Proceeds of Crime

Jacob Rees-Mogg Excerpts

Tuesday 12th June 2012 Commons Chamber

[James Brokenshire]

It is certainly true that bilateral arrangements can be structured. All that I am seeking to say is that negotiations on the directive provide the UK with an opportunity to have an influence. They do not affect our decision, reflected in the motion, not to opt in at this stage because of the serious risks and operational requirements that I have identified.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I urge the Minister to be very cautious about mutual recognition, because it means that countries that do not have a legal system that is as robust as ours can have their orders enforced in this country. It therefore threatens the rights of British subjects.

[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.

--- Later in debate ---

[Jacob Rees-Mogg (North East Somerset) (Con)]

I am grateful to have been called so early in the debate to represent the European Scrutiny Committee, replacing my hon. Friend the Member for Stone (Mr Cash), who is away. I apologise if, in comparison to him, I am more loquacious.

I want to start by raising a few points relating to scrutiny. The Minister was gracious in accepting that there had been problems with it. The document was first made available for an opt-in decision in the middle of March, with a three-month time scale for making a decision which ends on 15 June. It is a pity that Her Majesty’s Government could not have made up their mind on this matter slightly earlier in the process.

I also want to raise a point about the other place. The debate in this House was cancelled on the ground that we were unable to debate the matter until the Government had made up their mind, but in the same circumstances the other place was able to debate it. I am not entirely sure whether that is a discourtesy to the other place or to us, but it seems odd that such a rule should apply in one place and not the other.

[James Brokenshire]

Perhaps I can help my hon. Friend. There was a distinction, in that the debate in the other place was on an Opposition motion, rather than a Government motion.

[Jacob Rees-Mogg]

I am grateful for that clarification. I should also like to say, for future reference, that I have been given hope that the Government might occasionally listen to what the House says, and that having debates before a decision is finally made would not necessarily be a bad thing. It might be a pious hope that speeches made from these Benches might influence the wise thoughts of Her Majesty’s Government, but it is one that I hold to. I am grateful to the Minister for his explanation, but I hope that we can have better scheduled debates in future. From a personal point of view, I believe that the slot at the end of business on Wednesdays is extremely convenient for most people.

It is also a shame to be having this debate now, when half the members of the European Scrutiny Committee are away in, of all places, Europe. They are visiting Cyprus, in preparation for Cyprus taking over the European Union presidency. I was glad to have the opportunity of staying in the House. Like you, Mr Speaker, I prefer not to leave. I believe that you require specific permission to leave the country, and I would not mind being under the same constraint myself.

I shall move on to the substance of the opt-in decision, and to the Minister’s comments. It is tremendously important that, under our current law, any freezing order requires the order of a court, but that would not be the case under the proposed document from the European Union. It is unsatisfactory to allow the administrative freezing of assets without a court interfering. That is an important principle of justice, and on that basis alone it would be wise of the Government not to opt in to the directive.

As the Minister said, the directive would offer no direct benefit to our domestic asset recovery regime. That being the case, the only argument for opting in would be to have more Europe, and that is not the policy of Her Majesty’s Government, who are committed to keeping Europe closely under watch and limiting any extension of its powers. It is therefore difficult to see what changes to the draft directive the Government would find acceptable in order to make it better, or whether there is any prospect of their insisting that anything that happened under it should require a court order before being implemented. It would be interesting to know from the Minister what would be the consequences of our not opting in—by what would we be bound in our existing agreements and how would they develop, and what would be our ability to maintain bilateral arrangements with other member states in future? Might that not be a more suitable way of approaching the matter?

There are concerns about the standing of the directive under European constitutional law. As the Minister and other Members know, we have the ability to opt out of a great number of the crime and justice directives in 2014, but—and there is a but—if we signed this proposed directive, it would not be part of that block opt-out and it would remove our ability to opt out of three other directives that we have so far opted into. The block opt-out does not apply to EU policing and criminal justice legislation adopted following the Lisbon treaty’s entry and coming into force where the UK decides to become bound by it, and neither does it apply to pre-Lisbon treaty legislation that was amended once the Lisbon treaty came into effect. The three pieces of pre-Lisbon EU treaty legislation that we would lose are on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime under the framework decision 2001/500/JHA on the same subject, and another framework decision on the confiscation of crime-related proceeds. We would thus be tightly binding ourselves into all our future confiscation and money laundering policies being determined at the European level.

[George Eustice]

My hon. Friend makes an important point, which is that the longer we delay our decision about whether to exercise our block opt-out under the Lisbon protocol, the more it can be undermined by subsequent directives such as this one coming along. Does he agree that we should make a decision sooner rather than later about whether or not to exercise that block opt-out?

[Jacob Rees-Mogg]

I am in complete agreement, and the right hon. Member for Delyn (Mr Hanson) might not be surprised to know that I would opt out of everything at every possible opportunity—and I am more than happy to admit that and to have it held against me in evidence by suitable authorities in future. It is important not to get sucked into more changes through the development of existing pre-Lisbon directives that then become binding and are not subject to the opt-out.

The other important aspect is that this directive does not apply exclusively to cross-border activities, as it applies in the UK alone where we are enforcing standards that apply to crimes committed purely in the UK, so we need to raise the question of what the European dimension is in all cases. If any directive is suitable, is it this directive, or should a completely different one be reframed relating to cross-border activities? That poses all the questions about recognition of foreign countries’ laws and enforcements that we raised with the Minister.

