UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 417-i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

NORTHERN IRELAND AFFAIRS COMMITTEE

THE ASSETS RECOVERY AGENCY

Wednesday 21 March 2007

MR VERNON COAKER, MP and PAUL GOGGINS, MP

Evidence heard in Public Questions 1 - 34

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Northern Ireland Affairs Committee

on Wednesday 21 March 2007

Members present

Sir Patrick Cormack, in the Chair

Mr David Anderson

John Battle

Mr Gregory Campbell

Mr Christopher Fraser

Mr John Grogan

Lady Hermon

Dr Alasdair McDonnell

Stephen Pound

Sammy Wilson

________________

Witnesses: Mr Vernon Coaker, MP, Parliamentary Under-Secretary at the Home Office, and Paul Goggins, MP, Parliamentary Under-Secretary at the Northern Ireland Office, gave evidence.

Q1 Chairman: Could I welcome most warmly our two ministerial colleagues, Paul Goggins and Mr Vernon Coaker, who have come together because of the Home Office's now greater responsibility for the matter under discussion. I understand that you have a debate in Westminster Hall which you must be on time for, Mr Goggins, so we propose to run the questioning for exactly an hour and then take up your kind offer of ten minutes privately with the Committee on Northern Ireland aspects that need not detain you at all, although you are welcome to stay if you wish, Mr Coaker.

Mr Coaker: I have always had an interest in Northern Ireland.

Q2 Chairman: This session arises out of our report into organised crime which you are very familiar with. We made a number of recommendations about the Assets Recovery Agency which I suppose could be summarised in the phrase "doing well but could do better". It is very important that it remains. We were somewhat taken aback when it was subsumed within the Serious Organised Crime Agency because that only came into being relatively recently - indeed, during the course of our inquiry. We met with the senior officials at a time when they were just gearing up to begin so we thought it would be helpful, in view of expressions of concern within Northern Ireland and also within the Republic when we were over there in January, to discuss this matter with you. One of the things that has caused the Committee a degree of concern has been the fact that the Chief Constable seems to have been slightly taken aback and not entirely reassured. Could we begin there? If you feel you wish to make any opening statement, either or both of you, please do so.

Paul Goggins: Perhaps I can deal with the issue of the remarks of the Chief Constable. Vernon may want to say more general things because he has overall ministerial responsibility for the two agencies. The Chief Constable was on the record very early on after the announcement. I have subsequently been in discussion with him. Members of the Committee have seen the letter of reassurance from the Home Secretary. He and I have had opportunities to discuss this. He has in conversation with me gone on the record and is prepared to be on the record here this afternoon with a remark which I think the Committee will welcome when he says the following: "The Assets Recovery Agency worked well here and I was concerned about difficulties that the new system might create. However, I have had sight of the letter from the Secretary of State and this has given me the reassurance that I was seeking. I will monitor the situation when it changes over." He said he was more than happy for me to share that comment with the Committee. He may communicate with the Committee. I know you speak with him on a regular basis. It is important that the Chief Constable is able to feel a sense of confidence about the new, merged organisation. PSNI are one of the biggest referrers of cases to the Assets Recovery Agency and therefore confidence overall, particularly in the context of Northern Ireland, is very, very important.

Q3 Chairman: It is very important not least because of the close cross-border cooperation. When we were in Dublin, I think it is true to say that Sir Hugh's concerns had obviously been registered by his colleagues in the Republic, so there was a degree not of hostility or opposition but of apprehension. It is important because it is so crucial to the cracking of organised crime that there is a body which is absolutely determined to recover ill gotten gains and has the resources and the teeth to do it. Of course throughout the kindred body in the Republic has been an arm of the Garda Siochana and has therefore had a little more clout that side of the border. Anything you can tell us this afternoon to reassure us will I think in turn reassure the law abiding people of Northern Ireland.

Paul Goggins: Obviously at the point of the announcement and subsequently it was very important to get reassurance from Vernon, my ministerial colleague, and the Home Secretary as well. This came in the form of the letter which I have referred to already, which offers an absolute guarantee about the level of resources being at least at the level we currently have, having a lead figure on asset recovery in Northern Ireland in the new, merged agencies and some other assurances as well in relation to having the ability to set our own priorities in Northern Ireland for the asset recovery strategy. All of this is important and it all feeds into the relationship with the Criminal Assets Bureau that you have referred to. It goes without saying that the ability of CAB and the Assets Recovery Agency/the new, merged SOCA to work together, particularly in the cross-border area is absolutely vital. We have seen a number of cases where, by working together, there has been great success.

Mr Coaker: I was aware of the comment that the Chief Constable had made so I spoke to him on the phone to try and reassure him about what we planned and to point out the various things we were doing; the importance of the designated officer for Northern Ireland, that there will be a commitment to resources and to ensure that we continue to work closely with the PSNI. That exchange of opinion that I had with him by phone, I hope, was helpful.

