HL Deb 26 April 1995 vol 563 cc1011-20

9.4 p.m.

Lord Chesham

My Lords, I beg to move that this Bill be now read a second time.

When I was asked whether I would take this Bill through your Lordships' House I thought that it would have some humourous reflection on my Antipodean past. I am not certain that that was not so. However, crime, and organised crime in particular, is one of the greatest menaces facing this country and the international community generally. Therefore, I am proud to have this opportunity to take forward a Bill which impacts so directly on all forms of serious crime.

This House is justifiably most grateful to the honourable Member for Exeter, who was lucky enough to be successful in the Private Member's Ballot, for bringing forward the Bill in another place and for piloting it so skilfully and successfully through that place. If a real impact is to be made in the war against crime there must be determined action on many fronts. The enforcement agencies must have the investigatory powers that they need to bring offenders to justice. The courts must be able to impose tough prison sentences where appropriate and, equally importantly, strong powers of confiscation must be available to deprive criminals of the proceeds of their crimes.

The Bill addresses the investigatory and confiscatory elements of the problem. There is the clear moral imperative that crime must not pay and must be seen not to pay. There is also the deterrent effect of confiscation. Criminals will not relish the prospect of a long prison sentence if they have no nest-egg to look forward to on their release.

Additionally, there is an increasingly and worryingly important practical element to confiscation: the need to stop professional and organised criminals from reinvesting their profits in ever more lucrative criminal operations and activities.

The Bill amends Part VI of the Criminal Justice Act 1988, which already provides the courts with the power to confiscate the proceeds of all serious offences, other than drug trafficking and certain terrorist offences which are dealt with in separate legislation. The necessity for such amendment is that Part VI of the Criminal Justice Act 1988 has not worked effectively to deprive criminals of their proceeds. All too often we read reports in the media about criminals who have flouted the law and managed to retain large sums of money accumulated from crime. The same depressing picture is painted by the Government's own statistics which show that in the financial year 1993–94, only £265,600 was realised by confiscation orders under Part VI of the Criminal Justice Act 1988. By way of comparison, some £5.3 million was realised from drug trafficking confiscation orders for the same period.

The amount confiscated barely scratches the surface of the profits which are being made from crime, other than drug trafficking; for example, from crimes such as the trade in pornography, fraud, corruption and from forms of theft, such as car rigging, from which we know millions of pounds are being made. Something must be done to reassure the public that criminals are not being allowed to get away with the proceeds of their crimes.

I stress that the fundamental principle of confiscation orders under the 1988 Act, as amended by this Bill, remains intact. An order can be made only following a conviction. Broadly speaking, the Bill extends to crime generally the more effective confiscation scheme currently applicable to drug trafficking, subject to a number of important safeguards to which I shall turn in due course. It provides more effective powers from the start to the finish of the confiscation process, from specialised powers for the police and Customs at the investigative stage to more effective confiscation procedures in the courts and improved enforcement of confiscation orders once they have been made.

I should like now to deal with the main provisions in some detail. The first of the two key provisions of the Bill is contained in Clause 1. I should like to draw your Lordships' attention to the changes effected by the clause to the Criminal Justice Act 1988. It contains two very important changes to that Act. First, the courts are obliged to make a confiscation order in the full amount of the defendant's benefit or the amount of realisable property available for confiscation, where that is less.

I am afraid that there is some evidence, referred to in the Home Office report on which this Bill is based, that the courts have not always made a confiscation order even in cases where one was clearly merited or has made an order in an amount lower than the defendant's benefit from crime. I do not believe that it is acceptable for the legislation to permit a defendant to retain any of the proceeds of crime.

The obligation on the courts as to the amount of the confiscation order would be reduced only in the circumstances in which the court is satisfied that a victim of any relevant criminal conduct has instituted or intends to institute civil proceedings against the defendant in respect of any loss, injury or damage sustained in connection with that conduct.

The second important change is that it will now be possible for the courts to make a confiscation order under Part VI of the Criminal Justice Act 1988 for less than £10,000. Until now, criminals have known themselves to be secure from such an order if it appears that they have benefited from crime to the tune of less than £10,000 or have retained less than £10,000 worth of their ill-gotten gains. That was always an artificial threshold. I am sure that your Lordships will welcome this change. There will undoubtedly be cases where a confiscation order in an amount lower than £10,000 is appropriate.

At present, Part VI of the Criminal Justice Act 1988 enables the courts to confiscate only the proceeds of any offences of which a person has been convicted, thus including the proceeds of any offences taken into consideration by the court in the same proceedings. That is the root cause of the weakness of the confiscatory powers in the 1988 Act and explains why so little has been confiscated since the Act came into effect in 1989.

