Proceeds of Crime Bill (Hansard, 22 April 2002)

HL Deb 22 April 2002 vol 634 cc10-79 10

§ 3.6 p.m.

§ Lord Rooker
My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Rooker.)
On Question, Motion agreed to.
House in Committee accordingly.
11 [The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 agreed to.
Schedule 1 [Assets Recovery Agency]:

§ Baroness Buscombe
moved Amendment No. 1: Page 263, line 34, at end insert— ( ) For the purposes of sub-paragraph (3), there shall be no more than 10 performance targets for any financial year and these targets shall relate specifically to the functions of the Agency. The noble Baroness said: While the issue of performance targets set each year by the director of the assets recovery agency was the subject of considerable debate in another place, we felt it important to revisit this question and probe the Minister on whether the Government have thought more about it—particularly given that our concerns met with significant sympathy from the Government's own Back-Benchers.
We would like reassurances from the Minister that this open-ended desire for performance targets in Paragraph 8(3)(b) of Schedule 1—targets which need not relate to the director's objectives—will not in practice mean a plethora of targets that realistically cannot be met and indeed might compromise the entire function of the assets recovery agency. We are keen to ensure that the director will focus on a discrete number of realisable targets that genuinely contribute to the agency's effective operation. More importantly, we hope that that operation concentrates on the recovery of assets as opposed to economic targets. Although it would be nice to think that the assets recovery agency could pay its own expenses, that is not the aim of the exercise. I beg to move.

§ Lord Rooker
As the noble Baroness said, this issue has been discussed in another place—as have many other issues. The Bill was in another place for a long time and many of the issues which we shall be discussing have already been discussed there. To avoid repetition, I shall not make that point again. The Government are re-examining many of those issues.
The issue of agency targets has in fact been discussed on two previous occasions, and I understand that an amendment identical to Amendment No. 1 was tabled then. Although it is too early to say with any certainty what the targets will be, it might help our deliberations if I were to set out our broad thinking on the issue. Measures of the agency's output are likely to include targets relating to the number of confiscation orders obtained by the agency and the value of those orders; the number of successful civil recovery actions and the amounts recovered through that route; the number of successful taxation cases and the amounts recovered through that route; international co-operation over confiscation orders; the performance of the centre of excellence; the agency's financial performance, volume of output, quality of the service and efficiency and so forth; and the agency's involvement with the priorities of the Secretary of State and other government priorities.
12 We do not want to restrict the director's ability to draw up targets in terms of the number he may set or, indeed, to what they should relate. I fully accept the concerns expressed about a huge number of targets. However, at the end of the day in this case it is for the director to decide how many targets there should be according to his priorities and what he thinks he will be able to deliver. Frankly, if the director thinks that he should have 15, 20 or 30 targets, he should be able to put that number into his annual plan. We also anticipate specific targets being set in relation to Northern Ireland, which would increase the number of targets required.
The amendment would also require that the performance targets should relate specifically to the functions of the agency. The current provision requires the director to set objectives for the year but does not limit the targets he sets to those objectives. That is because he may want to set performance targets relating to functions which do not appear in his high-level objectives for the year. Paragraph 8(1) of Schedule 1 makes clear that while the director will be permitted to exercise only the functions he is given by statute, the annual plan must set out how he is to exercise those functions. In other words, it is not possible for the director to set performance targets that bear no relation to his functions. That is important because his functions are specifically laid down in the Bill.
The director will draw up his performance targets in his capacity as head of a non-ministerial department. That is not unique in Whitehall; there are several. It will be for him, with the agreement of the Secretary of State, to decide how many targets are appropriate. We should not place restrictions on the director in primary legislation.
Having given the noble Baroness an idea of the thinking behind the targets—certainly, we do not want to be prescriptive—I believe that, in the end, we should leave the matter to the director.

§ Baroness Buscombe
I thank the Minister for his response. Indeed, the fact that he has outlined some of the inclinations that underlie this clause is helpful to us. It has perhaps encouraged the Government to focus upon our concerns about a plethora of targets, which we all know from experience compromises the effective workings of any such organisation. I thank the Minister and, on that basis, beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ 3.15 p.m.

§ Baroness Buscombe
moved Amendment No. 2: Page 264, line 20, at end insert— In section 15(1) of the Scotland Act 1998 insert— (e) he is the Director of the Assets Recovery Agency"; In section 123(1) of the Government of Wales Act 1998 insert— (e) he is the Director of the Assets Recovery Agency". 13 The noble Baroness said: We believe that Amendment No. 2 is a straightforward amendment. It was suggested to us by the Law Society of Scotland. It provides for the disqualification of the director of the assets recovery agency from membership of the Scottish Parliament and the National Assembly for Wales. The Law Society of Scotland believes, and we in turn believe, that the amendment is necessary to fill the lacuna in the present drafting of the Bill. As the Bill stands, the director of the assets recovery agency would be disqualified from membership of the House of Commons and the Northern Ireland Assembly. However, there is no provision made for disqualification from the Scottish Parliament or the Welsh Assembly. I beg to move.

§ Lord Rooker
I am sure that the noble Baroness will be pleased if I say that, as was the position when identical amendments were tabled in the other place, we are in agreement with the principle behind them. Let there be no doubt about that. There is no obvious reason why the director could potentially become a Member of the Scottish Parliament or the Welsh Assembly 'while he could not be a Member of the House of Commons or the Northern Ireland Assembly. We promised in the other place that we would table amendments to the Bill in your Lordships' House if that was appropriate.
However, we have not done so because that would not be in accordance with the rationale behind the relevant provisions of the Scotland Act and the Government of Wales Act. It is worth putting on record the rationale, which was that, except as provided by the legislation establishing them, the new bodies should be left free to determine which office holders are disqualified from membership of that particular body. That is done by way of Orders in Council; in Scotland by the Scottish Parliament (Disqualification) Order 1999, and in Wales by the National Assembly for Wales (Disqualification) Order 1999.
Our view is, therefore, that the issue of disqualification from membership will best be achieved by means of amendments made to the relevant disqualification orders by the Scottish Parliament and the Welsh Assembly. That is subject to agreement by the devolved administrations that that would be desirable in the interests of consistency and political impartiality in this new important office.
I understand that the existing disqualification order for the Scottish Parliament is to be reviewed with the intention of a new order being made in good time before the next Scottish parliamentary elections in May 2003. I am able to give an undertaking that the director of the new assets recovery agency will be included in the new disqualification order when that time comes.
The position in respect of the Welsh Assembly is under consideration. It may be that disqualification is agreed in the interests of consistency. However, as the Welsh Assembly has no function in relation to crime or criminal justice—unlike the UK Parliament, the Northern Ireland Assembly and the Scottish 14 Parliament—the question of disqualification is not quite as straightforward. I believe that it is right to leave it to the Secretary of State for Wales to bring forward a draft order if he agrees that disqualification would be appropriate. In the circumstances, I invite the noble Baroness to withdraw the amendment. It is seductive, but on balance I believe that the matter should be left to the two bodies concerned. They have the means and the legal process with which to carry it out if they so choose. I have given a commitment in respect of the Scottish Parliament.

§ Baroness Carnegy of Lour
The answer given by the Minister was extremely interesting and helpful. I expect that my noble friend thinks the same; I do not know. In future can the Government consult with the devolved bodies when they are drafting Bills and such a matter arises? I can see why the Minister answered as he did. However, can the Government consult so that parliamentary time is not wasted here and in another place by having to answer such questions? Without my noble friend's question we would not have known of such matters. The Government could save themselves and noble Lords trouble. In future, would it be possible for the Government to think of that when drafting Bills and assure people of the position at Second Reading?

§ Lord Donaldson of Lymington
As a semi-outsider, I am a little puzzled. I understand why it should be a matter for the Scottish Parliament or the Welsh Assembly to decide who is eligible to become a Member. However, I am puzzled as to why it is not open to this House to decide that the director shall not apply to become a Member of either body, if, in the view of this place, it is undesirable that he should do so. That does not trespass on anyone's toes, as far as I know, except the director's.

§ Lord Rooker
I am not sure that I can reply specifically to the question asked by the noble and learned Lord, Lord Donaldson of Lymington. This is an important matter. As regards the question raised by the noble Baroness, Lady Carnegy of Lour, perhaps I may say that others will listen to what is said here on drafting. I do not know what the protocol would be if a Westminster Parliament Bill was drafted in such a way as to pre-empt a decision which was rightly one for the Scottish Parliament. As it has its own disqualification procedure, it should come under its own criminal justice system. I am all in favour of not having to repeat matters and of not wasting parliamentary time on a matter which could have been thought through before. It may be that a Bill is changed as it passes through the Westminster Parliament, which could change the rules for what is required. To pre-empt that would not make sense.
There seems to be a procedure, both in Wales and Scotland, for disqualifying from membership of those bodies someone who is in a high-profile, important public position where absolute political impartiality is required to the extent that the person shall not be a member of those two bodies. I believe that that is best 15 left to those two bodies. I shall probably need to take advice on the matter and, if need be, will write to the noble and learned Lord, Lord Donaldson, on the point that he raised.

§ Baroness Buscombe
I thank the Minister for his response. However, we would not be happy if the director could sit as a Member of the Welsh Assembly. Is it the Government's view that that would be acceptable?

§ Lord Rooker
I have made the point that this is an incredibly important position. Anyone who reads the powers in the Bill will recognise that. It is a public position. The utmost political impartiality is required. The nature of the functions of the Welsh Assembly are not the same as those of the Scottish Parliament, the Northern Ireland Assembly or the Westminster Parliament. Therefore, one must look at that narrow area. It will be for the Secretary of State for Wales to make that decision and bring forward an order if necessary. But the point is well made that, in order to show crystal-clear political impartiality, the situation might look bad, but as we all know perceptions are sometimes as important as the words in the statute.
We have the power to provide that the director should not be a Member of the Scottish Parliament or the Welsh Assembly, but as the Order in Council procedure is there we should use it. There is a process for dealing with the issue.

§ Baroness Buscombe
Having started out thinking that this was a fairly straightforward amendment, I am deeply concerned that someone could be a Member of the Welsh Assembly and at the same time hold down such an important position as the director of the assets recovery agency. However remote that possibility is, it could present an enormous conflict of interest. I also share the view of the noble and learned Lord, Lord Donaldson, that it seems grossly unjust that the Scottish Parliament and the Welsh Assembly should enjoy such freedom while we, in this Chamber, do not.
We shall consider the amendment with care. We shall most probably return to it on Report. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.

§ The Attorney-General (Lord Goldsmith)
moved Amendment No. 3: After Schedule 1, insert the following new schedule— "LIFESTYLE OFFENCES

§ Drug trafficking

§ 1 (1) An offence under any of the following provisions of the Misuse of Drugs Act 1971 (c. 38)—

(a) section 4(2) or (3) (unlawful production or supply of controlled drugs);
(b) section 5(3) (possession of controlled drug with intent to supply);
(c) section 8 (permitting certain activities relating to controlled drugs);
(d) section 20 (assisting in or inducing the commission outside the UK of an offence punishable under a corresponding law).

(2) An offence under any of the following provisions of the Customs and Excise Management Act 1979 (c. 2) if it is committed in connection with a prohibition or restriction on importation or exportation which has effect by virtue of section 3 of the Misuse of Drugs Act 1971 (c. 38)—

(a) section 50(2) or (3) (improper importation of goods);
(b) section 68(2) (exportation of prohibited or restricted goods);
(c) section 170 (fraudulent evasion).

(3) An offence under either of the following provisions of the Criminal Justice (International Co-operation) Act 1990 (c. 5)—

(a) section 12 (manufacture or supply of a substance for the time being specified in Schedule 2 to that Act);
(b) section 19 (using a ship for illicit traffic in controlled drugs).

§ Money laundering

§ 2 An offence under either of the following provisions of this Act—

(a) section 327 (concealing etc criminal property);
(b) section 328 (assisting another to retain criminal property).

§ People trafficking

§ 3 An offence under section 25(1) of the Immigration Act 1971 (c. 77) (assisting illegal entry etc).

§ Arms trafficking

§ 4 (1) An offence under either of the following provisions of the Customs and Excise Management Act 1979 (c. 2) if it is committed in connection with a firearm or ammunition—

(a) section 68(2) (exportation of prohibited goods);
(b) section 170 (fraudulent evasion).

(2) An offence under section 3(1) of the Firearms Act 1968 (c. 27) (dealing in firearms or ammunition by way of trade or business). (3) In this paragraph "firearm" and "ammunition" have the same meanings as in section 57 of the Firearms Act 1968 (c. 27).

§ Counterfeiting

§ 5 An offence under any of the following provisions of the Forgery and Counterfeiting Act 1981 (c. 45)—

(a) section 14 (making counterfeit notes or coins);
(b) section 15 (passing etc counterfeit notes or coins);
(c) section 16 (having counterfeit notes or coins);
(d) section 17 (making or possessing materials or equipment for counterfeiting).

§ Intellectual property

§ 6 (1) An offence under any of the following provisions of the Copyright, Designs and Patents Act 1988 (c. 48)—

(a) section 107(1) (making or dealing in an article which infringes copyright);
(b) section 107(2) (making or possessing an article designed or adapted for making a copy of a copyright work);
(c) section 198(1) (making or dealing in an illicit recording);
(d) section 297A (making or dealing in unauthorised decoders).

(2) An offence under section 92(1), (2) or (3) of the Trade Marks Act 1994 (e. 26) (unauthorised use etc of trade mark).

§ Pimps and brothels

§ 7 (1) An offence under any of the following provisions of the Sexual Offences Act 1956 (c. 69)—

(a) section 2 (procuring a woman by threats);
(b) section 3 (procuring a woman by false pretences);
(c) section 9 (procuring a defective woman to have sexual intercourse);
(d) section 22 (procuring a woman for prostitution);
(e) section 24 (detaining a woman in a brothel);
(f) section 28 (causing or encouraging prostitution etc of girl under 16);
(g) section 29 (causing or encouraging prostitution of defective woman);
(h) section 30 (man living on earnings of prostitution);
(i) section 31 (woman exercising control over prostitute);
(j) section 33 (keeping a brothel);
(k) section 34 (letting premises for use as brothel).

(2) An offence under section 5 of the Sexual Offences Act 1967 (c. 60) (living on the earnings of male prostitute).

§ Blackmail

§ 8 An offence under section 21 of the Theft Act 1968 (c. 60) (blackmail).

§ Inchoate offences

§ 9 (1) An offence of attempting, conspiring or inciting the commission of an offence specified in this Schedule. (2) An offence of aiding, abetting, counselling or procuring the commission of such an offence.

§ The noble and learned Lord said: Amendment No. 3 is of importance and of interest to Members of the Committee because it determines which single offences will attract the criminal lifestyle provisions and therefore the application of the assumptions in Clause 11 and its equivalents in Parts 3 and 4 for Scotland and Northern Ireland.

§ The Marshalled List is quite long. It will therefore be convenient to consider with this amendment the other amendments on Clause 75, so that we can have a wide-ranging debate on this issue.

§ Technically, the effect of the government amendments is as follows: Amendments Nos. 3 and 81 transfer the existing criminal lifestyle offences—that is to say, drug trafficking and money laundering offences—to a new schedule, to which additional offences have been added. The proposal is to introduce a new power to add or remove further offences to the schedule by means of Amendment No. 86. Clause 451 is being amended to make this power subject to the affirmative resolution procedure by means of Amendments Nos. 293 and 296. That is in accordance with the recommendation of your Lordships' Delegated Powers and Regulatory Reform Committee.

§ At the same time, Amendment No. 81 deletes the previous proposal in Clause 75(2)(c) to proceed by way of regulation. Therefore, it is a schedule plus a power by order which is subject to affirmative resolution instead of the present provision for regulations.

§ Perhaps I may say at the outset that the Government have taken a very careful approach to this exercise. We have been mindful that the Bill as presently drafted already allows for a conviction for an offence to attract the assumptions where the offence has been committed over a period of six months or where it forms part of a course of criminal conduct as specified in Clause 75(3). We have taken the approach that offences should be included in the schedule only where a single conviction for that offence can normally be regarded as indicative of a criminal lifestyle.Members of the Committee may 18 be aware that my honourable friend the Parliamentary Under-Secretary of State provided in the other place at the end of last year a list of the types of conduct which the Government were considering for possible inclusion in the schedule. A copy of that, as I think I said at Second Reading, is available in the Library of the House.

§ However, on further consideration, the Government have decided that it would not be appropriate to include some of this conduct in the schedule either because there were technical difficulties in including certain offences or because we did not think after all that they were normally indicative of a criminal lifestyle.

§ I shall first discuss which of the offences fall into that category; that is, those which have been omitted from the list. First, there is forgery of travel and other immigration documents. In the case of the forgery of travel and other immigration documents and conspiracy to defraud the Crown, the offences that currently relate to this conduct are very broad. The Government think that they will catch many offenders whom one would not normally regard as having a criminal lifestyle. Forgery offences, for example, could catch a person who forged a student card for the purpose of obtaining admission to a pub or a club.

§ Secondly, there is child pornography. Of course that is a very serious kind of crime. It may be indicative of a criminal lifestyle. It is not acquisitive but psychopathological. Most of the traffic in such material that goes on across the Internet is believed to be on an exchange or no-fee basis. The lack of an acquisitive element leads us to conclude that the offence is not indicative of a criminal lifestyle, as the term is understood in the Bill. So it has been omitted from the schedule.

§ With regard to bribery, prosecutors note that it often seems to be an isolated event related to particular and temporary circumstances. Against that background it is difficult to justify the inclusion of that offence in the schedule.

§ Similarly, insider dealing is not thought to be any more indicative of a criminal lifestyle than an offence such as theft, which is not included. It is not an activity typical of organised crime. The criminal law on insider dealing also works alongside a civil code of market conduct and rules of investment exchanges. That regime is designed to ensure that insider dealing does not occur on a systematic basis. So it is again omitted.

§ Terrorism has of course given us a great deal of food for thought. The list circulated in the other place talks in terms of including terrorist funding offences. But, on careful reflection, we have decided that it would not be appropriate to include these offences. They are very much concerned with the idea of raising funds for use in terrorism. As such, it is difficult to see how they could be regarded as indicative of the kind of offender who is involved in acquisitive crime.

§ Examination of that issue has lead to an acute awareness of the extent to which terrorists are involved in racketeering for their own benefit, particularly in Northern Ireland. The Government believe that it 19 would be wrong to overlook the evidence of their involvement in other acquisitive crime. As a result, we have been exploring which if any, offences in the Terrorism Act 2000 might justify the assumption in the case of these individuals of a criminal lifestyle. In the light of that exercise, a further amendment to the schedule will be presented for the consideration of Members of the Committee on Report.

§ So far as concerns money laundering, I should mention that in transferring the offences of money laundering from Clause 75(2)(b) into the schedule, we have decided not to include Clause 329 of the Bill—that is the acquisition, use and possession of criminal property—because we recognise that that offence is very broad and that there will be many cases where it is not indicative of a criminal lifestyle. Clauses 327—concealment of criminal property—and 328, dealing with certain arrangements, are, however, properly included.

