‘(4A) A statutory instrument containing regulations under subsection (1) in relation to Section 18 shall only be made after having been laid in draft before each House of Parliament and approved by a resolution of each House.”
Without anticipating the arguments of Opposition Members, I will try to deal with matters in the round so that we can be as efficient as possible. I will speak to clause 18 and schedule 3 because they are indelibly linked and provide new powers to tackle existing bank accounts held by illegal migrants. That includes accounts that were opened during a period of legal stay by a person who is now, as a result of due process, deemed to be unlawfully in the United Kingdom.
These measures build on the Immigration Act 2014, which prohibits banks and building societies from opening new current accounts for known illegal migrants. As with other measures in the Bill which deny services to illegal migrants, the aim is to deter illegal migration and to encourage those who are here unlawfully to leave the country. The process introduced by the Bill will operate in the following way. First, banks and building societies—I will use the generic term “banks” to refer to both—must carry out immigration checks on all their current accounts at regular intervals. The check will be made against the details of known illegal migrants which the Home Office shares with an anti-fraud organisation, currently CIFAS. Secondly, the bank must notify the Home Office of any matches that it believes it has found. Thirdly, the Home Office, if it confirms that the person is disqualified from holding an account, will then have a range of options available to it.
Those options all enable action to prevent the illegal migrant continuing to use the accounts held with a bank. Under the powers provided in the Bill, the Home Office may apply to the court for a freezing order, with the aim that that remains in place until the migrant leaves the United Kingdom. That action will be reserved for a small number of individuals with significant funds. The circumstances of the individual, including the risk posed to the public and the person’s immigration history, will be taken into account. The aim will be to encourage illegal migrants to co-operate with arrangements to remove them from the UK.
In the most routine cases, in which it is not judged necessary to apply for a freezing order, the Home Office will notify the bank that it will be required to close the illegal migrants’ accounts. Before closing them, the bank may take action to recover a debt or to disentangle the affairs of joint account holders who are lawfully present in the UK. Under other provisions in the Bill, we will also have the option to prosecute individuals for the new criminal offence of working illegally and to recover wages as part of the proceeds of crime. That measure will be used when there is sufficient evidence that assets are the proceeds of illegal working and that the person meets the requirement for prosecution. Of course, where we can simply remove those committing immigration offences from the UK without delay, that is rightly the preferred course of action.
Subsection (1) gives effect to schedule 3, which introduces the new bank accounts provisions into the Immigration Act 2014. Paragraph 2 of the schedule inserts proposed new sections 40A to 40H. Section 40A requires banks to carry out immigration checks on their current account holders. It defines an immigration check—made against data supplied to the specified anti-fraud organisation or data-sharing authority—and the persons who are disqualified from holding current accounts under the provisions. New section 40B requires banks to notify the Home Office if they believe that one of their current account holders is a disqualified person. Further detail will be specified in regulation.
New section 40C deals with the Home Office’s duties in response to the notification, including checking that the person is indeed disqualified. If so, the Home Office may apply to the court for a freezing order. If a freezing order is not sought, the Home Office must notify the bank that it must take action as set out in new section 40G—such action is usually the closure of the account. New section 40D provides for a court to be able to make a freezing order. Exceptions can be made, in particular to let a person meet reasonable living and legal expenses. A freezing order will be able to be made without notice—a power that is necessary to prevent accounts from simply being emptied before the order can be made. A person whose account is affected by a freezing order, as well as the Secretary of State, may apply for an order to be varied or discharged. New section 40E provides for appeals against freezing orders. New section 40F requires the Secretary of State to issue a code of practice, which will set out the factors to be taken into account in deciding whether to apply for a freezing order.
New section 40G deals with the closure process for bank accounts that are not subject to a freezing order, following it through the checking and notification that I have outlined in respect of other new sections. A bank is required to close all accounts that it holds for a disqualified person as soon as is reasonably practicable. That allows for a delay in closure for a reasonable period if an account is overdrawn or if closing a jointly operated account would have a significant adverse effect on other account holders. The bank will also have complied with its duty if it can prevent a disqualified person from using a jointly operated account while leaving the account open.
Paragraphs 3 to 6 of schedule 3 make a number of consequential amendments to the 2014 Act and paragraph 7 amends the Civil Jurisdiction and Judgments Act 1982 so that freezing orders may be enforced across the UK.
I am happy to deal with amendment 77 at this stage, before it has been spoken to. It would require schedule 3 to be commenced by regulations subject to the affirmative procedure, but that is an inappropriate level of scrutiny. Commencement regulations simply state when provisions come into force, and there would be nothing of substance to debate. The time for debate is now, when the clauses are being considered by Parliament, and when the secondary legislation is made. Schedule 3 contains a number of regulation-making powers and, where appropriate, they are already subject to the affirmative resolution procedure. Examples include regulations to exclude certain categories of current account from checking and those prescribing the information that banks must disclose to the Home Office.
Other regulation-making powers in the schedule deal with questions of administrative detail and so are subject to the negative procedure. They will none the less receive parliamentary scrutiny. The code of practice on freezing orders must be laid before Parliament before coming into force. The bank accounts provisions cannot come into force until the necessary regulations are in place. I therefore invite the hon. and learned Member for Holborn and St Pancras not to press the amendment. I will ask that clause 18 and schedule 3 stand part of the Bill, but I know that there will further debate on amendments that I would be happy to respond to in the usual way.
Let me indicate to the Committee that our general approach to these provisions is not to oppose them. Clearly there have not been difficulties in the provisions that are already in law, and we did not see in either the written or oral evidence any concern expressed by those operating banks that this proposal posed an undue burden on them. I think that is probably because banks are used to carrying out a number of checks—not just, as it were, immigration checks, but all sorts of other checks that are required now.
The concern we are really driving at—if I may, I will stray into schedule 3, which is triggered by clause 18—is the position of an individual where there has been closure or suspension in error and loss as a result. It is in that spirit and that limited way that the point is being made. That is what amendments 93 and 94 are driving at: essentially to explore—and, if necessary, push on—what the position of the individual is where closure is made in error and loss results from that.
I am grateful for that clarification, Mr Owen. To some extent, given the way that it is set out, the amendment pretty well speaks for itself in any event. There is obviously a distinction between the freezing provisions and the closure provisions, in terms of the right of appeal open to individuals. It may be that the Minister can give a degree of assurance about how that will operate, but the reason I raised it at this stage is because amendment 77, requiring scrutiny, is to some extent premised on the concern about that limited class of individuals. I take it together in that way, but I hope I have made the sprit clear. This is about being supportive of the approach, but also exploring and seeking assurances on what happens in the case of an error that could be very costly to the individual.