HL Deb 12 December 1989 vol 513 cc1214-33

2.55 p.m.

The Minister of State, Home Office (Earl Ferrers)

My Lords, I beg to move that the Bill be now read a second time. The Bill should help international co-ordination against the activities of criminals. I think it was John Donne who once said "No man is an island". Perhaps if he were around today, contemplating modern means of travel and communications, he might be tempted to say "No island is an island".

Certainly, the criminal fraternity has realised that the ability to hop from state to state and to operate across national boundaries can be turned to its advantage. Legend has it that Dick Turpin rode north furiously from London in order to try to avoid being brought to justice for a crime which he had committed. In 15 hours he had reached York. Today's criminals can fly virtually anywhere in the world in less time—and to most places in a matter of hours. Clearly, if the forces of law and order are to be able to respond effectively to the growing menace of international crime in all its manifestations, it is vital that there should be the fullest possible measure of international co-operation between them.

In recent years we have taken a number of steps to improve co-operation with other countries in the fight against crime. The Drug Trafficking Offences Act 1986 contained provisions enabling our courts to freeze and to confiscate the assets of drug traffickers. It also enables the courts to give effect to orders which are made by courts from other countries. To that effect, we have already concluded agreements or arrangements with 11 countries and more agreements are in the process of being negotiated.

The Criminal Justice Act 1988 extended these provisions beyond the area of drug trafficking into serious crime. It is encouraging that, in this aspect of the fight against crime, we have been able to offer a lead to the international community.

The second area of our law which has been changed significantly in recent times concerns extradition. The extradition provisions of the Criminal Justice Act 1988, which were consolidated into the Extradition Act 1989, modernised our extradition law. In particular, they made it much easier for us to respond to extradition requests from other countries, principally those in Europe which have a different legal system from ours. These are important and valuable changes.

The Bill now before your Lordships improves international co-operation yet further in two distinct areas. Part I is concerned with what is known as mutual legal assistance. This is the term applied to the procedures by which states co-operate with each other in the investigation and prosecution of criminal offences. Valuable means of international co-operation already exist at an informal level. Interpol, for example, performs an important function in fostering the effective exchange of information and intelligence between police forces around the world. Arrangements for co-operation between Customs services are of enormous value, particularly in the fight against drug trafficking.

The Bill will not affect arrangements such as these in any way. It is concerned instead with co-operation of a different kind—when it is necessary to use compulsory powers to obtain evidence or when court proceedings are actually under way. Over the years, there has developed a broad international consensus on what is meant by mutual legal assistance, and what kind of measures the term covers. This is contained in the European Convention on Mutual Assistance in Criminal Matters which was drawn up between the member states of the Council of Europe and in the Commonwealth scheme on the same subject.

Mutual assistance may involve providing written evidence for use in court proceedings in another country; serving judicial documents to a person on behalf of another country; making arrangements for the attendance of witnesses at hearings abroad (including those who are serving prison sentences); tracing witnesses and suspects; and searching for—and seizing—material which is required for use in overseas proceedings.

Some of those measures we can already implement. For example, we can respond to requests from other countries for help in tracing witnesses and suspects. In other areas, though, our legislation is either lacking or prevents us from responding helpfully to requests from overseas. For example, we cannot at present require people to give evidence in this country in an overseas case unless court proceedings are already pending in a foreign court. This makes it impossible for us to respond to requests from abroad for assistance in obtaining evidence as part of the investigation of an alleged offence. Without the evidence which may be in this country, it might be impossible for the overseas authorities to institute court proceedings. Yet until such proceedings have been instituted, we cannot at present provide the evidence. It is this situation that has led one overseas wag to comment somewhat ungraciously, "The United Kingdom can give us evidence in any case in which we already have evidence".

The deficiencies in our present legislation have, I regret to say, earned us a poor reputation for co-operation over mutual assistance. Our inability to assist other countries does not just damage our international reputation. It also damages our ability to obtain assistance from other countries. Many other countries are only able to provide help on a reciprocal basis—that is to say, they can help us only if we would be able to help them in a similar situation.

Our inability to give assistance to other countries has consequently meant that our prosecuting authorities have encountered serious difficulties in obtaining from overseas evidence which was crucial to cases which were being investigated in this country. Part I of the Bill will put this situation right. It fills the gaps which at present exist in our legislation, and it will enable us to seek—and to provide—the full range of assistance which is often needed.

Clauses 1 and 2 specifically make provision for summonses and other judicial documents of other countries to be served on individuals in the United Kingdom and for such documents, which are issued by our courts, to be served overseas under reciprocal powers. By virtue of Clauses 3 and 4 our courts will be able to request that evidence should be taken overseas for use here, both when proceedings have been instituted and at the investigating stage. And we shall be able to meet similar requests from other countries.

Clause 5 will make it possible for us to transfer United Kingdom prisoners abroad in order for them to give evidence in overseas proceedings or to assist with investigations there. By the same token, under Clause 6 we will be able to receive prisoners from abroad in order that they may be able to give evidence in cases here—a very important source of evidence which we have, up to now, been unable to tap.

Clause 7 enables our police to seek authority to search for, and to seize, evidence in respect of cases which are under investigation overseas in similar circumstances to those in which such powers would be available in a case here. By virtue of Clause 8 we shall be able to enforce orders which are made in overseas courts for the forfeiture of items which are used in the commission of serious offences; for example, a getaway car which might have been used in a bank robbery.