§ I have set out—I hope that Members of the Committee do not think at too much length—the thinking on the omitted offences partly because the Committee will want to know why certain offences are not included but partly also to emphasise the cautious approach which the Government have taken to the issue. The Government are well aware of the consequences that can flow from a finding of a criminal lifestyle. For that reason, where there is doubt as to whether an offence should be specified as a criminal lifestyle offence the approach has been to exclude it. It will, of course, be possible to add offences at a later date or even remove them by means of the order-making power if the Secretary of State considers that justified and if Parliament so approves by affirmative resolution.

§ I turn now to the offences listed in the new schedule. In the main, they are self-explanatory, but I should like to make a few general comments about them. People trafficking is an issue of international as well as national concern, and I should be surprised if there were any controversy about including it in the schedule. Similarly, arms trafficking, like people trafficking and drug trafficking, is lucrative criminal conduct typical of organised crime.

§ I should perhaps add that we will need to revisit the facilitation offence in the light of the new offences in the Nationality, Immigration and Asylum Bill recently introduced in another place. If it is appropriate to specify offences in the new Bill, we shall do so.

§ The involvement of professional criminals in the manufacture and circulation of counterfeit currency and other merchandise is well known and the counterfeiting offences are included for that reason.

§ The reasoning underlying the inclusion of piracy offences—piracy in the sense of intellectual property, rather than any other kind—is similar. They are offences from which we know that professional criminals are making a handsome living. The offences are not particularly serious in sentencing terms, but we are here concerned with their capacity to generate 20 revenue for those committing them. They are not offences that are committed accidentally or in isolation.

§ In relation to pimps and brothels, perhaps I may mention that at least one large confiscation order has been made under current legislation following a multiple conviction for brothel-keeping offences. The inclusion of sexual offences as a whole reflects our desire to attack the large profits made from sexual exploitation in all its forms.

§ Finally, I should make some comment on the offence of blackmail, which was not in the list circulated in the other place but which the Government now think should be included. The label of the offence may be slightly misleading. As Members of the Committee will be aware, English law makes no distinction between blackmail and extortion. I make it clear that the target of our attention in this instance is what people commonly refer to as extortion. That form of criminal conduct is quintessentially associated with organised crime, protection rackets and paramilitary racketeering in Northern Ireland.

§ The Government believe that the new schedule is a major improvement to the Bill, and I hope that the Committee will agree. It places the criminal lifestyle regime on a more coherent, rounded footing and will expose acquisitive criminals to more effective treatment than is presently possible. We intend to propose a list of parallel offences relating to Northern Ireland and Scotland.

§ I hope that in the light of my explanation, the Committee will support the new schedule, together with Amendments Nos. 81, 86, 293 and 296.

§ 3.30 p.m.

§ Lord Goodhart
To clarify one point, would I be right to assume that where there was a single instance of insider dealing from which a substantial profit had been made, that profit could be recovered by a confiscation order on the basis of particular conduct or under a civil recovery order?

§ Lord Goldsmith
Yes, the noble Lord is entirely right. The provision does not affect particular criminal conduct; we are here concerned with offences that attract the general conduct provision and the assumptions that then apply.
We shall oppose the Motion that Clauses 88 and 89 stand part of the Bill, because they were simply a way to include drug trafficking and money laundering offences, as we now propose to do in the schedule.
Amendments Nos. 73 to 75 and 190 would prevent a confiscation order from being made following a conviction in the magistrates' court unless the offences were punishable by imprisonment. Amendment No. 74 would prevent a confiscation order from being made following a conviction in the magistrates' court unless the offences were triable on indictment. In other words, it would exclude either way offences.
The effect of Amendment No. 75 would be that when it committed a defendant to the Crown Court for confiscation, the magistrates' court would not also 21 have to state whether or not it would also have committed the defendant for sentencing under its existing powers. That might have the effect of limiting a Crown Court dealing with an offender committed to it for confiscation to the sentencing powers of the magistrates' court, even if the case were one in which the magistrates' court would have committed the offender to the Crown Court for sentence.
Many of the reasons why the Government oppose those amendments have already been covered in another place. I refer Members of the Committee to the Hansard reports of 15th November 2001 at cols. 107 to 116 and of 29th November 2001 at cols. 406 to 411. Our position on the issue is straightforward. The idea that one may exclude from confiscation any class of criminal conduct is unacceptable in principle. Apart from the practical possibility of significant proceeds being derived from some summary offending, that would be tantamount to saying that we have no objection to offenders retaining the proceeds of their crimes. If conduct constitutes a criminal offence—as summary conduct does—its proceeds should be liable to confiscation.
Indeed, the coverage of summary offending in confiscation legislation is nothing new. The Hodgson committee, whose 1984 report on the proceeds of crime and their recovery underlay the first confiscation legislation, was not only concerned with serious offending. The committee was also exercised with: contraventions of regulations that involve little or no public obloquy but where the profits made from the offence far outweigh, in many cases, any penalty exacted". Hodgson referred to: the demolition of a listed building, the felling of protected trees, the systematic overloading of vehicles and the pollution of the environment"— as— some of the ways in which huge profits are made from breaking the law". The report considered whether it would be possible to limit confiscation to serious crime—perhaps defined as offences carrying the possible sanction of a prison sentence, but rejected this view. It considered that a serious crime approach would exclude many of the profitable regulatory offences which it clearly thought should be included. I await what is said when the amendments are moved, but the Government's approach is to include any summary offence, rather than the somewhat arbitrary listing that appears in existing legislation.
I turn to the proposed deletion of Clause 70(5). The subsection is required once the prosecutor has asked the magistrates' court to commit a person to the Crown Court for confiscation because, but for that provision, it may not indicate whether it would have committed the offender for sentence under existing powers. Without such an indication, the Crown Court would be limited to the sentencing power of the magistrates' court. That would not be correct if the magistrates' court would have committed the offender for sentence in any event.
22 Amendments Nos. 82, 136 and 196 would delete subsection (2)(c) from Clauses 75, 145 and 229. In the light of the Government's approach through the new schedule, they may not be pressed. I see the noble Baroness, Lady Buscombe, nodding, so I shall wait to hear what she says about them.
I turn to Amendment No. 195, which would add to Clause 29 in Part 4 the offence contained in Sections 11, 12 or 13 of the Terrorism Act 2000. Those sections concern membership of and support for a proscribed organisation and the wearing of uniforms. I suggest that none of those are inherently acquisitive offences, and we do not support the amendments for that reason.
I turn to opposition Amendments Nos. 79, 84, 85. 135, 138, 139, 190, 194, 198 and 199. They are all attempts to water down the effect of Clause 35. I think that I have already dealt with those amendments. If I have not, I shall come back to them, when they are moved.
I should mention Amendment No. 80. It is similar to those to which I have referred. It would exclude either-way offences from the application of the assumptions. It follows from what I said that the Government view the inclusion of either-way offences as even more appropriate than the inclusion of summary-only offences. I shall give an example. Either-way offences include theft. In its judicial capacity, your Lordships' House recently upheld the making of a general criminal conduct confiscation order for over £200,000 in the case of Rezvi. He had been convicted of two counts of theft. That is the existing legislation, and we do not want to row back from that.
I apologise for taking so much time, but I hope that I have indicated why we put forward our amendments and why we will resist the other amendments in the present grouping. I beg to move.

§ 3.45 p.m.

§ Lord Thomas of Gresford
On behalf of those on the Liberal Democrat Benches, I welcome the clarification in the schedule and the adoption of the affirrnative procedure to extend the schedule at any future date.
I listened to the explanation given by the noble and learned Lord, Lord Goldsmith, relating to the other offences for which no acquisitive element cart be defined. I understand the Government's reasons for excluding those matters from the schedule. If we have the opportunity to consider the matter further, it will, I am sure, become quite acceptable. The rationale is entirely acceptable.
Particular lifestyle offences are referred to. Drug trafficking is very serious, and people trafficking is as profitable today-some say that it is more profitable than drug trafficking. I am pleased to see that it is dealt with in the schedule. Counterfeiting has always attracted substantial sentences of imprisonment. Offences relating to intellectual property can carry heavy sentences. Sentences of years are passed for counterfeiting. It is a profitable trade, and it is easily done. It involves international counterfeiting and is a 23 serious problem. I also follow the inclusion of blackmail in the terms to which the noble and learned Lord referred.
I regret to say that I do not accept the provisional explanation that the noble and learned Lord gave for resisting the amendments put forward by the Opposition. It is noticeable that all the lifestyle offences are serious matters; there is nothing trivial about them. It is a major leap from such matters to what is to be contained in Clause 75(2)(d), which refers to, conduct forming part of a course of criminal activity". Such conduct is defined in subsection (3). All that is required are convictions for three or more offences. There is no qualification.
As the noble and learned Lord said, the matter was considered in the Hodgson report. The requirement in the clause refers to—or can refer to—all summary offences, particularly with regard to Clause 70. The noble and learned Lord said that the thrust of the legislation was to deal with profitable regulatory offences that did not carry sentences of imprisonment. The sort of matters that are referred to hardly come within the concept of a criminal lifestyle. A person who chops down trees or pollutes the atmosphere can hardly be described as having a criminal lifestyle. That is where I find a problem.
There must be some targeting of resources for all the provisions of the Bill. It is expensive—in time and resources—to take people to court to obtain orders under the existing legislation. I have some experience of that, as I said at Second Reading. It is time-consuming, and one would not want to see people brought to court for an order to be made under the new legislation in respect of trivial matters. Of course, the Director of Public Prosecutions—or the court, of its volition—must decide to make such an application.
I shall not address each of the amendments in my name and that of my noble friend Lord Goodhart, but I shall say that we are trying to place some reasonable limits on the extent to which the Bill should go. Consequently, we have suggested that, for the relevant parts of the Bill, a criminal lifestyle should be defined only with reference to the commission of crime that is punishable by imprisonment. Anything less than that takes the concept of a criminal lifestyle into the realms of absurdity and would not be acceptable. It is in that regard that I speak to our amendments. We will deal with them in due course.

§ Viscount Bledisloe
I wish to make one technical—but not entirely unimportant—point and ask the noble and learned Lord one question.
Amendment No. 3 would introduce a new schedule. There would be no provision in the Bill to tell us what the schedule was for or to what it relates. Such a provision would not exist unless we were to pass Amendment No. 81. Surely, the right way in which to draft the amendments and present them to the Committee would have been to propose Amendment 24 No. 81—to introduce the schedule—first and then propose the amendment that includes the schedule itself.
I accept that it is unlikely that Amendment No. 3 will be passed and Amendment No. 81 not. However, for anyone coming to the matter fresh, it would make things difficult to have an amendment introducing an entirely new schedule with no introduction and no clue as to what it is doing before one gets to Amendment No. 81. There is no difficulty. The schedule to be inserted by Amendment No. 3 must come after Schedule 1 because it comes before Schedule 2, which relates to Clause 140. Amendment No. 3 could easily have been presented after Amendment No. 81.
The noble and learned Lord said that the offence that he had in mind was gang extortion. Will the offence cover all forms of blackmail? For example, a disappointed mistress may say to a man that unless she is sent some money, she will publish details of his misdoings in the paper. That is not a criminal lifestyle. If the clause would cover such things, is it not too wide? Should it not be limited in some way to organised and—so to speak— professional extortion?

§ Viscount Goschen
In the noble and learned Lord's introductory remarks he took care to discuss certain offences which were not to be included in the new schedule. Among those he listed that of terrorism activity and pointed to a future amendment that the Government may bring forward which would add some detail.
First, I wonder whether, at this early stage of our consideration in Committee, the noble and learned Lord can go a little further in clarifying the degree to which the Bill could be used, and should be used, towards addressing the racketeering activities of terrorist groups. Clearly a reading of the offences under "lifestyle offences" which are included within the new schedule, such as drug trafficking, money laundering and arms trafficking in particular, may lead one to consider that the racketeering activities of certain terrorist groups, particularly those within Northern Ireland, would be squarely caught. So anything further that the Minister could say at this stage would accelerate our proceedings as these matters are likely to come up on a number of other occasions.
Secondly, will the Minister accept that the list to determine whether or not a criminal lifestyle is being enjoyed by a specific individual should be used with care? It does not in fact give a definitive indication both in terms of the offences omitted—there are proper reasons why that should be so—and also on the question of degree. To take one example, I looked at the paragraph on intellectual property. Paragraph 6(1)(c)refers to, making or dealing in an illicit recording". One can envisage circumstances where someone makes a recording of a CD for their own personal use, or downloads an MP3 file from the Internet, thereby stealing someone else's intellectual property. I understand that the law is still somewhat of a grey area 25 in connection with those issues and that the person could therefore be considered as enjoying a criminal lifestyle. Will the noble and learned Lord clarify whether or not, under those circumstances, that activity would be caught and whether, on an overall basis, the Government accept that this list should be treated with care?

§ The Earl of Mar and Kellie
Will the noble and learned Lord clarify a point for me? I may well have got the wrong end of the stick on this point. Believe it or not I am going to talk about cutting down trees and I am also going to talk about intimidation, though not necessarily at the same time.
Intimidation is excluded from this provision. Is somebody enjoying a criminal lifestyle who regularly makes a habit of intimidating competitors so that they go away and the person is then able to purchase property, for example, at a lower than market value because there was no competition? Similarly, a developer may buy a site, cut down trees, improve views and, more to the point, improve site value and therefore, by acting in that, on the face of it, minor illegal way—cutting down trees without a licence—clearly acquire a lot more money as a result. Is he leading a criminal lifestyle?

§ Lord Williamson of Horton
Can the noble and learned Lord say whether, when producing this list of offences, the Government considered the issue of large-scale smuggling by organised gangs? The only reason I raise the point is that there is a considerable amount of money at issue. The Government have published figures showing a loss of revenue of £2.5 billion and therefore a large amount of money is swilling about in consequence.
I agree with the text of Amendment No. 3. I do not have any difficulty with it. But I should like to know whether or not this point was considered since it is a substantial amount of money which forms the proceeds of crime. That money goes somewhere and is not easily recovered.

§ Baroness Buscombe
I shall take this matter carefully. As the Attorney-General pointed out, a number of amendments are involved in this group and I want to be sure that I address the correct ones.
I thank the Minister for responding positively to concerns raised in another place by my honourable friends. The new schedule gives clarity and we have no doubt that it will considerably assist the assets recovery agency and the courts. The introduction of this new schedule much improves the Bill. Further, we are pleased with the important concession that all regulations made by the Secretary of State under this provision will be subject to an affirmative resolution of both Houses, in which case Amendment No. 82, which seeks to leave out Clause 75(2)(c), is unnecessary.
I was interested to hear what the Attorney-General said in relation to certain offences that are not listed. Perhaps I may refer to one in particular and use this as an excuse and an opportunity to make a plea to the noble and learned Lord. He referred to child 26 pornography, and in particular to child pornography on the Internet. We hope to hear from the Government in the near future that they will find a way to deal with that heinous crime. However, we understand that, since it is not acquisitive, this is not the proper place to deal with it and therefore entirely accept his argument on that point.
In his response to our amendment referring to the Terrorism Act 2000, we understand the Minister to say that the Government will bring forward an amendment to take account of that point. Clearly racketeering is an important issue, as mentioned by my noble friend Lord Goschen. Indeed, I support my noble friend in his request for the Attorney-General to expand on that at this stage as it is so important and will assist us through the passage of this Bill.
We agree that a cautious approach should be taken to this matter. It will be helpful to hear the Attorney-General's response to the various questions concerning the parameters of the list. We heard what the Minister had to say with regard to Amendments Nos. 74 and 75 and so we shall not be moving them. That applies also to Amendment No. 80 and related amendments.
That said, in relation to Amendment No. 83, will the noble and learned Lord respond to the proposal to prevent a finding of a criminal lifestyle solely on the basis that a single offence has been committed which lasted for a period of at least six months? In our view, that category is unduly broad and any such offences should be specified under the new schedule of lifestyle offences proposed by the Government.
I am perhaps less concerned about the parameters of the schedule depending upon the Government's response to a proposal that I shall put forward when we reach Amendment No. 13, which relates specifically to the discretion of the court. On that basis I shall not press any of the amendments we tabled following on from Amendment No. 3 and await with interest the Minister's response.

§ Lord Goodhart
Perhaps I may intervene very briefly. While I can understand and appreciate the arguments in relation to the amendments to Clause 70, which would exclude arty power of the magistrates' court to commit a defendant to the Crown Court whether it was for general or specific criminal conduct, I do not entirely agree with the noble Baroness, Lady Buscombe, that the amendments to Clause 75 are inappropriate. I agree that it would not be right to limit those to indictable offences or to either way offences. However, there are serious arguments for saying that before one can describe someone as having a criminal lifestyle they must at least have committed offences which are punishable by imprisonment. If a person has demolished a listed building without planning consent, or committed another offence which does not carry imprisonment as a penalty, perhaps he or she should be pursued for profits made as a result of particular criminal conduct or for a civil recovery order. Even if committed on more than one occasion, it does not seem appropriate to decide that that constitutes a criminal lifestyle.
27 What kinds of offence are contemplated by paragraph (e)—the offence committed over a period of six months—and why is it necessary to include those as constituting a criminal lifestyle? If particular offences can be identified, I agree with the noble Baroness that they should be listed in the schedule.

