HL Deb 16 July 2004 vol 663 cc1549-66

Lord Slynn of Hadley rose to move, That this House takes note of the Report of the Joint Committee on the Draft Corruption Bill (HL Paper 157).

The noble and learned Lord said

My Lords, perhaps I may say first what a personal pleasure it is that my speech will be followed by that of the noble Lord, Lord Dykes, who I very much welcome to the House and to this debate. We have been friends for many years and his contribution in another place and in European politics has been considerable. I am delighted that he has decided to take part in this debate.

Corruption has for a long time been regarded as a criminal offence. The common law offence of bribery goes back for centuries and Parliament has added statutory crimes in the Public Bodies (Corrupt Practices) Act 1889 and the Prevention of Corruption Acts of 1906 and 1916. The latter dealt with not only the public but the private sector. But our domestic law has for many years been regarded as unsatisfactory and the Law Commission decided to look at it. The commission concluded in its report, delivered in 1998, that the current law was obscure, complex, inconsistent and insufficiently comprehensive. That is a good start for a review of the law.

However, the law not only needed to be clarified; it needed to take into account the huge increases in trade and the technological changes in business practice. Moreover, it needed to take into account the international conventions relating to the developed and the developing world which sought to eradicate corruption.

In its report the Law Commission suggested new legislation. After much consultation and discussion, the Government published a Draft Corruption Bill five years later, on 24 March 2003, and appointed a Joint Committee of the two Houses to consider it and to report within four months. In its main provisions the Government's draft Bill closely followed the recommendations of the Law Commission. In the course of our inquiry it became clear that there was general agreement that new legislation was needed and there was some support for the approach adopted in the new draft Bill.

In the course of our inquiry, however, there was considerable and strong criticism of the approach adopted in the Bill and its drafting, which was said by many to be on the wrong lines. Moreover, it is too complex and not sufficiently clear and comprehensible. The importance of the subject is underlined by what the noble and learned Lord, Lord Falconer of Thoroton, then the Minister promoting the Bill, wrote in the introduction. He said: Corruption is potentially devastating. If it is not kept in check, it has the potential to cause serious damage to government and business—indeed to every aspect of economic and social life. We need to be constantly on our guard against corruption—it is a complex crime, by its nature very insidious and its effects stretch across international borders. Corruption world-wide weakens democracy, harms economies, impedes sustainable development and can undermine respect for human rights by supporting corrupt governments, with widespread destabilising consequences".

That stresses not only the importance but the width of this particular crime.

The committee took the view that it was first necessary to consider whether the law was so deficient that it was necessary to consider legislation. On the evidence that we received that was not really an issue. More significant, therefore, were the next two questions that we asked ourselves. Does the draft Bill sufficiently criminalise conduct that is corrupt without criminalising any conduct which is not? Secondly, does the Bill clearly state what types of conduct are punishable as corrupt, in language that can be understood readily by the police, prosecutors and the public, especially including the business and public sector communities and their advisers, both here and abroad?

Those questions are at the heart of the matter, but there are other important questions. Should parliamentary privilege, as contained in Article IX of the Bill of Rights of 1689, be waived or removed in corruption cases? Should the intelligence services be exempt from prosecution for corruption? Should the Attorney-General's consent be required for the prosecution of corruption offences?

To begin at the beginning, what should be the scope—the ambit—of corruption for the purposes of the criminal law? There is no universally agreed definition. We looked, inter alia, at the South African. the Australian, the Canadian, the OECD's and the Council of Europe's definitions. Some are wider than others. Some are limited to public officials. Some have one general offence. Others consist of a number of specific offences, as is now contemplated in South African legislation and is supported by Transparency International UK, which gave us valuable assistance. We took the view that it was better to have one overarching broad offence, as the Government have done, even if subsidiary or specific offences may deal with specific matters. So, we return to the question: was the draft Bill with its specific offence on the right lines?

The draft Bill adopts, and the Government in their evidence resolutely stuck to, the principle that corruption is at base, and is only, a breach of loyalty. Accordingly, they looked for the relationship of principal and agent, and regard the relevant question in substance as being whether the agent has cheated on the principal. If that relationship does not exist, there can be no offence. Moreover, if the principal consents to what the agent does, there is no offence. They provide for that in a way which I should very much like to read to your Lordships in full. If one reads through the clauses of the draft legislation your Lordships will see why we conclude that this matter is complex and not easily understandable.

However, in view of the hour on a Friday afternoon, I shall resist the temptation to read those very complex clauses. However, I particularly commend to your Lordships' attention Clauses 5, 6, 7 and 11 to see how the Government trace through the meaning of "advantage", the meaning of "corruption" and what it means to "confer" and to "receive". So, sadly, I shall leave out those definitions.

