National Crime Agency (Directed Tasking) Order 2023
Lord Gascoigne
That the Grand Committee do consider the National Crime Agency (Directed Tasking) Order 2023.
Lord Gascoigne (Con)
My Lords, the impact of serious and organised crime on the United Kingdom is significant and growing. It poses a threat to our national security and prosperity. In partnership with law enforcement and industry, the Government are taking significant steps to tackle the increasingly complex threat posed by economic crime, fraud, bribery and corruption. These crimes severely harm the economy and cause significant suffering. We must do more to keep pace with the evolving threat. A whole-system response is critically important.
To this end, the Government announced, as part of the Serious and Organised Crime Strategy 2023, our intention to amend Section 5(5) of the Crime and Courts Act 2013. This amendment would allow the director-general of the National Crime Agency to direct the director of the Serious Fraud Office on matters relating to the investigation of suspected incidents of serious or complex fraud, bribery and corruption.
With the addition of the Serious Fraud Office to the list of agencies that can be subject to directed tasking, this measure will strengthen the ability of the National Crime Agency to co-ordinate a national effort against serious and organised crime. This will support strong ongoing collaboration between the National Crime Agency and the Serious Fraud Office, enabling the director-general of the National Crime Agency to direct the director of the Serious Fraud Office where the National Crime Agency requires the assistance, skills and expertise of the Serious Fraud Office, but where satisfactory arrangements cannot be made under the existing voluntary tasking arrangement.
It will also place the National Crime Agency’s relationship with the Serious Fraud Office on the same footing as that which the agency has with police forces in England and Wales and the British Transport Police.
The Government’s aim is to reduce serious and organised crime in the UK. We will do this by disrupting and dismantling organised crime groups operating in and against the UK. The social and economic cost of serious and organised crime to the UK is eyewatering, running to at least £47 billion a year. But, vast as that figure is, it does not begin to tell the whole story—a story of lives destroyed and of unimaginable suffering caused by heinous criminality such as sexual exploitation, drug abuse and human trafficking.
Beyond the enormous financial and human costs, serious and organised crime threatens the legitimacy of the state. It damages our national security and prosperity. That is why the Home Secretary recently published a new serious and organised crime strategy. Our mission is to reduce the impact of serious and organised crime on the country in all its forms. This includes reducing fraud.
The threat from fraud has increased in volume over recent years. The Government are implementing the fraud strategy, including launching a national fraud squad, blocking frauds at source and empowering the public to respond. This includes committing £100 million as part of a wider £400 million to tackle economic crime and improve the law enforcement response to fraud. We have also set ourselves the target to reduce fraud by 10% from December 2019 levels by the end of this Parliament.
The National Crime Agency is crucial to our response. The agency leads and co-ordinates the UK law enforcement response to serious and organised crime. We have strengthened the agency’s ability to combat organised criminals, increasing its budget by 21% to £860 million in 2023/24.
The Serious Fraud Office is a critical partner in the fraud system. In the last five years alone, it has recovered over £150 million in proceeds of crime, put 26 executives behind bars and forced big business to pay more than £1 billion in fines.
To summarise, this order gives effect to an element of the Government’s approach to tackling economic crime, an issue that causes significant direct and indirect harm to the country. Subject to proper safeguards, it brings the investigative capability of the Serious Fraud Office’s work within scope for direction by the director-general of the National Crime Agency, akin to what already exists in relation to police forces in England and Wales, as I said.
The addition of the directed tasking power is intended to enhance collaboration between the National Crime Agency and the Serious Fraud Office and assist in the sharing of tools and expertise to fight serious or complex fraud, bribery and corruption. I beg to move.
Lord Sharkey (LD)
My Lords, we are happy to support this SI. We welcome any increase in the effort to combat economic crime, in particular serious or complex fraud, bribery and corruption. The SI seems straightforward; it simply adds the SFO to the list of organisations that may be directly tasked by the NCA to investigate serious or complex economic crime that falls within the SFO’s remit.
However, one element of the SI would benefit from further explanation. Paragraph 4.2 of the Explanatory Memorandum says:
“The territorial application of this instrument … is England and Wales, Scotland and Northern Ireland”.
It defines the territorial application as being
“where the instrument produces a practical effect”.
The police services of Northern Ireland and Scotland are not listed in Section 5(5) of the Crime and Courts Act 2013 as organisations that the NCA may direct, unlike the police services of England and Wales. The NCA seems to have a kind of jurisdiction in Northern Ireland. The Explanatory Memorandum says that special provisions apply to Northern Ireland and that the memorandum of understanding between the Police Service of Northern Ireland and the NCA
“will be reviewed and amended as necessary, to reflect the extension of the directed tasking powers in this Order”.
