Sanctions and Anti-Money Laundering Bill [HL]

Lord Judge Excerpts

Wednesday 17th January 2018 Lords Chamber

Moved by

[Lord Judge]

71A: Clause 41, page 28, line 38, at end insert—
“( ) Regulations under subsection (1) may not make provisions that create new criminal offences.”

[Lord Judge (CB)]

My Lords, the issue which arises on this amendment captures precisely the same constitutional point on which your Lordships expressed your views on Monday. It is therefore disappointing that the Minister has not been able to acknowledge the view that vesting wide-ranging powers in a Minister to create criminal offences by regulation is constitutionally troublesome. Troublesome is a modest word; very troublesome is not much stronger; but understatement perhaps has something to do with my disappointment, because there is a further disappointment. During the course of the debate on Monday, the Minister made clear before the vote that he knew and, to use his words, “totally accepted” the concern of the House about the creation of criminal offences using secondary legislation.

There is a further reason for my disappointment. At least on the sanctions part of the Bill, the Minister was able to advance an arguable point—not a strongly arguable point, but an arguable point—that it was necessary to have the legislation in the form proposed because, after our departure from the EU, there would be a gap and sanctions would be needed which could not be provided for. In other words, there had to be an element of continuity. As I said, it was a colourable argument, but it was an argument.

No such argument is present in relation to this amendment. This is not a provision for continuity; it is not a provision for saving anything; it is a distinct part of a long Bill which is entirely creative and in no sense preservational. We have this very long Bill, and the legislation on money laundering which we are concerned with today is a very short part of it. There is no primary legislation in it at all; it is all regulation-making powers. It is backed up with an endless further supporting group of regulation-making powers in Schedule 2: on and on they go. I shall come to look at one or two of them in a moment.

Where criminal offences exist, and they do here, and if ever you were to be deterred from committing offences, there is also ample protection. The regulations which will support the regulations include: the power to have a supervisory body; directions for investigation; enabling those with the powers to do so to come into your home to search; liability to civil penalties; the fact that you can be caught if you are doing this abroad; and so on and so forth. There are ample powers, therefore, to provide the evidence which would be necessary to prove one of the many offences in the Terrorism Act, the Counter-Terrorism Act, the Terrorist Asset-Freezing etc. Act, the Proceeds of Crime Act—the litany is endless, and I shall not weary your Lordships with it.

Perhaps we may consider for a moment some of the offences which you can commit which exist and will exist whether we stay in Europe or come out of Europe—whatever we do until Parliament repeals them. There is the offence of entering into money laundering: precisely what this is about. There is the offence of concealing the proceeds of crime: precisely what this part of the Bill is about. There are endless offences currently in existence of which you will be guilty if the regulations come into force but which we do not need the regulations to base the prosecution on. The statute book is full of offences.

In none of our debates so far has a single possible gap been identified in the criminal law as requiring closure. I would have a recommendation to make if one had been identified—come back to Parliament—but there is none. As with the previous part of the Bill, we are invited to hand over power to a Minister which, save in the most exceptional circumstances, should remain within the power of Parliament to give or refuse on proper scrutiny.

[Viscount Hailsham (Con)]

Would the noble and learned Lord also agree that, if these powers were to be given, they should be exercised only in an emergency situation and that, heretofore, the Minister has not been able to identify any likely emergency not covered by existing legislation?

[Lord Judge]

I agree—and I do not propose to add anything to that, with no discourtesy to the noble Viscount. That is the reality. These powers are not to be given, save in the most exceptional circumstances—and I would not define them, but I would invite some suggestion of what is exceptional here.

So here we have it. There is no self-evident necessity for this. The criminal law covers what is proposed to be covered in the regulations that are proposed to be allowed to be created. Without this amendment, which I am advancing, we would once again be allowing an alarming accretion of power to the Executive. We should not do it; we did not do it on Monday; let us not do it today. I beg to move.

--- Later in debate ---

[Lord Judge]

I thank all noble Lords who have taken part. I fear that the disappointment I expressed about the Minister’s reaction remains. Of course it is true that from time to time, following primary legislation, Parliament allows regulations to be created which would impose a criminal sanction. However, I underline that we are not dealing here with a regulation made on the basis of primary legislation which identifies a criminal offence: this is a regulation to create offences based on something that is only a regulation. In other words, the Minister will have complete power, subject to the affirmative resolution procedure, to decide what should fall within the ambit of the regulations, and then complete power—quite apart from all the millions of provisions in the schedule—to create criminal offences. That is simply wrong in principle.

Although I have listened very carefully, there has been no suggestion from the Minister that, in reality, there are any serious available offences that are not adequately covered, for deterrent and punishment purposes, by the endless stream of legislation to which I referred when I began my submission. What is more, none of the letters to which the Minister referred, from the CPS and so on, pointed out that here is a gaping hole which must be filled. This House took a decision on Monday; it would be astonishing if I did not give it a chance to consider again what the position should be. Therefore, I seek to divide the House.

