Serious Crime Bill [HL]
Baroness Smith of Basildon Excerpts(9 years, 10 months ago)
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Baroness Smith of Basildon
Should we not be debating whether Clause 37 should stand part?
Lord Swinfen
My Lords, the Lord Speaker put the Question that Clause 37 stand part of the Bill and it was accepted by the Committee. We are now on to the next amendment.
“Annual reports: cyber-crime strategy
(1) The Police Reform and Social Responsibility Act 2011 is amended as follows.
(2) In section 12 (annual reports), after subsection (7) insert—
“(8) A report under this section must include details of the policing body’s strategy to deal with cyber-crime.””
Baroness Smith of Basildon
My Lords, I apologise if there has been some confusion. When the Question was whether Clause 37 should stand part of the Bill, I was loath to say no because, although I gave notice of my intention to oppose the Question, I really have no intention of opposing the clause. As noble Lords will agree, one way to have a general debate on the principle of an issue, rather than its individual parts, is to raise a clause stand part debate.
At the same time as moving Amendment 31K, which would require the annual reports of police authorities and police and crime commissioners to contain a statement on how they are tackling cybercrime, I will make some general comments on cybercrime and computer misuse. This is a probing amendment. The Bill amends the 1990 Act to create a new offence of unauthorised acts that cause serious damage, to implement the EU directive on attacks against information systems and to clarify the savings provisions for law enforcement. We have no difficulties with those provisions, but we wish to have a general debate and promote a discussion on whether the Government are doing enough or whether the Bill could go further and provide better and more effective protection from cybercrime.
Noble Lords may be aware that we also sought to table an amendment to create a new offence of identity theft. We have raised this issue with the Government before because it needs new legislation. We were disappointed that the Government did not take the opportunity to include something along those lines in the Bill. Noble Lords will know that, within cybercrime, identity theft causes a great deal of concern and affects a large number of people. However, it was not included in the Bill and, unfortunately, our amendment to address this was not in scope. I am sure we will return to this issue another time but, when dealing with cybercrime now, it is important to look at and address the loopholes in existing legislation.
There is little doubt that digital technology and the internet have changed our lives and provided us with new opportunities. However, they also create new challenges and provide new opportunities for criminals. Returning to the theme of Al Capone, even his creative criminal mind could not have imagined the opportunities that would be available to his successors in the 21st century. A recent HMIC report says that this could either be,
“where criminals use computers to help them commit crimes that would have been committed previously without the benefit of such technology, for example fraud and theft, or where they commit new crimes that were not possible before”,
or were not even thought of,
“such as an attack on government online services using ‘malicious software’”.
Recorded incidents of fraud have increased by a quarter over the past year but convictions have gone down. However, business crime—which surveys indicate is going up—is not counted in official figures despite online crime exploding.
The consumer watchdog Which? estimates that half of us have been targeted by online scams. Anyone who looks religiously through their spam in the parliamentary e-mail system will see scams offering services which I am sure most of us, particularly the women, would not want to take advantage of. Recorded online fraud is up by 30% but that is just the tip of the iceberg, because most of it is never reported to the police.
The Home Affairs Select Committee concluded in its report last summer that,
“there appears to be a ‘black hole’ where e-crime is committed with impunity. Online criminal activity which defrauds victims of money is not reported to or investigated by law enforcement. Banks simply reimburse the victims with no pursuit of the perpetrators. Criminals who commit a high volume of low level fraud can still make huge profits”.
Many members of the public take out insurance with banks and other organisations to protect themselves against online crime and identity fraud. I have yet to understand how easy that is or how it pays out to a victim. Although they may get their money back, the inconvenience, distress and worry caused by it are tremendous.
Despite that, the Bill does not offer a coherent government plan for tackling online fraud and economic crime, even though it would have been an ideal opportunity to do so. Looking at large-scale cyberincidents, the recent HMIC report has some very worrying findings. Only three police forces, Derbyshire, Lincolnshire and West Midlands, have developed comprehensive cybercrime strategies. The rest of us who live in other areas have to rely on some kind of knowledge within the police force because there is no specific strategy. Only 15 forces have considered cybercrime threats in their strategic threat and risk assessments and, where those assessments exist, the plans focus only on investigating cybercrime and are silent about preventing it and protecting people from the harm that it causes. While the Government and PCCs are increasing their investment in regional organised crime units, those units have not yet developed the necessary cybercapacity to assist the police forces. That indicates that there needs to be a real debate around these issues. There need to be new plans, new strategies and new actions in place to tackle new threats. The police need to do more, not less, to tackle online fraud and crime.
I have outlined that there is no serious strategy and that fragmented forces lack the skills and organisational structure to be effective. The shadow Home Secretary has said previously that that has to involve better skills and that the police need to have the skills in this very specialised area. They need better organisation, and they also need to co-operate with the private sector. That needs to be part of strengthening the law on identity theft. We have seen that there is some good practice within the police, but it is patchy. If it is going to be effective, it needs to be universal. Ensuring that this issue is addressed in the annual report will focus greater attention on it and on the strategies and plans that have to be made. What does not have to be reported can be forgotten or added as an afterthought. If it is central to the PCC report, we will have some way of measuring the actions taken. The scale of the challenge is too great for it to be forgotten or an afterthought.
I am not suggesting that the report itself will effect a marvellous change overnight, but it will help to ensure that the importance of this issue is recognised. As well as the impact on business, there is growing recognition of the implications for national security and our national infrastructure and its resilience. The security services and GCHQ also recognise that they need to do more to tackle the growing number of cyberattacks and the effects they could have. That means building on the work being done with major public and private sector organisations because we have to ensure that they are resilient against hacking and major online onslaughts. We have also said that we want major reform of oversight functions and responsibilities and accountabilities, and we want a major overhaul of the system of independent oversight commissioners, stronger safeguards and a serious review of the legal framework, including a full review of RIPA.
These clauses are welcome. They have our support. The reason for Amendment 31K is evident. It is to try to raise the issue which is of such importance. I seek assurances from the Minister that the Government recognise just how much this is needed. I express some disappointment. We think the Bill is an opportunity to go further, do more and really address the issues of resilience, national infrastructure resilience and national security. We are disappointed that an important issue in this area—identity theft—is out of scope of the Bill so we cannot address it. We support what the Government are doing. We think there could be more. We would like more. We would like to work with the Government to achieve more. I beg to move.
Lord Phillips of Sudbury (LD)
My Lords, I strongly support what the noble Baroness, Lady Smith of Basildon, said. The issue—if you can call it an issue as it is a series of issues—in relation to cybercrime could scarcely be of greater importance to our society. It is not just an economic crime of the greatest potential but a crime in all dimensions.
The only reservation I have about the amendment is whether it goes far enough. Besides having to deal with the strategy in relation to cybercrime, I would hope for something in the report about the extent of the implementation and enforcement of the laws we are passing and the laws we have already passed. It has become a commonplace in this House to remark upon the fact that we pass laws as if there is no tomorrow but fail again and again to implement the laws we pass. I therefore hope that the report will deal with that crucial aspect of the so-called strategy.
I am not clear as to whether we are in this group also now discussing whether Clause 37 shall stand part of the Bill. We are not? Right.
Lord Taylor of Holbeach
Cybercrime is the use of computers—indeed, I may have it here. I have the Serious and Organised Crime Strategy, which uses the term. Cybercrime is the use of computers and electronic systems to commit a crime. Clearly, what happened to the noble Lord’s charity is a crime, committed extraterritorially. One of the aspects of cybercrime is that it is not globally isolated to particular territories or countries—hence the debates that we have been having on this particular issue. That is why we need to tackle it globally and why we need to be globally active in order to deal with it.
I believe that the clauses in this area are designed specifically to bring the Computer Misuse Act, which is what lies at the bottom of it, up to date, to recognise the threat that can exist from computer crime and particularly nowadays, when electronic use is so much greater than it was in 1990, when the Act was first brought in.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister for his explanations and response to the debate and, indeed, grateful to those noble Lords who supported and spoke to my amendment. I am also grateful to the noble Lord for allowing a more wide-ranging discussion, although it may not have been technically correct. I quite like the idea that on the fourth anniversary of my introduction to your Lordships’ House I have created a new form of amendment, as the noble Lord put it.
As the noble Lord said, the question on the definition of cybercrime from the noble Lord, Lord Swinfen, was particularly appropriate. In this debate we have hit the nail on the head of how wide and vast this issue is. At one level we have the very big issues of national security and the resilience of our national infrastructure, which could be attacked by cybercrime. Then there are the issues around business security, with charities and organisations that can be affected by cybercrime. Then we come to the personal, which goes from merely inconvenient to causing misery and tragedy. All those things are encompassed in the term cybercrime.
The noble Lord’s explanation of what the Government are doing was very helpful. I do not see that any of that detracts from my amendment or makes it any less relevant. I remind the noble Lord of the point I made at the beginning: only three police forces—Derbyshire, Lincolnshire and West Midlands—have developed comprehensive cybercrime strategies. Only 15 forces considered cybercrime threats in their strategic threat and risk assessment. I do not doubt that at a national level a lot of work is going on and that it is well funded. However, it seems to me that if the annual report of the police and the police and crime commissioners focused on this issue and identified the work that was being done on it, that would let the public know what is going on and create awareness of this matter. The point made by the noble Lord, Lord Phillips of Sudbury, is absolutely right: this would be a way of monitoring implementation and enforcement. I do not see that anything the Minister said detracts from the usefulness of Amendment 31K.
Lord Taylor of Holbeach
If I felt that it could be useful, I would take a slightly different approach towards it. I hope that the noble Baroness will read what I said about the efforts being made to ensure that police forces take proper account of this issue. The HMIC report was a wake-up call: it made us realise that, for all the progress we have made in the National Crime Agency and the National Cyber Crime Unit, we also need a local presence on the ground and the involvement of local police forces.
Lord Phillips of Sudbury
The noble Lord has referred a second time to the new reporting initiative for police forces and mentioned specifically the City of London police. As it happens, I was with them this very morning, when the initiative to which he referred was discussed. However, resources are a matter of acute concern for every police force in this country. We must go beyond simply saying that the Government have initiated a new plan or a new regime because, as I tried to indicate earlier—the noble Baroness agreed with me—it is absolutely fundamental that we give police forces sufficient resources to enable them to undertake the duties that we lay on them. I hope that my noble friend will take that very much into account.
Baroness Smith of Basildon
My Lords, the point the noble Lord makes about police resources is very appropriate. I know how many police officers have been lost since 2010 in my own county of Essex. I am grateful to the Minister for coming back to this point. He described the wonderful things that are being done and how impressed I will be by that. I will read the report and look forward to being impressed. However, my point is that, if the work being done is impressive, why not tell people about it and include it in the annual report? As I have said before, I have been a Minister, albeit in the other place, and I have received notes telling me to resist amendments. However, it seems to me that Amendment 31K simply asks for a commentary in the annual report of the police and crime commissioners or for the police force to say what they are doing in this regard. I think that it would give people confidence as regards this issue.
As I say, I am grateful to the Minister for explaining this range of actions but, if they are so impressive, I see no reason why they cannot be included in the annual report. We may return to this issue. I will read the Minister’s comments and the documents to which he pointed but, for now, I beg leave to withdraw the amendment.
Baroness Smith of Basildon
My Lords, I have three amendments in this group, Amendments 31N, 31R and 31T, and I have given notice of my intention to oppose the Question that Clause 41 stand part of the Bill to enable a wider general discussion around the issue. On the individual amendments, Amendments 31N and 31R concern a point referred to by the noble Baroness, Lady Hamwee, about the regulated professions. Currently, the standard for the new offence is,
“knows or has reasonable cause to suspect”.
That is deemed by organisations to be too high. The small businessman or sole trader may not have had experience of money laundering. This amendment removes that standard for lay persons and replaces it with “suspect” but keeps it for regulated professions with protections equivalent to those of Section 330 of the Proceeds of Crime Act 2002. Amendment 31T inserts protection from prosecutions similar to the consent regime in the Proceeds of Crime Act 2002 to provide a defence from prosecution where the person has sought consent from the Financial Intelligence Unit to continue with their work.
Clause 41 creates a new offence of participating in the activities of an organised crime group. It will be an offence to participate in an organised crime group’s activities knowing, or having reasonable cause to suspect, that those are criminal activities or that their participation will assist the organised crime group to continue with those criminal activities. The criminal activities can be any offence that is punishable by a prison term of seven years or more. The clause seeks to reach all of those who are engaged in criminal operations, including those whose specific role may itself be legitimate and appear legitimate, if they are actively supporting or benefiting from criminal activity.
Many criminal gangs include corrupt and complicit professionals who use their professional expertise and skills to evade the law. At Second Reading, I referred to this as being the “Al Capone” clause. I remind noble Lords that Al Capone was never convicted of crimes related to the worst aspects of his criminal empire. He was convicted of tax evasion. I have since been told that I am getting old and that my reference is dated. I should in fact have referred to a spin-off from the series “Breaking Bad” which stars a dodgy lawyer in the title role. The programme is called “Better Call Saul”. To prove that I am with it and up to date, I use a new reference at which the noble Lord is shaking his head in despair.
Cultural references aside, as I said at Second Reading, the activities of serious and organised crime gangs today are evil. They exploit the weak, the poor and the vulnerable. Whether they engage in drug trafficking, people trafficking into slavery and prostitution, organised illegal immigration, or extreme and violent pornography, the human misery caused by such gangs is limitless. It defies our imagination. They are also engaged in money laundering as a way of hiding the rewards of criminal activity. If we are really serious about tackling such evils, we must agree that the law should be able to reach all those who are involved in and benefit from such criminal activity.
Of course there has to be duty on any individual or organisation to take reasonable steps to assure themselves that their business dealings are legitimate and anyone who knowingly profits from criminal activities should be held legally accountable for their actions. We have given notice of our intention to oppose the clause standing part of the Bill. I stress that it is not because we oppose the clause—we do not—but because we want to seek some assurances from the Minister about the way it will work in practice. Some points are similar to those made by the noble Baroness, Lady Hamwee, and some are points that I raised in general at Second Reading.
We have discussed the clause and received representations and briefings, as have other noble Lords, from professional organisations whose members could be affected. I want to make it clear that in all cases, despite concerns they have raised about the wording of the legislation, they are very clear that any professional engaged in criminal activity brings their profession into disrepute and should face the full legal and professional consequences of their actions. There is no doubt about that. I am clear that they share the same commitment to ensuring that those who break the law should face the consequences. It is worth commenting that in addressing such issues I hope the Minister and his colleagues will want to work with the professional associations of those professions that could be affected to ensure that we get the legislation right. If he is able to say anything about the discussions and meetings he is having with those professions, it would be helpful. We want the legislation to be accurate and watertight. My experience is that no respectable professional organisation wants to see criminals within its ranks and they share the desire of the Government to work with the authorities to root out and deal with rogue professionals.