§ Lord Goldsmith
First, I am grateful for the warm welcome that noble Lords have given to the proposed amendment. I have spent a number of years in practice close to the noble Viscount, Lord Bledisloe. I am well aware of his interest in technical matters. Amendment No. 81 forms part of the same grouping; the two plainly go together. I hope he will agree that his objections, although soundly based, do not give rise to any difficulty. Noble Lords well know where we are. As long as both amendments are passed, the purpose of the schedule will be clear.
I shall deal with some of the questions and return to the main points. The noble Viscount, Lord Bledisloe, also asked about the position in relation to blackmail. He is right. Because the offence under the Theft Act is a single offence it would cover a single instance of blackmail which did not constitute extortion. As a matter of English law, in the definition of the offence, there is no way of distinguishing between the one and the other.
However, there are two important safeguards. It is important to bear them in mind when considering that case and certain other cases. First, the order will not be made save where the prosecutor asks for confiscation. One would not expect that to take place if there were a single isolated instance of an opportunistic blackmail of the kind to which the noble Viscount referred. Secondly, under Clause 11 the court always has the power not to apply the assumptions if there might be a serious risk of injustice. That is a second safeguard against the instance where there would be an isolated example which, in the court's view, did not justify the finding.
As I made clear, whether to include blackmail was not an easy decision precisely because of the point to which the noble Viscount refers. It was thought on balance that it was right to do so in order to catch the important extortion and protection racketeering type of offences.
I turn to the relationship with terrorism to which the noble Viscount, Lord Goschen, and other noble Lords referred. We need to bear in mind that Section 23 of the Terrorism Act 2000 already sets out a discrete forfeiture scheme for persons convicted of those terrorist fund-raising offences. The scheme enables the forfeiture of funds which are intended for use in terrorism and other similar property. Theoretically, there is nothing to prevent a confiscation order under the Bill in respect of the benefit generated to the defendant by the offence as well as a forfeiture order under the 2000 Act in respect of the benefit generated for the terrorist cause. Those could be made in the same proceedings. I suggest that that would give the flexibility which the authorities require.
28 The Bill does not state that terrorist fund-raising is itself a criminal lifestyle offence and, therefore, does not trigger that set of provisions. The Government have not thought it appropriate that it should trigger those provisions. It is not clear that a single conviction for terrorist fund-raising would be indicative that the defendant is likely to be living off the proceeds of crime. It indicates that he has certain ideological or other convictions and political aspirations but not perhaps that he is a lifestyle criminal. That is the thinking underlying the existing provision. The Government are likely to return to the matter on Report. If I can provide the noble Viscount, Lord Goschen, before then with further information on the detail, I shall write to him.
The noble Earl, Lord Mar and Kellie, raised two points, including the question of environmental offences. Again in accordance with Government's overall approach, the question is whether a single conviction is indicative of a criminal lifestyle. The Government would not consider that appropriate. I shall come back to the issued raised by the noble Baroness, Lady Buscombe, and the noble Lord, Lord Goodhart, on Amendment No. 83, with regard to a series of offences committed over a period of time. I hope that I have indicated that a careful approach has been adopted in putting together the schedule.
I should mention two other examples which were referred to. The noble Lord, Lord Williamson, referred to smuggling. We are considering whether to include this sort of offence. His observations were helpful. We shall make our views known on Report.
The noble Viscount, Lord Goschen, referred to the copyright offence. The relevant definition of the offence—I hope that I have it right from recollection—involves making such a recording for sale or hire; in other words, it is for commercial purposes. Therefore, the example he gives of someone making it for his or her own purpose does not fall within the scheduled offence.
I turn to Amendment No. 83 and related amendments. Those seek to delete subsection (2)(e) from Clause 75. Subsection (2) specifies that a person has a criminal lifestyle, if it is an offence committed over a period of at least six months". I suggest that most people will agree that where an offence is committed over a long period of time, and where profits have been acquired from it, it is clear that the person concerned is indulging in a criminal lifestyle. I was asked to give an example of that and the most obvious would probably be the case of a conspiracy where such conduct is often a protracted activity.
Once again—I mention the same two safeguards—the prosecutor, or the court if the prosecutor does not do so, would have to decide whether to seek such an order and it would be a matter for the court to decide whether in the circumstances of a particular case there would be a serious risk of injustice if the assumptions were applied. The Government suggest that those are sufficient safeguards to prevent injudicious use of this provision.
29 I remind the Committee—I may want to return to this point later in the debate—that the proposal in the Bill is not as tight in some respects as the present law. On the present criteria, for example, it depends whether there is one other offence in the preceding six months or two or more on the indictment in the same proceedings. We have made these provisions tighter for the purposes of consolidating and bringing the different parts of the legislation together.
In opening, I dealt with summary offences. Of course, the schedule does not include summary offences. This situation arises in circumstances where one of the other provisions—for example, the provision in relation to repeat offences—is triggered. It is important to bear that clearly in mind. Where there are repeat offences, whether a summary or an either-way offence or an indictable-only offence, the Committee may feel that that is strongly indicative of a criminal lifestyle. Again, the assumptions under the Act can be displaced. I shall return to that point. The assumptions arise only where an order is sought and the court has the ability to say that in a particular case there is a serious risk of injustice so the assumption will not be made. For those reasons the Government press Amendment No. 3 and related provisions and they continue to resist those amendments that are still being pursued.
On Question, amendment agreed to.
Clause 2 agreed to.
Clause 3 [Accreditation and training]:

§ Baroness Buscombe
moved Amendment No. 4: Page 2, line 24, at end insert— ( ) The specific functions of the Agency are to trace and investigate ownership of property where there is a reasonable belief that possession of property is unlawful due to its being derived from criminal activity. The noble Baroness said: Amendment No. 4 is grouped with Amendment No. 5, but I shall speak only to Amendment No. 4. The purpose of the amendment is to clarify the specific functions of the asset recovery agency.
Part 1 of the Bill—Clauses 1 to 5—deals with the establishment of the asset recovery agency. The establishment of the agency is intended as a measure to rationalise and to co-ordinate the recovery of assets tainted by criminality through confiscation, civil recovery, the exercise of revenue functions and the training of financial investigators.
Clauses 1 to 5 are silent as to the specific functions of the director of the asset recovery agency. Those functions are, as is said in the Explanatory Notes, to be found in other provisions of the legislation. However, it is noteworthy that the director of the agency is generally referred to only in conjunction with the existing powers of prosecutors and, in certain circumstances, the courts, to initiate, to process and to enforce confiscation proceedings. The exception is in relation to the provisions relating to civil forfeiture.
Clause 3, which sets out the duties of the director to set up accreditation and training programmes, is to be commended. Asset recovery and confiscation are complicated areas and the current arrangements have 30 suffered from a lack of expertise in the various agencies which currently deal with confiscation: the Crown Prosecution Service, the Inland Revenue, HM Customs amp; Excise and so on. One may also hope that the higher profile of confiscation and asset recovery may result in greater resources being devoted to the area. Practitioners will know that the Crown Prosecution Service and other agencies are extremely hard pressed in terms of personnel and continue to have staffing problems. I beg to move.

§ 4.15 p.m.

§ Lord Rooker
In view of the brevity of the noble Baroness I shall not use my extensive notes. The noble Baroness is right that the director's functions are not laid out in one specific part of the Bill, but they are covered. Perhaps I can give a brief rundown of them. The director's functions will be, as set out in Parts 2 and 4, to initiate and pursue confiscation proceedings against convicted defendants in England, Wales and Northern Ireland; in Part 5 to recover the proceeds of crime by bringing civil recovery proceedings in England, Wales and Northern Ireland; in Part 6 to exercise revenue functions in the United Kingdom where there is a reasonable suspicion of the presence of the proceeds of crime; in Part 8 to carry out criminal confiscation and civil recovery investigations; in Part 11 to assist overseas public authorities to identify and recover the proceeds of crime (where an Order in Council is made under Part 11 to confer such functions on the director); in Clause 3 to provide training and to set up a system for the accreditation of financial investigators; in Clause 4(2) and Clause 432 to co-operate with other law enforcement agencies; and in Clause 5 to provide advice and assistance to the Secretary of State.
I hope that that brief summary will reinforce the fact that the functions of the director are in the Bill, but they are set out in the relevant parts, bearing in mind the functions deployed. It would be otiose to restate them all in one place in the Bill.

§ Baroness Buscombe
I thank the Minister for his response. I am sorry that he did not respond positively to what we believe is a helpful suggestion. It would be nice to have the functions of the asset recovery agency up front so that anyone considering the Bill, when it is an Act, will have them in a nutshell. I entirely understand what the Minister has said. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ [Amendment No. 5 not moved.]

§ Lord Rooker
moved Amendment No. 6: Page 2, line 25, leave out subsection (2). The noble Lord said: In moving this amendment I shall speak also to Amendment No. 7. This amendment clarifies that the director can provide different classes of accreditation for different purposes to financial investigators. We want to make it explicit that Clause 3 does not provide only for a single general training and accreditation scheme for financial 31 investigators. Financial investigators can be accredited for different purposes. That is appropriate because we expect different types of financial investigators to exercise different functions under the Bill.
Parts 2, 4 and 8 of the Bill provide investigators with access to powers to restrain property and certain investigation powers. Access to those powers will be partly governed by the director. He will be able to accredit civilian investigators whom he considers, against established criteria, suitable to use the relevant powers in the Bill. He may accredit investigators to use only the powers under Parts 2 and 4, to use only the powers under Part 8 or to use all the powers given to financial investigators under the Bill.
The investigation powers for which accreditation may be granted are production orders; search warrants; customer information orders (circulars to banks requiring them to report any account held by a person under investigation); and account monitoring orders (orders requiring a bank or other financial institution to provide transaction information on a suspect account for a specified period). The latter two are new powers. The customer information order will require the authorisation of a senior officer before an application can be made. We envisage that there will be a separate form of accreditation for those who are to authorise applications. That is because the skills necessary to authorise applications are different from those necessary to make an application.
In summary, the amendment simply clarifies that civilian personnel will be able to be accredited to use the restraint powers, investigation powers or both. In addition, they may also be accredited to fulfil the role given to senior officers of authorising the use of such powers. I beg to move.
On Question, amendment agreed to.

§ Lord Rooker
moved Amendment No. 7: Page 2, line 31, at end insert— (3A) A person may be accredited—

(a) in relation to this Act;

(b) in relation to particular provisions of this Act.

(3B) But the accreditation may be limited to specified purposes. (3C) A reference in this Act to an accredited financial investigator is to be construed accordingly. On Question, amendment agreed to.
Clause 3, as amended, agreed to.
Clause 4 agreed to.
Clause 5 [Advice and assistance]:

§ Lord Kingsland
moved Amendment No. 8: Page 3, line 11, at end insert— ( ) Where there is dispute between the agencies as to the appropriate means of proceeding, the dispute shall be referred to the Secretary of State, or alternatively will be decided by a code to be drawn up by the Secretary of State prior to implementation. The noble Lord said: The purpose of this amendment is to clarify the ARA's status and function in relation to the other investigative and prosecuting agencies.
32 To us at any rate, it is far from clear how the ARA's investigative functions and its functions in confiscation proceedings, will relate to those currently being exercised by the confiscation units of other prosecuting agencies. For example, Part 2 of the Bill, which deals with confiscation, makes clear that the director, the prosecutor or the court may initiate and maintain such proceedings.
In these circumstances one wonders whether there will be turf wars and, more importantly, how it will be decided which agency carries out the proceedings and enforces any judgment. For example, what happens if the prosecutor wishes to move to confiscation but the ARA does not? What about the reverse position?
Again, Part 10 of the Bill relates to the disclosure of information from the director and specifically refers to the disclosure of information to a prosecutor in the exercise of his or her functions under Parts 2 to 4 of the Bill. Will the ARA carry out investigations and pass on information to the prosecutor? If this is so, what are the implications for the existing confiscation and financial investigation units in the prosecuting agencies?
In general, one would wish for greater detail in relation to the actual functions of the ARA and its relationship with existing prosecuting agencies—in the exercise of their main functions in restraint and confiscation proceedings in particular and, to a lesser extent, in civil asset recovery proceedings. I beg to move.

§ Lord Rooker
As regards the points which the noble Lord, Lord Kingsland, has raised, it may be worth saying at the outset that the Bill provides that the director will share the confiscation functions of the law enforcement and prosecuting authorities in England, Wales and Northern Ireland. That will allow those authorities to ask the director to handle the financial investigation and confiscation aspects while they concentrate on the criminal investigation and proceedings.
Clearly, there are issues as to how the shared order will work in practice and that is recognised. It will be a key element in the memorandum of understanding drawn up between the agency and the enforcement and prosecuting authorities. That memorandum will serve to prevent turf wars because, with a new organisation, one has to be very careful to guard against such events being generated almost by accident.
The director will receive most of his cases from the law enforcement and prosecution authorities in the first place. He will need to keep in close contact during his investigations. As I have said, we envisage that there will be a memorandum of understanding. Guidance will be issued. It is intended to help the director. It will be for him to decide how to best exercise his functions.
I am not sure what the noble Lord, Lord Kingsland, said as regards doubts about the functions of the assets recovery agency. There is no question but that will be a formidable operation. Looking at the Bill and the 33 Notes on Clauses, one can see that it is a very important innovative step in terms of dealing with crime in this country.
As regards England, Wales and Northern Ireland, decisions will have to be made as to when a case should be referred to the director for possible civil recovery action because the possibility of taking forward a criminal prosecution has been ruled out.
We have made clear that decisions by law enforcement agencies as to whether or not to continue with a criminal investigation or to prosecute will be taken without reference to the possibility that civil recovery or taxation might subsequently be taken by the agency. Decisions will be taken in accordance with the normal evidential and public interest tests. We believe that that is the right approach because it will be a matter for the director to decide which of the cases referred to him by law enforcement authorities should be taken forward by him in the light of his objectives and resources.
I can confirm that the existing agencies are already considering which cases might be referred to the director once the agency has been established. But a considerable amount of detailed work, including that involved in preparing the memorandum of understanding, will have to await the appointment of the director. In the light of my comments I hope that noble Lords will appreciate that we do not see a need for the type of arrangements envisaged in the amendment. We actively oppose any role for the Secretary of State in taking what should be operational decisions.

§ Lord Kingsland
I thank the Minister very much indeed for his reply. Will the Committee have the opportunity to see the text of this memorandum of understanding at some early stage in the proceedings, perhaps at Report stage? The Minister also mentioned guidance, but by whom, to whom and about what? Perhaps the Minister can enlighten the House about that and give some idea as to when we might see a draft of such guidance.

§ Lord Rooker
We shall make sure that we publish everything that we possibly can. The guidance will come from the Secretary of State. It will be open to him to consult widely on it. It naturally follows that that he will want to consult the law enforcement and prosecuting authorities. I shall take advice on the memorandum and come back to the noble Lord on that matter. I do not know whether it will be in the public domain, although I suspect that most of it will be. I do not know the answer to that question, but I shall take advice and return to it later.

§ Lord Kingsland
To the extent that the director will be exercising his discretion to do or not to do something on the basis of the memorandum, will the Minister agree that it is important that it is in the public domain?

§ Lord Rooker
As I said earlier, I do not know whether all of it will be in the public domain. I said that 34 we would put everything we possibly can into that area. I indicated that the director will be guided by the number of cases he takes on as to the importance he gives to the matter. In addition, there is the question of his own resources. One does not know the number of cases which will go to the director. Consideration is now being given to the kinds of cases to be referred to him. We are some way down the road towards the agency being set up. The cases he takes up will depend on his resources. It will be for the director to explain in due course the decisions which he has taken.
I return to what I said earlier. We will put everything we can into the public domain, but I cannot say that the whole of the memorandum will be included. I do not know.

§ Lord Kingsland
I am most grateful to the Minister for that further reply. He will understand that we will wish to return to this matter at Report stage. I accept that the noble Lord will do his best to provide the Committee with further information. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.

§ 4.30 p.m.

§ Lord Brooke of Sutton Mandeville
moved Amendment No. 9: After Clause 5, insert the following new clause— "INVESTIGATIONS: ANONYMITY OF AGENCY STAFF AND OTHERS (1) Where the Director is satisfied that there is good reason to believe that the conduct of an investigation or the safety of a nominated officer might be prejudiced if the identity of that officer were known, he may determine that the nominated officer shall have the benefit of anonymity. (2) For the purposes of this section, a nominated officer is—

(a) a member of staff of the Agency, or

(b) an accredited financial investigator.

(3) Where, apart from this section, a nominated officer may be required for the purpose of exercising his functions in the conduct of an investigation to produce or show any written authority or otherwise to identify himself, a nominated officer with benefit of anonymity shall—

(a) not be required to produce or show any such authority or to so identify himself for the purpose of exercising his functions, and

(b) be accompanied by a constable who shall, on request by a person affected, identify himself as a constable and state that he is accompanied by a nominated officer.

(4) Where a nominated officer with benefit of anonymity exercises his functions in the conduct of an investigation in writing, such function shall be exercised in the name of the Agency and not in the name of the nominated officer with benefit of anonymity. (5) Any document relating to proceedings arising out of an investigation where a nominated officer had benefit of anonymity shall not reveal the identity or address of a nominated officer with benefit of anonymity. (6) For the purposes of this section, "investigation" means any investigation specified in section 336 other than a money laundering investigation. 35 The noble Lord said: It may be helpful if I describe the provenance and pedigree of the two proposed new clauses which stand in my name on the Marshalled List. They were tabled in another place on behalf of the Commons Select Committee on Northern Ireland Affairs, which is in the midst of an inquiry into the financing of terrorism in Northern Ireland which it has not yet concluded. The committee did, however, publish an interim report on 14th February in advance of the Report stage of the Bill in the Commons, on 26th and 27th February. The interim report described the committee's visit to Dublin as part of its inquiry because it felt that the visit and its findings had relevance to this Bill.
During that visit, committee members made the acquaintance of a similar agency to the assets recovery agency envisaged by the Bill; namely, the Criminal Assets Bureau, set up in the Republic in 1996, with a staff including officers of An Garda Siochána, Customs officers, tax inspectors, social security officials, professional lawyers and forensic accountants. Over the past five years, the bureau has recovered 21 million punts' worth of assets—aficionados can translate that figure into euros—through proceeds of crime actions. It has made social welfare savings of 1.25 million punts; and, to date, it has collected 28 million punts out of a total of 56 million punts demanded as tax on criminal assets. It is also said to have had a powerful deterrent effect among criminal classes which had previously considered themselves invulnerable.
In the interests of simplicity, perhaps I may quote paragraphs 6 and 7 of the committee's brief interim report: The Republic of Ireland's Criminal Assets Bureau deals with sophisticated and dangerous criminals, some of whom have paramilitary connections. In a number of cases these individuals, prior to the establishment of the Bureau, had evaded the law enforcement agencies by verbal and physical intimidation of both witnesses and officials. We were told that on occasion extreme violence had been used. Officers working for the Bureau are dealing with cases which it would frequently be difficult to pursue through other means without exposing staff to considerable personal risk. The CAB is able to pursue these individuals both safely and effectively because its civilian personnel are protected by statutory anonymity. The Criminal Assets Bureau Act 1996 provides for officials to be vouched for by a member of the Garda rather than disclosing any warrant of appointment while engaged in a search or other activities; for the identity of the official to be disclosed only to the judge during court proceedings; and for the name of the Bureau to be substituted for the individual officer's name in certain correspondence. Disclosure of the identity of members, or former members, of staff, or of their families, is punishable by up to three years' imprisonment The proposed new clauses standing in my name are intended to introduce the same concepts into British legislation. I should make it clear that I have repeated verbatim the new clauses tabled in the Commons. Imitation is, of course, the sincerest form of flattery, but the majority of the Select Committee are survivors from the same Select Committee in the previous Parliament and are thus experienced in Northern Ireland and Irish affairs, and its chairman, Michael 36 Mates MP, is also a vice-chairman of the British-Irish Inter-Parliamentary Body and a former security Minister in Northern Ireland.
The other place had a good debate on Report on 27th February on these clauses and other matters, which lasted for at least an hour and a quarter (cols. 748–768 of the Official Report). The Minister. Mr Bob Ainsworth, wound up the debate briefly, the final paragraph of his speech being devoted specifically to these new clauses. He did an exemplary job of making it clear that, while he was not against the new clauses, he was not fully in favour of them either. However, he did say that he would do his best to ensure that the Government could do something that was effective if that was in any way possible. Since that amounted effectively to taking the matter away for consideration, the new clauses reappear in this House by way of probing amendments to verify where further consideration has so far reached. That seems to me a not unreasonable question, as the Minister in another place, while being even-handed, was unspecific, except implicitly, as to what he liked about the clauses and was explicitly unspecific about what he did not like.
In conclusion, perhaps I may pay brief tribute to the courage of officers of the same backgrounds in Northern Ireland as serve in the bureau in Dublin. In the previous Parliament, the Northern Ireland Affairs Select Committee, on which I then served, investigated the massive smuggling of fuel oil between the two jurisdictions within the island of Ireland, with a centre of gravity in South Armagh. I am, therefore, recently familiar with the bravery of Customs officers in Northern Ireland whose Treasury Minister I once was. More than a decade ago, when I was serving as a Minister in Northern Ireland, I could not speak too highly of the courage of Inland Revenue officers in terms of other forms of tax fraud in particular parts of the Province. I recall one occasion when we conducted a very large number of raids simultaneously, often on professional premises, backed up, of course, by the security forces. The papers seized, as with the late Mr Al Capone in Chicago in the 1930s, proved amply an inattention to tax detail on the part of taxpayers, or perhaps more precisely non-taxpayers, who had believed that violence had placed them above the law.
I recognise that, as with, in John Masters' account, the half dozen Gurkha soldiers in World War Two who volunteered to jump out of aeroplanes even before it was explained to them that they would also be assisted by a parachute, the fact that there were volunteers for this sort of work a dozen years ago might make some say that the new clauses are otiose. However, the Irish experience indicates that anonymity and protection for officials and professional investigators in the bureau are conducive both to recruitment and to productive results. I beg to move.