Can the Minister tell us when this review is likely to take place and when any amendments are likely to be published?
What happens in Scotland is less clear. The SFO does not have jurisdiction there, and Police Scotland does not feature in Section 5(5) of the Crime and Courts Act 2013. Scotland does not feature in this SI, except in the assertion of territorial application that I mentioned a moment ago. What difference does this SI make in Scotland? What practical effect does it bring about? In the absence of explicit power to direct, how does the NCA operate in Scotland? What is the formal relationship between the NCA and the procurator fiscal service? I would be grateful if the Minister could address those questions when he replies.
Lord Coaker (Lab)
My Lords, we also welcome the general direction that the Government are taking in this SI. It goes without saying that we all agree that financial and economic crime and fraud are very serious issues and that we must do all we can to tackle them. Obviously, there is no disagreement between us at all.
I start where the noble Lord, Lord Sharkey, finished. There is a bit of confusion. It is necessary for the Minister to clarify some of the territorial applications between the various powers outlined in the order. I highlight paragraph 6.3 of the EM, which says:
“Section 5(5) of the 2013 Act makes provision for the Director General of the NCA to direct chief officers of an England and Wales police force or the Chief Constable of the British Transport Police”.
Clearly, that does not apply to direct tasking in Scotland and Northern Ireland, yet this order applies to the whole of the UK. How do the NCA’s powers, as directed under this SI, and the Serious Fraud Office’s powers relate to each other? It is about understanding that and having some clarity around the legislation with respect to that issue; this would also give clarity to the NCA, the Serious Fraud Office and the chief officers of the police of all four parts of the United Kingdom. The noble Lord, Lord Sharkey, is quite right to raise this; indeed, it is one of the issues that I was going to raise.
I want to ask the Minister about a couple of other things. Can he say why the change is needed? Presumably, the co-operation is good. If it is, why does it need to be legislated for? Have there been occasions when there has been a refusal by the SFO director to do something that the NCA’s director-general has asked them to do, leading the Government to think that we need some clarity there? What problems have emerged in the current arrangements to necessitate the Government deciding that they need to take this action?
Also, can the Minister explain what direct tasking actually is? Is it a compulsory demand that the SFO does this or that? Is there a level of seriousness that must be met, or is it a subjective judgment on the part of the NCA’s director-general—that is, this is what they would like the SFO to do and can require them to do? The other thing that emerges from this is the fact that, presumably, there is no way in which the SFO’s director can refuse? Otherwise, there would be no point to this legislation. Some clarity around direct tasking and the problems or difficulties that have come up, including what this SI seeks to overcome and in what circumstances it may be used, is needed.
Clearly, we all support this attempt to do more about economic and financial crime and fraud. The Government think that this order will help. I think that a little more explanation of how it will help, rather than an assertion that it will, would be helpful in our deliberations.
Lord Gascoigne (Con)
My Lords, I thank both noble Lords for their comments and their support for this order. I will begin with some brief remarks that should answer a number of the points raised and then try to tackle any specific outstanding ones.
As we have discussed, this order would amend the Crime and Courts Act 2013 to grant the National Crime Agency direct tasking power over the Serious Fraud Office in relation to combating fraud, bribery and corruption. The use of this power would be at the discretion of the director-general of the National Crime Agency. It will be used when it is deemed that such tasking would assist the agency in its role of investigating and reducing crime and, in particular, tackling serious and complex fraud, including bribery and corruption, as well as when satisfactory voluntary arrangements cannot be made, or cannot be made in time.
Through the extension of these tasking powers to the Serious Fraud Office, we align the arrangement between this office and the National Crime Agency, as I have said, with those for police forces in England and Wales and the British Transport Police. In doing so, we are strengthening the mechanisms for co-operation and a system-wide response. The agency has previously used its power to task to great effect: taking weapons off our streets; identifying and bringing to justice the highest-harm drug gangs we face; searching for and tackling prolific child sexual abusers; and combating fraudsters and seizing the proceeds of crime.
