Criminal Finances Bill

Baroness Hamwee Excerpts

3rd reading (Hansard): House of Lords & Report stage (Hansard): House of Lords
Tuesday 25th April 2017 Lords Chamber

I do not pretend that this is a perfect solution to what is a real problem. Various attempts have been made around the world to deal with such problems but they have only ever achieved partial success. However, let us not miss this opportunity of doing what we can to deal with the cancer of corruption in our society. This House should send a clear message to the Government about the level of its concern. I beg to move.

[Baroness Hamwee (LD)]

My Lords, like the noble Lord, we want to see the Bill as strong as possible. I have a few questions on the noble Lord’s amendments but I am grateful to him for bringing these matters back to the House. Amendment 1 would require questions to be answered on oath. Like the noble Lord, I felt that the answer from the Dispatch Box at the previous stage did not take us a great deal further. The Minister said:

“It would already be a criminal offence for the respondent to knowingly or recklessly provide false or misleading information”.—[Official Report, 28/3/17; col. 496.]


Unexplained wealth orders are court orders, so my question—I am not sure whether it is to the noble Lord or the Minister—is: does contempt of court arise here? That is not to support the amendment or otherwise, but to flesh out understanding of the procedure.

On Amendment 2, has the noble Lord been more timid than necessary by referring to the respondent or others having taken the step of registration as a beneficial owner, rather than using the criterion that he is such an owner? I agree on compliance: one either complies or one does not. Surely purported compliance is not compliance. This is quite a difficult area in legislation and it should be clear, and not raise more questions about whether the criteria are fulfilled.

My final question is on government Amendment 6. Will the Minister explain why, unusually, “a person” does not include a body corporate? I was interested to see that it is apparently necessary to include a definition. The definition itself is interesting: if it is read literally, references include bodies corporate and so on, regardless of whether they hold or obtain property. Does that restrict which bodies corporate are the subject of this new provision? I gave the Minister notice of my question so I hope she will be in a position to assist the House. I reiterate our strong support for getting this Bill through. I have spoken as briefly as I can because I know the House wants to get on with it and do just that.

[Lord Mackay of Clashfern (Con)]

My Lords, I support these amendments. I first came across unexplained wealth orders in Inland Revenue fraud proceedings where people had been accused of not paying their income tax. One of the methods of revealing that is by demonstrating that they suddenly have more wealth than their Revenue account suggests. Therefore, there is a question about whether the assets came from taxable income. That was the presumption at that time. That was before the terrific expansion of other forms of unexplained wealth that could arise. The explanation that someone had done something unlawful would not be a particularly good answer to a tax inquiry but perhaps that was not thought of. Certainly, that was a very useful tool in the armoury of the Inland Revenue in days past and is still so today. It is a very valuable method of dealing with this trouble. I find it very hard, however, to understand what is meant by purported compliance. As has just been said, it seems to me that you either comply or you do not. I must say that the explanation given in the draft practice system does not enlighten me any further. It suggests, indeed, that purported compliance covers certain aspects of non-compliance. It is a difficult definition to put in. I would have thought the measure would be better without it.

I raise questions with regard to the register. It is required to be done within six months of the passing of the Act. However, the commencement provisions of the Act allow the Act to come into force in accordance with regulations or orders made by the Secretary of State. I assume that the passing of the Act in this amendment is intended to refer to its getting Royal Assent. Strictly speaking, however, the Act comes into force only in accordance with orders made by the Secretary of State under the commencement provisions except in relation to certain aspects of that.

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[Lord Hodgson of Astley Abbotts]

I am grateful to the noble and learned Baroness for that intervention, but I can glide this down to third man, if I may use a cricketing analogy, because this is a government proposal. The Government are proposing to set up this new body, so I am sure my noble friend, when she comes to wind up, will have all the detail of how this body will work. I merely wish to ensure that it is sent down the right channels. I know that my noble friend, with her usual aplomb and ability, will deal with that by stroking it effortlessly to the boundary, if I may continue the cricketing analogy.

It is important to do some serious re-engineering of the general approach to money laundering to increase its effectiveness and public confidence in it. That the National Crime Agency can, in its annual report, trumpet the fact that SARs went up by 7.82% over the last year as a badge of success without any reference to the impact it is having, shows that there is much to do. I beg to move.

[Baroness Hamwee]

My Lords, when the noble Lord responds to the debate, will he tell the House whether he thinks “I haven’t a clue” is purported compliance.

[Lord Rosser]

In light of the last comment from the noble Lord, Lord Hodgson of Astley Abbotts, one can only hope that the points he made will not leave the Minister stumped. I hope it gets better.

I thank the noble Lord and the noble Lord, Lord Faulks, for tabling these amendments, since they enable me to raise a concern that I expressed in Committee about the Government’s intention to create a new office for professional body anti-money laundering supervision through a statutory instrument, without any apparent reference to such a body in the Bill that we are currently discussing—which is why the noble and learned Baroness, Lady Butler-Sloss, had to raise her question. Nobody has a clue what the Government intend because they have not chosen to put anything in the Bill to enable us to have a discussion about it. It was only in a government document issued around the time of the Bill that the Government declared their intention to set up this body.

A briefing that no doubt we have all received from the Solicitors Regulation Authority refers to the amendment from the noble Lord, Lord Hodgson of Astley Abbotts, as “proposing” the creation of an office for professional body anti-money laundering supervision—which could, perhaps wrongly, be interpreted as meaning that the Solicitors Regulation Authority was unaware that that is what the Government were already proposing, albeit keeping rather quiet about it as far as proper parliamentary scrutiny is concerned.

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[Lord Rosser]

I am not sure whether I should come in now but I just take this opportunity to thank the Minister and her ministerial colleagues in the Bill team for their willingness to meet and engage in what have been constructive and helpful discussions on not only provisions that are in the Bill but also provisions that are not, since it is with the latter that most differences of view or approach have centred. I also thank my Front-Bench colleagues for their hard work, not least—although he is not in his place—my noble friend Lord Kennedy of Southwark, who has not been exactly short of commitments in respect of other Bills as well. Finally, I thank the staff in our own office, not least Grace Wright, for their help and advice in navigating our way through this Bill.

[Baroness Hamwee]

My Lords, I echo those thanks to the Minister and the Bill team. As several people have said—most frequently the noble Lord, Lord Rosser —it is what is not in the Bill that has exercised us most. I can see an enormous amount of material for Private Members’ Bill in the next Session if we do not have government Bills that we can tack our—“demands” would be the wrong word—concerns on to. But the Minister has done an absolutely sterling job and I hope she gets five minutes to have a bit of a rest before she sets out campaigning. We have the luxury of knowing that we will be back to pursue these interests.

[Baroness Williams of Trafford]

As always with Bills such as this, it is what is not in the Bill. Also, sometimes we should have gone further. But we have had a challenge in this Bill and in the main the challenge has been lack of time, not of consensus. I place on record my thanks to the Front Benches—the noble Lords, Lord Rosser and Lord Kennedy, and the noble Baronesses, Lady Kramer and Lady Hamwee—and my noble friends behind me, who have kept me on my toes. I thank noble Lords for being so accommodating about having so little time to get through the business of the past 24 hours.

Criminal Finances Bill

Baroness Hamwee Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 3rd April 2017 Lords Chamber

[Baroness Williams of Trafford]

Perhaps I may look into that and let the noble Lord know because I am reluctant to make sweeping promises at the Dispatch Box without knowing exactly what the timescales will be. I will let him know, certainly before Report, what the expected timescales are.

[Baroness Hamwee (LD)]

Before my noble friend responds, the Minister referred to the Modern Slavery Act. I do not want to be overly pedantic but I do want to be a bit pedantic because this is an important point. She mentioned the requirement on certain companies to report on the steps that they are taking under Section 54 with regard to their supply chains. I think that she will agree that their statement as regards the steps they are taking can be a statement,

“that the organisation has taken no such steps”.

That would be regrettable. However, there seems to be a feeling that every organisation has got to report the detail of the steps when that is not quite the case.

[Baroness Williams of Trafford]

My Lords, I would say that the statement a company makes reflects the company, and if a statement of no effort is made, it will be for others to judge the efficacy of that company.