The difficulty is that in many cases the offences charged and for which there are convictions represent only a minute proportion of those actually committed by the offender. For example, it is an offence to produce one pornographic video. A pornographer may be producing thousands of videos per month but when he is arrested, he will probably be charged with only a few offences by way of specimen counts. The consequence is that the court can confiscate only the proceeds of the specimen offences which represent only a very small proportion of the criminal's true profits. That is wrong and the fundamental purpose of the Bill is to correct that situation.

The drug trafficking legislation overcomes the difficulty of multiple offences by enabling the court to assume that the property which a defendant holds or which has passed through a defendant's hands in the previous six years is the proceeds of crime. The defendant is then required to account for its lawful origin, otherwise an amount equal to the assumed proceeds may be confiscated.

Those provisions were regarded as quite radical when they were first proposed a decade ago. But they have since worked well, and fairly, in practice in relation to the drug trafficking legislation. I am convinced that those provisions should be extended so that they can be used against crime generally. The relevant provisions are to be found in Clause 2.

Because the Bill bites on acquisitive crime generally, Clause 2 takes a slightly different approach from that to be found in the drug trafficking and terrorism legislation. Clearly one would not wish the strong powers encompassed in Clause 2 to be brought to bear in trivial cases and the Bill incorporates a number of safeguards to prevent that from happening. First, under drug trafficking legislation, the court has no option but to make all the assumptions set out in that legislation in respect of a defendant's property. Under the Bill, the court will have the discretion as to whether it makes one or more assumptions—or, indeed, any at all—in a particular case.

A second important safeguard is that the court will only be able to make the assumptions where the prosecutor tenders written notice that the case is an appropriate one for them to be made. The third safeguard is that offenders appearing before the courts for the first time and convicted of a single offence are explicitly excluded from the powers. The assumptions will arise under the Bill where the defendant has a previous conviction of an acquisitive offence, or is convicted of two or more acquisitive offences in the present proceedings.

Those vital provisions were examined in detail in Committee in the other place. I have to say that the general feeling was that the Bill as originally drafted was over-cautious. For example, it was suggested in Committee that the courts should be required to make the assumptions as in the drug trafficking legislation. In the event, that particular proposal was not taken forward, but Clause 2 was amended.

In its original form, Clause 2 enabled the assumptions to be made if the defendant had been convicted of four or more acquisitive offences in the same proceedings— a figure reflecting the number of sample charges which frequently appears on the indictment. That threshold was felt to be too high and the number of offences for which a person must be convicted has been reduced from four to two.

That is the heart of the Bill. I have spoken at some length to the first two clauses and so I shall address the remaining clauses more briefly, which I am sure will be to everyone's relief, although they contain some very interesting and useful measures.

As I mentioned, the Bill provides more effective powers from the beginning to the end of the confiscation process; that is to say, from the initial investigation into the proceeds of crime to the enforcement of the confiscation orders. Although the new investigative powers are to be found towards the end of the Bill, it may be convenient for your Lordships if I deal with them before the other important provisions as, in practice, the investigative process obviously precedes confiscation.

The police and Customs will, in most cases, wish to carry out a financial investigation into whether a person has benefited from crime, or into the extent of any proceeds of crime and their whereabouts. Clause 11 enables them to obtain by means of a production order issued by a circuit judge any relevant material, such as bank records, to assist them in such an investigation. That power is already available in the drug trafficking legislation. Until now, the enforcement authorities have had to rely on powers provided by Schedule 1 to the Police and Criminal Evidence Act 1984. From the point of view of asset tracing, the new clause represents a considerable improvement on the powers in the 1984 Act because it will enable material to be collected at a very early stage of a financial investigation.

Clause 12 also emulates the drug trafficking legislation in enabling our enforcement agencies to obtain a search warrant at an early stage of a financial investigation. Clause 13 will enable materials to be obtained from government departments under circumstances where it is currently only possible to do so in the case of drug trafficking. Taken together, those new powers represent a very useful package. I know that they will find strong favour with financial investigators in particular.

I have already spoken about the confiscation process itself, so I shall move on to the effect of the Bill on the enforcement of confiscation orders made under Part VI of the Criminal Justice Act 1988. At present, the service of a term of imprisonment in default of payment of a confiscation order expunges the order and the defendant is no longer required to pay the order. In effect, the defendant is provided with a choice between paying the order or serving a term of imprisonment. In many cases, that term would be served by a person who is already serving a substantial term of imprisonment anyway. That defeats the whole purpose of confiscation: there should not be any option between paying or not paying.

