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Proceeds of Crime

Volume 604: debated on Wednesday 20 January 2016

I beg to move,

That the draft Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) (England and Wales and Northern Ireland) Order 2016, which was laid before this House on 17 December 2015, be approved.

With this, we shall consider:

That the draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2016, which was laid before this House on 16 December 2015, be approved.

That the draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (England and Wales) (No. 2) Order 2016, which was laid before this House on 16 December 2015, be approved.

That the draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (Northern Ireland) Order 2016, which was laid before this House on 16 December 2015, be approved.

That the draft Proceeds of Crime Act 2002 (Investigations: Code of Practice) (England and Wales and Northern Ireland) Order 2016, which was laid before this House on 16 December 2015, be approved.

I am grateful, as ever, Mr Speaker, for your stewardship and indulgence.

The important matters before us are technical and, I anticipate, relatively uncontroversial; they are certainly not partisan. Nevertheless, it is important that we scrutinise them with the diligence for which this House is rightly famed, and I will be happy to deal with any amount of detail with which the House wishes me to engage.

Isaiah Berlin once said:

“Freedom for the wolves has often meant death to the sheep.”

As someone who believes in standing fierce in defence of the gentle, I know exactly what he meant. It may be of some assurance and comfort to the House that the matters under debate relate to the Proceeds of Crime Act 2002 and were largely commenced in England and Wales on 1 June 2015. In order to extend that commencement, as is necessary, to Scotland and Northern Ireland, we are required to make codes of practice that encompass those jurisdictions and bodies using the powers there. So, the codes will largely replicate those that were considered and approved by this House, which is why I described them as technical and largely uncontroversial.

The codes are a safeguard to ensure effective and consistent use of the powers. Once commenced, the new powers will give officers important new tools for the recovery of criminally obtained assets. That is a key pledge of our serious and organised crime strategy and the Government’s commitment to tackling all levels of crime.

The codes build on previous codes. They closely follow those issued more widely to police officers under the Police and Criminal Evidence Act 1984. The codes provide an important safeguard and ensure that the powers are used in a targeted, consistent and effective way, thus providing vital reassurance to the public that the powers in the 2002 Act are being used appropriately and proportionately.

The orders bring into force a number of codes of practice that provide guidance on the use of various powers under the 2002 Act. Four current codes need updating and a new code is required as a consequence of amendments made to the 2002 Act by primary legislation already passed by this House. I draw Members’ attention to the Policing and Crime Act 2009, the Crime and Courts Act 2013 and the Serious Crime Act 2015.

We plan to commence those powers relating to the 2002 Act throughout the UK on 1 March, in so far as they are not already in force. To achieve that, we need to issue the codes of practice that will provide guidance on the use of the powers throughout the UK. The Scottish Parliament and the Northern Ireland Assembly will consider codes that fall within their competence due to devolution.

Some might think that it would be enough for me just to put those technical matters on the record, but knowing this House as you and I do, Mr Speaker, I know that it will want me to say a little more about the amendments to the 2002 Act, which require the codes of practice providing guidance—

Order. As the Minister of State has already prayed in aid Isaiah Berlin, I had supposed that it would be only a matter of time before he would refer, in an orderly way, of course, to “Four Essays on Liberty”, but perhaps I am being impatient and that will be reached in the course of the right hon. Gentleman’s peroration. We wait to see.

Mr Speaker, you are encouraging me to stray from the subject at hand, but I will just say this: in a frail and fallen world, liberty has to be handled with great caution, and I have neither the time nor the expertise to delve into those matters at sufficient depth to satisfy you, Sir, or the House as a whole.

I will therefore restrict my remarks to the matters before us and deal briefly with the areas to which the codes of practice relate, namely the power to allow search of vehicles for criminal cash; search and seizure powers to prevent the dissipation of property that may subsequently be used to satisfy a confiscation order; expanded confiscation investigation powers to allow the tracing and identification of assets following a confiscation order; expanded civil recovery investigation powers; and change of court jurisdiction so that the Crown Court rather than the High Court will make investigation orders in relation to cash forfeiture cases.