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Moved by

[Baroness Hamwee]

162: Clause 44, page 108, line 27, leave out “can put in place to” and insert “shall have regard to in order to”

[Baroness Hamwee]

My Lords, this is a probing amendment. Clause 44(1) provides that the Chancellor,

“must prepare and publish guidance about procedures that relevant bodies can put in place”,

to deal with certain matters. My amendment suggests that organisations should “have regard to” such guidance, and is really intended to probe precisely what is meant here. The phrase “can put in place” strikes me as an interesting one to use in the middle of a piece of legislation. Does it mean “must put in place”, or if they want to have guidance on procedures, it is only what the Chancellor prepares and there can be no other procedures? I wonder whether the Minister can explain what is actually required in subsection (1). I beg to move.

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[Baroness Vere of Norbiton (Con)]

My Lords, I am grateful to the noble Baroness, Lady Hamwee, for tabling this amendment, which allows us to discuss the Government’s guidance on the new corporate offences in Part 3 of the Bill. Part 3 creates two new offences for relevant bodies that fail to prevent the criminal facilitation of tax evasion. It also provides a defence for a body to show that it has put in place reasonable prevention procedures designed to prevent such criminal facilitation.

The Government produced guidance on the offences, and the related defence, in 2015 and conducted a full public consultation on it. Much of the guidance focuses on the operation of the defence and helps to inform businesses’ understanding of how to determine what prevention procedures are reasonable in their circumstances. The guidance has been discussed extensively with a wide range of businesses and organisations both within the UK and overseas. Following the consultation, the updated guidance was published last year.

In addition to the government guidance, officials have been working with a number of representative bodies to support them in producing their own sector-specific guidance, which can be endorsed by the Chancellor if it is clearly in keeping with the overarching government guidance. The Chancellor’s endorsement of external guidance will provide a hallmark of quality for individual businesses to identify good practice for their sector.

The government guidance makes it clear that it is just that: guidance. It does not set out a tick-box exercise of mandatory requirements for businesses but rather six principles to help each business decide what prevention procedures, if any, are reasonable for them in their individual circumstances.

The government guidance makes it clear that, for each business, there may be a number of appropriate approaches for them to take and that departure from suggested procedures will not mean that an organisation does not have reasonable prevention procedures. Likewise, different organisations may implement the same or similar procedures differently due to their individual circumstances. For example, what is reasonable for a large, multinational financial institution will be different from what is reasonable for a small, domestic retail business.

Conversely, while departing from the guidance will not mean that a relevant body does not have reasonable prevention procedures, nor does complying with the guidance necessarily guarantee that prevention procedures are reasonable. The guidance is not intended to be a safe harbour.

The new offences also provide a defence for a business where it was reasonable for it to have no procedures in place. A business can therefore avail itself of the defence without having followed the Government’s guidance if it was reasonable for it to have no procedures in place; for example, because the risks it faced were so remote that it would be unduly burdensome for it to put in place prevention procedures.

I hope that noble Lords will therefore agree that it is not necessary, and may impose undue burden, to force businesses to have regard to the government guidance. Those businesses which need to put in place prevention procedures and which seek to be compliant will likely already have regard to the government guidance. This has been demonstrated by the excellent engagement from many sectors on the development of the guidance. Accordingly, I invite the noble Baroness to withdraw her amendment.

[Baroness Hamwee]

My Lords, the noble Lord, Lord Kennedy, understood my thinking exactly, although I wonder whether it would be helpful to this House to use a procedure which is often used in the Commons to explain that one is probing to try to understand whatever is proposed and the thrust of a particular amendment—I was probing, as I had indicated to the Bill team.

I had not expected that answer, but I now understand the range of things which can happen under this clause. One is accustomed to phrases such as “for different purposes and for different persons”, which is what I think we are being asked to read into this provision. I note that the Minister said that guidance,

“can be endorsed by the Chancellor”—

I was not sure what route that was taking me down. I am grateful to noble Lords for indulging me. I, for one, now understand better what is proposed. I beg leave to withdraw the amendment.

Amendment 162 withdrawn.

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[Baroness Hamwee]

My Lords, if the Minister needs to answer my question after today, that will be fine. I well understand what the noble Baroness has said but some of the provisions to which this amendment will apply deal only with one area—mostly with Northern Ireland but one or two with Scotland. If there is a provision that regulations may apply to areas, how does that work when you have only got one area, as I understand it, being one of the four nations? They are not sub-divisible after that.

[Lord Kennedy of Southwark]

I am happy with the amendment. It is, unfortunately, necessary in this situation. I hope the parties can get round the table and get the Administration back and up and running again.

Criminal Finances Bill

Baroness Hamwee Excerpts

Committee: 1st sitting (Hansard - continued): House of Lords
Tuesday 28th March 2017 Lords Chamber

Moved by

[Baroness Hamwee]

81: Clause 13, page 43, line 42, at end insert—
“(h) money or assets in any form which may be used as currency,”.”

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[Baroness Hamwee (LD)]

Amendment 81 extends the debate we had immediately before the break with regard to the assets that may be liable to forfeiture. I understand the extension in Clause 13, which we have discussed, but I wonder why there should be any limits on what falls within the forfeiture provisions, because life changes. Items that come into common use change. Who had heard of bitcoins 10 years ago? That is the thinking behind my Amendment 81, which would extend cash, and Amendment 84, which would extend listed assets. The Minister in the Public Bill Committee in the Commons said of what is now Clause 14 that the Government did not want to use the power in new Section 303B(2) “indiscriminately”. I am puzzled what that term means. I can see that they would want to be careful about that use, but I do not see the relevance of discrimination.

In her letter of 17 March to noble Lords following Second Reading, the Minister referred to a balanced approach and said that allowing seizure of any type of property would not be proportionate. Again, that term puzzles me. Balance and proportion are relevant to the circumstances in which property can be forfeited—the conditions which have to be met, and so on—but are they relevant to the type of asset? We are in danger of allowing the owner of an asset to apply criminal ingenuity to remain a step ahead, finding new categories of property in which the proceeds of crime can be held. At Second Reading, the Minister said:

“As criminals adapt, so must we”.—[Official Report, 9/3/17; col. 1476.]


We should—but it would be even better if we were to anticipate and be a step ahead, not a step behind, because it is very hard to be in step precisely.

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[Baroness Williams of Trafford]

I am looking for a yes or a no, but I do not think that I will get it, so I will write to the noble Lord.

[Baroness Hamwee]

My Lords, I am grateful to the noble Lords, Lord Stevens and Lord Kennedy. Mobile phone credits for cash? I have led a very sheltered life.

The Minister said that the problem was in the phrase “may be used as currency”. But it seems to me that one can know that only through experience. That is why betting receipts, gaming vouchers and so on have now been included. I am really not sure that I follow the argument, although I will think about it after this evening.

I mentioned bitcoins not because I was suggesting that they should be included but simply as an example of how some time ago we did not know what was coming.

One’s living expenses include the expenses of dependants—I think that is what the Minister said. She is nodding. It is not quite within the normal meaning of the words, but I will accept that, and I am glad that it has been confirmed.

I do not think that I adequately followed the argument about the term “exceptional circumstances”. The Minister said quite a lot about the rest of the clause and of course I shall look at that after this evening. For now, I beg leave to withdraw the amendment.

[Baroness Williams of Trafford]

Perhaps I may intervene to say that the regulations will be affirmative.

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Moved by

[Baroness Hamwee]

107: Schedule 1, page 120, line 12, at end insert “of such minimum level of seniority as may be designated by the Secretary of State”

[Baroness Hamwee]

My Lords, we have had groupings which have covered half a dozen big issues; Amendment 107 would amend the definition of SFOs— serious fraud officers—in Schedule 1, where we are told that an SFO officer is,

“a member of staff of the Serious Fraud Office”.

My amendment would add to that,

“of such minimum level of seniority as may be designated by the Secretary of State”.

Realistically, of course, this aims to exclude a very junior member of staff who has perhaps simply administrative duties and so on—I seem to remember the noble and learned Lord, Lord Keen of Elie, saying, “It wouldn’t mean the janitor”. I want to make sure that it does not mean the janitor. The SFO officers are referred to for various purposes, and after all, staff include civilians. I hope that whoever is to reply to this from the Front Bench—it seems that it will be the noble Baroness, Lady Vere—will be able to reassure the Committee as to just what is meant in this context and why there is no obvious limit: or perhaps there is one somewhere else as regards what level of officer we are talking about. I beg to move.

