Criminal Finances Bill

Lord Kennedy of Southwark Excerpts

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

[Lord Leigh of Hurley]

My Lords, I spent quite a lot of time reading the amendment and trying to understand it. I am grateful to the noble Baroness, Lady Hamwee, for explaining it to us. As I understand it, the clause does not require relevant bodies to put these procedures in place; it just mandates the Chancellor to produce some presumably helpful guidelines, which the amendment would then require those relevant bodies to adopt. I think that is the gist of it.

If the amendment is prompted by concerns raised about the guidance the Chancellor will have to offer as a result of the clause, I hope the Minister might consider returning to that issue at subsequent readings as no explanation is given in the clause as to what the guidance will be. It would be very helpful for corporations affected to understand how they can rely on the defence of “reasonable prevention procedures”, so that they can put in place an appropriate strategy to ensure compliance with their new obligations if those are put on them through this amendment, or possibly—as is perhaps my great concern—at a later stage in the Bill or by statutory instrument.

It must be sensible to allow corporations to build on their current policies and procedures already in place under other legislative requirements to show that they have a defence to this offence. If not, the compliance costs would be significant. Even where current policies are acceptable there will still be costs involved in training staff, certification and reporting processes. There is, therefore, clearly a need to ensure that the measures can be implemented in a way that mitigates additional costs as far as possible.

Guidance can help corporations to identify how they can demonstrate that they have followed satisfactory due diligence procedures and have a “reasonable care” defence in the event that one of their associates is discovered to have criminally facilitated tax evasion. However, it must be recognised that every business is different. The importance of the guidance will be enhanced if the legislation explicitly states that the courts should “have regard to” it. This would provide a valuable extra—although not absolute—safeguard for corporations that have relied on the guidance when implementing their procedures, although, of course, it cannot be a safe harbour.

In short, the amendment will be onerous to apply to every relevant body. I therefore speak against it.

[Lord Kennedy of Southwark (Lab)]

My Lords, I support Amendment 162, proposed by the noble Baroness, Lady Hamwee. It would strengthen Clause 44, which is in a part of the Bill concerned with corporate offences of failure to prevent tax evasion. Failure to pay the right levels of tax due as an individual or as a corporate body hurts everyone. Having robust procedures in place to combat these offences is important. Some corporate entities will employ lawyers and accountants to minimise their tax liability, but where that steps over the line into tax evasion we have to be prepared to take swift action.

The clause so far will place a requirement on the Chancellor of the Exchequer to publish and prepare guidance, using the word “must”, which is not something we often see in government Bills—I have always thought parliamentary draftspersons preferred “shall”—but since it uses the word “must”, noble Lords can draw from that that great importance is implied about this guidance on the procedures. The idea is to help relevant bodies. The Bill then moves on and says,

“can put in place to”,

which negates the emphasis in the earlier part of the clause.

The amendment from the noble Baroness would place the right emphasis, saying that relevant bodies “shall have regard to” this important advice prepared by the Treasury and published by the Chancellor. The Government clearly thought it was important that companies should be aware of this advice. I hope they will tell us why they think their wording is sufficient and that that of the noble Baroness is not necessary in this case.

[Baroness Vere of Norbiton (Con)]

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

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

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

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

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

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

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

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

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Moved by

[Lord Kennedy of Southwark]

164: After Clause 47, insert the following new Clause—
“Exclusion of companies from public procurement
The Secretary of State must publish an annual report on the number of companies which have been excluded from tendering for public contracts under the Public Contracts Regulations 2015 or had an existing public contract terminated as a result of being charged with an offence under section 42 or 43 of this Act.”

[Lord Kennedy of Southwark]

My Lords, Amendment 164, proposed by myself and my noble friend Lord Rosser, seeks to add a new clause to Part 3 of the Bill requiring the Secretary of State to publish a report on the number of companies that have been excluded from tendering for public sector contracts, or had an existing contract terminated as a result of being charged with the offence of failing to prevent the facilitation of UK or foreign tax evasion offences. The more light that is shone into the whole area of corporate failure in respect of tax evasion, the better, as this in itself would force companies that are sloppy or that do not follow procedures to take more notice of the provisions, take greater care and be clear that the Government and the tax authorities do not take such matters lightly.

Amendment 165, again in my name and that of my noble friend Lord Rosser, would be, in effect, a supervision order imposed by a court on a company convicted of a serious offence in these matters. The court could appoint a third party, such as an expert or body, to supervise the probation period of companies that co-operate with law enforcement bodies to the extent that they are offered a deferred prosecution agreement. Companies convicted under the Corporate Manslaughter and Corporate Homicide Act 2007 may have an order imposed on them to remedy the management system that allowed the manslaughter to occur. However, there are currently no powers available to a court to impose such an order on companies convicted of non-manslaughter offences which have not co-operated sufficiently with law enforcement agencies for a DPA. The perverse result is that companies that co-operate with law enforcement bodies have greater external scrutiny of their corporate governance programmes than companies that do not co-operate with enforcement agencies. This lack of scrutiny represents a missed opportunity to improve corporate governance among convicted companies, but also a powerful disincentive for companies to co-operate with enforcement authorities.

Corporate probation orders are used in other jurisdictions. The US Sentencing Commission, for instance, has given the courts the power to introduce any probationary condition relating to the nature and circumstances of the entire case when sentencing companies convicted of criminal offences. Introduction of such a power in the UK would add another significant tool to the armoury of courts and prosecutors in dealing with financial crime and ensure that the discrepancy of treatment for companies that co-operate with law enforcement authorities and those that do not is evened out, creating a more level playing field for business.

Amendment 170, in the names of the noble Baronesses, Lady Bowles of Berkhamsted and Lady Kramer, and the right reverend Prelate the Bishop of Oxford, addresses the very real issue that senior executives rarely face any consequences when companies they run engage in criminal activity—a point made numerous times from all sides in Committee. The lack of senior executives being held to account properly is a serious matter of public concern. I look forward to the contribution of the noble Baroness, Lady Bowles, who will shortly be speaking to her amendment, and I beg to move.

[Baroness Bowles of Berkhamsted]

My Lords, I shall indeed speak to Amendment 170 and I thank the noble Lord for his comments on it. This concerns the procedure for disqualification of directors where there has been a criminal conviction of a company, or a deferred prosecution agreement. The amendment seeks to make it possible, following a criminal conviction of a company, for the court to consider whether any directors should be disqualified. This is not seeking to make a criminal conviction against directors—disqualification is a civil procedure—but to put company criminality procedures on a par with that which exists when there is a breach of competition law.

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[Baroness Williams of Trafford]

The noble Baroness foxed me when she asked that question the first time and she is still foxing me. I shall write to her before Report because I really do not know the answer.

[Lord Kennedy of Southwark]

My Lords, I thank all noble Lords who have spoken in this short debate, and I am pleased that the Minister understands the spirit and intention behind our amendment. The comments of the noble and learned Baroness, Lady Butler-Sloss, and the noble and learned Lord, Lord Judge, are points well made. They have vast legal experience and if I bring the issue back at all on Report, I shall take on board their comments and wise legal advice and draft my amendment accordingly. I certainly thank all noble Lords for their contribution today, and beg leave to withdraw the amendment.

Amendment 164 withdrawn.

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[Baroness Hamwee]

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

[Lord Kennedy of Southwark]

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

[Baroness Vere of Norbiton]

I thank the noble Baroness for her comments and, of course, I will write with further clarification.

Criminal Finances Bill

Lord Kennedy of Southwark Excerpts

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

As a PEP, I was keen to support Amendment 10, in the name of the noble Lord, Lord Sharkey. I also had a chap from the Royal Bank of Scotland come round to see me and ask me what my first salary was in 1982—bizarrely, I remember that it was £4,900—and he spent a lot of time going through records that I had long forgotten about. I am not convinced that there is the protection that the noble Lord, Lord Faulks, specified earlier. One particular concern is that the provision talks about income, not capital. In any event, I am not sure why it should not be absolutely clear-cut that the Government’s intention is not to attack PEPs in this House or in the other place.

[Lord Kennedy of Southwark (Lab)]

My Lords, the Bill was welcomed by all sides of the House at Second Reading. Unexplained wealth orders are a device to give law enforcement agencies powers to require a person suspected of involvement in or association with serious criminality to explain the origin or source of assets which appear disproportionate to their income.

Amendment 1, in the name of the noble Lord, Lord Hodgson of Astley Abbotts, seeks to insert the words, “beyond reasonable doubt” after the word “satisfied”, when requiring a person to comply with an order. This raises an important point, but I am not convinced that introducing this higher test is needed here. It would make it more difficult for law enforcement agencies to get permission to seek the source of the wealth which has led them to suspect that the person’s lawfully obtained income would be insufficient for the purposes of obtaining their assets. I agree with the remarks made about this amendment by the noble Lord, Lord Faulks, who said that the higher evidential test would not be welcome in this regard. I also agree with the comments made by the noble and learned Lords, Lord Brown of Eaton-under-Heywood and Lord Phillips. I also agree with the comments by the noble Lord, Lord Blair of Boughton, on the investigatory role—the test and procedure would be difficult there as well.

Amendments 2 and 7, in the name of the noble Lord, Lord Faulks, give a better definition in relation to a person’s connection to a property, and the Government should reflect carefully on this during the passage of the Bill and possibly bring an amendment forward on Report.

Amendment 5, also in the name of the noble Lord, Lord Faulks, would provide an additional power to require a person to answer questions under oath. Again, that seems a reasonable additional power to take, which could be used at the discretion of the court. I very much take the point that the noble Lord made about the William Hill defence in terms of how one acquires assets and wealth. We need to look at that important point.

On Amendments 8 and 9, I thought that the £100,000 value in respect of a property was about right, that the £50,000 figure proposed by the noble Baroness, Lady Williams of Trafford, was too low, and that the figure proposed by the noble Baroness, Lady Hamwee, was far too high. However, having sought advice from law enforcement agencies, I understand the motivation behind the amendment of the noble Baroness, Lady Williams of Trafford, and I am content that the figure she proposes may well be right.

There is a whole series of government amendments in this group which I am content with, as they seek to prevent a person subject to one of these orders seeking to circumvent it through complicated financial means and transactions.

This has been a very useful debate, with some well-informed contributions that posed a number of questions for the noble Baroness. I am sure that she will reflect on those as we may want to come back to some of those points on Report.

The noble Lord, Lord Leigh of Hurley, made important points about property and the problems associated with it. I think that we shall debate an amendment in the name of the noble Lord, Lord Faulks, in the next group which concerns property.

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

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

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

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

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

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

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

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

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[Lord Hodgson of Astley Abbotts]

My Lords, I support this amendment and the sentiments that have been expressed. Like other noble Lords, I am not sure whether it will do anything other than send a signal that this is something we are very serious about. An important aspect of not allowing it to become too London-centric—the darkened squares that my noble friend referred to in his opening remarks—is the ripple effect. What happens in central London ripples out through the country. I think the Lloyds Bank review says that Oxford is now the most unaffordable town in the country in terms of local wages to local house prices. If we can stop the ripple, or at least inhibit the ripple, that will have an effect much wider than merely the darkened squares to which my noble friend referred. As my noble friend Lord Deben said, if we take this further out, there are implications for social cohesion, as some of our less well-off and less well-resourced fellow citizens are finding themselves squeezed out by gentrification in an increasingly wide range of towns and cities across the country.