The approach adopted by the Government, which your Lordships will have read in detail in due course, is one way of dealing with the matter. But is that right and is the language clear enough? There was a conflict regarding the latter. In relation to the question of whether there should be one offence or a list, the noble and learned Lord, Lord Falconer, said, we have gone for a middle course which we think embraces both simplicity but also clarity and codification".

On the other hand Mr George Staple, who has had considerable experience of the administration of fraud law, thought that the proposed definitions would not be readily understood by police, prosecutors, jurors and the public without considerable study. The CBI and the Director of Public Prosecutions expressed concern about the lack of clarity. The committee concluded that the language was complex and that Mr Staple's view was correct.

As to whether the approach was right, we considered whether the Bill, with its insistence on the principal/agent relationship, could be improved by the concept of dishonesty, which is not expressly in the Bill, on the basis that it should be made clear that the definition of "corruption" should incorporate some element of immoral or improper behaviour or whether the Bill should state that the advantage should be "improper" or "undue" or an advantage to which a person is not entitled.

We came to the conclusion that to tinker in that way with the Bill was not sufficient to deal with the problem. Nor did we think it right to define "corruption" on the basis of the harm done to society or to business in a way that was suggested to us. In addition, we did not accept that it was sufficient to rely on the anti-trust law or the competition law in this country in order to deal with certain aspects of the matter.

The committee, which included lawyers of considerable criminal law experience from both Houses, was unanimous that the agent/principal approach left out conduct which should plainly be regarded as corrupt and conduct which should not simply be left to be dealt with by other statutory provisions. We suggested a possible test on page 35 of our report. We said that, we consider that (leaving aside related offences) the essence of corruption could be expressed in the following terms: A person acts corruptly if he gives, offers or agrees to give an improper advantage with the intention of influencing the recipient in the performance of his duties or functions; A person acts corruptly"—

this is the converse— if he receives, asks for or agrees to receive an improper advantage with the intention that it will influence him in the performance of his duties or functions".

We said that a possible alternative would be to substitute for the phrase "improper advantage" the words "advantage to which a person is not legally entitled".

We do not for a moment suggest that that is the only possible definition which could be given. We fully accepted that parliamentary counsel could improve on our drafting. But we think that the essence of "corruption" is set out there and that that approach is better, as well as clearer and simpler, than that contained in the draft Bill.

It may be that our present draft leaves out some acts which should be considered offences, as the Government, in their reply, suggest. However, it is notable that, in their reply, the Government accept that redrafting could "iron out these lacunae".

It is also possible that the draft which we have adopted would, on its face, include certain matters which arguably should not merit prosecution or punishment. We heard much about retaining facilitation payments, hospitality, tips and commission in the provision of financial services. We came to the conclusion that the Bill should not exclude those matters from the definition.

We recognise that there is a wide range in what is given or offered with a corrupt purpose. But it does not seem desirable to seek to define a priori where the line is to be drawn between the trivial gift (a drink in the bar), the medium-sized gift (a round of golf) and the expensive present. As the Serious Fraud Office told us: The proper use of prosecutorial discretion is one important way of ensuring that the line is correctly drawn between morally questionable behaviour and criminal conduct".

We stress that the use of the word "improper" in our draft would enable a jury to decide that, in particular circumstances, trivial hospitality would not be improper. That would be no more difficult—perhaps less difficult—than asking the jury to decide, as the Government ask the jury to decide, whether the advantage given was intended to be the primary motivator. In any case, it is difficult to see why tipping may be unlawful if the principal does not give his consent but lawful if he does.

As has been seen, we preferred to refer to the giving of an "improper advantage". But we suggested an alternative: "an advantage to which a person is not legally entitled". That is not the same as, but is directly comparable with, what is contained in the Australian legislation, which states that a benefit is not legitimately due.

The Government say that if that alternative—it is only an alternative—means that so long as there is some legal basis for the advantage, there is no corruption, that is "a charter for corruption". I hope that the Minister will allow me to say that, if this approach is adopted, the phrase "a charter for corruption" is a bit rich coming from a department which would make it lawful for a benefit to be accepted by the agent if the principal consented. I must confess that I found the suggestion that what we were proposing was a charter for corruption a somewhat pejorative way of expressing a criticism of a possibility suggested by a committee which had given considerable attention to this difficult question on the basis of legislation elsewhere.