I now move on to something that is slightly an aside, but it is an issue that we have dealt with before. Like other noble Lords, I was surprised and disappointed not to see it tackled in the Bill. It concerns greater regulation and licensing of the private security industry. I am not going to labour the point. The Minister is smiling at me. He knows of my interest in and concerns about this issue. But this is a sad example of professionals wanting to work with the Government to seek better regulation of their industry and prevent bad behaviour and even criminality, yet the Government have failed to act in that area. The professionals I have met are clear that they share the Government’s objectives but they have concerns about whether the clause is needed and whether there might be unintended consequences. I will put on the record some of the concerns and hope that the Minister will be able to respond.
The Institute of Chartered Accountants in England and Wales does not consider that the clause is necessary. Developing the point made by the noble Baroness, Lady Hamwee, professionals within the regulated sector are required to undergo anti money-laundering—AML—training. They have legal responsibilities already under the Proceeds of Crime Act and the Money Laundering Regulations, including a duty to make suspicious activity reports to the Financial Intelligence Unit upon knowing of or suspecting any money-laundering. But there is currently no such requirement on an enterprising individual who sets up their own business outside the regulated sector and who may have no concept or proper understanding of what due diligence really means when entering into business relationships, despite the best intentions they may have.
The Institute of Chartered Accountants says that the clause as drafted would be too onerous on such individuals and could have the effect of criminalising a negligent or simply naive provider of goods or services when they are doing nothing wrong—just trying to earn a living—but the due diligence would be very onerous on them. The institute has suggested the amendments we have tabled. I cannot claim credit for thinking them up myself, as the noble Baroness, Lady Hamwee, suggested. I am grateful to the institute for its advice. The amendments retain the current objective standard of proof for regulated professionals but replace it for lay persons. It would be helpful if the Minister could respond to that point.
The duty on regulated professionals under the Proceeds of Crime Act to make reports of suspicious activity provides valuable intelligence for law enforcement agencies, giving them information on crime in action as well as past criminal activity. It also provides the person reporting the activity with defence from prosecution where they have sought consent from the Financial Intelligence Unit to continue with the work. Although that defence exists under the Proceeds of Crime Act, it is not present in Clause 41. My concern is that that could deter a professional who, having already started working for a client, realises or suspects that something is suspicious but, in reporting it, may fear being caught by the provisions of this Bill because it does not have the same defence mechanisms as the Proceeds of Crime Act, where reporting it provides a defence from prosecution.
In addition, the concept of assisting an organised criminal gang to carry on criminal activities is potentially problematic. The Law Society has pointed out that it is not clear under the offence,
“how far an individual must go to satisfy themselves that whatever service they are providing is not assisting criminal activities down the line somewhere. Certain criminal activities, such as drug trafficking, are more easily identifiable in some circumstances, e.g. a client may not be able to provide any evidence of legitimate income. Fraud and other financial offending, however, are not as easy to identify. It is not clear from the draft Bill what level of due diligence a solicitor would need to carry out to ensure that they could not be said to have turned a blind eye to criminal activity”.
Amendment 31T extends the application of Section 328 of the Proceeds of Crime Act to offences under this clause.
Returning to the question we raised at Second Reading as to who would be covered by the Bill, the Law Society says in its briefing that although the,
“Home Office wishes to target so-called ‘professional enablers’ with this new offence … the legislation is drafted so widely that it would capture far more people”.
I raised this point at Second Reading; the noble Baroness, Lady Hamwee, has raised it today. I declare an interest as another of the vice-presidents in your Lordships’ House of the Local Government Association.
As Second Reading, my specific question was whether local authorities—I also included social housing providers and private landlords—could be caught by these provisions. The example I used was a drug dealer illegally using a rented property that a local authority, housing association or private landlord had rented in good faith. If that activity is reported to the landlord or the authority and no action is taken to remove the tenant, I asked whether there could be a case for action against the landlord if it could be argued they knew or had reason to suspect that criminality was taking place.
Lord Taylor of Holbeach
My Lords, as the noble Baroness, Lady Smith of Basildon, said, Clause 41 creates a new offence of participating in the activities of an organised crime group. I am pleased that she and my noble friend Lady Hamwee welcomed the general principles that underline this measure.
I think that we would all accept that, for far too long, many of those who take part in organised crime have been able to remain out of the reach of law enforcement. As we set out in the Serious and Organised Crime Strategy in October 2013, we are committed to doing everything we can to pursue them. The new participation offence complements the existing offence of conspiracy, which is central to the majority of law enforcement investigations into organised crime and will remain so. As noble Lords will be aware, conspiracy is used to prosecute two or more individuals who have agreed to commit an offence where the agreement can be evidenced and where the individuals intended the offence to be committed or knew that it would be.
In practice, there are a range of players in many criminal enterprises. “Conspiracy” is used to target the major players who commit the offence or who are fully aware of it and their contribution to it. The participation offence will ensure that there is an appropriate and proportionate sanction for those others who “oil the wheels” of organised crime, who deliberately ask no questions and who then rely on the defence that they were not part of the overarching conspiracy.
The participation offence is therefore complementary to “conspiracy” and can form the second tier of such an investigation. It will be triable only on indictment, with a maximum sentence of five years’ imprisonment. It will ensure that we can prosecute effectively the full spectrum of those engaged in organised crime.
Perhaps I may turn to the anxieties which noble Lords expressed about the way in which we have constructed the clause. Both the noble Baroness, Lady Smith, and my noble friend Lady Hamwee pointed to a number of concerns about the offence that have been raised by both the Law Society and the Institute of Chartered Accountants in England and Wales. As was pointed out, I had said that I hoped to meet those organisations and, since Second Reading, I have been able to meet representatives of both. We had positive and useful discussions about a number of issues. I am pleased to say that those discussions are continuing with officials at the Home Office; we see this as a continuing dialogue.
One of the concerns raised was that the participation offence risks extending the reach of the criminal law too far, and as a result capturing the naive or unwitting; or catching individuals where the “facts” seem more firmly grounded with hindsight than they might have done at the time; or creating anxiety among people that they might inadvertently be captured by the offence. There is a tension between defining an offence that addresses the broad range of activity that sustains organised crime and avoiding inadvertently capturing activities innocently carried out. Noble Lords have pointed to that in their contributions. I believe that Clause 41 gets this balance broadly right.
First, the offence requires a person to have actively participated in or facilitated the criminal activity in some way. To which end, I understand why my noble friend proposed Amendment 31M, which would insert text to emphasise this point. However, it may exclude the possibility that an omission or failure to act would be captured by the offence if it were both deliberate and arose for the purposes of furthering the criminal activities of an organised crime group.
Secondly, an organised crime group must consist of at least three persons. Amendment 31S would seek to remove this stipulation, but I put it to my noble friend that this definition reflects the definition set out in the United Nations Convention Against Transnational Organised Crime. Thirdly, the group must be committing offences carrying a sentence of seven years’ imprisonment or more. This threshold was adopted to catch typical organised crime group activities—for example, blackmail, trafficking in class A or class B drugs, people trafficking, assisting unlawful immigration fraud and theft.
Finally, the effect of subsection (2) of Clause 41 is to define the circumstances in which a person could be considered to be participating in an organised crime group in support of the offence outlined in subsection (1) of the clause. The definition has been drawn so as to capture those persons who know, or have reasonable cause to suspect, that their activities are criminal activities of an organised crime group or will help an organised crime group to carry on such activities. A “reasonable cause to suspect” must be firmly targeted on specific facts, and it will of course have to be proved by the prosecution beyond all reasonable doubt.
My noble friend Lady Hamwee highlighted the concern that local authorities could be unwittingly caught by the same offence. However, it is possible to envisage a number of scenarios where this offence could be of significant benefit to local authorities—or, indeed, banks or other businesses, since it goes beyond the professions. It would provide an appropriate and robust sanction against corrupt insiders: for example, where a bank employee steals customer data and supplies it to organised criminals; or where a local council employee receives corrupt payments to facilitate organised crime.
It is also worth repeating that for the participation offence to be committed, a person must have had reasonable cause to suspect, firmly grounded and targeted on facts, as I have said. If those facts are present, the granting of licences, for example, should not happen. Licences should not be granted if there is reasonable cause to suspect, or knowledge. Any prosecution would also need to prove that the person actively participated in or facilitated the criminal activity in some way. That test may not be met in the letting of contracts for the provision of services to a local authority. As a further safeguard, the Crown Prosecution Service must be satisfied that any prosecution would be in the public interest. I want to take this up further with the Local Government Association because I think that some of its anxieties are unfounded, but I want to be certain that we are reading this correctly in this respect.
Baroness Smith of Basildon
I am grateful to the noble Lord. That is very helpful. I have just two questions. First, may I give him the list that the LGA provided to me and ask him to comment on it in writing to noble Lords? That would be helpful. Secondly, in the case that he mentioned of offences where somebody within an organisation is passing information or money out to an organised crime gang, would they not be offences already; or does this create a new offence, or just greater penalties? I would have thought that those kinds of activities would be offences already, perhaps under conspiracy.
Lord Taylor of Holbeach
Yes, they could be if they were seen as integral to the conspiracy. However, the whole concept of a participatory offence is the arm’s-length connection that there sometimes has been, which has made conspiracy an aspect of the law that is not particularly easy to use. By creating a participatory offence, we would make those connections with criminality that much easier to establish and, indeed, would cut off the support that organised crime groups have frequently had from insiders who have provided them with assistance. As I said, I hope to talk to the Local Government Association about its anxieties. I would be grateful if the noble Baroness let me have a copy of the particular things that she was concerned about and I will do my best to answer them in correspondence. I will make sure that other noble Lords and the Library are made aware of that, too.
Lord Taylor of Holbeach
Right at the beginning of my speech, I talked about balance. I said that I thought we have got the balance in Clause 41 just about right. We do not want to upset the balance. We want to reassure people, particularly the professional groups that have been to see us and the Local Government Association, that that balance can be made to work for them. If it means that we come back on Report with some ideas on that, I am sure the House will welcome them because generally the House understands exactly where the Government are on this issue. Even though probing questions have been asked by my noble friend and the noble Lord and the noble Baroness, I understand that underlying them is their support for this participation offence and that they want to make it work.
Baroness Smith of Basildon
I want to raise a point on Amendment 31T. The Minister rejected the idea of a defence if a potential offence is suspected and reported. For example, under the Proceeds of Crime Act, a potential offence can be reported to the financial investigation unit. That is a defence, but not a guarantee, against prosecution. My concern is that one of the reasons that that defence is in the legislation is so that those who uncover what they believe may be illegal activity are not deterred from reporting it to the relevant authority. It is very useful information. Has the Minister considered whether it will have a deterrent effect if somebody working for somebody discovers some way down the line that there may be criminal activity? Does he consider that they may fear reporting it if there is no defence for them to be gained by reporting it? When the Minister meets the professional associations concerned, will he discuss the processes by which they will establish due diligence to see whether there are any additional costs involved that they can outline to him?
Lord Taylor of Holbeach
Our discussions went into that area. We discussed how these matters would be considered by them. The noble Baroness will appreciate that as we want to encourage people to report suspicions as soon as they have grounds to suspect, even more so if they know, they should have every incentive to report the matter. However, one would not want to create a general defence that would enable somebody to have, in effect, a “get out of jail free” card so that when things got a bit hot, they were automatically able to create immunity for themselves against prosecution. I am not convinced by the argument that where we are is wrong. We want to talk to professional organisations because we see how important it is to have them on side in the fight against crime. I know from what they have said to us that they are approaching this issue in exactly that way. They want to make sure that their professions are supportive in the fight against crime, and that any within their professions who are not pursuing that objective but are assisting crime are punished.
Baroness Hamwee
My Lords, like my noble friend and other noble Lords, I do not want to comment on the fine detail of the amendment but simply to support the noble Baroness. Her points about avoiding criminalisation and what I might summarise as an active, supportive, constructive response, are immensely important. Under the noble Baroness’s chairmanship, some of us met a number of MPs from Portugal. We were very struck by the agreement across the parties about the benefits of this measure and the lack of contention around it. We actually ran out of questions to ask them on that issue. Clearly, in that country they have succeeded in taking some of the heat out of the drugs issues, which has been a very considerable achievement. I hope that we might learn from that example.
Baroness Smith of Basildon
My Lords, I am grateful to the noble Baroness, Lady Meacher, for giving me a copy of her amendment and a briefing note on it when she tabled it. I was not aware of the Portuguese experience as my noble friend, Lord Howarth described it. It is interesting and bears further consideration. I am not an expert on whether the detail of the amendment is correct. It looks complicated, which might be because it was drafted by a lawyer, but I suspect that it is not so complicated in practice.
These dissuasion panels would sit alongside the injunctions, such as is proposed in the Bill, and a police officer would refer a young person if they were involved in gang-related violence or a drug-related activity. The panel would be tasked with assessing the young person. It would determine whether there was a need to require the young person to undertake some form of action, whether that be treatment or counselling, to prevent them engaging in further activities, to protect them or to address their drug dependency. That seems to be a more holistic approach to tackling the drug culture and drug abuse.
Baroness Meacher
I regret that the Minister referred to the speech of the noble Lord, Lord Howarth, as incoherent—or words to that effect. It seemed to me that the noble Lord’s arguments were incredibly powerful with regard to the lack of appropriate skills and training of the people in the courts, and the Howard League case he referred to. Obviously, as I said in my own speech, matters are made a great deal worse by cutting somebody off from their support systems and so on. I have to say that many of the comments made by the noble Lord, Lord Howarth, support strongly the case for having a professional tribunal or dissuasion panel to look at these cases, rather than leaving it to the courts, which do not appear to have the skills needed in these very difficult situations. I absolutely agree with the Minister that these are difficult problems; they have to be dealt with, but they have to be dealt with professionally, and I think that is the point the noble Lord, Lord Howarth, was trying to make.
Baroness Smith of Basildon
I had intended to speak in this debate. The noble Lord was uncharacteristically quick off his feet to respond to my noble friend. This clause requires some clarification and I am sorry that he seems quite upset about the probing questions that have been asked. I will listen to what he has to say. If the issues I intended to ask him about are not addressed, I will come back to him at the end of his comments, but there are some points of clarification that would be helpful in this debate.
Lord Taylor of Holbeach
I am sorry, I just felt that the closing remarks of the noble Lord, Lord Howarth, when he said that government policy lacked coherence in this area, were belied by the contribution that I had made in the previous debate on the amendment moved by the noble Baroness, Lady Meacher.
Baroness Smith of Basildon
I am grateful to the noble Lord, as I think the noble Baroness, Lady Meacher, was intending to speak on this. We were looking at each other, and the noble Lord beat us both to the Dispatch Box.
I will be brief, as the Minister has sought to answer some of the questions, although others remain. We accept that the current definition of gangs has not been able to include or address some of the existing problems. The number of injunctions indicates that. Our worry is—this was raised at Second Reading—that in broadening the definition it becomes easier to get the lower-hanging fruit. There are two levels here. There are those gangs which are violent, intimidating—there are serious levels of violence in some cases. There are others who are altogether different: younger people who may appear intimidating to some people close to them and will have signs to indicate that they are gangs, but are of a very different order from those who threaten and terrorise communities. So there are two kinds of gangs under discussion. We want to see the most serious kind—the intimidating and violent— come into the ambit of this measure, but not by widening the definition so that those who are easier to catch and easier to identify, or are on the fringes of gangs, are inadvertently caught up.