[Lord Kennedy of Southwark]

My Lords, Amendment 11 is tabled in the names of the noble Lord, Lord Faulks, and my noble friend Lord Anderson of Swansea. My noble friend was taken ill yesterday, and I am sure we all wish him a speedy recovery. This amendment would add a new paragraph to subsection (4) which clearly specifies that where,

“the respondent has a financial interest in land or property ... which is registered in the name of an overseas company”,

which could be being used as part of a complicated financial arrangement to hide from the authorities their unexplained wealth, the court can make an unexplained wealth order. I support the aims of this amendment. It highlights another way that a person can seek to avoid having to explain their wealth. This amendment seeks to address that in a very clear way. My noble friend Lord Rooker raised some important points, and I am sure the Minister will respond to them in her remarks.

Like the noble Lord, Lord Deben, I have had a bank account for 38 years. I have only ever had one—I opened it when I was 16. I went into the bank at Camberwell Green and have kept it in pretty reasonable order for those 38 years. All the things you have to do—saying who you are and having to give your mother’s maiden name—are very irritating, but there are clearly issues with funds travelling backwards and forwards that must have gone through a bank somewhere. If they are ever to be brought to account for things, that is something we must address in these debates.

A lot has been said about the London housing market. Any suggestion that it could be a safe haven for corrupt money should be of concern to us all. What a terrible thing that we even have to contemplate that. It contributes to the housing crisis in London. I referred to the Transparency International report in my contribution at Second Reading. It did some work in 14 developments and found that 1,616 companies and individuals bought properties and that only 450 were registered to people who were living in the UK. Forty per cent of purchases in London, totalling £1.6 billion, were bought by investors from countries with a high risk of corruption. We do not want any suggestion of our capital city being seen as a safe haven for corrupt money, as that must concern us all. The noble Lord, Lord Faulks, made the point that whole parts of central London are in darkness. Ten per cent of Westminster is owned by faceless companies. Properties with an abnormally low use of electricity suggests that they are not lived in on a regular basis. Transparency International also found that 140 properties with a value of £4.2 billion have been bought by investors who represent a high money-laundering risk. My friend the Mayor of London, Sadiq Khan, has launched an inquiry into the impact of foreign investment flooding into London’s housing market. The noble Lord, Lord Faulks, referred to this.

The other problem is the trickle-down effect. It causes property prices to be abnormally raised and is putting whole sections of the capital out of the reach of ordinary law-abiding citizens. That must worry us all, and very regrettable it is. About a year ago, I was standing at this Dispatch Box discussing with the Minister the Housing and Planning Bill—the cost of rents, how we get people living in safe, warm, dry properties, how people can afford to buy property and whether starter homes are the right answer. The way money has come in has made it more difficult for families, which must be of regret to us all. That is something we need to address in this Bill. The noble Lord, Lord Faulks, made the point that there may well be very little legislative time in the next Session, so we should take the opportunity that this Bill gives us.

The noble Lord, Lord Deben, talked about housing. I am happy to accept that all parties have failed in the past. There is no question about that—we all need to do very much more about it. I live in Lewisham. The noble Lord was the Member of Parliament for Lewisham at one time; I am a councillor in his old constituency. It is a great area to live in, not the most expensive part of London, but I could not now afford to buy the house that I live in. I have lived there for 13 years and the rent the people in the house next to me pay is more than my mortgage. It is ridiculous. If corrupt money has led to that, it is a bad situation.

This amendment raises important issues, and the Minister should reflect on them very carefully. If we can find some way forward before the Bill becomes law, we should do that.

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[Lord Faulks]

My Lords, I am sure the whole House shares the concern that the noble Baroness has expressed about whistleblowing and its importance generally. However, I respectfully submit that this amendment is a pretty substantial response to that. It seeks to set up a whole department—the office of the whistleblower. I accept that this is something of a probing amendment and therefore bears the standard for what the noble Baroness may hope to come, but it is little short of a job-creation scheme. The proposed functions of the office of the whistleblower are extensive and it would have powers. Of course, if an office is created, those who are given that office will appoint others to work for them and powers will be exercised. If they are not exercised it would be suggested that they were not doing their job. Before we know where we are, we will have a substantial bureaucracy that runs the risk of having the same problems that exist in other areas of bureaucratic supervision of financial institutions.

The question of incentives is interesting. I accept that that they have had some success in the United States and, as we heard from the noble and learned Lord, in Mauritius too. But as to the question of “retaliatory action against whistleblowers”, a whistleblower has remedies in civil law in any event. When she comes to respond to the Minister, will the noble Baroness give us some idea what is meant by the provision with regard to “retaliatory action against whistleblowers”? The criminal law exists and civil remedies exist for employees and I wonder whether that is not inviting something rather too much. Of course, she rightly acknowledges that whistleblowers are not entirely based in the financial institutions; they exist in the NHS and have recently been considered by Sir Robert Francis and in all other government departments.

The real question is whether the establishment of this no doubt expensive bureaucracy will deter and whether it will result in the detection of what would otherwise not have been detected. While I applaud the general thrust of the amendment, I wonder whether it is something of an overreaction.

[Lord Kennedy of Southwark]

My Lords, the noble Baroness, Lady Kramer, raised the issue of whistleblowing in her contribution at Second Reading and now proposes this new clause today with the noble Baroness, Lady Hamwee. As we have heard, it would establish an office of the whistleblower. The purpose would be to offer much-needed protection to whistleblowers who expose criminality, corruption, fraud and other illegal activity. The price that whistleblowers often pay for alerting the authorities to illegal and criminal activity is to lose their jobs and have their careers ruined and destroyed.

The noble Baroness is right to highlight that we need to do more to offer protection and compensation to people who come forward and alert the authorities to the illegal activity. The noble and learned Lord, Lord Phillips, supported action and I agree. However, I agree with the noble Lord, Lord Faulks, that setting up an office may not be the right way to go about that. What is definitely needed is further protection in statute and regulation. It may not need an office to be established. I will be interested to hear the response from the noble Baroness, Lady Williams of Trafford, to this amendment. I entirely accept that it is a probing amendment and I think that we should take the opportunity that this Bill affords us to do something to address the issue of whistleblowers and the precarious position that they can find themselves in, which the noble Baroness, Lady Kramer, has highlighted to the House today. I accept that whistleblowing goes across a variety of sectors, but we are dealing with the financial services sector and this would be a good place to start.

[Baroness Williams of Trafford]

My Lords, I am grateful to the noble Baroness for allowing us to debate this important issue. Whistleblowers play a valuable role in society by bringing wrongdoing to light that could otherwise go unchallenged. Individuals should be able to report malpractice in the workplace without fear of reprisal; and employers should be prepared to work with staff to resolve concerns, particularly by means of effective internal procedures.

The Employment Rights Act 1996, as amended by the Public Interest Disclosure Act 1998 and subsequently, provides employment protection for workers in all sectors who have blown the whistle. It enables them to seek redress if they are dismissed or suffer detriment at the hands of the employer because they have made a “protected disclosure” about wrongdoing that they have witnessed at work. To qualify for the protections, a worker must generally make their disclosure either to their employer or the relevant “prescribed person”. “Prescribed persons”’ are typically regulatory bodies for the sector in which the whistleblower works or the type of wrongdoing involved.

I assure noble Lords that, over recent years, the Government have taken steps to support a cultural change in relation to whistleblowing in all sectors, including financial services. A number of statutory and non-statutory improvements have been made. This includes guidance for whistleblowers on how in practice to make disclosures while preserving their employment protections; and guidance for employers including a non-statutory code of practice which we will review this year. We have fulfilled the commitment to keep the prescribed persons list up to date with annual reviews, and we now have guidance in place for prescribed persons. The next update will require prescribed persons to report annually on the number of whistleblowing disclosures they have received and broadly the action that resulted.

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I hope that noble Lords and the noble Baroness are reassured that the Government are taking action to address barriers to people coming forward to whistleblow, and she will feel able to withdraw her amendment.

[Lord Kennedy of Southwark]

I agree with the Minister that the office is not the right way forward, but is she saying that everything is fine?

[Baroness Williams of Trafford]

I am saying that the Government looked at this in 2014, certainly in terms of the financial incentives, and there are various mechanisms in the different sectors for whistleblowers to come forward. The ultimate sanction for employers is unlimited compensation, depending on the type of wrongs that that employer engages in.

[Lord Kennedy of Southwark]

I am sorry to come back on this, but I take it that the Government do not think that anything further needs to be done on this at the moment.

[Baroness Williams of Trafford]

The Government are never complacent in any area of law they introduce; I would never say that everything is perfect.

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[Baroness Vere of Norbiton (Con)]

My Lords, we now come to two proposed changes that the Government are seeking to make to the seizure and forfeiture powers set out in Chapter 3 of Part 1 of the Bill. In the House of Commons we introduced amendments to allow law enforcement agencies to seize casino chips and gaming vouchers where they had the suspicion that they were either the proceeds of crime or would be used to commit further offences. The Government were also asked to consider whether similar provisions could be introduced to allow the seizure of betting slips. Government Amendments 80, 82, 83 and 138 to 140 make such provision. If law enforcement agencies suspect that the funds used to place a bet are the proceeds of crime, they will be able to seize the betting slip. These provisions will be subject to the same safeguards as for cash seizure and we will be working with bookmakers and their trade associations to ensure that they are used effectively.

At present, Clause 14 allows for the seizure and forfeiture of moveable stores of value but makes no allowance for deductions for legal expenses on the part of the person the item was seized from. Government Amendments 88, 90 to 101 and 142 to 155 will therefore allow for a deduction to meet legal expenses from recovered sums following the forfeiture of the item. Where appropriate, the court will determine whether legal expenses should be paid and will provide for that as part of the forfeiture order. These amendments make similar provisions in Schedule 3 in relation to items seized where there is a suspicion of terrorist financing. I beg to move.

[Lord Kennedy of Southwark]

I am happy to support these amendments, which are both sensible and proportionate. Ensuring that betting slips can be seized is a sensible move, as indeed is the whole series of amendments.

[Lord Stevens of Kirkwhelpington (CB)]

My Lords, I also support this group of amendments. I declare an interest as my son is the head of the financial recovery unit of the Metropolitan Police. This is one area of the Bill that had an immense weakness. To ensure that the provisions work properly as far as officers working on the front line are concerned, these amendments must be inserted into the legislation.

Criminal Finances Bill

Lord Kennedy of Southwark Excerpts

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

[Lord Stevens of Kirkwhelpington (CB)]

My Lords, I support Amendments 81, 82 and 83. I pay tribute to the Minister and her team, who have listened to the officers who are actually on the front line as well as to others. In general terms—and I know these are probing amendments—if there are direct links between money assets and anything that may be used as currency, can consideration be given to those links being widened? Pursuing that would be of great help to the agencies which are enforcing these laws. I stress my tribute to the Minister and her team for listening to those who have to enforce these laws.