[Lord Kennedy of Southwark]

The noble Baroness’s amendment is obviously a probing amendment, and I hope that we will get a response from the Government Front Bench that clarifies the situation.

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[Baroness Hamwee]

My Lords, I understand the need to broaden the scope but I cannot help but think that we have been told that there are a lot of organisations that could give responsibilities to their janitors. The point is that decisions on who is given responsibility to do what can be made by senior officers of the day in an inconsistent fashion. In most organisations that would be entirely reasonable but we are talking about very serious powers, so my amendment and my comments are not intended to be frivolous.

Of course, I shall not pursue this matter tonight, and indeed after two or three mentions of thanks for my careful scrutiny and, reading between the lines, thoughts of “I wish the noble Baroness would shut up”, I think that I probably will for tonight. As I said, it is not a frivolous point but I beg leave to withdraw the amendment.

Amendment 107 withdrawn.

Criminal Finances Bill

Baroness Hamwee Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 28th March 2017 Lords Chamber

There are a number of issues to discuss, and I look forward to hearing what other noble Lords have to say about them.

[Baroness Hamwee (LD)]

My Lords, I was instinctively drawn to the amendment tabled by the noble Lord, Lord Hodgson of Astley Abbotts. However, for many of the reasons that the noble Lord, Lord Faulks, gave, and because this is a preventive provision, after thinking about it for a little while on Sunday, and rather to my surprise, I put a tick next to the Government’s amendment which states,

“that there is reasonable cause to believe”—

even though, like the noble Lord, I read that as reducing the threshold.

Our amendment to raise the threshold to £500,000 was tabled not in response to the proposal to lower it to £50,000 but because I wanted to explore whether £100,000 or £50,000 was the right amount. In this context, £50,000 is a pretty small amount, so I hope the Minister will share with the Committee the evidence behind the proposal to reduce the figure from £100,000 to £50,000. In evidence to the Public Bill Committee, the gloriously entitled prosperity director of the NCA, when asked about the amount, said that that was a reasonable value. The officer from the counterterrorism unit of the Met said that it was reasonable,

“when we are dealing with a higher end”.—[Official Report, Commons, Criminal Finances Bill Committee 15/11/16; col. 8.]

UWOs are not included in Part 2, where smaller amounts would be more relevant. In the debate concerning the amount, the Minister said that the Government,

“will be going for people worth £20 million, £30 million or £40 million and all the way down”.—[Official Report, Commons, Criminal Finances Bill Committee 17/11/16; col. 87.]

That was in response to an amendment to reduce the amount to £50,000. He said that £100,000 would catch serious criminals. The amendment in question arose from the value of property in Scotland, but the comments are still relevant.

Our concern is quite simply that if the amount is low the agencies might be tempted to go for the low-hanging fruit and fail to pursue those who commit grand corruption. It is a matter of human nature to do that. Although there is no direct read-over, the application of POCA has not been an entirely successful experience. I know that having a lower limit will not restrict going for the higher amounts, but practice and theory may not be the same thing.

We will come later to registers of beneficial ownership, both domestic and for the overseas territories, but I wonder whether UWOs can be administered effectively without a register of beneficial ownership.

We have other amendments in this group, some of which simply repeat the first amendment at different points in the Bill. Amendment 26 is the same as Amendment 54. It would change “must” to “may”—it is usually the other way round in this House, is it not? This is intended to probe why we would be restricted to the same proceedings in the paragraph that I would amend. In this context, does “same proceedings” mean the same case but allow for separate hearings? That would be sensible so that there can be a later application for a freezing order without starting new proceedings.

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[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, I thank all noble Lords who have taken part in this excellent debate. We have had some very good contributions from noble Lords from around the Committee on the significant new powers of the unexplained wealth order. I will do my best to respond to all the points that were made. I apologise in advance if I take some time to do so.

As noble Lords will know, the measures in this Bill are largely focused on serious and organised crime, but it also provides important new powers to tackle terrorist financing. Last week’s horrific attack reminds us all of the very real nature of this threat. I would like to take a moment to pause and think about the families of those who have been killed and those who still lie injured in hospital. I again pay tribute to the men and women of the police and other law enforcement and intelligence agencies who are so committed to keeping us safe—to PC Keith Palmer, but also to his many colleagues who work in Parliament and across the country. We must ensure that they have the powers they need to investigate and disrupt terrorists and terrorist groups. The powers in Part 2 of the Bill, which we will come to later, will do just that.

I return to the amendments in this group on unexplained wealth orders—or UWOs. The UK is a world leader in the fight against global corruption and the UWO is a substantial new power that will assist UK law enforcement agencies to do so. I welcome the continued cross-party support for these measures. I remind noble Lords that a UWO is a court order that requires a person to provide information which shows that they obtained identified property legitimately. If the person provides information in response to a UWO, the enforcement authority can then decide whether to investigate further, take recovery action under POCA or, if they are satisfied, take no further action. If the person does not comply with a UWO, either by not responding or not responding fully to the terms of the order, the property identified in the order is presumed to be recoverable under any subsequent civil recovery proceedings.

There are a number of government amendments in this group and I turn to them first. These are, by and large, technical changes to the provisions to help them function most effectively, but I will highlight a few for the benefit of noble Lords. As regards trusts, we have tabled government Amendments 3, 4, 6, 12, 14, 15, 17, 19, 21, 30 to 32, 36, 38 to 40, 52, 53, 174 and 175. Perhaps the biggest addition to the provisions made by the government amendments are the measures to ensure that a UWO can be served in situations where property of interest is held in trust or involves corporate structures. This, I believe, picks up some of the concerns raised by my noble friend Lord Faulks. The amendments will also allow subsequent UWOs to be obtained on additional individuals such as trustees in complex cases where this is necessary. The amendments are not a silver bullet in cases where trusts and corporate entities are involved. However, they are a significant improvement and will close a potential gap.

UWO thresholds are addressed by government Amendments 8 and 33, which would reduce the threshold for a UWO to be obtained from £100,000 to £50,000. Noble Lords rightly questioned how we settled on the balance. It followed representations from authorities in Scotland—including from the SNP during Commons consideration of the Bill—and Northern Ireland. It reflects the fact that the higher threshold could disadvantage law enforcement agencies in certain parts of the country where financial returns may not be as high or may be spread more evenly across criminal groups, and where property, in particular, has a lower value.

The threshold, however, is still an important safeguard, together with the other qualifying criteria that must be met before a UWO can be made by the court. It remains our view that the orders should be used in the most complex cases, where obtaining evidence has proved difficult, and this will be reflected in the supporting guidance.

The noble Baroness, Lady Hamwee, tabled a related amendment to push the threshold up rather than down. She helped us to reflect on the balance that must be struck in circumscribing the new power. However, based on our consultation with law enforcement agencies, I suggest that her proposed threshold of £500,000 would be prohibitive. It would stop the agencies using this power in significant cases involving serious and organised crime, and noble Lords have been clear that they want to see the most effective use of UWOs. I hope that the noble Baroness will be satisfied that our approach strikes the appropriate balance.

[Baroness Hamwee]

I could repeat my question about the temptation to get at the low-hanging fruit and not use the orders to deal with grand corruption, as I understand it.

[Baroness Williams of Trafford]

The noble Baroness is right that both ends of the scale should be tackled, so I hope that law enforcement agencies will use the orders in a proportionate way to tackle criminal activity at both ends of the scale. I hope that that will satisfy the noble Baroness. She looks satisfied.

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On Amendments 27 and 55, property that is frozen can be made subject to exclusions to allow the release of funds for reasonable expenses. That is in line with other existing powers in POCA and I understand that the position of dependants is already included in the consideration for the release of funds for the person subjected to other freezing powers in POCA, such as a restraint order obtained during a criminal investigation. I have detained the Committee for quite some time, but I hope that I have provided a reasonable explanation and I ask my noble friend to withdraw his amendment.