I do not know whether the noble Lord, or any other noble Lords, saw the TV programme on Sunday evening called “Common”. I hesitate to address legal issues in the presence of the noble and learned Lord, Lord Hope of Craighead, but this fictional drama examined the law of common purpose or joint enterprise. If I understood right—I am sure I will be corrected if I am wrong—that law dictates that all participants of a criminal enterprise have a responsibility for all the results of that enterprise. This was a case about a young man who was before the courts on a murder charge, even though he was the driver of the car and had no idea what was happening. Nevertheless, he was part of that criminal enterprise.
We have a slightly similar issue before us: could those who may not be part of violent activity, perhaps on the fringe but not involved, be somehow caught up? I am not defending those who are part of a criminal gang, or part of an activity where they should be held responsible: it is the idea of the wider definition catching the lower-hanging fruit, those who are easier to place an injunction on in the courts. Given that the first condition has to be satisfied on the balance of probabilities—the respondent has engaged in, or has encouraged or assisted gang-related violence or drug dealing—it would be helpful if the Minister could say exactly how he defines “engaged in, encouraged or assisted”. I suppose “engaged in” is quite easy. However, will whether someone is “encouraging” or “assisting” be defined in guidance?
I also echo the point made by my noble friend Lord Howarth when he asked for guidance from the Minister on what measures could be expected from the courts—when will that guidance be available? Will it be made available to your Lordships’ House before Report? It would be quite helpful in those discussions. Furthermore, concerns were raised by several noble Lords at Second Reading that the standard of proof here is a civil rather than a criminal one. I do not think the Minister addressed that in his comments in response to my noble friend. It would be helpful if he were able to address that.
I am sorry not to be as quick on my feet as the noble Lord—he is obviously fitter and healthier than I am. I will do better in future.
Lord Elton
My Lords, before my noble friend applies the secateurs again to this budding debate, perhaps I may give notice that I also have points to raise, after he has dealt with this one.
Child Abuse
Baroness Smith of Basildon Excerpts(9 years, 10 months ago)
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Baroness Smith of Basildon (Lab)
My Lords, I thank the Minister for repeating the Home Secretary’s Statement, which we welcome. There is a lot at stake today. Child abuse, particularly child sexual abuse, is an abhorrent crime that devastates its victims. There has been mounting distress and revulsion at the avalanche of allegations, arrests, charges and convictions that we have seen to date. The clear evidence is that abused children have had their pleas for help and reports of crimes dismissed. The fact that no action was taken must be fully investigated. Even when the abuse is historic, the trauma continues into the future. The truth may be painful and distressing, but nothing less will do.
We have rightly been angered and we have demanded action when there has been evidence of abuse and potential cover-ups. That has now been brought to the Government. It is truly shocking, as the Minister said, that allegations are being made that the Home Office not only failed to investigate evidence that was brought to it, but that crucial documents were lost and others may have been destroyed. The Minister will, I am sure, understand the concerns already expressed of a deliberate attempt to cover up crimes and to protect perpetrators.
The 2013 review that has now come to light was clearly inadequate. It was not announced to Parliament and it was not revealed that more than 100 related files had gone missing. The Minister will recall from previous debates that we called for a much wider, overarching inquiry. Indeed, I raised this with Ministers in your Lordships’ House on both 6 November and 14 November 2012 in debates on child abuse. At that time Ministers rejected those calls, but today’s announcement is a step further towards that and we welcome it.
I would like some clarification on the new process, both of the review and of the inquiry panel. Both have to be thorough investigations. Peter Wanless is highly regarded and, alongside his personal integrity and expertise, he brings the reputation and trust of the NSPCC. Nothing matters more now than reaching the truth, because only through the truth can we achieve justice and support for victims and provide stronger and better child protection now and for the future. I want to ask the Minister a few questions. What legal expertise and support will be provided to Mr Wanless? He will no doubt want to talk to those who have been victims themselves, so will professional support be made available when he does so? There have been reports that police officers have felt unable to provide information as they had signed gagging clauses. Will the Wanless—the Minister calls it a review—inquiry be able to override any such clause where criminality is suspected? Will the inquiry be able to obtain information from individual civil servants, whether in work or retired, and from any government agency or its employees? What powers will the Wanless inquiry have to compel witnesses to provide evidence? Will it be given access to any and all papers, notes and minutes of meetings from government and government agencies? The inquiry cannot just be given the information that it asks for; it needs to have the freedom to investigate and to search for information that it might not yet know is available.
The Minister will understand the serious concerns regarding the apparent mystery of the disappearing Dickens file or files that were handed to the then Home Secretary. What records and notes were kept of those initial meetings? Was the 2013 review able to identify whether any investigation or action followed from those meetings? Can the Minister confirm whether the Home Secretary has been advised of the identities of the private office staff and senior civil servants who were aware of the documentation and asked to review its contents and whether they were involved in the 2013 review? Can he confirm that they will be asked to co-operate with the Wanless inquiry? Will that 2013 review—inadequate as I think it is recognised now that it was—be published? When were the Home Secretary and the Prime Minister told that the files were missing or destroyed? Finally, can the Minister confirm that there will be no hiding place from justice for those who have committed child sex abuse crimes or have been involved in destroying or hiding evidence? Will a further Statement be made on the terms and references of the inquiry panel once the appointments are in place? At this stage there are more questions than answers and I hope that the Minister will agree to keep Parliament informed as this process proceeds.
Action has to be taken to deal with the past, but equally important are the lessons that we learn for the future. The Minister will know our concerns about the Government’s changes to the vetting and barring system. The system is designed to protect children, but we believe that the Government have weakened it. Is he aware that the number of people barred from working with children as a result of committing sexual offences against children has fallen by 75% in the past three years? Can the Minister assure me that the Government will, in the light of increasing evidence that perpetrators of child sex abuse have evaded justice for many years, reconsider the changes that they have made to this legislation?
We welcome the two investigations. I hope that, given the importance of the issues, the Minster will be able to answer my questions today, but if he is unable to do so I hope that he can write with answers to those specific points.
Serious Crime Bill [HL]
Baroness Smith of Basildon Excerpts(9 years, 10 months ago)
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Baroness Smith of Basildon (Lab)
I shall also speak to Clause 2 stand part and Amendment 8, which says that there should be a consultation on whether the court can require full disclosure from a suspect of his or her assets and liabilities. Amendment 13, to Clause 11, provides the court with the power when making a restraint order to require the defendant to provide specific information, particularly concerning his and any third-party interests in property. Amendment 14, also to Clause 11, has a similar intent.
As I said at Second Reading, we support many of the measures in the Bill because they address the issues that we agree should be addressed. The role of this Committee is now to examine whether the proposals brought forward in the Bill fully address the problems that have arisen and become evident, or if more can be done to tackle the specific problem of improving enforcement. As I said then, nothing brings the law into disrepute more than poor enforcement of a law. I know that the Minister agrees with me on that point.
It is relevant here to say something about the background and to set the clauses and amendments in context. In 2002, the then Labour Government introduced the Proceeds of Crime Act with new powers for the police, prosecutors and courts to freeze and confiscate the assets of criminals. It was innovative and ground-breaking, providing a wide range of civil and criminal recovery methods, but the use of the legislation and the changes over time have revealed its limitations. Improvements can be made.
The National Audit Office has issued a highly critical report on confiscation orders. It found that only 26p in every £100 of criminal profits was ever confiscated and that the total amount of outstanding debt on confiscation orders is £1.46 billion, a shocking level. In addition, the cost of recovering these ill gotten gains is very high. The estimate from the National Audit Office is that investigation, prosecution and enforcement costs 76p in every pound collected. The value to the Government is just £31 million and just 2% of offenders paid in full. The amount collected and the number of confiscation orders and restraint orders has fallen in recent years, as identified by the National Audit Office report. There is now a seriously worrying trend with the number of orders falling and the outstanding amount of debt increasing. It is clear that some criminals are running rings around the system and making a mockery of what we want to see, which is that crime does not pay.
Another factor in addressing the issue is the age of austerity, although I dislike the phrase. Police and prosecutors are finding it tough. They are having difficulties with resources and need to make greater use of the proceeds of crime as a source of income. We need to examine the reasons why the system has become so ineffective. The reasons are varied—there is no one particular reason—but it is clear that the evidential threshold for freezing a suspect’s assets is very high; criminals often move their money overseas; confiscation orders can be an afterthought; and the penalties for non-payments are not enough of a deterrent. It is also clear that there is a lack of leadership and a lack of strong incentives for the agencies involved in applying for and enforcing confiscation orders.
Are the measures proposed adequate and the best we can do to address this problem or can we be more effective? We have tabled a number of amendments to address these issues. The reason for tabling clause stand part debates—as the Minister knows, since I discussed this with him—is to allow for a slightly wider debate. We consider that there is room for improvement in the Bill and the Minister may be able to provide the reassurances we seek. This first group of amendments regards third-party claims. I stress that they are all probing amendments. As I say, although we have tabled clause stand part debates, we are clearly not opposed to Clauses 1 and 2. If the Bill goes far enough on third-party claims, will the Government go far enough to ensure early disclosure? There are three further amendments on the same theme, but slightly different. I hope that through these amendments we can probe the issue in debate and get a response from the Minister on the substance and ideas, rather than on the specific wording. We are not wedded to any particular form of words—it is the issues that we would like to discuss further.
Lord Phillips of Sudbury (LD)
My Lords, may I ask the noble Baroness whether subsection (2) of the proposed new clause will be adequate to force the person concerned to reveal assets owned by a company that they own? Today, the classic way of avoiding liabilities is to have a series of companies that own each other, and I am anxious in case the wording would not require the person who is required to give information to provide information on all the companies in a string of corporations.
Baroness Smith of Basildon
I am not sure which amendment the noble Lord is referring to.
Lord Phillips of Sudbury
I beg the noble Baroness’s pardon. I am referring to Amendment 8, which would insert the proposed new clause entitled, “Restraint order: determination of extent of defendant’s property”. I mentioned in particular proposed new subsection (2), which would require the suspect to disclose,
“the full extent and location of his or her assets and liabilities”.
I am concerned that that would require someone to disclose only the fact that they have, for example, a company in the Netherlands Antilles, but not the fact that that company is owned by another company, and so on.
Baroness Smith of Basildon
My understanding is that it would require that information, because it asks for,
“his or her assets and liabilities”.
However, if there is any deficiency in the wording I would be happy to see an amendment tabled to make that point even clearer.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, I was expecting that we might have a longer debate on this issue—but it is good to see that there is much agreement about the need to strengthen the effectiveness of the Proceeds of Crime Act. It is good that the noble Baroness, Lady Smith of Basildon, shares the Government’s views on that necessity, and I welcome her speech.
As we have heard, Clauses 1 and 2, and Amendments 8, 13 and 14, all deal with the determination by a court of the extent of a defendant’s interest in named property. By extension, the provisions also deal with any third-party interests in the relevant property. The Serious and Organised Crime Strategy sets out a number of proposals to strengthen the Proceeds of Crime Act by, among other things, ensuring that criminal assets cannot be hidden with spouses, associates or other third parties.
Confiscation orders are the principal method used by law enforcement agencies for the recovery of the proceeds of crime. It is open to the defendant to pay off the order from whatever assets he or she has available. A confiscation order specifies the amount to be paid; it does not itemise particular assets that are to be forfeited. Third parties making claims on assets that are part of the available amount can delay satisfaction of confiscation orders. These claims also reduce the amount of money available for recovery, as the noble Baroness said. Of course, some of these claims may be perfectly legitimate but others will be spurious, designed simply to frustrate the confiscation process.
To tackle such abuses, which were clearly described by the noble Baroness, Lady Smith, and to help speed up the confiscation process, Clause 1 confers on the court a power to make a determination as to the extent of the defendant’s interest in particular property at the confiscation hearing. Currently, any claims on property are dealt with at the enforcement stage, which can complicate, lengthen and impede the confiscation process. Clause 2 augments the provisions in Clause 1 by introducing a requirement, as part of the confiscation process, for the prosecutor and defendant to detail any known third-party interest in property associated with the defendant in their statement of information and provision of information respectively.
Amendments 8, 13 and 14, tabled by the noble Baroness, seek to bring the determination of third-party interests forward in time even further to the commencement of a criminal investigation or to the point at which a restraint order is made. The amendments also seek to impose on the defendant the obligation to disclose the extent and location of their assets and any third-party interests in those assets. Under Amendment 8, a failure fully to comply would be a criminal offence.
To protect legitimate third-party interests, the provisions in the Bill afford third parties who have, or may have, an interest in the property the right to make representations to the court about the extent of their interest. The right to make representations also extends to the defendant. This will allow the court to consider the evidence presented, assess its credibility and come to a decision.
There are currently no express provisions for the court to deal with any third-party interests in any of the property that the court takes into account when determining the amount of a confiscation order. The legislation does, however, make provision for third parties to make representations where they have been affected by a restraint order. Third parties also have the right to make representations when an enforcement receiver is appointed by the court. Enabling a court to make a determination on a defendant’s interest in property at the earlier confiscation stage will strengthen the operation of the asset recovery process by closing loopholes in the Act that allow third parties to delay the confiscation process.
We do not consider that it is appropriate to bring the determination of third-party interests back to the restraint stage or, indeed, earlier, as is proposed in the noble Baroness’s amendments. Not all defendants will be made subject to a restraint order. For example, where a defendant owns only a house in the UK, it may not be cost-effective to apply for a restraint order when it can take time to sell a house. The relevant law enforcement agency would be made aware of any attempt to sell the property without the need for a restraint order.
Moreover, not all restraint orders lead to confiscation orders. If the subject of a restraint order is not convicted, the restraint order will be discharged. In such cases, it would be a wasteful use of limited judicial and prosecutorial resources to require the court to make a determination as to third-party interests in restrained property. It is for these reasons that the Bill provides for third-party claims to be considered at the confiscation hearing stage.
None the less, third parties may have an interest in restrained assets, and in such cases it would be appropriate for the court to be able to assess such claims—for example, if a third party contests a restraint order on the grounds that it is freezing property wholly owned by that person rather than by the defendant. Therefore, on the face of it Amendment 13 might be beneficial, in that it would confer a power for the court to order the defendant to provide information at any time under a restraint order.
Specifically, the court would be able to require the defendant to provide details of any third-party interests in property. However, this power is already available to the court under the existing restraint order provisions. The court can make any order it believes is appropriate to ensure that a restraint order is effective. This would include a power to order the defendant to provide information, including information concerning his or her and any third-party interest in property. It can be done at restraint order stage. Where a restraint order is not in place, a defendant can be made subject to the provisions of a disclosure order under the investigation powers that are in Part 8 of POCA. Such an order can be made at the start of a confiscation investigation and compel a defendant to answer questions or disclose information specified in the notice.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister for his explanation. However, I will also say that I am disappointed. I have sat in his place, albeit in the other place, and I know that he will have a folder that contains my amendments with bold print at the bottom that says “Resist”. We have all been there. However I had hoped that with this Bill, where there is such a large amount of agreement between us on the objectives that we seek, there might be a little chink that would allow the Minister to open the door a little and say that this is something that we can look at and discuss. These amendments are not proposed in order to oppose what the Minister has said, as I have made clear. I do not doubt that the proposals before us in the Bill are better than the current situation; they improve on it. But are they the best that we can do?
