I start by welcoming you to the Chair, Mr. Cook. Half an hour is too short a time in which to give a detailed examination of the issue in every respect, so I shall try to highlight only a few aspects.

My central thesis is that none of the lessons of Abu Hamza’s stay have been learned. In fact, the entire saga could happen all over again. He, his wife and his family would likely be granted British citizenship, housed by a local authority, assessed as being entitled to thousands of pounds in benefits from the general taxpayer and entitled to buy their home from the local authority.

Furthermore, Abu Hamza would likely neither be brought before a British court for terror offences—unless the Government relented and allowed intercept evidence to be used in court—nor, crucially, be prevented by the Chancellor’s supposedly tough anti-terror measures from transferring assets worth many hundreds of thousands of pounds from a terrorist suspect family member to another family member who had actually been convicted of terrorist offences. The nightmare that has been Abu Hamza’s stay in Britain could happen all over again. In fact, it could happen sooner than we think, because Abu Hamza could be released from prison as early as next year.

I should declare what my interest in the matter has been. I have followed the history of Abu Hamza’s stay in Britain closely since 1999, when, as leader of the Conservative opposition on Labour-controlled Hammersmith and Fulham council, I first became aware of Hamza’s status as a Hammersmith and Fulham council tenant, living in a highly desirable street property on Adie road in the heart of the leafy Brackenbury village in Hammersmith. I called for the council to investigate Hamza’s financial affairs in 2001, and further called for him to be stripped of citizenship and expelled from Britain.

I undertook a great deal of research on the purchase and sale of the Adie road property in Hammersmith and called for resignations on the council when it transpired that Abu Hamza and his family had been housed not just once but twice by the then Labour council. Locally, I called on the council to investigate Hamza’s benefits and his tenancy. In 2003, I called on the Government to investigate his financial affairs in detail. In this debate, I shall set out to correct some of the many instances of misreporting in the press on the Hamza affair and bring some new information into the public domain.

Abu Hamza was a man at the heart of international terrorism. He influenced both the 7/7 and the 21/7 bombers. Two of the 7/7 bombers spent at least two periods living in the Finsbury Park mosque, while a third attended to hear Abu Hamza’s speeches. According to his family in France, the so-called 20th 9/11 bomber, Zacarias Moussaoui, was changed by the Finsbury Park mosque experience from a happy, outgoing young man into a hard-line radical. Richard Reid, the shoe bomber, was also there, as was the police killer and ricin poison plotter, Kamel Bourgass.

The Government failed to act on much, if any, of that, and decided to act only after US authorities made a move for Hamza, seeking his extradition. As it would have been difficult to extradite him to the US for offences for which he might have faced the death penalty, the British authorities took the easier choice of finally putting him on trial here for stirring up racial hatred, various public order offences and one terrorism offence.

Hamza’s views were heinous. There has been much material in the public domain, which I shall not repeat, but I shall repeat material that I downloaded from his website—the website of the Supporters of Sharia—before 9/11. The website was taken down a few days after 9/11, but I shall read a few of its statements that were allowed to go unchallenged by our authorities:

“The Jews have landed to spread corruption. When they come into a land, you will find that corruption begins slowly, then escalates until they are handed over power with others out in front. This is the ways of the Jews, and it has not changed since Rome at the plot to kill Isa”.

Just before 9/11, the Supporters of Sharia published a book entitled “Jihad in America”, which said:

“Many have been asking why doesn’t jihad take place in America. I have been asking myself that question ever since I watched the bombing of Iraq, the Sudan and Afghanistan.”

The first failure by those in authority that I wish to examine concerns Abu Hamza’s right-to-buy purchase of his flat on Adie road, Hammersmith. It was the kind of property that many of the homeless people and those in poor accommodation in my constituency can only dream of—a street property in the heart of the leafy Brackenbury village, home to various media personalities and celebrities. Despite the fact that Hamza was on a wide array of benefits, the Labour council accepted his story that the funds to purchase the flat had come from donations via the mosque. It seems incredible now that the presence of those substantial donations, totalling £75,000, did not trigger the stopping of his benefits.

Just as incredible is the fact that the Charity Commission was at the time investigating the finances of the Finsbury Park mosque—or the North Central London Mosque Trust, to give it its official title—where Hamza had been preaching since 1996 or 1997. Indeed, during the long period between the right-to-buy application being submitted in 1998 and the final purchase on 22 May 2000, Hamza and the Finsbury Park mosque were the subject of a number of Charity Commission investigations. According to the commission, five years of accounts were not submitted by the trustees. To use its own words,

“investigating officers concluded that the internal financial and management controls as exercised by the trustees were inadequate.”

