I beg to move amendment No. 217, in clause 90, page 53, line 23, at end insert

'or

(c) to meet his reasonable legal expenses'.

With this it will be convenient to discuss amendment No. 235, in clause 90, page 56, leave out lines 3 and 4.

I suppose that, having welcomed clause 89, I should be even more welcoming of clause 90 in its generality. When the 2002 Act first went through Committee, the possibility of having freezing orders, rather than appointing receivers, had not been entirely thought through, although it was touched on, and I remember some interesting discussions outside the formal setting of the Committee. The fact that we shall now have freezing orders strikes me as a very good thing.

The other thing that the Government are doing in the Bill, as they indicated on Second Reading, is taking the view that someone should be able to pay their legal expenses out of frozen assets if that is thought reasonable. There is a big history to this issue and it rang such a bell in my mind that I went off to dig out the Official Report of the Committee that considered the Proceeds of Crime Bill. I found that I had said the following:

''Will you end up with a legal aid bill of £5 million for convicting Mr. Big, without any regard to the fact that the money that was restrained and recovered would have covered that amount? That is bad PR for the legal system. Will the Minister explain how the system is designed to work?''—[Official Report, Standing Committee B, 29 November 2001; c. 375.]

I might add that the Minister then explained that that was exactly what was intended and that legal aid would be made available. So, the Government's   change of heart is, I suppose, even more welcome, because it follows my original suggestion exactly.

My query, which relates to amendment No. 217, is that I assume that legal expenses are regarded as part of reasonable living expenses. If it is the Government's intention that they are not to be seen in that way, however, should we not spell that out? On Second Reading, the then Home Secretary made it clear that that was his intention. If I have misunderstood the position, I would be grateful if somebody could clarify it for me.

Amendment No. 235 relates to clause 90 and page 56, and they highlight something that is slightly odd. The Scottish provisions include an express provision excluding a person from taking money to meet legal expenses, which muddied the waters for me even further. I therefore tabled the two probing amendments to try to understand exactly what the Government intend.

I hope that my contribution will reassure the hon. Gentleman that amendment No. 217 is unnecessary. It would introduce an explicit provision that reasonable legal expenses will be released from the new property freezing order. It is not needed because proposed new section 245C(3) is an illustrative, not an exhaustive, list of the purposes for which exclusions may be made—''may'' being the key term. Accordingly, just because a purpose is not mentioned in the list does not mean that an exclusion cannot be made for that purpose.

One reason for not mentioning legal expenses in the illustrative list in proposed new section 245C(3) is that proposed new section 245C(5) makes it clear that the power to make exclusions includes the power to make them for the purpose of enabling a person to meet legal expenses in respect of proceedings under part 5 of the 2002 Act. Given the general terms of the power to make exclusions—I refer hon. Members to proposed new section 245C(1) and (2)—confirmation that there is power to a make an exclusion in relation to legal expenses in respect of one type of proceedings must be a sure indicator that there is power to make an exclusion in relation to legal expenses in respect of proceedings of any type. Therefore, the matter is covered.

On amendment No. 235, we take on board the points about having access to the assets for legal expenses. As a listening Government, we sometimes learn through the implementation of law what we might not otherwise have understood. So well done to the hon. Gentleman for raising it the first time around. He will note that we are very generous on the Labour Benches.

Amendment No. 235 would remove the prohibition, which applies only in Scotland, on releasing frozen assets to meet a respondent's legal expenses. The amendment that schedule 6 makes to the 2002 Act will allow respondents in England, Wales and Northern Ireland to control access to their frozen assets to meet their legal expenses. Scotland did not want the extension to apply to it, partly because of some of the difficulties encountered in England, Wales and Northern Ireland have not been encountered in   Scotland. For that reason, we do not propose any change. That reflects a recognition of operational experience. I am sure that the situation will continue to be monitored in Scotland but, having inquired about it, I do not believe that the measure is detrimental to our proceedings if it does not apply in Scotland.