Therefore, Clause 8 of the Bill allows the confiscation order to be enforced regardless of the fact that the defendant has served a term in default of payment. Clause 9 also tightens up confiscation order enforcement by preventing criminals from benefiting from delaying payment and thus drawing interest on their ill-gotten gains. Clauses 6 and 7 allow the prosecutor to return to the court within six years of the defendant's conviction to obtain a revaluation of the confiscation order where new evidence comes to light to show that the defendant's benefit was greater than previously thought.

Clause 14 was added to the Bill in another place. It remedies a defect in the Prevention of Terrorism (Temporary Provisions) Act 1989 and the Criminal Justice (International Co-operation) Act 1990 by making it quite clear that a restraint order may be obtained from the High Court in this country in advance of a restraint or forfeiture order being made in a country overseas. It is clearly very important that in terms of international co-operation swift action should be available in this country to prevent a criminal from dissipating his ill-gotten gains.

In conclusion, this Bill narrows the gap between measures currently available to confiscate the proceeds of drug trafficking and the much more limited powers available in respect of other, equally lucrative, crimes. So wide a gap is not defensible, and that was certainly the view of honourable Members on all sides in the other place. As some noble Lords will be aware, the reception accorded there to this Bill was particularly warm, and I firmly hope that your Lordships will see it in a similar light. I beg to move.

Moved, That the Bill be now read a second time.— (Lord Chesham.)

9.20 p.m.

Lord Harris of Greenwich

My Lords, we support this Bill. I do so without a great deal of difficulty because I was involved in the earlier debates which we had in this House on the measure to empower the courts to confiscate the assets of convicted drug smugglers. Indeed on that occasion, like the noble and learned Lord, Lord Denning, I did not think that that measure went far enough. Subsequently there have been some improvements to that legislation which I welcome.

Since then we have also had the 1988 Criminal Justice Act which enables the courts to seize the proceeds of criminal activities of people convicted of other indictable offences. As the noble Lord, Lord Chesham, has said, this Bill goes significantly further than the 1988 Act. It imposes a duty on the court, on the application of the Crown Prosecution Service, to determine whether a defendant has benefited from a course of criminal conduct, and if so, to decide whether it is appropriate to make a confiscation order. This can be done only—as the noble Lord reminded us a few minutes ago—where there have been convictions for previous relevant offences, or where the defendant has been convicted of at least two in the current proceedings. That is fine as far as we are concerned. But having said that, I want to ask two questions of the noble Baroness because, with great respect to Sir John Hannam and the noble Lord, this is a Home Office Bill, drafted by Home Office lawyers and the parliamentary draftsmen. I welcome that because I would certainly not necessarily be quite so enthusiastic about a genuine Private Member's Bill dealing with issues as complex as those which are set out in this measure.

The questions which I want to put to the noble Baroness concern two particular areas. First, there is the issue of monitoring and the guidelines. The colleague of the noble Baroness in the House of Commons, Mr. Maclean, told the House of Commons on 31st March that the Home Office intended to be closely involved with the CPS in the formulation of the guidelines. Apparently, the prosecution authorities are to be asked to monitor the kind of cases that are to be dealt with under Clause 2 of this Bill. I welcome that, as I do Mr. Maclean's statement of 31st March, when he said in another place that the Government do not want the powers to be used in trivial cases.

It would clearly be foolish in the extreme to spend an immense amount of public money on CPS fees and those of other lawyers and accountants in order to secure the seizure of a few hundred pounds' worth of a defendant's assets. But if we are to ensure that ill-judged decisions are not taken by, say, a rather junior and inexperienced prosecutor, what undertaking can the noble Baroness give us about the manner in which these decisions will be taken within the Crown Prosecution Service? As the noble Baroness may be aware, we were given clear assurances on this question when we discussed this precise issue, in reality, on the Bail (Amendment) Act which was a Private Member's Bill which came from the House of Commons and to which we devoted quite a significant amount of time. We had to dispose of a number of formidable difficulties while discussing the Bill.

That particular Act gives a prosecutor the power to require a defendant to be held in custody for a limited period until a judge has determined the prosecutor's appeal against a magistrates' court decision to grant bail. On the instance of the prosecutor, a person can, in those circumstances, be held in custody, notwithstanding the provisional decision of the magistrates' court to give him bail.