I will withdraw my amendments today, but I ask the Minister to reflect further. His impact assessment refers to the delay in the process of identifying third-party claims as one of the reasons that some criminals are able to maximise, shall we say, the assets that they can hold onto. I hope that between now and Report the Minister and his officials will reflect further on the points that I have made today and understand why I proposed them, which was merely and only to seek to do things, not just better, but as best we can.
Lord Bourne of Aberystwyth (Con)
My Lords, I, too, will speak, albeit briefly, with some words of caution about this amendment. I do not think anybody could resist the seductive arguments put forward by the noble Lord, Lord Harris of Haringey, on the need to fund programmes. However, at present the asset recovery incentivisation scheme allows agencies to get back 50% of what they recover from the Home Office. That scheme is flexible in its application, and allows the money to be spent to drive up asset recovery and, where appropriate—those words are important—to fund local crime-fighting priorities for the benefit of the community. I know that the intention of the noble Lord was entirely benevolent and helpful; his example of Latin-teaching in Hillingdon as a sort of cheerleader for the Secretary of State for Education demonstrated that. However, the words “where appropriate” are extremely important.
If one looks at the wording of the noble Lord’s amendment, it is prescriptive. It provides for a three-way split of the proceeds for reinvestment in the communities and neighbourhoods affected by the relevant criminal action. There are no ifs, no buts, and no discretion. Sometimes that would work, and sometimes not. My noble friend Lady Hamwee referred to a situation relating to drugs where it would not. However, that is also true, in spades, of something like insider dealing. That is and should be a crime, but there is no classic victim in the personal sense. The victim, if anything, is the Stock Exchange or the City of London. Under this amendment, we might find that the noble Lord is funding the livery companies or Mansion House. I am sure that he does not intend that, but there is a danger with the way in which the amendment is phrased.
Therefore I have great sympathy with what he seeks to do. However, given that a review is being conducted at the moment, the appropriate thing is to wait to see what that review throws up. I also look forward to hearing what the Minister says about that review. Then would be the time to look at this to see how we can get more money used in crime-fighting rather than by means of something as prescriptive as is the wording of this amendment, which has no discretion at all.
Baroness Smith of Basildon
My Lords, I have noticed, in debates on Home Office legislation, that my noble friend Lord Harris of Haringey seems to attract adjectives. In the previous Bill we looked at he was described by the Minister as being “mischievous”, and today the noble Lord, Lord Phillips, described him as “beguiling” and the noble Lord, Lord Bourne, described him as “seductive”. I dread to think where we will go as the debate continues.
The issues the noble Lord raises are interesting and go to the heart of transparency on this issue, which is about how we want to engage the public and for them to understand what happens to money brought in by the Government. The noble Lord, Lord Deben, made an interesting point on hypothecation, which comes down to trust. The public want to know not just where their taxes go but what happens to money that is brought into the Government.
I was struck by my noble friend Lord Harris’s examples from the education sector. I was not aware of those examples; I do not know whether the Minister was aware before taking the Bill forward. If neither he nor I were aware, were his officials aware? Who does know what happens? This amendment does us a great service, serving to remind us that we have a duty to make this clear to the public. If we are trying to engage them in support of legislation that involves confiscation, fines, et cetera, there is an obligation on Governments and on Parliament to ensure that the public are aware of where that money goes. I hope that the Minister will take some of those comments on board and that it is something that we can return to, in terms of a wider public understanding of what happens to the money and how it is used for the public benefit. That comes to the heart of the points made by the noble Lord, Lord Deben, and by the amendment of my noble friend Lord Harris of Haringey.
“Confiscation orders: consultation
(1) The Secretary of State must consult on ways to strengthen and improve the effectiveness of confiscation orders.
(2) A consultation under subsection (1) must, in particular, seek views on the following matters—
(a) whether the court, when making a confiscation order, should be able to compel a suspect to return to the United Kingdom any realisable liquid assets overseas;(b) whether to provide the court with the power to fine or imprison a defendant who sells property subject to a confiscation;(c) whether to provide the court with the power, when making an order, to require the defendant to disclose any interests, including third party interests, in realisable property.(3) The Secretary of State must report to both Houses of Parliament on the outcome of the consultation under subsection (1) no later than 31 December 2014.”
Baroness Smith of Basildon
My Lords, in moving Amendment 4, I wish to speak also to Amendments 9, 11 and 12. Amendments 4 and 9 are similar: both require a consultation on ways to strengthen confiscation orders and restraint orders respectively. Amendment 11 addresses the disposal of assets. At present, one of the conditions of obtaining a restraint order is for the prosecution to show that there is a real risk that the defendant will dissipate his or her assets. These amendments would remove this requirement. As regards Amendment 12, although restraint orders are ex parte, many defendants then appeal against the orders and incur significant defence costs. If they win the appeal, their costs are reimbursed by the state. However, these can be high and can act as a disincentive for prosecutors to get a restraint order in the first place. Our amendments propose that any costs recoverable by the defendant would have to be capped at legal aid rates. These amendments seek to strengthen the confiscation and restraint orders. All these issues are linked. Indeed, I think that all the issues we are debating today around the proceeds of crime are linked, but this matter is at the very core of the process.
In its report, the National Audit Office said that the confiscation of criminal assets is “just not working at the moment”. Amyas Morse, the head of the National Audit Office, also said that,
“The use of confiscation orders to deny criminals the proceeds of their crimes is not proving to be value for money … nor … a credible deterrent to crime”.
That is a pretty sorry state of affairs and one which this Bill and the debates we are having in your Lordships’ House should seek to address. Whatever the reasons for that situation, those criticisms place a duty on your Lordships’ House to address the problem, to see whether legislative changes are needed and to question whether the law as it stands is being effectively and properly enforced, as the noble Lord, Lord Phillips, who is no longer in his place, said a moment ago. When criminals get to keep £99.74 in every £100, there is clearly a significant problem and it is right that this should be addressed and we support the Government on that.
In 2012-13, 6,392 confiscation orders were made, seeking the return of £318 million from a total pot, as it were, of £1.6 billion that had been illegally acquired. Eventually, only about £133 million was recovered and, although there are still some outstanding debts, the amount recovered will not rise significantly above that figure. I am curious and concerned about that issue. I hope that the Minister will comment on that and give an assurance that this issue has not been deprioritised by the Government. I hope that the Minister will also comment on the reasons why we have seen a slight reduction in the number of confiscation orders, which compounds the problem of getting money off the criminals once the orders have been issued. As I said, in 2012-13, only 6,392 orders were made, down slightly from 6,431, whereas we might have expected to see an increase in that figure.
However, this is not about just the number of orders; the most crucial point is compliance with the orders. I welcome the fact that there are now moves afoot to remedy this situation, close some of the loopholes and strengthen compliance with confiscation orders. However, I made a similar point in the earlier debate on third-party claims—namely, given the scale of the problem we are facing, can we not think bigger about this and try to do better? In our previous debate, the Minister said that the situation had improved. However, I put it to him that, if we are looking to improve matters, we should do the best we can, seek to be as strong as we can and close any loopholes.
I wish to address a number of issues. The first is the time limits for payments. The Proceeds of Crime Act currently provides that a confiscation order is payable immediately upon the making of the order unless a defendant can show that there are exceptional circumstances why this should not be the case, in which case they are given up to 12 months to pay, as we heard earlier. We recently highlighted the problems with this blanket approach. Some assets—this was referred to in an earlier debate and the Minister reaffirmed this—for example, money in bank accounts, are much easier to realise than other assets, which simply increases the likelihood of the defendant distributing or hiding their assets.
We are grateful to the Government for taking those points on board and for proposing action on this matter. Clause 5 now makes it clear that the full amount ordered to be paid must be paid on the day on which the order is made unless the court is satisfied that the defendant is unable to do so and includes a restriction on the circumstances under which an extension can be granted. That is welcome and there was a helpful explanation on that earlier. We also welcome the fact that Clause 7 requires the court to consider making an order that it considers appropriate to ensure that the confiscation order is paid. As discussed earlier, this includes placing a ban on overseas travel.
However, we want to probe other ways in which confiscation orders can be strengthened. Our amendment calls for a consultation on this. I hope that the noble Lord will be more sympathetic towards our proposals, given that we are proposing consultation. The areas that we would like to look at concern whether the court should be able to compel a suspect to return to the UK any realisable asset that is located overseas, to jail or fine someone who sells property that is subject to a confiscation order or to require a defendant to disclose any interests in property. Of course some of this touches on issues that have already been discussed. We would also welcome discussions on other ways to improve the orders; the noble Lord, Lord Phillips, earlier raised the issue of an individual’s assets being owned by a company that owns a company that owns a company, so that they are hidden in a labyrinth of financial dealings.
One way of strengthening the system generally is to strengthen restraint orders. The effect of a restraint or freezing order is to freeze the assets of a defendant, so preventing them from dissipating all or some of their assets before a confiscation order is made. Investigators and prosecutors agree that this is the most critical stage of the process. Early freezing of assets, at the outset of an investigation, minimises the risk that assets will be dissipated or disposed of. However, according to the National Audit Office, the number of restraint orders secured by prosecutors is falling sharply. I quote from the NAO report:
“Only 1,368 restraint orders were imposed in 2012-13, down 27 per cent from 1,878 in 2010-11. Many stakeholders believe opportunities for successful restraints are being missed and that the Crown Prosecution Service is too cautious in applying for restraint orders”.
The report also outlines that:
“Throughout the criminal justice system there is insufficient awareness of proceeds of crime and its potential impact. Within law enforcement and prosecution agencies, few officers and staff have good understanding about proceeds of crime legislation. In many cases effective powers, such as restraint orders, are applied late or not used at all, and specialist financial investigators are introduced to cases when audit trails have already run cold”.
Given that such orders can be applied for as soon as a criminal investigation is started, that would seem to address the problem. However, the current test is too high, because it must be shown that there is reasonable cause to believe that a defendant has benefited from his or her criminal conduct and that there is a risk that assets may be dissipated. Earlier this year, we called for the threshold needed to gain a restraint order to be lowered, with the onus to be placed on the suspect to show why assets should not be restrained, rather than on the investigating agency.
We therefore welcome the fact that Clause 11 reduces the test from “reasonable cause to believe” to “reasonable grounds to suspect” that a defendant has benefited from their criminality, which aligns it with the test for an arrest under the Police and Criminal Evidence Act 1984. The Bill also provides that a restraint order can be kept in place against a defendant for a reasonable period between the quashing of a conviction and the start of the proceedings for a retrial, and it closes the loophole that the restraint order is removed while the retrial proceedings are commenced, during which time the defendant’s assets are at risk of being dissipated.
However, the amendment that we have tabled today goes further than this, as we think that it should be up to the defendant, not the prosecution, to establish that there is no risk of dissipation. Alison Saunders from the CPS referred to this in her evidence to the Public Accounts Committee, saying that it was,
“quite a high test to look at”.
Another issue, of course, is the cost to the CPS. One of the key things raised to us by practitioners is that when an application is unsuccessful—particularly on appeal, as the original is often ex parte—the prosecution is liable for the legal costs of the defendant. Given that the CPS is undergoing cuts of 27% to its budget during the course of this Parliament, prosecutors understandably want to minimise the risk of expensive failure. Alison Saunders alluded to this also in her evidence. We have therefore tabled other amendments that do the same thing. Because they are probing amendments, we are not wedded to the wording but the intent is to try to tackle the disincentive. We are suggesting that a defendant should be able to recover costs only at a legal aid rate. It may be that that is covered by the LASPO Act but we wanted to raise this issue because it has often been raised with us. We are aware that there is a problem, and there is a way of dealing with this. Of course, there is unfairness in requiring an individual who has succeeded in setting aside a restraint order to pay his or her costs, but the alternative is to put all the cost risk on to the prosecutor. Capping costs at legal aid levels, as happens in other cases, could help lessen the disincentive to tackling large-scale restraint orders.
It would be helpful if the Minister could give a view on that. I hope that he will not just refer to his notes and resist the amendments because the whole purpose of Committee—I hope he understands the tone with which we have approached this—is not just to do better but to do the best we can. If he cannot accept these amendments, I hope that he will take them away and perhaps discuss this issue further with us, so we do not continue a situation in which we are unable to get at assets because they have been taken out of the country or removed and defendants do not come forward to say what their assets are. There is a way to deal with this and I hope the Minister can respond positively to these amendments. I beg to move.
Lord Dear (CB)
My Lords, I rise to re-emphasise the wording of subsection (1) of the amendment:
“The Secretary of State must consult on ways to strengthen and improve the effectiveness of confiscation orders”.
For many years, and bearing in mind my previous service in the police and my contact with it since, I have been concerned that the prosecution authorities generally do not pursue property that is the subject of crime nearly as rigorously as they should. That has gone on for years, although all the agencies concerned will deny it. It is a fact, however. I could produce evidence from recent personal experience but will not weary the Committee with that, other than to say that the police have always been, and still are, judged on reducing crime and gaining convictions. The CPS is also judged on its ability to gain convictions. It is not judged, by and large, on its ability to chase back money and other property.
I simply endorse the main thrust of subsection (1) of the amendment. There must be ways in which the efficiency of those two organisations can be enhanced, not by rewarding them—although rewards are involved, I suppose, particularly in the reapplication of assets that we have been discussing—but simply by recognising that efficiency is not just detecting crime or getting convictions but also recovering property and money. When all is said and done, in the upper echelons of crime, in particular, the criminals are in it for the money. If the money is not chased, it is eventually there for them to use later when they come out of prison, or when they have paid off the fine or whatever else. This is a plea to underline the wording of subsection (1) of the amendment, which I endorse.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister for taking the time to address, in order, the points I made—and perhaps some that I did not make. I think I was very clear that the initial restraint order hearing is ex parte. That is not what I was suggesting in terms of costs; it was the appeal, which can involve significant costs. Again, with regard to the test for restraint orders—“reasonable grounds to suspect” rather than “reasonable cause to believe”—I suggested that we were quite happy and supportive of the Minister in that. That is a later amendment, in the name of the noble Baroness, Lady Hamwee.
I will read Hansard carefully and look again at what the Minister said. I am disappointed that he seemed to be saying that he will not consider our amendments, other than the final one on capping, not because they are not worthwhile and not worth pursuing but because the Government are making improvements to the legislation. As the noble Lord, Lord Dear, said—I hope he will forgive me for saying that he speaks from experience on these matters; from the right end of the law, not the wrong end of the law, I hasten to add—there are cases where the law has not been enforced as effectively as we would like. The consultation the Minister spoke of—he rejected our suggestion of having further consultation on this issue—would help draw out some of the issues that the noble Lord, Lord Dear, and I addressed.