[Lord Kennedy of Southwark (Lab)]

My Lords, the amendment proposed by the noble Baroness, Lady Hamwee, has merit and widens the Bill so that assets which can be used as currency can be included for the purposes of the forfeiture of cash. In some parts of the world, mobile phone credits are traded as cash and it would not be impossible to see situations where large quantities of these credits could be traded, hold the proceeds of crime and be used as currency. There will be other items that will be used in similar circumstances in the future.

However, I am not persuaded by Amendment 84 in the name of the noble Baroness, Lady Hamwee. I understand the arguments about what is included in this broad definition but believe that what is shown in the Bill as “listed assets” is better. However, I would want the regulations which may amend subsection (1) to use the affirmative procedure because it is important that we have a discussion about it at that time.

Amendments 85, 89, and 106 add the words “reasonable grounds for suspecting”. Those are proportionate clarifications which the Minister should adopt. I am not convinced that Amendment 87 is necessary. I see the point which the noble Baroness, Lady Hamwee, is seeking to address but hope that the Government will confirm that the words “safely stored” will cover this point and that valuable goods will be stored appropriately.

I am not persuaded of the merits of Amendment 102, although I do support Amendments 103 and 104 in the name of the noble Baroness. If the court is satisfied that the person has suffered a loss then they should be compensated for that loss and it is important that regulations made under this section are not used to restrict the payment of compensation. Amendment 105 is also a sensible addition, unless the Minister says very clearly today that a person’s reasonable living expenses include them providing for their dependants. Amendment 106, bringing in the term “reasonable grounds”, in respect of forfeiture is also a welcome provision.

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

I thank noble Lords for their contributions, and particularly the noble Lord, Lord Stevens, for his kind words. The noble Baroness, Lady Hamwee, has—as always—scrutinised the provisions in some detail and I am grateful to her for the points she raised. Her Amendments 81 and 84 seek to broaden the scope of the seizure and forfeiture powers at Clauses 13 and 14 so that they can essentially be used to seize any items deemed to be the proceeds of crime. However, these will create a number of issues. The test that the property “may be used as currency” is legally ambiguous and untested, and it could complicate the use of these powers. The effect of Amendment 81 would also be to include a wide range of property in the cash forfeiture procedure which is not easily severable, as would be required for these provisions.

The noble Baroness referred to bitcoin at the beginning of her speech. There are difficulties in defining what we would seize. While we would not include this in the Bill, we are continuing to work with law enforcement agencies to determine how we should approach this issue more generally, and specifically to determine whether there is a gap in law enforcement capability that requires legislative change.

In respect of the noble Baroness’s Amendment 84, I am sure she would agree that we must take a proportionate approach to ensure that there is clarity regarding what can and cannot be seized. The items listed in the Bill are there based on clear justification that they may be used to move or hide the proceeds of crime, and we drew on the advice of law enforcement practitioners in developing this list. Her amendments would move away from the principle of clarity, eroding the careful circumscription that the Bill provides for these provisions. We can add to the list when the need arises, subject to parliamentary approval. As we have demonstrated through our amendments during the Bill’s passage, we will do so where a clear case arises. This gives us and the police the flexibility and balance we need while ensuring that this is not a sweeping seizure power. I am very grateful to the noble Baroness for allowing me to emphasise how seriously the Government take these issues, particularly the need for stringent safeguards on the use of such powers. I trust that she will feel inclined not to press these amendments.

I turn to the other amendments tabled by the noble Baroness. Amendment 85 seeks to insert the principle of “reasonable grounds for suspicion” into the definition of a listed asset. However, this appears to insert this test in the wrong place in the Bill. We consider that the inclusion of the “reasonable grounds to suspect” test in the sections relating to the operation of the seizure powers is more appropriate, and this approach mirrors the existing provisions for the recovery of cash.

Amendment 86 seeks to require the Secretary of State to take the actions relating to the issuing of the code of practice for searches for listed items before it is issued. The provision in the Bill is consistent with existing wording in the Proceeds of Crime Act relating to codes of conduct. I assure the noble Baroness that all the relevant actions will be taken before a code is issued.

Amendment 87 seeks to require that items seized under these provisions should be stored in appropriate conditions. The agency seizing such property is liable for its storage, and would be liable for damage to such property if due care were not taken. Therefore, we believe that the agency responsible would take such action in any case.

Amendment 102 seeks to remove the provision allowing the release of the listed item if the victim was deprived of it through unlawful conduct. The provision is one of three principles that the court must consider when the victim applies to the court for the item to be returned. The removal of this provision would remove the requirement on the victim to show that they had lost the property through unlawful means. This is an important test that the court must satisfy itself on, and which already applies to the well-established system for the forfeiture of cash, and we believe that it should be retained.

Amendment 104 seeks to prevent the Secretary of State restricting the payment of compensation through regulation. The intention behind the power in the Bill is to ensure that the appropriate agency can be held responsible for any compensation that may be paid. It allows the Secretary of State to add to the list of those who are liable for paying compensation where appropriate. The provision already exists for cash forfeiture, and I see no reason not to replicate it here. It should be noted that the circumstances in which compensation would be payable are set out elsewhere in new Section 303W, and that the Secretary of State’s power does not extend to amending these provisions.

The noble Baroness asked why exceptional circumstances are required. This is modelled on the cash provisions. The seizure power applies to a limited number of assets. It is not anticipated that, in normal circumstances, seizure would result in loss being sustained. The items are not likely to change in value during the timeframe for seizure.

I turn to provisions relating to Clause 15. Amendment 105 seeks to extend the exclusions to an account-freezing order to include the living expenses of a person’s dependants. The provision for exclusions relates to the actions on the account and the owner’s ability to use the contents of the account to meet reasonable living expenses. I fully appreciate that there may be dependants of the account owner who would be adversely affected if no provision were made for the account to be used to meet their living expenses. That is why we have included this provision. The living expenses will be determined by a court and, if there are dependants, the court will take them into consideration.

Amendment 106 would include a provision that, where forfeiture is sought on the grounds that it will be used for unlawful conduct, the officer must have reasonable grounds for suspicion that this is the case. The existing provisions already require the officer to be satisfied that the property may be recoverable or may be used for unlawful conduct, and we do not want to lower that threshold.

I thank noble Lords for their patience. I hope that I have addressed the issues that the noble Baroness raised and that she will be happy to withdraw her amendment.

[Lord Kennedy of Southwark]

When I spoke about listed assets, on page 44 of the Bill, I said I preferred what was in the Bill to the amendment of the noble Baroness, Lady Hamwee. I mentioned regulations being made by the affirmative procedure. Of course, it does not say that here, so I am assuming that they are not—that they will be made by the negative procedure or in some other way. Perhaps the Minister could write to me on this.

[Baroness Williams of Trafford]

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

--- Later in debate ---

[Lord Kennedy of Southwark]

I thank the Minister very much, but it does not say that in the Bill—it just refers to the regulations—and I think it needs to say that.

Amendment 81 withdrawn.

--- Later in debate ---

[Baroness Hamwee]

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

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

My amendment would add to that,

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

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

[Lord Kennedy of Southwark]

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

[Baroness Vere of Norbiton (Con)]

My Lords, I am grateful to the noble Baroness, Lady Hamwee, for her scrutiny of these provisions. Her Amendment 107 seeks to require the Secretary of State to define the seniority of SFO staff so that not all have access to POCA powers. I appreciate her concern at the extension of the powers conferred by POCA but I hope I can reassure her by explaining our reasons for extending powers to SFO officers.

As the noble Baroness is undoubtedly aware, the SFO is responsible for investigating some of the most serious cases of fraud, bribery and corruption. To effectively combat complex crime, it is vital that SFO officers have access to the most effective legislative tools. Currently, only SFO officers who have accredited financial investigator status have access to POCA powers. This is at variance with other agencies such as the police, the NCA, HMRC and Immigration Enforcement, whose officers have direct access to these powers whether or not they are financial investigators.

It is logical and appropriate that these powers are made available to all SFO officers, both to ensure consistency of approach across agencies and to ensure that non-accredited SFO officers have access to POCA powers when investigating complex crimes, which may include investigating the proceeds of crime.

I hope I can further reassure the noble Baroness that all agencies adopt a process whereby applications made under POCA are considered and approved by an appropriate management chain before they are submitted to court. This ensures that all officers, of whatever grade or rank—even the janitor—are required to consider the necessity and proportionality of any application they make.

I am grateful to the noble Baroness for allowing me to explain the rationale for this position—particularly the need to make powers available to a wide range of officers involved in the investigation of complex, acquisitive crime. I trust that she will feel inclined not to press this amendment and, accordingly, I invite her to withdraw it.

Greater Manchester Combined Authority (Fire and Rescue Functions) Order 2017

Lord Kennedy of Southwark Excerpts

Tuesday 21st March 2017 Grand Committee

[Lord Beecham (Lab)]

My Lords, I am sure the mayoral system will be interesting—possibly in the Chinese sense—but if it is likely to work anywhere, it will undoubtedly be Manchester. I want to raise a couple of issues with the Minister.

First, of course the Government would like to see combined police and fire authorities. There are places where that might be suitable. But I take it that where there is a different view locally—as there would be in the north-east, for example, where we have different boundaries for the different services—there will not be any compulsion on authorities to go in that direction.

I am sorry to say that, having been spending my time on the next statutory instrument, I have forgotten what my second point was. Perhaps I will approach the Minister afterwards.

[Lord Kennedy of Southwark (Lab)]

My Lords, first, I make my usual declaration of interests as in the register; specifically that I am a local councillor and a vice-president of the Local Government Association. The two orders before us I have no issue with, and my comments will be correspondingly brief. The Minister, the noble Lord, Lord Stunell, and my noble friend Lord Smith of Leigh, who is a member of the authority, are the experts here.

As we have heard, the orders transfer fire and rescue functions and police and crime commissioner functions to the mayor for Greater Manchester. I am pleased that we are having an election for this position on the first Thursday in May. These functions will then be transferred to this new elected person to be accountable for the delivery of these very important services to people living in the Greater Manchester area. At the same time, the office of police and crime commissioner and the Greater Manchester Fire and Rescue Authority will both be abolished.

I record my thanks to Tony Lloyd, who has been the PCC for Greater Manchester since 2012. Before that he was a Member of the other place for 29 years, for both Stretford and Manchester Central. In that time, he also served as the chair of the Parliamentary Labour Party, which is an interesting job to hold down, and he managed to hold it for six years until he left this place to become the PCC.

[Lord Beecham]

Escaped.

[Lord Kennedy of Southwark]

Escaped, yes. Anyway, it is important to put that on record. For both policing and fire and rescue services, specific functions can be exercised only by the mayor, although they will be able to appoint a deputy mayor for policing and crime.

The issue I have with these devolution deals in general—not this one specifically—is that I sometimes feel they are a little unclear and you get a sort of patchwork. I accept the point that areas can work with what they think they can cope with. Certainly, in this area, the Greater Manchester mayor will have considerable powers, in many respects similar to those of the Mayor of London. They will also have powers in respect of the health service.