Q4 Chairman: Could you just say a little bit about the designated person? What level will he or she be? When will the appointment be announced? When will that person be in post?

Mr Coaker: At the moment, you will be aware we have recently announced that the interim director for the Assets Recovery Agency as a whole is Mr McQuillan. I know that that has been welcomed across the whole of Northern Ireland. We hope and expect that Mr McQuillan is well thought of across the whole of the country.

Q5 Mr Campbell: Except among the criminals.

Mr Coaker: That is the whole point and why people were so pleased with his appointment that will bring his skills, professionalism, commitment and expertise to the whole of the ARA operation. That is obviously an interim appointment until the establishment of the new arrangements. Subject to parliamentary approval, we expect the Serious Crime Bill to proceed through Parliament and the new arrangements to come in for April 2008. Exactly what happens with respect to that person will be a matter for the Serious Organised Crime Agency but it is written onto the face of the Bill that there will be a person who is designated with specific responsibility for asset recovery work in Northern Ireland. The expectation is that that will be a senior post. It may be of interest to the Committee, as an aside, that I just found out - I must admit it had passed me by - Northern Ireland will benefit in the interim because there has to be an associate director with specific responsibility for Northern Ireland. Not only do we have Mr McQuillan as the director of the whole of the Assets Recovery Agency; there will also need to be an appointment in the interim for asset recovery with respect to Northern Ireland. We expect the Bill to become law and the implementation date is April 2008. On the face of the Bill there will be a designated person with responsibility for asset recovery in Northern Ireland.

Q6 Chairman: Was the decision to subsume - I prefer to use "subsume" rather than "merge" because it is being taken within a greater organisation - based upon an assessment of under-performance or disappointment?

Mr Coaker: No. A decision was made that in order to further build on the work that the Assets Recovery Agency had done up until now, in order to further enhance the work, it would make sense to merge the Assets Recovery Agency with the Serious Organised Crime Agency. If we reflect on it, it may be - this is a matter for speculation - that, had the Serious Organised Crime Agency existed at the time that the Assets Recovery Agency was established, there would not have been a separate body. It would have been part of that anyway. If you look at what the Serious Organised Crime Agency does, many of the people that the Assets Recovery Agency deals with are themselves serious and organised criminals. It seems that a synergy between the two would make sense. It is also the case, if you look at civil recovery, the tool of civil recovery is a hugely powerful tool alongside criminal prosecution to tackle serious and organised criminals. Therefore, the belief was that by putting the two organisations together we would have a better way of tackling not only serious and organised criminals but also tackling some of the individuals in our communities as well, the so-called lower level criminals, but extremely important nonetheless.

Q7 Lady Hermon: Both of you will know that the Home Secretary very kindly had a meeting with me on 28 February. Could I ask for some clarification about the letter which subsequently followed that was issued by the Home Secretary in relation to the implementations for Northern Ireland, particularly the Assets Recovery Agency, after the merger with SOCA? The Home Secretary - this is a very skilfully, carefully crafted letter; that is a compliment, not a criticism - was asking for clarification on three points. "SOCA are happy to confirm that the current asset recovery team in Northern Ireland will retain its distinct identity and SOCA will ensure asset recovery retains an appropriately high public profile." Would both Ministers care to elaborate on what is meant by its distinct identity? Does that mean its size? Does it mean a distinct identity indefinitely? As regards an appropriately high public profile, what does that consist of? The third point was strongly made by the Chairman and that is the very good working relationship that there has been with the Criminal Assets Bureau in the Republic of Ireland and the Assets Recovery Agency in Northern Ireland. The Home Secretary did indicate that he would be going to a meeting in Dublin the following day, the Friday - I believe that is 2 March - and in his letter he said, "I want to learn from their highly successful" - meaning the Criminal Assets Bureau - "exploitation of tax powers to target criminals." What was learned from CAB in that meeting in Dublin at the beginning of March?

Mr Coaker: As you will know, at the present time with respect to asset recovery, we have in the country a hierarchy of criminal prosecution first, followed by criminal confiscation if that is appropriate; then civil recovery and then the use of taxation. There is this hierarchy of powers and you will see that that is contained within the Serious Crime Bill, a continuation of that. The expectation would be first of all that you will criminally prosecute before you move to some of the other measures available to tackle those who have acquired their gains through criminal activity. What the Home Secretary and all of us want to do is to see where CAB have been extremely successful in the use of taxation powers in order to take money away from the criminals, to see what we could learn from that and whether there was more that we could do with respect to that power. It is simply a matter of learning from them, establishing what good practice they have and seeing whether we have the correct balance here with respect to that.