I repeat that we are not suggesting for one second that what the Government are proposing in the Bill does not improve the position. We are just saying that we think consideration should be given to improving it further—we could do better. We should do the best we can, not just aim for an improvement. It would be disappointing if the Minister was to leave this debate without thinking that he could reflect on the points we had made, to make the Bill as tight as it can be and ensure that those who gain from criminal activities are not allowed to keep as much of their ill gotten gains as they are at present.
I listened carefully to what the Minister said. I did not quite understand how some of it addressed the points I had raised. I will read Hansard carefully and make a decision on whether or not we wish to bring some of these matters back on Report for further consideration by your Lordships’ House. For now, I beg leave to withdraw the amendment.
Student Visas
Baroness Smith of Basildon Excerpts(9 years, 11 months ago)
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Baroness Smith of Basildon (Lab)
My Lords, the most important criterion of any immigration and visa system is its integrity. Governments should always take swift and effective action to stop any abuses of the system and must always be vigilant to prevent abuse. The scale of abuse outlined in the Minister’s Statement is absolutely shocking and it is right that action is taken to tackle such abuse. Indeed, the Labour Government closed 140 colleges between April 2009 and January 2010. My questions are on the practicalities and implications, rather than the principle.
As the Minister said in repeating the Statement, following the BBC “Panorama” programme’s investigation in February the Government announced that they had suspended language tests run by ETS. Can the Minister clarify the timescale of who knew what and when? When were Ministers made aware of the scale of the abuse? Was that before or after the BBC investigation? If they knew before, why was action not taken earlier? If they did not know before, how is it that after four years in government the BBC knew about it before the Government did? The longer this goes on, the greater the culpability of the Government in not tackling it.
The Minister referred to criminal proceedings. Can he tell us who those proceedings will be against and how long those investigations will take? Will they include proceedings against the 48,000 people who fraudulently obtained language certificates? Do the Government know who they are and where they are? The Statement says that arrests were made but how many have been made to date? With regard to the universities, what discussions and consultations have there been with those universities where action has been taken? What are the implications for lawful, legitimate university students and institutions?
The Government’s independent inspector, John Vine, issued warnings about the system’s abuse in 2012. However, it appears that no serious action was taken until the BBC investigation, so this is a crisis created on the Government’s watch. The Government have talked tough but done very little and while this abuse was festering, we had the nonsense of an Immigration Bill that did nothing to tackle the abuses we are talking about today but proposed actions detrimental to law-abiding universities and their genuine students. In the interests of national security and the integrity of the system, and in the interests of those universities and students that abide by the rules and bring huge benefit to this country, the Government must restore confidence.
Terrorism Act 2000 (Proscribed Organisations) (Amendment) (No. 2) Order 2014
Baroness Smith of Basildon Excerpts(9 years, 11 months ago)
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Lord Harris of Haringey (Lab)
My Lords, I am grateful to the Minister for his very helpful and detailed introduction of the order. Indeed, it was so detailed that I think he read almost verbatim the entire Explanatory Memorandum in terms of the details of the groups concerned. I agree absolutely with his analysis of the unpleasantness, nastiness and danger of these groups.
However, my reason for speaking is that I have never quite understood the purpose of proscribing organisations in this way. First, the organisations concerned have a capacity to change their names and identities with remarkable rapidity and ease. Does proscription mean that, if any of those organisations change their names or identities, a new proscription order must be found?
Secondly, what additional and valuable powers does the order actually give over the individuals who may be covered by such proscription? For example, in the various cases that the Minister cited, he talked about individuals who have fought as part of those groups overseas and might be returning to this country. Are they not therefore covered by other offences under the Terrorism Act, which means that, in fact, the key issue would be their combatant status elsewhere, engaging in and promoting acts of terrorism elsewhere?
Then there is the question of what the order actually covers. It would now be a criminal offence for a person to belong to those organisations. Which of them have an explicit membership? Surely the issue here is one of association rather than membership. I cannot believe that the extremely nasty Islamic State of Iraq and the Levant has a membership card. I cannot believe that it has a formal roster of members. There may be a series of people who are associated with it, who have fought with it or worked with it, but I do not believe that it is likely to have a membership structure. I may be wrong; it may be that some of these organisations have a membership structure, but it would be useful to know from the Minister which of them do.
It will become a criminal offence to arrange a meeting to support a proscribed organisation. When, in respect of each of those organisations, has anyone organised a meeting in support of them? By a meeting, does the Minister mean a public meeting or does he mean a gathering of like-minded individuals? If it is the latter, I see that the order might have some function, but I wonder whether there have been public meetings organised in that way.
Finally, I ask about the proscription on wearing clothing or carrying articles in public which arouse reasonable suspicion that an individual is a member or supporter of one of those organisations. I have already made the point about whether those organisations have membership, but what would constitute clothing or articles that may be carried in public that would arouse that suspicion? If they have a membership badge which reads, “I am a member”, no doubt that is covered, but I do not think that that is what the Minister is talking about. Is it a scarf in a particular colour? Is it a particular style of dress? It would be helpful to have some clarity as to what that means in practice.
Baroness Smith of Basildon (Lab)
My Lords, like my noble friend Lord Harris of Haringey, I thank the Minister for his explanation today—and for writing to me earlier this week with the details of the Government’s proposals and much of the information that he gave today.
This is not the first time that such an order has been debated in your Lordships’ House—by my reckoning, it is the fifth such order that I have been involved in debating—but it is right that we have an opportunity to have a serious debate, so I appreciate the time that the Minister took to put on record the information that he did, because the proscription of any group or organisation is not a matter to be taken lightly.
The Government have to be confident that the information that has led them to propose proscription is robust, accurate and up-to-date. This is a very tough measure. As my noble friend Lord Harris just said, it makes it illegal to belong to or in any way support a listed organisation, so it can be used only when it is essential to protect the national interest. Although as the Official Opposition we do not have access to the same security and intelligence information as is available to Ministers, we base our judgment in support of proscription orders on the assurances of Ministers. That is why we are grateful for the explanation given by the Minister today, and why we support the order before us today.
A group can be proscribed under Section 3 of the Terrorism Act 2000 if it,
“commits or participates in acts of terrorism … prepares for terrorism … promotes or encourages terrorism, or … is otherwise concerned in terrorism”.
The Minister spoke of the care taken by the Home Secretary in considering these matters. I would also place on record some kind of tribute to or appreciation of those agencies that undertake the gathering of such evidence. That obviously takes considerable time and requires painstaking attention to detail, while of course at times it can be very dangerous to seek to gather such information.
Lord Taylor of Holbeach
My Lords, I thank the noble Baroness, Lady Smith of Basildon, and the noble Lord, Lord Harris of Haringey, for their speeches and their support of the Government bringing forward the order. They are quite right to challenge; that is why we have these debates. However, this is very much a cross-party issue; indeed, the legislation under which we are dealing with these matters was introduced by the previous Government. The truth is that both the Home Secretary and I, and I believe the House, strongly believe that ISIL, THKP-C, KaK, AAB and PFLP-GC—I will get these initials right in the end; your Lordships can tell that I am slightly word-blind—should be added to the list of proscribed organisations in Schedule 2.
There were some usual useful challenges and it is good that we should discuss them. The noble Lord, Lord Harris, asked what proscription does. It effectively outlaws listed organisations, as I said in my speech. It stops people belonging to an organisation from arranging any sort of meeting supporting it—in other words, meeting in any numbers at all—and wearing clothing or any identifying articles that can be considered to show support for that organisation. In other words, it makes it difficult for such an organisation to prosper in this country.
Our priority is to make it difficult for these organisations to survive in this country. It sends a strong message that terrorist organisations are not tolerated in the UK and deters them operating here. It is a valuable tool as it supports other disruptive activities, including immigration disruptions, prosecution for other offences, messaging and EU asset freezes. The assets of a terrorist organisation are terrorist property and therefore are liable to be seized. That is an important aspect when one thinks of the funds that have been available to some of these organisations.
The noble Lord asked whether these organisations have members and whether they are card-carrying members. No. The criminal offence requires that a person belongs to or professes to belong to a proscribed organisation. It does not require a subscription to have been paid in the way that we are members of our parties. It is a different sort of membership, but it is with a serious purpose in mind. The Section 13 offence is of wearing clothing in such a way or in such circumstances as to arouse a reasonable suspicion that a person is a member. Whether somebody is prosecuted will depend on the circumstances, but if, for example, a person wears a badge with the insignia on it it would constitute an offence, so it effectively bans the wearing of the insignia of an organisation.
While understanding the reason why these organisations are being banned, the noble Baroness asked whether, given the fact that in February al-Qaeda announced that it was severing its links with this group, there was an interim period with a security risk. The fact that a group is not proscribed does not prevent the police or the Crown Prosecution Service taking action against an individual for terrorist offences. The fact that a group is not proscribed does not prevent other disruptive activity, including these powers that I have talked of. None the less, it is quite clear that the two organisations are now separate and, indeed, in conflict with each other, and it is right that we should therefore ban ISIL.
Section 3(6) of the Terrorism Act 2000 allows the Home Secretary by order subject to the negative procedure to specify an alternative name for an organisation to deal with these matters. The listing of proscribed organisations is kept under review, including whether they are operating under any aliases. This is why, following review, the Home Secretary decided specifically to ban ISIL under Section 3 of the Terrorism Act. This provides an effective mechanism for dealing with organisations which, as the noble Baroness will know, splinter all the time and when actual membership is difficult to prove for exactly the reasons that the noble Lord, Lord Harris, provided.
Baroness Smith of Basildon
I am grateful to the Minister. I think he has confirmed my understanding, but I hoped I was wrong. In the letter he sent to me he pointed out that ISIL is designated as a terror group in Canada and Australia and as an alias of al-Qaeda in the US, New Zealand and the UN. It seems that there is a mechanism so, as groups splinter off, action is taken to deal with them. What he appears to be saying is that we have to take separate action once a group splinters and that there was a gap when ISIL was not proscribed. Even though it was known to be part of al-Qaeda, it was covered only by the order affecting al-Qaeda.
Lord Taylor of Holbeach
Action would have been taken against any individuals who were involved in ISIL’s activities under the proscription of al-Qaeda. This has been specifically mentioned today because we wish to make it clear that that organisation is proscribed and that the full force of the law, through anti-terrorism measures, can therefore be levelled against that body.
The noble Baroness was quite right to mention Prevent, which is an important part of the anti-terrorism measures. The police’s Counter Terrorism Internet Referral Unit has taken down 34,000 pieces of unlawful terrorist-related content which encourage or glorify acts of terrorism, of which 15,000 have come down since the extremism taskforce concluded in 2013. Through proposals from the extremism taskforce, as announced by the Prime Minister in December, we want to further restrict access to terrorist material which is hosted overseas and to identify other harmful extremist content to be included in filters. The police also have comprehensive powers to take action against people who spread hatred and incite violence.
To counter the messages of those who are attempting to recruit fighters to Syria and Iraq, we produce community-wide messages that aim to raise awareness of the risks of travelling and directly target the motivation for travel. We also provide tailored advice for those who are actively considering travel before their plans develop. I repeat that people intending to travel to Syria, as well as returnees, are actively considered for Prevent interventions. We do not recommend travel to Syria.
I conclude by saying that proscription is based on clear evidence that an organisation is concerned in terrorism. We need that evidence in order to make a proscription order and there is a process laid down in law which we are rightly required to follow. It is not targeted at any particular faith or social grouping. It is my and the Home Secretary’s firm opinion that, on the basis of the available evidence, all five groups named in the order meet the statutory test for proscription. It is appropriate in each case for the Home Secretary to exercise her discretion to proscribe these groups.
Proscribing these groups linked to the conflict in Syria demonstrates our condemnation of their activities and our support for the efforts of members of the international community in tackling terrorism. Proscribing them will also enable the police to carry out disruptive action against their supporters in the UK and to ensure that they cannot operate here. For that reason, I commend this order to the House.
Serious Crime Bill [HL]
Baroness Smith of Basildon Excerpts(9 years, 11 months ago)
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Baroness Smith of Basildon (Lab)
My Lords, I thank the Minister for his explanation of the Bill. There is always a sense of déjà vu about Home Office legislation. I have been in your Lordships’ House now for just four years. This is the ninth Bill and the fifth that I have spoken on from the Front Bench in that short time. That is a lot of legislation. But it is legislation that is concerned with some of the most serious and important issues facing society and a priority of any government—the safety and security of citizens and the ability of government to play a part in reducing crime and taking action against criminals including, with specific reference to this Bill, those criminals engaged in serious and organised crime.
Any approach to the criminal law has of course to deal with four aspects: the offence and the detail of exactly what that offence is; the appropriate penalties for breaking the law; any defence or mitigation; and, perhaps most crucially, the enforcement and resources available to prosecute—nothing brings the law into disrepute more quickly than erratic enforcement or non-enforcement. I use as an example the sensible law of not using a hand-held mobile phone while driving. We all know that that is dangerous but, as we watch somebody negotiating a roundabout with the steering wheel in one hand and a mobile phone in the other, we know—and, worse, they know—the probability of them being prosecuted is very low. More serious are the current problems with enforcement of legislation on asset recovery and the proceeds of crime. We welcome measures to address current failures, but improvement in legislation cannot make up for the lack of enforcement. There must be a determined commitment to effective policing and enforcement, without which any laws are meaningless.
The issues raised in this Bill are important and we have called for action to better protect children, to tackle cybercrime and to ensure that criminal gangs are not allowed to stash their ill-gotten gains to pick them up later. We will scrutinise these proposals for their workability and for effective enforcement and there is cross-party support on many of these issues. We want to ensure that legislation is as robust as possible.
On Part 1, on proceeds of crime, it is clear that confiscation orders are not working, given that criminals currently get to keep £99.74 in every £100. In 2012-13, there were 6,392 confiscation orders seeking the return of £380 million from a total criminal pot of £1.6 billion, but eventually only £133 million was recovered. The cost of recovering those ill-gotten gains is extremely high. The estimate from the National Audit Office is that investigation, prosecution and enforcement costs 76p in every £1 collected. The value to the Government from that initial £1.6 billion is just £31 million, and only 2% of offenders paid in full. The National Audit Office has identified that the amount collected and the number of confiscation and restraint orders have fallen in recent years. That is a seriously worrying trend. Restraint orders freeze assets so that they cannot be hidden abroad. They have fallen by 27% under this Government. There are a number of reasons why that is the case and I hope that the Government will be willing to engage with us to address the practical and legal reasons to improve implementation.
Noble Lords will be aware that we have called for the ending of early release from sentences for those who have failed to pay back amounts specified in confiscation orders. Currently, automatic release is available at the halfway point. I am pleased to see that ended in the Bill, but that is proposed only for orders involving amounts over £10 million. The Minister in his comments said that there are order-making powers that would enable that level to be lowered, so perhaps we can revisit in Committee whether that is the appropriate level at which to end these early releases. We have also called for the law to make it easier for prosecutors to freeze suspects’ assets quickly and close loopholes that allow criminals to hide stolen assets, sometimes with family members. We welcome the Government's response to that and again we will examine the detail in Committee.