I am sure the three noble Lords present today fully understand all the functions the mayor will take over, but I am not convinced that every Member of your Lordships’ House is fully aware, or members of the general public living in Greater Manchester and other places. We need to have a much wider discussion about where we are going with local government and all these functions. It is time for the Government to consider producing a Green Paper to enable proper debate about these functions in England. I have approved a number of these orders in recent weeks in this Room and the Chamber. They are all different and sometimes you cannot work out why. We need a discussion about where we are going with local government. All these positions are important, and it is important to have democratic control. Let us not forget that the individuals involved will be spending huge sums of council tax payers’ and taxpayers’ money. We must be clear who is there, why they are doing it and how we engage with them. But that is a discussion for another time.

As I said, I support the orders and I certainly wish the new Manchester mayor—whoever it is, although I hope, of course, that the Labour candidate gets elected—the very best in their new role.

[Lord Beecham]

My Lords, I have overcome my senior moment. I wanted to ask whether any consideration had been given to ambulance trusts, which are fairly unaccountable bodies but are, of course, part of the emergency services. Has there been any discussion with either trusts or local authorities about a different relationship—keeping that phrase fairly neutral—as regards the future of that service?

[Baroness Williams of Trafford]

I thank all noble Lords who have taken part in this debate. I too must declare an interest as a former councillor and resident of Greater Manchester. I pay tribute to Tony Lloyd who has held the fort very well over the last couple of years in his role as interim mayor, and in all the roles he has held previously in government and local government. We have here three people who will be voting in the mayoral elections in May, so that is very good. The noble Lord, Lord Stunell, mentioned turnout. I recall an experience I had in Greater Manchester of probably the worst turnout in history: the Benchill by-election back in November or December 2001, where turnout was 8%. That was a depressing low. Looking forward to the mayoral elections, I was quite sceptical about the Mayor of London, but that is not a position for which any political party is scraping round for candidates. It is very sought-after and has gained a profile over the years, and I fully expect that will happen in Greater Manchester and elsewhere. As it does, visibility will grow and accountability will become a lot more obvious.

The noble Lord, Lord Smith—I was going to call him my noble friend, but he is really—talked about blue light services being brought back down to GM. The noble Lord, Lord Beecham, asked about ambulance trusts. It is within the gift of whichever combined authority to request collaboration in that regard, or that those matters be part of the devolved model. There are no limits to what the model may look at. That brings in the point made by the noble Lord, Lord Kennedy: that the different devolution deals are a bit of a patchwork. This is necessarily a patchwork because every area is different. For example, rural areas look very different from urban areas; they have different needs and different proposals. The noble Lord, Lord Kennedy, is smiling at me slightly but I said that on the then devolution Bill, and I firmly believe it. I say to the noble Lord, Lord Stunell, that the Liberal Democrats grilled me on accountability and scrutiny during the passage of that Bill. We have very rigorous structures in place, certainly in Greater Manchester and, I hope, elsewhere.

The noble Lord, Lord Beecham, asked about the compulsion to combine police and fire authority areas, particularly where they are not contiguous. There is absolutely no compulsion to do that. If they are not contiguous, such a move would require structural change anyway.

I think I have answered all the questions, but if not I will certainly come back to noble Lords.

[Lord Kennedy of Southwark]

I accept entirely that different areas have different needs and may want to tackle this issue in different ways. The point I was making is that the Government have not made it clear where we are going. That is not to say that different areas cannot tackle this issue in different ways; of course they can; they have different needs. However, the Government have never set out clearly in a document where they are going with this, which is why the situation is confusing. The West Midlands is a similar conurbation to others, with similar problems and similar areas, but the deal that was arrived at and the powers that were transferred are vastly different from those in other similar areas. Why? That information is missing. There is no difficulty with having different arrangements, but we need to know how the Government have arrived at the present position.

[Baroness Williams of Trafford]

As the noble Lord, Lord Smith, mentioned, we left it up to local areas to say what their version of public service reform looked like—what did public service efficiency look like going forward and what was their plan for growth? Therefore, that might look slightly different in different areas, which is why I explained it in the way I did. However, there will be similarities: transport is a huge issue in Greater Manchester and the solution to that will be huge in terms of growth, as it will be for other areas.

Criminal Finances Bill

Lord Kennedy of Southwark Excerpts

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

[Lord Kennedy of Southwark (Lab)]

My Lords, at the outset of my remarks I am pleased, like my noble friend Lord Rosser, to put on record that Her Majesty’s Official Opposition support the aims of this legislation. We will seek, as we always do, to probe, strengthen and improve the legislation that has come before us from the other place so that the Bill goes back there in better shape than when it arrived here.

Both serious organised crime and terrorism pose real and present dangers to the United Kingdom, and it is our job to ensure we pass laws that are fit for purpose and provide the law enforcement and other agencies with the tools they need to do their important job of keeping the United Kingdom, its citizens and all the people living here safe and protected from danger.

Noble Lords will have heard the figure of £24 billion, which is the estimate of what serious criminality costs the UK economy each year. I agree with what the noble Lord, Lord Faulks, said about the cost to the UK. It is a huge sum of money and with it go lives destroyed, communities ruined and real hurt to our economy. It is everything from the vulnerable person being ripped off on the phone by con artists—losing thousands of pounds, possibly every penny they have—to tax evasion, the evil trade in drugs, prostitution, slavery and firearms. It is our duty to do everything possible to disrupt the activities of criminals, to stop these activities and to bring the perpetrators to justice.

The things that criminals do to hide their ill-gotten gains include holding large cash sums and buying expensive cars, art, jewellery and expensive clothes in order to live a lifestyle that they have not earned through legal means, as the noble Lord, Lord Dear, said. An estimated $1.6 trillion is laundered throughout the world, and the National Crime Agency estimates that many billions of pounds of that money is laundered into or through the United Kingdom as a result of international corruption. Those are staggering figures, and they illustrate why action is needed.

The noble and learned Lord, Lord Brown of Eaton-under-Heywood, made an important point about the disparity between these criminal gains and the amounts recovered from those criminals, as did a number of other noble Lords during today’s debate. Action must be taken to make the UK the most hostile place in the world for those seeking to move, hide or use the proceeds of crime, and the criminals must get that message loud and clear.

I agree with what the noble Lord, Lord Flight, said about the importance of the various agencies, both public and private, working more closely together and sharing information, and the provisions there are very welcome.

That must also be the case for all the Crown dependencies, and this is one area where I think the Bill is deficient and improvements need to be made. My noble friend Lord Watson was right when he highlighted that the Government’s position on our overseas territories is weak: they have to do better than they are doing at present.

Transparency is one of the most effective ways of dealing with this type of corruption. The right reverend Prelate the Bishop of Oxford spoke about the scandal of the illicit flows of funds from the developing world and the need for firm action to be taken to deal with the issue of tax havens in British Crown dependencies and overseas territories. The lack of transparency is a real problem and prevents individuals from seeing who owns what. It enables criminals to hide behind a cloak of secrecy.

I agree with the noble Lord, Lord Hodgson of Astley Abbotts, that we have to get the issues right in respect of overseas territories. It would be appreciated if the Minister could explain to the House why the Government have not sought to introduce requirements to ensure that overseas territories and Crown dependencies which come under the jurisdiction of the United Kingdom publish publicly available registers of beneficial ownership. It is a requirement here in the UK, allowing us to see who owns which company, so why not in overseas territories and Crown dependencies?

The United Nations Conference on Trade and Development recently estimated that tax havens, including those in the United Kingdom’s overseas territories, are costing developing countries at least $100 billion per year. The noble Lord, Lord Thomas, referred to this. The Minister must be aware that the British Virgin Islands was by far the most widely used tax haven in the Panama papers, as referred to by my noble friend Lord Rosser. We have the ability to change that, and we should take the opportunity that the Bill provides to do so.

With the additional challenge of Brexit, it is important that we create an economy, a business centre, that is the best in the world in which to do business legally and is attractive to inward investment but protected from the risks of criminality. I do not agree with the noble Lord, Lord Hodgson of Astley Abbotts, if he is against proper regulation. It is not about box-ticking but about preventing criminality in a proportionate manner.

I have been reading Faulty Towers, a report from Transparency International UK which looks at the impact of overseas corruption on the London property market. It makes staggering reading. £4.2 billion of property has been bought in London with suspicious wealth, as the noble Baroness, Lady Kramer, referred to. In 14 landmark developments, almost 40% of future homes were bought by those from high-corruption jurisdictions. Again, I agree with the noble Lord, Lord Faulks, in this respect.

My noble friend Lord Rooker made important points about who owned what property in some of the most expensive parts of London. The shining of sunlight on bankers, estate agents and other middlemen must happen urgently. This situation leads to, among things, a distortion of housing supply, with ordinary law-abiding citizens unable to afford a home in the capital. The noble Lord, Lord Patten, speaking about the effects of criminal activity on the purchase of property in London, made similar points.

My noble friend Lord Anderson of Swansea made important points about properties bought in London with suspicious funds and asked who should ring the alarm bells—should it be the estate agents, lawyers, accountants and the bankers? I bought the home I live in 13 years ago. My wife and I could not afford to buy it at today’s prices, and we live in a very ordinary terraced house in Lewisham. That is a problem all over London, with people who work hard, pay their taxes and play by the rules unable to afford a home in the capital.

I agree with the noble Baroness, Lady Kramer, on the need for further protection for whistleblowers. I hope that the Minister will comment on that in her response.

There are many welcome measures in the Bill. Part 1 includes a number of measures, including the creation of unexplained wealth orders, which seek to tackle criminals who claim that they have no assets and are penniless but at the same time appear to control considerable funds. This measure will require an individual or organisation to explain the origin of assets that appear to be disproportionate to their known income. It is a welcome move, as is the extension of disclosure orders to money laundering, which will require someone who has relevant information to answer questions put to them as part of an investigation.

Chapter 2 of the Bill seeks to improve the procedures around money laundering and suspicious activity reports. Allowing the National Crime Agency further time to consider such reports, along with the power to request further information, is again a welcome move. The sharing of information to identify illegal activity is vital, and ensuring that companies can share information for the purposes of preventing and detecting serious crime, with clear legal certainty, will be another important tool in the box. The noble Lord, Lord James of Blackheath, gave a number of examples of shocking practices that have taken place in the past. Such behaviour has to be condemned and stamped out, with, where necessary, people brought to justice for behaving so irresponsibly, aiding criminality and putting lives at risk.

Tax evasion is a crime. I welcome provisions in the Bill that seek to disrupt this activity and in particular to deal with the issue of a company operating a business in the UK being able to escape criminal liability because a tax loss is suffered in another country rather than the UK. This will be of particular benefit to developing countries, which are at great risk of such activity.

Additionally, I welcome the introduction of new powers in respect of forfeiture and seizure of assets. I will want to probe in Committee whether we have got the list right and whether the process to amend it by the affirmative procedure is the correct way to proceed.

The Bill also seeks to extend the powers of various officials and agencies. We will again probe in Committee whether the new measures are both proportionate and fit for purpose.

The second part of the Bill extends powers provided for in Part 1 so that they can apply to investigations in relation to terrorist assets and terrorist financing. These measures are welcome. We must always be vigilant and ensure that we have in place measures to assist the appropriate authorities in carrying out investigations into terrorist offences. I am sure that the Minister will acknowledge the sometimes grey area between money laundering offences, criminality and terrorism offences, so having powers that work across the piece is important for those engaged in the work to keep us safe.