Three principles have guided the Government's approach to the preparation of these provisions. First, having recognised the inadequacies of our existing legislation, we have been determined to secure arrangements which will place us in the first rank internationally in our ability to co-operate with other countries in this most important of areas.

Secondly, we have sought to ensure that, once the measures which are proposed in the Bill have been enacted, we will be able to seek assistance from other countries to just the same extent, and in the same ways, as we are able to offer help to them.

Thirdly, we have been conscious that, however much we may wish to assist other countries, we cannot ask Parliament to make greater powers available on behalf of overseas authorities than are available to our own police or prosecution authorities in domestic cases.

I think that the result of these three principles has been to produce a Bill which I hope will receive the support of your Lordships. If the Bill is enacted in due course, the provisions which are contained in Part I will enable us to ratify the European Convention on Mutual Assistance in Criminal Matters. This is a step which will be widely welcomed among the international community.

I turn now to Part II of the Bill. The purpose of this part is to make the legislative changes which are necessary in order to enable the United Kingdom to ratify the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. This convention—which is known for the purposes of the Bill as the Vienna Convention—was adopted in Vienna on 20th December by a plenipotentiary conference which was attended by representatives of 106 states. On the following day, together with representatives of 42 other states, I had the honour of signing the convention on behalf of Her Majesty's Government.

The convention represents a major advance in the fight against the evil men who produce, manufacture and distribute drugs, and who thereby corrupt society. It provides a comprehensive range of measures which parties are obliged to adopt in order to penalise trafficking and to co-operate more effectively with each other in combating this, the most international of criminal activities.

The convention will come into force after 20 countries have ratified it. To date only the Bahamas, China and Nigeria have done so, although the number of countries which have signed the convention has risen to 75. There is a genuine desire on the part of the international community to bring the convention into force at the earliest possible date. In the meantime, while they are preparing legislation such as this, most countries are doing their best to implement the spirit of the convention within their existing law.

For your Lordships' convenience, we have prepared an explanatory memorandum which contains the text of the convention and describes our proposals. The memorandum is in the Printed Paper Office. Your Lordships will see that the convention is a very practical instrument.

The convention provides a code of criminal offences which extends the penal provisions contained in the earlier United Nations conventions on narcotic drugs and psychotropic substances so as to embrace all forms of trafficking. It also provides a framework of judicial and practical measures which are designed to facilitate the task of law enforcement agencies in detecting traffickers and their activities and in bringing them to justice. The judicial measures include confiscation of the assets of drug traffickers—a most powerful weapon which is already provided for in this country's law under the Drug Trafficking Offence Act 1986.

Comprehensive arrangements for extraditing offenders and a code of mutual legal assistance provisions are also included. The practical measures include arrangements for the controlled delivery of consignments of goods which are found to contain drugs with a view to identifying the principals who are involved in the traffic. Arrangements designed to prevent the diversion of chemical substances, which are necessary for manufacturing drugs, are also included as are measures to combat illicit traffic by sea and by mail.

The convention also urges parties to preserve and to enhance more informal measures of co-operation, especially in the areas of intelligence sharing and training, and in providing assistance to the authorities of states where drugs are produced or through which they pass on their way to other countries.

I am glad to say that our law and working procedures already enable the United Kingdom to apply many—if not most—of the requirements of the convention. There are, nevertheless, several gaps. Part II of the Bill is intended to fill those gaps. As presently drafted, the Bill makes the changes in legislation which are needed in order to enable us to implement those of the convention's requirements which relate to mutual legal assistance and to the control and monitoring of precursor and essential chemicals.

I have already described the mutual legal assistance provisions. I will, if I may, describe the precursor chemical provisions in a moment. There are, however, several other areas where legislation is needed in order to enable us to ratify the convention. First, we need to extend the circumstances in which handling the proceeds of drug trafficking is an offence.

Secondly, the court must be empowered in certain circumstances to order the uprating of orders for the confiscation of the proceeds of drug trafficking. Thirdly, there must be power to authorise the boarding and searching in international waters of vessels which are suspected of being engaged in drug trafficking; and, fourthly, we need provisions for the extradition of suspected drug traffickers where no general extradition arrangements exist.

I regret that it has not been possible to include those provisions in the Bill as introduced. The Government had originally planned that this would be a short Bill designed merely to make the changes in respect of mutual assistance which appear in Part I.

We subsequently decided, and I hope that your Lordships will agree, that it would be prudent to take the opportunity of this Bill to make the necessary changes in order to enable us to ratify the Vienna Convention. Those are unfortunately technically very difficult issues, and I am afraid that the preparation of the necessary clauses has proved a more complex task than we had anticipated. We were therefore faced with the difficult decision of whether to leave these provisions out altogether, and thereby delay ratification of the convention, or to proceed with a Bill in the form before your Lordships, in the knowledge that Government amendments will be required to make it complete.

We decided on the latter course, and I hope that your Lordships will think that we were right. I acknowledge that it is not an ideal way to proceed, and I hope that your Lordships will acquit me of any discourtesy to the House in producing a Bill in such a fashion. We have, though, attempted to minimise the inconvenience for your Lordships by the preparation of the memorandum on the Vienna Convention, which describes in some detail the legislative changes which we shall be proposing in response to it. I hope that that document, together with the amendments themselves, which I hope to table in the next few days, will help your Lordships to see what we have in mind.