Q8 Lady Hermon: Is that a hint of change in the hierarchy?

Mr Coaker: No. That is just a confirmation of the fact that that is what the hierarchy is. We wanted to learn from what CAB are doing.

Q9 Chairman: Do we have the powers to do what they do?

Mr Coaker: As it stands at the moment, the merged organisation, SOCA, will have the powers that the director, Jane Earl, at the present time has to look at taxed income and, if it seems to be inappropriate, to try and recover that. Those powers will transfer to SOCA. They will not transfer, as some of the other powers will, to the prosecuting authorities but they will transfer to SOCA. We have this hierarchy that is established at the present time where, in the first instance, it is agreed with the Attorney General and others that we will look at criminal prosecutions first. We know CAB has been particularly successful in the Republic of Ireland and the Home Secretary is going over there to see whether we can learn from the practice that they have there. In terms of the high public profile, I am sure my follow Minister will talk about the other relationships between ARA and CAB which are extremely important. ARA at the moment, as you know, has to publish a report on how it has done in the year. That will be carried on with respect to the new, merged organisation. The annual report will come out and detail what has been done. That is one way but I personally think that this is a whole area of work we need to raise our game on. I know that in Northern Ireland Mr McQuillan and others have been very successful in publicising through the media the success of the various operations that they have conducted. I think this is hugely powerful because it reassures the public and individuals that the criminals are not able to just get away with it. People who at the moment strut around our communities with no visible means of support, where we all know what is supporting them, have to feel that the law is after them. Therefore, when we talk about a high public profile, it is not only the official reports; it is looking at what more we can do with respect to the media and all of that to ensure that people are reassured. On the distinct identity, the point that the Home Secretary made in his letter, I think what he was trying to say there is that we know and understand the impact that the Assets Recovery Agency work has had in Northern Ireland. That is why there will be, on the face of the Bill, a designated senior officer who will be responsible for the Assets Recovery Agency work in Northern Ireland. Alongside that there is a commitment to at least the same level of resources as is currently committed to the Assets Recovery Agency work in Northern Ireland. The distinct identity will be to ensure that people are aware that, although the Assets Recovery Agency is now part of SOCA, that work continues and that work has the high public profile Lady Hermon was mentioning earlier. Just because it is subsumed, it has not gone away. That is an important message that we need to get across. The way we do that is ensuring that this distinct identity is maintained.

Q10 Lady Hermon: It is not just the distinct identity to be carried forward. Apart from the resources, are we going to have an increased team working, dedicated in Northern Ireland, in assets recovery after the merger with SOCA?

Mr Coaker: It may be that the Serious Organised Crime Agency as a whole decide that they want to increase the amount of resources that they have and increase the number of people they have working there. I want to give reassurance to the Committee and also to the people of Northern Ireland that, at the very least, the current level of resources will be maintained. Should the Serious Organised Crime Agency decide that more resources are needed, that will clearly be a matter for them.

Q11 Lady Hermon: There is an assurance that there will be no reduction in the number engaged at the present time in assets recovery work in Northern Ireland?

Mr Coaker: The assurance is that the current level of resources that currently go to Northern Ireland will be maintained.

Q12 Stephen Pound: Surely there will be economies of scale?

Mr Coaker: There may be economies of scale but the commitment we have made in writing through the Home Secretary's letter is for the current level of resources. This is where it is difficult to micromanage. It is difficult to say, when people who are operationally responsible for the new, merged organisation, what particular way they see will be the most appropriate. All we are trying to say is that the level of commitment, the level of determination, remains not only with ministers but across government and will remain in the new, merged organisation. If there are economies of scale, it may be that more people can be employed; it may be that better ways of doing things will also be found.

Paul Goggins: Having received assurances from Vernon prior to the announcement being made, I was able to go to the offices of the Assets Recovery Agency on the Monday morning following the announcement and say to them that the new, merged organisation will need their skills and that I hoped all of them would apply to join the new organisation. I was assured that there would be room for all of their skills within that organisation as we continue the fight against crime. I felt confident enough to say that to all the staff there because it will be vital that all the skills that have been developed continue to be deployed, albeit within a broader organisation that can bring a wider range of intelligence and so on. Can I briefly respond to two points that Lady Hermon made? The issue of public recognition is a very important aspect in Northern Ireland. There is a common acknowledgement of the importance of ordinary taxpayers seeing those who have ill gotten gains having them taken from them in the way that Vernon described but in Northern Ireland 80% of the people of Northern Ireland know what the agency is and what it does. It is often quite personalised to Alan McQuillan because he is out in the media doing that. A judgment that I would make about the success of the merger would be can we at least hold that level of recognition and indeed enhance it over the coming period of time. That is very important because we need public support for the asset recovery approach and the serious organised crime fight that we have on our hands. In relation the Criminal Assets Bureau, clearly the model in the Republic is a different one but what we seek to do in Northern Ireland is create, through the Organised Crime Task Force, a strategic group involving Revenue and Customs, PSNI, the Assets Recovery Agency and SOCA. I chair the stakeholder group. We work together on that basis in all the plans that we develop. Following your report we have broadened out the membership of that group to include more business representation.