[Baroness Hamwee]

My Lords, on that last point, I was not clear whether the Minister was saying that defendants’ living expenses were covered or not. I would be happy to discuss that with her after today. I raised it because I was aware that they are specifically referred to in other legislation.

[Baroness Williams of Trafford]

The noble Baroness is right: they are provided for because they are in line with existing powers in POCA.

[Baroness Hamwee]

The Minister said that it would be right to have everything dealt with in the same hearing. I questioned whether “proceedings” meant “hearing” because to me they are not the same thing. Did the Minister say “hearing”? That might require a tweak.

[Baroness Williams of Trafford]

I did say “hearing”.

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Moved by

[Baroness Hamwee]

58: Clause 9, page 29, leave out lines 10 to 13

[Baroness Hamwee]

My Lords, Amendments 58 and 59 deal with the same provision in the Bill. We have now come to the chapter on money laundering.

Under new Section 336B(6), the Bill provides that the court must direct the exclusion from the hearing of an application of,

“the interested person to whom that application relates”,

and “anyone representing that person”. The second of my amendments would make that discretionary for the court, but the principal amendment would remove the provision, because it would be appropriate for the Committee to hear the Minister’s justification for excluding from the hearing without alternative arrangements on their behalf the suspected person and his representatives. I acknowledge that I missed a similar provision earlier in the Bill, but the point remains.

I appreciate that there is concern not to tell that person what evidence the police have when they seek to extend the moratorium period, but it is serious to restrict arguments and representation when the person is likely to be subject to an extension of the moratorium. It is part of the whole landscape of innocence until guilt is proved. As far as I understand it, that person will have no opportunity to object to the extension—or perhaps will have an opportunity but no real target to aim at because neither he nor his representatives will have heard the arguments.

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[Baroness Williams of Trafford]

My Lords, I recognise that the issue was considered in 2015. It is now 2017. I totally take on board what the noble Lord says. This issue is complex but I will go back to the department to see what is in the art of the possible before Report. I cannot promise anything at this stage other than that I will try to expedite it if possible.

Prioritisation and the allocation of resources are operational matters. The NCA already has processes in place to take tasking decisions and allocate its resources. It is very unlikely that a SAR would be the only factor taken into account when deciding whether to open an investigation. Putting this matter into legislation could, if anything, impose additional restrictions on law enforcement agencies, which already have the type of flexibility to prioritise cases that the noble Lord’s amendment seeks to achieve.

I hope that he is at least partly satisfied with my explanation. I invite the noble Baroness, Lady Hamwee, to withdraw her amendment.

[Baroness Hamwee]

My Lords, as regards the bad things in subsection (5), I would feel more comfortable if these were a matter of discretion for the court. However, if a court has to be satisfied about something, the provision goes against my instincts—of course, I do not have the experience of other noble Lords in this area—as it would not be in a position to hear arguments on the other side. I specifically mentioned there being no alternative provisions because, in another part of the landscape, we are accustomed to there being special advocates, although that may not be a perfect system and I am not sure that I want to go down that route.

I will have to read the Minister’s response on legal professional privilege. It did not immediately answer my questions. Clearly, we are not going to make further progress on that today but it may well be something that I would like to come back to on Report, which, as I understand it from the provisional arrangements, will be very inconveniently held on the day after the day that we return from the Easter Recess. Therefore, I may disturb somebody’s holiday. I am sorry about that. I beg leave to withdraw the amendment.

Amendment 58 withdrawn.

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Moved by

[Baroness Hamwee]

70: After Clause 11, insert the following new Clause—
“Anti-money laundering supervision
The Secretary of State must by regulations made by statutory instrument amend the Money Laundering Regulations 2007 to require the supervisory authorities to—(a) publish annually their enforcement statistics;(b) publish annually details of individual cases of enforcement; and(c) report to HM Treasury such information as it requests, including information regarding failures of compliance and a lack of understanding of compliance requirements.”

[Baroness Hamwee]

My Lords, this amendment would provide a new clause on anti-money laundering supervision, requiring supervisory authorities to publish certain information. When the Bill started its passage through this House, briefings to noble Lords from a number of organisations made similar points about supervision, including that there are too many supervisors, there is inconsistency, and there are conflicts of interest since enforcement does not lie very comfortably with promotional activity. The term “a dysfunctional system” also was used. There was also quite a lot of comment about lack of transparency and accountability in the supervisory system, a matter which formed part of Transparency International UK’s analysis of the weakness in the rules. Its report was entitled Don’t Look, Won’t Find.

I am aware of the Treasury’s work and the current call for information but it seemed to me that it was worth pausing particularly on transparency and accountability. As Transparency International explains, these are,

“fundamental components to an effective supervisory regime”.

TI also quotes the Macrory report:

“Transparency is something that the regulator must provide to external stakeholders, including both industry and the public, so they have an opportunity to be informed of their rights and responsibilities and of enforcement activity. However, it is also important for the regulator itself, to help ensure they use their sanctioning powers in a proportionate and risk based way”.


My Amendment 70 is based directly on Transparency International’s report in the light of the recent government announcements.

The supervisors do not necessarily seem comfortable with the system. The Solicitors Regulation Authority comments that the draft regulations—the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017—fall short of requiring the supervisors of anti-money laundering to be fully independent of any representative body. The authority is keen to see where the weaknesses in the system can be addressed ahead of the Financial Action Task Force review next year. It asks us to raise in the context of the Bill the issue that the underlying legal position is in need of clarification to ensure explicit recognition that supervisory bodies should be fully independent from representative ones. I dare say that the Minister, or at any rate her officials, will have seen that briefing. Having focused on transparency and accountability, I beg to move.

[Lord Rosser]

We have Amendment 73 in this group, which is on not dissimilar lines to the amendment moved by the noble Baroness, Lady Hamwee. Amendment 73 would require the Secretary of State to,

“lay before each House of Parliament an annual statement on the money laundering supervision regime and any plans the Government has to amend it”.

At Second Reading, we raised questions about the effectiveness or otherwise of our anti-money laundering system in the light of the billions of pounds in corrupt money that comes into this country each year. Reference has already been made to that point in our earlier debate on the London property market. According to the National Crime Agency, the figure could be as high as £90 billion. The Government’s impact assessment says that this country is unusually exposed to the risks of international money laundering, which is made even more serious by the reality that money laundering is also a key enabler of serious and organised crime, including terrorist financing. The social and economic costs of this are estimated in the Government’s impact assessment at some £24 billion per year. However, despite this far from satisfactory state of affairs, there are, as I understand it, some 27 supervisory bodies in the relevant sectors, which must surely lead to a fragmented approach in the identification and mitigation of risks, and in the approach to enforcement.

--- Later in debate ---

[Baroness Williams of Trafford]

I do not know, which is why I will write to the noble Lord, if he is happy with that.

[Baroness Hamwee]

That will be helpful. As I understood it, the proposal was for regulations, and the further consultation has a limited number of questions to flesh out the earlier work. The Minister obviously has some more information.

[Baroness Williams of Trafford]

I have just had an answer from the Box. It will in fact be secondary legislation that is laid before Parliament.

[Baroness Hamwee]

My Lords, perhaps I should accept that it will be up to us to ensure that transparency and accountability are included in those regulations. I will set myself some more homework. I am grateful for the Minister’s responses. The story is obviously not ending here but I beg leave to withdraw the amendment.

Amendment 70 withdrawn.

Preventing and Combating Violence Against Women and Domestic Violence (Ratification of Convention) Bill

Baroness Hamwee Excerpts

2nd reading (Hansard): House of Lords
Friday 10th March 2017 Lords Chamber

[Baroness Hamwee (LD)]

My Lords, I, too, thank Dr Whiteford, and I am sure that the noble Baroness did not mean to suggest that Scotland and Northern Ireland are not integral parts of the United Kingdom.

The noble and learned Lord, Lord Brown, has rightly reminded us that this is a people’s issue, not just a women’s issue; his crown is highly polished, and very bejewelled. I declare an interest as I was a member of the board and chair of the domestic violence charity Refuge. That was many years ago, but I still declare the interest because that experience was very vivid. Very recently, within the last few days, I have agreed to become a member of an advisory group for the organisation Voice 4 Victims.