The Government recognise that their Bill is visually fairly complex. On that point, I regret that I could not read to your Lordships Clauses 5, 6, 7, 9 and so on. The Government concede that their Bill may well not be immediately understood by laymen. But they say that once you can make your way through this thicket, you will in the end achieve uniformity and that is more important, apparently, than clarity. Primarily, say the Government, it gives an adequate steer which jurors will understand. I suggest that "improper" is even more intelligible.

I repeat, we do not say that our draft is the only one but it does express, however inadequately, that what the committee says unanimously is the right approach. We consider a number of other possibilities that your Lordships will find in the report.

We do not claim infallibility. The committee states, with conviction, that the agent/principal test is not the appropriate one. We invite the Home Secretary perhaps to step back from the Bill and to reconsider how a criminal offence can be defined which is wide enough, meeting the essentials of corruption and in language which is intelligible rather than to hold on so resolutely to the agent/principal test. That was the main point of the debate. The other matters I can deal with more shortly. There are three points which I need to mention. First, should the Attorney-General's consent be required for a prosecution? Someone's consent is required. People should not be allowed to make wild allegations of corruption without some form of filter. The committee conceded, and I understand that the Government accept, that the Attorney-General's consent is not necessary. We thought that in addition to not needing to involve the Attorney-General, it was undesirable that he as a member of the Government should control the right of people to bring corruption cases. We have proposed that the Director of Public Prosecutions, with the power to delegate to a named specific deputy, would be suitable.

The second question, which I mentioned earlier, is what is the position of the intelligence agencies. They have the most difficult task. Should they be liable to prosecution for corruption or should they be exempted? Clause 15 of the Bill deals with that. We heard a great deal of evidence on that. We had no doubt that in matters of national security and the prosecution and detection of serious crime, the exemption was justified. Some of their functions cover the safeguarding of the economic well-being of the country. It seemed to the committee that it was right that these should not be protected by an exemption. To include the economic activities went too far and was clearly in breach of our international obligations, which we set out in the report.

More difficult is the question of parliamentary privilege. Your Lordships are familiar with Article IX of the Bill of Rights, which provides that proceedings in Parliament shall not be impeached or questioned in any court or place out of Parliament. The question is, as the Bill proposes in Clause 12, should that be removed altogether.

Two very important principles come into conflict here: the desirability, the need, for free speech in Parliament and, on the other hand, the need to prosecute for serious offences. So the question is, first, should Clause 12 of the proposed Bill be left as it is so that no one is protected under Article 9. Secondly, should we leave the law as it is so that freedom of speech is fully preserved; or thirdly, should we adopt a midway course?

We heard very strong evidence in favour of the two extremes. We came to the view in the end that the provision was justified in relation to witnesses in parliamentary proceedings before Select Committees and so forth, but should not be retained in respect of prosecutions against Members of Parliament and against others where the evidence alleged was the same.

In our report—this is my final major point we said very clearly that the position should be that to the extent that the words or actions of an MP or a Peer are admissible for or against him, they should also be admissible for or against all co-defendants in respect of corruption offences based on the same facts. So, the protection of witnesses, those not Members of either House, would be retained.

The Government recognised in their reply that this was a delicate and complex constitutional question, on which they wished to seek the opinion of both Houses. I understand that there may have been a development in the Government's thinking and perhaps that is no longer an issue between the Government and the committee. The Minister will no doubt tell us.

Finally, the committee recommended that, contrary to many representations, we should not include an offence of trading in influence and the offence of misconduct in any public office. We also recommended that United Kingdom companies should not be made liable for the actions of their non-resident subsidiaries and agents. That matter caused great debate in our inquiry. There is an argument both ways. We came to the clear conclusion that there should not be liability for the actions of nonresident subsidiaries and that the individuals concerned would be liable to prosecution. As I understand it, the Government also accept that.

This is a complex Bill, and the issues to which I have adverted briefly are not entirely easy. I hope the House will consider that the report of the committee has dealt with the really important matters. The committee wishes to record its considerable appreciation of the great assistance given by Professor Alldridge, our specialist adviser, and other members of the committee staff, led by Andrew Kennon and Mary Robertson. Mr Kennon devoted great time in giving us the benefit of his experience and advice, and we pay particular tribute to him.

As someone who has not previously taken part in a Joint Committee of both Houses, may I say what a highly educative and agreeable experience it was? I am particularly happy that we were able to reach a unanimous conclusion. I express my appreciation for the co-operation of all members of the committee, who often had to meet at highly inconvenient times.

Moved, That this House takes note of the Report of the Joint Committee on the Draft Corruption Bill (HL Paper 157).

2.15 p.m.

