Lord Blencathra:

Moved by Lord Blencathra

55C: Clause 18, page 22, line 24, leave out “an amount not exceeding £60,000” and insert “a minimum of 500% of the value of the illegal goods advertised”Member’s explanatory statementA fine is based on a judgement of the seriousness of the crime and is subjective. My Amendment ensures that the penalty is based on the actual value of the illegal knives and the profits from their sale.

My Lords, in moving Amendment 55C, I will speak also to my Amendments 55D and 55E. My three amendments here are all similar, as I argue that a value-based penalty is more effective than a maximum fixed fine. The issue of illegal knife sales on the internet is a matter of serious public concern. It is big business with big consequences when those knives—machetes and zombie knives—are used to kill and maim, as is increasingly the case.

The proposals in the Bill to fine individuals and businesses up to £60,000 for selling illegal knives online seem hefty at first glance. However, the effectiveness and fairness of such a fixed penalty are questionable. A more effective approach would be to impose a fine equal to 500% of the total value of all the illegal goods advertised. I want to convince the Minister that a proportional penalty is, in some cases, superior to a subjective fixed maximum fine.

First, there is the subjectivity of the fixed maximum fine. Setting a maximum fine of £60,000 for selling illegal knives leaves the final penalty to the discretion of the court. This introduces subjectivity into the process, as judges must determine what amount is appropriate in each case. The outcome may vary significantly depending on the judge’s interpretation of the offence’s severity, the defendant’s circumstances and other factors. Consequently, similar offenders could face vastly different penalties, undermining the consistency and predictability of the law. Then, of course, I come back to my favourite organisation, the Sentencing Council, advising that the £60,000 fine should never be imposed—but let us leave that aside for the moment.

Moreover, a fixed cap may not reflect the true scale of the illegal activity. For example, a small-scale individual seller and a large business operation could both face the same maximum penalty, despite the latter potentially profiting far more from illegal sales. This lack of proportionality can result in fines that are either too lenient or excessively harsh, depending on the specifics of the case.

In contrast, my suggestion of a fine set at 500% of the value of all illegal knives advertised is directly linked to the scale of the offence and the profits. This proportional penalty approach ensures that the penalty increases in line with the seriousness of the crime. Large-scale operations, which are likely to profit more and cause greater harm, would face correspondingly larger fines. This not only achieves greater fairness but strengthens the deterrent effect. As we have said on many occasions, criminals are primarily motivated by profit. If the financial penalty reliably exceeds any potential gains—by a factor of five in this case—the risk heavily outweighs the reward. I suggest that that creates a strong disincentive for individuals and businesses to engage in illegal knife sales.

The proportional system also ensures that penalties remain meaningful, even as the market or profitability of legal knives fluctuates over time. The proportional penalty system is more likely to deter criminal behaviour, because it removes ambiguity and subjectivity from sentencing. Offenders know in advance that any profits from illegal activity will be entirely wiped out and replaced by a substantial loss. That clarity and certainty are crucial in discouraging would-be offenders. Furthermore, tying the fine to the value of the legal goods ensures fairness across all cases. Small-time offenders are punished proportionately for their actions, while major players face penalties commensurate with the harm they cause and the profits they make. That upholds the principle that the punishment should fit the crime.

In summary, I submit that a fixed maximum fine of £60,000 for selling illegal knives online introduces subjectivity and inconsistency—whereas a penalty of 500% of the value of all illegal goods advertised is fair, more predictable and far more likely to deter criminal activity.

I do not need to speak to my Amendment 55E; it is the same concept but suggests a mere 100% proportional penalty for a lesser offence. I urge the Minister to consider adopting a proportional penalty system to effectively combat the sale of illegal knives over the internet. I beg to move.

My Lords, as the noble Lord, Lord Blencathra, has so concisely described—he gets more concise as the evening goes on—this group deals with the sanctions applied under the online weapon advertising regime.