I am grateful for that explanation, particularly about the situation in Scotland. In view of the principles that we apply these days, we would certainly not want to impose primary legislation of this kind without the consent of the Scottish Executive and the Scottish Parliament. If that is how they want to keep matters, so be it.

I can only repeat my delight at seeing that common sense has prevailed in respect of what happens south of the border. It seemed when we introduced the original measure that it was going to bring the legal system into disrepute, and that has proved to be the case. People have complained that legal aid is being milked when both criminal and civil legal aid are being hugely squeezed while individuals have substantial assets that could be used for the purposes of their own representation. Clearly, the legal expenses have to be reasonable. In fairness to the Minister who served on that Committee, with whom I had an amicable relationship, he did express the concern that Mr. Bigs would somehow fritter away their assets as a way of preventing their seizure. His concern was legitimate, but with proper control the system that we are bringing into being is much better. I welcome it, and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment No. 234, in clause 90, page 54, leave out lines 19 to 24.

I am a bit puzzled about the restrictions on proceedings and remedies:

''(3) If a property freezing order applies to a tenancy of any premises, no landlord or other person to whom rent is payable may exercise the right of forfeiture by peaceable re-entry in relation to the premises in respect of any failure by the tenant to comply with any term or condition of the tenancy, except with the leave of the court and subject to any terms the court may impose.''

I am conscious that in that last sentence there might be the satisfactory let-out, because of ''leave of the court''. However, it is a strange state of affairs when the consequence of a freezing order is to prevent a completely innocent third party from enforcing a completely legitimate right and obliging him instead to abide the outcome of criminal proceedings that might last a long time and at the end of which, when the assets have been seized, he is not guaranteed to be a preferential creditor of any kind. I think that that is likely to be the position, and I am therefore anxious about it.

I appreciate that the ''leave of the court'' clause provides a possible let-out, but I am still slightly concerned that, unless I have misunderstood the position, innocent third parties could be adversely affected by such an order and could suffer serious financial loss.

This is an interesting provision. I discussed with officials a scenario in which, for   example, the person against whom a property freezing order was directed was a tenant. If that person was running a commercial enterprise—let us say a betting shop—we would want to freeze the assets to allow time to look at what was happening in that business, and so on, even though there would be a landlord. In those circumstances and others the landlord would own the building, but there might be within that property considerable assets over which the individual against whom the order had been served had control and which we would be trying to investigate.

My best explanation is, first, that proposed new section 245D of the Proceeds of Crime Act 2002 simply mirrors existing provisions in section 253 of that Act, which relate to interim receiving orders. The same issues arise in respect of new property freezing orders, so no new policy is being introduced per se. We are not trying to trample on the rights of landlords, but where a landlord wants to exercise his rights in such circumstances there must be some engagement with the court.

It seems to me that the provision is important, because those engaged in organised crime will often make quite sure that few assets stand in their name and that there is a tissue of phantom owners who own everything, from that person's car to their business premises and house, in order to ensure that the provisions of normal seizure do not apply. The provisions in the clause at least allow that network to be traced before ceding the power given by the 2002 Act.

That is a very interesting point. My example was of a landlord who had no connection with the criminal proceedings, but where the court would still have to be aware of the situation before that landlord took action that would disrupt the assets involved.

My hon. Friend raises another point. There could be circumstances in which a property freezing order is taken out against a tenant, and issues linked to the landlord arise during the investigation. I can think of examples where people own properties that are run as massage parlours but have other people running those establishments, which is a tenant-landlord relationship.

The Minister is right in her reply to her hon. Friend the Member for Hemel Hempstead. In terms of levying distress, there is no difference in kind between subsections (3) and (1) of proposed new section 245D of the 2002 Act. Again, there is an effectively innocent party who is barred from their rightful property, cash or whatever, by the property freezing order. It would then be for the court to adjudicate on how that can be properly managed. That is a sensible provision, although I understand entirely the point that the hon. Member for Beaconsfield made.