Q13 John Battle: It seems to me there are two approaches to the problem. One is that the Assets Recovery Agency serves notice on criminals that they cannot get away with it. I think that is going well. On the other side of that is getting the money back and it is there that there has not been such a good record. The National Audit Office reported that the recovery of assets or the idea of self-financing was a long way off. I can see that affecting the budget in the background unless there is a grip on the actual recovery of assets as opposed to just serving notice. Is there more success in Northern Ireland in getting the assets than simply serving notice on criminals to say, "You are not getting away with it; we are chasing you into court"?

Mr Coaker: The specific success ARA has had as well in Northern Ireland has been around the impact it has had with the general public and the success it has had in making people feel that there is somebody out there trying to take away the assets. In terms of the figures, would you like to give the figures for Northern Ireland?

Paul Goggins: Yes, I am happy to do that. I do not think that in Northern Ireland we have been any more successful in turning the frozen assets into recovered cash than the Assets Recovery Agency elsewhere. It is hard to give an exact figure here but we reckon in the region of £35 million to £40 million-worth of assets have been frozen in Northern Ireland but £1.5 million is what has been recovered. That is, the assets that have been turned into cash. The lesson is that this has taken longer than perhaps any of us would have wanted because, frankly, the people who get these ill gotten gains do not want to give them up so they fight in court. The message is that we win. When they take us on, we win and we just have to dig in.

John Battle: You do and you do not. Jane Earl said at one of the committees at which she gave evidence recently that the delaying tactics by the criminals end up as trench warfare. In the end, there is court case challenging court case challenging court case. Are cases proceeding through the courts now? Have you defeated the legal challenges?

Q14 Chairman: She also asked this Committee for more powers and we put it in our report.

Mr Coaker: I have a long list here of legal challenges in England and Wales. I know Paul also has some lists of various successes that the Assets Recovery Agency have had in spearheading the change. This is a whole new area of law. When the Assets Recovery Agency has tried through the civil recovery process to take action in court, there have been human rights appeals and all sorts of tactics used to try and delay that. Every single step of the way they have had to fight to change the law. There is a whole series of cases that I have in front of me. It may be very useful if I sent them to the Committee for circulation to Members. For example, retrospective application. The court decides after a period of months that the law does and can have a retrospective effect. Abuse of process; civil versus criminal. I am not a solicitor or a lawyer but that demonstrates the fact that we have spearheaded a new approach which now we can take forward to the next step.

Q15 John Battle: To draw an analogy, it has taken me 22 years to campaign to get money to people who are victims of asbestos pollution and then only by changing the statutory instrument. That is going to be changed next week. The law, the courts and the perpetrators have played every trick in the book to avoid paying out, which is exactly what seems to be happening here. Are you making any progress in cutting through it or are you going to be coming back to Parliament saying, "You need to toughen up the law", which I think was what was hinted at in the report from this Committee, that the law itself was not giving enough capacity to the courts to get the money back.

Paul Goggins: It may be that the law needs to be toughened up. The Home Office has been looking all the time at what more can be done, whether powers need to be strengthened. Specifically relating to Northern Ireland, the Assets Recovery Agency has engaged 84 cases since its inception. Eight of those are still at the assessment stage. 28 are at the investigation stage. 36 are in litigation and ten have been completed. Almost half are still at the litigation stage. As case law develops and cases are won, as we develop a pattern in what is a new area of litigation, hopefully these things will happen more speedily. Certainly my commitment is to try over this next period to make sure that in Northern Ireland we are able to speed up the process because, apart from anything else, what happens during the process - this is something the Committee picked up on in its earlier inquiry - the assets themselves dissipate in order to fund the litigation. It is in nobody's interests that there is delay and certainly there is commitment from both of us.

Q16 John Battle: I would not like to see the dissipation of the assets meaning that the staff are reduced. The National Audit Office also said that there were poor quality referrals. They pointed to that as a kind of barrier to making progress. Has the quality of referrals from other law enforcement agencies improved nationally and in Northern Ireland?