Part 3 introduces a welcome new corporate offence of failure to prevent tax evasion, but we will want to explore in Committee what further can be done. The noble Baroness, Lady Bowles of Berkhamsted, is right that people have the right to know who owns which companies and to be clear about the chain of responsibility. Economic crime must be policed with vigour. Good companies will have proper procedures in place and those that do not will be forced to take action. The Prime Minister has committed to getting tough on irresponsible behaviour in big businesses, and that is an aim I welcome very much.

Cracking down on corporate economic crime has the potential to deliver significant savings to taxpayers and ensures that the vast majority of businesses that act responsibly and play by the rules are not put at a competitive disadvantage. It would be useful if the Minister could comment on how she sees the present balance of the corporate liability regime and whether there is not a case for reform to make it easier to prosecute those companies that commit offences.

I again confirm that I welcome the Bill. We will seek constructively to probe and challenge the measures contained in it so that we send back to the other place an even better Bill that can tackle effectively and proportionately all the issues that Members around the House want dealt with, with people protected and kept safe, which is the first duty of government.

Police and Criminal Evidence Act 1984 (Codes of Practice) (Revision of Codes C, D and H) Order 2016

Lord Kennedy of Southwark Excerpts

Thursday 19th January 2017 Lords Chamber

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

My Lords, this order, laid in draft before the House on 22 November 2016, will bring into effect three revised codes of practice issued under Section 66 of the Police and Criminal Evidence Act 1984, which I shall call PACE from now on: Code C, which concerns the detention, treatment and questioning of persons detained under PACE; Code H, which concerns the detention, treatment and questioning of persons detained under terrorism provisions; and Code D, which concerns the identification of suspects by witnesses and biometric data, for example, fingerprints, DNA and photographs. I will briefly describe what the PACE codes are, how these revised codes come before us today and outline the changes they introduce.

For England and Wales, the statutory provisions of PACE set out the core framework of police powers to detect and investigate crime, and require the Secretary of State to issue codes of practice. The eight accompanying codes of practice, A to F, do not create powers but provide rules and procedures for the police to follow when exercising their powers. Together, PACE and the codes establish important safeguards for individuals, which are designed to strike a balance between the need for police to have powers to tackle crime on the one hand and the need for safeguards for suspects and other members of the public on the other. In order to maintain this balance, we regularly update the codes—for example, as we change primary legislation—in the light of new decisions by the courts and to promote developments in operational policing practice.

The three codes before us today were published in draft format in March 2016 for statutory consultation in accordance with Section 67 of PACE. The consultation, which was also open to the public, ran for eight weeks, and the bodies that the Secretary of State is required to consult in accordance with Section 67(4) of PACE, and others, were invited to comment. These others included the Crown Prosecution Service, Liberty—I see the noble Baroness, Lady Chakrabarti, here today—Justice and the Youth Justice Board. The drafts, together with an invitation to the public at large to respond, were also published on GOV.UK. A total of 18 responses were received, which is normal for this type of consultation.

In accordance with Section 67 of PACE, the revised codes were laid before this House and in another place together with the draft order and Explanatory Memorandum. Yesterday, the order was approved in Committee in another place, and subject to the order being approved by this House, the three codes will come into force 21 days after the date the order is signed.

The main revision to PACE Code C is to expressly permit the use of live-link communications technology for interpreters. The changes enable interpretation services to be provided by interpreters based at remote locations and allow access to be shared by forces throughout England and Wales. This will avoid interpreters having to travel to individual police stations, and improve the availability of interpreters for all languages. By reducing delays in the investigation, it will enable a more streamlined and cost-effective approach to the administration of justice. The revisions include safeguards for suspects to ensure, as far as practicable, that the fairness of proceedings are not prejudiced by the interpreter not being physically present with the suspect. The provisions therefore require the interpreter’s physical presence unless specified conditions are satisfied and allow live-link interpretation.

Revisions to Code C also reflect the amendment to PACE made by the Criminal Justice and Courts Act 2015 that defines a “juvenile” for the purpose of detention under PACE as someone under the age of 18, rather than under the age of 17. This resulted from a government review of the way in which 17 year-olds were treated under PACE and the codes. The review concluded that the age at which a person should be treated as an adult under PACE should be raised from 17 to 18. This accords with the age-related jurisdiction of youth courts and other criminal justice legislation applicable to children.

New provisions also support Section 38(6) of PACE, which requires juveniles who are not released on bail after being charged to be moved to local authority accommodation pending appearance at court. The revisions point out that the certificate given to the court in accordance with Section 38(7) must show why the juvenile was kept at a police station and require these cases to be monitored and supervised by an inspector or above. Separate measures in the Policing and Crime Bill ensure that outstanding provisions of PACE that continue to treat 17 year-olds as adults are amended.

New provisions in Code C permit an appropriate adult to be removed from interview if they prevent proper questioning. When a suspect who is a juvenile or a vulnerable adult is interviewed, the code requires that an independent adult, known as an “appropriate adult”, be called to help. Their job is to help ensure that the suspect understands what is happening and why, and that they are able to exercise their rights and entitlements under PACE and the codes. These new provisions are necessary to ensure consistency with the existing provisions, which have been in Code H since 2006, and they are modelled on paragraph 6.9 of Code C concerning the removal of a solicitor from an interview if they prevent proper questioning. Before an appropriate adult can be removed, an additional safeguard in both codes requires the inspector or superintendent who is called on to determine whether they should be excluded to remind the adult about their role and advise them of the concerns about their behaviour. That advice, if accepted, would then enable the appropriate adult to remain.

The changes to Code C are mirrored in Code H, as applicable, for persons detained under terrorism provisions. This ensures consistency in the provisions that are common to both codes.

In Code D, eye-witness and witness identification procedures are updated to take account of significant changes and developments in case law and police practice, and to address operational concerns raised by the police. Revised video identification provisions clarify and confirm the identification officer’s discretion to use “historic” images of the suspect; to regulate the presence of solicitors at witness viewings; and to direct others—police officers and police civilian staff—to implement any arrangements for identification procedures. The investigating officer’s responsibility concerning the viewing of CCTV and similar images by a witness other than an eye-witness is also clarified.

Other revisions to Code D reflect amendments made by the Anti-social Behaviour, Crime and Policing Act 2014 to PACE concerning the retention of fingerprints, DNA profiles and samples. Revisions to all three codes also highlight the need to check all sources of relevant information in order to establish a detainee’s identity; enable officers to use electronic pocket books and other devices in order to make records required by the Codes; clarify those who are not eligible to act as the appropriate adult for children under 18 and for mentally vulnerable adults; and highlight the requirement under Section 31 of the Children and Young Persons Act 1933 to separate children from adult detainees in police stations and other places of detention by including a link to College of Policing guidance on this matter.

Minor typographical and grammatical corrections have been made, and out-of-date references updated.

The revisions strike a balance between the need to safeguard the rights of suspects while supporting the operational flexibility of the police to investigate crime. They are being introduced to bring codes C, D and H in line with current legislation and to support operational police practice. The revised codes provide invaluable guidance to both police and the public on how the police should use their powers fairly, efficiently and effectively. I commend the order and urge noble Lords to support it.

[Lord Kennedy of Southwark (Lab)]

My Lords, I thank the noble Baroness for her explanation of the effect of the order before the House this afternoon. I say at the outset that the Opposition support the order, and that we must always carefully consider these matters and strive to strike the right balance between giving the police and other law enforcement agencies the tools, guidance and procedures to do their job effectively and keep citizens safe, when we are balancing the rights of citizens and ensuring that the rights of suspects and witnesses are protected. This is very much my thinking in how I approach the order and similar matters when they come before this House.

I have a number of questions to ask the Minister and hope that she will be able to answer me today—but, if she cannot, I will of course be very happy for her to write me. I turn first to Code C and the ability to permit the use of live-link communication technology for interpreters. This will allow for interpreters to be based at remote locations and for their services to be used by a number of police forces without the need for travel. I can see how this will help the police by speeding up their investigations. Can the noble Baroness confirm whether this facility will be used only in respect of suspects, or will the police be making use of it in respect of witnesses? Is that the intention of the change? Is it envisaged by the department that this will become the norm; will it be used on only limited occasions; or is it somewhere between the two? How will the test of fairness to the suspect be assessed, and what role will there be for the suspect’s solicitor in making representations on the appropriateness of the use of remote translation services?

I move on to the provision to enable an appropriate adult be removed from an interview if they prevent the proper questioning of a subject. An appropriate adult is used when a juvenile or vulnerable adult is being interviewed. They have a specific role: to help the person understand what is happening and to protect their rights under law and the relevant codes. These individuals do a very important job in the justice system, but their role is not to prevent the questioning of suspects. However, there can be cases where there is a very fine line between what could be deemed fair practice and action that could be determined as breaching somebody’s rights. Will there be a role for the suspect’s solicitor in the process of determining whether an appropriate adult should be removed? What would happen if it was viewed that an appropriate adult should be present but, for whatever reason, it was thought that the appropriate adult present at the time had overstepped the line and needed to be removed? Would the interview be suspended until such time as another person could be identified to fulfil that role?

In respect of the electronic pocket books for use by police officers, can the noble Baroness say a little more about the trials that have taken place? It is important that police officers have access to technology that makes their jobs and the application of the law easier and allows for the efficient administration of justice to be done in a timely manner, but we must always be confident that the appropriate safeguards are in place. Very clever people invent, develop and create all sorts of devices, and where they can be used to fight crime, that is welcome—but we must be satisfied that there is no possibility that these devices can be tampered with to produce an inaccurate or untrue picture of what has happened.

There is also the question of the development of technology, which does not stand still. Because something cannot be done at the moment does not mean that it cannot be done in future. How does the noble Baroness plan to ensure that technological developments do not get ahead of the procedures before the House today and the practices of the police and other law enforcement agencies?

In respect of the changes to Code D that alter the way in which witness identification is undertaken, the change effectively deletes the old annexes A and E. We need a bit more evidence for why that is necessary, so I hope that the Minister will give a full explanation when she responds. With those questions, I say again that we are happy to support the order.

--- Later in debate ---

[Baroness Williams of Trafford]

I thank noble Lords for their questions. Perhaps I can deal with the question of the noble Viscount, Lord Simon, first while it is fresh in my mind. The usual safeguards for young children in detention would be employed to ensure that a young person did not get away.

The noble Lord, Lord Kennedy, asked about the use of live link and whether it would become the norm or used only on limited occasions. The police will use the live-link technology only in certain circumstances judged on a case-by-case basis, taking account of the representation given to the suspect by an appropriate adult and a solicitor. The noble Lord also asked whether the facility would be used only in relation to suspects. I can answer in the affirmative yes, not for the witnesses. He asked about safeguards being ensured and the role of the solicitor. Solicitors must be asked if they wish to make representations to be considered by the police. If there is any doubt the inspector must authorise.