Lord Dykes

My Lords, the stunning and magisterial speech we have just heard from the noble and learned Lord, Lord Slynn of Hadley, indicates two things for a newcomer like myself making a maiden speech today. The first is the high quality of contributions in the House of Lords. During 27 years of hard grinding in the House of Commons, I was often told that the quality of speeches was much higher. That has been shown amply not only in the speech made by the noble and learned Lord, Lord Slynn, but in other contributions today in other debates.

Also there is the noble Lord's distinction-something that pleases me, as an enthusiastic European—as first of all advocate-general in the European Court of Justice and afterwards president, working with great distinction there for a number of years and contributing greatly to the development of the corpus juris in Europe. I add my pleasure at seeing the president and chairman of the Luxembourg Society in the United Kingdom, representing a country so successful that the unofficial definition of poverty there is owning two small Mercedes.

It is a great honour for me to be in the House making this speech and referring to the Bill, albeit after a few words, if I may crave the House's indulgence. I am wearing a yellow badge saying, "I was in Leicester South". Of course, we Liberal Democrats are extremely pleased with last night's events and results, and frustrated, but none the less also enthusiastic, about the near win we had in Birmingham Hodge Hill.

One of the greatest pleasures of coming to this House has been the extraordinary kindness of all the staff, the Doorkeepers, the officials, the high officials of the House—Black Rod and his office—and everybody concerned. If I leave out anybody it is only for reasons of time. As a newcomer, one feels quite overwhelmed, and I am sure other new Peers would agree. The welcome is overwhelming in an institutional and a personal sense. I thank my Liberal Democrat colleagues, and colleagues and former colleagues in other parties whom I have known over the years, for their equally warm welcome.

The addition of eight Liberal Democrat Peers adds to our total. I suppose that if one said—I hope that I am not being controversial in any way—that there was roughly a sort of "Cook-Maclennan Mark II" ruling in current political conditions in the Upper House, then we would be getting closer to that target figure of 92 or 93, which the noble Baroness, Lady Scotland, may recall from the old days when such things were first promulgated after the 1997 Labour victory.

Be that as it may, I suppose that there will be fierce tussles even in this place, which is much gentler—quite rightly—and more civilized than the other place, in the run-up to the general election, with all the party tussles and battles. It remains my conviction—I hope I will not annoy any noble Lords by being too controversial in a maiden speech—that this House's role will become even more important in the future in those general and specific political matters as well and also of course in connection with the European Union and its future development. Equally, I say with some sombreness that the public dismay about Iraq will not go away completely. I am sure that that is recognised in all parts of the House.

I thank the noble and learned Lord, Lord Slynn, for his sagacious guidance on such a complicated matter. As a non-lawyer my heart sinks because the huge complexity of getting a modern definition of corruption and corrupt acts—mainly in business, but also, I imagine, in other human and social contacts, if money is to change hands—must be seen to be believed. The Government should be commended for launching the exercise in a very careful way, after responding to the Law Commission's own investigations, which took a considerable amount of time and were part of their general work in modernising various statutes and laws related to such matters over the years.

I was very struck by the comments of the noble and learned Lord the Lord Chancellor in the introduction to the draft legislation, included in the Explanatory Notes of 24 March, to which the noble and learned Lord, Lord Slynn, referred. He said at paragraph 3 of the foreword: In the international sphere, the UK is at the forefront of efforts to tackle corruption. We are active members of the Organisation for Economic Co-operation and Development (OECD), the Working Group on Bribery and of GRECO, the Council of Europe anti-corruption body. We support the development of EU wide minimum standards on corruption, and are currently negotiating along with our UN partners a UN Convention against Corruption".

With that huge background and its complexities, one hesitates as a non-lawyer—I am sure that many lawyers do as well—even to enter this territory. It is so difficult to build a coherent, modern and generally acceptable definition of such a corrupt act and acting corruptly. As a very inexpert contributor to this complicated debate, I agree with the assertion of the noble and learned Lord, Lord Slynn, that Clause 5 in the draft Bill is not satisfactory, with its extraordinary adherence, virtually to the exclusion of all other constructs, to the concept of the agent/principal test as the only basis. That surprised me as a layman, although, in many years of City experience, sadly one witnessed occasionally what such corruption could bring.

I understand the Government's difficulties and admire how they and the officials concerned have gone as painstakingly carefully and methodically as they can to accommodate different comments and suggestions.

I was puzzled by the following provision in Clause 9, on page 11 that, the person obtaining the advantage must give his expressed or implied consent to obtaining it".

So if another person transfers a large sum to an agent's bank account when the agent expressly requested him not to, the agent does not commit an offence although he knows that the person transferring the money is doing so for the purpose of influencing his functions as an agent.