I know that the Minister shares my concerns that some previous measures introduced in the Crime and Courts Act on the proceeds of crime and the National Crime Agency still do not apply to Northern Ireland because the Government failed to get a legislative consent Motion. Obviously, the measures applying to Scotland and Northern Ireland in this Bill relating to criminal assets also require an LCM, without which there would be a massive loophole. I urge that past mistakes are not repeated and every effort is taken to ensure that no part of the UK can become a haven for those hiding their criminal gains from justice. Finally on this issue, we think that it would be appropriate if the additional revenue that is raised is ploughed back into the communities on issues such as neighbourhood policing and criminal justice and we would welcome a commitment from the Minister that the Government would also support this.
Part 2 deals with computer misuse. The phenomenal technical changes we have seen in recent years bring new threats to individuals, businesses and national security. When we debated the Government’s flawed policy of opting out of all EU police and criminal justice measures, cybercrime was an issue we highlighted where international and European-wide co-operation is absolutely essential. The extension of extraterritorial jurisdiction is welcome because, as the Minister knows and as we know, such crimes know no boundaries. We have some questions about the practical application and how decisions will be taken between UK-based prosecutions and extradition, but the measures proposed have our broad support.
Part 3 deals with organised, serious and gang-related crime. Clause 41 seeks to reach all those who actively support or benefit from criminal activity, including those whose specific role appears to be legitimate. Many criminal gangs include corrupt and complicit professionals who use their expertise and skills to seek to evade the law. Obviously, we want to ensure that those who are genuinely innocently caught up in illegal activity are protected. For example, would housing associations, local authorities or private landlords who, despite their best efforts, find their property being used by a drug gang be liable for prosecution? Perhaps this could be seen as the “Al Capone” clause. In a sleazy, corrupt criminal prohibition era, Al Capone and his crime empire were responsible not just for bootlegging, but for prostitution, smuggling, murder and dirty politics, where voters and politicians were threatened or bought and feared for their lives. Some noble Lords will recall the television series with Robert Stack—I am far too young. Despite the best efforts of Eliot Ness and his “Untouchables”, Al Capone was never brought to justice for his worst crimes but for tax evasion, for which he went to prison and his empire was dismantled. If only he had had a better accountant.
The activities of serious and organised crime gangs today are more modern but equally evil and exploit the weak, poor and vulnerable: drug trafficking, people trafficking for slavery and prostitution, organised illegal immigration, extreme and violent pornography. The human misery caused by such gangs is almost limitless and defies imagination. If we are serious about really tackling such evil, we agree that the law should be able to reach all those involved in and benefiting from such activity. Obviously, anyone, including qualified professionals, who knowingly profit from criminal activities should be held legally accountable for their actions. We want to ensure that it is effective in practice. It would be interesting and very useful to have information from the Serious Fraud Office and the police as to how many and what kind of cases they feel they have been unable to pursue because the law is inadequate.
Part 4 concerns the seizure and forfeiture of drug-cutting agents. We do not oppose these clauses, but I question whether they are adequate. We are all aware of the human misery and suffering caused by drugs and the criminal industry behind their sale. In the information provided, I was struck by the number and amount of seizures of chemicals used as cutting agents by drug sellers. Adulterating a hard drug, such as cocaine, with a significantly cheaper compound increases profit and, of course, the dangers for the drug user. However, the seizures to date seem to be minimal. Only 75 seizures, of around 2 tonnes in total, is clearly a fraction of the amount being used. Therefore, although obviously worthwhile, is this the right target and approach, or should it be extended? The Minister said in his introduction it would lead to higher prices and therefore decrease consumption. I am not clear that higher drug prices necessarily reduce consumption by an equivalent amount, so it would be useful to have the evidence for that. I was surprised not to see some measures in the Bill to tackle so-called legal highs. So many young people are being conned into believing something is safe, as the law has not caught up with that particular compound, and a number have already paid with their lives.
Part 5 deals with the protection of children. There is a unity of purpose in your Lordships’ House to do whatever we can to protect children and young people from harm of any kind. We welcome the fact that the Bill seeks to make it explicit that, under the Children and Young Persons Act 1933, emotional cruelty likely to cause psychological harm is an offence. Noble Lords will be aware that there remains some concern from charities and organisations representing children’s interests that, because cruelty to a child must be wilful to be considered an offence, this can be misunderstood. It would be helpful to explore this point further in Committee to ensure that the law is as effective as it possibly can be.
I listened to what the noble Lord said about manuals on child sexual abuse and paedophilia. Like other noble Lords, I am horrified to know that such things exist. Obviously, they should be banned. It serves to highlight the inadequacy of current legislation in protecting children online and from what I understand is called the dark web. It is alarming that online abuse is increasing while the number of arrests is falling. Over the past three years we have seen a 60% decline in the number of arrests made by CEOP although referrals rose by 14% in the last year. The Minister may recall that, in our debates on the Crime and Courts Bill, we raised concerns about CEOP being part of the National Crime Agency rather than remaining a separate specialist and dedicated body. We welcomed the concessions that the Government made and would welcome further information about the operation of CEOP within the NCA. As I stated earlier, having the right structures and resources for enforcement is as important as any legislation.
In the anti-social behaviour Bill earlier this year, the Government accepted our arguments on new amendments to provide some extra tools to the police and local authorities to tackle child grooming, and introduced a new measure on Report. Obviously, there is still more to be done and I hope that the noble Lord will be willing, in the same spirit of co-operation, to consider this matter further; for example, the strengthening of child abduction warning orders may be an issue that we could examine in Committee. There may indeed be other areas we can look at.
The Government have made clear their commitment to opposing female genital mutilation at home and abroad. Like the noble Lord, we regret the lack of prosecutions to date. FGM is a barbaric evil and we support these new measures to tackle it. Noble Lords will be as shocked as I am that in London alone nearly 4,000 girls and women have been treated for FGM since 2009. Again, I reinforce the need for proactive and determined enforcement and prevention, including sex and relationship education in all schools.
On the final part of the Bill, we support measures to tackle terrorism at home and abroad and we will examine the detail on this. I am grateful to the Minister for his explanation and we look forward to our further deliberations on this Bill in Committee.
Passport Office
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Baroness Smith of Basildon (Lab)
My Lords, I am grateful to the Minister for repeating the Statement. However, those of us who have in the past renewed our passports, and were very impressed at the speed and efficiency of the passport service, are really shocked and appalled that it is now in chaos. Do the Government understand the impact that this shambles has had on those whose passports have been seriously delayed? The Statement mentions holidays, but it is not only holidays and honeymoons that have been wrecked—people have also missed crucial business appointments and family engagements. The Government’s excuses and denials have changed daily but the problems remain. I just wonder how on earth we got to this point after having such an efficient and effective service.
Why did the Home Secretary say that it was not true that staff had been cut when official government figures from her own department show a cut of 600? Why did Ministers not know that security checks had been dropped, and why did the Government insist on transferring overseas citizens’ passport renewals to the Home Office from our embassies in the face of evidence showing that it was not working? Will the Minister please also apologise to those who have suffered?
Immigration Bill
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Baroness Smith of Basildon (Lab)
My Lords, I thank the Minister for his care in initiating this debate and addressing some of the issues that have been raised here and in the other place. When your Lordships’ House voted by a majority of 62 to refer the issue of making someone stateless to a Joint Committee of both Houses, it did so not to frustrate the Government in any way but to assist them in their deliberations.
I will not rehearse the detail here but it was clear that the Government’s proposed new clause to extend the power to deprive an individual of naturalised citizenship, and in so doing make them stateless, had not been adequately or effectively considered in the other place. As we have said before, the amendment was tabled 24 hours before Report and there was no prior consultation or consideration in Committee, just a last minute amendment and short debate before it was accepted. I note the point the Minister has just made about adequate consideration having been given to the measure recently in the other place. However, it has to be said that even then the Deputy Speaker asked for brief speeches because of time constraints. We believe that further and more detailed consideration should be given to the matter in your Lordships’ House. In contrast to the other place, we had two excellent debates in Committee and on Report. The outcome of those two debates was that this matter required further examination because of the importance and complexity of the issues raised. An amendment was then tabled in my name and in the names of the noble Lord, Lord Pannick, the noble and learned Lord, Lord Brown of Eaton-under-Heywood, and the noble Lord, Lord Macdonald of River Glaven, was passed by 62 votes, and returned to the other place for further consideration. The other place rejected our amendment. However, we welcome the fact that the Government have taken note of some of the issues raised in our debates and have brought forward their own amendments. Government Amendment 18A refers to the reasonable grounds that the Home Secretary would have to have before making a naturalised citizen stateless, and government Amendment 18B is about a review. We certainly welcome the fact that the Government recognise the deficiencies in their original proposal and have sought to deal with some of the difficulties.
The reasons the Government gave for bringing forward the proposed new clause was the Supreme Court’s judgment in the Al-Jedda case, in which it was ruled that by depriving Mr Al-Jedda of his naturalised citizenship on the ground that that was conducive to the public good, the Secretary of State had made him stateless. The Supreme Court quoted from the Government’s own guidance in saying that it was necessary for a naturalised citizen to hold another citizenship not merely to apply for it, or have the right or the ability to apply, for the Secretary of State to be able to withdraw citizenship and in effect make them stateless, which she should not be able to do. As I have confessed before in your Lordships’ House, I am not a lawyer, and I listened with great care to those who have far greater legal expertise in this area than I do. However, it seems that by amending the law through Amendment 18A to ensure that the Secretary of State must have reasonable grounds for believing that the individual is able to acquire another citizenship, she would be able to deprive him of his British nationality in those circumstances even if it made him stateless. I think that the Minister—the noble Lord, Lord Taylor—used the phrase “recourse to apply”. However, I reread what the Immigration Minister, James Brokenshire, said in the debate in the other place. At col.191 of Commons Hansard of 7 May, he said it was important that the person was able to acquire another nationality, and repeated that at col. 192. At col. 194, he said that there should be the “ability to obtain citizenship”, but then said at col. 195 that the Home Secretary had to be,
“satisfied of their ability to seek the citizenship of another country”.—[Official Report, Commons, 7/5/14; col. 195.]
We need clarity on that point. Is it a question of being able to gain citizenship or the ability to seek citizenship? All those phrases were used by James Brokenshire in the other place. The noble Lord, Lord Deben, said in your Lordships’ House on 19 March that,
“to take away someone’s citizenship, it is not reasonable to say that you assume that they can get another country’s citizenship. It is only reasonable to say that you know that they have another citizenship; anything less than that is wrong. It may not be convenient, but it is not right”.—[Official Report, 19/3/14; col. 213.]
I would therefore welcome further clarification from the Minister.
In the Al-Jedda case, the Secretary of State referred to the original nationality that Mr Al-Jedda held, whereas this amendment, if I have understood it correctly, refers to the Home Secretary having “reasonable grounds” to believe that they could obtain citizenship of any country. In which case, does this government amendment go further than what is required to comply with the Al-Jedda judgment?
Although the Al-Jedda judgment represented an important principle in this debate, it was not the only issue that gave us cause for concern. Questions and issues remain around both the principle and practical implications, which I hope the noble Lord will address in his response. It was the lack of certainty on those points and those that arise from the new amendment that led to the need for further, more detailed examination by a Joint Committee. Perhaps I may therefore raise the concerns that remain about the implications for our relationship with other countries. I have read the legal opinion of Professor Guy Goodwin-Gill, who is a professor of international refugee law at the University of Oxford, a senior research fellow at All Souls College, and a barrister at Blackstone Chambers. His opinion from looking at international law is that the Government’s proposals risk damaging international relations and could lead to breaches of international obligations. I know that the noble Lord rejects that, but Professor Goodwin-Gill has provided a 20-page opinion that raises a number of issues that, at the very least, should be further considered and addressed to the satisfaction of your Lordships’ House.
I greatly welcomed the Government’s commitment to respond to that opinion. I was sorry that it arrived so late on Friday in order for us to have an opportunity to look at it. I am sorry that robust responses were not available for earlier consideration. However, I have now had the opportunity to read that response. Although it deals with various treaty obligations, it does not address the practical or diplomatic implications that I raised previously. We all know that the fight against terrorism is international and global. That highlights the need for international co-operation and collaboration. We really need proper and proportionate consideration of the implications for national and international security. This amendment would allow terror suspects to be loose and undocumented in any country where they happened to be when their citizenship of the UK was revoked. When citizenship has been withdrawn from citizens who are overseas, will the country that has admitted that individual in good faith on a British passport be consulted or advised at any stage that that person has had British citizenship withdrawn from them—even after citizenship has been withdrawn?
The noble Lord will recall that Professor Goodwin-Gill stated:
“Any state which admitted an individual on the basis of his or her British passport would be fully entitled to ignore any purported deprivation of citizenship and, as a matter of right, to return that person to the United Kingdom”.
The Government dispute that but the Minister confirmed to me in his letter of 25 March that the Government have not discussed the development of what was then Clause 60, on deprivation of citizenship, with other countries and do not consider it necessary to do so. I still find it quite incredible that the Government do not think that they have to consider other countries and debate this issue with them prior to implementation. In his letter, the noble Lord also relied on the statement that other countries allow for deprivations to make people stateless. He used, as the Immigration Minister, James Brokenshire, used in the other place, the Republic of Ireland and Belgium as examples. I was not aware of the position of Belgium on the issue and whether it has made anyone stateless in recent years, but the Minister could have quoted Tunisia, Lithuania, or countries that have rendered political opponents or ethnic minorities stateless—such as Zimbabwe, Burma, Serbia and Russia.
This country has a proud record over half a century of opposition to making individuals stateless. What about our relationship with, for example, the USA, Canada, Australia, France, Germany, Scandinavian countries and Italy? These countries have not taken a power to make citizens stateless. Again I looked at the response of Professor Goodwin-Gill in reply to the Government’s response. He took the view—I do not know whether this is correct; it is one of the reasons why we consider that such examination by a Joint Committee of both Houses is essential—that it would appear that Her Majesty’s Government have never accepted that another state has a right and is able unilaterally to denationalise its citizens while they are present in the UK, so making this country responsible for its residents’ safety and well-being. Are we imposing an obligation on other countries that we would not ourselves accept?
I should like to raise a second issue which was also raised in the other place and it would be helpful if the Minister could respond on this point specifically. It concerns what will happen if someone cannot obtain another citizenship despite their very best efforts to do so. The Government propose that the Home Secretary has to have reasonable grounds for believing that someone can acquire another citizenship, but what if they cannot? It has to be recognised that although someone may be entitled to apply for the citizenship of another country, they may not in practice be able to acquire it. The Minister admitted as much in his letter to me of 25 March when he said:
“The number of people affected by this new provision will be very low and not all remain stateless as some may be able to acquire or re-aquire another nationality”.
I know that that was written before the new amendment but it does not change the position of a person’s statelessness or ability to gain another citizenship.