It struck me that this debate might almost have been wrapped up with yesterday’s debate for International Women’s Day, on the UK’s role in promoting gender equality. Because of the importance of the exercise of the UK’s role, it would be very significant if the UK ratified the convention—or, I should say, it will be significant when it does.

Reports on violence against women often have a section headed something like, “What is violence against women and girls?”. Sadly, there are many women and girls who could testify. This week, a survey of laws in 73 countries found that there are bad laws underpinning what was described as a global “epidemic of sexual violence”. The aims of the convention—prevention, protection, prosecution and integrating policies—are so sensible as hardly to need any description. However, there have been only 10 ratifications so far.

I joined the board of Refuge on the day I was asked to come to your Lordships’ House 25 years ago. Attitudes in the UK have changed, but not as much as one might expect in a generation. They have often changed among senior people who have to deal with the issue—the police are one example—but less so in lower ranks. Some of us were privileged to hear DCC Louisa Rolfe from West Midlands Police talk about coercive control at a recent all-party group meeting. Her understanding and description were very impressive indeed. As I said, there have not been the changes one might expect in a generation. The importance of the issue is enormous, yet there is a lack of belief and understanding.

[Baroness Farrington of Ribbleton (Lab)]

I compliment the noble Baroness on raising the issue of people’s attitudes. I declare an interest: as a local councillor in Preston in the early 1970s, I was part of a group trying to establish refuge provision. I was invited to speak to senior members of Chorley Council. The then leader of that council finished the meeting by saying that he was absolutely appalled that men in Preston behaved like that—of course, they did not in Chorley. Another councillor came to speak to me and said that her son-in-law was a barrister and her daughter had complained of being a victim. The daughter’s father would not believe that a barrister could behave like that. Today’s debate demonstrates the wide range of backgrounds and areas that people come from.

[Baroness Vere of Norbiton (Con)]

My Lords, I remind the House that if there are to be interruptions they should be kept very brief.

[Baroness Hamwee]

My Lords, I am grateful for that intervention. I was about to say that one often hears, “It does not happen here”. The lack of understanding that what is happening is a crime is, sadly, shared among those who experience that crime.

I am a member of the Joint Committee on Human Rights, which in 2015 undertook an inquiry to examine progress towards ratification. The noble Baroness referred to that. Its report told your Lordships that,

“the Convention would have a strong indirect effect on the UK legal system”,

firstly in that it,

“could be cited by the UK courts as persuasive authority”,

and secondly through the role of the European Court of Human Rights, given that the Government are bound by its judgment and, therefore,

“the terms of the Convention could have a strong indirect effect on the UK legal system”.

The report also commented on some of the evidence that the committee had obtained. Witnesses had told the committee that ratification would,

“help the UK’s position internationally in tackling violence against women and girls and would encourage other countries to follow suit”.

The Bar Human Rights Committee of England and Wales said that ratification would emphasise the state’s positive duty and it would,

“provide a further basis in law for those who wish to persuade the state to provide adequate and meaningful resources to construct an effective mechanism to protect women from gender violence and harm”.

That raises the question of whether there is a resource issue behind this which may not have been acknowledged in the same way as the concerns about the devolved institutions. I hope that the Minister will assure us that there is no resource component precluding ratification. The evidence from the Minister to the Committee referred to ratification being a matter for the devolved Administrations. Let us not seek to avoid any responsibility ourselves in that area. The Government’s response to the JCHR’s report emphasised their commitment to the convention but referred again to the devolved Administrations.

We have heard about the international context but, as we have also heard, this is not just a third-world issue. Real commitment would put all the mechanisms in place. It would be a considerable achievement of Her Majesty’s Government both to be able to ratify the convention and actually to ratify it. It would be a solid expression of our commitment to preventing and combating violence against women and domestic violence. It would put the country’s legislation where its mouth is. According to the JCHR, the UK is in a good position to ratify. The then Home Secretary showed her personal commitment and only a single legislative change is required.

Last year, the JCHR visited Strasbourg. I recall a member of the Council of Europe strongly emphasising the importance of the UK’s example. The context was different—we were talking about compliance with the judgment of the court on a different issue—but the message was the same: the example set by a country which is respected and whose respect needs to be maintained. We support the Bill from these Benches.

Criminal Finances Bill

Baroness Hamwee Excerpts

2nd reading (Hansard): House of Lords
Thursday 9th March 2017 Lords Chamber

[Baroness Hamwee (LD)]

My Lords, when I first looked at this Bill, the first word I wrote down was “privacy”—which may be a legacy of recent Home Office Bills. Then I wrote down “housing market London” and then “reputation”. My noble friend Lady Bowles referred to the fundamental agreement with society. The noble Lord, Lord Hodgson, reminded us—picking up points made by my noble friend Lord Thomas of Gresford—of the importance of engaging the public without the deterrence of bureaucracy, which I am not alone in the Chamber in having suffered from. I should perhaps have first written “transparency”, which goes hand in hand with—I stress this—the accessibility of information, because the antithesis of transparency is not privacy but secrecy. So I will not be defensive if, from time to time during the passage of the Bill, I apply in a moderate way the lens of privacy.

What might seem, at first sight, a rather dry subject on only a very little reading turns out to be the stuff of a page-turning thriller—possibly accompanied by coffee and Sachertorte, as the noble Lord, Lord Dear, reminded us, as lunchtime comes and goes. Sadly, it is not fiction that apparently more than £100 billion of dirty money goes through the UK system each year, so far as one can tell—ironically, as my noble friend said, equivalent to twice the size of Panama’s economy.

The criminality that is the subject of the Bill does very real damage to the UK’s reputation and to individuals. The noble Baroness, Lady Stern, referred to the penetration of grand corruption and gave your Lordships a very vivid picture of the impact of corruption. The noble Baroness, Lady Whitaker, referred to the importance of the restoration of funds. We have been briefed by organisations outside this House on the evidence of the cost to developing countries of corruption and of the use of tax havens.

Of course, it is all around us. You do not have to go on a kleptocracy tour to see it in London. Transparency International said:

“For those in possession of corrupt funds, a property in the UK can provide a secure investment, but also help bestow prestige, respectability and a bolthole when the going gets rough at home. Most importantly, property in the UK can be acquired anonymously through companies registered in secrecy jurisdictions and anti-money laundering checks can be bypassed with relative ease”.


That is a pretty quick canter through many of the issues that this Bill gives rise to—one could quote very much more from Transparency International on this subject.

I resent, on behalf of those who struggle to find housing in London and those who are affected, perhaps slightly less directly but still pretty directly, by corruption, the fact that property in my city is available to corrupt individuals. There are some developers at the high end who are selling London. I welcome the steps taken to tackle the situation. I dare say that, from these Benches, we will be pressing the Government for more, while also unpacking how appropriate and effective the measures in the Bill will be. Some of this will be detail, but important detail. For instance, is £100,000 the right threshold for unexplained wealth orders? How big should be the identifiable tip of a possibly very substantial iceberg?

The noble Lord, Lord Faulks, referred to safeguards. I am sure that we will want to satisfy ourselves about those. I confess to feeling a little discomfort, which perhaps in the context is inappropriate, about a civil rather than a criminal standard of proof applying in this area. No suspicion is required in the case of a non-UK or EEA politically exposed person. That is a hook on which to ask about progress on the definition of PEPs domestically, possibly in writing, after this debate. My noble friend Lady Kramer alerted me to the possibility of guidance being given by the FCA, I think, under the recent Bank of England and Financial Services Act. It is quite clear that there are issues around domestic PEPs.

Like everything else, new legislation depends on enforcement. Would it be indelicate to inquire whether the Minister wants to say anything on the sharing of information and co-operation with other EU states, post Brexit? There are 27 states, of course, like the 27 fragmented supervisors who have been referred to. Comments have been made about the number of SARs now; quantity can hinder effectiveness. One must worry about the NCA’s capacity to deal with super SARs, though I note the reference of the noble Lord, Lord Dear, to the description of systems that are in use.

I am anxious about the extension of seizure and forfeiture powers, but not perhaps as the Minister may expect. Why extend them only to specified items? I appreciate that the list of items in question can be extended, but why not to all items now—certainly all items of personal property, if not real property, such as land?