If the noble Lord would like me to go through the conditions, I will do so. Before interview, the suspect’s solicitor, where legal advice is requested, and an appropriate adult for any juvenile or vulnerable adult, must be asked about their views on live-link interpretation. The representations for the interpreter to be present may be made at any time before and during the interview. If there is any doubt about the suspect’s ability to adequately cope with the live-link arrangements during the interview, the physical presence of the interpreter will be required, unless an inspector, having considered the circumstances—in particular, the availability of an interpreter, representations from the suspect’s solicitor, the appropriate adult’s impact on the suspect and the evidential implications—authorises live-link interpretation.

[Lord Kennedy of Southwark]

It is very kind of the Minister to give way. She said that it would not be the case for witnesses, but could she explain why? At an interview, the witness and the suspect might both need interpreters, so I understand that you might want to bring the live link in to speed things up. If you have a witness with the same language problems—I think that the Minister can see the point that I am making.

[Baroness Williams of Trafford]

I understand the noble Lord’s point, but at the moment it is just for suspects. It may well be that we will consider future codes that will extend it to witnesses—but not at this time.

The noble Lord also asked about the use of electronic pocket books and recording devices—and he took a very pragmatic approach to the need to move on with technology. He made the point about what happens if there are errors. I suppose that that is a risk in any method of recording. It is not good practice to have errors, but we are human. The likelihood is just as risky in electronic recording as it is in written recording.

In fact, the PACE codes apply only to suspects—and the noble Baroness, Lady Chakrabarti, who should have taken this question, is nodding. I do not know why I did not think of that. Those codes apply only to suspects and not to witnesses.

[Lord Kennedy of Southwark]

I made the point about technological developments. I am conscious that we might not be able to do something today but that people are very clever and invent all sorts of things in future—so how are we going to keep up to speed with those sorts of changes? What does the department do?

[Baroness Williams of Trafford]

The code talks about electronic recording devices. I would imagine that within the code that in some way attempts to keep up with technology.

Policing and Crime Bill

Lord Kennedy of Southwark Excerpts

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

[Lord Kennedy of Southwark (Lab)]

My Lords, as the noble Baroness, Lady Hamwee, said, these amendments were discussed on Report a few days ago. Amendments 1 and 2 add the world “reasonably” to this section of the Bill requiring someone to confirm their nationality. In that discussion, I made the point that in this section of the Bill the wording “without reasonable excuse” is used in respect of suspects in new Section 43B(1) and again in new Section 46C(1), and on that page there is also “for a reasonable cause”. That is different from the provisions for police and immigration officers. I asked the noble Baroness, Lady Chisholm, to write to me, and I think she was going to, but I have not yet had the letter. It is on its way. That is good to know. When she replies, I hope she will shed some light on why the Government do not need the same provision for both groups in this part of the Bill.

[Baroness Chisholm of Owlpen (Con)]

My Lords, these amendments again seek to provide in the Bill that a police or immigration officer exercising the powers in Clauses 161 and 162 to require a suspected foreign national to state their nationality and provide their nationality documents on request must act reasonably.

I am grateful for the opportunity to clarify the Government’s position. On Report, the noble Lord, Lord Kennedy, suggested that the drafting of these clauses seemed inconsistent, given that, on the one hand, there was no express requirement on an officer to exercise the powers reasonably but, on the other hand, the defence operated only where the accused had a reasonable excuse. There is no inconsistency here. The reasonable excuse defence is a necessary safeguard which allows a suspected foreign national to offer legitimate reasons to an officer and, if necessary, a court, for their non-compliance. This might include, for example, circumstances where a document may have been destroyed with reasonable cause—a scenario which is also catered for elsewhere in immigration legislation. The requirement for officers to act reasonably in the first instance is, in the Government’s view, a quite different point.

I acknowledge that there are some variations in the drafting of the large number of existing Acts which set out UK immigration law. It is also accepted that certain actions in the Immigration Act 2016 explicitly require those exercising coercive powers to act reasonably. However, it is not the case that, in the absence of an explicit reference to that effect, officers are able, through that omission, to act unreasonably. This language is not universally applied, or required, nor is it used elsewhere in legislation which deals with the seizure or retention of nationality documents.

In exercising the powers conferred by Clauses 161 and 162, police and immigration officers must act in accordance with public law principles, which include acting reasonably, or they may be challenged in the courts by means of judicial review. I also note that the wording of these clauses is consistent with that used elsewhere in immigration legislation—for example, Section 17 of the asylum and immigration Act 2004, which uses the same language for similar purposes. Section 17 deals with the retention of documents that come into the possession of the Secretary of State or an immigration officer in the course of exercising an immigration function.

Finally, I should add that operational guidance in respect of these new powers will make it clear to officers the circumstances under which these powers may be exercised. In the light of this further assurance that these powers may be exercised only when an officer has a reasonable suspicion that an arrested person may not be a British citizen, I hope that the noble Baroness will be content to withdraw her amendment.

However, I will just add a couple of things: of course we are very happy to continue to engage with the noble Baroness as our plans for pilots develop; she is also right that Hampshire was one of the places that was suggested for the pilot.

[Lord Kennedy of Southwark]

Before the noble Baroness sits down, did I hear her correctly say that these powers can be exercised only when an officer has a reasonable suspicion? If that is the case, then I do not see why it should not be in the Act and this amendment accepted.

[Baroness Chisholm of Owlpen]

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

Policing and Crime Bill

Lord Kennedy of Southwark Excerpts

Report: 3rd sitting (Hansard): House of Lords
Monday 12th December 2016 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, on looking at Amendment 179A and Amendment 179B in the names of the noble Lord, Lord Paddick, and the noble Baroness, Lady Hamwee, your Lordships might think that they are not necessary. They insert only the word “reasonably” in both cases. I would not agree with that. They are very important additions in the context of this part of the Bill, which concerns the circumstances whereby an individual may be required by an immigration officer or a police officer to state their nationality.

The words “reasonably” or “reasonable” are often used in a legal context. Your Lordships can find the word “reasonable” in this part of the Bill. I refer noble Lords to page 163, where at line 28 we have “without reasonable excuse”, at line 31 “not a reasonable excuse”, and at line 35 “reasonable cause”.

These uses of “reasonable” place obligations on the person being arrested for an offence. It is right that in the same part of the Bill the same obligation to act reasonably should be placed on the immigration officer or police officer when requiring someone who has been arrested to state their nationality. They must have some reasonable suspicion that the individual may not be a British citizen. Acting in the way that any prudent person in a similar situation would act is a proper duty to be placed on officers when in that situation.

--- Later in debate ---

[Lord Kennedy of Southwark]

Before the Minister sits down, will she address the point I made earlier about page 163 where “reasonable” is used a number of times in respect of suspects but not of police officers. Why is that distinction there? If the Minister would like to write to me, that is fine, but I think it is odd that there is that distinction.

[Baroness Chisholm of Owlpen]

I will write to the noble Lord to clarify that point.

--- Later in debate ---

[Lord Paddick (LD)]

My Lords, briefly, I thank the noble Lords, Lord Lexden and Lord Cashman, for introducing the amendments, and the noble Baroness for supporting them, and ask that she consider the matters still outstanding, to which the noble Lord, Lord Lexden, referred, concerning the Armed Forces. I am very grateful that the Government are also considering other offences mentioned by the noble Lord, Lord Cashman, as a consequence of his amendment.

[Lord Kennedy of Southwark]

My Lords, I very much support all the amendments in this group. We have made tremendous progress in recent years in seeking to redress the effects of homophobic legislation. Terrible injustices were suffered, and previous changes to the law and the amendments are intended to go some way to correct that and make amends. They have my full support and that of my party.

Of course, we need to go further in Northern Ireland, but this is an important step. I want to see the day when LGBT people living in Northern Ireland have exactly the same rights, protections and freedoms as LGBT people living in England, Scotland and Wales. We are a United Kingdom, albeit with devolved institutions, but LGBT people should have the right to get married in Northern Ireland; that must be urgently addressed by the Northern Ireland Assembly and the ministerial team led by the First Minister and Deputy First Minister in Stormont. It is wrong to keep using the petition of concern procedure to block progress in this matter. The UK Government must play their role in championing the rights of LGBT people in Northern Ireland by raising this issue at ministerial and official level. It is not enough for the Government to say that it is a matter for the devolved institution.

During Committee on the Bill on 9 November, I made clear my support for a range of amendments proposed by several Lords. I was clear that welcome progress was being made, but that the amendments proposed by my noble friend Lord Cashman were in my view the best ones before your Lordships’ House. They were not accepted by the Government, but discussions have taken place outside the Chamber, and the amendments proposed by my noble friend Lord Cashman and the noble Baroness, Lady Williams of Trafford, are very welcome. I thank the noble Baroness very much for listening and working with my noble friend on them.

I pay warm tribute to my noble friend Lord Cashman. We have been friends for many years. It is his tireless campaigning with others, including the noble Lord, Lord Lexden, that has got us to this point today, and we should be very grateful to them all.

Although it is not on the subject of the amendments, I will make one final point on equality in Northern Ireland in respect of women’s equality. The Northern Ireland Assembly, Ministers, led by the First Minister and Deputy First Minister, and the political parties must get together to deliver equality for women living in Northern Ireland, so that they enjoy the same rights as women living in England, Scotland and Wales. Again, the UK Government have to play their role by raising that at ministerial level. Although that is a matter for another day, it is an important issue to which we must return. In conclusion, I confirm my full support for the amendments.

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

My Lords, I am so pleased to be able warmly to support the amendments proposed by the noble Lord, Lord Cashman, and my noble friend, Lord Lexden. I also acknowledge the spirit of very positive co-operation that has led to the amendments. I recognise that they will continue to strengthen the efforts made by this Government to tackle the historical wrongs suffered by gay and bisexual men in England and Wales—and now Northern Ireland—who were criminalised over a long period for something that something that society today regards as normal sexual activity.

I shall deal first with Amendments 181D, 181E and 181F, tabled by the noble Lord, Lord Cashman. As he explained, they will enable the Secretary of State to extend, by regulations, the list of offences eligible for a disregard under the provisions of the Protection of Freedoms Act 2012. The regulation-making power enables the necessary modifications to be made to Chapter 4 of Part 5 of the 2012 Act, and provides for corresponding provision for pardons to that contained in Clauses 148 and 149 of the Bill.

In Committee the noble Lord made the case for other offences being included in the disregard process, in particular the offence of solicitation by men which is in Section 32 of the Sexual Offences Act 1956. As I indicated at that time, the Government are broadly sympathetic to this, but we need more time to work through the implications of adding offences to the disregard scheme, and in particular the conditions that need to be satisfied before a conviction could be disregarded. In recognition of the fact that we should not rush that consideration, Amendment 181D enables the Home Secretary to add other abolished offences to the disregard scheme by regulations, subject to the affirmative procedure. It is important that, in taking this forward, we are able to distinguish between activities that are now no longer illegal and those that are still illegal. This amendment also gives us scope to consider what other offences may be appropriate for inclusion, so it is to be welcomed as a signal of our continued commitment to address these historical wrongs.

As my noble friend Lord Lexden explained, the amendments in his name introduce a comparable disregard scheme in Northern Ireland to match that already in operation in England and Wales. They also introduce the same approach to statutory pardons as that contained in Clauses 148 to 150 of the Bill.