These are all rational and sensible examples. A criminal tenant might also be in cahoots with the landlord. There might be many years to run on a tenancy, but the tenant does not pay rent so as to allow the landlord rather than the Assets Recovery   Agency to get the benefits of a long lease. There are a number of scenarios in which there needs to be protection. As I said, I discussed the issue with officials, because I did not want a property owner to be unduly frustrated or for their own affairs to be put in a difficult situation through their being caught up in a property freezing order.

I draw attention to my entry in the Register of Members' Interests.

When a property freezing order takes place, the state is obviously entitled through the Proceeds of Crime Act 2002 to recover assets from a serious crime, but we are talking about the liability going forward. If a freezing order takes place and the rent is not paid for a number of years, the landlord will suffer for some while on a prospective basis rather than a retrospective basis.

As far as I understand it, if a situation arises where a landlord is not being paid rent, we are not saying that the landlord should not exercise his or her rights. We are just saying that the landlord has to notify the court in order for us to deal with that situation. In a scenario where we feel that the contents of a premises are important assets, that would give some scope for the court to engage with the landlord as to how to proceed, so that the landlord is not penalised as the innocent victim of a property freezing order.

With respect, as my hon. Friend the Member for Beaconsfield read out, the Bill states:

''If a property freezing order applies to a tenancy of any premises, no landlord or other person to whom rent is payable may exercise the right of forfeiture''.

Forfeiture is not only about assets on the property, but about rent. Forfeiture can usually, and often does, involve obtaining vacant possession of the property.

Except, as the Bill says further down in that paragraph

''with the leave of the court''.

That is the point. We are not trying to deny a legitimate landlord their rights.

This may be a small point, but the purpose of a property freezing order is to stop anyone from dealing with the property. Is it proposed that a land charge or some sort of caution should be registered? If the person who is subject to a freezing order tries to sell the property under the table of the freezing order, we need to be able to tell the prospective purchaser that there is a freezing order on it. The way in which that could be done would be to register a land charge or something of that kind. I do not know whether there is provision to do that.

My hon. and learned Friend makes an interesting proposal. I will look into that matter and inform the Committee.

This has been a most useful and interesting short debate, and I am grateful to the Minister for her comments. I am certainly reassured by the fact that the leave of the court can be obtained.

A freezing order and a receiving order are not one and the same. The Government are creating freezing   orders because they are cheaper. That is the truth. Receiving orders are expensive. As I understand it, by way of background, it has been discovered in the course of the implementation of the Proceeds of Crime Act that a lot of the seizing of assets that is taking place is not so complicated that a receiver is required to be appointed. The need to appoint receivers is costing an arm and a leg, and all the assets are dissipated in the receivership. It has always been well known that receivers do better even than lawyers in terms of professional remuneration.

In such circumstances, a freezing order is a good idea. Of course, the freezing order does just that—it freezes. A receiver at least has certain duties to manage what has been placed into receivership in ways that are compatible with the rules of law, and one can go to court to have that argued. My anxiety was that the freezing order might be a rather draconian way of dealing with the matter on a long-term basis without the rights of the landlord being properly taken into account. I appreciate entirely the point that the Minister made. If we were simply to allow landlords to have peaceful re-entry in such circumstances, there could be abuse. On that basis, and as the leave of the court can be obtained, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

I have two brief questions. First, I presume that the freezing order will cause a delay in granting probate in the event of someone having predeceased the completion of the order. Secondly—I display my ignorance, but it may assist the Committee—does the Scottish legal term ''sist'', to be found in proposed new section 255C at page 56, line 14, mean the equivalent of ''stay'' in English or Welsh law?

The answer is yes to the latter question. On the first question, it is suggested that there might be some delay, but I shall seek a more detailed answer.

Question put and agreed to.

Clause 90 ordered to stand part of the Bill.