I noted the extension elsewhere in the Bill of powers to immigration officers, which will take my noble friend Lord Paddick and me back to comments we have made on previous legislation about the disappearing distinction between immigration officers and the police. We may also want to probe a little on the supervision and powers of civilian counterterrorist investigators. My noble friend Lord Sharkey, who cannot be here today but will, I know, join us at a later stage, wants to probe the operation of deferred prosecutions and will have suggestions about money being held in escrow until the agreed sum is paid, given the problems of collection of cash—because it seems that pockets and wallets are sensitive to depletion in a way that, apparently, deprivation of liberty cannot match. Prison seems to be merely an occupational hazard to some people.

I mentioned the damage to individuals. Corruption and the infringement of human rights go hand in hand. I welcome the Magnitsky amendment. The Joint Committee on Human Rights, of which I am a member, commented on the issue. The committee is currently looking at business and human rights, including issues of strict liability, civil remedies and reporting and transparency. There is quite a lot of read-across here.

My noble friend Lady Kramer rightly mentioned the issue of whistleblowing, while the noble Baroness, Lady Bowles, the noble Lord, Lord Watson, and others mentioned corporate liability—but I will come back to where I started, with transparency. There is a clear will to spend some time in Committee on the implementation of public registers of beneficial owners in British overseas territories. It was the focus of the speech of the noble Lord, Lord Rosser, though we heard a contrary view. The UK has led the way and we have heard about steps being taken elsewhere in the European Union. Let us acknowledge that Montserrat has committed itself to introducing a register, though we do not know when, and use our influence—or, if necessary, power—over what are, after all, British overseas territories: further and faster, as the right reverend Prelate said.

The term “open for business” is used quite a lot at the moment, in the context of the UK being open for business. None of us wants to be open for the business of being used as somewhere to bleach some very dirty laundry.

Brexit: EU Nationals’ Right to Remain

Baroness Hamwee Excerpts

Wednesday 11th January 2017 Lords Chamber

[Baroness Williams of Trafford]

My Lords, as we conduct our negotiations, it must be a priority to regain more control of the numbers of people who come here from Europe but also to allow British companies and British public services to employ people with the correct skills, and companies to trade with the single market in goods and services.

[Baroness Hamwee (LD)]

My Lords, does the Minister agree with the statement in the recent CBI report that we need,

“a system informed by business rather than imposed on business”,

and that this is,

“essential to the future economic growth of the UK”?

Are the Government talking and listening to employers? What have they had to say about the £1,000 levy about which we have heard today?

[Baroness Williams of Trafford]

My Lords, the Prime Minister has made it absolutely clear that she wants to hear from all sectors and from anybody who is interested in the subject of Brexit. All opinions and cases made to her will be listened to, and she will form her views accordingly.

Policing and Crime Bill

Baroness Hamwee Excerpts

3rd reading (Hansard): House of Lords
Monday 19th December 2016 Lords Chamber

Moved by

[Baroness Hamwee]

1: Clause 161, page 174, line 34, after “constable” insert “reasonably”

[Baroness Hamwee (LD)]

My Lords, Amendments 1 and 2 deal with the same issue and are amendments to clauses requiring people to state their nationality when an immigration officer or constable suspects that an individual may not be a British citizen. Underlying our amendments is a concern that these powers may be exercised on the part of law enforcement officers in a discriminatory fashion. Suspecting that someone “may” not be British is a low hurdle.

At the previous stage, the Minister said that,

“it is already the case that officers may only ever act on reasonable grounds when exercising their powers”.—[Official Report, 12/12/16; col. 1012.]

That sounds all well and good, but if that is the case then why, in closely comparable provisions in Section 43 of the Immigration Act of this year, is there the formula:

“if the officer has reasonable grounds for believing”?

That formula is used in the case of requiring someone to provide a driving licence if he is suspected, or, as I say, if there are reasonable grounds for believing him to be not entitled to drive in the UK. Belief, as in the Immigration Act, is, as I understand it, in itself a higher hurdle than “suspicion”, but earlier this year it was considered that the formula which I have quoted was appropriate—both belief and reasonableness.

I was grateful for the support of the noble Lord, Lord Kennedy, during the previous stage. He made a substantive point about the term “reasonable”. Given the constraints of Third Reading, my amendments today are based on what might be called a technical point: that there is, as a matter of legal construction, a lower test to be applied under the Bill than under the Immigration Act. Two provisions which mean the same thing should be expressed in such a way as to indicate that. If they are expressed differently, there must be an implication—I hesitate to say this, given other noble Lords who are sitting around the Chamber—that they do not mean quite the same thing. To be told that we should base the point about reasonableness on what I think comes from the relevant PACE code does not, I am afraid, satisfy me. I probably took the Minister by surprise by making this point at the previous stage, but I hope that she may be able to answer the point, or better still to agree to the amendment.

This amendment also enables me to refer to a commitment given during the passage of the Immigration Bill, when we discussed the provision to which I have just referred. My noble friend Lord Paddick and the noble Baroness, Lady Lawrence of Clarendon, were very much involved with this issue and meetings were held with the then Minister, the noble Lord, Lord Bates. I think that he was as concerned at the possible misapplication of the provision as we were, and we had quite a long meeting to discuss it. He offered this in debate:

“I would … like to make sure, when the consultation document is published”,

on that provision and the piloting of it, “that we reconvene”, and that the noble Baroness and my noble friend should,

“meet with officials again … to get the noble Lord’s and the noble Baroness’s perspective on that. How the pilot scheme will be framed will also be looked at. Again, we would value the noble Lord’s and the noble Baroness’s perspective. We will make sure that that happens before they are brought forward and placed in the Library, and before the pilot commences”.—[Official Report, 15/3/16; col. 1772.]

At the last stage, we heard that the provisions under the Immigration Act on the production of drivers’ licences were to be piloted. It was not known at that time whether that would be a pilot in conjunction with the pilot which is provided for in this Bill. I hope the Minister can give us assurances about wide consultation, including about where the pilots should take place. She was able to tell the House that one pilot would be in Hampshire, which everyone to whom I have mentioned it has reacted by saying that it is not a very helpful place to show whether the provisions might be used in a discriminatory fashion. That is a substantive point and I hope the Minister can assist on it, but at this late stage of the Bill I base the amendments on the technical point of comparison with the Immigration Act. I beg to move.

--- Later in debate ---

[Baroness Chisholm of Owlpen]

We take the view that the police should always act in a reasonable way.

[Baroness Hamwee]

I think that encompasses our arguments.

With regard to the pilots, I am grateful for the noble Baroness’s assurances, but had there been consultation on the choice of Hampshire, she might have had some useful input.

I do not know whether the noble Baroness is in a position to tell us whether there is a distinction between an immigration officer or constable “suspecting” under these clauses in the Bill and an officer having “reasonable grounds for believing”. Are these different tests? It seems to me that suspecting and having reasonable grounds for believing are not the same, but I think she is telling us that they are. Does she have anything that she is able to add?

[Baroness Chisholm of Owlpen]

I am slightly muddled by what the noble Baroness is saying. Could she explain that a bit more?

[Baroness Hamwee]

I take the point that different formulae are used in different parts of immigration law, but the Immigration Act to which I have referred provides for an officer to have “reasonable grounds for believing” something, while under this Bill, he simply has to “suspect” something. “Reasonable grounds for believing” seems to me to be a much tougher test than simply suspecting. The noble Baroness may have something she can share with the House on that.

[Baroness Chisholm of Owlpen]

Suspecting and believing are slightly different words, obviously. Perhaps I had better write to the noble Baroness with more clarification.

[Baroness Hamwee]

My Lords, I wonder whether this is something that we can add to the discussion or consultation on the pilots. If one is going to pilot two provisions in the same place, carried out by the same officers and prompted no doubt by the same observations, it would be quite interesting to have them either able or not able to require documents from the same people, but not able to do so because in one case the ground applies and in the other it does not. I realise we are getting into very fine detail, but it will be very real detail in the application. It is not the noble Baroness’s fault, but I can see that we are not going to be able to make further progress on this today. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

--- Later in debate ---

[Lord Rosser (Lab)]

My Lords, Amendment 12 is in essence the same as our Amendments 12 and 14 on Report, which we withdrew in the light of the Minister’s response. In accordance with that response, I have since received a letter from the Minister that covers guidance on a PCC’s business case and consultation arrangements, and on the terms and conditions of fire personnel transferring to PCC fire and rescue authorities and to chief officers under the single-employer model.