As I indicated in Committee, as these provisions relate to transferred matters in Northern Ireland, it is right that this House should respect the usual convention that the UK Parliament legislates in respect of such matters only with the consent of the Northern Ireland Assembly. I am pleased to say that the Assembly adopted the necessary legislative consent Motion on 28 November.

My noble friend Lord Lexden pointed out the important difference in the Northern Ireland disregard scheme; I thank him for explaining it to the House so that I shall not have to go through it again. I am pleased that we have been able to work fruitfully with the noble Lord, Lord Cashman, and with my noble friend, and I commend their amendments to the House.

My noble friend Lord Lexden pointed out an apparent contrast in the approach taken in Clause 148 as between civilian and service offences. That clause confers posthumous pardons for convictions for buggery and certain other abolished offences tried in the civilian courts, which date back to the Henry VIII statute of 1533—whereas posthumous pardons for convictions for the equivalent offences under service law reach back only to 1866. My noble friend said that it was in fact the Navy Act 1661 which first criminalised buggery in the Armed Forces. While the intention behind Clause 148(4) is to capture only relevant service offences that could have been prosecuted in either civilian or service courts, my noble friend may have alighted on a very valid point. I therefore undertake to consider this matter further with a view to bringing back a suitable amendment at Third Reading.

--- Later in debate ---

[Lord Paddick]

My Lords, Amendment 181M is in my name and that of my noble friend Lady Hamwee. I tried to make it clear in Committee that the specific offence of being a suspected person loitering with intent to commit an indictable and later an arrestable offence under that specific part of Section 4 of the Vagrancy Act 1824 and how it was used against the black community is seen by the black community—and by many others, myself included—as as much of a clear historical wrong as the offences that we have just debated.

In Committee, the Minister suggested that, without looking at the facts of individual cases, it is impossible to know whether the conduct in question would still be an offence today. In Committee, I described exactly how, in circumstances where a person behaved in a way that would have amounted to an offence today, they would have been charged with a substantive offence—for example, attempted theft of or from a motor vehicle, or attempted burglary. I suggested that it was only when behaviour did not amount to an offence under other legislation that individuals would have been charged with an offence of being a suspected person under Section 4.

These offences are important and symbolic to the black community and how they have in the past been, and continue to be, discriminated against in the criminal justice system. I beg to move.

[Lord Kennedy of Southwark]

My Lords, this amendment in the names of the noble Lord, Lord Paddick, and the noble Baroness, Lady Hamwee, was debated in Committee. It is fair to say that it did not get a warm welcome from the Minister in responding to the debate. I was surprised to learn that the Government had no data at all on the number of people affected by the law before it was abolished. Clearly, the amendment is not going to be accepted by the Government tonight, but the noble Lord is right to keep raising the issue and I hope that it will keep being raised. It is only by doing so that we can explore what options are available to us, what happened in the past and whether it was right and whether, with hindsight, the offence should have been removed from the statute books many years before it actually was, as it was used in a way that discriminated against black people.

I hope that, when the Minister responds to this short debate, she can focus particularly on the amendment. In her response in Committee, the focus was as much on the previous debate, so I hope that it can focus particularly on the points voiced before us here today.

[Baroness Williams of Trafford]

My Lords, I thank both noble Lords for explaining the amendment, which was of course also tabled in Committee, seeking to confer a pardon on persons, living and deceased, who were convicted under that part of Section 4 of the Vagrancy Act 1824 which was repealed by Section 8 of the Criminal Attempts Act 1981.

Section 4 of the Vagrancy Act 1824 was originally a wide-ranging provision, and some of it is still in force today. The part with which the noble Lord’s amendment is concerned is the offence of being a suspected person, frequenting, in effect, any public place,

“with intent to commit felony”,

or, as it became, an arrestable offence. The noble Lord has illustrated from his own experience, and the Home Affairs Select Committee identified in 1980, that this so-called “sus” offence was used in a discriminatory and unfair way, particularly in relation to young black men. However, as the noble Lord has also acknowledged, not every conviction under this provision, certainly not going all the way back to 1824, was wrong or unfair. In fact, the Home Affairs Select Committee concluded:

“The most powerful argument against ‘sus’ is that it is a fundamentally unsatisfactory offence in principle”.

Policing and Crime Bill

Lord Kennedy of Southwark Excerpts

Report: 1st sitting: House of Lords
Wednesday 30th November 2016 Lords Chamber

[Lord Paddick]

My Lords, in moving Amendment 46 I will speak also to the other amendment in the group, Amendment 47. Both are in my name and that of my noble friend Lady Hamwee. This is a straight rerun of the amendments we had in Committee in relation to police super-complaints, which bodies can make them and the authorised persons who can ask the Secretary of State to add or remove bodies from the list of bodies that can make them. In Committee, we argued that the Secretary of State should be required to consult on the regulations that designate which bodies can make super-complaints. These regulations will contain the criteria that will be applied to decide which bodies can bring police super-complaints. New Section 29B, inserted by Clause 25, requires the Secretary of State to consult when she makes or revokes a designation but does not require her to consult on the criteria that she applies in deciding whether to make or revoke a designation. That is the intended effect of Amendment 46.

Amendment 47 relates to the “authorised persons” who can ask the Secretary of State to make or revoke a designation under new Section 29B(2)(b) of the Police Reform Act 2002. Contrary to what the Minister took as our intention in Committee, Amendment 47 sets out a list of bodies that the Secretary of State should specify as authorised persons who can ask the Secretary of State to make or revoke a designated body under new subsection (2)(a), not a list of designated bodies that can make police super-complaints.

Just to be clear, there will be two lists of bodies in relation to police super-complaints. There are authorised persons, who are bodies who can ask the Secretary of State to designate or remove a body from the list of those able to make police super-complaints, and there are bodies that are designated as being able to bring police super-complaints. We believe that the list of authorised persons should include the Law Society, the National Council for Voluntary Organisations and Citizens Advice, and others that should be listed in the Bill. I beg to move Amendment 46.

[Lord Kennedy of Southwark (Lab)]

My Lords, as the noble Lord, Lord Paddick, said, these matters were discussed in Committee. I am very supportive of Amendments 46 and 47. As we have heard, designated bodies will get the power to make super-complaints to Her Majesty’s Chief Inspector of Constabulary, and these complaints can be made where, in the opinion of the designated body, a feature of policing may be harming the public and needs looking at. It is based on a system that works in the private sector and this is the first time it will be used in the public sector. Only designated bodies will be able to make super-complaints, and the process for designating these bodies will be set out in regulations.

When the noble Baroness, Lady Williams of Trafford, responds to this debate, it would be helpful if she said something about the timescale for the consultation processes, and when she expects these regulations to be laid before Parliament and come into force. I should also say that I am happy for the negative procedure to be used in respect of the regulations; perhaps the noble Baroness could bring that fact to the attention of the noble Lord, Lord Hyde of Ashton, who is of the opinion that I would never agree to the negative procedure being used for regulations in this House.

The proposals in this section of the Bill are a welcome move and will be a positive benefit to organisations and individuals that have legitimate concerns to raise. We are supportive of them and of these amendments.

[Baroness Williams of Trafford]

My Lords, I am grateful to the noble Lord, Lord Paddick, for the opportunity to address the misunderstanding over Amendment 47, which was previously tabled in Committee. However, I am again going to have to disappoint the noble Lord as the Government cannot support either of these amendments. The Bill provides for the delegation of the ability to authorise those who can be designated bodies for the purposes of the new super-complaints system.

I welcome the noble Lord’s suggestions of who should perform this function but I do not agree that this task can be performed by bodies that might themselves want to raise super-complaints, or by multiple agencies. For the system to have legitimacy, we need to avoid a conflict of interest in this role. That is why the Bill creates this distinct role, as we do not consider it appropriate that HM Inspectorate of Constabulary designates the bodies that can come to it with super-complaints.

All three bodies put forward by the noble Lord could potentially add significant value as designated bodies, should they wish to apply. It would be a shame if, for example, Citizens Advice were precluded from raising issues through the super-complaints system. In the interests of a smooth and speedy process, I suggest that this role should be undertaken by an individual or single body, not by a committee.

The critical point here is that the criteria for designation are clear and unambiguous so that authorisation is a simple and objective process. That is why we will consult widely on the criteria in due course, and I encourage all those who have an interest to feed in their views. The noble Lord, Lord Kennedy, asked about timing: it will be in the coming months.

Having consulted to establish clear criteria, we believe it is unnecessary to subsequently consult on any list of bodies deemed to have met the criteria, as required by the noble Lord’s Amendment 46. This risks slowing the whole system down, delaying designation and further delaying the point at which bodies can submit super-complaints to HMIC.

I reiterate the Government’s commitment to consulting widely on the criteria. As part of that process, we would welcome the input of noble Lords on bodies or organisations that may be suitable for designation or for the role as the authorised person. I hope the noble Lord, having considered the Government’s arguments, will feel free to withdraw his amendment.

--- Later in debate ---

[Lord Paddick]

My Lords, I am very grateful to the Minister and to the Government for listening to the concerns we raised around whistleblowing in Committee. We certainly support the government amendments in this group.

[Lord Kennedy of Southwark]

My Lords, there was a very useful debate in Committee on whistleblowing. The noble Lord, Lord Paddick, and I raised a number of issues; we are very grateful that the Government have listened and tabled these amendments and we are very supportive of them.

Amendment 49 agreed.

--- Later in debate ---

[Lord Bach (Lab)]

My Lords, the Government, particularly the Ministers, deserve real congratulation on making this amendment. I think all Members of the House, wherever they sit, will be really pleased that this has happened. It will certainly, in a small way, make my life as a police and crime commissioner easier. Having “Independent” in the name of the new body will make it easier to explain how the complaints system works. I congratulate the Government and I am very happy to support the amendment.

[Lord Kennedy of Southwark]

I, too, thank the Government and the Minister for listening. A number of Members, including noble Lords who had been senior police officers, made the point about how important this is to enable police officers to do their job. I am very pleased that the Government have listened.

Amendment 56 agreed.

--- Later in debate ---

Moved by

[Lord Kennedy of Southwark]

106: Clause 37, page 66, leave out lines 1 to 18

[Lord Kennedy of Southwark]

My Lords, Amendment 106, which is tabled in my name and that of my noble friend Lord Rosser, would delete the provision that would allow police civilian staff and volunteers to use CS spray or PAVA spray. We had an interesting, if somewhat confusing, debate on this subject in Committee. I think this is a step too far and that the public will be rightly concerned about who is authorised to use these incapacitating sprays.

PCSOs have specific duties and have performed them very well. I pay tribute to them and the work they do. This provision enables civilian staff and volunteers to be designated as PCSOs to use these weapons, which can kill and have unfortunately done so. Equipping volunteers and staff with such weapons, giving them some limited training and authorising them to use those weapons against members of the public is a huge leap and one we need to be very careful about. I do not believe that the Government have made a convincing case about why it is necessary to take this route.

We have heard very little in these debates about special constables, who have the powers of police officers and undertake extensive training. Surely greater recruitment and use of special constables would be a better option if the Government want more officers on the street supporting the full-time police service. I will listen carefully to the debate and, in particular, to the response from the Minister. I beg to move.