Some years later, in 2002, an order was made by the commission to suspend a Barclays bank account after it emerged that Hamza was a signatory to the account and after the trustees confirmed that they had not been aware of the existence of the account.

The information on the case is not yet complete, but there should be an urgent investigation of whether the £75,000 purchase price for the Adie road property came from diverted funds from the charitable mosque. That investigation should of course have been carried out thoroughly at the time. It seems extraordinary that a man on benefits could pitch up with £75,000, explain it as donations to fund the purchase of a house and not have his benefits stopped, nor have questions asked about the origin of such a large sum of money. It is also worth remembering that Hamza bought the flat for £75,000 and that his son sold it four years later for £228,000.

The second issue that needs urgent investigation is how the Labour council, having sold Hamza the flat on Adie road, managed to house him again, this time in an even bigger and better property—a five-bedroom house on Aldbourne road, Shepherd’s Bush. To give an idea of the desirability of the road, it is home to a Cabinet Minister and another member of the Government. Five-bedroom houses for social rent are in incredibly short supply in Hammersmith and Fulham, and one can imagine how that must appear now.

Order. I am listening carefully and doing my best to acknowledge that the hon. Gentleman is staying within the terms of the debate, which I must remind him is listed in the Order Paper as “Case of Abu Hamza and Government attempts to freeze terrorist assets”. I read that as national Government rather than local government, so I hope that the hon. Gentleman can confine his comments to that issue.

Thank you for your guidance, Mr. Cook. I am coming on to explain how the funds that were raised from the purchase of the property on Adie road include some funds that are at issue in relation to central Government efforts to clamp down on terrorist financing. If you bear with me, I shall try not to test your patience, but there is a point to the information that I have given.

It was not Hamza who was housed on Aldbourne road, but his wife. She had already been living there since December 1994, being supported by all of us, through income support, housing benefit and council tax benefit. The wife was originally housed by the council from 1989, in various properties. The reason for housing her at that time was that she was reportedly fleeing domestic violence at the hands of Abu Hamza. Domestic violence is a serious problem in my constituency, but I draw attention to the fact that after Abu Hamza and his wife were housed separately, they went on to have four further children together, making seven in total.

The Labour council seemed to be in complete denial that Hamza was living in the five-bedroom house on Aldbourne road.

Order. I must point out again that the hon. Gentleman is expecting a ministerial reply, but the Minister cannot be held responsible for the actions of a local council. The one thing that I want to avoid is the hon. Gentleman wasting his debate, so if he would please try to focus on national Government attempts to freeze terrorist assets, rather than on local government attempts to shuffle benefits into Hamza’s pockets, that would makes things much easier for the Chair.

I thank you for that guidance, Mr. Cook, and shall accelerate a little.

The council was in touch with the security services after Hamza was placed on the UN sanctions list in 2002, shortly after a G8 Finance Ministers conference in Washington, I believe. However, according to residents in Aldbourne road, Hamza was constantly watched by plain-clothes detectives, so the reasoning of the Department for Work and Pensions and the council in saying that they were unable to take action because there was no evidence that he was living in that property does not hold water. Everybody knew that he was living there.

As the hon. Gentleman may know, I was tracking Abu Hamza a year before he was. I asked my first questions about Hamza and his associates at about this time in 1998. I certainly agree with some of the hon. Gentleman’s points, but would like to make it clear that Hamza’s citizenship was granted by Mrs. Thatcher’s Government.

The key point is that I was asking questions about Hamza’s finances and benefit position from about that time. The problem was that the answers were always, “We don’t comment on individual cases.” However, the Chancellor wrote to me separately, making it clear that if I had evidence he would be prepared to consider it and take action in respect of any of the individuals concerned, not just Hamza.

Does the hon. Gentleman think that it would be right for the Government to be a little more forthcoming in their answers to hon. Members, even if that was in private? Secondly, has he put any of the evidence that he has produced today before the Chancellor so that it may be followed up in accordance with the UN requirements?

The hon. Gentleman is right to say that if individual people are brought to the Treasury’s attention, they should be investigated. On his second point, yes, I will be talking about the evidence in due course.

Will the hon. Gentleman give way?

The Economic Secretary will have a chance to respond in due course, but if he insists, I shall.