As you will understand, Mr Speaker, we are not debating the powers themselves, because they have already been approved by the House, as I have described. Importantly, however, we are considering the codes that provide guidance on the use of the powers. This is essentially about the consideration of appropriate safeguards. Such safeguards are required under the 2002 Act in investigations by law enforcement officers. There is a final further code that relates to the use of the investigation powers by prosecutors, and owing to amendments made to the powers new codes are needed to address the new provisions.

The orders will bring all the relevant codes of practice into effect, ensuring that effective safeguards and up-to-date guidance are in place, and enabling full commencement of the amendments to the 2002 Act, which I have described. For the powers that are not yet in force, we are working towards a common commencement date of 1 March. The use of the powers will be rightly guided by the revised codes of practice. I make no apology for repeating that the codes are an important safeguard to ensure the targeted, proportionate and effective use of the powers in the Act, balanced against the entitlements—my brief says “rights”, a word I always hesitate to use, but I mean the lawful entitlements that we often call rights—of individuals and communities. I therefore ask the House to approve the orders to give effect to the codes of practice.

In order not to disappoint you of all people, Mr Speaker, I conclude by quoting my favourite poet—not T. S. Eliot, but W. B. Yeats:

“Do not wait to strike till the iron is hot; but make it hot by striking.”

The Government, with appropriate alacrity and determination, and with the moderation associated with putting in place such safeguards, are indeed striking to make the iron hot. In that spirit, I hope the whole House will agree that the orders are an appropriate way forward, with appropriate checks and balances in the exercise of these vital powers.

I have to say that our determination to support the measures has been reinforced by the Minister quoting my favourite poet. As someone whose dad came from County Cork in Ireland and whose mother came from Tipperary, and as someone who grew up on “A terrible beauty is born”, I fully support the Minister’s choice of poet.

The Minister was right both to paint the context of the measures and to stress that they are non-controversial, as indeed they are. The origins of the proceeds of crime legislation was a determination, across the House, that crime should not pay, and, indeed, that the proceeds of crime should help to pay for the prevention of crime and for support for victims—hence the 2002 Act, a bold step that was widely welcomed at the time.

To be frank, the 2002 Act was not as strong as it might have been, and as experience unfolded that certainly pointed to the need for the legislation to be further strengthened. That was dramatically evidenced in the two National Audit Office reports, which respectively showed that only 26p and 35p was recovered for every £100 of the proceeds of crime.

There were some very famous cases. On the one hand, there was the aptly named Adams family, who ultimately did not succeed in avoiding the full force of the law. On the other hand, Julian de Vere Whiteway-Wilkinson was ordered to repay £2.1 million, but only £262,000 was recovered, and Nasir Khan was ordered to repay £14 million, but nothing was recovered. Classically, smaller confiscation orders tended to have a high rate of success in recovering the moneys concerned, but the Mr Bigs of this world continued to get away with it.

We acknowledged that our legislation was not as strong as it needed to be, and during the last Parliament we argued for the law to be strengthened. The Minister mentioned the successive Acts, which culminated in the 2015 Act. There is no question but that welcome progress has been made on key issues, including the freezing of assets, default sentences, strengthening the leadership of the National Crime Agency, a stronger ministerial focus and, crucially, effective information and communications technology and data sharing. Real progress has been made.

What is before us today is the latest necessary step in the process of not just strengthening the law, but, crucially, seeing the law enforced. It does so in a way that strikes the balance between the liberty of the individual and our utter determination not to allow people to get away with swinging the lead, particularly when an order is made.

We are content to support all five of the measures. I will not go through them all in detail. The Minister was right that that is not necessary. I will highlight just one: the search, seizure and detention of property code of practice for England and Wales. Allowing seizures in reasonable anticipation of confiscation orders is right, as is the determination of the appropriate officer to authorise and oversee seizure.

In conclusion, we welcome the steps that are being taken. They are necessary steps. I will ask but one question of the Minister. There is a shared determination to ensure that those who commit crimes do not get away with the benefits of them and, therefore, to recover the proceeds of crime. Crucially, as the experience under successive Governments tells us, there must be effective enforcement. Therefore, will the Minister say how we can be confident that there will be effective enforcement and to what extent the orders will help? We almost need case studies that bring alive the progress that the Government intend to make. We certainly believe that this is progress and we are content to support it.