There are many other such aspects in the highly competent Joint Committee's report on the Draft Corruption Bill. I do not have time to refer to it other than to say that the committee's definition of a person acting corruptly seems to be somewhat of an improvement. I say hesitantly as a very inexpert contributor and not a lawyer that that might be better. But if it is considered too broad by the Government, presumably it is their job in due course to submit an alternative recommendation.

I wish to refer to question 72 by the noble Lord, Lord Campbell-Savours, on page 22 of the minutes of evidence of the Joint Committee's report on 14 March 2003. This creates huge difficulties for anyone considering how to proceed in these matters in practical terms when cases come to court. He asked: Can I take you back to what is a fairly elementary question really: how important is it, in your view, sitting there in the role you have, that a jury does fully and completely understand the nature of an offence that they are trying?".

Sir David Calvert-Smith answered: It is absolutely essential".

The noble Lord continued in question 73: So if it could be shown that they would not understand it, then the law, as far as you are concerned, is an ass. Is that correct?

The answer was: That may be. It is undesirable". So, the more you read all the inserts in the questions and minutes of evidence, the more difficult the matter seems to be. I wonder whether it is right to assume that the old common law bribery legislation should lapse completely. There may be other matters that need to be looked at carefully again.

I refer to the Government's response. Everyone appreciated that they accepted two of the main suggestions of the Joint Committee, while having hesitations about one other and objecting to the definition of "corruption" as already discussed. Paragraph (5) on page 3 of the Government's response says: The enormous difficulty in defining corruption is how to differentiate an offence of corruption from all kinds of legitimate giving and receiving of advantages that make up ordinary transactions of business and social life".

With all those difficulties, it is not surprising that much further thought will presumably be given to the legislation. I thank the House for giving me the opportunity to make a few humble contributions today.

2.26 p.m.

Baroness Scott of Needham Market

My Lords, it is a great privilege to offer congratulations on behalf of the whole House to my noble friend Lord Dykes on the occasion of his maiden speech, in what has been a busy week for him. As we have heard today, my noble friend Lord Dykes is not only fluent and easy to listen to, but he has demonstrated diligence in his research and thoughtfulness. I know that we will be able to look forward to many interesting contributions from him in the future.

As I looked at his biography, I noted that he can just claim to be pre-war. He was educated in Weston-super-Mare and at Pembroke College, Cambridge. He has a professional background as a stockbroker and a financial consultant, but it is as the Conservative Member of Parliament for Harrow East for something like 27 years that he is best known to your Lordships and beyond this House. He joined the Liberal Democrats in 1997, and since then has been an active campaigner and a tireless worker for the causes in which we on these Benches believe.

It is as a passionate and committed pro-European that my noble friend is best known. He has the admiration and respect of many noble Lords who do not necessarily agree with his views. His experience in Europe is formidable. He was a Member of the European Parliament before direct elections to Strasbourg; he has been a European parliamentary candidate for the Liberal Democrat party; and he is an active member of our defence, foreign affairs and European team. He is a vice-president of the British-German Association, and he speaks several European languages fluently. It is also good news that only recently my noble friend has been awarded the Légion d'Honneur, to add to the Medal of the Order of Merit of the Federal Republic of Germany, which he already holds. 1 know that the whole House will join me in looking forward to his future contributions.

Noble Lords

Hear, hear!

Baroness Scott of Needham Market

My Lords, noble Lords will be relieved to hear that I will be fairly brief, partly due to the lateness of the hour, but also because the noble and learned Lord, Lord Slynn, who so ably chaired our committee, has covered the ground so comprehensively. It gives me an opportunity to confirm that despite the wide variation in backgrounds and experience of the members of the committee, we nevertheless came to complete agreement on all the major issues. Therefore, it is not necessary for me as a member of that committee to say a lot about it.

Like the noble and learned Lord, this was my first experience of pre-legislative scrutiny, and it demonstrated all the good points that this approach has to offer to our parliamentary system. The experience of the members taking part in the committee, having the time to interview the expert witnesses, having extremely good advisers to the committee and first-rate committee staff, give an opportunity to look at these complicated issues in some depth.

However, there are disadvantages. The committee was under time pressure to report quickly. We often met several times a week, which made the management of diaries rather difficult. It also meant that witnesses who were giving up their time were often subject to long delays while Members from both Houses rushed off to vote. That must have been irritating, although they were all incredibly patient. It is a little annoying, therefore, that after all the rush we have now had to wait a very long time to find a slot in which to debate this important topic.

