Proceeds of Crime

Lord Hanson of Flint Excerpts

Tuesday 12th June 2012 Commons Chamber

[James Brokenshire]

I certainly hear my hon. Friend’s point, and we will monitor that carefully in relation to the directive. As I have indicated to the House, there is currently no proposal in the directive dealing with mutual recognition.

[Mr David Hanson (Delyn) (Lab)]

I hear what the Minister says, but I wish to clarify it. In another place’s proceedings on the matter only recently, on 22 May, Lord Henley, the Minister, said:

“The directive offers us a valuable opportunity to raise the standard of asset recovery legislation in the EU, enhance our co-operation with member states, and increase our powers to recover criminal assets held overseas.”—[Official Report, House of Lords, 22 May 2012; Vol. 737, c. 778.]

Why did the Minister in the Lords say that only two weeks ago, whereas the Under-Secretary is saying today that we are not going to opt in?

[James Brokenshire]

If the right hon. Gentleman reads the report, he will see that my noble Friend underlined clearly that the Government had not concluded their consideration of the directive at that point and had not formulated their decision on whether to opt in. We have listened carefully to the concerns expressed by law enforcement partners about civil recovery powers, and we have determined that the best course of action to protect our laws and our current civil recovery operation is not to opt in. I am surprised that the right hon. Gentleman seems to challenge that view. He seems to have determined that it would be appropriate to opt in.

[Mr Hanson]

rose—

[James Brokenshire]

If the right hon. Gentleman wants to take a different course, I am happy to give way to him.

[Mr Hanson]

I was simply looking at what was said only three weeks ago in another place and what the Minister is saying now. Given what he has said today, is he willing to publish in the Library at least some sort of précis of the responses that he has had from the agencies concerned, so that we can examine them in the light of the directive?

[James Brokenshire]

I am certainly happy to consider that, but the right hon. Gentleman will recognise that there are sometimes operational sensitivities attached to doing so. We have heard clear representations from operational law enforcement partners, which have been an important factor for the reasons that I have outlined. We none the less recognise that the UK would benefit from the directive raising standards across the EU regardless of whether we opted in, because of the developed legislation that we have in place in this country.

Not opting in at this stage is not a sign that we do not care about asset recovery. It is a sign that the UK takes it very seriously and is committed to getting legislation right for the UK and all member states. Our ultimate aim is to achieve better mutual recognition of both criminal and civil confiscation. The directive will not achieve that, and we will press for a further instrument or instruments in due course that would have that effect. We will analyse the directive carefully, but in the context of the current version, and for the reasons that I have explained, our clear judgment is that the UK should not opt in at this point.

[Mr David Hanson (Delyn) (Lab)]

The nature of the debate has changed slightly since the initial discussions in another place some weeks ago. I welcome the opportunity to discuss the draft directive on the freezing and confiscation of the proceeds of crime in the European Union, and I am grateful to the Minister for his explanation of his view. He mentioned that the debate should have taken place before the recent recess and was pulled at the last minute. That might be for the reasons of operational advice that he gave, but I smell a bit of anti-Europeanism on the Conservative Back Benches—there is a slight whiff of concern about the EU encroaching on the House’s legislation. Perhaps that is one reason why the Minister has looked at the matter in more detail, but I accept at face value his indication that he has taken advice.

The directive seeks to harmonise national responses by laying down minimum rules for member states with respect to the freezing and confiscation of criminal assets. As the Minister knows, dissipating and converting the proceeds of crime into a variety of assets is one way in which criminal gangs and terrorist organisations operate. The process of uncovering such assets can be complex and difficult, and international co-operation is an indispensable tool in the recovery process.

Like the Minister, I welcome the promotion of cross-border responses. In order to be effective in tackling organised and other crime, we need to co-operate and strengthen our existing relationships with other states within the EU. The Commission believes that EU and international law remain underdeveloped and underutilised. Crime does not respect borders, and we must have a proactive cross-border approach.

I found myself agreeing with Lord Henley, the Minister in another place, who said on 22 May that the directive offers a valuable opportunity to raise the standard of asset recovery in the EU. The Minister has tonight indicated that we already have a strong UK provision on such matters. In fact, for the most part, the UK exceeds the requirements of the draft provisions, owing in no small part to the measures he mentioned, such as the Proceeds of Crime Act 2002, which was passed by the previous Government, and the Terrorist Asset-Freezing etc. Act 2010, which I supported as a Minister and saw through the House as a shadow Minister only a couple of years ago.

The Minister has noted that there are a range of figures, but around £560 million-worth of UK criminal assets are overseas. We need to look at how we recover those, because sums of that magnitude indicate that the Government can do more. Effective international co-operation is key.

I believe the directive will be an important tool in tackling serious organised crime, but I am willing to take at face value what the Minister has said. I would like further information on any concerns that have been expressed to him. He can share those either with the House or with me on—dare I say—a Privy Council basis, because I would like a flavour of them. Ultimately, I want an improvement in the asset recovery regime across Europe and international co-operation with our European partners to deal with this problem.