The person on my list is not here, but the hon. Member for North West Hampshire (Kit Malthouse) is here. Mr Malthouse, if you wish to give us your views, we wish to hear them.

I just want to speak briefly, Mr Speaker.

I support the measures completely, but I want to plant a small seed in the Minister’s fertile mind. When I was deputy mayor for policing, we were very keen to use the Proceeds of Crime Act 2002 to an enormous extent. We thought that it held enormous potential for recovering money in London and elsewhere. However, it involved a significant investment of police resources, which had to be diverted from elsewhere.

We therefore attempted to cut a deal with the Home Office that would have allowed the Metropolitan police to retain some, if not all, of the money that was recovered. The Home Office denied us that ability and, as a result, we did not invest anywhere near the resources that we could, and perhaps should, have invested in using the Act in the devastating way it can be used, particularly against organised criminal networks.

I ask the Minister to consider allowing police forces to retain a proportion of the money they recover, first to cover their costs in pursuing the money and, secondly, so that it can be reinvested in local services. There is nothing in the current climate that would motivate a chief constable to use these powers more than the idea that it might be a profit centre for his or her force. If the measures are to be as effective as I know the Minister wants them to be, allowing such entrepreneurialism, shall we say, among police forces would be extremely welcome. Other than that, I completely support the measures.

It is a pleasure to take part in this debate.

The Minister has, indeed, been incredibly persuasive, so he will find no opposition from the SNP Benches. To put it mildly, all Members are enthusiastic about ensuring that the proceeds of crime are confiscated wherever possible and put to good use. In Scotland, the CashBack for Communities scheme has proved enormously successful and popular. It ploughs money recovered from criminals into free community initiatives for young people around the country.

Today, we are concerned with the safeguards that are in place for the powers that are designed to help recover certain proceeds of crime. The powers to detain, search and seize are clearly very invasive, so it is imperative to have appropriate safeguards. I will be helpfully brief, Mr Speaker, and will confine myself to the order on the cash searches code of practice, which is the only one that relates to Scotland.

The code of practice order relates to search powers, which can represent a significant interference with privacy rights. The code of practice must therefore ensure that the use of the powers is fully justified and that consideration is given to whether results could be achieved by less intrusive means. The code of practice must explain clearly what the reasonable suspicion amounts to, as well as making clear the necessity to seek judicial authority, or at the very least the authority of a senior officer, wherever practical. It must also outline how to conduct a proper search. The code appears to do all those things and it is, as the Minister says, essentially a reworking of previous drafts. For those reasons, we have no opposition to the order or the code.

I want to flag up one concern, however. On the one hand, it was a surprise to see a reference on page 4 of the code to the use of the powers by immigration officers. That possibility was not present in the Proceeds of Crime Act 2002. However, a footnote in the draft order explains that the UK Borders Act 2007 provides that part 5 of the 2002 Act should apply to immigration officers as it applies in relation to a constable. On the other hand, having been involved in the scrutiny of the Immigration Bill, I know that it is not a new experience to see police powers being handed out almost like sweeties. Successive Governments seem to have been tempted down that path. I am not saying that customs officers or immigration officers do not, on occasion, require similar powers to those of the police. However, whenever police-like powers are going to be handed to people who are not police officers, we need to be extra-vigilant and to demand a clear operational case and appropriate safeguards.

I would like to highlight the inspection of immigration officers’ powers to enter business premises without a search warrant that was conducted by the chief inspector of the UK Border Agency between October and November 2013. He reported that 59% of the cases he examined did not have the required justification for the use of the power, and that a further 12% had insufficient information for him to form an opinion. He found widespread non-compliance with the guidance, and ineffective processes for ensuring that staff were complying with the legislation and guidance. I could go on, but I believe that those findings cast a light on the need to be very careful when handing police-like powers to officials who are, quite simply, not police officers. We also need to be extra-vigilant when scrutinising the codes that guide the use of those powers, and to question whether the safeguards are sufficient to make up for the fact that they are being used by non-police officers.