There is widespread agreement that we need to update the legislation in this area. The most recent statute governing corruption is the Prevention of Corruption Act 1916, so clearly it is time that we looked at it again. However, it is important to emphasise that, despite the broad agreement that the issue needs to be looked at again, in no way does that imply that corruption is widespread in this country. Compared with fraud, for example, where the problem is more serious, corruption is not a major issue here. But we must comply with international obligations and ensure that our approach is compatible with those. That is particularly important given the standing this country enjoys around the world as regards dealing with corruption and associated offences.

As a non-lawyer, I have to confess to noble Lords that I often found the proceedings quite perplexing. However, one of the remits of the Select Committee was to consider whether the draft Bill used language that could be readily understood by those who would be required to implement it; that is, the business community and so forth. In my capacity as a layman, I felt that if at times I did not understand something, clearly others would struggle with it as well. Indeed, the issue of clarity was raised by the CBI, the OECD, Transparency International and our experts, Bob McKittrick, George Staple and Professor Pieth, so I was in good company.

The key here is how exactly one defines "corruption". At the start I found myself struggling with what felt like an "Alice in Wonderland" situation. Corruption appeared to be defined as something being done corruptly, or the other way around. I was glad to see that my difficulty was confirmed by Transparency International, which described it as a "circuitous definition", and perhaps explains why I found it so hard. Mr Justice Silber described the definition as "ambiguous" and pointed out that over time it has been the subject of six conflicting judicial interpretations.

Like the noble and learned Lord, Lord Slynn, I am still concerned about the Government's strong adherence to the agent/principal approach. That fails to cover cases where employers could be said to have consented to the bribery of their agents or cases where the heads of companies are themselves in some sort of collusion. Also, it would not apply to the public sector. Nowadays it is not easy to define public and private activity. I cite, for example, local government-my own background—where the culture of contracting out has blurred the lines. The CBI mentioned situations where private companies offer what are clearly public services, such as the utilities, television companies and so forth.

I am still very much of the view I formed a year ago, that the term "improper advantage" or the Council of Europe definition, "undue advantage", is an approach I should like the Government to look at. Certainly the CBI supports that view. Moreover, those terms cover the crucial issue and support the Government's own view of corruption as something which, weakens democracy and can undermine respect for human rights".

I shall not speak on the issue of parliamentary privilege save to say that it took up a good deal of the time of the committee. I would be delighted if the Minister takes the opportunity today to update noble Lords on the Government's thinking. Certainly, given current public opinion and the low standing of politicians, it is important that something as central as parliamentary privilege is seen to be used properly.

2.35 p.m.

Viscount Bridgeman

My Lords, I add my congratulations to the noble Lord, Lord Dykes, on his thoughtful and informed maiden speech. The noble Lord has, if he will permit me to say so, wide political experience. I hope that we can look forward to many contributions from the noble Lord in the future, albeit from Benches not my own.

I shall be brief because time presses. I echo the thanks of the House to the noble and learned Lord, Lord Slynn of Hadley, for introducing this important and worthwhile debate. The Draft Corruption Bill is of great interest to noble Lords on all sides of the House, and I add my voice to those of others who have commended the excellent work of the noble and learned Lord and his committee. I particularly welcome the presence of the noble Baroness, Lady Scott, who is taking part in the debate and was a member of the committee.

We on these Benches, in essence, welcome the findings of the committee as laid out in its report. We are particularly reassured that in many cases it supports the conclusions of the Law Commission's report of 1998, particularly on issues such as the need for reform of the current law.

A number of specific areas have been fully covered in the debate, the first being the thorny subject of the presumption of corruption. The report echoes that of the Law Commission when it asserts that public bodies are, in effect, subject to a "presumption of corruption"; and a benefit conferred on an employee of a public body by someone who holds or is seeking a contract with any such body is deemed to be corrupt unless it proves to be innocent. This is clearly out of line with other offences, where prosecuting authorities are required to prove guilt beyond reasonable doubt. However, I shall not trespass on the noble and learned Lord's explanation of the subject.

We therefore welcome the proposal for there to be one new single offence for corruption which does not focus on the relationship between the agent and the principal and would thus abolish the presumption of corruption for public bodies.

This brings me to the relationship between the agent and the principal, which has been well covered, particularly by the noble and learned Lord. It is an issue which the committee clearly considered with great care. In fact, the report states that one of the central problems with the present Bill appears to be the agent/principal relationship.

One of the main problems with the current legislation is that there is an obvious need for clarity, and the reliance on the agent/principal relationship as a means to defining the meaning of acting corruptly seems to undermine this. The committee's suggestion that the Bill should rely on a clearer and simpler definition of corruption that makes obsolete the need for the agent/principal relationship and the obscurity and complexity inherent within it, should be acknowledged and included in the revised Bill. This issue is clearly a part of the major point of contention with the Government.