§ Baroness Buscombe
I entirely support my noble friend Lord Brooke and defer completely to his experience.

§ Lord Rooker
I was almost about to say the same. I have never set foot on the island of Ireland, but it is 37 not so easy to carry out law enforcement activities on a small island with a single community as it is in a large country with millions of people. Therefore, the noble Lord's tribute to the bravery of the officers concerned is wholly justified. Although I cannot accept the amendments today, we shall accept the idea at another time. As Bob Ainsworth said in reply to the debate in the other place, we shall examine the matter further.
At present, anonymity is available only to police and to Customs officers and in very limited circumstances in relation to the investigation of terrorism. Civilian staff working for bodies such as the Crown Prosecution Service and the Serious Fraud Office have no statutory right to anonymity. However, we have given the matter further consideration. At a suitable point in the Bill—which I understand to be Part 12 the Government will bring forward an amendment dealing with the protection of the identity of members of staff of the agency. We shall have a full opportunity then to debate the issue.
It may be useful for future debate if I say that the amendment that we intend to table will empower the director of the agency, and only the director, to direct that members of agency staff may operate using pseudonyms in circumstances where they would otherwise need to identify themselves by name. That will, we believe, provide an important protection in appropriate cases. We shall discuss those in some detail when we reach that part of the Bill.

§ Viscount Bledisloe
As we shall be returning to this matter, perhaps I may make one point. Does not this provision go too far? The noble Lord, Lord Brooke, said that the identity of the anonymous person would be revealed to the judge. What happens if the judge himself thinks it necessary to reveal it for the purposes of the proceedings to other persons taking part in the proceedings? Strictly, under the Bill as drafted, the judge himself would be committing the offence under subsection (3) of the new clause proposed in Amendment No. 10. I do not believe that there is any exclusion for the judge causing the name to be revealed if he feels it necessary in the interests of justice.

§ Lord Rooker
The noble Viscount raises an important point. I do not know whether judges have that power when at the moment only limited anonymity is available. I hear what the noble Viscount says and we shall consider the issue with a view to debating it in greater detail. That point will have to be addressed in Part 12 of the Bill.

§ Lord Brooke of Sutton Mandeville
I am grateful to your Lordships who have taken part in this debate and I am extremely grateful to the Minister for his response. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ [Amendment No. 10 not moved]

§ Clause 6 [Making of order]:

§ Baroness Buscombe
moved Amendment No. 11: Page 3, line 17, at end insert "and the court considers that there is no real risk of injustice from it so proceeding 38 The noble Baroness said: I shall also speak to Amendments Nos. 13, 15, 78, 97, 98, 144 and 146. I do not intend to speak to Amendments Nos. 87, 140 and 200.
The amendment address one of the most important issues of the Bill, which is judicial discretion and the power of the judiciary to intervene to ensure that justice is done, and seen to be done. There was considerable debate on this issue in another place and a good deal of concern was expressed in your Lordships' House at Second Reading. All the reasoning was laudable and reflected the criminal justice system as we know it and as we wish to protect it. In so doing, we wish to protect the freedom and rights of the individual against the undue and overbearing power of the state.
To put the matter in context, when I first read the Bill I was appalled at the prospect of the courts having no discretion to decide whether an investigation should proceed under Clause 3. We are then confronted with a further new element of criminal lifestyle, which is thrust upon us in Clause 6, wherein a judge can decide only as a matter of fact whether to confiscate a person's assets before the person has had the opportunity to show that such assets were obtained by innocent means.
Our Amendments Nos. 11, 13, 93, 97, 98 and 144 all contend that the court should have a discretion at the outset as to whether an investigation should take place at all. The matter was pressed in another place by my honourable friends the Members for Beaconsfield and for Surrey Heath. My honourable friend the Member for Beaconsfied, Mr Grieve, said: Under the Bill, action can be taken not only at the prosecutor's but at the director's discretion. In truth, it is being turned into a confiscatory administrative mechanism, wholly controlled by the director of the Assets Recovery Agency. That should be a source of concern to those who wish asset recovery to be an instrument of justice and not of oppression".—[Official Report, Commons Standing Committee B, 15/11/01; col. 61.] Following discussions with the metropolitan police and the head of the serious crime group, we are now suggesting in Amendments Nos. 15, 78 and 146 what we believe to be a sensible, workable compromise. We appreciate that when a prosecutor asks for an investigation he or she is doing so at a stage when a judge or magistrate will not necessarily have the information that underlies the reason for that investigation.
Under Clause 6 the Crown Court can make a confiscation order if certain conditions are satisfied. For example, if a defendant is convicted of an offence in the Crown Court and the prosecutor asks the court to proceed under Clause 6, and if the court decides that the defendant has a criminal lifestyle and has benefited from his general criminal conduct, or if he has benefited from his particular criminal conduct although he does not have a criminal lifestyle, the court must—not may—make a confiscation order. The court has no discretion in the matter. Essentially the only discretion leading to a confiscation order is to be exercised by the prosecutor or the director of the assets recovery agency making the appropriate 39 decision to ask the court to proceed under Clause 6. If either of them do that the court must make the confiscation order once it has decided certain issues of fact.
The court must make that order however great the injustice. We think that it could be argued that the court should have discretion in the matter. It cannot be right that what little discretion there is under the clause can be exercised only by a prosecutor, who is hardly an impartial observer. We believe that a judge is the best qualified person. He has the appropriate knowledge, experience and impartiality to decide whether a confiscation order should be made.
Amendment No. 15 would give the judge a discretion not to make a confiscation order if he felt it inappropriate to do so. If the prosecutor or the director of the assets recovery agency does not like that decision, he or she can appeal. The noble and learned Lord the Attorney-General may say that our amendment is unnecessary because of Clause 11(6). Clause 11 refers to assumptions to be made in case of a criminal lifestyle and subsection (6) states that, the court must not make a required assumption in relation to particular property or expenditure if …there would be a serious risk of injustice if the assumption were made". That is not sufficient. At this stage of the proceedings, the court must be given proper discretion on all the facts before it decides what is just. I beg to move.

§ 4.45 p.m.

§ Lord Goodhart
This group of amendments includes three—Amendments Nos. 14, 95 and 145—in my name and that of my noble friend Lord Thomas of Gresford. I should say at the outset that our views are similar to those of the Conservatives, as expressed by the noble Baroness.
The Government are showing an alarming lack of trust in the courts, and perhaps an equally alarming confidence in the prosecutor or director to reach the right decisions. The Government are attempting to impose rigid rules. I have no great problem with the idea that if a defendant is convicted in the Crown Court, or committed there for sentence, the court must at least consider making a confiscation order if it is asked to do so by the director or the prosecution. However, that consideration opens up a two-stage process in cases when a criminal lifestyle is alleged.
The court has to decide whether the defendant has a criminal lifestyle, and if it finds that he does, under Clause 11, it has to investigate what benefit, if any, the defendant has obtained from that lifestyle and order the confiscation of the benefit. Criminal lifestyle is defined in Clause 75.
The court's decision at stage one of the inquiry—whether there is a criminal lifestyle—depends almost entirely on the defendant having been convicted of one or more offences included in the list, or three or more unlisted offences. In the great majority of cases, previous convictions will be formally proved and that will be that. But the formality of the requirement in 40 Clause 75 leaves the court with no effective discretion. We know that three minor shoplifting offences for which a defendant has been convicted over a period of six years would constitute a criminal lifestyle. So, too, as it appears from the reply of the noble and learned Lord the Attorney-General to a previous group of amendments, would a conspiracy for apparently any purpose that had continued for a period of six months, or more; for example, a conspiracy by members of an environmental group deliberately to cause some relatively minor form of criminal damage as part of a protest.
The court cannot say, technically, that the requirements of Clause 75 are satisfied if the defendant does not, in reality, have anything that could be called "a criminal lifestyle". The Government can, and do, say that in such a case the prosecutor would not ask for a confiscation order—probably not. But there will be cases, although perhaps not quite so obviously non-lifestyle as the ones that I mentioned, where an overzealous prosecutor might ask for a confiscation order on the basis of general criminal conduct where it was unreasonable to press for such an order.
The Government will then point out that there is a safety net in the courts' jurisdiction in Clause 11(6). The courts can refuse to make an assumption under Clause 11 if there would be a serious risk of injustice if an assumption were made. Indeed, I acknowledge that that is a matter of some help. However, it still means that the defendant will have to go through the process of providing information about his assets, identifying how they were paid for, and so on, which will be extremely onerous. Where the defendant's lifestyle is criminal in a purely technical sense only under Clause 75 and not so in reality, it would surely be much better for the court to have power to stop the case at stage 1 and not have to continue with the full investigation required by stage 2.
The Government are saying, "We can't trust the courts to exercise that discretion reasonably. Therefore we have to force everyone to sit through the lengthy hearing of an application, which should not have been brought to begin with". I accept that the fact that convictions are nominally trivial does not always mean that there is not a real criminal lifestyle, but in deciding what is just the prosecution could outline the case against a defendant—and would no doubt do so—and could allege that the conviction was only the tip of the iceberg and that, therefore, the confiscation order was justified.
In order to achieve a just result, we need a power for the court to bring the proceedings to an end at stage 1 when the court decides whether or not a criminal lifestyle is proven, if the court is satisfied that, in all the circumstances of the case, it would be unjust to allow the proceedings to continue on the basis that there was a criminal lifestyle.

§ Lord Thomas of Gresford
Perhaps I may ask a question in support of my noble friend. Why should this Bill give a discretion to the prosecutor but no discretion to the court? I repeat that question because I want to be sure that the noble and learned Lord the 41 Attorney-General has heard my question, which is very short. Why should the discretion as to whether or not to bring proceedings under the Bill rest with the prosecutor, not with the court? I quite fail to follow the rationale of that provision. Once the prosecutor says, "We will have an investigation", it is mandatory. Is it that the Government do not trust the judges, or what?

§ Lord Goldsmith
I apologise to the noble Lord for my momentary lapse of attention for technical reasons. The amendments now before the Committee resurrect quite a lengthy debate in another place. The amendments are different variants of the same point; namely, to remove the mandatory element, or elements, from the scheme.
I should like to make some general points before dealing with the specifics of the amendments. First, the use of a mandatory process is not new. Under existing drug trafficking confiscation legislation that applies to England and Wales, it is the position—and has been for a number of years—that there is a mandatory requirement for the assumptions to be made following conviction of a single drug trafficking offence. Indeed, having found that the existing legislation in 1988, which did not include mandatory assumptions, was not working, the previous Conservative government introduced mandatory assumptions into the later Bill. Therefore, although it is true that the mandatory element does not apply in all cases, either across the United Kingdom or in relation to all offences, it would be very strange to row back from the existing position in relation to whether such assumptions should be made mandatory.
Secondly, we need to remember why the legislation is necessary. As was largely agreed on Second Reading, it is necessary because the proceeds of crime are fuelling more crime: they are the working capital of drug traffickers, of people traffickers, and of organised crime. As the noble Lord, Lord Kingsland, put it pithily on Second Reading, they have a corrosive effect. I believe that we are all agreed that it is important for them to be reached. However, at present, only a very small proportion of the proceeds of crime are reached by existing legislation. As I said previously, less than £20 million was confiscated in 2000–01, whereas it is estimated that the added value of the drug trade alone is perhaps as much as £8.5 billion. That represents a very remarkable disparity between what we are able to achieve and the actual proceeds of crime. Therefore, the Government believe it to he crucial for the legislation to be both workable and effective.
I do not choose the words "workable" and "effective" accidentally; indeed, they are words used by the noble Baroness, Lady Buscombe, on Second Reading, when she said that it was the will and wish of her party, to assist the Government in producing a workable and effective piece of legislation".—[Official Report, 25/5/02; col. 19.] The removal of the mandatory requirements—and, therefore, a major plank of the scheme—would, in our view, be the opposite of producing a workable and effective piece of legislation; indeed, as I said, it would 42 be rowing back on the existing position, even though that does not achieve as much as I believe all noble Lords desire.
Thirdly, I wish to emphasise the nature of the proceedings that will take place. To begin with, the prosecutor must ask. Noble Lords will be aware that prosecutors—certainly those in the Crown Prosecution Service and in the Serious Fraud Office—come under my jurisdiction. I am the Minister responsible for them. Noble Lords will also be aware that the prosecutors jealously guard their independence: they exercise an independent judgment in the prosecution decisions that they make. Therefore, the only zealousness that I recognise in relation to prosecutors is the exercise of an independent judgment; that is, a judgment in accordance with the facts, with the evidence, and with the law, as opposed to their being over-zealous in the way suggested by the noble Lord, Lord Thomas of Gresford.
As public authorities, it is unlikely in the extreme that prosecutors would consider it appropriate to spend the time or the resources on pursuing a confiscation in a case where that was plainly inappropriate. I regard the fact that the prosecutor must ask as an important, but entirely appropriate, safeguard in these procedures. But there is a further important safeguard. Where we are concerned with a case in which assumptions are to be made, then in two circumstances those assumptions will not be made; first, if the assumption is not made out, as in Clause 11(6)(a), because the assumption is inappropriate and the defendant demonstrates that it is inappropriate, and, secondly, as I mentioned earlier, where the court is of the view that there would be a serious risk of injustice if a particular assumption were to be made. Again, that is a fallback position. That is not to minimise what it is, but it is an important circumstance in which the court, if it thinks that there would be a serious risk of injustice, would be able not to make a particular assumption.
Short of that, what the legislation provides is that if the prosecutor asks for the order and the court finds—either in the particular case or by application of the assumptions—that the defendant has benefited from criminal conduct, then the court will have to make an order. The Government ask: what is wrong with that? If the defendant has benefited from criminal conduct, why should not the proceeds, up to the available amount and not beyond what the defendant actually has—we have debated that point—be forfeited? What is the justification for forfeiting less than that?
Those general points are applicable to all the amendments in this grouping. Perhaps I may refer briefly to the slight variations between the amendments which have been put forward. As the noble Baroness, Lady Buscombe, pointed out, Amendments Nos. 11, 93 and 144—the latter two referring to the respective Scotland and Northern Ireland variants—would put an additional requirement into Clause 6. I suggest that that would have the effect of abolishing the mandatory nature of the procedure. It would change confiscation from a certain disposal applied uniformly across the jurisdiction into something rather unreliable and 43 subjective. If I may respectfully say so, the lead amendment does not even suggest the criteria by which the court is to decide what is meant by a, real risk of injustice from … proceeding". Of course we understand what would be meant if the court reached the stage of either making or not making an assumption because of the serious risk of injustice in making it. In effect, this would amount to a discretionary power which, for the reasons I have given, the Government would regard as seriously and dramatically undermining the benefits of the legislation.
Noble Lords may also consider that it is important for criminals to know that if they do benefit from criminal conduct, they will not be able to escape and will not be permitted to keep their benefit. If convicted of the relevant offences, then the confiscation procedure will follow. That is an important message.
Amendments Nos. 15, 97, 98 and 146 put the discretion at a different stage; that is, once the court has decided that the defendant has benefited from criminal conduct. The noble Baroness seeks to give the court a discretion, notwithstanding that, not to make an order. If the court has decided that the defendant has benefited from criminal conduct, then the Government ask why the defendant should not have to pass over such money—if the money is not there, that is a different matter—up to the available amount. Why, they ask, should he be allowed to keep it?
If it is a case of application of the assumptions, then a different safeguard is already available. It is that the court will not make the assumption if there is a serious risk of injustice.
I turn to Amendments Nos. 14 and their Scotland and Northern Ireland equivalents, Amendments Nos. 95 and 145, spoken to by the noble Lord, Lord Goodhart. The effect of those amendments would be to prevent the court deciding that the defendant had a criminal lifestyle and confiscating the benefit from his general criminal conduct if it considered that it would be unjust to do so. These are variations on the previous amendments which would make the holding of a confiscation hearing a matter for the discretion of the court.
While we understand that the amendments are not intended to remove the obligation of the court to confiscate a defendant's benefit from particular criminal conduct, they would give the court a discretion not to confiscate a defendant's benefit from his general criminal conduct. If we understand the amendments correctly, because they would not apply to the first case then they are somewhat less objectionable than the amendments proposed by the noble Baroness, Lady Buscombe, but for the reasons that I have already given, we still regard them as unacceptable.
Where the conduct of a defendant shows that he has been living a criminal lifestyle in the ways provided for in the legislation, then to be restricted simply to the 44 consequences of the particular offence of which a defendant has been convicted would he a very inadequate way of getting at the proceeds of crime.

§ 5 p.m.

§ Lord Goodhart
Does the noble and learned Lord agree that the test of "criminal lifestyle" is so dependent on being convicted of certain particular offences that it could well arise even where, in reality, the defendant has not been living on the proceeds of crime?

§ Lord Goldsmith
If the facts are such, then either the defendant will demonstrate that the assumption that certain property has been acquired as a result of a criminal lifestyle is incorrect, or the court will form the view that there would be a serious risk of injustice in making that particular assumption. I suggest that those are the safeguards which are important and appropriate.
Finally I turn to Amendment No. 78, spoken to by the noble Baroness. It is similar to the previous amendments and would give the court discretion as to whether to find that a defendant had a criminal lifestyle and therefore to make the assumptions at all. That is absolutely diametrically opposed to the existing legislation, a statute brought forward by the noble Baroness's own party in the last administration. It would mean rowing back from the existing position and, in the Government's view, it would undermine the effectiveness of this legislation.
For those reasons, we cannot support the amendments. I hope that they will be withdrawn.

