Clause 46

Policing and Crime Bill – in a Public Bill Committee at 12:00 pm on 24th February 2009.

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Forfeiture of detained cash

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

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

I will raise one general point of principle and then some more general queries. The point of principle is that clause 46 gives a new power of what might be termed “administrative forfeiture” without the need for a court order. An important principle is being set out: in essence, the state can order the forfeiture of assets without going to court. That might be convenient for law enforcement and SOCA, but it will erode a fundamental principle of the law on property rights. If it is argued that in some way that is about cost, administrative convenience, access to the courts and timing, those arguments have to be balanced against the principle of the existing requirement for the state to go to court to obtain an order to get the forfeiture of assets in those circumstances. That concept and the need for due process to be seen to be done—a court being seen to be the body that actually uses the power—is important for the way in which we organise ourselves and for the sort of society we want. The Minister needs to come up  with a clear and persuasive case for why that balance should not be adhered to and why those powers are so necessary and appropriate that the Government have to go against the current requirement for a court application to use powers of forfeiture and instead go through this process of administration.

On the use of forfeiture and the performance of the relevant agencies more generally, the Minister will know that we have had various debates and discussions before about the historical performance of the Assets Recovery Agency and the fact that it did not meet its targets, which in many ways was why it was merged into SOCA. The key questions are about how SOCA is performing, whether it is using those and other powers appropriately, and whether its recoveries exceed its costs, because that was the big problem with how the Assets Recovery Agency operated. That agency had to be changed because although it had recovered £23 million by December 2006, it had cost the taxpayer £65 million. The Minister will be aware of the reports of the National Audit Office and the Public Accounts Committee highlighting the weaknesses in the Assets Recovery Agency and how it conducted its business. We need to know that there will be some transparency in how SOCA uses those powers and how it performs financially, because it is sometimes difficult to read from SOCA’s annual report how it is performing and what level of recoveries, forfeitures and financial assets it has managed to recover when using such powers. Will the Minister reassure the Committee that SOCA will publish financial information on its asset recovery function showing its net recoveries using those powers?

The old ARA used to provide such information, and the Minister’s colleague, the Under-Secretary, has provided me with parliamentary answers on this subject, for which I am grateful, but it is important to know about net recoveries—costs against assets recovered—if we are to understand and scrutinise SOCA appropriately. Similar information that was previously obtained about the ARA flagged up the problems on which the NAO and PAC reported, so it is important to understand that SOCA is acting appropriately and is not in the unfortunate position in which the ARA found itself of having higher costs than recoveries from forfeiture and recovered assets. We need that assurance not only to see how powers are being used, but to be sure that SOCA is delivering value for money when utilising those and other powers.

Photo of Vernon Coaker Vernon Coaker Minister of State (Home Office) (Policing, Crime & Security)

Cases in which people contest these matters will go to court. Only in uncontested cases can a forfeiture order be made. If someone receives a notice saying, “You are going to forfeit this detained cash,” all they have to do is say, “I object,” and it will become a matter for the courts. One would suppose that if someone thought, “My goodness, the state is taking money that is legally mine—money that I have worked for all these years and that I have saved for my retirement,” they would object. If the police had detained someone’s money, and they received a letter telling them that it would be forfeited unless they objected, 99.9 per cent. of the population would say, “Hang on, that money is legally mine; I’m going to object,” and it would become a matter for the courts.

People do not have to prove anything for their case to go to court. They do not have to prove that the money is theirs or that it is not criminal money; they have only to say, “I object to forfeiting this money,” and it becomes a matter for the court. Which people would not do that? That is the question is it not? Who would not say to the court, “I object to you detaining my money,” if £10,000 of their money was being held and was going to be kept? Does anyone honestly expect that that person would not ring up the court and send them a note saying, “Excuse me, I object”? Who would not do that? That question answers itself. The people who will not do that are those who think, “Hang on a minute, I obtained this money illegally or criminally.” The question the hon. Member for Hornchurch did not answer is, if money is taken from a person and detained and they know that it was gained honestly and legally, why would they not tell the person who takes it that it is legally theirs? There must then be a court hearing. Why would anybody not reasonably do that? The vast majority of the population would be amazed to think that anybody who has money legally would not object to somebody taking it from them. If it was my money, there would be a letter in the post straight away.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs) 12:15 pm, 24th February 2009

I hear what the Minister says, but he is making various assumptions in saying that a person who gains money legally will always object. He said that the vast majority of those who do not object will be criminals or those who know they have received money unlawfully. However, there may be circumstances in which that is not the case. Somebody in receipt of such a notice might not fully appreciate its nature and ambit and that forfeiture will arise. That could happen regardless of what is stated in the provisions on the right to challenge such a notice.