Will the hon. Gentleman confirm that Abu Hamza’s assets were frozen by the Government following his UN designation?

I can confirm that that was absolutely not the case; his assets were not frozen by the Government in 2002. That is accepted wisdom, and I shall come to it.

There is excessive evidence that Hamza was living in that property in Aldbourne road. Everyone accepted it, it seems, except the council and the Department for Work and Pensions, which were housing the family and paying them benefits. The council claimed that his wife was estranged and that describing her as Hamza’s wife

“elicits a negative emotional response”.

The fact that the children whose details were added to the application form all bore the surname Mustafa Kemal—the same as that of Abu Hamza—was, the council said, “of little evidential weight”.

Investigations should have been triggered into the housing benefit, the income support and the council tax benefit. However, in its defence, the council said that the primary duty to investigate Hamza and his family, and to look at past and present benefit claims, lay with the Department for Work and Pensions.

It can be established beyond reasonable doubt that Hamza was living in Aldbourne road. Indeed, the police’s dawn raid to arrest him in May 2004 found him there, and he, and/or his family, was the beneficiary of an expensive flat in Adie road or the proceeds from its sale. Given that Hamza might be released next year, we do not have a moment to lose.

That brings me to the freezing of terrorists’ assets. A year ago, we were told by the Chancellor that

“the Treasury…had to become a department for security…I have found myself immersed in measures designed to cut off the sources of terrorist finance. And I have discovered that this will require an international operation using modern methods of forensic accounting as imaginative and pathbreaking in our times as the…enigma codebreakers at Bletchley Park”.

I hope that his forensic accounting is more effective than that used by the former Labour council or the Department for Work and Pensions.

I am not going to re-rehearse the whole fiasco of the emergence, a few months back, of the fact that Hamza, despite being incarcerated in Belmarsh and despite the Chancellor’s order to freeze his assets in April 2002, managed to transfer the Adie road property to his son, who has himself been convicted of terrorist offences.

I have already established that Hamza needs to be watched carefully when it comes to finances. Indeed, he threw down the gauntlet to the Chancellor when his assets were frozen in 2002, telling The Sunday Times on 21 April 2002:

“I don’t have anything in the bank to freeze. So where are they going to get it from?”

At almost exactly the same time, the Charity Commission suspended Hamza from the mosque, partly because of financial irregularities. The alarm bells should have been ringing, but a year later he was allowed to transfer the Adie road flat to his son—and at nil value, it seems.

This was no ordinary son, but a convicted terrorist. Aged 17, he was jailed in Yemen in 1999 for plotting a bombing campaign against the British consulate, a western-owned hotel and the Anglican church in Aden. After leaving prison, he was deported to Britain. According to the Yemeni court case, Hamza paid for his son’s flight there and gave him £3,000 in cash to help him to carry out the offences. Hamza himself is wanted in Yemen for similar terrorist offences that led indirectly to the death of two Britons. That same son got a job on the tube after 7/7. London Underground said that he was allowed to work as

“he has no criminal convictions in the UK.”

So, despite all the assurances and the fact that Hamza was being watched by a number of agencies, the transfer of the Adie road property was allowed to go ahead. If the Government—

Will the hon. Gentleman give way?

No, I will not. The Economic Secretary will have a chance to answer, and time is short.

If the Government had got their act together, the property could have been frozen as part of a benefits investigation. The Minister has told us that his Department was aware of the transfer at the time, but was powerless to prevent it. That transfer happened in June 2003. Only in October 2006, it seems, was the loophole closed.

On 18 October 2006, the Treasury Committee was told that the transfer could not have been stopped because the assets order affected only funds, not property. The permanent secretary to the Treasury told the Committee that

“the authorities were aware of this transaction”

at the time. Why, then, did it take more than three years to close the loophole?

If we had discovered that we were powerless to prevent terrorist transfers, surely the Treasury’s reaction should have been, “Let’s go get new powers.” It should not have taken three years. Further to that, I put a question to the Economic Secretary: is that loophole now closed? Can an individual subject to an asset-freezing order transfer an asset at nil value to another individual?

Despite all the assurances from the Chancellor, it seems to me that any Abu Hamza of the future, accused of terrorist offences, might not be prevented from transferring large assets at nil value to family members or other third parties. That loophole appears to me to be still open. If it is now closed, it still took more than three years to get there. The Prime Minister calls the Chancellor the “clunking fist”, but in this context he seems to be more of a ham fist.