My purpose in tabling this amendment at Third Reading is to ask the Minister to cover the content of her letter to me in her response today so that it is on the record in Hansard. The letter said that government Amendment 11 on Report meant that,

“the PCC would always be required to publish a response to their consultation, regardless of whether they have local agreement or not”,

and, crucially, that,

“the guidance will fully reflect the issues covered by your amendments 12 and 14”,

on Report, which are now reiterated in Amendment 12, which we are now discussing at Third Reading. The letter also said:

“Whilst this guidance will be owned and issued by APACE”—

the Association of Policing and Crime Chief Executives—

“Home Office officials are part of an advisory group that has been set up to steer the development of the guidance and are working closely with the authors to ensure that it reflects Government’s expectations”.

In other words, the guidance reflecting the Government’s expectations will fully reflect issues covered by our Amendments 12 and 14 on Report, which are repeated now in Amendment 12, which we are now discussing at Third Reading.

If the Minister can place on record in Hansard the key parts of the letter that she sent me following Report, then from my perspective that would achieve the purpose of this amendment. In particular, confirmation of the points that I have just made, and which are referred to in the letter, about the guidance fully reflecting the issues covered by my Amendments 12 and 14 on Report, and the fact that the guidance will reflect the Government’s expectations, would be extremely helpful.

[Baroness Hamwee]

My Lords, I am glad that the noble Lord has dealt with the matter as he has and has sought to have the points put on record. I wonder whether, in replying, the Minister can confirm that in paragraph 3(d), the requirement on the commissioner to publish,

“in such manner as the commissioner thinks appropriate”,

is consistent with the description that the noble Lord has just given—and that, within statute, one cannot think something “appropriate” without it also being “reasonable”.

Immigration (European Economic Area) Regulations 2016

Baroness Hamwee Excerpts

Thursday 15th December 2016 Lords Chamber

Finally, what is the procedure adopted by the Home Office when faced with these two critical reports from the committee—namely, the 14th and 17th reports? At what level have the committee’s findings been considered, or will be considered, in the Home Office, and who has responsibility in the Home Office for ensuring that this is the last such report which the Secondary Legislation Scrutiny Committee feels it has no choice but to issue in relation to a Home Office statutory instrument? This issue of making the appropriate information available, and of issuing guidance so that that guidance can be scrutinised by Parliament if there is an unwillingness to put the information into the regulations, affects the ability of Parliament to call the Government to account. That, in a sense, is what is at stake, and what the Home Office has sought to avoid through what it has done in relation to these regulations. I hope the Minister will be able to give satisfactory responses to the questions I have raised. After I have heard her reply, I hope I will not be left with the feeling that the Home Office’s position is that the committee can say whatever it likes, but the way the Home Office carries on will continue unchanged.

[Baroness Hamwee (LD)]

My Lords, I join the noble Lord, Lord Rosser, in his expression of regret. I was for some time a member of the Secondary Legislation Scrutiny Committee and can confirm his characterisation of the restraint it uses in its reports. It does not use extreme language and reports to the House only when it is very necessary to do so. My regret goes wider than the process but the committee is to be thanked for that process. It is dogged in its pursuit of detail and in reminding departments of the requirement to maintain the necessary standards as regards the mountain—it is a mountain—of instruments which are put before Parliament.

I shall say a few words about these regulations but I want to make a broader point. The likelihood must be that, in connection with exiting the European Union, Parliament will be asked to approve, or not to oppose, very large quantities of secondary legislation. I think of the great repeal Bill as a great reinstatement Bill because it will repeal one thing but it is likely to provide a mechanism for reinstating a very great deal of our current legislation, as an awful lot of legislation will have to be reinstated in domestic law. It is critical—I do not use that term lightly—that those instruments have the highest standards and do not require the sort of pursuit of detail, or indeed of meaning, that characterises this instrument.

I have more of an objection to these regulations than the committee has, and I guess that it would have been outside its remit. The undesirability of regulations which require guidance for them to make sense is an issue. The committee says that guidance should be available in draft when the regulations are being considered so that Parliament can in effect treat them as part of the scrutiny process. It should not be necessary to rely on guidance to understand the kernel—the fundamental issues raised by regulations. That is not only because, like regulations, guidance is unamendable by Parliament but because it can so easily be changed without reference to Parliament.

The committee in this instance quite rightly advises the House that the interpretation of specific terms and how decisions are made should be set out clearly in this instrument. I note that it says:

“A fundamental tenet for new legislation is that it should not make work for the courts by using loosely worded provisions”.

That is particularly notable since the Government so much object to what they perceive as judge-made law.

These regulations deal with particularly sensitive subjects, so the issue of redaction, raised by the noble Lord, Lord Rosser, is of concern. Paragraph 2 of Schedule 1 is about integration—a topical and concerning issue. Paragraph 7 of Schedule 1, to which the noble Lord referred, attempts to define, although not exhaustively, the “fundamental interests of society”. The best that can be said about them is that may be a better term than “British values”. The committee says:

“We are surprised that so significant a change should be implemented by a negative instrument, and also”—

as the noble Lord, Lord Rosser, said—

“that it was undertaken without any prior consultation”.

I could imagine this House spending at least two days debating the fundamental interests of society, and probably not coming to a conclusion. Academia could spend months and years over it. To see them listed, or purported to be listed, in the schedule to unamendable regulations, is therefore bold. I will not attempt to analyse and critique the list, but I cannot resist mentioning the conjunction of a sub-paragraph about “protecting public services”, which is right up against,

“preventing the evasion of taxes”.

Although it would not be relevant to this, you cannot think about that without the context of how services and taxes relate to one another. Perhaps more importantly, the people who will be affected by this and who see that conjunction of issues may well wonder what fundamental interests—or interest—society has in their position, and the way they will perceive these regulations will not be a happy experience. We support the Motion.

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, I thank both noble Lords who have made comments during this debate.

Following the public’s vote to leave the European Union and until exit negotiations are concluded, all the rights and obligations of EU membership remain in force and the Government will continue to apply and implement EU legislation. It is important to continue to make this point at the outset. At present, the rights of EEA nationals and Swiss citizens to live and work in the UK have not been affected by the referendum.

It is the free movement directive that mainly sets out those rights, and it is implemented in the UK through the Immigration (European Economic Area) Regulations 2006, as amended. These regulations were amended in 2009, 2011, twice in 2012, twice in 2013, three times in 2014, and in 2015 to reflect developments in immigration policy and to give effect to relevant case law. As noble Lords will therefore appreciate, this has resulted in a legislative framework that has become quite fragmented and complex.

The new 2016 regulations, which are the subject of today’s debate, do not significantly change the Government’s policy and legal position as set out in the 2006 regulations. Their main effect is to revoke and replace the 2006 regulations, consolidating the previous legislation, modernising the language used and simplifying terms, where possible, in line with current drafting practice.

The Government have also taken this opportunity to address issues concerning the practical application of the 2006 regulations and to clarify our approach in key areas such as criminality and the abuse of free movement. These changes are not about restricting the free movement rights of law-abiding EEA nationals and their family members who make a valuable contribution to society but about making sure that we are in the strongest possible position to deal with those who come here and do not abide by the rules.

I totally agree with noble Lords that it is undesirable to have regulations that are broad and open-ended in nature. That is precisely why we have made some of these changes. For example, the 2006 regulations stuck closely to the wording of the free movement directive, simply providing for a person to be expelled from the UK on public policy and public security grounds where their conduct represents a,

“genuine, present and sufficiently serious threat affecting one of the fundamental interests of society”.

That wording clearly covers a wide range of scenarios and could be criticised as being too broad and overarching, possibly giving rise to a lack of certainty, either for individuals or for the courts, as to what behaviour might meet that threshold.

European Court of Justice case law in this area is clear: member states have a margin of discretion to determine the fundamental interests of their society. Therefore, the 2016 regulations are now significantly clearer by providing further descriptions and examples of matters of public policy and public security, and they provide more detail about what the Home Secretary considers to be in the fundamental interests of the United Kingdom in respect of taking such decisions under these regulations.