I caution the Minister about making the administrative convenience argument. Why should there not be a simple obligation on the relevant authorities to obtain the necessary order from a court and be done with it? I want to understand why it is felt that the route in the clause is better. There is a broader issue of principle because the proposal sets certain precedents. That is why I am not just focusing on the specifics of the clause.

Photo of Vernon Coaker Vernon Coaker Minister of State (Home Office) (Policing, Crime & Security)

I understand the hon. Gentleman’s point, I just do not agree with it. I rarely say that I just do not agree with people. There is a process and the clause is about speeding up that process and not wasting the court’s time, while ensuring that the power is used in a necessary and proportionate way.

When I went through the Bill I ensured that it contained all sorts of safeguards. If someone receives a forfeiture notice saying that this mythical £10,000 will be detained and held by the state, there are 30 days in which they can object. If they do so, there will be a court hearing. If the court decides that the forfeiture notice should become an order, there is another 30 days in which to object—that is 60 days.

In exceptional circumstances, the person can go to the court and put the case made by the hon. Gentleman. They could say, “I’m sorry, I live in Spain. I come back to my place in the UK every three months and, goodness me, when I returned I found a notice in my letter box  saying that I will lose £10,000.” Being an honest person, they might ring the court and say, “The exceptional circumstance is that I forfeited the money while I was in Spain. How was I supposed to know?” The Bill will give that person the right of appeal to the court to say that there were exceptional circumstances for running out of time. Because they were in Spain for three months, they can go to the court and it can set aside the order.

There have been many debates on this provision on real issues. I understand the point about traditional oversight and such things. However, on this issue, the only people with anything to worry about are those who have obtained cash criminally, had it detained and as a consequence will forfeit it unless they follow due process. The clause is an important part of the Bill. I would have hoped that the judicial oversight, the additional time available and the appeal would have been sufficient, but I have clearly failed to convince the hon. Gentleman of that. We have tried to build in the necessity to ensure that more cash is forfeited with judicial oversight.

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

I rise briefly for the last time in this section to say that this comes down to whether one accepts, as a starting point, that it is right for the state to have the ability to forfeit private assets, or whether ones feels that the court should have that ability. I recognise what the Minister says about judicial oversight, but that depends on who has the ultimate authority. He is setting a precedent by saying that the state rather than the court has the right to forfeit. It is that distinction between the judiciary, and the legislature and the Government, that I seek to underline on the basis of fundamental principles. While I accept that he does not understand it, that is the basis of my argument. I do not support criminal elements or those who have acquired ill-gotten gains through illegal means.

Photo of Vernon Coaker Vernon Coaker Minister of State (Home Office) (Policing, Crime & Security)

It was unfair of me to say that I did not understand the point—I did. I suppose that I was saying that I do not agree with it. As always, the hon. Gentleman put his point perfectly.

I shall make one further point on judicial oversight. The hon. Gentleman does not agree with my point and feels that I am setting a precedent, but I have tried to balance the need to get more detained cash forfeited with sufficient safeguards to ensure that somebody can go to the courts to protect their money. However, there will, of course, already have been a court order to detain the cash.

Photo of Vernon Coaker Vernon Coaker Minister of State (Home Office) (Policing, Crime & Security)

The hon. Gentleman says that it is different. The cash is detained by a court order and is then forfeited. The point of difference is that the hon. Gentleman wants there always to be judicial forfeiture, but in certain circumstances there is a case for administrative forfeiture. Administrative forfeiture is not, however, automatic. There is judicial oversight, so someone can go back to the court and say that the forfeiture is not fair and they wish to contest it because the money was not criminally gained. Providing that that is done, the measure is proportionate, particularly as in exceptional circumstances someone can appeal if the time limit laid out in the Bill has run out.

There are increasing numbers of detained cash investigations and detained cash orders, and there is the need therefore to try to forfeit the money. We all want to ensure that more criminal assets are obtained from criminals and that they do not gain from their criminal activity. This is a proportionate step forward; it balances the administrative process with some judicial oversight.

I apologise; I forgot to deal with SOCA. Hon. Members will know that I always try to answer the questions. Whether I answer them to their satisfaction is another matter. The hon. Gentleman raised a point about SOCA. The easy part of the answer is that he knows that SOCA will publish its annual report, in which it will have to outline its progress. SOCA will publish its reports in the same way as ARA did, and that should allow proper comparison between them with respect to assets recovered. I know the hon. Gentleman is concerned about that. I hope that that is helpful to him.

Question put and agreed to.

Clause 46 accordingly ordered to stand part of the Bill.

Clause 47 ordered to stand part of the Bill.