I have outlined three areas in need of urgent attention: there should be an investigation of the funding of Hamza’s right-to-buy purchase in 1998 to 2000, an urgent investigation of the benefits paid to Abu Hamza and his family for many years, which continue today, and the closing of the terrorist finance loophole, along with the prevention of the transfer of fixed assets at nil value.

Abu Hamza has inflicted 10 years of pain on this country. It should trouble us all greatly that he may be released next year. He is a very dangerous individual, linked to many different terror plots in the past nine years. Moreover, he has been living at our expense, and many of the matters that I have outlined to the House today deserve urgent investigation. I look forward to the Minister’s response.

Mr. Cook, it is a great pleasure to serve under your chairmanship yet again, although for the first time in Westminster Hall.

I congratulate the hon. Member for Hammersmith and Fulham (Mr. Hands) on securing a slot for an Adjournment debate. He was concerned about the many misreportings in the press of the case of Abu Hamza. I fear that people reading the transcript of this debate so far, to the extent that they understand it, will also read a number of misreportings. I shall do my best to put the record straight once again, although I have done so a number of times.

I have answered the questions that the hon. Gentleman has put to me, and the same questions when they have been put to me by the hon. Members for Tatton (Mr. Osborne) and for Chipping Barnet (Mrs. Villiers). In fact, a few weeks ago I had a meeting with those hon. Members and the hon. Member for Hammersmith and Fulham. He put some of those points to me; I answered them at the time and he put the answers on his website. But he asks me the same questions again and again in a way that fundamentally misunderstands both the law and the facts of the case. I shall try to set the record straight.

People listening today or reading this debate probably will have missed some crucial facts. First, Abu Hamza’s assets were, in fact, frozen in April 2002, and he is currently serving a seven-year prison sentence in Belmarsh following his conviction in February last year on six charges of incitement to murder, two charges of stirring up racial hatred and one charge under section 58 of the Terrorism Act 2000 for possessing information

“likely to be useful to a person committing or preparing an act of terrorism”.

He lost his appeal against the conviction and is now seeking to appeal in the House of Lords.

Those wider issues and the many issues that the hon. Member for Hammersmith and Fulham raised about the history of benefit fraud are not really matters for me as a Treasury Minister. They have been widely discussed in the public domain. As I understand it, the case in 2003 of benefit fraud was closed on the advice of the police. Until now, it was not on the agenda in relation to today’s debate.

I would like to set out the facts for the hon. Gentleman and the House. Before I discuss details, I would like to make two general points. First, counter-terrorist financing is an important part of my work at the Treasury. We take our responsibility for asset freezing very seriously. As hon. Members will be aware, this morning eight arrests were made in Birmingham under the 2000 Act. My right hon. Friend the Home Secretary said that that action serves as a reminder of the real and serious nature of the threat that we face. We have acted and legislated decisively and repeatedly in recent years to tighten and toughen the regime for freezing assets and tackling terrorism financing. In the past few months alone, we have passed new orders to deal with al-Qaeda and the Taliban and terrorism. They allow the use for the first time of classified intelligence material in asset-freezing cases and restrict the payment of state benefits to listed terrorism suspects.

Will the Economic Secretary give way?

Not yet. As a result of those actions, important progress has been made. We have frozen nearly 200 bank accounts holding a total of some £500,000—the frozen money of suspected terrorists. In addition, since 2001 there have been cash seizures under the 2000 Act totalling £469,000, forfeitures by those suspected of involvement in terrorism totalling £126,000, and seizure of £1.4 million of terrorist funds under the Proceeds of Crime Act 2002. My first point is, therefore, that we have been acting decisively, and with substantial results.

My second point, which I have made to the hon. Gentleman and his colleagues several times, is that in the national interest, given that the matter is one of national security, we should be trying to achieve cross-party consensus and not descending into political point scoring and the misrepresentation of information. I am always eager to co-operate with my hon. Friends and Opposition Members in sharing information, but there is a way to do such things, and I do not think that the hon. Gentleman’s conduct in these matters has been consistent with trying, in the national interest, to build consensus about the way forward.

Let me turn now to the matter of Abu Hamza and property transfer. It has been alleged before and again today that he was able to buy and sell properties while he was in custody, thereby contravening our asset-freezing regulations. I will repeat again as firmly as I have in the past, because that is a serious allegation, that Abu Hamza did not buy any property while subject to an asset freeze or during his time in prison.