On that occasion assurances were given on behalf of the CPS that such decisions would not be made by a prosecutor who was not adequately experienced. If we are to avoid misjudgments being made as a result of this legislation, can a similar undertaking be given today? In other words, can we be sure that the people who make the decision to make an application of this character have substantial prosecutorial experience behind them?

On the general question of monitoring, how precisely is this to be done? Will it simply be a review by senior management, or is it intended to have a limited research programme? Perhaps the noble Baroness will deal with that matter when she replies to the debate in a few moments.

Secondly, I want to turn to the last sentence of the Bill's explanatory memorandum. Here it is stated: The Bill is not expected to have any effect on public service manpower". That is a remarkable statement. In my view, it does not happen to be an accurate statement. The term "public service manpower" must include the police. The noble Lord, Lord Chesham, gave an indication of the way in which the police would approach the matter as a result of the Bill and the substantial inquiries that would take place. As I indicated, I am not opposed to the Bill; I am in favour of it. However, to say that it will have no effect on public service manpower is manifestly nonsensical, unless it is argued that public service manpower does not include the police.

On a number of occasions there will have to be significant police inquiries, just as there have been in relation to drug trafficking offences. I have had an opportunity to talk to a number of police officers who have been involved in following up cases where drug traffickers have been convicted. I am aware of the immense amount of work which has to be done in order to recover some of those assets. It is quite obvious that the burden of work in these cases can be substantial.

That being so, how can we be told that there is no effect on public service manpower? It would be better to say bluntly that there is an effect, because I regret to say that when many police officers see this Bill there will be derisive laughter at the suggestion that it will have no effect on their resources. Therefore, I very much hope that the noble Baroness will deal with this question, because, as I indicated, having seen the amount of work that is involved in tracking down the assets of drug traffickers, I am clear that there will have to be a significant amount of work in relation to following up the people who have been convicted and where applications have been made as laid down by the Bill.

On this particular point, I fear that there is a temptation for all governments of all political persuasions to minimise the additional calls on resources when they discuss legislation which they favour. I very much hope that that experience will not be repeated in relation to this piece of legislation.

I have made it clear that I am firmly in favour of the Bill. I believe that it is highly desirable, but I should like answers to the points that I have made.

9.30 p.m.

Lord McIntosh of Haringey

My Lords, the Opposition are totally in favour of the Bill and so I do not need to detain your Lordships long. We are grateful to the noble Lord, Lord Chesham, for introducing it in this House. I can confirm that the only interventions made from Opposition Benches in another place were in support of the Bill and the principles underlying it. There was one exception. There was considerable irritation on the Opposition Front Bench about the filibustering tactics of three Conservative Back-Benchers who were not particularly opposed to the Bill but were determined to see off another Private Member's Bill which was to follow. They therefore took up Committee sessions for two-and-a-half hours with utterly irrelevant amendments which were a complete waste of parliamentary time. I do not say that simply in criticism of behaviour in another place. That would be improper. I say it simply in the hope that a comparable experience will not befall your Lordships.

The only point that I have to make about the Bill is in confirmation of what the noble Lord, Lord Harris, said. It is a Home Office Bill. It follows a Home Office report. It has been drafted by the Home Office and parliamentary draftsmen. It seems to me an abuse of the procedures of this House that the very scarce parliamentary time available for Private Members' Bills in another place— there is less restriction in this House—should be taken up by Bills for which the Government themselves should be taking responsibility. I regret that it was necessary for the Bill to come to us in this way rather than as a government Bill, as it should be.

Nevertheless, the intentions underlying the Bill, and I am sure the drafting of it, are an advance on the Criminal Justice Act 1988. I hope that the provisions will achieve real benefits, although we must remember that only 2 per cent. of crimes result in convictions before the courts. Therefore the potential scope of the Bill is significantly limited. However, in so far as it will serve a useful purpose, as I believe it will, we support the Bill.

9.31 p.m.

Baroness Blatch

My Lords, this has been a short but interesting debate and I wish to put on record at the outset that the Government are strongly supportive of the Bill. As has already been said, it is a Government-backed Bill. I am most grateful to my noble friend Lord Chesham for taking us so clearly and painstakingly through the details of the Bill. That has relieved me of the duty of repeating what he said.

The Bill takes forward proposals contained in a Home Office report published in 1992. The report in question was the second report of the Home Office Working Group on Confiscation, an interdepartmental working group established in the wake of the 1989 Home Affairs Committee's inquiry into drug trafficking. The working group's first report, published in May 1991, reviewed the operation of the Drug Trafficking Offences Act 1986 and made a number of recommendations for improvements. Those were taken forward in the Criminal Justice Act 1993 and ultimately consolidated in the Drug Trafficking Act 1994, which came into force earlier this year.