Mr Coaker: The national picture is one that we are trying to improve. There is a mixed picture of referral that is going on and we want that to improve. Again, it is part of establishing this whole area of asset recovery as mainstream police work and mainstream for the courts so that every time a case goes to court, every time somebody is investigated, the removal and restraint on their assets and confiscation, whether it be through the criminal or the civil process, becomes an automatic part of the work that is done. That requires a cultural change and a gradual increased awareness on the part of everyone. The honest answer to that is that it is an ongoing process. It is variable across the country and between the various referring agencies. We know that we want to improve it and part of that task is to ensure that that is done.

Q17 John Battle: You feel that when you get the criminals to the courts you are starting to win the legal battle to get the money into the pot to pay the agency? I think that will be crucial in the long term.

Mr Coaker: If you look at the performance of the Assets Recovery Agency, this year so far it looks as though for the first time it will have covered its costs. That is one example of the progress that has been made.

Paul Goggins: In answer to the question are the referrals improving in quality, I gave the figure of 84 cases engaged. 61 cases that were referred were not engaged. They were withdrawn but only three of those were withdrawn in 2006/7 so it shows that as we are moving on the quality of referrals is getting better.

Sammy Wilson: Could I ask about the use of the frozen assets? The police gave us quite a lot of evidence when we were looking at the organised crime report that, first of all, the frozen assets were not really frozen because they could be drawn on by the criminals to pay their legal bills. Indeed, there was some indication that sometimes, if they got the right law firm, these could be recycled through inflated legal bills and made available to the criminals once again. Has there been no attempt to try and ensure that, when an asset is frozen, it is totally frozen so it is not able to be used by the criminals?

Q18 Chairman: It is deep frozen.

Mr Coaker: We are trying to ensure that when assets are frozen it means they are frozen. On the particular point with respect to unfreezing assets to pay for legal bills ----

Q19 Chairman: Then they become liquid assets.

Mr Coaker: They do but the point was that this was done because of the request of the prosecuting authority. Some of the people that ARA were trying to prosecute were frustrating the system by not applying for legal aid, so they were refusing to apply for legal aid, or they were deemed ineligible. Therefore, the system was being slowed down and it was found that if you can take some of that asset to pay for the court costs you could get them to court to confiscate their assets. In that sense, although it looks a bit peculiar, it was done because it was about trying to make sure that they could not frustrate the court and the legal process and we could then try and get their assets.

Q20 Sammy Wilson: I think in an earlier answer to Mr Battle you did indicate that by having those huge assets at their disposal they were slowing the process down because they used all kinds of legal devices. I am not so sure it has achieved that. Mr Goggins made a very important point that, as far as ordinary people in the street are concerned, it is important to see the local criminals who they know are living beyond their means, who are getting assets from criminal activities, taken out and their assets taken from them. I believe that the merger is a good thing. I think it gives expertise and a synergy which will be beneficial but the big fear is that, being part of a bigger organisation which is aiming to go for the top criminals, because that is obviously what SOCA when they came to talk to us were talking about, the level two and level three investigations will be given less priority. What practical steps are being taken to ensure that the level two and three type criminal investigations will continue and that all the resources will not go into the Mr Bigs or organised crime? What steps are there? Will there be so many resources reserved for referrals by the police of smaller time criminals? Will the plan that SOCA has to have include so many cases like that? How are you going to ensure that those lower level crimes are fully investigated?

Paul Goggins: One of the assurances that I sought and was very pleased to receive from the Home Secretary and Vernon at the time of the announcement was that in Northern Ireland we would be able to set our own priorities and draw up our own action plan on asset recovery that would not be bound by any threshold limits that applied elsewhere in the United Kingdom. In other words, we could go for the smaller financial fish who might carry huge significance in terms of the wider community. It is very important that we are able to do that and that we have the freedom and flexibility to do it. We might go for somebody where the cash that comes back is not a great deal but where the significance of being able to do it is huge in community terms. At the moment, the Assets Recovery Agency has an obligation in law to produce an annual plan for Northern Ireland. The assurance is that within the new, merged organisation we will have still that obligation to produce that plan. We will have a lot of flexibility and we will be able to put our own priorities in there. It gives me the reassurance that we can design an appropriate asset recovery strategy that suits us.

Q21 Sammy Wilson: Let us say that there are two or three Mr Bigs being pursued by SOCA. In order to get the assets from them there is a requirement for a big increase in resources to be used just on those particular individuals. Within a merged organisation how do you stop the resources being pulled towards what might be, politically and in terms of the PR and the media, the cases which the organisation will see as desirable, therefore taking resources away from the smaller fish?