Will the Economic Secretary give way?

No, I shall set out the facts first and then I will take an intervention. It will be worthwhile if I recap the facts to prevent further confusion. Abu Hamza already owned a property in Adie road when his assets were frozen. In June 2003, it was transferred for nil value to his son. The police considered whether the transfer constituted a criminal offence under the Terrorism (United Nations Measures) Order 2001 or the Al-Qaeda and Taliban (United Nations Measures) Order 2002. On reviewing the evidence, they concluded that no offence was committed, as the property was transferred for no economic benefit rather than sold and no funds were made available to Abu Hamza. The police reached the same conclusion on the evidence that Abu Hamza’s son sold the property in Hammersmith and purchased a property at Hicks avenue. They decided that no criminal offence had been committed and no funds were made available to terrorists.

The hon. Gentleman claims that the new orders that we introduced last autumn would have meant that those transfers constituted a criminal offence. When I had a meeting with him in December, I set out the position clearly that under the old and new orders, and under UN, EU and UK law, a transfer of property with nil value and therefore no transfer of funds to the designated individual was not, in the judgment of the police and the security services, an illegal act. I set that out in detail to the hon. Gentleman. Six weeks later, the same allegations are still being bandied around.

Today he called for urgency and asked more detailed questions about benefit transfers that go beyond my ministerial remit. After our meeting, he put on his website a report of the meeting and a report about the dealings of a particular designated individual and his family. He complains on his website that I said that I would like to have in writing the details of his concerns so that I can investigate them. The meeting was on 18 December; today is 31 January. I have no evidence of having received a detailed letter from the hon. Gentleman. Indeed, I rang his office this afternoon to ask whether it had been sent, because there was no receipt by my office of such a letter, and I was told that they did not know the answer, that they would have to get back to me, and that they had no evidence of a letter being sent. I have no evidence of a letter being received.

Will the Economic Secretary give way?

In a moment. The hon. Gentleman lectures me about the importance of urgency. I said to him that he should put down his detailed questions, and that I would give him answers. Some weeks later, I can read about our meeting on the website, but I have yet to receive a letter with the detailed questions.

Instead, we have a repeat of the same allegations. They are a misrepresentation based on a misunderstanding of the law, as I have set out clearly in the House of Commons Chamber and in a written document placed in the Library in reply to the hon. Member for Chipping Barnet. I repeat again: there was no illegal act, there was no illegal transfer of funds. The continued allegation that there was undermines the standing of the police and the security services who are responsible for such matters, and the wider credibility of the British regime against terror. On that basis, I am happy to give way.

I am delighted that the Economic Secretary has finally given way. I should make one thing clear: at no point was there an allegation about buying and selling property. My comments about Hamza buying property and his son selling it were carefully phrased.

Secondly, I did not say that the transaction was an illegal act. The Economic Secretary has missed the point. If it was not an illegal act at the time, why was it not, if the Government are clamping down on the transfer of terrorist assets? A valuable fixed asset was transferred between somebody who was accused of terrorist offences and a son who had been convicted of terrorist offences.

I am happy to answer the question again. Abu Hamza is an individual who is designated under UN law as a terrorist suspect. Therefore, under UN law, under EU law and under UK law, the transfer of resources to him—his receiving revenues—would be an illegal act. There is no evidence, as the hon. Gentleman now acknowledges for the first time, that such a transfer of resources to Abu Hamza occurred. It is true, as I have always accepted, that a property was transferred for nil value to his son, not to Abu Hamza, the designated individual who received no resource. The son is not a designated individual and it is not a criminal offence for him to receive an asset or property.

The hon. Gentleman makes allegations about so-called events that occurred in Yemen. Whether designation occurs is a matter of advice to us from the police and the security services, and at no point has any advice come to us that the son should be designated. Unless the designation is made, the law does not apply. We act not on the basis of hearsay and misrepresentation but on proper evidence from the police and the security services. In this case, it has not arrived—and it certainly has not arrived in this debate. Perhaps when I receive the letter from the hon. Gentleman I will see some evidence, but, as I have yet to receive any correspondence from him six weeks on, I begin to doubt whether I will receive such evidence.

In a classic way, the Economic Secretary is making allegations about allegations that have not been made, but I put a specific question to him: is he happy for people who are charged with terrorist offences to be able to transfer fixed assets at nil value? The implication is that he is.

Order. We must switch our attention to the final topic for our consideration today.