§ Lord Thomas of Gresford
Generally, when counsel makes an application to a judge in court, he does not know what the result of that application is going to be, however confident he may feel. What is envisaged under this legislation is that the prosecutor will say, "I have decided, in the exercise of my discretion and in exercising my independent judgment—that is, independent of the Attorney-General and anyone else—to make this application. You have no choice. You must enter upon the inquiry which I now require you to make". I find it constitutionally unacceptable for such a power to rest simply with the prosecutor. The judge will have no control over an application made to him in court.
The noble and learned Lord the Attorney-General surely was setting his case rather high when he said that giving a discretion to the judge to stop such an application on the threshold would amount to a serious and dramatic weakening of the legislation. I would be interested to know between now and Report stage whether any instance has come to the Attorney-General's notice where an application by a prosecutor has been refused on the threshold by a judge. If that is the case, what were the circumstances and the reasons given by the judge for exercising the current discretion that he has in cases other than drugs cases?

§ Viscount Bledisloe
I agree with much of the reply given by the noble and learned Lord. The amendments 45 are too wide. Apart from anything else, under Amendment No. 13 a judge would have to decide whether it was appropriate to proceed before he had investigated the matter.
None the less, there will be exceptional cases. The noble and learned Lord accepted my suggestion that blackmail may be exceptional. When asked by the prosecutor or the director for an order, could not the judge have the power to decide not to proceed in exceptional circumstances? Such an amendment has not been asked for but perhaps the noble and learned Lord will consider the matter.
The noble and learned Lord spoke about the prosecutor as though it would always be the Crown Prosecution Service which would ask for an order. It may be unlikely in relation to the offences to which we are referring but there is always the possibility of a private prosecution—and a private prosecutor may be singularly unreasonable in what he may ask for in relation to a victim. I do not ask for an answer now, but will the noble and learned Lord consider before the next stage whether it might be appropriate to give the court a residual discretion, limited to exceptional circumstances, to decide not to proceed even if the prosecutor or the director has asked it to do so?

§ Lord Goldsmith
I shall not answer now but we always consider carefully what noble Lords say.
Let me make two provisional comments. First, when I dealt with the blackmail example, I was pointing to the fact that the court has the ability to say that it is inappropriate to make the assumption because there would be a serious risk of injustice. We should not overlook that extremely important safeguard and the safeguard where the defendant shows that the assumption is incorrect.
Secondly, the Director of Public Prosecutions has the ability to take over proceedings started by a private prosecutor. So where a private prosecutor is thought to be abusing whatever power he may have—whether bringing a prosecution or taking a particular step in the process—there is always the remedy that the director (and therefore the Crown Prosecution Service) can step in and exercise his judgment in relation to the case.

§ Baroness Buscombe
I thank the noble and learned Lord the Attorney-General for his response. Perhaps I did not make it clear that, in speaking to Amendments Nos. 11 and 13, I was seeking to set a comparison between having the discretion right at the beginning or later. I agree with the noble Viscount, Lord Bledisloe, that it is too early—notwithstanding the debate that took place in another place—because the information that underlies a request for an investigation is not in front of the judge or magistrate, in which case it would make sense to see some discretion kick in at a later stage. That is the purpose behind Amendment No. 15.
I wondered how long it would be before the noble and learned Lord made reference to what I said at Second Reading, as I was sure he would. I stand by what I said then because we are not in any way 46 diminishing the ability of the legislation to be workable and effective by proposing Amendment No. 13. It will not remove a major plank of the scheme. It simply seeks to give discretion to the court to address the individual circumstances of the case. It would mitigate the potentially onerous and time-wasting impact of this provision.
The noble and learned Lord said that it would be unlikely in the extreme that the prosecutor would use this procedure unnecessarily, but surely that is not a good reason for removing any discretion. We are simply proposing the introduction into the legislation of an important, tested and tried safeguard. I have heard what the noble and learned Lord has said and I shall read it with care in Hansard. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ 5.15 p.m.

§ Baroness Buscombe
moved Amendment No. 12: Page 3, line 17, at end insert "as having taken place after this Act comes into force The noble Baroness said: In moving Amendment No. 12, I shall not speak to Amendment No. 88, with which it is grouped.
Amendment No. 12 seeks to ensure that the Bill is not applied retrospectively. Throughout the Bill, the possession of the alleged proceeds of crime and an alleged criminal lifestyle derived from those proceeds is differentiated— hence the alleged criminal lifestyle may have taken place many years previously and yet proceedings in relation to current possession of alleged proceeds is deemed a current and not retrospective offence.
Retrospective legislation lacks clarity and raises issues of unfairness because of the time that has passed. The burden of proof is of a civil standard and in confiscation proceedings it shifts to the suspect. At the very least we consider 12 years to be too long a period given that the Inland Revenue requires documentation to be held for only six years. I beg to move.

§ Viscount Bledisloe
I am wholly opposed to the amendment. Quite apart from the fact that it is inelegantly worded, it is a misapplication of the presumption against retrospective legislation, which is that actions should not be criminalised or made illegal after they have been carried out. To say that a new procedure designed to get back the proceeds of what was always criminal is retrospective legislation and objectionable is entirely contrary to the principles against retrospectivity.

§ Lord Rooker
As a starting point, I hope that the noble Baroness will accept that recovery of the proceeds of crime can never be unjust. It does not matter when the crime was committed as long as there has been a conviction.
Our view is that confiscation orders made after the commencement of the Bill which deal with general criminal conduct should be able to recover the benefit 47 from conduct that took place at any time. The penalty attaches to the offence of which the defendant has been convicted rather than to the offence for which the benefit is being confiscated. This interpretation has been endorsed by the Court of Appeal and the Strasbourg Court in the case of Taylor.
Any other interpretation would make the legislation completely unworkable because lawyers—I almost said my learned friends—would be queuing up on behalf of defendants to argue whether the property in question derived from a crime and when the crime was committed. The split in the current legislation between drug trafficking and other crimes has caused difficulties because defendants have sought to argue that the property was derived from different types of crime and they somehow think, "Well, that is okay then. If it is one type of crime, that is okay".
As I said, the recovery of the proceeds of crime cannot be unjust. The amendment would provide a loophole which would be easy to exploit. Criminals would argue that the crime giving rise to the benefit was committed before the relevant cut-off date. I ask the noble Baroness to reconsider the matter. I am sure that having done so she will not press her amendment.

§ Baroness Buscombe
I thank the Minister for his firm response. I had been encouraged to propose the amendment by members of the legal profession, which perhaps explains his response that learned friends would be queuing up. I say no more than that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ [Amendments Nos. 13 to 15 not moved.]

§ Lord Kingsland
moved Amendment No. 16: Page 4, line 5, leave out "on a balance of probabilities" and insert "to the standard of proof applicable in civil proceedings The noble Lord said: The amendment is about the standard of proof applicable in civil proceedings, which is generally on a balance of probabilities. However, as I know many noble Lords will be aware, the degree of probability varies from case to case. When considering whether a defendant has been guilty of a criminal offence, a civil court will naturally want a higher degree of probability than it would require in, for example, an allegation of negligence. A civil court would not go so far as to apply the criminal standard of proof, but would look for a degree of probability commensurate with the issue. They usually apply a certain amount of common sense and flexibility in conducting that task.
Clause 6 provides that any questions arising under subsections (4) or (5) must be decided on a balance of probabilities. In my submission, that is an unacceptable constraint on a civil court. That court must be given flexibility. We believe that it is better to provide that decisions must be proved to the standard of proof applicable in civil proceedings rather than invariably on a balance of probability. I beg to move.

§ Lord Thomas of Gresford
I support the amendment. The expression "balance of probabilities" is well 48 known and well used, but it is slightly unsatisfactory, because it could mean, for example, that when there are two competing sets of facts that are almost equally improbable, the less improbable one will succeed. The civil courts seek to achieve an acceptable degree of probability, which is a slightly different concept.
In the context of this legislation, the decision as to whether a person enjoys a criminal lifestyle depends on whether he has been convicted of an offence set out in the schedule or had three convictions within a particular period or over a period of six months. The fundamental point is that there has already been a conviction of conduct beyond reasonable doubt to the criminal standard. The issue is, in subsection (4), whether the criminal has benefited by his criminal conduct and, in subsection (5), what is the recoverable amount, having regard to the extent to which he has benefited.
On that latter question of the recoverable amount depends the possibility of a lengthy term of imprisonment. In default of payment of a sum in excess of £1 million, for example, a person can be sentenced to serve 10 years' imprisonment. There is a reducing scale from there. Loss of liberty is certainly involved.
The civil standard of proof is well understood to require something more than a balance of probability if a person's liberty is involved. Perhaps it is best expressed in the words of Justice Dixon in an Australian case called Briginshaw. He said: The seriousness of an allegation made … the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters 'reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony, or indirect inferences. Everyone must feel that, when, for instance, the issue is on which of two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of the kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency". His point is that the more serious the effect on a person, the greater the degree of probability that is required. In this case, when the possibility of long terms of imprisonment can be imposed by way of default, it is essential that the civil standard of proof, as understood in the courts, should be applied, not merely the rather trite phrase "the balance of probabilities".

§ Lord Rooker
The amendments revisit a theme that has been used previously in the Bill. In its simplest terms, the Government's intention is that the standard of proof applied in confiscation proceedings should be the flexible civil standard. We believe that the fact that the Bill refers to the balance of probabilities does not make any difference in that respect. The Bill refers to the balance of probabilities rather than to the standard applicable in civil proceedings because we have received advice that in some civil proceedings, such as those for contempt, the applicable standard of proof is beyond reasonable doubt. We want to make it clear that that standard of proof—beyond reasonable 49 doubt—does not apply in confiscation proceedings. The use of the expression "the balance of probabilities" helps to achieve that end. Nor do we believe that the expression "the balance of probabilities" applies a lower standard of proof to confiscation proceedings than the civil standard. We are fortified in our view on this point by earlier case law, although—I am going to put myself in a pit here— I do not have one to quote. If need be, I shall get one. Briefly, the effect of the jurisprudence is that the references to the balance of probabilities import flexibility, but, at the same time, require a standard lower than the criminal standard of beyond reasonable doubt.
I hope that that explains our position. We want to be able to use the flexible civil standard, but we have received advice that in some proceedings, particularly contempt proceedings, that has been interpreted as beyond reasonable doubt, which would go much too far for confiscation proceedings.

§ Lord Kingsland
I thank the Minister for that extremely helpful reply. I look forward to hearing the noble Lord's statement read out many times in the High Court when this matter is addressed by counsel. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.

§ 5.30 p.m.

§ Baroness Buscombe
moved Amendment No. 17: After Clause 6, insert the following new clause— "DISPOSAL OF FAMILY HOME: ENGLAND AND WALES (1) This section applies where a confiscation order has been made in relation to any person and the prosecutor has not satisfied the court that the person's interest in his family home has been acquired as a benefit from his criminal conduct. (2) Where this section applies, then, before the administrator disposes of any right or interest in the person's family home he shall—

(a) obtain the relevant consent; or

(b) where he is unable to do so, apply to the court for authority to carry out the disposal.

(3) On an application being made to it under subsection (2)(b), the court, after having regard to all the circumstances of the case including—

(a) the needs and financial resources of the spouse or former spouse of the person concerned;

(b) the needs and financial resources of any child of the family;

(c) the length of the period during which the family home has been used as a residence by any of the persons referred to in paragraph (a) or (b),

may refuse to grant the application or may postpone the granting of the application for such period (not exceeding twelve months) as it may consider reasonable in the circumstances or may grant the application subject to such conditions as it may prescribe. (4) Subsection (3) shall apply—

(a) to art action for division and sale of the family home of the person concerned; or

(b) to an action for the purpose of obtaining vacant possession of that home,

50 brought by the administrator as it applies to an application under subsection (2)(b) and, for the purposes of this subsection, any reference in subsection (3) to the granting of the application shall be construed as a reference to the granting of decree in the action. (5) In this section— family home", in relation to any person (in this subsection referred to as "the relevant person") means any property in which the relevant person has or had (whether alone or in common with any other person) a right or interest, being property which is occupied as a residence by the relevant person and his or her spouse or by the relevant person's spouse or former spouse (in any case with or without a child of the family) or by the relevant person with a child of the family; child of the family" includes any child or grandchild of either the relevant person, or his or her spouse or former spouse, and any person who has been treated by either the relevant person, or his or her spouse or former spouse, as if he or she were a child of the relevant person, spouse or former spouse, whatever the age of such a child, grandchild or person may be; relevant consent" means in relation to the disposal of any right or interest in a family home—

(a) in a case where the family home is occupied by the spouse or former spouse of the relevant person, the consent of the spouse or, as the case may be, of the former spouse, whether or not the family home is also occupied by the relevant person;

(b) where paragraph (a) does not apply, in a case where the family home is occupied by the relevant person with a child of the family, the consent of the relevant person."

The noble Baroness said: In moving Amendment No. 17, I shall speak also to Amendment No. 148, a related amendment applying to Northern Ireland.
Clause 101 gives certain limited rights to the spouse or former spouse of a person in relation to whom a confiscation order has been made and to children of the family. It applies where the family home has not been acquired as a benefit from criminal conduct. If that is the case, it will be necessary before the disposal of a family home to obtain the consent of the occupying spouse or the authority of the court.
On an application for such authority, the court must have regard to all the circumstances of the case including the needs and financial resources of the spouse or former spouse and the needs and financial resources of any child of the family. The court then decides whether to give its full authority. However, it can postpone any disposal for such period not exceeding 12 months as it may consider reasonable in the circumstances. It can also grant such authority subject to such conditions as it may prescribe. That gives some protection to a spouse, former spouse or children of the family.
The curiosity of Clause 101 is that it applies only in Scotland. In England, Wales and Northern Ireland—however great the need of a spouse, former spouse or the children of the family, and however pressing the circumstances of the case—the court will never have an opportunity to postpone giving authority for even a couple of months. In England, Wales and Northern Ireland, there is no necessity to obtain the relevant consent or to ask the court for authority to carry out the disposal.
51 Although I appreciate that there are interesting historical reasons for spouses and children being treated better in Scotland, historical reasons cannot justify what would otherwise be an injustice. Surely, it cannot be right that spouses and children are treated better in Scotland than they are in England, Wales and Northern Ireland. All must be treated the same. Today, regardless of history, we must ensure that that happens. The proposed new clauses will give spouses, former spouses and the children of the family exactly the same rights in England, Wales and Northern Ireland as they will have in Scotland.
There is one drafting point. References in Amendment No. 17 to "the administrator" should be read as "the receiver" to reflect the fact that we are talking about confiscation proceedings in England and Wales. I beg to move.

§ Lord Goodhart
I support this pair of amendments. As I understand it, their effect would be to shift the burden of proof in relation to the family home in England, Wales and Northern Ireland. Whereas the Bill currently provides that it is in general for the defendant to prove that property has been acquired innocently, in Scotland Clause 101 puts the burden of proof on the prosecution to show that the family home has been acquired as a benefit from criminal conduct. If that is satisfied, it is clear that Clause 101 will have no application, as Clause 101(1) states that, This section applies where a confiscation order has been made … and the prosecutor has not satisfied the court that the person's interest in his family home has been acquired as a benefit from his criminal conduct". Clearly, therefore, even in Scotland, if the home is the proceeds of crime, there will be no power to defer the operation of the Bill.
We say in other amendments which have not yet been considered that the burden of proof on the defendant should be an evidential and not an absolute one, so that if credible evidence of innocent acquisition is produced by the defendant, it will be for the prosecution to prove that the acquisition has been made from the profits of crime. If those amendments are accepted, Clause 101 will not be needed.
Assuming that these amendments are not successful, Clause 101 seems wholly and entirely reasonable, not only in Scotland but across the entire United Kingdom. We believe that it should be extended to the rest of the United Kingdom. It has a very limited operation. First, as has been said, it will not apply if it has been established that the home comes from the proceeds of crime. Secondly, Clause 101 does not prevent the court ordering a sale. If there is a house with eight bedrooms, a swimming pool, a large garden and a garage for five cars, the court would be unlikely to refuse an order for sale. However, if the prosecution cannot establish on the balance of probabilities that the house represents the proceeds of crime, we firmly believe that the court should have a discretion to defer the sale for a limited time to enable the other members of the defendant's family to avoid all the deeply 52 unpleasant consequences that could result from immediate ejection from the house in which they are living.

§ Lord Rooker
Although there may seem to be a contradiction, I do not think that the differences are as great as they may at first sight appear. I hope that Members of the Committee can agree a settled position during our consideration of the Bill.
The amendments concern the exercise by the courts and the receivers of the power to realise property in satisfaction of a confiscation order. The English and Northern Irish legislation, both currently and in the Bill, require the defendant's interest in his or her home to be realised if that is necessary to satisfy a confiscation order. The legislation applies whether the interest has been legally or illegally obtained, in accordance with the general principle that a confiscation order, like a fine, is enforceable against any property. I should make it clear that we are talking only about the defendant's interest in the home. If the defendant's spouse has a beneficial interest in the home—for example, from helping to pay the mortgage with his or her earnings—the court must allow the third-party spouse to retain it.
Conversely, Part 3 of the Bill reflects a longstanding provision in the Scottish confiscation legislation that gives the Scottish court the power ultimately to refuse the realisation of the defendant's interest in his home in satisfaction of a confiscation order. As I think has been clearly identified, the power applies only to a legally acquired interest of the defendant, and is exercisable only where the court is satisfied that the defendant's spouse or another specified relative has asserted a claim to occupancy. So the position is not as black and white as it may seem.
As was pointed out in another place, the provision on the family home in Part 3 replicates earlier Scottish confiscation legislation in the Proceeds of Crime (Scotland) Act 1995. The 1995 Act developed briefer provision along the same lines in the Criminal Justice (Scotland) Act 1987. Therefore, as noble Lords can see, the difference has been around for about 15 years. The confiscation legislation in the three jurisdictions is different because Scottish law adopts a different approach to the occupancy rights of spouses in general.
The Matrimonial Homes (Family Protection) (Scotland) Act 1981 gives a right to occupy the matrimonial home to spouses who are not owners or tenants and provides for the protection of their occupancy rights, regardless of whether they have any beneficial interest in the home. These are referred to as non-entitled spouses, and they are protected by sections 6 to 9 of the 1981 Act from dealings by the entitled spouse. What that means is that protection is given against dealings which might include giving up the tenancy or selling the home. There is no directly equivalent legislation in England and Wales or Northern Ireland.
As we have already made clear, there are arguments in favour of both the position in Parts 2 and 4 of the Bill, and that in Part 3. One argument maintains that 53 the proceeds of crime should never be capable of retention and that a confiscation order should be enforceable against any realisable property. On the other hand, there is the argument that family circumstances may be so particular on occasion that the retention of the lawfully obtained value of the proceeds of crime may be justified.
The difficulty here, I freely admit, is that there is an argument both ways. There is no doubt about that. There is an element of principle in both approaches. We intend, therefore, to leave Parts 2, 3 and 4 as they stand but we shall monitor the operation. That is crucial. This is a fundamental change in legislation in terms of ensuring that people do not retain the proceeds of crime. We shall monitor those parts closely for any consequences flowing from the decision to retain the differences in the legislation.
To show that an element of principle is involved in both approaches, I should add that we have examined all three parts from the point of view of the European Convention on Human Rights. We are satisfied that the approaches are consistent with that convention. While Article 8 of the convention protects a person's home, that right must be balanced by virtue of paragraph 2 of Article 8 against other factors; in this instance the public interest in ensuring that criminals do not retain the benefits from their crimes. Nor do we see an arguable case under Article 14 of the convention over that issue.
I freely admit that the issue will probably be around until the Bill becomes an Act. However, I hope that I have made clear why we are unable to accept the amendments. We accept that there are different approaches. I hope I have given an explanation of the reasons for them. However, as I said, once the Bill reaches the statute book and is in operation, we shall monitor closely the consequences.