Mr Coaker: I think this is an extremely important point. Obviously, whether you have a police force or a new, merged agency, there will be operational decisions that are made. People will make decisions about what is the best way of tackling this problem in a community or in a particular area. It is difficult to answer in that sense because people will take these operational decisions. I think the important point is that, from the outset, whether it be in Northern Ireland, Wales or other parts of the UK, England or wherever, what we are about with respect to asset recovery is getting the Mr Bigs, the people who are making a fortune; but it is also very clear that it has to be about the so-called small level people in our communities who are frustrating the will of the law abiding majority, who are terrible role models for our kids. I say this all the time when I meet Sir Stephen Lander and Bill Hughes. I say to them that we have to go after the small as well as the big fish. Paul mentioned the Home Secretary's letter. I think it is important to read this into the record because I think it is important that the people of Northern Ireland will read our deliberations. He says, "In particular asset recover work in Northern Ireland will be focused against local priority targets and not subject to any threshold limit which might apply elsewhere. Prioritisation of decisions locally will need to follow a framework which you will be consulted on." That framework will be very clear. It will mean that, yes, we will concentrate on the Mr Bigs but also of profound importance to our communities is ensuring that the local Mr Bigs, the local people who are living beyond their means, are tackled as well.

Q22 Mr Grogan: There was a report in The Belfast Telegraph in mid-January which suggested that certain of the caseload might be dropped when the merger happens. Can you give us assurances that those cases that have started to be pursued will continue to be pursued?

Mr Coaker: Absolutely. You have the assurance that the merger will not affect any cases that are being pursued at the current time. They will be carried on and pursued.

Q23 Chairman: With at least as much vigour?

Mr Coaker: Absolutely.

Q24 Mr Campbell: I accept the Minister's assurance in terms of the regional application because what would apply in large urban centres in GB, Manchester, London, Birmingham, would not apply in relatively sparsely populated, rural parts of Northern Ireland where local drug dealers are prevalent. They are not Mr Bigs but they are category two and three criminals, the pursuit, the conviction and the assets being frozen of whom would send a very clear message to the local community that their community is safer because of those assets being seized. I really think that there needs to be that preservation of the regional identity. I am glad that is the case. Hopefully, it will be maintained. The other issue I wanted to ask you about is the hierarchy principle. Is that going to be maintained in terms of the pursuit for criminal prosecution and, at the same time, accompanying the issue of the seizure of assets? There is going to be no diminution in that principle?

Mr Coaker: The hierarchy will remain in terms of the pursuit of assets and is in the Serious Crime Bill. Whichever route we pursue, whether it be through criminal prosecution with a confiscation order attached to it or whether it be through the civil recovery route or through the taxation route, the really crucial point for us all is to ensure that this becomes an absolute matter of course that it is done. We are not just saying, "This is a good case. Look at what has happened here. They have done well in that criminal prosecution" or, "Look how well the Assets Recovery Agency has done with respect to a particular case." In every single case that is before the criminal courts or other measure that is taken where somebody is living beyond their means through the civil recovery route, it becomes a matter of course that people are clearly benefiting from their ill gotten gains, from their criminal activity, whether it be in the criminal court or in the civil court. It is a matter of course that we take their assets away from them. As well as the punishment to the criminal, that is such a powerful message to the people in our communities who, frankly, are fed up with seeing people who they know are not getting up in the morning to go to work as they do, who are not studying to improve themselves as they do but are simply living beyond their means. They feel the state should do more about it and that is what we are trying to do. I think it is an incredibly important point that Gregory and Sammy have just made. If it is a small person living off the drug trade, we need to pursue them and we will.

Q25 Mr Campbell: This is a political issue with a small "p". As Northern Ireland evolves and hopefully emerges from the pattern of the last 35 years, there is a deep concern across the community that those who were previously involved in very direct paramilitary related activity are now being allowed to devote their energies and resources to criminal activities for no other purpose than lining their own pockets. The people who previously were involved in paramilitary groups are now being allowed to engage in drug dealing, theft, fuel smuggling and all of those other activities. We have heard and read, I am sure, about many of those issues. I think people need to see that the resource being dedicated to the new organisation is not going to have any political interference or involvement, any consideration of easing back because there is a bigger picture of people who may in the past have been involved politically but are now on the loose. They need not just to see an assurance; they need to see those people in court. They need to see the assets being seized so that the message goes out in the wider community that there is no let up for these people, no matter what their background is over 30 years. Can you not only give that assurance but let us come back, say, in 12 months after we have seen the new organisation at work and test it after 12 months of the assurance being put to the test?

Paul Goggins: There is an absolute guarantee that the fight against criminality of all kinds, wherever it comes from, will go on. There is a clear challenge that comes from the criminal infrastructure that has been built up by paramilitary groups. They will continue with that infrastructure to gain illegally in all kinds of different ways. We understand that. It is very important. Even in the last couple of weeks there was a major operation in the border area with HMRC involved and the PSNI, apprehending people in relation to fuel laundering plants and illegal gas bottling facilities, which is very dangerous apart from anything else. That will go on and I am sure the Committee will continue to take a great interest in it.