Perhaps I may say a word or two about the material relevant to the Vienna Convention, which we have been able to include within the Bill; that is to say, the provisions relating to the control of precursor and essential chemicals which appear in Clauses 11 to 14. The substances, which are listed in Schedule 2, comprise two separate groups. The first is precursors which are essential chemicals for the manufacture of certain controlled drugs. The second is other chemicals which are used as reagents or solvents in the manufacturing process; because many of those chemicals are widely used by industry, it is impracticable to control them strictly by, for example, a licensing system.

Since 1971 we have, in the United Kingdom, operated a voluntary system whereby companies which manufacture and supply these chemicals have been encouraged to draw to the attention of the police and of the Home Office drugs inspectors details of any suspicious orders or transactions. The information which has been provided has led to the detection of many clandestine laboratories in the United Kingdom and overseas. We are most grateful to the industry for its co-operation. Because the system has worked well, we wish to use it as a basis for the procedures which are needed to implement Article 12 of the convention.

Clause 11 makes it an offence for any person to manufacture a substance which is specified in Schedule 2 or to supply such a substance to another person where he knows or suspects that the substance is to be used for the unlawful production of any drug which is controlled under the Misuse of Drugs Act. It also provides a procedure, which is exercisable by Order in Council, whereby substances may be added to or deleted from Schedule 2 or transferred from one table to the other.

Clause 12 establishes a regulation-making power (which is backed by criminal sanctions) to enable the enforcement authorities to obtain from the chemical companies the intelligence information which they need to trace clandestine laboratories. The regulations will also provide for documentation, record-keeping and the labelling of consignments.

Clause 13 applies certain provisions of the Misuse of Drugs Act 1971 in relation to offences which are committed under Clauses 11 and 12. For example, it will provide enforcement officers with powers to enter premises and to demand the production of records and stocks of scheduled substances.

Clause 14 extends the definition of "drug trafficking" contained in the Drugs Trafficking Offences Act 1986 and the corresponding Scottish legislation so as to include the offence which is provided by Clause 11.

If your Lordships give the Bill a Second Reading, we shall table the amendments, together with descriptive notes, to give effect to the additional convention provisions as soon as possible. In the debate on the loyal Address in another place, the Leader of the Opposition signalled that the Bill was one which he thought his party would be able to support. In doing so, he demonstrated the degree of consensus which exists on the importance of fighting international crime and drug trafficking, and, if I may say so, I believe that that is very important.

The Bill is indeed a measure of the importance which Her Majesty's Government attach to co-operating internationally in the war against those who have come to be called "the drug barons". We played a leading role in the negotiations which led to the adoption of the Vienna Convention, and we are active participants in the United Nations and European drugs fora.

Next April we shall be hosting in London a conference called "The World Ministerial Summit to Reduce the Demand for Drugs and to Combat the Cocaine Threat". That important conference will meet under the chairmanship of my right honourable friend the Home Secretary. The opening ceremony will be performed by my right honourable friend the Prime Minister. She will be joined for that occasion by President Barco of Colombia and the Secretary-General of the United Nations, Senor Perez de Cuellar. We very much hope that that conference will have a practical outcome, and that it will prove to be yet another important success in the battle against the terrible scourge of drugs.

The Bill is, I hope, an uncontroversial one and one which I trust will command support from all sides of your Lordships' House. It is a simple measure. It will not solve the problem of international crime, but it will be one more important weapon in our armoury in the fight against it.

I started my speech with a reference to Dick Turpin. Perhaps I may end with him too. Dick Turpin rode to York to avoid being brought to justice. He failed. He was brought to justice. As your Lordships will no doubt recall, he was hanged at York in 1793 for horse stealing. In this country, at least, drug traffickers may not find themselves suffering quite such a controversial and disagreeable penalty as did Dick Turpin, but the Bill will, I hope, make it just that much harder for today's criminals, however far and fast they flee, to evade justice. I commend it to your Lordships.

Moved, That the Bill be now read a second time.—(Earl Ferrers.)

3.17 p.m.

Lord Mishcon

My Lords, the noble Earl the Minister with his, as ever, attention to lucidity, was gracious enough to let me have a copy of the memorandum with regard to the Bill to which he referred. I am deeply grateful to him for also supplying me with Notes on Clauses. I hope that I have responded correctly to that courtesy by giving him notice of the various questions which arise from a perusal of the Bill. Let me at once say what I believe is superfluous: that all conceivable co-operation will come from these Benches on matters of criminal investigation and trials on an international basis. All conceivable co-operation too will come from these Benches, as I believe it will from every section of your Lordships' House, when it comes to combating what I can only refer to as the murderous trade of drug trafficking.

One word, if I may, before we look at Part I. It is brought into the same measure as drug trafficking, but deals with international arrangements with regard to criminal matters generally. That is all right on this occasion because the matters referred to in Part I are, as I see them, generally acceptable. However, I believe it is a rather dangerous precedent to have a Bill dealing generally with criminal evidential matters and other matters of that kind, together with a measure—even if it be in a separate part of the Bill—dealing with offences which the House regards as deeply objectionable and dangerous.

The reason I say that is that we can be tempted, because of our hatred of the trade of drug trafficking and our anxiety to bring to justice those who traffic in drugs, to pass into our general criminal law matters which should be specific to drug trafficking. I refer to unusual measures which we have taken in our statutes up till now to deal with that menacing trade.

In these days of international crime it is extremely important that we should be seen as the country that offers co-operation and in return receives co-operation in order to apprehend those who deserve to be brought before criminal courts. We have no difficulty at all in dealing with that aspect of the matter.

