Serious Crime Bill [HL]

First, on the question raised by the noble Lord, Lord Burnett, I do not think that anything is not covered by the Bill at the moment; but, as I said to the noble Baroness, Lady Noakes, as things have evolved, we have created new bodies that should properly be included in any such list. The list is up-to-date as of today, but whether we will have created anything else by a year or two hence, I could not possibly comment. I say to the noble Baroness that on at least two occasions she suggested putting these orders into the criminal law. The whole purpose of the Government making these orders is, actually, to make civil orders. The prevention orders will not be made in relation to crime; they are protective orders. That is why we have borrowed from the Insolvency Act. One of the things that we are trying to do in relation to the authorities that are charged with interdiction of high-volume, serious crime is to be able to take action in a comprehensive and inclusive way in relation to these criminals. I know that the noble Baroness is familiar with the threat that they pose to legitimate business, particularly because they have previously created companies for the sole purpose of having a sham through which their nefarious practices can be covered. The noble Baroness is correct with regard to the way in which we have used the current provisions of insolvency to deal with those circumstances. It is not because the circumstances have not been found to be well proven; it is because they are well proven that, when looking at these provisions in terms of what the High Court can do in considering an application, we see this as being one thing that the court may be minded to do and will be entitled to do within these proceedings. The clause provides the applicant authorities with the power to petition the court for the winding up of a company, partnership or relevant body. This is so that, where such a body is being used for serious criminal purposes, it is possible to stop such activity through the authority where appropriate. At the time of making an application to the High Court, such an authority might make a number of orders in relation to stopping the activity. It might be winding up the company, making an application to restrict the movement of the individual or seeking to make appropriate further or other conditions on their ability to act. Clause 27(2) to (4) provide for the winding up of a company for that purpose. Subsection (5) allows the Secretary of State to make an order to allow the court to wind up a partnership. Subsection (6) allows the Secretary of State to make an order to allow the court to wind up a relevant body. The court will not be able to wind up a partnership or a relevant body unless the secondary legislation under those subsections has been made. The noble Baroness was right to highlight the provisions of Section 124A of the Insolvency Act 1986, because that is an example of winding up a company where it is in the public interest to do so. We have tapped into that legislation and used that framework so that the court can make an order within it. It is not the case that Section 124A is insufficient—that is not the point; rather, we simply wanted to provide for the court to be able to tap into that legislation when dealing with serious organised crimes and applications in this way. We wanted to provide for an applicant authority under the Bill to petition the court for winding up rather than having to go back through the route provided for an application in the Insolvency Act; otherwise, a number of applications would be going through the court at different times. This is a way of consolidating matters and enabling one application to be made in relation to one body. We have acted in that way in order to prevent fragmentation, and we have avoided creating any new procedures. If the noble Baroness goes through all the safeguards that we have in relation to Her Majesty’s Customs and Excise and so on, she will see the way in which we have transported provisions from past legislation into these provisions. We have sought to remove any duplication so that there is consistency, a framework and a synergy, and we are not doing anything outwith what was argued about and debated when those other provisions were passed. We are not adding anything. I have looked at whether we can find a reason why the word ““expedient”” has been left out on this occasion. It simply seems to me that the issues have been differently framed. It does not seem to have great significance other than being a drafting difference. The key is that the court must consider that winding up would be, first, just and, secondly, equitable, and those two safeguards will ensure that winding up occurs only when appropriate. I shall look at that issue and try to get a better explanation for why it is not there. I certainly did not have specific briefing on it and it does not seem to have a real significance. I shall need to have an explanation for the Committee as to why it is not there. The noble Baroness asked me which Secretary of State will be responsible. As insolvency is an issue for the Secretary of State for Trade and Industry, it will be for that Secretary of State to make the orders, so nothing will change. We are considering the possibility of the Treasury making orders in relation to mutuals, such as building societies, for which it is responsible. That will enable us to be consistent with the framework that we currently have. We are not seeking to make any material change in that structure. I hope I have been able to say enough to assure the noble Baroness that the framework, which is clearly dear to her and which works well, will not be interfered with. It will stay as it is and will simply allow applicants, when they look at what they need to prevent criminals from taking advantage of the proceeds of their crime and to stop them from furthering crime, to be able to make all the relevant orders at the same time as may seem to the court to be convenient. That is another reason why we thought that these orders should properly be made in the High Court as, in any event, the High Court is the court that will normally be seized with all these applications and will have the expertise and knowledge to deal with them.