Q26 Chairman: Whatever happens, you will remain within our remit for at least another 15 months and we will certainly want to keep a close eye on this.

Mr Coaker: Can I put on the record that I give Gregory that assurance as well? I am perfectly happy to return to the Committee should they wish me to do so to see how things are going.

Q27 Chairman: Thank you very much indeed. Could I bring you back to the question of all Ireland cooperation? All of us were very genuinely impressed by the level of cooperation between the Garda Siochana and the PSNI and the work of the Criminal Assets Bureau is impressive. As we understand it, they have powers greater than SOCA when it comes to taxation powers. I would like not necessarily a categorical answer this afternoon but at least an assurance that you will seek to do all you can to ensure that the comparative powers are as near equal as possible.

Mr Coaker: We are looking at taxation powers and we will look to learn from the work that is done in the Republic. I can give you the assurance that we are obviously looking to see what we can learn from what is happening in camp. As it stands at the moment, the powers of investigation of taxation that Jane Earl currently has will transfer to SOCA so they will have the ability to look at unsourced income. If it is clearly beyond somebody's visible means, they will be able to investigate that and try and recover some of it. It is a whole area of work that SOCA will be able to carry on, but we will always look to see whether we can learn from any other jurisdiction.

Stephen Pound: You mentioned illegal gas bottling. I thought we had surveyed every aspect of the full, rich panoply of criminality in this Committee. I have never come across gas bottling before. It could be that I am the only person who has not. I would be very grateful if you could indicate where we can get some information about that. We are always on the look-out for new breaches of the law.

John Battle: A demonstration?

Stephen Pound: I was not asking for a demonstration.

Chairman: I thought you only gave them.

Q28 Stephen Pound: I am not being tempted down that particular avenue. On the point that you have made about the CAB and the Assets Recovery Agency, the CAB has an entirely different structure in terms of accountability through Justice Minister McDowell and through the Garda Commissioner. How does it work on a bilateral basis? The Minister said that you have he relationship between PSNI and the Garda Siochana but, bearing in mind it is a completely different hierarchy and oversight, is it done entirely at officer to officer level or do the Justice Ministry and either of yourselves come into it?

Paul Goggins: At the political level, I have the opportunity for dialogue with Minister McDowell. We meet from time to time and review matters of general security and justice issues. That is in place, but obviously in certain operational terms the various agencies relate to the appropriate opposite number in the Republic. If it is to do with asset recovery, it is the Assets Recovery Agency to CAB. If it is a broader police matter and investigation then it is an Garda Siochana and the PSNI. The collaboration is at the appropriate level between the different agencies and the appropriate officers. At the strategic level, in Northern Ireland we have the Organised Crime Task Force. Again, if there is a need to do things cooperatively north and south, we do. Towards the end of last year I took part in the annual conference that we have of law enforcement agencies north and south of the border on organised crime, where we take stock of what together has been achieved and what needs to be done. We do take that corporate approach to the problem because we recognise that we absolutely have to in an island such as Ireland. With the border area we have, we have to have a common approach. I believe it is working. I do not think we have to have the same systems and structures north and south for that cooperation to be very effective.

Mr Coaker: In the Criminal Justice Bill we are looking to improve data sharing between the CAB and the various agencies in the UK as well, to see whether we can improve that. We are always looking at the tax powers that are available to us. SOCA and HMRC are always reviewing the use of tax powers to see what more we can do to improve our work in that area.

Q29 Stephen Pound: That would include Europol and Interpol presumably as well?

Mr Coaker: It would include any facet of law enforcement, looking at what is available to us to try and improve our work in this area.

Stephen Pound: It may sound like an actuarial point but when Vernon Coaker was speaking earlier on I was mightily cheered by the passion he brought to this which is a credit to your father, if I may say so. He would have been very proud to have heard you. Vernon's father was the police officer on the beat where I live.

Chairman: He has a lot to answer for. What is your question?

Q30 Stephen Pound: When you talked about the commitment of resources and maintenance of existing resources in the combined operation, I asked a question about economies of scale. Can you clarify that none of that committed resource stream in any way contains potential, prospective or hypothetical future economies of scale? I know neither of you gentlemen would do it but there have been ministers in the past who have factored in an assumption on savings at a time of combination to form a major component of the revenue stream.

Mr Coaker: The commitment that has been made publicly is to the existing level of resources. I have seen nothing that would suggest anything in the way that Stephen has suggested.

Q31 Mr Campbell: For how long?

Mr Coaker: I have seen no suggestion at all that anything would be done in the way that Stephen has suggested might happen.

Stephen Pound: I was not suggesting.

Dr McDonnell: It would be remiss of me if I did not enquire if Sergeant Coaker ever had to arrest one Stephen Pound for any misdemeanours.