The working group's second report examined Part VI of the Criminal Justice Act 1988 and made a series of recommendations and proposals for amending that legislation, many of which are now being taken forward in this Bill.

As your Lordships will see, the Bill is the product of long and methodical preparation. First, the drug trafficking confiscation legislation was reviewed and amended. Then the all crime confiscation legislation in Part VI of the Criminal Justice Act 1988 was reviewed, and a similar process of amendment is under way in this Bill. In this sense, the present Bill rounds off, and provides the culmination to a legislative process that goes back a decade.

The Government are grateful to my noble friend Lord Chesham for agreeing to take forward this important measure. From the outset, the confiscation legislation has received wide support on all sides of the House. As my noble friend mentioned, this latest Bill was well received in another place, and I am grateful to noble Lords who have similarly given their support to the Bill this evening.

In his opening remarks, my noble friend expounded the main provisions of the Bill in some detail and I shall not detain your Lordships with a repetition of them. I would, however, pick up briefly his reference to the universal threat posed by organised crime. The provisions in the Bill which provide the enforcement agencies with new investigative powers have been drawn up specifically, like their predecessors in the drug trafficking legislation, so that they can be used here on behalf of agencies carrying out financial investigations outside this country. In this way, though it is not immediately obvious, the Bill will make its contribution to international co-operation against crime. I hope, more generally, that authorities overseas will study the Bill very carefully. Many of its provisions might provide a model for others.

It has been mentioned that this is a Private Member's Bill and it is important for me again to put on record that the Government brought forward a number of major criminal justice initiatives in recent years, not least the Criminal Justice Acts of 1991 and 1993 and last year's Criminal Justice and Public Order Act. The latter was rightly regarded as a measure of somewhat gargantuan proportions and the Government took the view, as a result, that a further criminal justice Bill in the present Session of Parliament should be avoided, if at all possible. It so happened that the provisions which now form the basis of the Bill were finalised in readiness for a criminal justice Bill this year, had there been one. The choice was between bringing them forward at a later date and thus delaying them, or finding some other way of enacting them. The Private Member's ballot offered a way forward and we must all be grateful to Sir John Hannam for choosing the Bill over and above the many other competing measures which he will no doubt have considered. I make absolutely no comment about his speech in another place.

I emphasise that the provisions of the Criminal Justice Act 1988 have not acted so as to deprive criminals of their ill-gotten gains as effectively as the Government had hoped. That point was made by my noble friend Lord Chesham. The Bill contains powerful measures to rectify the shortcomings in that Act. The criminals will find it much more difficult to accumulate and enjoy ill-gotten gains once the Bill comes into force. That is something which will be welcomed, not just by your Lordships but also by the public.

The noble Lord, Lord Harris, referred to manpower. The Drug Trafficking Act 1994 which came into force on 3rd February 1995 no longer obliges the court to make a confiscation order, unless the prosecutor asks for one to be made. Fines will be imposed which will have a substantial effect on the police and court costs. Those savings will be used to operate the new confiscation hearings. If the noble Lord wishes to ask anything further on that, perhaps we can correspond later.

Lord Harris of Greenwich

My Lords, of course I accept what the noble Baroness said. She is entirely right. The point I was making referred to the last sentence of the explanatory memorandum. We are not talking about costs in the normal sense but about manpower resources. The memorandum states that there will be no effect on manpower resources but, as I said a few moments ago, manifestly that cannot be true. The police will have to carry out inquiries and investigations. If they did not, there would be no purpose in having the legislation.

Baroness Blatch

My Lords, I happily agree with the distinction between whether there will be increased activity and whether the activity is a neutral cost when it comes to paying for it.

As to the guidelines, my understanding is that the guidelines are being drawn up by the CPS in consultation with other prosecuting authorities. They have not yet been completed and I understand that the cost for considering confiscation is around £10,000. It is expected that the guidelines will state that a confiscation order should not generally be sought when it is likely to realise less than £10,000. That point was well made by the noble Lord. It is anticipated that such a judgment will be made by a suitable senior official in the Crown Prosecution Service. I hope that the Bill will be given a Second Reading.

9.34 p.m.

Lord Chesham

My Lords, this has been a brief but interesting debate which has achieved a certain amount of clarification. I thank your Lordships warmly for the support which the Bill has received this evening. I commend the Bill and very much hope that the House will grant it a Second Reading.

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