As well as explaining corruption along simpler terms, this definition would also apply equally to the public and private sectors and would leave open the question of whether further specific offences could be created at a later date.

Another essential point referred to in the report is that of parliamentary privilege. Again, this has been well covered. Although we on these Benches recognise the good intentions behind Clause 12 of the draft Bill—that is, to remove any evidential difficulty in prosecuting MPs and Peers—we also acknowledge that it is a complicated matter. Of course, we too believe that Members of Parliament and Peers should be subject to the same corruption laws as everyone else; but, at the same time, there is a conflict between convicting the corrupt and protecting the freedom of speech in Parliament, something which we all value highly.

As a result, we support the committee's view that a more appropriate course of action would be to introduce a parliamentary privilege Bill to deal with this difficult question. We have had the corner of an exciting curtain lifted by the noble and learned Lord; perhaps we shall hear further from the Minister.

Clauses 15 and 16 of the draft Bill deal with another contentious issue, that of the Secret Service, the Secret Intelligence Service and the Government Communications Headquarters. As many noble Lords have pointed out, we in this country are rightly proud of the quality and integrity of the intelligence services, and any attempts to limit their capabilities, particularly in the climate of fear and threat in which we now sadly live, must be carefully scrutinised. So, while we welcome the exemptions made by the draft Bill, we also acknowledge the concerns voiced by the committee that the scope of Clause 14 would lead the UK to fail to comply with its obligations under the OECD convention and the Council of Europe's criminal law convention.

During the passage of the International Development Bill 2000 in another place we consistently urged the Government to ratify the OECD convention. I understand that the new legislation provides for this. I should be very grateful for the Minister's confirmation that the OECD convention ratification is, in this case, superseded.

As the committee listened to evidence from a number of witnesses from both sides of the argument, we believe that its recommendation to the Government to reconsider the scope of Clause 14 and, in particular, the suggestion that it is revised so that exemption covers only interests of national security and serious crime detection and prevention, should be welcomed and adhered to.

On a more general note, we welcome the fact that any future corruption Bill will complement the Proceeds of Crime Act 2002. Although this Act was quite specific in its remit in that it covered only the law against money laundering and the profits of organised crime, making the Corruption Bill compatible with it would be a step towards making our laws more workable as a whole.

To conclude, we on the opposition Benches applaud the work of the committee and the excellent report it has produced. Its recommendations go a long way to resolving some of the key concerns with the Draft Corruption Bill; namely, the agent-principal relationship and the meaning and scope of the corruption charge. The noble and learned Lord, Lord Slynn, has, in his comments, reflected in his own polished style on the draft Bill's provisions, which are somewhat obscure and not easy to understand. I am sure that the Plain English Campaign would echo those sentiments.

We note with satisfaction that in their reply to the committee's recommendations, the Government have undertaken to produce a revised Bill. This is clearly germane to the whole issue. The House will be grateful for the Government's thoughtful, informative and, I dare say, constructive response.

We are indeed fortunate that we have the noble Baroness, Lady Scotland, to continue the dialogue on the proposed draft Bill, the committee's report and the revised Bill which will, I hope, flow from it. It is to be hoped that the Home Office's hierarchy will permit the noble Baroness to play a continuing leading part in that. We look forward to her opening salvo in that dialogue.

2.42 p.m.

The Minister of State, Home Office (Baroness Scotland of Asthal)

My Lords, I join with those who have said it has been a privilege to hear one of the most elegant and, if I may say so, neatly expressed expositions of the competing arguments which have arisen as a result of the challenge which faces us in contemplating a change to the law of corruption, and all in one beautifully expressed speech by the noble and learned Lord, Lord Slynn of Hadley. No one could have opened this debate better. Indeed, the noble and learned Lord has put the competing arguments so well, including covering the Government's case, that at one point during his exposition, I rather wondered whether I could relieve your Lordships of the burden of being wearied by my reply at all. But if I had done that, I would have taken a course that would have deprived me of the opportunity of welcoming and congratulating the noble Lord, Lord Dykes, on his maiden speech and his fine contribution to this debate. That is a privilege that even I could not deny myself.

We have considered very carefully the recommendations of the Joint Committee in detail and at some length. There are some aspects that we have been able to take into account, such as the changes to the consent regime, the modifications as concerns the authorisation procedure for security agencies and the extent of the derogation from parliamentary privilege. These are important and significant changes. We have also made a number of technical modifications to the Bill in the light of issues raised during the pre-legislative scrutiny. I join the noble Baroness, Lady Scott, in saying that this shows just how useful and constructive the process of pre-legislative scrutiny has been.