However, some questions arise. As I understand it from a Home Office discussion paper on international mutual assistance in criminal matters, it was suggested—indeed recommended—that there should be a central authority which would act as a clearing house for the receipt of formal requests going one way or the other. I, and I imagine other noble Lords, should like to know whether that central authority idea which is so necessary, as we see it, will be created. If so, what measures have already been taken to create it? If the central authority is to be set up can we have confirmation that assistance on evidentiary matters, the taking of testimony and so on, will be available to the defence as well as to the prosecution? That is particularly necessary when we deal with questions of tracing evidence where those who act for the defence are in as much difficulty in trying to see that justice is done as those who act for the prosecution.

Will those who are arrested in this country for offences committed abroad be able to receive the benefit of legal aid? It is obviously just that they should, if we are taking part in the arrest and in sending over the results of search warrants and the arrest. Will they be entitled to legal aid? That applies I suppose not only to those who are subject to arrest, but to those who will be potential witnesses as a result of the international procedures and the taking of evidence from them. Will they be properly advised or have available to them legal advice under our scheme?

Are we quite sure that we too will receive mutuality on such matters? Will British subjects abroad receive the legal assistance and legal aid that we ought to secure for those who are in foreign countries and who will to some extent have their liberties curtailed or their responsibilities in law made graver as a result of the procedures under the Bill?

My next question is this. In the case of destruction orders, what happens if mistakes are made? What happens if a mistake is made on one of those and property is wrongly destroyed, as it turns out, as a result of a request or an order from a foreign land? What happens if a mistake has been made regarding an arrest or a search warrant? Is compensation payable? If so, by whom? Will there be an undertaking by a foreign country that compensation will be paid by it if a mistake has been made? Or will it fall upon the mercy, compassion and sense of justice of our own Government?

I turn now to Part II. As your Lordships have heard, the Bill enables us to ratify the Vienna Convention. To look at the gravity of the matter with which we are dealing in the second part of the Bill, I turn to paragraph 20, page viii, of the report which has just been made by the Home Affairs Committee. It is the Seventh Report of another place, Drug Trafficking and Related Serious Crime. Perhaps noble Lords will allow me to read a short part of that report. Paragraph 20 says: The National Drugs Intelligence Co-ordinator estimated that there is at least £1,800 million derived from drug trafficking in the United Kingdom. In its written memorandum, the NDIU— that is the abbreviation for this co-ordinator— noted that such vast amounts of money circulating within the legitimate banking system may have a destablising effect on smaller financial institutions. The NDIC also indicated that, despite the Drug Trafficking Offences Act 1986, the United Kingdom continued to be a major centre for money laundering. Indeed, he said that the United Kingdom was 'regarded by the United States, Canada and some others as an offshore banking system'. These comments give added importance to our discussion of the effectiveness of legal measures against money laundering in section V below". I do not think that I have to quote anything other than that in order to accentuate the serious dimensions of the problem within the United Kingdom. I ask this question not only of the United Kingdom and its Government but of the whole of the United Nations in dealing with urgent matters of this kind. I wonder why there are these dreadful delays. Your Lordships may share that wonder. It was in 1984 that the United Nations General Assembly dealt with the international dimensions which they regarded as being most serious, and instructed the commission to prepare a draft convention. I repeat, that was in 1984. In August 1987—it took three years—the first draft was circulated. The plenipotentiary conference to which the Minister referred took place in Vienna in December 1988. That was well over a year after the first draft. The first draft was not circulated until three years after the setting up of what I would call the emergency resolution and instruction.

As your Lordships have heard, this convention only becomes effective some 90 days after the deposit of the 20th instrument of ratification, and only three countries have ratified. The United Kingdom is not yet one of them, but presumably will be if this Bill is carried into an Act. In 1984 and in 1989–1989 is just passing away—the United Nations declared this as an urgent international matter. I ask the Minister what is wrong with the machinery in the United Nations which allows a matter of this international urgency still to await effectiveness in the sense that ratification is there only on the part of three countries at the end of 1989, and yet 20 countries have to ratify before this measure becomes effective.

It is true that we have been effective in the legislation that we have passed so far regarding the Misuse of Drugs Act 1971 and the regulations passed under that Act, and the Drug Trafficking Offences Act 1986. I ask the Minister with deep respect—he knows I always have deep respect for him—that with the draft convention before the United Kingdom some time ago and with our own experience of having passed two Acts dealing with drug trafficking, are we not entitled to expect that by this time our own government would have been able to decide what offences to put into Part II of the Bill in order to obtain effective international co-operation? Instead of that, the Explanatory Memorandum states at paragraph 1.2: The amendments to give effect to the remaining provisions which require legislation will be tabled very shortly". The Minister said there was some difficulty in wording these offences, but here we are on Second Reading giving approval, as we undoubtedly shall, to a Bill where vital matters are not before us but will be tabled after Second Reading. I shall not repeat the dates involved because I do not want to sound like a gramophone record. However, if I am starting to sound like a gramophone record, the needle is scratching a rather painful matter and it is a matter which at least deserves to be answered. I ask the Minister why we do not have a full Bill in front of us.