The changes clarify that we can take deportation action in a broad range of cases, including against those who abuse their free movement right by facilitating illegal immigration or engaging in immigration abuse—for example, through sham marriage—or those who undermine our public services through tax evasion or benefit fraud. The regulations also make it clear that it is not only high-harm criminality that threatens the fundamental interests of the UK but persistent low-level offending as well.

As noble Lords can see, the new regulations do not significantly change the legal position; rather, they spell out the detailed factors that decision-makers and the courts should take into account when considering whether the deportation of an EEA national is in the fundamental interests of society. The new drafting approach in the 2016 regulations merely sets out a fuller range of circumstances and interests that fall within the term “public policy”. However, this range always fell within the meaning of that term, even under the 2006 regulations, so there has been no extension of the term.

Clearly, there is a very broad and varied array of circumstances in which an individual may pose a threat to public policy concerns, so it is quite impossible to draft in a way that specifically deals with each possibility but still provides comprehensive coverage in a single document that is not excessive in length. To ensure comprehensive cover in a manageable document means it is inevitable that some of the provisions are somewhat broad in nature. Although I am all for improving clarity and providing extra detail, having to describe in legislation every possible circumstance would be neither practically possible nor indeed helpful, given the number of provisions this would need and the changing threats that UK society faces.

The noble Lord, Lord Rosser, queried the sorts of persistent low-level offending that will be aggregated to qualify a person for removal. As is very much the case now, and as is required under both the 2006 and the 2016 regulations, all decisions taken on the grounds of public policy and public security will be made in accordance with the principle of proportionality, will take into consideration the personal circumstances and will be based exclusively on the conduct of the individual concerned. For this reason, there is no prescribed list of offences, nor a threshold for the number of offences which must be committed in order for a decision to be made on the grounds of public policy or public security to combat persistent offending—a matter which is of significant concern to the public.

I note the noble Lord’s concern about the level of scrutiny that Parliament has been able to afford these new regulations. I hope that the reassurances I have given as to the modest evolutionary rather than revolutionary nature of the 2016 regulations will serve to explain why, as was the case with the 2006 regulations and their very many amendments, the Government considered that the negative resolution procedure was the appropriate mechanism. The noble Lord also raised the issue of consultation. We of course consulted other government departments where substantive policy changes were made; for example, implementation of the Upper Tribunal case of Sala, removing a right of appeal from applicants seeking recognition as an extended family member.

I understand the reasonable point made by noble Lords that it would have been helpful if the guidance had been published when we laid the regulations, to assist their scrutiny. We did publish detailed guidance on GOV.UK regarding Regulation 9 when it came into force on 25 November, as the noble Lord, Lord Rosser, said. Detailed guidance on the remainder of the regulations will be published when they come into force on 1 February. However, I am afraid that we are not in a position at this point to provide additional information on the remaining regulations. The noble Lord also mentioned that the guidance on Regulation 9 relating to the genuineness of residence included several redacted sections marked “For Home Office Use Only”. As is usual with redacted sections of guidance, disclosure to the court will be considered on a case-by-case basis in accordance with the relevant procedural requirements or court order.

The noble Lord, Lord Rosser, said that the new, more specific drafting gives rise to concern that a different approach would be adopted across the country due to the terms being somewhat general and non-exhaustive. As I think I have mentioned, the new drafting substantially improves on the drafting of the 2006 regulations, and in the 10 years they have been in effect there has been no complaint about differing geographical application even though, based on the above argument, surely the risk was so much greater given that all this was covered in one sentence in the 2006 regulations but is now covered by many times that number of words.

Schedule 1 seeks to replicate the existing position in the 2006 regulations but in a clearer way by providing extensive language to describe the scope of things such as the fundamental interests of society in relation to public policy.

The noble Lord also asked what the procedure was for acting on these reports and at what level. A parliamentary team will bring the various reports to the attention of relevant units within the Home Office, and the directors of those units are responsible for ensuring that the Secondary Legislation Scrutiny Committee is considered and taken account of at the relevant time and in relation to future practice.

I hope that I have covered all points that noble Lords raised. I am sure that they will intervene if I have not.

[Baroness Hamwee]

My Lords, I shall accept that invitation. This is not a point that I have raised before and I do not expect the Minister to have an instant answer, but I make a plea. I would not have found the guidance had I not seen a reference to the date when it was published. Even then, it took me some time to navigate the GOV.UK website to find it, by which time I did not have very much time to look at it. There seemed to be no cross-reference to the number or title of the regulations, and I think the guidance may well cover more than just these regulations. I really think that that website could do with the uninitiated doing some mystery shopping on it.

[Baroness Williams of Trafford]

I will certainly take that point back because, if the noble Baroness cannot find it, lesser mortals would really struggle.

In conclusion, the Government believe that the changes made in the 2016 regulations do not fundamentally change the legal position set out in the 2006 regulations and that the measures are proportionate. I hope with those words and with my explanation on the noble Lord’s questions, that he will feel free to withdraw his Motion.

Terrorism Act 2000 (Proscribed Organisations) (Amendment) (No. 3) Order 2016

Baroness Hamwee Excerpts

Thursday 15th December 2016 Lords Chamber

I would like to ask just two questions, although I want to make it clear that we welcome and support the order. First, how easy or otherwise will it be for this organisation to get round the order? Can it do that simply by renaming itself or setting up another organisation, which may not be all that difficult? Is it more complicated for an organisation in this position to get around the order which we hope will be made this evening? Secondly, are there any other right-wing organisations—I stress, without naming them—of similar views, means of operation and objectives to National Action in the sights of the Government for adding at some future stage to the list of proscribed organisations?

[Baroness Hamwee (LD)]

My Lords, I too thank the Minister for her careful explanation. I will not oppose the order, but this is a moment for reminding ourselves of the distinction between distasteful and, in a non-technical sense, offensive speech and the promotion of terrorism and other actions which are the criteria for proscription. In that connection, I would like to remind myself and the House of the importance of freedom of speech.

The Minister described some of the activities of National Action. I have read of its advocacy that, when it assumes power, those who promote liberal values, tolerance and multiculturalism will be “in the chambers”. She referred to photographs taken in what had been gas chambers. It has used the phrase “Hitler was right”; it is quite clear what it means by “the chambers”. When one of its members was jailed for a series of anti-Semitic tweets against the Member for Liverpool Wavertree, National Action led a campaign to have him freed. It clearly supports violence to achieve its political goals and has gone well beyond the bounds of free speech, into advocating violence and engaging in acts to “compel, coerce or undermine” the Government, which is engaging in terrorism.

However, that is a stronger definition of terrorism than in the current legislation. This definition was first advocated by my noble friend Lord Carlile of Berriew in 2008, when he was the Independent Reviewer of Terrorism Legislation. It was supported by David Anderson, the current reviewer, in 2014. National Action clearly falls within both the legal and recommended definitions of a terrorist organisation, but I wonder whether the Minister has anything in her brief about these recommendations. David Anderson also recommended that proscription should be for a limited period and subject to renewal. I would be grateful if the Minister could say whether this order is time-limited or in some way subject to review.

As the Minister said, this is the first order against a right-wing organisation that advocates terrorism. I understand—I think these figures are from the National Police Chiefs’ Council—that the number of far-right referrals to the Prevent programme increased from 323 in 2014-15 to 561 the following year, which must be the most recent year for which we have figures. Does the Minister have any comments on that?

These Benches support freedom of speech and this proscription, and it has occurred to me, listening to this debate, that an organisation such as this infringes the right of free speech for the rest of us.

[Baroness Williams of Trafford]

I thank noble Lords for their constructive comments. The noble Lord, Lord Davies, asked about the freezing of funds. As I outlined in my speech, it is entirely possible and we freeze assets, but we do not comment on whether individuals are being considered for an asset freeze. If that were the case, it would be an operational issue for the police and the Treasury.

On how easy it is to get round the order if an organisation is renamed or a new organisation is set up, if organisations change their name, they remain proscribed. We can, of course, also lay a name change order to clarify that they remain proscribed. We most certainly keep extreme right-wing groups under review, as we would with any other type of proscribed organisation, but we do not routinely comment on whether an organisation is under consideration. I hope that answers noble Lords’ questions. I thank noble Lords for their comments.