Further to the comments of the noble Lord, Lord Coaker, ideally this mechanism would not need to be used because of the already very good co-operation and relationship between the National Crime Agency and the Serious Fraud Office. However, it is important to have it in place to ensure a joined-up response to serious or complex fraud, including bribery and corruption, when and if needed. This step is part of the response set out in the Government’s serious and organised crime strategy. As we have discussed, this new strategy, which the Home Secretary published last year, makes clear the challenges we face from serious and organised crime. Its mission is to reduce serious and organised crime in the UK by disrupting and dismantling the organised crime groups operating in and against the UK. The strategy has five lines of action for reducing serious and organised crime: in-country, at the border, international, technology and capabilities, and a multiagency response. The package of measures announced as part of the strategy also included new powers in the Criminal Justice Bill that will clamp down on organised criminal gangs. As I have said, there is also a further £5 million for the police to disrupt organised immigration crime and £24 million allocated to the modern slavery fund to address the serious root causes of modern slavery and human trafficking.
To be clear, this power is intended to strengthen the ability of the NCA to lead the system in tackling serious and organised crime. The Serious Fraud Office will remain a strong and independent body. The wider reform agenda being delivered by Director Ephgrave is strengthening its capacity to deliver more effective investigations into the most complex cases. It has had several notable successes over the past few years, including deferred prosecution agreements, which have contributed almost £1.3 billion to the public purse since 2017. This attests to its capacity and capability to investigate the most serious, complex and harmful fraud cases and prosecute those responsible.
I will now try to address the points raised—with the emphasis on “try”. The devolved Administrations have been consulted on this and, before any application, we will have further discussions with them. They have been consulted in advance, but we will continue to do so. The SFO may need to use its powers to investigate crime within its jurisdictions in England, Wales and Northern Ireland. The noble Lord, Lord Sharkey, asked when there would be a review of the MoU. This is a consultative process, and we will check on requirements to update the MoU—but I reiterate that this is consultative and collaborative, and that is the crucial part.
I was also asked about examples. I think the noble Lord, Lord Coaker, asked whether there have been refusals. As it stands, there have not been any. A lot of it is just streamlining the process to ensure that it is there. I am informed that when different agencies talk it may not be possible for the NCA to raise a specific issue, so in effect it is a power that it has in its back pocket.
On how it might be used, decisions on voluntary and directed tasking are taken following discussions with the national strategic tasking and co-ordination group where it is assessed that improving the intelligence picture or operational delivery to tackle a threat is required as a priority. Obviously, there are discussions between a number of parties at official and senior level in advance of those discussions. Directing tasking will occur only where a voluntary arrangement cannot be made or made in time.
Lord Coaker (Lab)
The territorial complexities of that may need to be teased out a little more between now and discussion in the other place. To be fair, there is still a little confusion in my mind about the inter- relationship between all that. I leave that on the table for the Minister to consider. That would be helpful; I do not know whether the noble Lord, Lord Sharkey, agrees.
Before we move on, the main point I want to make on this direct tasking is that there clearly is an issue where the National Crime Agency wants to be able to direct the Serious Fraud Office to do certain things that the NCA is worried the SFO is not going to do. Is that a fair interpretation? In other words, the Home Office wants to strengthen the response to financial and economic crime, it is worried about whether the Serious Fraud Office will take the same priorities as the National Crime Agency, and this is a way of saying, “If you don’t, we’ll direct task you to do it”.
Lord Gascoigne (Con)
I thank the noble Lord for those two points. I will certainly write to both noble Lords on the devolved nations and any other outstanding issues. I completely appreciate the points made.
Forgive me if I have not been clear. Given that this has not been used in other circumstances, my understanding is that this has always been the intent for some time. It is not in response to anything in particular but an important part of a broader strategy to tackle crime. I am assured, having spoken to officials in those bodies, that there is a very good working relationship at senior level. My understanding is that this is just a backstop, just in case, should that relationship not work. If I am not correct on that I will write to both noble Lords, but I will also reiterate the point if it is correct.
To conclude, this measure represents a positive step forward, in our view. It is part of a larger effort and a wider package of measures to strengthen our collective ability to identify and investigate the most harmful and complex criminal cases, and prosecute those responsible.
Lord Sharkey (LD)
I am no wiser, really, about Scotland. I do not know, from listening to the Minister or reading the material, how this SI has any effect in Scotland, if at all, and I do not know how the NCA will operate. I have asked the questions anyway—I will not repeat them in detail here—but I would like an assurance from the Minister that he will write to us to answer those questions and that he will do so before this instrument reaches the other place.
Lord Gascoigne (Con)
I am very sorry not to have answered that sufficiently. I assure the noble Lord that I will write, and I will do so as fast as I possibly can. Forgive me for not answering it in the first place.