In responding to similar questions in the other place, James Brokenshire referred to those who make no effort to obtain another citizenship. But that is a completely different point. If the Home Secretary’s belief that they could obtain another citizenship was reasonably held but it was wrong and they were unable to do so, what action could then be taken to avoid a lengthy period of statelessness? The Minister talked about not wanting an arbitrary time limit for such a decision to be made, but there is no time limit in the amendment for the Secretary of State to look again to see whether it was a reasonable decision which was not correct.
The Minister spoke of a limited form of leave to remain being available to those stranded in country. What form would that take and what are the state’s obligations? How does that make UK citizens safer? If someone from outside the UK cannot obtain another citizenship, what are the implications? They may not be in their country of birth or of a previous citizenship. Given that our Government have had no discussions with other countries about this, the point being made by Professor Goodwin-Gill about being returned to the UK has to be a possibility at the very least. The country that admitted them in good faith has done so as it believed them to have British citizenship at the time. They will not be admitted back into the UK so I am slightly alarmed that they might end up like the character played by Tom Hanks in the film “The Terminal”. I do not know whether the Minister has seen the film but it is based on a true story of the case of Mehran Karimi Nasseri who, having been expelled from Iran, was refused entry to London and sent back to France where he was arrested. I will not go into the details but he ended up spending 18 years in Charles de Gaulle Airport because he was stateless. That is not the only example, but I hope that it is the most extreme one. I found several cases of people being detained at airports for several weeks or months.
If the purpose of the clause is to make us safer from terrorists, we need greater clarity and certainty on what happens to those who become stateless, particularly those from outside the country. Unless there is certainty, we could end up in some kind of legal quagmire with cases being taken to court because of the lack of certainty. I am sure we all want to avoid that.
I shall touch briefly on Amendment 18B. We welcome the review outlined by the Minister. I recall that a similar amendment was tabled on Report by the noble Baroness, Lady Hamwee. This amendment differs in that the amendment of the noble Baroness referred to an annual review, which I think would be a much improved position on waiting, after the initial one-year review, for one every three years. That seems to be a very long timescale for the power that the Secretary of State wants to take.
Our concern remains that this amendment still allows for what the Supreme Court described as the “evil of statelessness”. Although the government amendment offers some concessions to the concerns raised by that particular case, I would welcome further clarity from the Minister as we are not yet convinced that the argument has been made for individuals who are terror suspects and are stateless. I am looking here at the interests of national and international security. I shall listen carefully to the debate, to the legal expertise that we have in your Lordships’ House, and to the Minister’s response. However, we need a full examination of this issue to ensure that we fulfil our obligations without making people stateless, given the difficulties and concerns that that raises. I beg to move.
Lord Taylor of Holbeach
I am sure that the Home Secretary will not exercise powers, which are clearly very important powers, carelessly or in any way that would damage the interests of the United Kingdom. I can assure the noble Lord that all such factors will be considered by the Home Secretary when she considers the question of deprivation.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister for the time he has taken and the effort he has made to address the points that have been raised in the debate. I concur entirely with his remarks about internal and international security. Obviously, the first duty of any Government is to keep their citizens safe and secure at all times. There has to be consideration of those issues when they are brought before your Lordships’ House. I can assure him that our consideration of these issues has at its heart the security of this nation and our international obligations to tackle terrorism. As the noble Lord said, I am grateful to all those who have spoken in this debate. We have benefited from substantial legal expertise. I am grateful to my noble friend Lady Lister for confessing that, like the Minister and me, she is not a lawyer. It is significant that even with the legal expertise in your Lordships’ House there is no complete agreement among lawyers, either. We made that point earlier.
I welcome the fact that the Government have moved away from the position that they took previously when the issue was debated in Committee and on Report. I welcome the answers given by the Minister. A lot of the debate hinges on one particular issue. I am grateful for the advice given to me by the noble Lord, Lord Pannick, in the conversations we have had. One of his questions summed up clearly the issue of the power to take away British citizenship if it relies on a discretionary power of another state. The noble Lord was very honest in his response to that. We have no power to know what another state will do. Other states have discretionary powers on whether to make people citizens.
The Government’s Motion rests on whether somebody is able to obtain citizenship. It hangs on the interpretation of that. We have concerns in that we want to avoid at all costs somebody becoming stateless—the evil of statelessness via the Supreme Court—and the dangers that that would bring to citizens of this country and abroad. I mentioned that James Brokenshire, the Minister in the other place, gave three different interpretations of what being able to obtain other citizenship could mean. If somebody is unable to obtain another citizenship and they remain stateless, at what point would the Home Secretary have to say, “We have a problem; this person does not have citizenship of any country”? There is a danger in leaving somebody abroad who we think is a danger to this country and involved in terrorism, who is stateless in another country or who remains in this country and cannot travel.
The noble Lord, Lord Lester, said that the intention was that those who are dangerous should leave—but they cannot do so if they have not got citizenship of any other country. The noble Lord also made the point that our position has changed. I can assure him that our position has not changed. These are the very same issues we raised in Committee and on Report, and we wanted to consider them in the light of the changes that the Government have made.
We have to consider the practical and diplomatic implications here. I know the Minister says that there is no need to discuss this issue with other countries, but he was not even able to confirm to your Lordships’ House that, if we remove citizenship from an individual who we suspect of being involved in terrorist activity while they are in another country, we would notify the Government of that country that we were doing so. That seems to be a rather irresponsible attitude and I worry that we will be passing the problems of terrorism on to other countries when international co-operation is so essential.
I do not wish to detain the House. We have had an interesting and worthy debate on this issue. What the Government have not been able to do, however, is rule out the possibility that we will make people who could be highly dangerous stateless. All it requires is that the Home Secretary must have reasonable grounds for believing that an individual can obtain other citizenship—but if those grounds are wrong and the individual cannot do so, we do not know what will happen to that individual.
The point was made when we debated this previously that we are not saying to the Government, “No, this must not happen”, but that there are still a number of questions which remain unanswered even at this late stage. They include the issue of what happens to someone when they have been rendered stateless and what the implications are for our relationships with other countries. The noble Lord, Lord Pannick, gave examples, and I am not sure that the Minister’s answer was that someone could not be made stateless.
Lord Lester of Herne Hill
I am most grateful to the noble Baroness. To be clear, what I said about the Opposition was not that they have not changed, but that they have not changed in the light of the changed circumstances of this concession.
Baroness Smith of Basildon
The Minister cheers the noble Lord on, but no one else is doing so. I said in response to the Government’s changes to their Motion that they do not remove the danger of statelessness. The noble Lord referred to the Pepper v Hart ruling, and he is absolutely right. What the Minister here and the Minister in the other place say is very important, but we have now had many interpretations from Ministers of what the amendment actually means.
Again, this has been a useful and interesting debate which I value, but we are seeking certainty on a number of issues, and that has not been forthcoming today. I believe that this matter would benefit from further consideration. It does not have to delay business. We are at the end of this Session, but it could be brought back quickly at the start of the next Session. It is important that we understand the implications for the security of this country and for individuals living in it. Accordingly, I wish to test the opinion of the House.
Misuse of Drugs Act 1971 (Amendment) (No. 2) Order 2014
Baroness Smith of Basildon Excerpts(10 years ago)
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Baroness Smith of Basildon
At end to insert “but that this House regrets that Her Majesty’s Government’s plans for the introduction of the Order do not include provisions for a 12-month review of the impact of the reclassification of khat in view of the highly unusual community focus of its use, for putting a detailed policing strategy in place before a ban takes effect, or for a health strategy to prevent a transfer of addiction to other substances; and do not commit the Department for International Development to do more work with the government of Kenya to alleviate the effect of the reclassification on the Kenyan economy.”
Baroness Smith of Basildon (Lab)
My Lords, I am grateful to the Minister for his explanation. I shall explain why we have brought this amendment before the House today.
It is around six weeks since we discussed this issue in Grand Committee. I thank the noble Lord for asking to meet me prior to this debate and for the discussion we had on the issue during the Recess. In Committee, the noble Lord, Lord Ahmad, responded for the Government. He agreed that this was a finely balanced decision. The Advisory Council on the Misuse of Drugs, the ACMD, does not advise that the drug should be banned, due to a lack of robust evidence. In fact, it considers it to be,
“a much less potent stimulant than other commonly used drugs”.
As I identified in Grand Committee, successive Governments have considered whether khat should be banned, but the evidence has not been clear or strong enough previously to support such a ban. It is clear from the evidence base in the Explanatory Memorandum and the Government’s assessment of the options that the decision remains a finely balanced one. One of the new considerations is the impact of the ban by other European countries.
Having considered the evidence, we accept that the benefits of a ban could outweigh the risks. However, as I stated previously, there are a number of assurances needed from the Government before that is clear. When we debated this in Committee and sought assurances from the Government, we did not do so unexpectedly. My colleague in the other place, the shadow Home Office Minister, Diana Johnson, had discussions with the Minister who had responsibility for this order. Curiously, this was not the Drugs Minister, Norman Baker, but another Minister, Karen Bradley. She spoke to her regarding our concerns and the conditions we consider to be essential if a ban is to be put in place. These were raised in the debate in Committee in the other place on 31 March and indeed in our own debate on the same day. I had also notified the Minister’s office of our concerns. Both Diana Johnson and I were disappointed with the responses from the Government, so this amendment is another attempt to seek reassurances from the Government on the implementation of such a ban. There are no surprises and no reasons of which I am aware that a full answer to the points we have raised should not be forthcoming.
I do not think I need to repeat the detail of the Committee debate on the harms of the drug or the risks associated with a ban. They are well documented in those debates, the Explanatory Memorandum, the impact assessment and, indeed, the letter from the Home Secretary. We are aware of the social and possible health harms associated with khat and which communities—largely the Somali and Yemeni communities—in the UK are most likely to use the drug. Overall, just 0.2% of the population have used khat but some 50% of Somali males are thought to be users, and up to 10% daily users. We are also aware that it is very difficult to separate the social harms of khat from the wider social issues faced by the Somali community and, to a lesser extent, the Yemeni and Ethiopian communities. We are also aware of significant and strong support from within the Somali community for a ban.
However, it must also be recognised that neither the ACMD nor the Home Office review has been able to isolate khat as the cause of problems or as exacerbating existing social problems. Khat has been linked to health harms including liver toxicity and tooth loss, as well as issues relating to the manner in which it is consumed, and mental health problems in the Somali community. But again, the evidence in relation to physical health is not considered by the ACMD—the committee that advises the Government on the misuse of drugs—as being robust enough to justify a ban.
We must also examine the risks of banning khat. We recognise that in assessing the risks we have to consider the risk of the UK becoming a hub for illegal exports to the US and other EU countries which have already implemented bans. I understand that is a key issue behind the Government’s intention to ban the drug.
In Committee, I asked the Minister, the noble Lord, Lord Ahmad, whether there was any evidence that khat imports into the UK were increasing and that the UK was being used as a base for illegal imports. He was able to advise that there had been a change although I am not 100% clear from the figures how significant that change is. Of course, that is a very reasonable issue for the Government to take into account and clarification of the scale of the problem would be helpful. When looking at the risks, it is relevant for the Government to consider the impact on the criminal justice system and to recognise that the enforcement costs may be high initially.
The Government recognise that there is a significant risk that a ban could damage community relations because khat use is both common and widely accepted within the Somali, Yemeni and Ethiopian communities. That would mean that banning khat would criminalise an established and accepted social practice.
The amendment would not prevent the ban but, because the impact must be fully understood and handled very carefully, we have identified four areas that are essential to ensure that any ban does not damage community relations and does not lead to khat’s displacement by other drugs, leading to more serious social and health impacts. As the noble Lord is aware, we wish to raise four issues that we think are essential before any ban should proceed.
The first is the review. Particularly because this is a very finely balanced decision, we think that there must be a review after 12 months that looks at the impact of reclassification, including on organised crime as well as community relations. That should include a monitoring framework, as outlined by the Home Affairs Select Committee; it was the second recommendation in its report. I know that the Government already collect some data in relation to drugs but, because khat is unique among drugs in that it is focused in particular communities, specific data need to be collected on community relations. Rather than that just being published as part of the overall publication of statistics and figures on crime, community relations and drug use, there should be a separate review published on khat.
One issue that the Minister very helpfully discussed with me when we met was policing. Because khat is highly prevalent in the Somali and Yemeni communities, the introduction of a ban would allow any Somali or Yemeni male to be subject to stop and search. I know that the Minister recognises that this could have a seriously detrimental effect on community relations, and the Government are bringing in changes to stop and search. Although we discussed this, it would be helpful if the Minister could put on the record how the Government will ensure that this does not undermine the Prevent agenda, which is now being focused on the Somali and Yemeni communities.
One risk that we can particularly identify, because khat is a social drug, is that it is linked to numerous businesses, including cafés and community centres, so policing has to be very sensitive to those risks. To ensure that this happens, we want a specific policing strategy, agreed by the ACPO lead for drugs and the Prevent team. That should be in place before a ban is in force.
I mentioned my meeting with the Minister and his officials. He was able to outline some of the issues regarding policing. I am aware that the Government are giving serious consideration to them. He agreed at that meeting to provide me with details and a copy of the draft guidance currently being considered but I have not yet had it. I know that he would want me to have a copy of that. It would have been helpful for the debate today but, if we could have a copy of that, it would be very helpful.
When we met I also reiterated the need for a programme of engagement and support for the Somali community. There needs to be some kind of education about the dangers of drugs and alcohol. As the advisory committee recognises, the evidence on the harms is not robust enough for a ban and the last thing that I think anybody wants to see is khat being replaced with illegal or prescription drugs or alcohol. That would be a very serious matter and could cause greater health harms. When we discussed this, the Minister was not able to provide me with any further information other than that he was sure that this was ongoing. These programmes will be essential, and if he is able to provide more information today that would be extremely helpful to our considerations.
My final point is on international development, an issue recognised by the Select Committee in the other place. The Department for International Development has to commit to work with the Kenyan Government to alleviate the effect of the khat ban on the Kenyan economy. When we discussed this, the Minister was confident that Kenyan farming was robust enough to diversify. He is more of an expert on farming than I am—I hope that will be the case. The Select Committee identified this as a very serious issue. My understanding is that the department is working with the Kenyan authorities. We need more information on this, as part of the review that should be undertaken and reported on in a year’s time, so that we can understand the work that is ongoing.
These are very real and genuine concerns. As I said, we are not opposing the ban but we really consider that before any ban is implemented these kinds of issues have to be considered and dealt with first. I hope that we will have a positive response from the Minister today. I beg to move.
Lord Taylor of Holbeach
My Lords, I welcome this further opportunity to set out the Government’s approach, which allows me to focus, in particular, on the activities to support the successful implementation of the ban on khat. That has lain at the heart of concerns raised by noble Lords, which I take seriously. I am reassured that the points raised in today’s debate are nearly all matters that were taken into account in the early stages of our decision-making when we considered our response to the issues associated with this drug.