In case your Lordships feel there is nothing very vital in the amendments to be put before us, I must quote from the report of the Home Affairs Committee of another place, to which I referred before. I hope your Lordships will forgive me if I read from the report. I wish to mention particularly paragraph 80 and some subsequent paragraph. Paragraph 80 states: The difficulties in securing convictions for money laundering offences raise the question of whether changes to the law are required. In the light of the dangers in Britain being perceived in North America as 'an offshore banking system' referred to by the NDIC, we asked the Bank of England and the Committee of London and Scottish Bankers how they believed the law against money laundering could be strengthened. We were extremely concerned that neither body, with their considerable combined expertise of the financial world, were able to propose any changes to the law in response to the scale of the threat facing the financial system". I wish to ask the Minister whether there is any more co-operation yet. Are the Government as disappointed as the committee of another place was at the lack of co-operation and practical ideas? Paragraph 82 states: In any case, amendments to the Drug Trafficking Offences Act 1986 will be required to enable the United Kingdom to ratify the 1988 UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. The opportunity could be taken in framing the amending legislation to introduce other desirable amendments to the law in relation to drug trafficking. One possible change would be a shift in the burden of proof". I shall not read any more because the recommendation is that we do not alter the burden of proof. However, I shall now quote from paragraph 83 that states: The possibility of a significant but less controversial change was drawn to our attention by the US Customs Service during our visit to the United States. They pointed out that in the United States the crime of money laundering involved concealing the source or origin of money derived from unlawful activity, whereas in British law the offence has to be traced to a particular unlawful act. This fact is the cause of some of the difficulties in the prosecution of persons for money laundering offences referred to in paragraph 79 above". The evidence was given to the Home Affairs Committee quite a time ago. The United States representations were made quite a time ago. Will this offence be introduced in the Bill, and why is it not in front of us on Second Reading?

3.37 p.m.

Lord Mancroft

My Lords, I rise with some trepidation to find that I am the only Back-Bencher who has been rash enough to put his name down to speak. I am however delighted that the noble Lord, Lord Harris of Greenwich, is speaking as I was somewhat fearful that I would be the only slice of ham sandwiched between the oratorical giants: the noble Lord, Lord Mishcon, and my noble friend Lord Ferrers.

I commend the Government for the speed with which they plan to insert in this Bill the necessary clauses which enable us to join with our friends and allies in further hampering the financial laundering activities of international drug traffickers. This shows the seriousness with which the Government view the problem. I noted too that last year about £11 million was confiscated. That is of course encouraging. However, Detective Superintendent Todd at the Central London Drug Squad told the all-party committee on the misuse of drugs in March this year that official estimates of the value of illegal drugs coming into this country in 1988 was, as the noble Lord, Lord Mishcon, said, about £1.85 billion. He said that the cost of drug-related crime in London and the South-East was running at about £1.2 billion each year. That is after 10 years in which drug squads have increased in size and budget; in which Customs officers have more than doubled in number; during which officers have been stationed in Pakistan, India and South America; and in which the International Drugs Intelligence Unit has been set up.

The conclusion is an obvious one. We live in a demand-led society. I have read—although I was not around to verify it—that it was possible to buy the very best French brandy in London throughout the entire course of the Napoleonic Wars. Times of course have not changed. If there is a demand for a commodity, whatever the obstacles placed in the way and however illegal the commodity may be, someone will supply that commodity.

Our American friends have learnt that lesson and we must learn it too before it is too late. The only way to deal with the drug problem is to try to cut demand. That means providing treatment for existing addicts and education and prevention programmes to deter new ones. In the USA there are now 8,000 treatment centres, and they produce results. In Britain there are 25. I know a little about them because I am a trustee of one and a director of another. There is also a hotch-potch of largely ineffectual detoxification centres and, within the National Health Service, some old-fashioned psychotherapy units which do not work.

The Government must realise that the drug problem is not in Colombia or Pakistan or hidden in onshore or offshore bank accounts. It is here at home, in our cities, towns and villages. We shall not deal with what President Bush has called the greatest threat to Western civilisation in the twentieth century by changing the international banking laws.

The forthcoming conference mentioned by my noble friend is to be welcomed. But what we need is specialist treatment centres, specialist counsellors and specialist teachers; and we need them now.

3.41 p.m.

Lord Harris of Greenwich

My Lords, we on these Benches welcome this Bill unreservedly. Both conventions, which the Bill will enable us to ratify, are of central importance in the battle against international crime and in particular against the sophisticated criminals involved in the illicit narcotics industry.

The Bill is also welcome for another reason, which was touched on by the noble Lord, Lord Mishcon. It gives Parliament the opportunity to discuss what progress has been made since the passage of the Drug Trafficking Offences Act 1986.

No one who has had the opportunity, as I have in the relatively recent past, to look at the drug situation both in the United States and in Colombia could doubt the gravity of the situation for the whole of Europe. This is not a unique problem for the United Kingdom.

Not only do cocaine and heroin destroy thousands of lives, but the profits generated by that huge industry are used both to threaten and to corrupt law enforcement officers. We have seen the consequences recently in Colombia, where many men and women in the law enforcement community have been murdered. Judges, policemen, soldiers and their wives and families have been killed by representatives of that massive industry. Unhappily, others have succumbed to blackmail or financial inducements. The power of the drug traffickers is so overwhelming and their arrogance so complete that fairly recently they offered to pay off a substantial proportion of the Colombian national debt if they were left alone.

In the United States, where the scale of the problem remains infinitely more serious than in Europe, a large and powerful law enforcement organisation has been established to counter the activities of the drug traffickers. Yet during a recent visit to the United States, where I had the opportunity to discuss the matter with a number of senior police officers and representatives of the Federal Government, I found that few believed that they were winning the battle. In Europe too there is very little evidence that we are yet succeeding.

