Clause 14

Serious Crime Bill [Lords] – in a Public Bill Committee at 10:30 am on 3 July 2007.

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Restrictions on excluded material and banking information

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

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs)

What an unexpected pleasure it is to serve under your chairmanship, Mr. Bercow, on yet another occasion. It has been a great privilege to do so in the past. I shall try my best to ensure that I do not go over any ground that has been referred to before in Committee and I hope that, should I dare stray into that territory, I shall be reminded by the Chair. I shall try to avoid it happening.

The clause relates to the application of serious crime prevention orders in the context of excluded material and banking information. The provision makes it particularly clear that a serious crime prevention order can be used to obtain certain documentation relating to banking business. My questions for the Minister concern the discussions that have taken place with the banking industry or other regulators about the application of the provision. Given this country’s obvious reliance on financial services and balancing the need to ensure that effective measures are in place to control the activities of serious organised criminals, we must have some certainty that industry understands what is going on and what the expectations are.

My reading of the Bill suggests that there could be extraterritorial application and that an international bank could be subject to an order if it were felt that a protective measure was required to prevent someone from committing a serious criminal offence in this country. I understand the intent behind the provision, and the meaning of subsections (3)and (4) under which

Condition A is that the person to whom the obligation of confidence is owed consents”,

is straightforward if someone has consented to the provision of information required under an order. However, subsection (4) has a wide ambit and says that, if the order requires certain documentation to be provided, in essence the bank or financial institution would have to comply.

It is a matter of clearly understanding the position of the banking industry and commerce. Given the potential sanctions for breach if a bank, company or financial institution were to fall foul of the clause, it would be helpful if the Minister could set out in more detail the application of the clause, and what consultation has taken place with and what representations have been received from financial service institutions as well as from regulators here or internationally that may have been involved in the preparation and consideration of the clause.

Photo of Vernon Coaker Vernon Coaker Parliamentary Under-Secretary (Home Office) (Crime Reduction)

Mr. Bercow, in the light of your comments, I wish also to welcome a few members to the Committee and make one or two other comments. I should be grateful if you would allow me to indulge you and the Committee. I congratulate those members of the Committee who have now moved on—[ Laughter.] I hasten to add that they have moved on in a positive sense. I am pleased that my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) now has the post of the Under-Secretary of State for Culture, Media and Sport; and I am delighted for my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) and the new Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hartlepool (Mr. Wright). The Committee’s debates have been of a good-hearted nature, but they have been challenging and have given the Bill proper scrutiny. In that spirit, I ask the hon. Member for Hornchurch to pass on my congratulations and best wishes to the hon. Member for Arundel and South Downs (Nick Herbert), who has been promoted.

I welcome my hon. Friend the Member for Liverpool, Garston. I also wish to mention the hon. Member for Reigate and the Lord Commissioner of Her Majesty’s Treasury, my hon. Friend the Member for Tynemouth, who are staying put. If it is not too self-indulgent, may I congratulate myself on staying put?—[Interruption.] It is very self-indulgent. I also welcome my hon. Friends the Members for Stourbridge and for Vale of Clwyd and, lastly, the hon. Member for Hornchurch to the Committee. I wish him well in navigating his way through the Bill.

I am also pleased to see that you are still chairing the Committee, Mr. Bercow, with Mr. Benton.

I start by saying that the measures in clause 14 have been discussed with the British Bankers Association. It has commented on the clause, and the Government have taken account of what it has said; it is perfectly happy with the clause. I hope that that offers the hon. Member for Hornchurch reassurance on that question.

The clause provides that a person cannot be required to produce excluded material under a serious crime prevention order; and that a person cannot be required to provide information in relation to which

“he owes an obligation of confidence by virtue of carrying on a banking business unless” one of two conditions is met. The first condition is

“that the person to whom the obligation of confidence is owed consents to the disclosure”,

as the hon. Gentleman pointed out. The second condition is that the order requires the disclosure of specific information, or disclosure of a particular kind of information and that the confidential information is of that type.

That is an important safeguard. A serious crime prevention order should not be capable of requiring the disclosure of excluded material. In addition, an order should not be able to require the disclosure of information

“in respect of obligation of confidence” is owed

“by virtue of carrying on a banking business” unless a court has given permission for or has specifically considered its disclosure and concluded that disclosure is appropriate.

The Government have said throughout the passage of the Bill that it is important to recognise that the court must always act fairly and proportionately, and it will have to do so on the disclosure of information under the clause.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs)

I welcome the assurance on the preparation of the clause and the consultation with the BBA—it is helpful to have that on the record. Was any consideration given to the international aspects of the provision? The BBA was consulted, but did the Government look at the matter from an international angle? Will the measure have applications to banks outside the UK?

Photo of Vernon Coaker Vernon Coaker Parliamentary Under-Secretary (Home Office) (Crime Reduction)

We are not sure that that would be necessary under the clause. We are dealing with the prevention of crime in this country, which is why we negotiated with the BBA.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs)

Just to clarify, it is not inconceivable that someone intent on committing a crime in this country might seek to use banking services overseas. Will the Minister tell us whether that has been contemplated, so that we can understand the breadth and ambit of the measure? Will the measure apply only to UK banks and financial institutions or could it have wider application to overseas entities, particularly as we know that, in this age of internet banking and other types of trading of finance, it is not impossible for a financial institution outside the UK to be used for improper purposes?

Photo of Vernon Coaker Vernon Coaker Parliamentary Under-Secretary (Home Office) (Crime Reduction)

The hon. Gentleman is making a reasonable point. My understanding is that our particular concern was with respect to British banks and financial institutions, but I will consider that point and, if necessary, come back to the hon. Gentleman.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs)

I thank the Minister for his assurance that he will look at the matter in greater detail.

I welcome to the Committee the hon. Member for Liverpool, Garston and congratulate the Minister on holding his position and his clear modesty in that respect. I also congratulate the other Committee members who have gone on to greater things. I will certainly pass on the Minister’s kind wishes to my hon. Friend the Member for Arundel and South Downs, who is now the shadow spokesman for Justice, in the spirit in which they were expressed.

Question put and agreed to.

Clause 14 ordered to stand part of the Bill.