--- Later in debate ---

Moved by

[Lord Judge]

98: Clause 44, page 29, line 31, leave out paragraph (a)

[Lord Judge]

My Lords, my concern with this clause is that it is a Henry VIII provision. A number of your Lordships have listened to me on the subject of Henry VIII clauses and I do not want to repeat myself but it remains a matter of puzzlement to me that Governments of all different hues and compositions rely on them. To rely on such a clause is not to rely on a badge of honour—Henry VIII was a monstrous tyrant. There are many things about him that I would like to say but anybody who thinks that Henry VIII is less than a badge of shame should just look at the story. Ignore the hypocrisy of sleeping with Anne Boleyn and not Catherine of Aragon because his brother had slept with Catherine, when he himself had earlier slept with Mary, Anne’s sister. How do you square that for honesty and integrity? Much more seriously, how do you claim to have clauses in the name of a man who gave his solemn oath as the anointed monarch to Robert Aske at the Pilgrimage of Grace that he would reform, and then sent his troops out under the Duke of Norfolk to exercise and wreak vengeance and havoc so as to deter anybody from ever rebelling against him again?

Noble Lords will not want to hear any more from me on Henry VIII, but he was a monster and these are monstrous clauses. Take this one—with Clause 44, there is no primary legislation at all. As I have said in the course of the debates on other aspects of the Bill, one cannot find anything in it to bite on. It just says, “Let’s give the Minister regulation-making powers for this, that and the other”. I am not suggesting this about our Minister tonight, but it is, “Come in and buy one: take anything you like—it’s regulations”. Can we bear that in mind, given that we are now to have a regulation which can be supplemental, incidental, consequential, transitional or saving, and which may amend, repeal or revoke enactments whenever passed or made—possibly even in the future?

This is all being done on the basis of an unknown law, because the Minister has not yet brought the regulations into existence. In advance of the law being made by regulation, we are giving the Minister power to amend the regulations and to do away with statute. This is in a world where, as we discussed earlier, we already have the Terrorism Act, the Counter-Terrorism and Security Act, the Terrorism Asset-Freezing etc Act and the Proceeds of Crime Act—goodness knows how many—all of which bear on this Act, and all of which will be susceptible to amendment repeal at the Minister’s behest.

The lesser will override the greater; the secondary will override the primary; and the Minister is, in effect, going to replace Parliament. I hope that when the Minister comes to deal with this part of the debate, he is able to reflect on the vote earlier this afternoon on allowing the Minister to create criminal offences by regulation. That vote, which I urged on the House, reflected a constitutional concern about too much power being vested in any Minister. Today, the vote against giving Ministers these extraordinary powers was clear and unequivocal. It is a sign that Ministers need to be cautious; that maybe times will come when Ministers will not be given Henry VIII powers just because they ask for them, and will have to reflect carefully before they allow such a clause to be included in any Bill. For the time being, I beg to move, and I invite the Minister to address the consequences of this afternoon’s vote.

[Viscount Hailsham]

My Lords, I support what the noble and learned Lord has said. My own view is that the power in the Bill gives far too great a power to Ministers. The fact that this specific power is subject to the affirmative resolution procedure is not a sufficient safeguard, not least because—a point I have made time and again—the procedure does not provide a power of amendment.

Let us consider for a moment what this power enables the Government to do. It could be used in amending, revoking or repealing existing legislation or to extend classes of offence to which the amended legislation applied. It could be used to increase penalties. It could be used to remove statutory defences. It could be used to amend the definition of criminal intent. Indeed, it could make absolute offences that presently require proof of a specific intent. Because it is an amending power, it could be used to give further powers to the investigating officials or to increase the penalties imposed by the courts.

One can get a very good guide as to what could be done from the clause of the Bill on enforcement, Clause 16, where one can find among other things that the regulations could impose a sentence of imprisonment of up to 10 years. That could be done by regulation—without the power to amend. There is a further objection if one actually considers, just for a moment, the purpose that can be used to justify the regulations. Clause 1(2) states:

“A purpose is within this subsection if the appropriate Minister making the regulations considers that carrying out that purpose would—


(a) further the prevention of terrorism, in the United Kingdom or elsewhere,

(b) be in the interests of national security,

(c) be in the interests of international peace and security, or

(d) further a foreign policy objective of the government of the United Kingdom”.

Paragraph (a) is all right, but paragraph (b) is becoming pretty broad and paragraph (c) is even broader, and paragraph (d) refers to an objective that might never previously have been discussed by Parliament or even disclosed to an admiring public. We are enabling a Minister, by fiat, to introduce regulations of that kind.

There are well-intentioned Ministers on the Front Bench such as the noble Lord, Lord Young. We have known each other for almost 60 years. I would no doubt be very content to let him have those powers. But then I ask myself whether I would want to give those powers to Mr McDonnell or Jeremy Corbyn. I suspect that nobody in your Lordships’ House tonight would wish to do that—certainly not the noble Lord, Lord Adonis, very sensible fellow that he is. I suspect that we would be paving the way to the elective dictatorship of which my father wrote and spoke.

If we are to do these things we do them by primary legislation, surely not by secondary legislation over which we have precious little control and when I know that the Whips will be very active with noble Lords who have never read the legislation. I do not know whether the noble and learned Lord will press his amendment, but, if he does, he will have my support.

--- Later in debate ---

[Lord Judge]

My Lords, it is quite alarming to hear, because it is entirely true, that this is not an unusual power. It is lamentable that we have reached the stage where we are habituated to Henry VIII clauses in every piece of legislation. We never have a piece of legislation without a Henry VIII clause. That is not something of which we should be proud. It happens because we allow the legislation through—we pass it. We should think more carefully before we do so.

I am grateful to everyone who has taken part in the debate, and to the Minister. Perhaps I might say how much I have enjoyed working with him to try to improve the Bill. I have appreciated very much his courtesy and the co-operation of the Bill team. Given the situation we are now in, I beg leave to withdraw the amendment.

Amendment 98 withdrawn.