Proceeds of Crime Act 2002 (Investigations in England, Wales and Northern Ireland: Code of Practice) Order 2008

The noble Lord should not feel that he has to apologise. It is quite proper to use these proceedings to raise issues of concern. Noble Lords have done exactly that today, and quite rightly so. The noble Baroness, Lady Hanham, raised the issue of who might be a ““contractor””. A contractor might be an insolvency practitioner or another kind of expert. These cases are quite complex and different forms of expertise need to be brought to bear. Given the strange nature of some of these cases, it might have to be someone who has a knowledge or an expertise in the selling or disposal of assets such as horses or stables or something like that. The contractors will vary. The noble Baroness made points about financial reporting orders. There has been some misunderstanding in relation to this issue and the allegation has been that they have been ineffective. We do not agree with that. However, I understand that David Davis asked a PQ of the Ministry of Justice about how many financial reporting orders had been issued by courts. The Parliamentary Written Answer from my right honourable friend Jack Straw, the Secretary of State, simply said that no financial reporting orders had been recorded as a primary disposal by the courts, and that that indeed was the case. But financial reporting orders are secondary or ancillary orders made by the courts at the point of sentence following the principal disposal, which could be a period of imprisonment. More than 40 financial reporting orders have been made since they were introduced in 2006 as secondary and ancillary orders. The Ministry of Justice had not originally included this in its Answer. It has now clarified the situation and I understand that the Secretary of State is contacting David Davis MP directly on that point. SOCA and law enforcement agencies are already making good and effective use of these new powers to keep track of the financial affairs of serious criminals. Concern was raised about the powers of search and seizure and it is important that we keep a careful check on these issues. It is understandable that noble Lords are concerned about them. But, so far as training and preparation for this role is concerned, the National Policing Improvement Agency will train, accredit and, importantly, monitor the exercise of search-and-seizure powers, and it will have the power to withdraw accreditation from an investigator. An accredited financial investigator will have to be a member of staff of a public body listed in a statutory instrument which is to be laid before the House in due course. The question was raised about who accredited financial investigators might be and what they will be able to do. They will have the ability to recover cash—that will be their principal power—and they will be listed in the order which is to be laid. So far, those to be considered have all been from public bodies. Accredited investigators are all members currently of the Serious Fraud Office, the Department for Work and Pensions the Immigration Service and the fraud unit of the National Health Service; sadly, we need such an organisation. It is likely that they will come from similar bodies. But, as I said earlier, noble Lords will have the opportunity to object to any of those listed bodies when the order is brought before the House. The noble Baroness made a point about the work of the Assets Recovery Agency. I do not accept that the agency has been a failure. It has achieved a great deal and has recovered its base budget for the financial year 2006-07. With the merger of the Assets Recovery Agency and the Serious Organised Crime Agency, the skills and the expertise of both agencies will be brought together and we believe that that will enable them to maximise their efficiency and effectiveness. I have not heard it argued that this is not an important initiative in attacking those who seek to profit massively from crime, because this is where our policy is directed. SOCA will report on asset-recovery performance annually, as did the Assets Recovery Agency. Much cash has been seized in the past few years. I was asked how many searches have been conducted under the powers that have been used in the past. The answer is that there have been 23 in the past year and, in the five years of its operation, some 973. It is worth noting that in the past financial year some £53 million and in the five years of ARA’s operation some £211 million have been seized. In the past year, £31.5 million and in the five years of the ARA’s operation £103 million cash has been forfeited. There are necessarily continuing cases where cash has been detained but is yet to be forfeited, so one will see those numbers go up over time. Therefore, I think that it has been a very successful exercise. Big criminals know that they cannot expect to get away indefinitely with profiting from some of the appalling crimes that they commit. The noble Baroness, Lady Miller, expressed general support for the measures but asked about the removal of contractors. We have not yet had a situation where contractors have had to be removed from an operation but if, for example, there was unsatisfactory performance or a failure to get value for money in liquidating assets, we would expect contractors to be stood down. Obviously, we want them to perform well but, if they are not doing so, clearly it is not appropriate for them to continue in that role The noble Lord, Lord Lyell, asked a number of questions relating to his unease about the extent of the search powers. In general terms, the amended code before us follows the precedence of the previous code and the updated Police and Criminal Evidence Act 1984 codes—in particular, code A, which relates to stop and search, and code B, which relates to the searching of premises and the seizure of property. These codes are tried and tested. They have well over 20 years of history to them and generally one can reasonably argue that they have operated very well. Therefore, this code very much mirrors the others. The search powers operate in a precise way. The power to search premises is exercisable only on premises where the relevant officer is lawfully present under other powers or where he is there at the invitation of the owner. The power does not confer any right to force entry. The search powers also include powers to search a person and any article with a person. However, they do not extend to requiring a person to undergo an intimate or strip-search. There are safeguards. Search powers may be exercised only where prior judicial authority has been obtained or, if that is not practicable, with the approval of a senior officer. The Act also recognises that there may be circumstances where it is not practical to obtain the approval of a senior officer but, if judicial approval is not obtained prior to a search and cash is either not seized or is released before 48 hours, the officer concerned must prepare a written report and submit it to the independent person who, in relation to searches in England, Wales and Northern Ireland, has been properly appointed by the Secretary of State. That report will detail why the officer considered that he had the power to carry out the search and why it was not practicable to obtain judicial approval prior to it. I can provide some more examples of safeguards within the code, particularly at paragraph 62, which allows a person to call their own witness to a search, and paragraphs 53 and 64, which require that all searches be fully recorded and kept on a search register. Many other safeguards will ensure the proportionate use of the power. We are not aware that the powers have caused great difficulty in the past, and their use has been proportionate. We feel that they are of great benefit because those subject to them know that they are properly carried out and that they have a real effect in terms of recovering assets. To our knowledge, we have had no complaints in the past five years on the use of the search powers as currently exercised. I think that the noble Lord, Lord Lyell, was asking about accredited financial investigators in Scotland. Accredited financial investigators do not operate in Scotland. In general terms, that is a matter for the devolved Administration. As I understand it, only the police and Her Majesty’s Revenue and Customs officers in Scotland operate in that regard. As the noble Lord rightly spotted, it is a different system in Scotland, and the powers are not exercised in the same way north of the border. I think that I have covered most of the points raised. If I have not, I am sure that Members of the Committee will remind me and I shall return to their points.