We very much welcome the Government’s commitment to ensuring accountability for businesses and sellers who facilitate the online sale of knives. However, if the penalties imposed are too small, they merely become a tolerable cost of doing business for large, wealthy online service providers. As the noble Lord explained, the Bill proposes maximum civil penalties for service providers of up to £60,000 for failing to comply with content manager requirements or for failing to comply with a content removal notice. His Amendments 55C and 55D directly challenge that maximum limit by proposing that the penalty for a service provider’s non-compliance should instead be a minimum of 500% of the value of the illegal goods advertised.

In our view, that proposal shifts the focus decisively towards financial deterrence—although I hate to agree with the noble Lord twice in one evening. The argument embedded within these amendments is sound: fines should reflect the scale and profitability of the illegal advertising business they enable. By linking the minimum fine directly to five times the value of the illegal goods advertised, we ensure that the penalty scales proportionally with the volume of the illicit trade facilitated by the platform, making it financially unsustainable to turn a blind eye to illegal weapon content.

The noble Lord’s Amendment 55E applies this same principle to the penalties imposed on the service provider’s content manager. Clause 23 currently sets the maximum penalty for the content manager at £10,000. Amendment 55E seeks to replace that cap with a minimum penalty of 100% of the value of the illegal goods advertised. That would ensure that the individual responsible for overseeing compliance within the organisation also faces a penalty that reflects the seriousness of the content they failed to manage or remove, particularly where that content is tied directly to the advertisement of unlawful weapons.

These amendments force us to consider how we can make our Laws genuinely tough on organised online crime. In our view, legislation must be proportionate; and proportionality, in the face of corporate digital crime, means that penalties should meaningfully exceed the profits derived from facilitating criminal activity. The amendments rightly push us to consider the financial consequences that would truly deter platforms from risking public safety for private gain.

My Lords, I am grateful to my noble friend Lord Blencathra for these amendments and offer support from the front bench for them.

The three amendments by my noble friend all have the same aim: to tie the level of financial penalty directly to the value of the illegal knives being advertised and the profits generated from their sale. The logic behind them is obvious—and they also raise an important point. Fines that merely represent a modest operational cost to criminals will do little to deter those who deliberately trade in dangerous and illegal weapons. If the economic reward remains greater than the economic risk, the deterrent effect is minimal. Therefore, it seems prudent to put into statute appropriate provisions to ensure that that never is the case. The purpose of penalties must be both to punish wrongdoing and to disrupt the business model that makes it worth pursuing.

Knife crime and its associated sales should be thought of not as back-alley transactions conducted by a small handful of criminals but instead in the more accurate context of modern supply chains, marketing strategies and online commercial structures that enable weapons to reach young and vulnerable people. The digital world has dramatically shifted the landscape of enforcement. As we know, criminal enterprises operate across borders and platforms, and enforcement agencies must be equipped with powers and sanctions. I hope that the Government will reflect thoughtfully on the arguments raised.

My Lords, I am grateful to the noble Lord, Lord Blencathra, for his explanation of the amendments in this group. As he said, Amendment 55C would set minimum fines for companies that fail to comply with an appointment notice that requires them to designate an executive to be held liable for failing to take down illegal knife and weapons content. Amendments 55D and 55E would set minimum fines for companies and liable executives that fail to take down illegal content when requested to do so. As he explains, his proposed minimum fines are proportionate for companies; they are set at 500% of the value of the knife or the weapon for companies, and 100% of the value for individuals.

I hate to disappoint the Committee or to ruin the spirit of accord that has broken out across the Benches opposite, but while the logic of the amendment from the noble Lord, Lord Blencathra, is good, I am afraid it does not reflect the actual behaviour and experience of the marketplace. If I can, I will try to explain why it would not be as effective or as impactful as he no doubt intends.

I hate to interrupt the Minister—well, I do not really—but can he explain what he means by that about the market? I did not grasp what he meant by that.

Well, that is a very good segue into the words that are just following—I was about to get there.