Consider for a moment the scale of the problem faced in the United Kingdom. The heroin and cocaine seized by Customs and Excise in the first nine months of 1986 had a street value of £41 million. The following year, 1987, the value was £72 million, and in the first nine months of this year the value of heroin and cocaine seizures came to £117 million, a rise of well over 50 per cent. in two years.

But of course Customs intercept only a fraction of the illicit drugs destined for the United Kingdom market. In the United States, Customs estimate that they succeed in intercepting about 10 per cent.; others believe that that is a fairly significant overestimate. Let us assume for a moment that we intercept in the region of 10 per cent. There is not a great deal of evidence to suggest that we intercept any more. That means that so far this year drugs—heroin and cocaine—with a street value of approximately £1 billion have entered the United Kingdom. That demonstrates the immense resources available to the criminals involved in the industry. It is in that context that we are discussing this Bill this afternoon.

I propose to discuss two matters today—that touched on by the noble Lord, Lord Mishcon—namely, the report published last Thursday of the House of Commons Home Affairs Committee—and some of the issues which arise directly from the Bill.

I recognise that the Government will require time to consider the Home Affairs Committee's recommendations. However, as the noble Earl will realise, a number of them will have direct implications for this Bill. Others raise significant questions concerning the operation of the Drug Trafficking Offences Act 1986. Without that, we should not be in a position to ratify the Vienna Convention.

When that Bill was debated in this House I welcomed it, as did the noble Lord, Lord Mishcon. I believe that there was unanimous support for the Bill from all quarters of the House. It was an innovatory piece of legislation and problems were bound to arise. But the scale of those problems is deeply disturbing.

I find it a matter of concern that although the 1986 Act makes confiscation mandatory after any conviction in a Crown Court for drug trafficking—the noble Earl, Lord Ferrers, referred to that as a poweful weapon, and I agree with that description—according to the criminal statistics for 1988 in only one case out of every six (in 539 cases out of 3,469) is such an order made. Why is that so? I find that a quite extraordinary statistic. It means that last year the new law was ignored by the courts in 83 per cent. of the cases that came before them. That is a matter of significant concern which I hope will be an issue that will be discussed between the Home Secretary and the Lord Chancellor.

Secondly, I think we must all be very disappointed that until May this year only some £22 million had been frozen by the courts, of which £11 million was confiscated. Yet as the noble Lord, Lord Mishcon, reminded us a few moments ago, the National Drugs Intelligence Co-ordinator estimates that the drug traffickers' assets in the United Kingdom amount to £1,800 million. In other words, up to May we succeeded in confiscating less than 1 per cent. of those assets. In my view that is a deeply worrying figure.

Clearly, in the context of that situation a great deal remains to be done, and speedily. Yet so far there appears to be a depressing degree of complacency in the banking community, to take just one example, about our existing arrangements. The Home Affairs Committee said, as the noble Lord, Lord Mishcon, reminded us, that the difficulties in securing convictions for money laundering offences raised the question of whether changes in the law were required. However, as we were reminded, when those issues were put to them neither the Bank of England nor the Committee of London and Scottish Bankers felt able to give any positive responses.

The Home Affairs Committee said: If bodies such as the Bank of England and the Committee of London and Scottish Bankers are as passive as appears to be the case in responding to the significant threat facing financial institutions from money laundering, the Government must take the initiative". The Home Affairs Committee has asked the Government to require the Bank of England to examine the scale of the threat to the banking community and to recommend any legislative action that may be required. I very much hope that we shall have an early indication that the Government are prepared to ask the Bank of England to take on that responsibility.

There is another matter concerning the Drug Trafficking Offences Act which requires urgent attention. As the noble Earl will be aware, that legislation carried with it the strong support of the police service. Unhappily, however, it was passed without any consideration of the implications for police resources. According to the Home Affairs Committee's report there are now 330 police officers engaged in full-time work on drug profit confiscation, many of whom have been involved in long and complex international investigations. This has become a major resource burden for the police service; yet all the money confiscated by the courts goes to the Consolidated Fund. The situation in the United States is quite different. There, the individual law enforcement agency responsible for the arrest of drug traffickers secures a substantial proportion of their assets.

I understand the problems associated with the procedure. They were discussed in a recent booklet by Professor Michael Zander who argued against a precise replication of American procedures into English law for reasons which I accept. But both he and the Home Affairs Committee have suggested the establishment of a central fund into which the proceeds of the seizure of drug traffickers' assets should be paid.

I am sure that that is right. It makes no sense whatever to ask the police to carry the full cost of immensely expensive operations and to allow the Treasury simply to pocket the proceeds. It is also damaging in another way. Only a few years ago, the United States authorities wanted to pay the Metropolitan Police a large sum of money which had been confiscated by the American courts as a result of work done primarily by Metropolitan Police officers. The Americans could not do that because machinery did not exist to allow that money to be accepted in this country. How can that possibly be right? As a result not only of the Drug Trafficking Offences Act but also of enactment of the legislation that we are discussing today, those incidents are bound to recur unless we change our procedures. Again, I hope that the Government will look at this difficult question and accept the recommendation of the Home Affairs Committee.