§ Baroness Buscombe
I thank the Minister for his full response. The matter was debated at some length in another place. However, we consider it to be of such importance that it should be revisited here and we should continue to look at it. As the Minister said, there is no directly-equivalent legislation in England and Wales to that set out for Scotland. Our response is that that is no argument for inconsistency.
We shall not detain the Committee. We shall read with care the Minister's response and, on that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ 5.45 p.m.

§ Clause 7 [Time for making order]:

§ On Question, Whether Clause 7 shall stand part of the Bill?

§ Lord Rooker
As the Committee is aware, I oppose the Question that Clause 7 shall stand part of the Bill. In doing so, I speak also to the other government amendments in this group. The decision bears on the subject of postponement. It will be convenient to 54 consider with that a number of related government and opposition amendments. Perhaps I may provide the Committee with a brief exposition of the reasons for the deletion of Clause 7 and for tabling the related amendments, and then turn to the opposition amendments.
Clause 7 states that a confiscation order must be made before sentence. However, that is subject to Clause 16, which makes clear that if confiscation proceedings are postponed under Clause 15, a confiscation order may be made after sentence. It was objected to in the other place that Clause 7 should refer forward to Clause 16 to make that clear. In considering the issue, we have consulted the prosecuting authorities. We understand that nowadays confiscation proceedings are generally postponed, so sentence will often be passed before a confiscation order is made.
It seems to us that the very stark terms of Clause 7 imply that a confiscation order should normally be made before sentence and that confiscation proceedings will be postponed only exceptionally. However, that is not what happens at present. With the wider use of confiscation orders which we hope to achieve as a result of the Bill, no doubt they will be made in future in many more straightforward cases than at present. Where a confiscation order is straightforward it is more likely to be made before sentence without the need for the proceedings to be postponed. Perhaps at some future date it might even be the norm for confiscation orders to be made before sentence.
We would prefer the Bill to leave the matter open. We think that it would be better to avoid any implication either way. We would expect a confiscation order to be made before or after sentence, whichever is more appropriate in the particular case. The amendments, together with the deletion of Clause 7, achieve that end. The amendments are designed to improve the practical operation of the Bill and deal with an issue raised in the other place.
Without seeking to pre-empt any speeches on opposition amendments, perhaps I may comment on them, starting with Amendment No. 29. The effect of the amendment would be to reduce the normal maximum period of postponement from two years to six months. However, an amendment on similar lines was tabled and not pressed to a Division in another place. In that instance it was proposed to reduce the maximum period from two years to either six months or, indeed, three months. I refer the Committee to Hansard of 22nd November 2001.
As we pointed out on that occasion, the current arrangements for the postponement of confiscation hearings in the Criminal Justice Act 1988 and the Drug Trafficking Act 1994, which provide for a maximum period of six months, were carefully examined in the report of the Performance and Innovation Unit. The defects of the current arrangements are discussed in some detail in that report.
Paragraph 8.22 of the report concluded that the short six-month deadline meant that some confiscation orders could not be obtained due to 55 simple administrative delay occasioned, for example, by lack of court time or the unavailability of the trial judge. We agree with the conclusions expressed in the report that six months is far too short a period. A longer period may routinely be needed for all sorts of reasons. For example, the requirement to obtain evidence from abroad can lead to a delay of several months. Nor would we want defendants to be able to frustrate the purposes of confiscation by stalling in the hope that the six months will expire. That is another important point which is brought out in the PIU report. Therefore, the Government will not support the amendment.
Perhaps I may briefly refer to opposition Amendments Nos. 30, 111 and 155. The basic effect of the amendments would be to require the court to sentence the defendant within three months if it postponed the confiscation proceedings. Bearing in mind the amount of discussion on the court's discretion during the passage of the Bill, it seems odd that the amendment seeks to fetter that discretion. We see no particular reason why the court should be bound by that fixed time limit. For example, it might be ready to make a confiscation order just after the end of the three-month period only to have to hold a hearing to sentence the defendant and then return a week or two later for the confiscation matters. We believe that the court is the best arbiter of the matter. I hope that, while speaking to their amendments, noble Lords will not press them.

§ Baroness Buscombe
I accept the Minister's comments in respect of Amendment No. 29, wherein we proposed allowing proceedings for a confiscation order under Clause 6 to be postponed for only six months after the date of the defendant's conviction rather than two years as currently set out in the Bill. I accept the Minister's comments. On that basis, I shall not pursue the amendment.
I do not understand why our discussion is not grouped with Clause 162 stand part, which seems to be a mirror of Clause 7 but which relates to Northern Ireland. I put the suggestion to the Minister that it might save time later if it were dealt with now if he accepts that it covers the same point.

§ Lord Rooker
I am all for saving time. The groupings are offered to me as a humble Minister. We try our best to have groups which are as large as possible so that we can have structured debates. If there is a way in which another group can be merged with this one, that is fine by me. However, I shall need to take advice.

§ Lord Goodhart
I shall speak to Amendments Nos. 30, 111 and 155. Amendment No. 111 relates to Scotland and Amendment No. 155 relates to Northern Ireland.
It is important that a convicted defendant should be sentenced within a reasonably short time of that conviction. When I first saw that under Clause 7 sentence would be deferred until after the confiscation order had been decided on I was seriously worried by 56 its effect. The removal of Clause 7 has to some extent, although not entirely, removed my concerns about the matter.
I quite understand that confiscation orders may take a long time to investigate, and indeed in many cases probably will take a matter of several months. It is entirely inappropriate that a criminal sentence should be overhanging the defendant for the whole of that period. My amendment may be a little rigid and would be improved by giving the court the discretion to decide whether or not to apply it. However, it seems to me that the principle behind the amendment is correct. In normal criminal proceedings a sentence is imposed immediately on conviction, although in a good many cases it may be deferred for a relatively short period of time in order to obtain social and/or psychiatric reports or other information which the judge needs before sentencing.
It is desirable that the Bill should reflect the principle that there should be a reasonably short time within which sentence should be imposed. That is trebly important in cases where a defendant has been remanded in custody and is therefore sitting in prison, having been convicted, not knowing how long his sentence will be. Therefore, we may want to come back to the matter, perhaps in a modified form, at a later stage of these proceedings.

§ Lord Rooker
As I said when I made my initial remarks, I in no way want to pre-empt Members of the Committee in making their speeches. It is always difficult when speaking to a government proposal that is grouped with opposition amendments to avoid making the same speech twice. I repeat what I said. I take on board the point made by the noble Lord, Lord Goodhart. We do not see any reason why the court should be bound to a fixed time limit. Basically, I think that we should leave the matter to the courts.
With regard to the point made by the noble Baroness, I am quite happy to have the debate on Clause 162 stand part as part of this grouping if there nothing more to say about it. I am not exactly clear how that would be done from a procedural point of view. But if it were for the convenience of the Committee and everyone agreed that the Clause 162 stand part debate should form part of this grouping I should be happy for that to happen.

§ Baroness Buscombe
I thank the Minister. We would be entirely happy as the debate on Clause 162 stand part mirrors the debate on Clause 7 stand part.
Clause 7 negatived.
Clause 8 [Recoverable amount]:

§ Lord Kingsland
moved Amendment No. 18: Page 4, line 16, at end insert— ( ) But the defendant shall not be held to have benefited to the extent that such benefit has already been forfeited by reason of any other power or enactment. The noble Lord said: I rise to move Amendment No. 18. Under Clause 6 of the Bill, the Crown Court must, if certain conditions are satisfied, make a 57 confiscation order for what is called the "recoverable amount". Clause 8 provides that the recoverable amount for the purposes of Clause 6, is an amount equal to the defendant's benefit from the conduct concerned". Moreover, subsection (4) of Clause 8 provides: In calculating the defendant's benefit from the conduct concerned … any property in respect of which—

(a) a recovery order is in force under section 270, or

(b) a forfeiture order is in force under section 300(2), must be ignored".

Under Clause 9(3) it is provided that the court must deduct from the recoverable amount any, amount ordered to be paid under each confiscation order previously made against the defendant", and any amount, ordered to be paid under each confiscation order previously made against him under any of the provisions listed in subsection (4) [of Clause 91". However, I believe that there may be powers in other enactments which could result in confiscation. It may well he that subsequent enactments will give the court powers to make similar orders with regard to criminal offences.
We believe that the Bill can be improved by making it clear that, when calculating the amount equal to the defendant's benefit from the conduct concerned, one must deduct any benefit otherwise forfeited by reason of any other power or enactment. That will make clear what we believe to be the real intention of the Bill, which is to take everything into account. I beg to move.

§ Lord Rooker
The effect of these amendments would be to require the court to investigate whether any benefit belonging to the defendant had previously been recovered by means of any other power or enactment.
I point out that the Bill already recognises the principle that double counting should not apply. Clause 8(4) for example, requires the court to disregard property subject to a recovery or forfeiture order under Part 5 of the Bill. Additionally, where a confiscation order is made in respect of general criminal conduct, Clause 9(3) requires the court to deduct from the current confiscation order the amount ordered to be paid under any previous confiscation order.
The difficulty with the amendments is that they cast the net beyond previous confiscation orders to any power which may have had the incidental effect of recovering proceeds. The most obvious example of such a power is the power to fine. Another example is Section 27 of the Misuse of Drugs Act 1971, which enables the courts to make forfeiture orders in relation to drugs convictions.
However, there is no formal mechanism in these provisions for calculating the amount of the proceeds recovered. The only legislation dedicated solely and expressly to the recovery of criminal proceeds is currently the confiscation legislation.
Therefore, we currently deal with these types of orders in Clauses 14(2), 100(2) and 170(2), which state that the court must take the confiscation order into 58 account before it imposes such orders on a defendant. If the court postpones making a confiscation order until after sentence it cannot make any of these types of orders until the confiscation order has been calculated. That gives the court the flexibility to take account of what has and what has not been included in the confiscation order.
It is true that Clause 14 will have effect only where property is forfeited into the same proceedings as the confiscation order is made. It does not have effect in cases such as Cadman Smith where the criminal is deprived of assets before the case comes to court. However, where Clause 14 does not apply, we think that it is right to continue to recover the pecuniary advantage as well as forfeiting the goods. It may be helpful to quote what the noble and learned Lord. Lord Rodger, said on the point. He said: If, then, the value of property obtained as a result of or in connection with the commission of an offence is simply the value of the property to the offender when he obtained it, even if it is subsequently destroyed, damaged or forfeited, one would expect the same general approach to apply in the case of a pecuniary advantage". For example, if an offender steals a television and subsequently drops and breaks it while carrying it to his home, he would still be liable to have the value of the television confiscated from him even though he could not sell the television in order to make any money. There is no reason why a pecuniary advantage that has been lost should be treated any differently. The point is that recovering the proceeds of crime is supposed to have a deterrent as well as a restitutory effect. It must be a laudable aim to try to stop it being worth criminals' while avoiding excise duty.
From what I have said, it will be clear that the amendments would force the courts to adopt an over-rigid approach in relation to such orders. It is far better for the courts to have the flexibility given to them under the Bill as drafted. For example, the amendments would require the court making a confiscation order to consider the confiscatory effect of previous fines and other measures not designed for confiscatory purposes. That would make matters extremely difficult because the court imposing such a measure may not give a formal indication of precisely how much of the fine is imposed with recovery in mind and what is intended to be penal.
The amendments would therefore tend to undermine the precise calculations which are central to the concept of confiscation. For that reason, we cannot accept them. I hope that the noble Lord will find my explanation helpful and reasonable and will be willing to withdraw the amendment.

§ Lord Kingsland
I am inclined to press the Minister further. He adumbrated the principle that there should be no double counting—that if any previous forfeiture or confiscation in relation to ill-gotten gains has led to the payment of funds or in kind by the offender, that should count against what is designated in the Bill as the proceeds of crime. Would it not be more 59 appropriate to have a general clause to that effect, leaving it to the court to apply that general clause to the specific circumstances of the culprit?

§ Lord Rooker
I do not think so, for the reasons that I gave. That would go much too far. There must be precision about the confiscation of proceeds of crime. As I made clear, we do not want double counting. I also want to make clear that we shall make appropriate provision in any subsequent enactments to prevent double counting under the Bill.
It is far better that the courts are given flexibility under the Bill. As I said, the amendments would require the court making a confiscation order to consider the confiscatory effect of previous fines and other measures not designed for confiscatory purposes. That would make matters difficult, because, as I said, the court imposing such a measure may not indicate precisely how much of a fine was imposed with recovery in mind and what was intended to be penal—we would not know.
As I said, the amendments would therefore undermine the precision of the calculation, which is crucial to get across the message to the criminal fraternity.

§ Lord Kingsland
I am most grateful to the Minister for his reply. He has fairly said that he is not inclined to accept our preferred position. In those circumstances, I should like to test the opinion of the Committee.

§ 6.4 p.m.

§ On Question, Whether the said amendment (No. 18) shall be agreed to?

§ Their Lordships divided: Contents, 64; Not-Contents, 108.

Division No. 1
CONTENTS
Anelay of St Johns, B.	Geddes,L.
Astor of Hever, L.	Glentoran, L.
Boardman, L.	Goschen, V.
Brooke of Sutton Mandeville, L.	Henley, L.
Brookeborough, V.	Higgins, L.
Brougham and Vaux, L.	Holderness, L.
Burnham, L.	Howe of Aberavon, L.
Buscombe, B.	Howell of Guildford, L.
Byford, B.	Hylton, L.
Caithness, E.	Jenkin of Roding, L.
Campbell of Alloway, L.	Jopling, L.
Campbell of Croy,L.	King of Bridgwater, L.
CarnegyofLour, B.	Kingsland, L.
Cavendish of Furness, L.	Laird, L.
Chadlington, L.	Liverpool, E.
Colwyn, L.	Lucas, L.
Cope of Berkeley, L. [Teller]	Lyell, L.
Craigavon, V.	MacGregor of Pulham Market, L.
Dean of Harptree, L.
Elton, L.	Marlesford, L.
Erroll,E.	Monro of Langholm, L.
Feldman, L.	Montrose, D.
Ferrers, E.	Newton of Braintree, L.
Flather,B.	Northesk,E.

O'Cathain, B.	Saltoun of Abernethy, Ly.
Palmer, L.	Seccombe, B. [Teller]
Pearson of Rannoch, L.	Strathclyde, L.
Perry of Southwark, B.	Taylor of Warwick, L.
Pilkington of Oxenford, L.	Tebbit, L.
	Vivian, L.
Rees-Mogg, L.	Wade of Chorlton, L.
Renton, L.	Warnock, B.
Rotherwick, L.	Wilcox, B.
NOT-CONTENTS
Acton, L.	Hughes of Woodside, L.
Ahmed, L.	Hunt of Chesterton, L.
Allenby of Megjddo, V.	Hunt of Kings Heath, L.
Alli,L.	Irvine of Lairg, L. (Lord Chancellor)
Alton of Liverpool, L.
Amos, B.	Jay of Paddington, B.
Andrews, B.	Jenkins of Putney, L.
Archer of Sandwell, L.	Jones, L.
Ashton of Upholland, B.	Layard, L.
Bach,L.	Lea of Crondall, L.
Barnett,L.	Lipsey, L.
Bassam of Brighton, L.	Lofthouseof Pontefract, L.
Berkeley, L.	McCarthy, L.
Bernstein of Craigweil, L.	Macdonald of Tradeston, L.
Blackstone, B.	Mclntosh of Haringey, L. [Teller]
Blease,L.
Boothroyd, B.	Mclntosh of Hudnall, B.
Brennan, L.	MacKenzie of Culkein, L.
Brett, L.	Mackenzie of Framwellgate, L
Brooke of Alverthorpe, L.	Masham of Ilton, B.
Campbell-Savours, L.	Mason of Barnsley, L.
Carter, L. [Teller]	Massey of Darwen, B.
Chan,L.	Milner of Leeds, L.
Cohen of Pimlico, B.	Mitchell, L.
Corbett of Castle Vale, L.	Nicol, B.
Craig of Radley, L.	Patel, L.
Crawley, B.	Patel of Blackburn, L.
Darcy de Knayth, B.	Pendry, L.
David, B.	Pitkeathley, B.
Davies of Coity, L.	Plant of Highfield, L.
Davies of Oldham, L.	Ponsonby of Shulbrede, L.
Desai, L.	Prys-Davies, L.
Dixon, L.	Puttnam, L.
Dormand of Easington, L.	Ramsay of Cartvale, B.
Dubs,L.	Randall of St. Budeaux, L.
Elder, L.	Rea, L.
Evans of Parkside, L.	Rendell of Babergh, B.
Farrington of Ribbleton, B.	Renwick of Clifton, L.
Faulkner of Worcester, L.	Rooker, L.
Filkin, L.	Sawyer, L.
Gale, B.	Scotland of Astha, B.
Gibson of Market Rasen, B.	Sheldon, L.
Gladwin of Clee, L.	Simon, V.
Golding, B.	Symons of Vernham Dean, B.
Goldsmith, L.	Taylor of Blackburn, L.
Gordon of Strathblane, L.	Turnberg, L.
Gould of Potternewton, B.	Turner of Camden, B.
Grocott, L.	Walker of Doncaster, L.
Hardy of Wath, L.	Weatherill, L.
Harrison, L.	Wedderburn of Charlton, L.
Hilton of Eggardon, B.	Whitaker, B.
Hogg of Cumbernauld, L.	Whitty, L.
Hollis of Heigham, B.	Wilkins, B.
Howells of St. Davids, B.	Williamson of Horton, L.
Hoyle, L.	Woolmer of Leeds, L.

§ Resolved in the negative, and amendment disagreed to accordingly.

§ 6.15 p.m.

§ Clause 8 agreed to.

§ Clauses 9 and 10 agreed to.

§ Lord Goodhart
moved Amendment No. 19: After Clause 10, insert the following new clause— "COMPENSATION OF CREDITORS (1) Any person who was a creditor of the defendant at the time when the confiscation order was made may, within one year of the date of the order, make an application to the court for compensation. (2) The court may require the enforcement authority to pay compensation to the applicant if it is satisfied that—

(a) as a result of the making of the order the defendant is wholly or in part unable to repay the debt;

(b) the debt was incurred for full consideration; and

(c) at the time the debt was incurred the applicant had no reason to believe that a confiscation order could be made against the defendant."

