Baroness Levitt (Lab)

I apologise once again to the noble Lord, Lord Marks, for standing up before him a few moments ago. Amendment 40 from the noble and learned Lord, Lord Garnier, raises the important issue of compensating victims of economic crime. I really mean it when I say that I am grateful to him for his continued interest in this matter. No one could accuse him of not being consistent. Indeed, he and I are due to meet after the Recess to discuss his amendment further, and I look forward to that. As the noble and learned Lord knows, I practised at the Bar in the area of economic crime, including fraud and other crimes, and I want to make it clear that the Government take the compensation of victims of economic crime very seriously. It is of critical importance in limiting the harm of these often ruthless and cruel crimes. We are committed to ensuring that, whenever possible, funds are taken from criminals and returned to victims. As the noble and learned Lord knows, as things currently stand, there are already several mechanisms that enable victims of economic crime to be compensated. For example, the asset recovery powers under the Proceeds of Crime Act 2002 already provide the court with the ability to prioritise the payment of compensation orders to victims. Noble Lords may be interested to learn that, where both a compensation order and a confiscation order are imposed but there are not enough funds available to satisfy both, the court may direct that the compensation order be paid out of the confiscation order funds to ensure that victims are prioritised. A total of £47.2 million was paid in compensation to victims from the proceeds of confiscation orders in the financial year ending March 2025. Of course, I acknowledge that we could do better. In addition, the Economic Crime (Transparency and Enforcement) Act 2022 allows applications for stolen crypto assets or funds in accounts to be released to victims at any stage of civil forfeiture proceedings.    Through the Financial Services and Markets Act 2023, the then Government legislated to require the Payment Systems Regulator to introduce mandatory reimbursement for authorised push payment scams. In the first nine months of the APP reimbursement scheme, 88% of eligible losses were reimbursed, with £112 million returned to victims. This further protects victims and provides incentives for firms to prevent these scams in the first place.   Victims of unauthorised fraud, where payment has been taken without the victim’s permission, are already reimbursed by payment service providers. But we want to go further. The Government recognise the serious financial and emotional impact that fraud can have on victims, which is why we will shortly publish a new fraud strategy that will improve how we safeguard and respond to victims of fraud. I am of course acutely aware that one of the noble and learned Lord’s major considerations is overseas victims. As far as they are concerned, the Serious Fraud Office, Crown Prosecution Service and National Crime Agency compensation principles have committed law enforcement bodies to ensuring that compensation for overseas victims of economic crime is considered in every relevant case and to using whatever legal mechanisms are available to secure it whenever appropriate.  Internationally, victims’ interests also continue to be a priority issue for the United Kingdom. As a signatory to the UN Convention Against Corruption, the UK places great importance on the recovery and return of the proceeds of corruption to those affected by bribery, embezzlement of public funds, money laundering, trading in influence and other abuses of official functions. The UK is required to return funds where the conditions for mandatory return are met. However, the UK also exercises its discretion to return funds in appropriate cases even when it is not otherwise required to do so.  The noble and learned Lord’s amendment calls for a review, but the Government have already publicly committed to reviewing UK policies and procedures for compensating victims of foreign bribery in the UK Anti-Corruption Strategy 2025. We look forward to the results of this review, expected in 2027.  In addition, I refer to the Crime and Policing Bill, which will introduce a new measure to redirect funds to victims when a confiscation order is increased if it is identified that the defendant has additional assets with which to satisfy it. The Bill will also reinforce that compensation orders are to be prioritised over confiscation orders. There are already significant measures in place, and further work is being done to strengthen the rights of victims of economic crime to compensation. I hope that this provides the noble and learned Lord, Lord Garnier, with some reassurance. I look forward to discussing this further with him, but for now I invite him to withdraw his amendment. I turn now to Amendments 46 and 47 in the names of the noble Baronesses, Lady Brinton and Lady Kidron, and the noble Lord, Lord Russell. This Government share the strength of feeling in this House and in the other place about the importance of supporting the victims of child sexual abuse. The proposed new clauses would implement a recommendation of the Independent Inquiry into Child Sexual Abuse about which the previous Government consulted. However, in April last year, the Government announced that we would not take it forward. The reason is that such changes would benefit only victims of child sexual abuse, and that would undermine the scheme’s core principle of universality—in other words, it compensates all seriously injured victims of violent crimes, and the payments are based on the injury suffered rather than the crime type from which they resulted. We are very concerned not to create a hierarchy of victims in which some are seen as more deserving than others. Different support for different violent crimes would imply that some victims are less important than others. It would also put the scheme under more financial pressure. It is taxpayer-funded and is already facing record and increasing demand. However, we agree that the scheme needs reform, and it is our intention to decide how best to support all victims with the resources that we have. We will update Members of both Houses as our work progresses. Dealing very briefly with Amendment 47 in the name of the noble Lord, Lord Russell, I am going to ask him to leave it with me for the time being. I want to give this some further thought. He and I began to discuss it when we met about a week ago. We did not make an awful lot of progress on that occasion, but I would like to talk to him about it further. I know that he has sent me some literature, and I will look at that and consider it further. While I am grateful to the noble Baronesses and the noble Lord for ensuring that we remain focused on the criminal injuries compensation scheme, I ask them not to press their amendments. Amendment 67 in the names of the noble and learned Lord, Lord Keen of Elie, and the noble Lord, Lord Sandhurst, would require the revision of sentencing guidelines so that the court would have to award compensation to a victim to the value of the items stolen. When a judge passes a sentence, she or he is already required to consider making a compensation order that requires the offender to make financial reparation to the victim for any personal injury, loss or damage resulting from an offence, and that includes the offences captured by this amendment. Magistrates are subject to the same duty, but for simplicity I am going to refer just to the judge for the rest of my remarks. If the judge decides not to make such an order, she or he must explain why they are not doing so. There is no set amount for compensation, because that would fetter the discretion of the independent judge. The law says that compensation may be ordered for such an amount as the court considers appropriate, having regard to any evidence and any representations made by the offender or the prosecutor. For adult offenders, there is no limit on the value of a single compensation order, and compensation is paid to the victim first before any other financial orders made by the court are satisfied by the offender. The noble Lord, Lord Marks, has already powerfully made the point that it is not always a straightforward process to determine the value of the loss. I am not going to repeat that, but I am going to add to the second part of his concerns about this. As part of the process of deciding on the level of compensation, the court must also consider the financial circumstances of the offender, so far as they are known. The reason is to ensure that the offender has sufficient means to pay. This amendment would require the judge to ignore the fact that there may in some cases be absolutely no prospect of the offender being able to pay. This would create a system requiring the authorities to spend time and money chasing people for money that they are never going to be able to pay, in the process causing a cycle of unnecessary harm and emotional distress to victims whose expectations had been raised that they were going to receive compensation for the full amount. I want to reassure your Lordships that most judges will order the full amount unless the defendant does not have sufficient means. For these reasons, the Government are satisfied that the existing system allows courts to strike an appropriate balance between seeking compensation for the harm caused to victims in a way that is enforceable and ensuring that victims are not left waiting for debts to be paid to them which were always unrealistic. The Sentencing Council has issued explanatory information on compensation which outlines these matters to help sentencers when considering or making compensation orders. I therefore invite the noble and learned Lord to withdraw his amendment.