The noble Baroness, Lady Hamwee, and the noble Lord, Lord Rea, asked what new figures we had on this drug. The new evidence, including reports from law enforcement agencies, emerged after the ACMD published its report and the Dutch banned khat in January 2013. It pointed to an increase in the volume of khat in transit via the UK to European countries where it is banned. The latest update for the first three months of this year shows that 17 seizures of khat—with a combined net weight of over 11.5 tonnes—originating in the UK were made in France en route to other countries where it is banned, including Denmark, Germany, Belgium and the Netherlands. This is evidence that this country is becoming a substantial hub for this material.
Before I address the particular concerns of the noble Baroness, Lady Smith—
Baroness Smith of Basildon
The Minister has given helpful figures, but can he give comparative figures on how the situation has changed over time? The premise is that if seizures of illegal imports are up, they must be up against another figure. I made this point in Committee; we had figures but not comparative ones.
Lord Taylor of Holbeach
I do not have those figures to hand. I think the noble Baroness will understand that, if this material is arriving here to be distributed to other countries, as I have illustrated, it confirms the view that this country is serving as a distribution hub in a way that would not have happened before those countries banned its use. That is the point which the Government have had to consider. The noble Baroness came to see us and we had a good and useful meeting, talking about issues that concern her. I will address these but I would like to consider the points made by other speakers first.
My noble friend Lady Hamwee wanted to know what the Somali network’s report had to say. An important aspect of this is that, according to testimony given by community leaders and mothers, several areas of a person’s life can be affected by khat use. Disagreements and frustration over drug use can cause family arguments and affect personal relationships; legal and health problems associated with khat use add to the strain on personal, financial and work relationships; and chewers of khat tend to be more inward looking rather than reaching out to others, fuelling further segregation. In other words, it can be anti-social in its impact.
The noble Baroness, Lady Meacher, rang me this morning to advise me that she wanted some assurances on this issue. I cannot give her the assurances that she is seeking but I can, at least, explain the Government’s thinking. She asked what the ACMD thought of our decision to control khat. The ACMD acknowledged the lack of robust evidence on whether khat caused medical or social harm. It understood that the scope of issues that the Government will take into account to make a decision on drug control would go beyond the remit of the committee itself. Before the decision was publicly announced, the Government discussed it with the chairman of ACMD, who accepted that we came to a different view on this occasion, based on consideration of the wider issues beyond those that were the immediate responsibility of ACMD.
The noble Baroness asked about temporary bans. They form part of the Police Reform and Social Responsibility Act 2011 but they are very different. Temporary class drug orders were introduced as a swift legislative tool to tackle the fast-paced emergence in the UK of psychoactive substances or so-called “legal highs”. I have debated these with the noble Baroness on other occasions. In essence, they are used where there is an urgent or significant threat to public safety or health. There is often very little evidence of the harm these drugs do, for the simple reason that they have been available only for a matter of months, if not weeks. Under a temporary class drug order, the advisory council has just 20 working days to advise and only looks at medical harms. Temporary bans are the exception, not the rule, and only last for 12 months. Khat is not a new drug where such swift, temporary action is demanded.
The role of advisors is to advise—
Baroness Smith of Basildon
My Lords, as on many other occasions, I am grateful to the Minister for the time and care he takes in responding to issues raised in debate. I hope he understands that the only contributions made in your Lordships’ House today have expressed concerns about the Government’s actions regarding the ban on this drug. Our concern is that, with a decision as finely balanced as the Minister said, how it is implemented is very important.
I was somewhat surprised at the uncharacteristically ungenerous comments made by the noble Baroness, Lady Hamwee. She said we were looking for something to do. I find that a curious expression when we are looking at a very serious issue on a busy day in your Lordships’ House. These issues strike at the heart of how such a policy would be implemented. The noble Baroness said that she was unhappy with the amendment before us, but it is open to any Member of your Lordships’ House to table a regret Motion or any other kind of Motion.
We debated this issue in Grand Committee and today. Noble Lords will understand that there are grave concerns about the Government’s action. I am grateful to the Minister for giving us more information on policing. My greatest disappointment is on the issue of health. In a previous debate on drugs, to which I think the noble Lord, Lord Ahmad, responded, I said that the FRANK website is not really an answer in cases such as this because somebody has to be interested in order to access it in the first place. As the Government are seeking to ban this drug, they have to be very proactive.
Lord Taylor of Holbeach
I am sure the noble Baroness will admit that this is not the sole intervention that the Government are making but is part and parcel of a package of health and community activities that the Government have commissioned. Public Health England is and will be very active in pursing this ban.
Baroness Smith of Basildon
That is helpful, and I look forward to receiving more information. The point is that the measures must be in place and understood prior to the implementation of any ban. My greatest disappointment is that the Minister has failed to commit to a review. For us, that is crucial. At the 12-month point, there should be a full understanding and published figures and information. Given that it is such a finely balanced decision, to say that there will be continuous review seems to be an opportunity not to have the serious review that we are seeking. I am grateful to the Minister for his response, but I am disappointed that he has not been able to address all the points that we raised. I wish to test the opinion of the House.
Licensing Act 2003 (Mandatory Conditions) Order 2014
Baroness Smith of Basildon Excerpts(10 years ago)
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The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, the order makes provision for the introduction of a mandatory licensing condition banning the sale of alcohol below the cost of duty plus VAT. Some noble Lords will notice that the substance of this order has been debated previously, as the Licensing Act 2003 (Mandatory Licensing Conditions) Order 2014. After some debate, the order did receive the approval of the House. Unfortunately, the process necessary for formal approval of the order did not take place, so we must give the order our consideration again.
The Policing and Crime Act 2009 amended the Licensing Act 2003 to confer a power on the Secretary of State to specify further mandatory licensing conditions relating to the sale and supply of alcohol. New Sections 19A and 73B of the Licensing Act allow for such conditions where the Home Secretary considers it appropriate for the promotion of licensing objectives. The order will apply to all licensed premises in England and Wales. Scotland and Northern Ireland are subject to different legislation.
The Government are committed to reducing alcohol-related harms. We have taken a decision to ban the sale of alcohol below the permitted price—that is, the cost of duty and VAT. This fulfils a commitment in the coalition agreement. It will ensure that the worst cases of cheap alcohol are banned from sale. The ban will prevent anyone selling alcohol at heavily discounted prices. A can—that is, 440 millilitres—of average-strength lager will now cost no less than 40p, and a standard bottle of 70 centilitres of vodka no less than £8.89. The ban aims to reduce excessive alcohol consumption and its associated impact on alcohol-related crime and health harms.
It is estimated that overall alcohol consumption will fall by 10.5 million units in the first year alone, resulting in 900 fewer crimes and 100 fewer hospital admissions. After 10 years, there will be 500 fewer hospital admissions and 14 lives will be saved each year. It is vital that we reduce alcohol-related harm, which is estimated to cost society £21 billion per year, with £11 billion of this being alcohol-related crime. In nearly half of all violent incidents the victim believed the perpetrator to be under the influence of alcohol. The most common type of anti-social behaviour experienced or witnessed—by one in 10 people—was drink-related. This measure will ensure that we take a step towards a much needed reduction in the £21 billion bill that this country faces as a result of alcohol.
In the previous debate, the noble Baroness, Lady Smith of Basildon, raised concerns regarding the evidence upon which we based the policy. I reiterate that the benefits of this policy have been assessed using the University of Sheffield’s School of Health and Related Research model. This is accepted as the best model available for estimating the benefits of this policy. I hope that the noble Baroness found helpful my correspondence following the debate setting out the modelling in more detail. More detailed information on the modelling used by the University of Sheffield can be found at annexe 3 of the impact assessment, which was published alongside the order.
My noble friend Lord Clement-Jones, who is not in his place this evening, raised during the previous debate a question on minimum unit pricing and its effects in Canada. As I noted then, the context of sale in Canada is quite different from that in England and Wales. I hope that my noble friend found my subsequent response outlining the studies helpful.
The modelling from the University of Sheffield estimates that this policy is worth £3.6 million a year in crime reduction benefits in England alone. This figure was laid before Parliament in the impact assessment and the Explanatory Memorandum. The health benefits have also been considered and again laid before Parliament. The Explanatory Memorandum notes an estimated benefit to the public sector in England alone of £1.15 million per year on average over the first 10 years. The impact assessment estimates the wider health benefits to society, as well as the public sector, to be £5.3 million per year.
While the reduction in average consumption is modest, this policy will impact the most on hazardous and harmful drinkers. We know that there is a direct link between the price of alcohol and the quantity consumed by the heaviest drinkers, who tend to favour the cheapest alcohol. We also know that hazardous and harmful drinkers generate the biggest costs for alcohol-related crime. What this policy seeks to achieve is 900 fewer crimes in the first year alone, with a reduction in hospital admissions from 100 in year 1 to 500 in year 10. Two consultations have been held on the Licensing Act and alcohol strategy, in 2010 and 2012-13. Following the results of the consultations, banning the sale of alcohol below the cost of duty plus VAT was considered to be the most pragmatic way with which to tackle the worst examples of cheap alcohol.
I hope that noble Lords will agree with the Government that the introduction of the ban is an appropriate use of the powers conferred on the Home Secretary by the Licensing Act 2003. Accordingly, I commend the order to the House.
Baroness Smith of Basildon (Lab)
My Lords, I am grateful again to the Minister for his explanation, and I admire his ability to keep going today, as this is the fifth debate in which he has taken part. I do not intend to repeat the comments I made previously when this matter was debated. He will recall—he alluded to this—that I challenged the Government on the robustness of the evidence he provided for the policy and its impact. Indeed, I used the 32nd and 35th reports of the Secondary Legislation Scrutiny Committee. I concurred with its conclusion that the effect of this policy, as outlined in the order, “appears to be negligible”. As I recall from the debate, he said that the level of reduction in alcohol consumption would be 10.5 million units in the first year. When the matter was considered further by the committee, it said that that was equivalent to one large glass of wine a year per individual. That does not have quite the same impact as saying 10.5 million units. There was no robust evidence to show that those who most needed to reduce their alcohol intake would do so under this policy.
The Minister alluded to the letter that he wrote to me following the debate. I admit that I had not expected this order to come before us again. Had it done so with no changes, my comments would be very brief, but there are significant changes and new evidence to which he did not refer today. It might be helpful if I did so. The Secondary Legislation Scrutiny Committee in its 40th report drew attention to those changes. I share the committee’s disappointment that neither the Explanatory Memorandum nor the impact assessment was revised on being re-presented to your Lordships’ House in light of the strong and justified criticisms highlighted in the previous debate. It would have been helpful if those had been taken into account before re-presenting the Explanatory Memorandum and impact assessment to your Lordships’ House.
I will raise two issues on which I seek the Minister’s comments. In terms of new evidence, consideration of the Budget is important in assessing the impact of this policy. As was evident from the previous debate, there would be a marginal impact, which has failed to convince the Secondary Legislation Scrutiny Committee that the costs to industry, which would be significant in implementing the permitted pricing policy, could be justified. The impacts would be low and marginal—one large glass of wine a year. The Wine and Spirit Trade Association claimed that the Budget would save the industry £175 million in additional duty payments. That, in turn, would bring down the permitted price at which alcohol would be sold. If the Minister is relying on a higher permitted price to reduce alcohol consumption, he perhaps ought to talk to the Chancellor, who has ensured that the permitted price will be reduced by the reduction and freezing of duty on alcohol.
Other evidence from the Cardiff University study was presented in the committee’s report. I do not know if the noble Lord has had an opportunity to read it, but it makes interesting reading around the reasons for a significant fall in violent crime. The study was unconvinced that alcohol pricing is the most significant factor. There was a 12% reduction in injuries from violent incidents in 2003 and, for the fifth consecutive year, the NHS has recorded a decrease in injuries from violence. This issue has to be looked at again, given the large implementation costs and the impact on the industry. What added value will this policy change brought forward by the order produce for the NHS and policing if you also take into account the economic and social factors, and the policing initiatives that have led to the fall in violent crime? What additional change will this order bring about?
Finally, the impact assessment suggests that doubling the level of alcohol excise duty will reduce alcohol-related mortality by an average of 35%, traffic-crash deaths by 11%, sexually transmitted diseases by 6%, violence by 2% and crime by 1.4%. Although the impact assessment does not specify the timeframe, it says that that would be the impact. That would be pretty impressive but it is not what this policy seeks to do. It is based only on maintaining the current level of excise duty, but the Chancellor reduced it in the Budget. Can we take it that we should now seek an increase following the reduction in excise duty?
We all want the harms from excess alcohol, to which the noble Lord referred in his comments on domestic violence, reduced. However, I have serious concerns.
Lord Tyler (LD)
The noble Baroness seems to be coming to the end of her speech. Can she be optimistic for once? We have so much pessimism from the Opposition. Will she make a firm commitment? Does the Labour Party understand that the principle of minimum alcohol pricing is important? Are we not all in favour? This order may not go far enough for her; I understand that, but could she for once be optimistic and say that this may be a step in the right direction?
Baroness Smith of Basildon
There is a coalition Government and it is pretty hard to be optimistic. It is not about minimum alcohol pricing; that would be a completely different debate. The Government have ruled it in, then ruled it out—it will happen, it will not happen. This is about a different issue altogether. I am questioning whether the measures taken and the wonderful responses and results they are supposed to give really measure up. The Secondary Legislation Scrutiny Committee does not think so, and neither do I.
Lord Taylor of Holbeach
My Lords, I tend to agree with my noble friend Lord Tyler. We have had situations today where the measures are agreed in principle but then the Government’s reasoning is challenged. This is another case in which the Opposition are not quite sure where to be on this issue.
Baroness Smith of Basildon
The Minister is right. It is the Opposition’s job to challenge the Government not just on policy but on implementation. In accusing the Opposition of being negative I remind him that this policy was looked at by a cross-party group of esteemed Members of your Lordships’ House on a Secondary Legislation Scrutiny Committee. If I am negative and pessimistic, so are they.
Lord Taylor of Holbeach
The noble Baroness is quite within her constitutional rights to be critical of the Government. If the Opposition welcome a change, which I am sure they do, it would be rather nice if they said so. After all, this policy will deal with a particular class of drinker that I think the noble Baroness and I agree is a problem. We are talking about hazardous and dangerous drinkers, the very people who are attracted by the offer of cheap alcohol, as existed in the past. This measure is designed particularly with them in mind. We know that savings to the National Health Service alone are £5.3 million and the costs related to crime are £3.6 million. We welcome the general trend of a drop in violence, and alcohol is only one factor in a number of measures being taken to deal with violence—just as price is only one factor to deal with alcohol abuse. It does not invalidate its use.
The noble Baroness asked about the Budget and whether we should have changed the figures in the light of the Budget. I emphasise that it is a targeted measure, as alcohol harms. It will stop the worst instances of deep discounting which result in alcohol being sold cheaply and harmfully. The whole point of the order is to ban the worst cases of cheap alcohol sales, but other actions that help local areas to identify and tackle alcohol-related issues are all part and parcel of the coalition’s commitment to dealing with alcohol abuse. I hope that the noble Baroness will recognise the purpose of bringing forward this order and welcome it. With that in mind I ask that the order be approved.