The noble Lord said: The amendment raises an important issue of principle; namely, the question of priority as between the state and the creditors of a defendant.
On these Benches, we agree fully with the principle that a criminal should he deprived of the proceeds of his crime. However, we also believe that the state has no legal claim to those assets that is equal to that of a creditor who has acted in good faith. If the state deprives a defendant of the money to pay his debts and does not compensate a bona fide creditor, the creditor—not the defendant—will suffer the loss.
It is obvious that we cannot leave a criminal with enough money to pay off his debts. In such a situation, the criminal will pay not them and will choose to use his money for something else. That explains why the identification of the "available amount" in Clause 10 does not include unsecured debts, unless they are preferential debts within the meaning of the bankruptcy legislation. However, it is not clear whether the available amount includes securities. Would a confiscation order override the security of a secured creditor? My initial impression was that it would not, but, having read through the Bill, I am not sure that that is the case. If a confiscation order did override secured debts, there would be serious problems with banks and building societies.
Let us assume that the confiscation order overrides only unsecured debts and that a criminal has entered into a contract with a builder for ordinary work—of some value—to be done to his house. It is a bona fide contract, and the builder does not know that the defendant is a criminal and has no reason to be aware of the risk that a confiscation order will be made. If, after the work is done—on credit terms, as usual—the criminal goes to prison and his assets, including his house, are confiscated, the builder will get nothing.
Assuming that a secured debt will not be overridden, we can see that, if the criminal has borrowed money on a mortgage from a building society or a bank to help him buy the home, the building society or bank will get its money back because it has security. However, on any interpretation of the Bill, the builder will not. Why should not the state, having confiscated the assets out of which the builder would have been paid, be obliged to pay him off? If it does not do that, it is punishing an innocent third party.
62 A bona fide creditor has a higher moral right to the money than the state. It can be said that the state has a duty, in the public interest, to deprive criminals of the benefits of their crime. However, that duty is not infringed by using confiscated money to pay off a bona fide creditor. Of course, accept that it is possible to manufacture artificial debts by, for instance, creating fictitious loans to the defendant. So safeguards are needed to ensure that the only debts that are repaid are those that are made in good faith.
Amendment No. 19 proposes that there should be three conditions for payment of debts out of confiscated money. Those three conditions are, first, that as a result of the confiscation order having been made, the defendant has become unable to pay the unsecured debt. If the confiscation order still leaves the defendant with enough assets to pay his unsecured debts, then that is where the creditor should look for them.
The second condition is that the debt should be paid for full consideration. The third consideration is that the court must be satisfied that the creditor did not have any reason to believe that the defendant was a person against whom a confiscation order might be made and that he had no reason to believe that such an order was likely to be made.
If those conditions are not met—in many cases they will not be easy to meet—the court should require payment of compensation out of the confiscated funds. Amendment No. 63 extends that by allowing debts to be paid out of property if, before it is subject to a confiscation order, it is subject to a restraint order. The remaining amendments apply the same rules in relation to Scotland and Northern Ireland. I beg to move.

§ Lord Rooker
I understand that the issues raised in these amendments revisit an issue raised in the other place but in a different form. However, I cannot accept the principle behind the new clauses or the amendments. In practical terms their effect would be disastrous on the operation of the legislation.
The Bill recognises the rights of secured creditors to recover their security. A typical example would be where a person has an outstanding mortgage. It would be open to the mortgage company to apply for a variation or discharge of a restraint order under Clause 43(3) in order to recover the debt. There is also provision for such interest to be taken into account if a receiver is appointed at the realisation stage of a confiscation order.
Secured creditors are also protected under the legislation by the legislative steer in Clause 69(3)(a), which states that, the powers must be exercised with a view to allowing a person other than the defendant or a recipient of a tainted gift to retain or recover the value of any interest held by him". The Bill also recognises the prior claims of preferential debts as defined in the insolvency legislation by giving them priority over a confiscation in Clause 10.
63 The only issue before us therefore is whether unsecured creditors should take priority over the settlement of the confiscation order. We do not believe they should. The new clauses provide that they should take priority. It is true that the unsecured lender will be exposed to a wide range of risks; the fact that the borrower may be subject to a confiscation order is only one of them. We are not inventing the risk in that respect. The borrower or recipient of goods or services may turn out to be insolvent, may die without leaving adequate funds in the estate, or may simply default.
The new clauses also overlook the consequences for other obligations to the Crown. For example, are members of the public who owe debts to be absolved thereby from the obligation to pay their taxes? There is an extension for which people would push. Are the courts to be able to require the state to pay the debts of criminals against whom fines, compensation orders, costs and other disposals have been levied? It is preposterous.
The amendment also overlooks the fact that the making of a confiscation order does not absolve the defendant of the obligation to pay his debts. There is no wipe-out of the defendant's debts just because there is a confiscation order. The debts remain payable. Even if the confiscation order takes priority, the defendant has to pay the debts after the confiscation order has been satisfied. In any case, the confiscation order may not consume all the defendant's property. No one has implied during any of our discussions today that that would necessarily be the case.

§ Lord Goodhart
I entirely understand that. That is why one of the conditions on which our amendment proposes payment should be dependent is that the inability to pay by the defendant derives from the confiscation order having been made. So if the defendant has other assets out of which to pay this order, then no order is made for payment out of the confiscated money.

§ Lord Rooker
I accept that. But that does not hold up, simply because, taken as a package, the clauses and amendments would have an adverse practical effect on the operation of the effective confiscation system. In a way the noble Lord, Lord Goodhart, touched on one aspect of that in his opening speech.
We would be setting up a system that invites claims from bogus creditors who in reality were associates of the defendant. A whole new industry would start up. It would be difficult to prevent and would greatly weaken the confiscation system. What is worse, it would make the legislation inoperable from the enforcement authorities' point of view. The enforcement authorities would undoubtedly be discouraged from pursuing confiscations with the threat of claims from unsecured creditors hanging over them.
64 The end result of the amendments would be to encourage defendants to defeat the confiscation process by running up legitimate debts, safe in the knowledge that the authorities would be left out of pocket at the end of any confiscation.
Of course, other assets are not taken into account in the amendments. That factor must also be noted. The amendments to Clauses 42, 123 and 196 would have a similar effect even before a confiscation was made, for reasons similar to those I have given. A restraint order currently prevents the defendant from paying his debts. That is how it should remain. For those reasons I hope that the proposed amendments will not be pursued. They are wrong in principle and in practice for the reasons I set out.

§ Viscount Goschen
Before the noble Lord, Lord Goodhart, responds to the Minister, does the Minister agree that this amendment highlights a potential situation where, notwithstanding the points made by the Minister in terms of bogus creditors and so forth, which the noble Lord sought to address within his amendment, the action of the state, in imposing a confiscation order, could force companies into bankruptcy because the party with whom they contracted was the subject of a major confiscation order which substantially changed their financial circumstances? Does the Minister feel, therefore, that it would be a just situation if, as a result of a confiscation order, a company which had contracted with the guilty party in good faith was forced into bankruptcy?

§ Lord Rooker
I would not want anyone to be forced into bankruptcy. But it is the way of the world. People are dealing with companies day in and day out. The fact is that the underlying principle of this legislation is to reduce crime by depriving criminals of the proceeds of crime. If anyone is going to make the claim that the whole economy, even for the good guys, is running on the basis of the bad guys, I cannot accept that.

§ Lord Goodhart
I am deeply disappointed, and indeed astonished, by the extent to which I received a negative reply from the Minister. A real problem exists here. It may not affect a great many people, but it will certainly affect some.
The Minister said that, of course, a creditor runs many risks—bankruptcy of the debtor, and so on—and of course he does. But if, as a creditor, I had given entirely bona fide credit to someone and the reason that I did not have that debt paid was because a confiscation order had taken away all the debtor's money, I should regard the state as having stolen that money from me. The Government should think again about the matter. I disagree that it will sabotage the operation of the scheme. It seems perfectly possible for the court to deal with the problem without a great deal of effort. Some effort would be necessary and entirely appropriate.
While today I beg leave to withdraw the amendment, it is likely that I shall bring it back at a later stage.
Amendment, by leave, withdrawn.

§ 6.30 p.m.

§ Clause 11 [Assumptions to be made in case of criminal lifestyle]:

§ [Amendment No. 20 not moved.]

§ Lord Kingsland
moved Amendment No. 21: Page 6, line 113, leave out paragraph (a) and insert— (a) the defendant adduces sufficient evidence to raise an issue with respect to the matter The noble Lord said: I shall speak briefly to the amendment because its substance will be familiar to the Minister. It reflects a view espoused among others by Justice.
As the Committee is aware, reverse onus of proof clauses do not necessarily breach paragraph 2 of Article 6 of the European Convention on Human Rights. However, our courts have held that the imposition of a persuasive burden of proof on the defendant in respect of the crucial elements of an offence breaches paragraph 2 of Article 6. For example, in R v Lambert the Judicial Committee of your Lordships' House held that, in accordance with the principle of proportionality reverse onuses of proof clauses in the Misuse of Drugs Act 1971 should impose only an evidential rather than a persuasive burden of proof in order to comply with paragraph 2 of Article 6.
Although it may be open to the courts to interpret Clause 11 so as to impose an evidential burden only in accordance with the Human Rights Act, in my submission it should be clarified on the face of the legislation' that the burden to be imposed is evidential rather than persuasive. Indeed, reverse onus of proof clauses in recent legislation have been expressly drafted so as to impose an evidential burden only following human rights concerns expressed in your Lordships' House and another place—for example, in Section 118 of the Terrorism Act 2000 or Section 53(3) of the Regulation of Investigatory Powers Act 2000.
In short, a similar provision in Clause 11 would help to ensure that the reverse onus clauses in the Bill are applied in accordance with the principles of the convention. I beg to move.

§ Lord Thomas of Gresford
In supporting the amendment, speak also to Amendments Nos. 24 and 25 and their concurrent amendments in relation to Scotland. We are concerned also with the substitution of the legal or persuasive burden of proof as currently drafted with an evidential burden.
The general and sensible principle of litigation, whether civil or criminal, is that he who asserts must prove. It is difficult to prove a negative. Negative evidence is always circumstantial or indirect where a respondent must prove the existence of a fact, or a series of facts, which is or are inconsistent with the fact which his opponent is asserting and he seeks to disprove.
We have here in straightforward language a reverse burden of proof which, as the noble Lord, Lord Kingsland, said, always attracts the interest of the 66 lawyers who are engaged in considering the provisions of the European convention. The clause states that property transferred, held or purchased is the result of the respondent's general criminal conduct. That is the presumption that the court must make unless there is evidence to the contrary. As drafted, the respondent must prove a series of facts which are inconsistent with that proposition. For example, he must prove that he has been given money, won money on the horses, has had a bonus from the Stock Exchange or has had money from specific innocent sources. In principle, that is far too heavy a burden to impose upon an individual. The evidential burden should replace that which is drafted so that the respondent may discharge that burden by adducing evidence of a reasonable possibility of the existence of such facts and then leave it to the applicant—whether it is the prosecutor or whoever—to establish overall that the property is indeed the proceeds of crime.

§ Lord Goodhart
Amendments Nos. 25, 105 and 153 relate to a parallel matter but are not consequential on the earlier amendments with regard to what happens if an application is dismissed.
Under Clause 11(7), if the court does not make one or more of the required assumptions it must state its reasons. Whether or not the burden of proof is changed, if there is a serious challenge to the assumptions, even if that assumption were accepted and the challenge to it dismissed, the court should state its reasons. In such a case there would be the possibility of an appeal. It is surely a basic principle that where an issue has been debated fully before a court the court should be required to give its reasons whichever way that decision goes.
I do not suggest that the court should be required to give its reasons where there is effectively no challenge to the assumption. But where a serious challenge is made, natural justice requires that the court should be required to give its reasons whichever way it decides.

§ Lord Goldsmith
The key question is whether what is a persuasive burden should become an evidential burden.
The starting point must be the state of the existing law. The state of the existing law both under the Drug Trafficking Act 1994 and the Criminal Justice A ct 1988 is that the burden is on the defendant. It is not simply an evidential but a persuasive burden. Those provisions have been considered by this House and in the Court in Strasbourg and have been found in the circumstances to be acceptable.
What are those circumstances? The circumstances are that it is notorious that criminals can hide, through a paper trail—or a paperless trail—where proceeds of crime have gone. Secondly, there is the great practical problem of dealing with the situation. I indicated and do so again that if the defendant simply had to reply to a question, he could say, "The £10,000 that you found I won on gambling", or "I was given it by a man whose name I can no longer recall". Unconvincing though those statements may be, it would be for the prosecutor or the director to prove, contrary to those 67 assertions, that the money had come from a criminal source. In practical terms, that would be extremely difficult.
The defendant will always be in the best position to account for his assets. He will be able to say from where they came and how he acquired them. As I understand it, that is why the courts have accepted that while often, as the noble Lord, Lord Kingsland, said, it would be inappropriate to place on a defendant a burden of proving something in proceedings, in this situation the legislation so provides and the courts at the highest level have accepted that it is legitimate and proportionate in the circumstances.
Having regard to the fact that there is the additional safeguard of the serious risk of injustice proviso, the Government strongly take the view, as they did in another place, that it would not be appropriate to change the basis upon which the burden is set at present in the Bill. That is in no way unreasonable having regard to the practical problem and the fact that it is not an imposition on a defendant to explain where his property came from, bearing in mind that we are concerned with someone who has been convicted of a criminal offence. At this stage we accept only cases that arise after a criminal conviction. On the contrary, as upheld in the highest courts, it is reasonable, proportionate and legitimate.
I turn briefly to the point raised by the noble Lord, Lord Goodhart, of whether the court should give reasons. I have no doubt that the court will, in the kind of case to which the noble Lord referred, give reasons that will be recorded in a transcript, although there may be exceptional circumstances where that does not happen. In this place one must never say "always" because one never knows to what use it will be put hereafter. I would expect any court, before whom there has been a debate about whether an assumption is appropriate and it has decided to reject a defendant's case, or even to accept it, to give those reasons. I anticipate that that would happen in practice. With respect, I do not see a need to spell that out on the face of the legislation.
With what comfort my statement of expectation brings, at least in that respect, I hope that the noble Lord will not press the amendment. As to the main basis of the amendment, the opposition is strong for the reasons that I have given.

§ 6.45 p.m.

§ Lord Kingsland
I thought that the noble and learned Lord would reply as he did. I understand his reasons for doing so. On the one hand, noble Lords have to address the interests of society in ensuring that conduct of the kind that we are seeking to penalise is properly penalised and, on the other hand, your Lordships have to balance against that the rights of the individual in the context of paragraph 2 of Article 6 of the European Convention on Human Rights. Your Lordships have to decide, as a matter of constitutional judgment, in which direction to lean. Our preliminary view is that the contents of the amendment reflect the 68 right balance. However, the noble and learned Lord is always persuasive at the Dispatch Box; so I shall read carefully what he said, reflect on it and consider whether to return to the matter on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Baroness Buscombe
moved Amendment No. 22: Page 6, line 14, leave out "serious" and insert "real The noble Baroness said: In Clause 11 the court must make certain assumptions for the purposes of deciding whether or not a defendant has benefited from his general criminal conduct and for the purposes of deciding his benefit from the conduct. Those assumptions are set out in that clause. Those assumptions are, however, rebuttable assumptions. By subsection (6) a court must not make an assumption if the assumption is shown to be incorrect. The same subsection provides that the court must not make an assumption if there is a serious risk of injustice if the assumption were made.
We believe that that threshold is too high. We agree that if there were a serious risk of injustice, the assumption should not be made. We believe that if there is a real, as opposed to a serious risk, of injustice the assumption should not be made either. Our amendment seeks to replace the word "serious" with the word "real" which would lower the threshold to a more acceptable level. If the Bill remains in its current form, the court will have to make certain assumptions even where there is a real risk of injustice. Surely that cannot be right. While I have little sympathy with convicted criminals who have a criminal lifestyle, it is not right that we stoop to their level by subjecting them to a real risk of injustice. However low a man may be, he is still entitled to justice and if there is a real risk of injustice should certain assumptions be made, those assumptions should not be made. I beg to move.

§ Lord Goodhart
Although we have not put our names to these amendments, we on these Benches support them.

§ Lord Goldsmith
This is a short point. The existing legislation—the Drug Trafficking Act 1994 and the Criminal Justice Act 1988—uses the same expression as appears in the Bill, "serious risk of injustice". We want to maintain the concept in the existing legislation which has caused no difficulty.
The footnote to that is that the noble and learned Lord, Lord Steyn, in one of the judgments to which I referred earlier indicating that the reverse burden was acceptable, proportionate and legitimate, used those words. In the context of legislation that uses the expression "serious risk of injustice", he talked about whether there is or may be a serious or real risk of injustice. So it appears that in this House no real distinction, in any event, is judicially drawn between the two words. The main point is that we would not want to depart from the existing language which has 69 caused no difficulty. I hope that the noble Baroness finds that explanation helpful and will withdraw the amendment.

§ Baroness Buscombe
I thank the Attorney General for his response to the amendments. With great respect, I believe that there is a difference between "serious" and "real". Something can be real without being serious. I hear what he has said in relation to current law, but I still believe that what I have set out is correct, or more just. We shall consider the matter further and may return to it on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Goodhart
moved Amendment No. 23: Page 6, line 14, at end insert— ( ) Evidence that any property was transferred to or obtained by the defendant as winnings from betting or gaming is not evidence which shows that the first or second assumption is incorrect. The noble Lord said: This is meant as a probing amendment. It proposes that there should be a new subsection which states that, Evidence that any property was transferred to or obtained by the defendant as, winnings from betting or gaming is not evidence which shows that the first or second assumption [in Clause 11] is incorrect". Claiming that money has been acquired as winnings from gambling is in fact one of the easiest ways of laundering it. It is perfectly possible to do that while at the same time producing perfectly genuine documentation to show that winnings have been obtained. Let us take an obvious example. It would be perfectly possible in a race between, say, six horses to put a suitable level of bet on each horse. One claims the winnings and one has documentation to prove it, but simply destroys the documentation which shows that one also had losses on the same race.
It may well be—I hope it is the case—that the Minister will be able to say that my fears about this are ungrounded because if anyone claims that winnings were obtained from gambling he would also have to establish that the stake money itself was not obtained from the proceeds of crime. If it is, or it cannot be shown to have been obtained innocently, then the gambling winnings are also potentially subject to a confiscation order. If that is not the case, then something of the kind proposed in this amendment—I am not suggesting that the drafting is perfect—is required in order to stop up what otherwise might be a serious loophole in the operation of the Bill. I beg to move.