[Viscount Hailsham]

I propose to be brief. This amendment, as has been very fairly pointed out by the noble Lord, removes the substance of new subsection (9B) of the Firearms Act. It is therefore relevant to look at the new subsection to see the extent to which it is acceptable. I am content with one bit of it, welcome another bit of it and remain very concerned about a third bit of it, and I shall deal with each rather briefly.

--- Later in debate ---

[Baroness Williams of Trafford]

My noble friend is right that it would theoretically be possible to use the power to enable a firearm in that way. However, the power is subject to the affirmative procedure, as he has said, so it would require the unlikely agreement of the Home Secretary, both Houses of Parliament and at least one chief constable to decide that a staff member or volunteer should be given a gun. I leave it to my noble friend, with his vast experience, to judge whether that would be likely to happen. I take the point that he was making but I want to point out the hoops that would have to be jumped through for that to be achieved.

The noble Lord, Lord Blair, talked about the order-making power for defensive weapons. There is no such thing in the Firearms Act as a “defensive weapon”. It is not the nature of the weapon that is important but how it is used; a baton or a truncheon could be used offensively while a pistol could be used defensively. The consultation was clear that only police officers should use pistols or Tasers, and we think the Bill delivers that.

I shall finish with a quote from Chief Constable David Jones, the national policing lead for Citizens in Policing. He says:

“This is a very positive development … The proposals will open up new opportunities for people to use statutory powers who would like to be part of the volunteering police family but who are unable to commit to the rigorous and intensive selection and training requirements associated with the special constabulary. The proposals will empower Chief Constables to have a much more flexible resource platform … Chief Officers are best positioned to decide how to police their local area most effectively through the empowerment of their workforce, through their understanding and knowledge of the needs of their local communities”.

As I have said at previous stages of the Bill, no chief officer has yet made a decision to designate their staff with the power to carry and use a defensive spray. However, we believe that if a chief officer, using their professional judgment and experience, were to reach the view that it was necessary to issue such sprays to their PCSOs, after they have been well-trained in their use, they should be able to do so irrespective of whether those PCSOs are employees of the force or volunteers. On that basis, I invite the noble Lord, Lord Kennedy, to withdraw his amendment and perhaps to address the question that I first put to him.

[Lord Kennedy of Southwark]

My Lords, I thank all noble Lords who have spoken in this debate. A number of points have been raised. I say to the noble Viscount, Lord Hailsham, that my concern all along has been the placing of these weapons in the hands of people without sufficient training.

I agree very much with the points made by the noble Lord, Lord Blair. We have to be very careful about the extension of these powers. As we have heard, so far no chief constable has empowered their present PCSOs to have these powers. The power is there already for PCSOs to be designated but no one has decided to do that yet.

The Government have not made a convincing case for the further extension of these powers. As the noble Lord, Lord Paddick, said, this is a broad power that we are now taking on board. I concur with his remarks about the fantastic contribution made by volunteers to the police service.

In response to the Minister, Clause 37 grants the extension of powers to police civilian staff and police volunteers. This extension is to those other staff who are not PCSOs but are volunteers or other designated staff. I do not see why, if they have not yet been tested on designated PCSOs, they should be extended at this stage. On that basis, I wish to test the opinion of the House.

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[Lord Berkeley of Knighton (CB)]

My Lords, listening to this debate, I found myself wondering, like the noble Lord, Lord Harris, exactly what the Government were hoping to achieve. To be generous, I imagine that they were trying to assist with the rights of the defendant as well as help the police. I can understand if that was the aim but, from what we have heard, neither of those objectives will be secured in this way. Therefore, I hope that the noble Baroness will be able to give a positive reply and that perhaps the Government will put forward their own amendments, as my noble friend Lord Blair suggested.

[Lord Kennedy of Southwark]

My Lords, the noble Baroness, Lady Harris of Richmond, in moving Amendment 108A, has made a compelling case. No one wants anybody to be on pre-charge bail any longer than is absolutely necessary. Her amendments seek to take account of the realities on the ground in local police forces, and the Government should accept them and the flexibility that they offer to police forces. She gave detailed figures to support her argument, and my noble friends Lord Bach and Lord Harris of Haringey spoke about the realities on the ground and the risk of a significant burden on police forces.

We should of course set the number of days that an individual can be on pre-charge bail before the matter is reconsidered at a maximum that is necessary, reasonable and proportionate. There should not be a target date, which in the majority of cases will not be met. The noble Baroness suggests in her Amendment 109 that 56 rather than 28 days is a more realistic target to work towards. There appears to be little to be gained from bringing people back only to be rebailed because the inquiries have not been completed—often, as we heard from the noble Lord, Lord Blair, and my noble friend Lord Harris, because other agencies have not completed their work on behalf of the police within 28 days.

Amendment 115, in the name of the noble Lord, Lord Paddick, would place a duty on the Secretary of State to commission, two years after the passing of this Bill, a report on the impact of the 28 days. That strikes me as a very wise thing to do and I hope that the Government will accept it. We want to ensure that Parliament and Government are informed with proper data before coming to a decision.

Amendment 116 in this group, which has not yet been referred to, is in the name of the noble Baroness, Lady Williams of Trafford. It responds to the case made by the noble Lord, Lord Marlesford, who is not in his place at the moment. The Government listened to that case and I welcome the fact that they have put forward an amendment today.

[Baroness Williams of Trafford]

My Lords, I hope that what I say will assuage some of the concerns expressed by noble Lords—through Amendments 109, 113 and 114—about the proposed 28-day period of bail being too short.

In Committee, the noble Lord, Lord Paddick, pointed to research conducted by Professor Hucklesby and Professor Zander to justify extending the initial period of pre-charge bail from 28 to 56 days. I point out from the outset that, as part of our reforms, there is a presumption that a suspect who has been arrested will be released without bail—that is, there is a presumption against bail. As the noble Lord, Lord Blair, rightly said, even though he does not agree with the Government’s position, bail has been overused and not used correctly. Over time, there has been a sloppy use of bail, if I may paraphrase what he said. Therefore, in a sense, we start from that position.

In reaching our view, we took full account of the research findings referred to by the noble Lord, Lord Paddick. As I said in Committee, the 28-day period set out in the Bill was not arrived at by chance; we carefully considered the initial period of bail, taking into account the research in drawing up our proposals. We acknowledge that the research concludes that many cases will not be dealt with within 28 days. That is why the system allows for extensions in such cases, but only where such extensions can be justified. We consider that the involvement of superintendents at this stage would enable them to review the cases under investigation within their force and to chase any cases where required. I stress again that a central feature of these reforms is that there is a presumption that a suspect who has been arrested will be released without bail—where there is no bail, no 28-day or any other limit is in operation.

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[Earl Attlee]

I meant the noble Viscount. I absolutely accept the point made by my noble friend. There is no flexibility in the amendment. After a fleeting grope of a 17 year-old at a Tube station, someone would still be caught by this in totally inappropriate circumstances. So, although I accept the need in serious cases, I am afraid that I cannot advise my noble friend the Minister to accept this amendment because of the lack of flexibility.

[Lord Kennedy of Southwark]

I am conscious of the late hour and that the next business should be coming on, so I will be very brief. From our Benches, we certainly endorse the amendment in the name of the noble Baroness, Lady Walmsley, who, along with the noble Baroness, Lady Howe, has spoken in great detail on it. I do not intend to speak for much longer than that—but what is being highlighted here is very important. I will make one point: the amendment is not suggesting that all young people need is CAMHS; they need a holistic approach, so that their mental health needs can be properly assessed. It is not quite as stark as the noble Viscount or the noble Earl suggested. We certainly support the amendment on these Benches and I will leave it at that.

[Baroness Williams of Trafford]

I applaud the noble Baroness, Lady Walmsley, on her intention to ensure that children who have been abused have the proper provision following that abuse, mainly because they are often traumatised by their experiences. I share her desire to ensure that such children receive the support they need, including for their mental and physical health, but I must reiterate my strong belief that the overriding determinant of referral for health services must be clinical need.

Drugs Policy

Lord Kennedy of Southwark Excerpts

Monday 21st November 2016 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, like other noble Lords, I start by thanking the noble Baroness, Lady Meacher, for bringing this Question for Short Debate to your Lordships’ House. In the time allowed it is not possible to cover all the points I would like to, or to respond to all the points made by noble Lords. I know that other noble Lords will be with me on this: I hope that for all government policy decisions the starting point is a reasoned, evidential base at the heart of what the Government promote as a policy. The noble Lord, Lord Paddick, referred to that, but the fact is that all three parties have failed that test over many years.

The Question before us concerns evidenced-based policies to promote public health and to place health rather than prohibition at the heart of our policies on drugs. Of course, we have two legal recreational drugs that can cause serious problems, namely tobacco and alcohol. I am fully aware of the debate about the legalisation of cannabis and the contention that it is less harmful than the two legal drugs I mentioned. My position is that I would not legalise cannabis for general use. It may well be less harmful than alcohol or tobacco but that in itself is not a good enough reason.

I do, though, see the point that the Government should give careful consideration to the case for the use of cannabis or cannabis products as a medicine. As the noble Baroness, Lady Meacher, said, where there is medical evidence, the Government should consider the case for trials and consider rescheduling cannabis from Schedule 1 to Schedule 4. These trials would be with named patients only. There should be further research seeking to establish for which ailments cannabis could be an effective and inexpensive treatment.

With the passing into law of the Psychoactive Substances Act 2016, there is no criminal penalty for the personal possession or use of new psychoactive substances, such as the synthetic cannabinoid known as Spice. There has been considerable press coverage of the harmful effects of this product, and I recall a debate in the Moses Room with the noble Baroness, Lady Williams of Trafford, when this very subject came up. There is no criminal penalty for possession of this product, but it is still illegal to produce and supply the drug—criminal penalties still apply. There seems to me some inconsistency between the Government’s policy on Spice, a synthetic cannabinoid, and that on cannabis itself. The Government should look at that carefully and urgently to get both products on the same footing. Maybe the noble Baroness can address that tonight. If she cannot, maybe she can write to me after the debate.

I turn to some of the points raised by noble Lords. I accept, as mentioned by the noble Lord, Lord Crickhowell, and my noble friend Lord Rea, that many people in the UK are using cannabis for the relief of pain and in doing so are breaking the law. The noble Lord, Lord Mancroft, made an important point in saying that what we want is not revolution but evolution on an evidential base.

The noble Lord, Lord Maclennan of Rogart, addressed the serious issue of drugs in Glasgow. It will be important to evidentially assess the programmes and the results of work being done to deal with the serious problems there.

The noble Lord, Lord Norton of Louth, made an important point that the Government should review these matters on the basis of evidence and not get themselves stuck and be unable or unwilling to move.

I thank the noble Baroness, Lady Meacher, for bringing this Question forward for debate and I look forward to the Minister’s response.

[Lord Mancroft]

If the Government were to move in the direction that the noble Lord talked about, would Her Majesty’s Opposition support or oppose the Government? That would make a huge difference to the Government’s position.

[Lord Kennedy of Southwark]

If the noble Baroness were to come forward tonight and suggest what I just described, I hope we would support them.