We have those problems to face in a once-and-for-all decision, but I also want to look at what the European Union document states on this issue and the basis on which it has been produced. The two legal bases are article 83(1) and article 82(2) of the treaty on the functioning of the European Union. Article 83(1) includes provisions on organised crime, which the European Commission has decided includes almost any serious crime that could be mentioned, so we can see immediately in that justification part of the general European creep in using the treaties to extend the Commission’s remit—indeed, the EU’s own documentation admits that.

The other legal basis, article 82(2), is all about the facilitation of mutual recognition, so although the current document is not about mutual recognition specifically, this is part of the basis of the directive coming into force. There is some broad contradiction between how the directive will be applied and the legal base used for it. I think we should be suspicious of the EU extending its powers on a basis that it then does not wish to use. Why is it doing it that way?

I know that many other Members wish to speak, but I want to say a little about the way in which the European Union reached its decision. As can be seen in the document provided for the debate, it considered five policy options. The first was the status quo, which it immediately rejected as being completely unsatisfactory. Each of the subsequent options had a slightly more European context than the one preceding it. The second option was non-legislative:

“promoting implementation of existing confiscation obligations… and promoting… existing mutual recognition obligations”.

The European Union did not like that one.

The third option was the “Minimal legislative option”, involving

“transposition and utilisation workshops plus additional policy actions addressing identified deficiencies in the existing”

legislation. Lo and behold, the European Union did not like that one either.

The fourth option was the

“Maximal legislative option without mutual recognition”.

I do not think that “maximal” is a word, Mr Speaker, but your vocabulary is better than mine. Perhaps I should ask you to rule on it later in the day. That option, it was said, would provide many benefits, and

“would consist of all policy actions which do not involve legislative action in relation to mutual recognition.”

Finally, there was policy option 4.2:

“Maximal legislative option including mutual recognition”.

We can see exactly how the process operates. The European Union issues a discussion document and considers all the options. “What should we do? Should we just leave it to the nation states? No, that will not do: we cannot trust them. Should we just do a little bit that will ease the process and make it a bit better? Should we round some of the corners to make them smoother? No, we had best not do that; the European Parliament would not like it.” That is one of the arguments that it uses. “We must go for the maximum option. We must go for the most federalist option. We must go for the option that brings in the European Court of Justice to rule over laws that apply purely in the United Kingdom and purely in the criminal justice area.” That is how the European Union operates.

Her Majesty’s Government were absolutely right to decide not to opt in at this stage, and they should remain right by robustly refusing an extension of EU powers which is, as always, being introduced in the area where it is hardest to oppose. The suggestion is that there are all those nasty people out there, and that if we all club together we will be able to deal with them. However, a Bulgarian enforcement order on some Englishman who has mislaid a parking ticket is not a way of reducing crime. What we need is a robust British system—which I think we already have—that is subject to fair controls and court orders. We do not need a further power grab by the European Union.

[Keith Vaz (Leicester East) (Lab)]

It is always a pleasure to follow the hon. Member for North East Somerset (Jacob Rees-Mogg). I do not know whether he was implying that the Government were holding the debate this evening because the European Scrutiny Committee had gone to Cyprus, but I am glad that he was left behind—or remained behind—to participate in it.

[Jacob Rees-Mogg]

I should have thanked the Government rather than criticising them, because they gave me a chance to speak for a little longer than normal.

[Keith Vaz]

I am sure that the Government are most grateful for the hon. Gentleman’s thanks.

Last night I was present at the launch of a document produced by the hon. Member for Bournemouth West (Conor Burns) about the operation of the European arrest warrant and what it has delivered over the last few years. I know that the hon. Member for Esher and Walton (Mr Raab) is a frequent commentator on its justice and home affairs implications for our country.

I think that we should be cautious in dealing with these matters. The EU document needs to be considered with great care. I am not one of those who believe that we need a directive in order to secure co-operation between EU partners, but I think that my right hon. Friend the Member for Delyn (Mr Hanson) deserves the explanation that he seeks. I think that he deserves to be told why the Minister in the other place was so enthusiastic about the directive, and why the Government have apparently changed their mind. Of course, if there is a valid explanation, and if the various agencies—the Serious Organised Crime Agency being one of them—make representations to the Government pointing out that this is going to create problems for our legislation, it is important that that advice is shared not only with the Minister, but with the House.

The hon. Member for South Ribble (Lorraine Fullbrook) and I recently returned from an official visit to Colombia as part of a Home Affairs Committee delegation, where we were looking at the drugs trade. We noted a very important fact: only 2.6% of the profits from the trade in cocaine remain in Colombia. Some 97% of cocaine profits are administered and laundered within the European Union—in our country and other countries of the EU. That means that our existing structures are not used appropriately enough to catch the people who are responsible for drugs having become the biggest illicit activity in the world.

Even though a directive would help, it will not provide the answer. The Government are right not to opt in unless and until there are further negotiations, therefore. We need to make sure that the structures that are in place in the various countries of the EU can work together to catch those responsible for laundering the profits from drugs. I hope that the Government will use the time that will be available to them as a result of their decision not to opt in constructively and productively, and that they look at the institutions and organisations and make sure that that co-operation is improved. There are, of course, organisations—such as Europol and Interpol—which can be used effectively. I do not think Europol is used enough. We have a very good British director of Europol, Rob Wainwright, who was trained at SOCA. We must co-operate much more closely, without legislation from Brussels being needed.

Drugs is one example. The other is human trafficking, which is the third biggest illicit activity in the world, with profits of £32 billion a year. Through our co-operation with the Romanian authorities in Operation Golf, we showed that it is possible to have mutual co-operation with other EU countries without having a further directive, if there is willingness on the part of our European partners to work with us to deal with illegal activity.