We are very grateful—I say without reservation—to the Joint Committee and all those who gave evidence to it. I endorse all the compliments paid to the committee by the noble Viscount, Lord Bridgeman. However, on the central issue of the definition of corruption, as your Lordships know, we cannot agree with the Joint Committee's approach. We have set out our arguments in the Government's reply to the Joint Committee, published on 18 December 2003, which has already been broadly summarised. I can reassure the noble Viscount, Lord Bridgeman, that the provisions are already ratified. They comply with the OECD convention, which was ratified in 1999, so we are secure in relation to those matters.

We see no advantage in moving away from the agent/principal approach which has existed in law since 1906. It is not unique to the UK and is conceptually close to, although broader than, the breach of duty approach used by several countries and present within all international instruments that address private sector corruption. We are not convinced that there is behaviour that would fall outwith the agent/principal construct that should be criminalised as corruption. We believe that the essence of corruption is the suborning of an agent against his principal, whether the "principal" is a person or persons or the public in general. As the noble and learned Lord, Lord Slynn, said, this point has been made. As the noble and learned Lord, Lord Falconer, put it, the essence of the matter is that it would be cheating on the person you are supposed to be looking after.

Other activities, such as connivance between principals are more properly dealt with in other fields of the law. We have the new cartel offence in the Enterprise Act 2003, which is a significant step forward in this respect. With regard to the principal's consent in the private sector, because the law exists to prevent a specific principal being cheated on, it is difficult to argue why an agent who accepts an advantage with the full knowledge of his principal should be liable to sanction by the criminal law on corruption. The principal's consent is no defence in the public sector. We are dealing with two slightly different areas.

We also accept that the definition of corruption within our Bill is at first sight intricate. However, in that respect one is faced with a choice that is broadly twofold—either to define what is meant by acting corruptly, as we have done through a series of tests that translate into concrete questions to a jury, or to leave the concept open to interpretation. The latter approach would be acceptable if there were a consistent understanding among the public about what constitutes a corrupt act, but we would argue strongly that that is not the case at present. The word "bribe" is used to describe all manner of advantages intended to influence, from those that the public would rightly condemn to the entirely innocent—such as cakes to encourage employees to work harder. Likewise, there is a need to draw a line between legitimate levels of corporate hospitality such as product launches and those that should be outlawed. Without drawing these lines in statute we cannot expect uniformity of prosecution or conviction. An offence that draws the lines clearly will be of help to the business community in drawing up internal guidance. We do not believe that the Joint Committee's definition, advantage to which a person is not legally entitled is useful because if "legally entitled" encompasses any legal basis, such as any form of agreement, then all sorts of corrupt activities would thereby be legalised.

Finally, the Joint Committee's definition allows for a number of lacunae, such as a bribe given to a third party, acting corruptly in anticipation of a bribe and a recipient of a bribe who has no intention of allowing it to influence him. While some modification of the definition might iron out those lacunae, such an approach would detract from the simplicity of the definition, which is its most attractive selling point. Once that goes, we believe that the course adopted by the Law Commission is the better one.

There is a rightful place for the robust discussion that there has been with the Joint Committee. We have learnt quite a lot from it, because we have had to interrogate and tease out those differences. I believe that we have come to a better place than the one we would have come to had we not had this debate.

As we noted in our reply to the Joint Committee in December, our aim remains to introduce a Bill to Parliament in due course. I very much look forward to the debates that we shall have across the Dispatch Box. As the noble Viscount, Lord Bridgeman, said, whether I can throw any salvoes I do not know. But I am sure that we shall have some very interesting times.

2.51 p.m.

Lord Slynn of Hadley

My Lords, I thank the Minister for her very generous remarks and for her clear and detailed answer to the essential points of this case. I am glad that we have been able to come to agreement on at least a number of important aspects, even if the remaining one will have to be fought out by others on another day.

I also thank all Members of the House present during the debate, especially those who have spoken. I am very glad that the noble Baroness, Lady Scott of Needham Market, was here because she as a member of the committee took a very active part in our discussions.

I, too, congratulate the noble Lord, Lord Dykes, on his maiden speech and on his homework, too. As the noble Viscount, Lord Bridgeman, said, he has clearly done a great deal of work on this matter. I have no doubt that we shall see evidence not only of his oratory and experience but of his hard work on many future occasions, to which we all look forward.

On Question, Motion agreed to.

House adjourned at eight minutes before three o'clock.