawful authority or reasonable excuse.

The provisions in this Bill apply only to the proceeds of drug trafficking. And not all of the powers necessary in this context may be appropriate in relation to other offences. I must say, however, that we are anxious to strengthen the powers of the courts to deprive convicted offenders of the proceeds of crime generally, as I believe the noble Lord, Lord Harris of Greenwich, would have liked us to have done, if I have the drift of his remarks correctly. That seemed to me also to cover some of the points made by the noble and learned Lord, Lord Denning. We are hoping to extend similar powers, with any appropriate modification, to other profitable offences such as fraud and organised crime in future legislation. In considering exactly what powers are necessary and in relation to which offences, we will be taking careful stock of the views expressed in your Lordships' House and elsewhere. So, to that extent, we are wary, to use Lord Mishcon's expression, too. Our minds are very much open on this point. We are by no means wedded to the provisions in this present Bill for use elsewhere. The provisions in this Bill are devised specifically in relation to drug trafficking offences.

The noble Lord, Lord Hams of Greenwich, raised the question of bank reporting requirements. I accept the concern that he expressed in a forceful manner. I have to say, however, that we do not believe that any useful purpose would be served by imposing a requirement on banks and other financial institutions to report large cash transactions. A great many legitimate transactions involve the transfer of large sums at irregular intervals and frequently in cash. A reporting requirement would impose a substantial burden on some branches. It would also be difficult or impossible for whoever had to process the information to isolate transactions attributable to criminal activities. In the United States—the noble Lord dwelt particularly on experience there—reporting requirements have been patchily observed and offenders have managed to evade them by making a series of deposits, each just under the level at which reporting is required. We would not realistically be able to adopt this procedure without good reason for doing so—and what I have said points to the difficulties.

But an important feature of the Drug Trafficking Offences Bill is new powers for the police and Customs to obtain access to information held by banks and other financial institutions at an early stage of a drug trafficking investigation. It is also important to remember, however, that a bank's duty to maintain the confidentiality of its customers' affairs does not prevent it disclosing information when there is a public interest in disclosure—for example, to prevent fraud and crime. This was held by the Court of Appeal in the case of Tournier v. The National Provincial Bank of England.

My noble friend Lord Rodney raised the question of user dealers. The Crown Court will be required to impose a confiscation order on any trafficker convicted by that court but small-scale user dealers will often be dealt with by magistrates' courts which will not have confiscation powers. Where, however, a user dealer has trafficked on a sufficiently large scale to warrant trial at the Crown Court, it is right that he should be deprived of the full extent of his proceeds, at least to the extent that he still has them or equivalent assets available.

The growing menace of international drug trafficking has been called the most serious peace-time threat to our national well-being. A recent report by the Home Affairs Select Committee of another place referred to the indescribable despair, terror and squalor caused by the mis-use of hard drugs in the United States. Indeed, adequate words to describe the evil of drugs in any country defeat even the most assiduous browser through Roget's, or any other, thesaurus. In the United States, the drug trafficking industry now ranks in money terms second only to the motor industry. We cannot and dare not be complacent about the threat that the drugs menace poses for the United Kingdom. We must make every possible strong and determined effort, to use the words of the noble and learned Lord, Lord Denning, in his powerful speech, to intensify law enforcement against drug traffickers by attacking their profits and by preventing the laundering of those profits. This Bill will give the police, Customs and the courts one more effective mechanism to this end by enabling confiscation to play a central role in our strategy against drugs trafficking. I am delighted that it has your Lordships' support. My Lords, I commend the Bill.

On Question, Bill read a second time, and committed to a Committee of the Whole House.