It is a pleasure to make a short speech in this short debate. The Minister for Security, the right hon. Member for South Holland and The Deepings (Mr Hayes), gave us a Yeatsian introduction to what is actually a fairly prosaic set of statutory instruments, and I would not want to provoke him any further in that direction. I just want to use this opportunity to make a couple of points clear. We support these measures, which will properly even out a number of anomalies and inconsistencies. We need to ensure that we have proper codes of practice and guidance on the use of these powers, and that is what the statutory instruments will provide.

In Northern Ireland, there has at times been sensitivity when the Home Office has introduced legislation here. An example would be the introduction of the National Crime Agency, when not enough attention was paid in advance to the Patten architecture or to ensuring that any additional policing systems and powers were consistent with the Patten principles. It took time to get that right, but it has now been got right. The statutory instruments before us tonight to build on that work that has already been done. They do not transgress the principles and they will not trigger any of the Patten tripwires in any way.

Most people in Northern Ireland will welcome the fact that there is to be full, even and consistent pursuit of the proceeds of crime. During the last set of negotiations at Stormont House, paramilitarism was a vexed issue among the parties. There was an impression abroad that not all the proceeds of crime were being fully pursued, and that some of those in possession of assets that were deemed to derive from years of paramilitary activity were being allowed to enjoy a life of ease and economic largesse that would otherwise have been discomfited by the relevant authorities. It was also thought that some of those assets were treated as personal rather than organisational, because some of those persons were deemed to be friends of the peace process. Both Governments, north and south, tried to reassure parties that that was not the case, and they undertook to ensure that in all legal measures and in all future practice, there would be a clear working assurance that no bye ball was given, no blind eyes were turned and there was no acceptable level of criminal enterprise, current or historic.

In so far as these statutory instruments add to that suite of reassurance to everyone and are compatible with the very important architecture derived from Patten in relation to the policing environment in Northern Ireland, my party is happy to endorse these statutory instruments.

Like other Members who have spoken, I want to put on the record that my party supports the statutory instruments. We need them even more today, perhaps, than in the past. Statistics given to me beforehand show that since the end of the troubles, the number of organised crime gangs in Northern Ireland has risen from 60 to 170. It is important that we have legislation in place, such as the Proceeds of Crime Act 2002 in relation to the search, seizure and detention of property or in relation to the code of practice for investigations. People look to the law of the land for support.

Some 600,000 litres of illegal fuel were seized in the past year and 27 laundering plants have been dismantled. It is clear to me that there are crime lords out there and those 170 groups are involved in systematic criminal activities. The laundering plants generate money, but when they are washed out the pollution goes into the rivers and waterways. In some places around the border in Northern Ireland and the Republic, there are no fish and no life left in the waters because of what is happening. The effects of that are clear. There were three times as many deaths due to heroin in 2013 than there were in 2009 as a result of the criminal gangs and crime lords in Northern Ireland.

There has been some success and it is good to have that—14 organised crime gangs were dismantled in 2015 as a result of the Organised Crime Task Force, so good work has been done. We want it to continue, and these measures can stop those involved in criminal activities and those who live off their ill-gotten gains. Seize their goods and the proceeds of their crime, take those crime lords out of action, dismantle their empires and give freedom to the estates and the people of Northern Ireland by stopping those who live off them. My party and I fully support the proceeds of crime measures, congratulate the Government on moving forward in a positive fashion, and look forward to supporting the Government in all aspects of these measures.

I shall answer one or two points on the first of the codes, then, with your permission and indulgence, Mr Speaker, I shall move the subsequent ones formally.

The points that have been made are all in the spirit of wanting the measure to work. I am grateful to the House for that. The shadow Minister, the hon. Member for Birmingham, Erdington (Jack Dromey), made the telling point that this has long been a consideration of this House and of successive Governments. He referenced in particular the 2002 Act and he will know that subsequent legislation to which I referred earlier builds on that Act and brings it up to date, because as crime changes, the proceeds of crime and our ability to recover them change too. Very much in that spirit, I welcome what he said.