§ Lord Goldsmith
The noble Lord has raised one point to which I want to return concerning the stake money. But first I want to deal with the basic point, which I understood to lie behind the amendment: to disentitle a defendant from asserting that property was acquired as a result of gaming. The reason that we could not accept the amendment, to the extent that it precludes a defendant from doing that, is that indeed he may have received moneys from gaming. As I 70 believe I indicated at Second Reading, we were sympathetic to the thrust of the point made by the noble Lord in that he is right in identifying a possible way in which a defendant might seek to explain his earnings. He would still have to demonstrate that that was the case. He would have to show that the assumption was incorrect.
The fact is that besides gaming almost any use of cash can be relied on in the same way to explain why assets have been acquired. Equally, if the defendant dealt in cash as part of his business he could claim that money coming into it explained away criminal assets, but not alert the court to the fact that cash was also going out of his business. Any attempt to try to deal with this problem in the way proposed would result in an unacceptable level of injustice to the defendant. That is the main thrust of the point.
The noble Lord raised the additional question to which I shall not venture an answer this afternoon: what would the court make of a situation where these were the facts—that the court was satisfied that moneys had been obtained from gaming, but that the stake had itself been the proceeds of crime? I simply do not know how likely it is that the court would get into that factual situation. Everything is theoretical and therefore very interesting for lawyers to consider. One would need to consider whether, as regards Clause 11, the relevant assumption would be that the property was obtained as a result of general criminal conduct, and whether the court would say, if it was obtained as a result of using a stake which was the proceeds of crime, that that in itself constitutes for these purposes property obtained by reason of criminal conduct. I do not want to venture an answer to that, but simply pose the question. I undertake to give further thought to it. As regards the basic amendment, for the reasons I have given, and respecting the spirit in which lit has been put forward, it cannot be accepted.

§ Lord Goodhart
I am grateful to the noble and learned Lord for that answer. We are concerned to strengthen the Bill where we believe it needs strengthening. We believe that this amendment applies to one of those places. I accept that one cannot justify a general prohibition on all winnings from gaming being treated as though they were part of the proceeds of crime. But I believe that if' there is a burden on the defendant to prove the source of assets, there should be a burden on the defendant to prove that the stake money which produced the winnings was itself innocent money rather than money acquired by crime. Unless in the interim the Government produce something which is more acceptable, it could be a matter we would wish to return to at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ [Amendments Nos. 24 and 25 not moved.]

§ Clause 11 agreed to.

§ Clause 12 [Time for Payment]:

§ Baroness Buscombe
moved Amendment No. 26: Page 7, line 2, leave out from "period" to end of line 3. 71 The noble Baroness said: The purpose of this amendment is to seek to prevent fettering the discretion of the court in exceptional cases. It concerns time for payment under a confiscation order.
There are frequently persons who have been convicted of offences and against whom confiscation orders have been made, but who do not have funds to pay them; for example, persons who have been convicted of supplying drugs to feed their own habit and, following sentence, they and their family are legitimately on benefit with no assets. Currently, those persons are ordered to pay, say, £2 or £5 per week towards the confiscation order. If there are no means with which to pay then a mandatory time limit is pointless and could lead to a default prison sentence with the order still to pay. We suggest that these are not the categories of persons against whom the Bill is aimed, but they may commonly fall within its remit. I beg to move.

§ Lord Rooker
I shall reply to the thrust of the amendment. It is technically defective in that Clause 12(4) would need to be deleted to give indefinite time to pay. The only effect of this amendment as it stands is that an application could be made at any time after the end of the specified period. But if the 12 months has already expired under Clause 12(4) the court would not be able to grant the application.
The effect of the amendment is to give the court the power to grant unlimited time to pay a confiscation order. Clause 12 sets out to address one of the main problems of the current system for enforcing confiscation orders. They are basically enforced like Crown Court fines.
One of the consequences of the regime is that the Crown Court, when it makes a confiscation order, has the power to allow payment by instalments and time to pay. There is some evidence of the unacceptable use of the present powers. We are informed that the present typical period seems to be between two and three years. To improve matters we are abolishing payment by instalments and placing a finite limit on the court's power to allow time to pay.
This Bill expects offenders to pay their confiscation orders straightaway, as provided here. The amount of the confiscation order is based on the value of the property available for enforcement when the order is made and not on an assessment of future earnings. Only if an offender produces a particular reason justifying time to pay should any time be allowed.
In no circumstances do we consider that the period should be extended beyond 12 months. Even if there are exceptional circumstances, no defendants should take more than a year to dispose of their assets in order to satisfy a confiscation order.
Far from speeding up enforcement, these amendments would preserve the open-ended payment regime that is one of the current system's weak points. I hope that in the light of my remarks the noble Baroness will withdraw her amendment.

§ 7 p.m.

§ Baroness Buscombe
I thank the Minister for his helpful response, which I entirely accept. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clause 13 [Interest on unpaid sums]:

§ [Amendment No. 27 not moved.]

§ Clause 13 agreed to.

§ Clause 14 agreed to.

§ Clause 15 [Postponement]:

§ Lord Rooker moved Amendment No. 28: Page 8, line 9, leave out subsection (1) and insert— (1) The court may—

(a) proceed under section 6 before it sentences the defendant for the offence (or any of the offences) concerned, or
(b) postpone proceedings under section 6 for a specified period.

(1A) A period of postponement may be extended.

§ On Question, amendment agreed to.

§ [Amendment No. 29 not moved.]

§ Clause 15, as amended, agreed to.

§ Clause 16 [Effect of postponement]:

§ [Amendment No. 30 not moved.]

§ Lord Rooker
moved Amendment No. 31: Page 9, line 29, leave out paragraph (b). On Question, amendment agreed to.
Clause 16, as amended, agreed to.
Clause 17 [Statement of information]:

§ Baroness Buscombe
moved Amendment No. 32: Page 9, line 38, at end insert— ( ) The content of the statement shall be drawn up in a manner conforming to guidance issued to the Director by the Secretary of State under Schedule 2(5) hereof. The noble Baroness said: The purpose of the amendment is to ensure quality and to standardise requirements for the contents of the statement of information.
Clauses 17 to 19 deal with the provision of information by the prosecution and by the defendant in confiscation proceedings. Information provided by the prosecution in such proceedings is often extremely sketchy and sometimes almost non-existent in nature. Examples of half a side of A4 paper constituting a statement from the prosecution are not unknown.
The Bill does not address the content of any statement of information provided by the prosecution under Clause 17, simply stating that information must be relevant in deciding whether a defendant has a criminal lifestyle, and whether he has benefited from his general criminal conduct. A code of practice which sets out in a little more detail the actual information that must be provided by the prosecution, or indeed the defendant, would ensure quality and standards.
It is important to note that where the court of its own motion proceeds to confiscation, it may decide that there is no need for a statement to be made by the 73 prosecution or the director. The fact that the court: is proceeding of its own motion rather than the prosecution requesting confiscation should not remove the need for the prosecution to provide a statement of information. We believe that that is illogical.
We welcome Clause 17(4)(b), which requires the prosecution or the director to include information in any statement if an assumption being made would result in a serious risk of injustice. Presumably this is one of the "safeguards" which have been identified by the Government as protecting an individual defendant from what remains a draconian power. I beg to move.

§ Lord Goodhart
The other amendments in the group—Amendments Nos. 33 to 35, 113 to 115 and 157 to 159—stand in our names. They refer to the information which the prosecutor or director must place before the court in proceedings for a confiscation order.
Under Clause 17, the director or prosecutor must provide a statement of information. Under subsection (3) the statement of information is a, statement of matters the prosecutor or the Director believes are relevant", in deciding whether the defendant has a general criminal lifestyle and has benefited from it.
The reference is not to "the matters" or to "all matters"; it is merely to "matters". The wording is similar in subsection (4) in relation to information relevant to the assumptions that are to be made under Clause 11. Under Clause 17(5), If the prosecutor or the Director … does not believe the defendant has a criminal lifestyle", it alleges a benefit from his particular criminal conduct.
I believe that the prosecutor or the director should be required to include all information in the statement which he believes is relevant. That would include information which, for example, might be inconsistent with the claim of there being a criminal lifestyle.
Amendments Nos. 33 to 35, as I have said, amend Clause 17 to ensure that all the information which the prosecutor or the defendant thinks is relevant must be included in the statement of information. I accept that it may be the intention anyway, but an amendment of this kind would clarify that and clear up a matter that is not clear at present. The later amendments apply to the Scottish and Northern Ireland situation.

§ Lord Rooker
Amendment No. 32 relates to an operational matter. The Secretary of State is not the person who is best placed to lay down guidance. We see no reason why the Secretary of State should be required to issue guidance to the director, or to anyone else for that matter, as to the contents of a statement of information. It is not a proper function for the Secretary of State. In any case, we see no reason why the contents of a statement should be formalised. There should be some flexibility to allow the statement to contain what is necessary on a case-by-case basis.
74 The amendment relates to existing legislation with which I am personally unfamiliar, but the statement system has been in place for 15 years. I am told that it has been one of the more successful elements in the confiscation regime. We have received no complaints about its operation. After that period of time, therefore, it appears to have been tried and tested.
In response to the noble Lord, Lord Goodhart, we do not believe that the amendments are necessary. The effect of Clause 17 as drafted is that the statement must include all relevant information, simply because it does not contain any exceptions. If the court considers that it needs more information, it can ask for that information under Clause 17(6). I hope that the noble Baroness and the noble Lord find that answer satisfactory.

§ Baroness Buscombe
I thank the Minister for his response which is a little disappointing. I agree that there should be flexibility on a case-by-case basis. Some form of guidance would not necessarily disallow that flexibility; it might even encourage the production of more information relevant to each case so that a proper judgment could be made as to whether a defendant has a criminal lifestyle. I repeat that information provided by the prosecution is often in practice bald, extremely sketchy and barely existent. We believe that guidance notes would make a positive contribution to the Bill.
However, I hear the Minister. I am disappointed but I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ [Amendments Nos. 33 to 35 not moved]

§ Clause 17 agreed to.

§ Clause 18 agreed to.

§ Clause 19 [Provision of information by defendant]:

§ Lord Thomas of Gresford
moved Amendment No. 36: Page 11, line 24, at end insert— ( ) Information given pursuant to an order under this section may not be used in evidence against the defendant in criminal proceedings, other than in proceedings under section 6. The noble Lord said: The purpose of the amendment is that information given under Clause 19 shall not found a subsequent criminal prosecution. That is not the purpose of the clause, which is part of a quasi administrative procedure in which the civil standard of proof operates.
The court will make an order requiring all or a specified part of the information to be given in a specified manner and the sanction appears to be not that refusal to obey the order would amount to contempt of court but that the court may draw such inference as it believes is appropriate if the defendant fails to respond. I should welcome the Minister's assurance that contempt of court would not arise if an order were not obeyed in those circumstances.
Essentially this is the Saunders point and I can do no better than remind your Lordships of two passages from the judgment of the European Court of Human 75 Rights. Paragraph 68 refers to the right not to incriminate oneself, which presupposes that the prosecution in a criminal case seeks to prove its case against the accused without resort to evidence obtained through methods of coercion in defiance of the will of the accused. In that sense, the right is closely linked to the presumption of innocence contained in Article 6, paragraph 2 of the Convention. Your Lordships will recall that Mr Saunders was required to answer questions that were put to him by Board of Trade inspectors.
Paragraph 74 of the judgment stated that it did not accept the Government's argument that the complexity of corporate fraud, the vital public interest in the investigation of such fraud and the punishment of those responsible could justify the marked departure in that case from the basic principle of a fair procedure. It continued that the general requirements of fairness contained in Article 6, including the right not to incriminate oneself, should apply to criminal proceedings in respect of all types of criminal offence, without distinction, from the most simple to the most complex and that the public interest should not be invoked to justify the use of answers compulsorily obtained in a non-judicial investigation to incriminate the accused during the trial proceedings.
I appreciate that that judgment refers to a non-judicial investigation but that does not amount to a significant distinction from the provisions of the Bill. If that is the view that has been clearly expressed by the European Court of Human Rights, our amendment is one that we hope the Government will accept. I beg to move.

§ 7.15 p.m.

§ Lord Rooker
In the spirit of our debate, I shall consider the matter and return to it on Report.
I shall seek advice on the issue of contempt and will write to the noble Lord, Lord Thomas, well in advance of the Report stage.
Some people might argue that there is a respectable case to be made that evidence provided by the defendant in responding to an order under Clause 19 should be capable of being used against him, or indeed against others in separate criminal proceedings. We do not think that these orders are in the same category as orders to provide evidence under compulsion, such as in Saunders.
Clause 18(6) contains a provision that is very similar to that intended by the amendment. It goes further than the amendment in that it prevents the evidence from being used in the criminal trial of any person, not just the defendant. The provision has nothing to do with the Saunders judgment. The thinking underlying Clause 18(6) is that defendants are more likely to be honest and forthcoming about their benefit if the evidence they provide in response to a statement of information cannot be used to incriminate them or their associates.
Our thinking hitherto has been that Clauses 18 and 19 are different in the sense that Clause 18 statements invariably make allegations as to the defendant's 76 criminal conduct, whereas Clause 19 orders are unlikely to do so. It may be that the same issue is capable of arising under both clauses in much the same way.
However, as I said, I shall consider the amendments tabled by the noble Lord, Lord Thomas, and come back to them on Report.

§ Lord Thomas of Gresford
I am grateful to the Minister for his response and ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 agreed to.
Clause 20 [No order made: reconsideration of case]:

§ [Amendment No. 37 not moved.]

§ Lord Rooker
moved Amendment No. 38: Page 12, line 1, leave out paragraph (b). On Question, amendment agreed to.
Clause 20, as amended, agreed to.
Clause 21 [No order made: reconsideration of benefit]:

§ [Amendments Nos. 39 to 41 not moved.]

§ Lord Rooker
moved Amendment No. 42: Page 13. line 43, leave out paragraph (b). On Question, amendment agreed to.
Clause 21, as amended, agreed to.
Clause 22 [Order made: reconsideration of benefit]:

§ Lord Rooker
moved Amendment No. 43: Page 14, line 32, at end insert— (aa) there is evidence which was not available to the prosecutor or the Director at the relevant time, The noble Lord said: I am not complaining about the noble Baroness, but by not moving the first amendment when many others are grouped with it, she presents considerable difficulty to me. I shall explain the thinking behind the Government's amendments but I shall not discuss the amendments tabled by the Opposition because they were not moved.
The government amendments arise out of a point raised in the other place about Clause 22, as recorded in the Official Report on 27th November. First, under Clauses 20 and 21, the prosecutor and the director of the agency are allowed to apply to the court for a revaluation of the defendant's benefit from crime only if they have new evidence. Currently, there is no requirement of this kind in Clause 22. In theory, they could apply to the court on the basis of evidence that they have held in previous proceedings.
The question raised in the other place was whether the clause should not be brought into line with Clauses 20 and 21 in this respect. We agree that it should. The first purpose of the amendments is to make that clear. The director and the prosecutor will be able to apply under Clause 22 only if their evidence is new.
Secondly, our intention has always been that more than one revaluation should be possible under Clause 22. In looking again at the reconsideration clauses, we 77 doubt whether the wording of the clause currently achieves that intention. It appears to allow for one application only. We have accordingly taken the opportunity to make it quite clear that there may be more than one revaluation under Clause 22. We have also made changes to Clause 23, making it clear that more than one application can be made under Clause 23.
Finally, Clause 23 permits the prosecutor and director to apply to the court for an increase in the confiscation order where more realisable property comes to light. Arguably, the clause does not allow such an application to be made where a confiscation order has been varied under Clause 22. We have taken the opportunity to put it beyond doubt that such applications are permissible.
These government amendments are very much fine-tuning amendments in one of the more technical areas of the Bill. However, they will help to ensure that it operates exactly as we would wish. I beg to move.
On Question, amendment agreed to.

§ Lord Rooker
moved Amendments Nos. 44 and 45: Page 14, line 35, leave out from first "the" to end of line and insert "relevant amount Page 14, line 38, leave out "on which his belief is based On Question, amendments agreed to.

§ [Amendment No. 46 not moved.]

§ Lord Rooker
moved Amendments Nos. 47 and 48: Page 15, line 18, leave out from first "the" to "the" in line 19 and insert "relevant amount Page 15, line 45, at end insert— (11A) The relevant time is—

(a) when the court calculated the defendant's benefit for the purposes of the confiscation order, if this section has not applied previously;

(b) when the court last calculated the defendant's benefit in pursuance of this section, if this section has applied previously.

(11B) The relevant amount is—

(a) the amount found as the defendant's benefit for the purposes of the confiscation order, if this section has not applied previously;

(b) the amount last found as the defendant's benefit in pursuance of this section, if this section has applied previously."

On Question, amendments agreed to.
Clause 22, as amended, agreed to.
Clause 23 [Order made: reconsideration of available amount]:

§ Lord Rooker
moved Amendments Nos. 49 to 51: Page 16, line 17, leave out from third "the" to fourth "the" in line 18 and insert "relevant amount Page 16, line 22, leave out "(when the confiscation order was made) Page 16, line 37, at end insert— (7A) The relevant amount is—

(a) the amount found as the available amount for the purposes of the confiscation order, if this section has not applied previously;
78
(b) the amount last found as the available amount in pursuance of this section, if this section has applied previously.

(7B) The amount found as the defendant's benefit from the conduct concerned is—

(a) the amount so found when the confiscation order was made, or

(b) if one or more new calculations of the defendant's benefit have been made under section 22 the amount found on the occasion of the last such calculation."

On Question, amendments agreed to.
Clause 23, as amended, agreed to.
Clauses 24 and 25 agreed to.
Clause 26 [Small amount outstanding: discharge of order]:

§ Baroness Buscombe
moved Amendment No. 52: Page 18, line 3, leave out "£50" and insert "£500 The noble Baroness said: This amendment deals with a small point; namely, to allow for de minimis considerations in discharge of orders. The purpose of the power to discharge is that, where there are no assets left with which to discharge the order, £50 is such a low sum that it is almost meaningless. Any legal or court costs in considering the application would far outweigh that sum. Where there is no ability to pay but the circumstances do not fall under the Clause 24 inadequacy provisions, we believe that the court should be able to exercise sensible discretion—in which case we suggest that £500 is a more meaningful sum. I beg to move.

§ Lord Rooker
It may be useful to the Committee if I explained a little more of the background to Clause 26 at this point.
Representations have been made to us by justices' chief executives that the current legislation contains no provision whereby a confiscation order can be written off where only a small amount is remaining and cannot be satisfied. Consequently, such sums remain on the books of the justices' chief executives indefinitely and cannot be removed from court records, This clause responds to those concerns and allows the justices' chief executives to apply to the Crown Court to write off a confiscation order where all that remains is £50, or below.
We have considered carefully at what level to set the threshold. We did not want to pitch the level too high in order not to create the impression that defendants need not pay their orders because they know that they will be written off. As this is a new power, we believe that the level is modest and about right. If it turns out to be too low, it will be open to the Secretary of State to make an order to raise the threshold by virtue of subsection (3). In the light of that explanation, I hope that the noble Baroness will be satisfied and feel able to withdraw her amendment.

§ Baroness Buscombe
I thank the Minister for his response, for which I am grateful. I am also grateful to him for offering further background on the drafting and meaning of Clause 26. I entirely understand what the noble Lord said with regard to not wishing 79 defendants to believe that the sum would just be written off. On that basis, I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ Clause 26 agreed to.

§ Clause 27 agreed to.

§ Lord Davies of Oldham
I beg to move that the House do now resume. In moving the Motion, perhaps I may suggest that the Committee stage begin again not before 8.30 p.m.

§ Moved accordingly, and, on Question, Motion agreed to.

§ House resumed.