Chairman: It might be interesting but it is not relevant.

Q32 Dr McDonnell: From where I am sitting and from where many others are sitting or standing, the Assets Recovery Agency in Northern Ireland has worked well. I am a little worried that we are basing our assessment of it on the amount of assets recovery rather than the social effect of stamping out crime because I have never perceived it as having to wash its face fully, certainly if it pulls in 75 or 80%. I am a little concerned that we are drifting perhaps more to the cash. Minister Goggins said earlier that the cash was not as big an issue as the social consequences, which are huge. I think that is something where we need a very clear undertaking that the change will bring. It is all very well, the theory of how we juggle this around and how much structure we put into this. The reality is that the Assets Recovery Agency worked when it had not the powers and should have had the far reaching powers that the Criminal Assets Bureau had in the south. It still did a fantastic job. Yes, a lot of that was vested in the personality of Alan McQuillan who had tremendous success and brought a lot of personal credibility with him to the Assets Recovery Agency. Can we be sure in the move to SOCA that loose ends will not be left and it just will not be a matter for SOCA to make up its own mind, that there will be serious terms and conditions put in there and that there will be a serious effort to march up SOCA's strengths to the CAB strengths? What we are talking about here is that organisations may have merged in different times in response to different circumstances - for example, the Criminal Assets Bureau and the Assets Recovery Agency - but nevertheless from where I am sitting they managed very quietly to effect a very strong cross-border cooperation that 99% of people supported on both sides of the border. The missing link for me in this is that in theory the change seems to work quite well but the fear is that in practice it will not glue together. I go back to the point that different standards will be applied. We have a success and the attitude is if it is not broken why should we fix it.

Paul Goggins: As of now, the Assets Recovery Agency has to have a specific published plan for Northern Ireland each year. When we move to the new, merged organisation, the new SOCA will also have to have an asset recovery plan for Northern Ireland. It will have to have a plan overall for its work in Northern Ireland which will be published after consultation with the Secretary of State for Northern Ireland. There is proper accountability there in terms of the interests of Northern Ireland being written into the action plan, even though this is a UK-wide agency. That is one level of guarantee. Having the Organised Crime Task Force in place in Northern Ireland means there is a real strategic way of gathering the evidence of what is working on the ground, what the priorities are, and that will then be fed into that action plan. In response to the question you have asked, the Assets Recovery Agency and the allied law enforcement agencies have done terrific work dealing with the kind of criminality that is endemic in Northern Ireland, particularly in the cross-border areas and taking back criminal assets. That is all very important. If we look ahead, this is where I think the real opportunity comes with the merger, organised crime is a global business. That will have an impact on Northern Ireland just as it has an impact on other areas of the UK. If we look at human trafficking and drug trafficking, these are issues that have to be embraced on a wider scale. SOCA will bring a whole range of intelligence and information to bear that will really help us. If you do the criminal investigation with the financial investigation, you get the best of both worlds: drugs, for example, that start off in Colombia, go to Africa, Birmingham and Ballymena. That is the kind of route they follow and we need an organisation that is up to dealing with that and the global challenge that it presents. I am not a reluctant supporter of this merger. I am an enthusiastic supporter of this merger because I think it will give us that greater capacity.

Chairman: From Timbuktu to Ballymena, we will get you. That is the motto, is it?

Q33 Dr McDonnell: Will there be any input before or after the devolution of justice from the Assembly in Northern Ireland which I am praying we will have established on Monday?

Paul Goggins: Certainly we would be very keen to make sure there is proper consultation with the Assembly on all of this. My constant cry as the chair of the Organised Crime Task Force is that this is everybody's business. It certainly will be the business of the Assembly and we will consult ministers and the Assembly as a whole.

Mr Coaker: Can I give that commitment as well? We should consult everybody about the prioritisation of how we take this forward.

Q34 Mr Anderson: You were asked about whether you would allow political interference to play a part in the future and you said you would not, but there have been some references that we have had that some people make the case that the whole doing away with ARA is a sop to Sinn Fein. Is there any truth in that?

Mr Coaker: There is absolutely, categorically no truth in that. There was no consultation or liaison with respect to Sinn Fein or anybody in coming to this decision. It was a decision taken by ourselves as being the best way for taking this work forward in Northern Ireland. Just to reassure the Committee, there is absolutely no truth in it.

Paul Goggins: I also have seen and heard that speculation and that is what it is. It is an utter fabrication. Wherever it came from, there is absolutely no truth in it at all.

Chairman: It is good to have that on the record.

Sammy Wilson: The public did not believe Paul McCartney in Northern Ireland.

Chairman: At this point I am going to bring the public session to a close. I would like to thank you both formally for your evidence which will be extremely helpful.