The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)
My Lords, I welcome this amendment as an opportunity to look at the financial proceeds of this wicked crime. We will deal with this in subsequent groups and amendments, and I have no doubt that we will return to it at various stages on the way through. Amendment 30 allows us to debate how the Modern Slavery Bill will ensure that committing modern slavery offences does not benefit the offenders or third parties who either benefit or look the other way when these crimes are committed. It would place a duty on the Secretary of State to make regulations to ensure that legal persons benefiting from modern slavery offences or whose lack of supervision makes them possible will have committed an offence.
I greatly welcome the opportunity presented by the amendment to debate the role of legal persons, such as companies, in modern slavery. We will return to that subject in more detail—in particular, as the noble Baroness referred to, when we come to the section on supply chains. It is absolutely right that companies who profit from modern slavery can be held responsible, so it is right that the offences in the Bill can be committed by all persons, including legal persons. That means they can be committed by companies provided that the usual legal principles of corporate criminal liability apply. As the noble Baroness mentioned, companies can also be held liable under the civil law —such as negligence and proceeds of crime legislation—where they benefit from modern slavery committed for their benefit. Therefore, companies that make money as a result of modern slavery committed for their benefit can be deprived of those profits and pursued for damages by the victims. Article 5.2 of the EU trafficking directive does not require legal persons to be criminally liable; liability for the commission of offences by third parties that occur as a result of lack of supervision can be criminal, civil or administrative.
We are confident that currently—and under the Modern Slavery Bill—we are fully compliant with the requirements of the trafficking directive around the liability of legal persons. We want to make sure that we recover the ill gotten gains of slave-masters and traffickers. That is why Clause 7 subjects those convicted of slavery and trafficking to the most robust available asset recovery regime. That element of recovery of assets was also a provision of the Serious Crime Bill, part of the Proceeds of Crime Act, and all those provisions will of course apply in the case of modern slavery. It is absolutely vital that modern slavery should be viewed as no different from any other organised criminal activity in that where we can obtain the proceeds of that—so that criminals do not see the profits—and use it to help the victims of these evil crimes, that is what the Government want to do. We are satisfied at this stage that the law provides for that, as currently drafted in the Bill, but we have listened very carefully to what the noble Baroness has said and we will continue to review this in the light of that. Perhaps, therefore, the noble Baroness will feel able to withdraw her amendment.
Baroness Young of Hornsey
I thank the Minister for his reply and I am glad that he also said that this is still open to review. I agree with him that it complies to some extent with what we have to do and with all the other bits of legislation to which he has referred. However, it is a question that goes a bit wider than that and links it to the issue of transparency in the supply chain, which many people feel does not have any teeth—there are no sanctions and no real deterrence embedded in it. So to have something else in the Bill that would make a real statement about that would be very useful. None the less, I am happy to withdraw the amendment.
Lord Rosser
My Lords, I will be brief in view of the time. It is vital that those who profit from modern slavery crime should know that their ill gotten gains can and will be confiscated, by extending Schedule 2 of the Proceeds of Crime Act 2002 to these serious offences. However, my noble friend Lord Warner has made the case for his amendment, with which I am associated, and for the consultation on a number of questions for which it provides, in the light of the weaknesses in the present arrangements. I will not go into those weaknesses; they were highlighted by my noble friend Lady Smith of Basildon during the debates on the Serious Crime Bill.
Victims of modern slavery should be compensated, but, as my noble friend Lord Warner said, money cannot go to victims if we are not recovering it from the perpetrators of the crimes. We need to strengthen and improve the present legal framework on the recovery of assets and the use of property derived from the proceeds of these crimes. This amendment, with which I am associated, provides for a consultation by the Secretary of State to do just this. I hope that the Government will feel able to give a favourable response.
Lord Bates
My Lords, I am grateful for the amendment moved by the noble Lord, Lord Alton, and grouped with the amendment spoken to by the noble Lord, Lord Warner. In many ways it might be easier if I sum up by taking the amendment of the noble Lord, Lord Warner, first, because it feeds into the principle of—if you like—the hopper, which then comes down to the general fund, which is the subject of the amendment of the noble Lord, Lord Alton.
I shall touch on a few things on the way through. The scale of the proceeds gained through this is widely acknowledged: the noble and learned Baroness, Lady Butler-Sloss, mentioned a figure she found on page 38 of the strategy document that we put out. We used a figure from the ILO, which estimates the global proceeds from this activity at about $150 billion. That equates to something like $34,800 per victim. So the amounts concerned—as we have heard all the way through—are very sizeable, and that is the underlying reason why organised criminals are moving increasingly towards the trafficking of human beings, rather than the drugs, guns and other weapons that we have seen in the past. It is because it is lucrative.
That is why we are absolutely determined that their financial resources—there is a financial motivation—ought to be the target of our activities. As my noble friend Lady Hamwee mentioned, this debate reflects a significant debate that we had on the Serious Crime Bill, where we talked about the process for doing this and inserted a legal test for obtaining such an order to be reasonable cause to believe that the alleged offender has benefited from his criminal conduct. The noble Lord, Lord Warner, was good enough to recognise that that was a step forward. There was a general feeling that if one applied for the restraint order or the freeze early in the proceedings, that could in some cases alert the perpetrators to the fact that there was an imminent investigation, and perhaps arrests, and that some of the jointly held assets might cause that to happen. That is not to say that this is our final position but it is something that we looked at very carefully before coming up with the current proposal.