As the motion asks the House to take note of the document, it is important that we examine it. The European Scrutiny Committee highlighted a number of issues, including a range of matters on which there needed to be further work—I accept that these are for discussion—including the extent of criminal offences and the implications of article 8 on safeguards for the legal aid budget. There is a concern whether article 9 includes value-based confiscation, and a concern about articles 3 and 4 on the confiscation of the proceeds of crime, and on extending confiscation when the court

“‘finds it substantially more probable’ than not that these assets are derived from other similar crimes.”

There is concern about article 7.2, under which, in urgent cases, assets may be frozen prior to obtaining a court order, which is at odds with UK legislation. Article 7 requires member states to be able to freeze property that is in danger of being dissipated, hidden or transferred, as ordered by a court.

A range of issues were raised, including on article 11 and others, by members of the European Scrutiny Committee.

[Charlie Elphicke]

I am listening with care to the argument the right right hon. Gentleman puts to the House, but I am unclear on one thing: does he think we should opt in to the directive, yes or no?

[Mr Hanson]

I have said to the Minister that we believe that the directive is a positive development, as the Minister in the other place also said, only two weeks ago, and we should look at it in a positive way. I will take at face value the concerns that the Minister has raised this evening about operability and the advice that he has received from the agencies, but if the hon. Gentleman thinks that we should not opt in because of a wave of anti-European sentiment, that is a very different matter indeed. I will certainly be a positive European. We should have co-operation. I want to see co-operation between states. I also want the European Union to take powers to take the assets of criminals abroad who are operating and making profits in this country. That would not be a bad thing. I would very much welcome further discussions with the Minister about the points that he has raised, but in principle I have no objection to a Europe-wide document helping to support this approach and enshrine improvements on what we currently have in British law.

[Mark Reckless (Rochester and Strood) (Con)]

Was that a yes?

[Mr Hanson]

For the anti-Europeans on the Government Benches, let me say that it is certainly a yes. I certainly wish to see co-operation on a Europe-wide basis to freeze terrorist and criminal assets and to repatriate them to this country. The hon. Gentleman can certainly take it as a yes. This evening I have listened to what the Minister has said, which indicates that he has had advice—which I have not seen—that says that there are difficulties with this measure. What I am saying to the Minister—and to his right hon. Friend the Home Secretary, who is in her place—is that my right hon. Friend the shadow Home Secretary and I would wish to have sight of that advice and to have further briefing on it, so that we can scrutinise the operation of the process by the Minister and how he intends to take forward discussions on the document as a whole. However, I sense that Government Members have objections to the very principle of such co-operation, rather than to the practice that the Minister has set out.

I would like to have some idea from the Minister—either now or after contributions from right hon. and hon. Members—of how he will take this matter forward. He has indicated that he has concerns about certain issues, but he has not yet shared with the House the details of what they are. What is his timetable for discussion with his European Union colleagues on these matters? Does he have a timetable to try to resolve the issues? Does he intend to return to the House at some point to sign up to the document, or has it been kicked into the long grass because he knows that, ultimately, Members such as, I suspect—with due respect—the hon. Member for Rochester and Strood (Mark Reckless) and others would vote against the measure, no matter what was brought forward, as a matter of principle? If that is the case, the Minister should be honest with the House, because we will certainly return to this matter in due course, when we have seen the advice that he has received, as far as he can share it with us. I sense that this is not just about the operation and practice of the measure; rather, I sense that there are certain elements on the Government Back Benches with a fundamental objection to the principle of such co-operation.

[George Eustice (Camborne and Redruth) (Con)]

Many Members on the Government Benches agree that we should co-operate. However, does the right hon. Gentleman not understand that we can co-operate without giving up control in some of these policy areas and without subjecting ourselves to the authority of the European Court of Justice, which is what this directive is about?

[Mr Hanson]

Case proved, m’lud: the hon. Gentleman, along with the hon. Member for Rochester and Strood and others, does have concerns about this issue in principle. What I take from the Minister this evening is that the advice that he has received from operational organisations points to concerns about the ability of the measure to deliver what it should deliver, which is an increase in the assets taken from criminals and terrorists, and their repatriation to the United Kingdom. If that is the reason he is lukewarm this evening about progressing the measure, I will look at that in detail. If the reason is the pain and suffering that hon. Gentlemen such as the hon. Member for Rochester and Strood and others may bring upon him—because of their fundamental objections to further European co-operation on such matters—that is something that we will also revisit in due course. If the Minister can provide us with a timetable for further discussion and examination of the issues, and if he is saying that he will rule out for ever signing up to this—[Interruption.] If he would like to say that on the record, that would be helpful.

[James Brokenshire]

I say to the right hon. Gentleman that we do not rule anything in, and we do not rule anything out. It will depend on how the negotiations proceed. The EU itself will be leading the timetable, and the presidency will take that forward. I understand his desire for a timetable, but that is not within my gift.

[Mr Hanson]

We have heard an interesting development in the consideration of the order this evening. There has been a clear position change from that expressed by the noble Lord, Lord Henley, only two weeks ago.

[James Brokenshire]

indicated dissent.

[Mr Hanson]

I am afraid there has. The Minister has explained this evening the basis on which he has made his comments on the order. I will seek to obtain further information on that, as that would represent valuable progress. I suspect, however, that underneath all this there is a slight concern about the reaction of some Conservative Members, who will undoubtedly raise the concerns that I have mentioned, during the rest of the debate.