Many knives and weapons that are sold illegally are sold relatively cheaply, in the order of tens of pounds. Some sellers who sell knives and weapons over social media tend to hold and advertise small stock numbers. Therefore, we contend that the suggested minimum penalties are simply too low to incentivise the prompt removal of illegal content. The independent review of online safety of knives shows a case study as an example where an individual bought 30 knives to sell illegally over social media for under £50 each. Should the social media company not take the illegal content down, the proposed minimum fine under these amendments would be £1,500 for the executive and £7,500 for the companies. Those penalties, as I am sure noble Lords would agree, would be too low for large tech companies and executives to be worried about at all. Not having a minimum penalty will leave full discretion to the police, who specialise in investigating illegal knife sales online. This will allow them to use their judgment to issue fines that are commensurate in each case.

The penalties for failing to comply with these are, as already noted, issued in the form of civil penalty notices by the police. They can be up to £60,000 for companies and £10,000 for individuals. I remind noble Lords that these penalties are for single violations and will add up if companies and executives repeatedly fail to comply with removal notices. The measure is intended not just to punish companies but to facilitate behaviour change. I trust that the police administering these measures will issue fines of an appropriate level to incentivise the prompt removal of illegal content.

I note the experience, which I found instructive, of the independent review of the online sale of knives, that a lot of the activity is undertaken through very small stocks that are cheaply sold. If we used the regime of a proportionate measure, proposed by the noble Lord, Lord Blencathra, we simply would not generate enough. Noble Lords may not think that £60,000 is worth much, but we certainly would not generate anywhere near £60,000 in those examples.

It is worth bearing in mind that a lot of the grey market sellers do so over social media websites. The recipient of the fine is the tech company that does not take down the illegal material, rather than the person selling the knives or the weapons. We understand the intended recipient of the punishment—the fines—which is why we think that having the £60,000 or £10,000 level is appropriate, because that is for single offences. Any time a company fails to remove the content for which they have received a notice, the fines will add up and accumulate, which will make an impact—and we would all agree that that needs to be done.

In response to another point made by the noble Lord, Lord Blencathra, we feel that the Sentencing Council is unlikely to comment on the level of a civil penalty. That may be a little speculative from my perspective, but I think that it is probably what the experience bears out.

Given this explanation and the clarification of our view of how the environment—I should not have used the word “market” earlier—in which these sales take place, I hope that the noble Lord is sufficiently assured that these penalties will have an impact in the way they are set out in the Bill and that he will be content to withdraw his Amendment.

My Lords, I almost had palpitations for the second time tonight when the noble Lord, Lord Clement-Jones, supported my Amendment.

I hear what the Minister has to say. I had not intended for the 500% penalty to apply to just two or three individuals selling a few knives; I intended that it would apply to the supply of the whole shooting match. The individuals who are selling a few knives have got them from somewhere: there is a supplier or a big source making these by the thousand. For someone at the centre who has a warehouse with £100,000 worth of knives, a penalty of £500,000 would clean them out completely, whereas a penalty of £60,000 would still leave them with £40,000 profit. However, I accept the point that, if the case involves small-scale individuals, the 500% penalty might not be as great as the penalty in the Act. I wonder whether it is worth looking at the possibility of offering “either/or” as an option—I think that is a possibility for the future.

I will make another general point. I woke up about a week ago at 2 am and thought of this proportional system. It may not be perfect for knives, but I think there is some merit in this concept of proportionate fines for certain offences, whereby rather than having a maximum penalty imposed by law, the penalty is a percentage—100%, 200%, 300% or 1,000%—of the value of the goods being advertised or sold.

Bearing in mind what the Minister said, we would like to look again at the possibility of offering a fine and some proportional penalty. Having said that, I beg leave to withdraw the amendment.

Amendment 55C withdrawn.

Clause 18 agreed.

Schedule 4 agreed.

Clauses 19 to 22 agreed.

Clause 23: Failure to comply with content removal notice or decision notice: civil penalties

Amendments 55D and 55E not moved.

Clause 23 agreed.

Clause 24: Guidance

Amendment 55F not moved.

Clause 24 agreed.

Clauses 25 and 26 agreed.

Clause 27: Possession of weapon with intent to use unlawful violence etc