I note the hon. Gentleman’s point about the way the measure is explained. Although with typical courtesy he did not draw the attention of hon. Members to the fact, I am aware that the Secondary Legislation Scrutiny Committee felt that the explanatory memorandum that accompanied these orders was not sufficient. I agree that the policy background in the memorandum was insufficient and did not set out that the powers will operate in the way I want them to, as he said. To that end, I am delighted to be able to tell him that this very morning I asked my officials to redraw the explanatory memorandum in exactly the form that he requested, with worked examples of how these things might work in practice. These are complex matters, but none the less it seems to me that they need to be articulated in a way that makes it absolutely clear how the codes will introduce the kind of safeguards that we all favour.

To that end, I can assure the House that my officials are well aware that the explanatory memorandum must do just that. I am delighted to be able to tell the House that the Secondary Legislation Scrutiny Committee has said that were that to be done with the speed and in the fashion that I have described, it would be satisfied. The hon. Gentleman has done a service to this House and it is not his fault that I have anticipated his point by doing what I have described this morning. Indeed, it shows that we are on the same page.

My hon. Friend the Member for North West Hampshire (Kit Malthouse), who has moved—he is in his place, but his place has changed—made the interesting suggestion that the police might be incentivised, if I might put it in those terms, to go still further if they were to recover some of the costs of their inquiries. That is an interesting suggestion. It would be above my pay grade and outside my remit to agree it on the Floor of the House at this very moment, but I shall certainly take it back to the Department to discuss with the policing Minister and others.

My right hon. Friend rightly mentioned that the explanatory memorandum could go into a little more detail, and I welcome that suggestion. Paragraph 4.9 of the explanatory memorandum suggests not only that there have been new additions but that:

“The code has been slightly restructured to make it easier to read and understand.”

Would it be possible to set out what is a clarification and what is a new provision, so that when that is considered in due course it will be clear that some points are just clarifications rather than new provisions?

With the eye for detail that my hon. Friend’s scrutiny increasingly shows, and for which she is building a substantial reputation, she draws attention to precisely one of the matters that I discussed with my officials in the conversation I had with them this morning, to which I referred in relation to the comments made by the shadow Minister. It is right that we should clarify that point. She is also right that we need to consider the whole of the explanatory memorandum in a similar spirit, and that is precisely what we intend to do. I am grateful to her for allowing me to illustrate that not only she has an eye for detail, but the Minister has too.

The points made by the hon. Member for Foyle (Mark Durkan) seemed to me to be absolutely on the button. It is important that these things are dealt with consistently and that we take them seriously. I make no comments on his remarks about the previous history in the Province, but I can assure him that we are determined that the powers shall apply across our kingdom and that they will be pursued with appropriate vehemence. There can be no greater mission than to ensure that criminals do not profit from what they do. That is precisely what we intend to achieve. I am grateful for his support and for the comments he made about that.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) spoke about immigration officers’ powers. I take his point; they have been generally expanded so that they are now mainstream law enforcement officers, like the police, the NCA and others. There is appropriate training—he is right that it is very important that that takes place—and appropriate safeguards and oversight, as there always should be in such matters. This is in relation to the 2002 Act, as I said, and I will pass concerns on to the Minister for Immigration so that the people for whom he is responsible are equipped with the information and skills they need. As I said in response to the hon. Member for Foyle (Mark Durkan), it is important that we behave consistently, and I am grateful for his contribution to the debate.

The hon. Member for Strangford (Jim Shannon) spoke about effective enforcement, and not only is it important that these codes are clear, established, transparent and comprehensible, but the powers that they effect or give appropriate safeguards to must be used. As he said, it is right that there has been a determination in this House, but we must ensure that that is seen through to the point of impact. It is all very well having intent, a legislative vehicle and safeguards, but there must also be a determination that this is seen as an important priority in the Province and across the United Kingdom.

This has been a useful debate, and I am grateful for the spirit in which the House has considered these matters. It is perhaps best to end not with Yeats—although I could, and I am tempted to—but with C. S. Lewis, who said in “The Weight of Glory” that

“the art of life consists in tackling each immediate evil as well as we can”.

The proceeds of crime are an evil that this Government are entirely determined to tackle, and these codes will help us to do so. In that spirit, I commend the motion to the House.

With the indulgence of both the Chair and the House, the Minister has served up both a starter and a pudding, for which I am sure the House is deeply grateful. The main course has, of course, been provided by other hon. Members who have contributed to the debate and whom the Minister has graciously accommodated.

Question put and agreed to.