I turn to a similar question relating to the Bill. What is the true cost to be? As I indicated, I welcome the Bill unreservedly. But why does the financial memorandum deal only with public service manpower and exclude the implications for the police? We are told that Part I of the Bill will probably require another 22 civil servants and cost £2.2 million. Those civil servants will presumably carry out the work of what is described in all recent mutual assistance arrangements as the "central authority", which in this country I understand to be the Home Office. I hope that the Government will tell us what the additional call on police resources will be. It is essential that that should be done, particularly in the light of what has happened following the passage of the 1986 Act. I hope that the noble Earl will be able to help us with that point.

I come now to one particular question dealt with by the noble Earl which puzzles me and also, I suspect, the noble Lord, Lord Mishcon. The Home Affairs Committee indicated clearly that, if we were to ratify the Vienna Convention, it would be necessary to amend the Drug Trafficking Offences Act; yet, when one examines the Bill, there is no reference to that. The noble Earl said that he would bring forward amendments to deal with the question, and I welcome that. However, perhaps I might ask him whether, if he is to do that—this is a matter of some importance to those of us who will be involved in the Committee stage of the Bill—he proposes, as I assume he will, to amend the Long Title of the Bill. Obviously, if amendments are to be made, a number of us would like to consider the possibility of other amendments to the 1986 Act. I should like to refer the noble Earl to the publication to which I referred by Professor Zander who has made a number of suggestions as to how the Act could be improved. I very much hope that the Home Office will look carefully at his proposals between now and the Committee stage of the Bill after Christmas.

We have made some progress on the matters dealt with in the Bill. For instance, the Drug Trafficking Offences Act, despite all the difficulties surrounding it, represents a substantial improvement in our statute law. There has been a substantial reinforcement of regional crime squads as a result of the creation of drug units. There has also been the welcome appointment of police officers and Customs representatives at a number of British embassies abroad. The Bill will significantly improve the chances of bringing before the courts some of the major criminals responsible for organising this industry. As such, it deserves a warm welcome.

3.56 p.m.

Earl Ferrers

My Lords, I am grateful to noble Lords for the welcome that they have given to the Bill. I had hoped that this would prove a relatively uncontroversial matter, albeit a very serious one. As usual, I am immensely grateful to the noble Lord, Lord Mishcon, for the courtesy which he always extends to me by letting me know in advance the points about which he is concerned. Anything to do with drugs is extremely important, not only nationally but internationally. Everyone is concerned to see that we deal with the drugs problem as best we can.

The noble Lord, Lord Harris of Greenwich, said that we are not on top of the drugs problem. I am grateful to him for continually reminding us of the dangers of drugs. However, if one looks back 10 years or so at the warnings and forebodings about what this country would be like in 10 years' time—in other words, now—and we then look at the present position, we see that, although there is no room for complacency, we are not in the horrible position that some people had forecast. That is not by accident. It is because people—this goes for the police and all officials—have made every conceivable effort to ensure our not getting into the position that some people predicted. That does not mean to say that we can ever afford to sit back and think that the position will remain the same; it will not. The international efforts of those whom we call drug barons will continue with greater force in the future.

I am grateful to my noble friend Lord Mancroft for referring to the need for specialist treatment centres. The Government fully accept the need for more to be done in that area. Over the past two or three years, we have increased each year the funding for improved treatment and prevention measures not only in this area but also in relation to preventing HIV disease and AIDS. In the Autumn Statement, my right honourable friend the Chancellor of the Exchequer announced £2.3 million of new money in 1990–91 to set up local drug prevention teams which will operate in selected areas. The international conference, which we intend to hold next year, will also place emphasis on that work.

The noble Lords, Lord Mishcon and Lord Harris, referred understandably to the Home Affairs Select Committee. We welcome the Select Committee's report. It is very helpful; it is a constructive analysis of a serious and pressing problem; and it contains a lot of information and suggestions. Your Lordships will understand that the report has been available for only a week. I hope that both noble Lords will acquit me of any discourtesy if I say that the Government would like time to digest its implications. The Home Office will be considering the detailed recommendations of the report in consultation with other departments. We will publish a formal response as soon as possible.

Action has already been taken in some of the areas covered by the report. The Bill which we are discussing today includes provisions to enable the United Kingdom to ratify both the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the European Convention on Mutual Assistance in Criminal Matters.

Both the noble Lord, Lord Mishcon, and the noble Lord, Lord Harris, were understandably concerned about money laundering. The noble Lord, Lord Harris, said that only £11 million has been confiscated. It may be helpful to put your Lordships in the picture. Confiscation orders have been made totalling more than £13 million, and more than £22 million has been restrained. This demonstrates the success of the 1986 Act since it was introduced in 1987. The further amendments which we intend to make under Part II of the Bill will strengthen the money-laundering provisions even further and should help to reduce the amount of money which is laundered through the financial centres in this country. The noble Lord, Lord Harris, said that it was only a small amount that we had confiscated. That is true, but it is at least a start. I hope that those sums of money will increase.

The noble Lord, Lord Mishcon, referred to the central authority and asked what was being done about that. The intention is that when the Bill is implemented there will be established within the Home Office a unit which will be known in the international legal assistance vernacular as a central authority. This authority will be responsible for acting as a channel through which requests for assistance, both incoming and outgoing, will pass.

In practice the central authority will exercise on a day-to-day level the powers which, under the Bill, are to be conferred on the Secretary of State with the exception of the power to issue a warrant under Clause 5 or Clause 6 concerning the temporary transfer of prisoners for the purpose of giving evidence. Action by the central authority will, in all cases, be initiated by receipt of a request from a court, tribunal or other central authority overseas or from a court or prosecuting authority in this country.