The recovery regime, which has been strengthened in the Serious Crime Bill—your Lordships’ amendments to which are currently under consideration in another place—is aimed very much at increasing the resources recovered from organised crime. The noble Lord, Lord Alton, asked about the amount of funds that had been recovered. I think that in the order of £746 million worth of criminal assets have been seized across all four means of recovery, which is a record amount. We expect that to increase.
Noble Lords may also be interested to note that paragraph 4.32 of the strategy document states:
“Over £2 million has been recovered from slave drivers and traffickers in the past four years”.
Compared with the amount which has been earned, that is a pitiful and woefully low sum, and is why this legislation is before us to strengthen the law and to ensure that more assets are recovered. How is that to be done? I am not sure whether the noble Lord, Lord Warner, was at the Home Office when the Proceeds of Crime Act 2002 was going through.
Lord Bates
The noble Lord says, “Not guilty”, but he should be proud of the measure because it tightened the loopholes to which he referred. The noble and learned Baroness, Lady Butler-Sloss, also mentioned that in the Serious Crime Bill we have introduced the criminal lifestyle element which is a tougher test for extracting an appropriate amount of funds. We are also providing for the deployment of asset recovery advisers to priority jurisdictions as part of the asset recovery strategy. In general terms, that is what we are trying to do to tighten the regime so that we get more funds in under the asset recovery incentivisation scheme. The noble Lord, Lord Alton, asked me to set out where those funds are currently located. I will come back to that in a second but effectively they are divided between key areas—namely, the police, the prosecuting authorities and the courts. But ahead of those, of course, are the victims. It is the victims who are compensated first. That is what is contained in the Bill for the reparation orders. The reparation orders will ensure that the victims, who are the ones who have suffered, are compensated first.
The noble Lord’s argument, as I take it, through his amendment—he rightly picks up the tone of my letter to him on this subject—is not saying that we do not recognise that there could be a role for this fund in providing some support to other organisations that are aiding victims. That is not something that we are ruling out. In fact, there is a ministerially-chaired Criminal Finances Board review of the asset recovery incentivisation scheme going on at this precise time. It will report in December. I offer this undertaking to the noble Lord: officials have been listening very carefully to what he said and the arguments that he has made, and which other noble Lords have made. Those arguments will be fed into this review to be put forward.
I also believe that in this response, the use of funds, which, of course, we expect as a result of the tougher measures and the greater sanctions that we have available under the new laws that are coming into effect, will result in more prosecutions and greater funds coming into this scheme. We fully expect those funds to increase. I am sure that the Independent Anti-slavery Commissioner-designate, as we must still say at this stage, will have an eye on how those funds are used to best ensure that we get more prosecutions, and help more victims. As we have heard time and again—the noble Baroness, Lady Hamwee, I think, referred to this as well—much of the evidence that we have of the mistreatment and the case examples are as a result of the excellent work of those charities and organisations that are out there meeting the victims and getting them to feed into the national referral mechanism, leading, it is hoped, to prosecutions.
I am sure that that is not as far as either noble Lord would like us to go, but I hope a couple of steps there will offer the noble Lord, Lord Alton, whose work in this area we all acknowledge, the opportunity to consider withdrawing his amendment.
Baroness Butler-Sloss
Before the noble Lord sits down, I do not want to waste time, and I understand the point that the Minister is making about not alerting a potential trafficker so that he might skip the country, but what you can do, for instance, is get a without notice order in the civil court to freeze the assets and then arrest immediately afterwards. You do not have to alert the trafficker in order to freeze the assets. However, I am not sure that the powers for freezing assets would include people who are traffickers. That is the point that I want to put to the Minister.
Lord Alton of Liverpool
Before the Minister sits down, is he going to reply to my noble and learned friend first, or may I also put a point to him?
Lord Bates
I think that I am probably going to have to reflect on that point and come back to the noble and learned Baroness in writing, certainly before Report.
Lord Alton of Liverpool
I am grateful to the Minister. As a young Member of another place, I was once given the quite good advice always to beware Ministers when they are promising reviews, but in this case the Minister has said that the review is already under way. I am very grateful to him for saying that. He says that it is going to report in December. Will that be in time for us to be able to come back on Report acting on the outcome of the review? What is his estimate of the timetable?
Lord Bates
In the matter of the timetable and in many other matters I am grateful to have the Chief Whip, my noble friend Lord Taylor, on the Bench beside me. He has signalled his assent to the suggestion that this may be something where the report will be published, in all likelihood, before Report. Therefore, there will be an opportunity to revisit it then.
I should also say, as I have found the note, that the current distribution of the scheme provides that 50% of the proceeds go to the Home Office; 18.75% to investigation agencies; 18.75% to prosecution agencies; and 12.5% to HM Courts and Tribunal Service, which enforces the orders. That is the current distribution. I hope that is helpful.
Lord Alton of Liverpool
The noble Lord has been incredibly helpful to the Committee. It is very late and I do not intend to detain the Committee for long now. I simply want to thank my noble and learned friend, and thank the noble Lord, Lord Warner, for putting his argument so effectively. He is right that we have to generate the funds in the first place to provide the pots in order to do the things that the noble Baroness, Lady Hamwee, and my noble friend Lord Hylton all recognise need to be done. Indeed, the Minister himself has recognised that the principle behind this is not a bad one and is worth looking at further. He has engaged with the arguments in his usual courteous and characteristically helpful way. I am extremely grateful to him at this stage. We will see what the review holds and will keep open the possibility of coming back on Report if his noble friend is able to timetable events to ensure that the chronology works out that way. Having said that, I beg leave to withdraw the amendment standing in my name.