The provision in the Bill which is most likely to be of use to the defence in a case in the United Kingdom is Clause 3, which provides for assistance to be sought overseas for use in United Kingdom proceedings. By virtue of Clause 3(2) it will be open to a defendant in any case in which proceedings have been instituted to apply to a Justice of the Peace to issue a letter of request. If such a letter is issued it will then be sent to the central authority acting in the name of the Secretary of State for onward transmission to the appropriate court or other authority in the country in which the evidence requested is to be sought.

The noble Lord, Lord Mishcon, asked whether the central authority had already been set up. Preparations for the establishment of the central authority are under way. It will have a job to do once the Bill is enacted, but the nucleus of the central authority exists already. It will perform functions relating to the enforcement of the drugs confiscation orders which are made by overseas courts.

The noble Lord, Lord Mishcon, also asked about legal aid. There is nothing in the Bill which provides for individuals in this country to be arrested for offences which are committed abroad. I believe that that is the point about which the noble Lord was concerned. The existing law governing arrest with a view to extradition will remain unaltered. Anyone who is arrested in this way is eligible for legal aid both in connection with obtaining legal advice and assistance and with representation in any hearing in a United Kingdom court. If the proposals in Clause 5 of the Bill are approved our intention is to amend prison standing orders to make it clear that it will be open to a prisoner to seek legal advice before consenting to be transferred abroad under the clause.

The noble Lord also asked about reciprocal provision for mutual assistance from abroad. Countries which have ratified the European convention on mutual assistance will have committed themselves to giving us assistance. The Commonwealth scheme on mutual assistance encourages Commonwealth countries to provide similar help. We cannot require other countries to do likewise, but we hope that they will. Our ability to help them should make this more likely.

The noble Lord referred to confiscation. The spirit of Section 26 of the Drug Trafficking Offences Act 1986—which provides for the enforcement of foreign restraint and confiscation orders—is to strengthen co-operation between ourselves and other countries with a view to depriving drug traffickers of ill-gotten gains. Including bilateral arrangements with other countries, it is implicit that we recognise judicial proceedings of these countries. But, as a safeguard, we have included grounds for refusal of any request—including refusal in the national or other essential interest—in all such agreements so far concluded.

In a domestic case Section 19 of the 1986 Act provides for compensation in certain well-defined circumstances. It covers the case where there was misconduct in the investigation or prosecution of the offence which gave rise to the making of a confiscation order. In the Drug Trafficking Offences Act 1986 (United States of America) Order 1989—which was debated both in this House and in another place—we did not apply Section 19 to actions taken under the Act in relation to American proceedings because the conduct of such prceedings is inevitably a matter for the American authorities. In most cases civil action would be available through the courts of the country which conducted the trial. We will want to reflect very carefully on whether Section 19 should be applied blanket-fashion in respect of all the enforcement requests which we shall be receiving through bilateral agreements.

The noble Lord, Lord Mishcon, also asked why there were such dreadful delays. I can tell him that the drafing of the convention created the most massive technical problems. It had to take into account the requirements of many different systems of law throughout the world. These difficulties became very apparent in the working groups which examined the draft and indeed in the plenipotentiary conference which met at the end to adopt the convention. It was generally regarded as a tribute to the determination of the international community to achieve what it did that these problems were overcome. It took a long time. I can understand the noble Lord's frustration that it was not done earlier.

The United Kingdom takes the view that there is no point in ratifying a convention until there is in place all the legislation and procedures which are necessary to implement it fully. The convention was signed last December; therefore this is the first parliamentary session in which we are able to introduce a programmed Bill. In the meantime, as I have described to your Lordships, we have been at the forefront, having implemented most of the convention. This has been fully recognised by the international community. I hope therefore that the noble Lord will not think that we have been unduly laggardly.

The procedure is that we in the United Kingdom first put our own legal house in order. We then ratify the convention. Others sometimes ratify the convention first and then sort out their own legislation afterwards. Ratification is done by an order in council. Then the instrument of ratification is deposited with the Secretary General of the United Nations, because it is a United Nations convention.

The noble Lord, Lord Harris, referred to confiscated assets and asked why these could not be given to the police. That is a paraphrase of what he said. Confiscated assets are at the moment paid into the Consolidated Fund from which government expenditure generally—including very substantial support for anti-drugs effort—is financed. We are currently considering the detailed arrangements whereby a proportion of sums confiscated from drug traffickers as a result of international agreements might be used directly to strengthen the United Kingdom's enforcement and other efforts to curb drug misuse. The noble Lord will also realise that, on a practical basis, although giving to police forces the funds that they have secured is prima facie attractive, it is a difficult way to finance police forces because one never knows when they will be successful and when they will not.

The noble Lord also asked what the cost of the provisions in the Bill was to the police. Provisions in Part I of the Bill will require 13 additional police posts, three for the Metropolitan Police, four for Interpol and six for provincial forces. Those are all included in the total of 22 which is referred to in the Explanatory Memorandum. Part II should not result in the need for any additional police.

I am grateful to your Lordships for the welcome that you have given to the Bill. I hope that the sooner we can ratify the European Convention on Mutual Assistance in Criminal Matters, and are able to co-operate fully with the Council of Europe and our Commonwealth partners, the better. I hope that the Bill before your Lordships will have a smooth passage both here and in another place. I am grateful to noble Lords for the support that you have given it today. I commend the Bill to the House.

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